Lord Aberdare raises case for reducing tourism VAT
Cut Tourism VAT has welcomed Lord Aberdare for outlining the case to reduce Tourism VAT in a debate in the House of Lords last week. During a Parliamentary debate on the impact of music upon the tourism industry Lord Aberdare said:
“The UK is one of only four EU countries that do not take advantage of the option to apply a reduced rate of VAT on visitor accommodation and one of only nine to apply the full rate on admissions to cultural attractions. So tourism, our sixth largest export industry, is the only one subject to VAT. Other countries, including competitors such as France and Germany, have gained additional investment, employment, particularly of younger people who are disproportionately represented in the tourism sector, and growth through applying reduced VAT rates in this area. It has been calculated that every pound invested by the Treasury in this way would generate £18 of extra inbound tourism revenue and other significant growth benefits.”
In response Baroness Northover, representing the Government, said:
“I heard what the noble Lord, Lord Aberdare, said about VAT, and I can assure him that the Government have considered that matter. The Treasury could not see a causal link between VAT rates and tourism levels, so I am afraid that the Treasury is thus far not persuaded. No doubt, it will note what the noble Lord has said.”
Graham Wason, Chairman of Cut Tourism VAT commented:
“We are grateful to Lord Aberdare for making clear how the UK is losing out to other countries by not having a reduced rate of VAT for tourism.
“Despite the Government’s reply, independent research using the Treasury’s own economic model shows the clear benefits that would accrue from a reduced tourism rate. There is increasing recognition that this is a growth measure which also has the added benefit of helping hard-working British families afford domestic days-out and breaks.”
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