FOLLOWING COMMENTS MADE by the Prime Minister on cutting VAT for the hospitality sector, campaigners have issued a response arguing that the sector’s case for VAT decreases would fuel consumer leisure spending and increase profits leading to new job creation.
During an interview on Global Radio in Manchester on the topic of the BHA driven Cut Tourism VAT campaign, David Cameron stated that the hospitality industry was just one sector making a cases for VAT decreases, with others such as housing building, also making a good argument.
He went on to say that the weak British pound already made it cheaper than ever to come to Britain and there were other ways to attract visitors without cutting VAT.
In response Cut Tourism VAT campaigners have said that a very good case had been made to the Treasury earlier this year, for reducing tourism VAT as one of the most efficient means of generating GDP gains at low cost to the Exchequer.
Campaigners also pointed out that the UK tourism industry paid some of the highest levies in the EU, with Germany and France paying just 7% - the level at which they are calling for the UK to be dropped.
Graham Watson, chairman of the Cut Tourism VAT campaign, said: “It is not true that lots of other industries make a strong case for cutting VAT – tourism is one of only a limited number of sectors that is permitted to have a reduced VAT rate. As an industry we have the strongest case for a reduction and we will be bringing this directly to the attention of the Prime Minister.”
“It is surprising that the Prime Minister refers to the weak pound as an opportunity for tourism. Relying on the UK economy to remain weak is not part of a sustainable strategy for tourism – and it makes no difference to the cost of domestic breaks for hard-working British families.”