Lord Foster submits written questions to the House of Lords
On the 11th of December, Lord Foster of Bath submitted two written questions to the government. Lord Foster, a Liberal Democrat Peer, has been a long term support of the Campaign to Cut Tourism VAT, and has been vocal on the issue during his time as an MP for Bath as well as throughout his peerage. The first question he asked the Government was how many representations they received during their consultation in VAT, APD and Tourism in Northern Ireland; and of those, how many opposed a reduction in tourism VAT in Northern Ireland. The Campaign to Cut Tourism VAT was one of the key voices in the consultation working closely with the Treasury and key stakeholders across the tourism industry to ensure that the benefits of reduction in tourism VAT are understood.
The answer came from Lord Bates on behalf of the Treasury, who replied that the Government received over 80 individual representations during the call for evidence from a wide range of stakeholders, including trade organisations, public sector bodies, campaign groups and wider industry; he went on to say that many of the respondents were in favour of a cut to VAT on tourism, particularly in Northern Ireland. However, his conclusion as that in light of the legal restrictions on reform of VAT for Northern Ireland exclusively, and the fiscal implications of reform on a UK wide basis, the government will not be making a change to the rate of tourism VAT at this time. This mirrored the response given in the Budget document, which did not make an outright rejection of the policy, and stated the Government’s intentions to keep the issue under review.
The second question from Lord Foster asked the Government what assessment they have made of limiting the reduction in tourism VAT to accommodation and attractions. Lord Bates again answered the question, highlighting how a VAT reduction to accommodation and attractions has been estimated to cost the Exchequer £3 billion in the first year, which must be balanced by increased borrowing, reduced public spending or increased taxation elsewhere. In his response, he failed to describe how, after the first year, the gain to the Treasury would be £58.7 million, rising to £710 million by the fifth year, and £1.36 billion by the tenth year. His conclusion was the same as the first question that considering the fiscal implications of a UK wide reform, there won’t be a change to VAT and tourism at this time.
The campaign will continue our efforts in both chambers of Parliament, working with MPs and Peers from all parties towards achieving our goal.
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