Wetherspoon boss Tim Martin should shut up and pay his taxes

The millionaire boss of the profitable pub chain wants 'tax equalisation' with supermarkets. But that would hurt the poorest in society

James Moore
Chief Business Commentator
Friday 10 March 2017 14:06
In case JD Wetherspoon boss Tim Martin hadn’t noticed, the biggest risk to his trade, and almost every other trade in Britain, is not tax
In case JD Wetherspoon boss Tim Martin hadn’t noticed, the biggest risk to his trade, and almost every other trade in Britain, is not tax

“A budget for dinner parties,” growled big mouth JD Wetherspoon boss Tim Martin in the by now familiar diatribe issued along with his company’s results. I’m here to fight for the working man who drinks in my pubs!

At least that’s what Mr Martin wants you to believe, even if it is faintly ridiculous for a multimillionaire to be moaning about posh dinner parties.

But his statement is much worse than that. Much, much worse.

Amongst other things, Mr Martin’s chief beef with the Budget is that a concession over the business rates paid by pubs won’t actually benefit many of his outlets.

Well, boo hoo. He is a long way from being the sort of struggling local publican that could do with a leg up.

But, having produced a list of the extra taxes and costs he says he’s going to incur, Mr Martin goes on to complain about “the far higher taxes per meal or per pint that pubs pay compared to supermarkets”.

He also argues that “pubs also pay VAT of 20 per cent in respect of food sales, but supermarkets pay almost nothing, enabling supermarkets to subsidise the price of alcoholic drinks”.

Mr Martin says that “we understand the need for the Government to raise taxes”. Well, thanks.

“However, there should be a sensible re-balancing of the taxes paid by pubs and supermarkets, if the pub industry is to survive in the long term.”

There are multiple problems with his argument. As he points out, food sold in supermarkets, which you cook yourself, is zero rated. The difference with his pubs is that the food served there is prepared for you, and therefore counts as a luxury,

Now, my family and I are lucky enough to be able to afford to eat out every now and again. We are happy to pay VAT on the meals we buy because if our money helps to keep what is a rather weak system of social support in the UK going, then well and good. With so many people resorting to food banks, it’s the least we could do.

Were the tax to be somehow “equalised” between Mr Martin's business and the supermarkets, say by putting VAT on food, the poorest in society, people who can’t afford to drink in pubs as it is, would potentially be poorer still because they would have to pay more. That’s unconscionable.

He doesn't explicitly say that, of course. But here's thing. I carry no flag for the supermarkets, and just like Mr Martin, they too should pay their way. But if you make them pay more tax with the aim of cutting what Wetherspoon pays, and given the (welcome) competitive pressures they are under, food prices going up is the inevitable consequence.

It might stop supermarkets subsiding booze, but at what cost?

If Mr Martin were to argue for measures to explicitly target the latter, assuming he can provide evidence for it, then I'd hear him out. If he were to argue for minimum alcohol pricing, again, I’d listen. Limits on alcohol promotions? Make your case! You can make a workable one for all of them.

But the economic reality of the case he does make? As far as I can see, it could very well hurt the very poorest in society. That's flat out wrong.

It’s not as if Mr Martin’s business is suffering. It is a highly profitable company. After having his moan, he unveiled pre-tax profits of £51.4m for the 26 weeks ending 22 January, a rise of 42.8 per cent. Even when you strip out one-offs, which boosted the results this time around, the company still turned in a 9 per cent rise in profit to £39.9m.

Sales at outlets open at least a year increased by 3.3 per cent too. That's a figure that most supermarket bosses would give their right arms to be able to report.

Wetherspoon’s shareholders aren’t going hungry. Nor should anyone else on their account.

In case Mr Martin hadn’t noticed, the biggest risk to his trade, and almost every other trade in Britain, is not tax. It is the Brexit he was such a vocal supporter of.

That will make everyone poorer, and long term it will mean fewer people can afford to drink in his pubs.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments