Chancellor Rachel Reeves has unveiled a temporary reduction in VAT on summer attractions as part of a broader cost of living package aimed at easing financial pressures on families. The 'Great British Summer Savings' scheme will see the VAT rate on tickets for zoos, museums, fairs, and theme parks slashed from 20% to 5% for the period from June to September.
Details of the Scheme
Speaking in the House of Commons, Ms Reeves emphasised the importance of allowing families to enjoy time together without financial worry. The reduced rate will apply to both adult and child tickets for a range of attractions, including fairs, theme parks, zoos, and museums. Additionally, children's tickets for cinemas, concerts, soft play areas, and theatres will benefit from the lower VAT rate, as will children's meals in restaurants and cafes. The measure takes effect from June 25 and will expire on September 1.
Additional Measures
The Chancellor also confirmed that there will be no rise in fuel duty as originally planned, and tariffs on over 100 supermarket items will be suspended. These steps are designed to cushion families from the economic fallout of the Iran conflict. Ms Reeves reiterated the government's readiness to act on energy bills, noting that the household energy price cap is expected to rise by £209 a year from July due to increased global oil and gas prices following the closure of the Strait of Hormuz.
Energy Support
While ruling out universal support on the scale of the 2022 response to the Russian invasion of Ukraine, Ms Reeves stated that the government stands ready to implement targeted and temporary support for businesses if market conditions worsen. She highlighted that her decision at the last budget to cut £150 from energy bills has already lessened the impact of rising prices.
Supermarket Savings
The Chancellor expressed her expectation that supermarkets will pass on savings from reduced tariffs to customers in full. She announced tough new powers for the Competition and Markets Authority and other regulators to prevent companies from exploiting the situation to make excess profits at consumers' expense.
Industry Reaction
Kate Nicholls, chair of UKHospitality, welcomed the recognition of the importance of a lower VAT rate for hospitality, calling it a positive step to help families enjoy a Great British break this summer. She encouraged the Chancellor to consider including accommodation in the reduced rate to further support families. Alison Garnham, chief executive of Child Poverty Action Group, praised the focus on children's wellbeing but emphasised the need for sustained investment to tackle child poverty.
