Reeves Package: VAT Cut on Attractions, 100 Food Tariffs Removed, £120m Ceramics
The wider Reeves cost-of-living package announced today, includes a VAT reduction from 20% to 5% on tickets for summer attractions (theme parks, zoos and museums); free bus travel for children over the summer holiday; the removal of import tariffs from 100 food items including biscuits and baked beans; a VAT cut on children’s meals; and a £120 million support package for the ceramics industry largely based in Stoke-on-Trent. The Stoke component is politically specific: Stoke was won by Boris Johnson’s Tories in 2019, taken back by Labour in 2024, and is now a Reform UK target. Ceramics is also important for the aerospace sector.
Two of the most heavily-trailed cap mechanics are notably absent: the supermarket food price cap (dropped Wednesday after a sharp retail backlash) and the energy bill cap that has been calculated as unaffordable. The Liz Truss September 2022 energy-bill-cap fiscal blow-up is the explicit precedent. The Independent’s David Maddox: “the chancellor ducked a war with supermarkets… She also avoided a package to cap energy bills — almost certainly because she could not afford it”. The Reeves Thursday statement is best read as a calibrated political holding action: substantive enough to offer Labour a domestic-policy narrative against the leadership-crisis news cycle, but with no measure significant enough to materially alter the fiscal envelope for the autumn Budget.