MPs from regions with large tourism industries have continued to press Government ministers on the impact of VAT on tourism and hospitality businesses, following a debate on the issue in Parliament earlier this week.
Speaking in Parliament yesterday, Labour MP Albert Owen, who represents Anglesey, asked Welsh Secretary David Jones what recent discussions he’s had with his ministerial colleagues on the effects of VAT on the tourism and hospitality industry in Wales.
Jones said: “Tourism and hospitality play an important role in the economy in Wales, attracting more than four million people from across Great Britain between July and September last year. The World Economic Forum has recently ranked the UK fifth in Europe in its travel and tourism competitiveness index.”
Owen also pressed Jones on whether the Government would follow Ireland other European countries and reduce VAT for the sector, saying the UK has some of the highest rates of VAT in Europe that “has led to the suppression of jobs and investment”. Jones responded by saying the UK is a “highly competitive in the tourism market”.
Scottish National Party MP Angus Brendan MacNeil, who represents Na h-Eileanan an Iar in the western isles of Scotland, added: “As in Scotland, VAT on tourism in Wales has a negative effect on the industry. Will he press his Treasury colleagues to ensure a reduction from 20% to 5%… to benefit very scenic constituencies like mine and Carmarthen East and Dinefwr?”
Jones responded: “I am hugely grateful to the honourable gentleman for the interest he shows in the Welsh tourism industry. I invite him to visit Wales and see what a competitive product we have there.”
Separately, North Belfast MP Nigel Dodds of the Democratic Ulster Unionists asked Northern Ireland Secretary Theresa Villiers what recent discussions she has had with the Northern Ireland Executive and the Chancellor “on the effect of the level of VAT on the tourism and hospitality sectors”.
Villiers said: “I regularly hold discussions with the Northern Ireland Executive and Treasury ministers on a wide range of issues. Measures to provide a boost to tourism in Northern Ireland were included in the economic pact, Building a Prosperous and United Community, which was agreed between HM Government and the Northern Ireland Executive.”
During Tuesday’s debate in Parliament on plans to cut VAT to 5% on tourism businesses and accommodation, Treasury minister David Gauke said the Government has “no plans” for such as move.
Yesterday industry VAT campaigner Jacques Borel told M&C Report that his optimism about the likelihood of securing a VAT cut for the sector has not diminished despite Gauke’s comments.
Borel said he’s “confident” that a VAT cut for the entire industry will be secured next April. Borel said his VAT Club has met 25 MPs on the issue in the past two months, all but one of whom support the tax cut.
