French veteran seeks British jobs boost with VAT cut

LONDON Thu Jan 17, 2013 4:36pm GMT

Campaigner Jacques Borel speaks during an interview with Reuters in London January 15, 2013. REUTERS/Suzanne Plunkett

Campaigner Jacques Borel speaks during an interview with Reuters in London January 15, 2013.

Credit: Reuters/Suzanne Plunkett

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LONDON (Reuters) - Frenchman Jacques Borel's opponents have ranged from the Nazi secret police to compatriots angered by his move to bring fast food to the home of fine dining. Now the 85-year-old is in Britain, leading a campaign to cut tax for pubs and restaurants.

Borel's mission is to persuade the British government to cut VAT sales tax on food and drink for the industry to 5 percent from 20 percent, which he says will create as many as 670,000 jobs and boost an economy where 2.5 million are unemployed.

A reputation for persuasiveness, along with a 70-hour working week, has helped Borel win campaigns for VAT cuts in some 58 countries, he says. For Britain, he has a 40-strong list of financial backers, including pubs group JD Wetherspoon (JDW.L), brewer Heineken (HEIN.AS) and Pizza Hut.

"I've been a salesman for 62 years. I never doubt, I never give up," Borel told Reuters, bubbling with enthusiasm for a cause which has found support elsewhere in the European Union where VAT rates on restaurants in many countries are lower.

Britain's pubs and eateries have long complained about VAT, arguing the disparity in the rate on food for them and supermarkets - where sales often carry little or no VAT - has seen the latter grab half of all pub beer sales in 30 years, as they can afford to subsidise cheaper prices.

Borel believes cutting VAT would revive a sector closing 18 pubs a week, and would create up to 670,000 jobs if alcohol is included in the decrease, or 450,000 jobs if it isn't, with many posts going to young people seeking first time employment.

The Parisian, who aged 45 recovered to walk again after a car crash put him in a 23-day coma and then a wheelchair, says Britain's pubs and restaurants are waiting to invest.

His proposal would see Britain's eateries take just five percent of a VAT cut as profit, with around a third of the reduction going on investment and training and the rest feeding into lower prices to attract more customers.

The loss to the treasury could be as much as 7.8 billion pounds ($12.6 billion), but Borel says a significant amount would be clawed back through higher income and corporation tax and lower social security payments.

With VAT the third-largest source of British tax revenue, the government's reaction has not been encouraging.

"Any such reduced rates would make a significant impact on revenue and, as a significant proportion of spending in these areas is by UK residents, any increase in activity in these areas would largely be at the expense of other consumer spending," a Treasury spokesperson said.

RESISTANCE

But Borel, 86 in April, has always liked a challenge.

During the Second World War, aged 13, he cycled mail between Nazi-occupied Paris and resistance groups in Lyon over 400 kilometres away, under cover of darkness to avoid the Gestapo.

Years on, and to the disgust of many compatriots, he introduced France, home of fine cuisine, to its first burger chain, prompting one newspaper to label him "Public Enemy No.1".

Borel, awarded France's prestigious Legion of Honour in 2008, is happiest though in the less glamorous world of tax.

In 2009 his eight year campaign culminated in 27 EU finance ministers voting to allow member states to reduce VAT for restaurant services. Belgium, Finland, Sweden, Ireland and France have since made varying VAT reductions on restaurants, while Germany has lowered its rate for hotel accommodation.

German and Irish hospitality sectors have reacted well, though opinion in France after a 2009 cut was mixed and in 2012 VAT rose from 5.5 to 7 percent to claw back revenue.

In Britain, Borel believes the governing coalition cannot afford to enter an election due in 2015 with low growth and high unemployment. In one of 400 trips across the English Channel in just under four years, he last met with officials in September, but declined to say how talks have progressed.

His hope is to obtain the reduction in time for government's autumn update on the economy and to see it enacted in 2014.

Wetherspoon chairman Tim Martin thinks Borel will win, though he expects a compromise on the size of the reduction.

"It takes a bit of mental gymnastics to think that what sounds like a bad tax reduction could end up benefiting the country," he told Reuters.

"The (pop) group Black Eyed Peas do a song called ‘Meet Me Half Way', I think it will be somewhere between that (20 percent) and 5 percent."

(Additional reporting by Tom Bergin and Paul Taylor; Editing by Mark Potter)

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