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Culture Media and Sport committee faces calls for VAT cut

25 November 2014 by
Culture Media and Sport committee faces calls for VAT cut

The Cut Tourism VAT campaign chairman has appeared in front of the Culture, Media and Sport committee inquiry on tourism today, to put forward the case for a VAT cut in hospitality.

The committee, chaired by John Whittingdale, Conservative MP for Malden, has promised to investigate the effect taxation, including VAT, has on limiting the potential of the industry.

The Cut Tourism VAT campaign was expected to set out how, using the Treasury's own economic forecasting model, a reduction in VAT on attractions and accommodation from 20% to 5% would create 120,000 jobs and add £4b to UK GDP, making it cost free for the Exchequer after four years and net $4b after 10 years.

Chancellor George Osborne has so far refused to cut VAT for the tourism industry, even though it is allowed to under EU rules. As a result, Britain is currently one of the most expensive destinations to holiday in the world, ranked 138th out of 140 for price competitiveness by the Travel and Tourism Index.

Graham Wason, chairman of the Cut Tourism VAT campaign, said: "The tourism inquiry is a golden opportunity for politicians to show they take tourism seriously and value its contribution to British economy and society. Reducing VAT for the sector would create thousands of jobs and add billions to GDP and treasury revenues. For me, and the thousands of the businesses that support the campaign, a VAT cut is a no brainer."

Nick Varney, chief executive of Merlin Entertainment, said: "For too long government policy on tourism has relied on a weak pound and fancy posters. It is time now to demonstrate bold leadership, and slash VAT from 20% to 5%, allowing companies to re-invest in the areas they operate in, opening more job opportunities - particularly for young people."

Dermot King, managing director of Butlins, said: "Tourism is a major employer and export but has been consistently ignored by governments past and present. London is not an accurate snapshot of the state of the industry, and help is needed to aid struggling seaside resorts up and down the country - help that would best come in the form of a VAT cut for the sector."

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