Current Affairs

Cut Tourism VAT gives evidence to tourism inquiry

The Cut Tourism VAT campaign chairman is today giving evidence on how a VAT cut for all attractions and accommodation would benefit the UK economy. 

The Culture, Media and Sport Committee inquiry on tourism, 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, using the Treasury’s own economic model, show reducing the tax on attractions and accommodation from 20% to 5% would create 120,000 jobs and add £4bn to the UK economy.

Campaigners claim it would be ‘cost free’ for the exchequer after four years and net £4bn after 10 years. They also say such a cut would boost British exports – tourism is currently the UK’s sixth largest export earner bringing in £24bn annually – yet it is the only export subject to VAT.

Chancellor of the exchequer 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 reinvest in the areas they operate in, opening more job opportunities – particularly for young people.”

Since relaunching at the start of the summer, the Cut Tourism VAT campaign has drawn support from more than 90 MPs of all parties, thousands of businesses and gained widespread media attention, including from the Sun newspaper.

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