A PUB is to cut the price of all food and drink by 7.5 per cent on to highlight the benefit of a permanent VAT reduction in the hospitality industry.

Prices at The Furness Railway in Abbey Road will be reduced for one day only on Thursday September 23 to mark Tax Equality Day in the Wetherspoon pub.

A pint of beer costing £1.99 will be reduced to £1.84 and a traditional breakfast costing £3.59 will cost £3.32 on the day.

At present all food and drink in pubs is subject to five per cent VAT as a result of the VAT cut by the Chancellor in July 2020. However, this will change on October 1, when the VAT rate will rise to 12.5 per cent, with the government's aim of returning VAT to 20 per cent in 2022.

By comparison, supermarkets pay zero VAT on food, and are able to use that saving to sell alcohol to its customers at a discounted price.

The pub's manager, Rob Hope, said: "It is unfair that supermarkets pay zero VAT on food, but pubs and restaurants, in normal circumstances, pay 20 per cent.

"Pubs have been under fantastic pressure for decades due to the tax disadvantages it has with supermarkets. We urge the Chancellor to create tax equality between pubs and supermarkets by making the current VAT regime for pubs permanent."