An early day motion, sponsored by Stephen Lloyd, Liberal Democrat MP for Eastbourne and backed by MPs including Jim Shannon, Sammy Wilson, Caroline Lucas and Dr Philippa Whitford, has renewed calls for a reduction in tourism VAT.
The motion follows a major victory for the Campaign to Cut Tourism VAT, when the Chancellor announced that the Treasury is going forward with plans to review Tourism VAT in Northern Ireland, as previously announced as part of the confidence and supply agreement between the government and DUP following the general election.
This was the first ever budget mention of a reduction in tourism VAT and followed extensive campaigning from the Cut Tourism VAT campaign and the British Hospitality Association, both of whom look forward to working with the Treasury as their report is produced. The announcement represents a trend of increasing Parliamentary support for a Cut to Tourism VAT, which has been recommended by three Select Committees and advocated by more than 130 MPs from different parties and an APPG.
The early day motion in full reads : “That this House recognises the value of the tourism sector; notes that tourism-related businesses lie at the heart of local communities an economy; further notes that UK tourism is disadvantaged by high taxes with a VAT rate on accommodation and attractions that is double the European average; acknowledges that across Europe, where tourism VAT has been reduced, investment has taken place, jobs have been created and the tourism sector has grown; welcomes the Government’s commitment to conduct a report into the impact of VAT on tourism in Northern Ireland, believing that it will show the potential for job and wealth creation across the UK; highlights economic research that shows a cut in tourism VAT could bring in £4.6 billion to HM Treasury, create 121,000 jobs and support exports, improving the UK’s balance of trade by £23 billion over 10 years; notes that a reduced rate of VAT for tourism has been recommended by three Select Committees and advocated by more than 100 hon. Members from different parties; further recognises that such a move would strengthen the wider economy, support job creation and generate investment in local businesses, particularly in deprived coastal and rural communities; believes that a reduction in tourism VAT is particularly important as the UK prepares to leave the EU, since it would send a strong signal that the UK is open for business and continues to welcome visitors; and calls on the Chancellor of the Exchequer to reduce tourism VAT to five per cent across the UK.”
Chairman of Eastbourne Hoteliers Association, Dave Brachtvogel, said he supported the Early Day Motion: “As observed by the British Hospitality Association’s recent report of the inquiry into coastal communities, the tourism industry is crucial for coastal communities, providing a business presence in areas which have seen the decline of their once traditional industries.
“In Eastbourne alone, the tourism industry provides 10.9% of Eastbourne’s full employment figures and boosts our economy by £110m each year. A reduction in the rate of tourism VAT to 5% would stimulate investment, job creation and consumer spending and help us to ensure that Eastbourne’s visitor’s economy continues to thrive and that we are able to continue to offer quality accommodation to our guests.”
Vernon Hunte, campaign manager of the Campaign to Cut Tourism VAT, said: “I welcome Stephen Lloyd’s Early Day Motion and for his commitment to celebrating Britain’s tourism and hospitality sector, as the UK’s fourth largest industry. Independent research has shown that a reduction in the rate of tourism VAT to 5% would stimulate investment and spending in the hospitality industry across the UK, contributing £4.6b to the Exchequer, and leading to a reduction in the UK’s balance of trade deficit by £23b over 10 years. Show your support for the Campaign to Cut Tourism VAT today by writing to your MP and urging them to sign the EDM.”