Net Zero Festival: Provide tax breaks for climate-friendly dishes, Treasury urged

The government should slash VAT on restaurant dishes that come with a lower environmental footprint, the Sustainable Restaurant Association (SRA) has urged, arguing the move would help nudge consumers towards greener, healthier diets.

Andrew Stephen, CEO of the SRA - which works with businesses across the food service sector to push for greener practices - argued cutting the cost of eco-friendly dishes could also offer welcome support for the hospitality sector by encouraging diners to eat out in the wake of the Covid-19 pandemic.

Speaking during the final day of BusinessGreen's Net Zero Festival on Friday - for which all panel debates, keynote speeches, and presentations are now available to watch again on demand - Stephen welcomed the "enormous amount" of interventions over the summer to help support the food sector, such as the furlough scheme for UK employees and Eat Out to Help Out scheme, which offered discounts for dining out in August.

But he said such policy interventions only recognised the public benefit of the restaurant industry in terms of tax revenues and job creation, and failed to harness the potential of the sector for boosting UK health, environmental, and climate ambitions.

"I think we're super keen to see incentives that are a little bit more progressive," Stephen explained. "We're pushing for things like VAT relief and business rate relief on One Planet Plates."

Launched in 2018, the SRA's One Planet Plate campaign urges chefs to put dishes on their menus which celebrate local produce, make use of surplus produce to cut down on waste, feature less meat and more vegetarian options, and come with a lower carbon footprint. The campaign includes an online map showing where participating restaurants are located, and has attracted broad support from acclaimed eateries such as Ottolenghi, Saltyard Group, and the Modern Pantry.

Stephen conceded that the number of industries pushing for VAT relief on different products and services was "not insignificant", but argued seizing the chance to use progressive tax policy to nudge diners towards greener diets offered a raft of socioeconomic benefits for the UK.

"We've seen a dramatic reduction in VAT, down to five per cent initially for three months, which has been extended for a further six," he explained. "Simply put, as we try to wean off some of those special measures, and the Treasury wants some coin back in its coffers, we think a much cheaper way of doing it would be to extend VAT relief only to environmentally-sound menu choices."

Potential policy levers to encourage low carbon diets have attracted growing interest over the past year, with the UK's Committee on Climate Change arguing average British consumers will need to reduce their meat and dairy intake by around a fifth by 2050 to meet the UK's net zero target. As such, the CCC's latest reports have suggested governments and businesses consider a range of policy measures - including taxation and product labelling - to help encourage greener dietary shifts.

The Treasury is set to shortly undertake a major review of the potential costs of achieving the UK's 2050 net zero target, and is also expected to set out its latest thinking on taxation in the Autumn Statement later this year.

Among policy measures being considered are a potential hike in fuel duty to encourage drivers away from petrol and diesel cars, according to recent reports.

A Treasury spokesperson said the government was "committed to meeting our climate change and wider environmental targets, including our commitment to net zero by 2050". "We've supported the hospitality sector from the start of the outbreak, protecting millions of jobs through initiatives such as the Eat Out to Help Out scheme, VAT cuts, business rates holidays and cash grants of up to £25,000," the Treasury said in a statement. "We keep all taxes under review and make changes at Budgets, in the context of the overall public finances."

Meanwhile, the SRA's calls for VAT relief on sustainable meals comes amid growing concerns in the UK food service industry about the impacts of a no-deal Brexit cliff-edge at the end of the year, which industry groups believe could lead to a hike in food prices alongside a lowering of standards for food imports to the UK.

Stephen also used his appearance at the Net Zero Festival on Friday, to argue the food sector had a "huge role" to play in helping the UK achieve its 2050 net zero target, but warned that the next six months spelled significant risk for the industry due to both Covid-19 and the potential of a no-deal Brexit.

"I think right now [the UK] has got a pretty high watermark in terms of food standards - things like feed and welfare which do have knock-on impacts on carbon," he said. "And I think it's highly likely we're going to be seeing some reduction in minimum standards for food available in the UK, and food service will be a significant market for that, because it's generally sold without labels."

"It's going to be an interesting watch for the next six months on coronavirus, and also into the new year on food standards," added Stephen.

 

All of the panel debates, keynote speeches, and presentations from the world's first Net Zero Festival - which took place over three days from 30 September featuring hundreds of top speakers from business, politics and academia - are now available to watch again on demand through the Net Zero Festival website.

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• Topics
• Net Zero Now
• Taxation
• Net Zero Festival
• Sustainable Restaurant Association
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