Shrewsbury town centre councillor calls for hospitality VAT cut at Budget

Shrewsbury has been ranked the most vital retail centre in the West Midlands and even topped The Telegraph’s list of “Most Perfect Market Towns”. Footfall and sales have risen steadily, with Shrewsbury BID reporting an 11% increase in visitor numbers year-on-year and a 6.4% rise in retail sales, outperforming national averages where many high streets are in decline. Independent retailers account for over half of customer spend, far above the UK average of 29%, showing how central local businesses are to Shrewsbury’s success.

But local leaders warn that this resilience is fragile. Soaring energy bills, spiralling food prices, and rigid national tax policies are putting enormous pressure on hospitality and retail businesses. Many venues are operating on razor-thin margins, and without intervention, closures could start as in other towns – taking with them jobs, community spaces, and the character that makes Shrewsbury unique.

Proposals by Liberal Democrat MPs ahead of the Budget would immediately cut VAT from 20% to 15% for hospitality, accommodation, and attractions, boosting the high street and slash prices for hard-pressed families. This would form part of a two-pronged ‘cost of living and cost of doing business rescue plan’ with the party also calling on the Chancellor to reduce household energy bills by removing the current ‘renewables obligation’ levy. This combined support package, in place until April 2027, would save a typical family around £270 over the next eighteen months.

The party says that this would be funded by a new windfall tax on big banks, originally proposed by the IPPR think tank, which could raise around £30bn in total between now and 2030. Less than half of this revenue would be needed to cover the cost of the VAT cut and that of replacing the current renewables obligation levy.

Shrewsbury BID data underlines what’s at stake. Visitor spending in the Town Centre topped £135 million in 2024, with food and drink leading at £47.8 million. Hospitality and retail are major employers, supporting hundreds of jobs and contributing significantly to the local economy. Every closure means fewer jobs, less choice, and a weaker community. The VAT cut and local rate-setting powers would give businesses the breathing space they need to survive and thrive.

Cllr Alex Wagner, who represents Quarry division, said:

“Shrewsbury Town Centre is at the beating heart of our county. It’s a place where independent businesses thrive, where people come together, and where our local economy grows. But speaking to local entrepreneurs, it’s clear that much of this success is fragile.

“Cutting VAT for the hospitality sector and returning local control over rate-setting powers would help restore confidence, protect jobs, and keep all of our town centres vibrant. It would allow us to better tailor support to local needs, ensuring that the high street remains a place where businesses can succeed and communities can flourish. In turn, this would help us to push more positive initiatives like late night buses and plans to cut through-traffic from the loop of the river.

“National policies often fail to recognise the unique challenges faced in rural counties like Shropshire. Returning the local power to set rates would mean we can support independent businesses more effectively, encourage investment, and keep our town centres alive and thriving.”