The prospect of a VAT cut on hotel accommodation and tourist attractions is “a matter of when rather than if”, British Hospitality Association (BHA) chief executive Ufi Ibrahim has told M&C Report.
It follows the launch of the second stage of the BHA-backed VAT campaign targeted at consumers, which has received high-profile support from The Sun - it made the newspaper’s front page yesterday. The Sun is giving away sticks of rock featuring a petition to Chancellor George Osborne for readers to sign, urging VAT to be cut to 5% for hotels and attractions, under the Give Us A Break campaign.
Ibrahim said the first stage of the activity, targeted at politicians and businesses, and saw more than 700 firms write to their MPs calling for the VAT cut. Around 70 MPs from the main parties agreed to support the cause.
“That’s a fantastic start. This is the second phase of the campaign, which is to build on that, and to push for it, and to show that this campaign is not just going to die out.
“We’re delighted that The Sun has come on board and the consumers need to know about it.
“Now we’re campaigning so that British families understand that they’re being treated unfairly by the British Government.
“We are seeing lots of signs that the Government is beginning to understand that, actually, the majority of tourism in this country is domestic and they do vote. It’s not that easy to put more tax on them and think it won’t have an impact. That’s why it’s really important to educate the customer.”
During a debate in Parliament in February, Treasury minister David Gauke said the Government has “no plans” to introduce a VAT cut for the tourism sector.
However, Ibrahim expressed confidence that the tax cut would occur, saying: “I prefer to say it’s a matter of ‘when’ rather than ‘if’.” Regarding the expected timescale, she said: “The sooner the better. We are relentless and we will continue until we get the right result.”
Ibrahim added: “We’ve been speaking to all the main political parties. We’ve spent a lot of time on educating them on the fact there’s real evidence here, this is not just an industry making a lot of noise, this is supported and underpinned by research that shows there’s serious return on investment for the Government in doing this.
“That’s why we’ve been extremely noisy about this and we’ll continue to push this until we get the right result.”
The campaign is separate to that of the VAT Club headed by Jacques Borel, which is campaigning for the tax cut to include restaurant meals and on-trade alcohol sales.
Ibrahim said: “As the chief executive of the British Hospitality Association we want all our industry to benefit from competitive rates of VAT, but we decided to follow a campaign that has a suitable, feasible and achievable set of outcomes, which is based on research undertaken by the Treasury’s own economic model, by Treasury economists - to have a very evidence-based approach to lobbying. That’s what sets us apart from other campaigns.”
Asked if the BHA-backed campaign could work with the Borel initiative, she said: “We have a plan, we need to remain focused to our plan. We wish them every success as we want them to succeed as well.”
The BHA group estimates that more than 120,000 new jobs would be created if VAT is cut to 5% for the tourism sector.
