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Cutting VAT will boost growth

23 December 2011
Cutting VAT will boost growth

British Hospitality Association chief executive Ufi Ibrahim appeals for the industry to get behind the campaigns to cut VAT for hospitality

Next year will be one of the most significant for the UK hospitality and tourism sector. The Olympic Games and the Diamond Jubilee celebrations will focus international attention on Britain. So 2012 presents a one-off opportunity to make the case to Government for measures which will boost hospitality growth, create jobs and generate wealth at a time when the country is in economic difficulties.

But we need Caterer and Hotelkeeper readers' help. We believe the best way to boost growth is to reduce the rate of VAT to 5% for hotel accommodation, entry to attractions and on out-of-home meals to make this country competitive with the most of Europe.

January will see us stepping up our efforts to make the case to Government and so ensure the lasting legacy that a VAT cut would bring to the industry - and to the UK economy. We have brought together a strong coalition of partners led by the BHA and including the British Association of Leisure Parks, Piers & Attractions, the Federation of Small Business and the Tourism Alliance.

Backing this coalition, an independent report by Deloitte, commissioned by Bourne Leisure and Merlin Entertainments, already provides ample evidence to show that a reduction in VAT for hotel accommodation and attractions would produce a net benefit to the Treasury of £2.6b over 10 years, generate some 78,000 jobs, and drive further investment in the UK. This investment is already considerable. As the BHA's recent publication, British Hospitality: Trends and Developments 2011, highlights, over 100 hotels opened this year and a further 170 are due to open in 2012, with more planned for future years.

We have already begun a series of positive discussions with HM Treasury officials. These are ongoing. Our next step is to adapt a version of the Treasury's economic model to demonstrate the impact of a reduction in VAT using the Treasury's own modelling approach.

Reducing VAT will create hospitality jobs and hugely benefit our international competitiveness. This is the best New Year message the industry can give the Government.

â- Sign Caterer and Hotelkeeper's petition at www.catererandhotelkeeper.com/slashVAT

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