Lib Dems call for ‘bold’ 15pc tax cut to help tourism

VAT on domestic tourism should be cut to 5 per cent as part of a ‘bold’ plan to rescue the industry following the coronavirus crisis, an MP has said.

Orkney and Shetland MP Alistair Carmichael said the tax should be reduced from its present rate of 20 per cent.

Many tourism businesses in Scotland will be able to reopen from July 15 as the lockdown eases but Mr Carmichael said the potential for job losses remained ‘severe’ in the aftermath of the crisis.

He called on the Chancellor to cut VAT as part of a comprehensive plan to support the tourism sector. He said: ‘In the Northern Isles and across Scotland, local hotels, B&Bs and tourism attractions play a vital role in our communities. With most of the summer already gone and many people still anxious about travel, these businesses face the prospect of “three winters in a row”.’

He added: ‘Scottish Liberal Democrats believe our vital tourism businesses deserve a bold VAT cut – as a sensible investment to ensure future success.

‘The Chancellor should make this reduction as part of a comprehensive package of measures to tackle the growing economic crisis. People in the UK are being taxed harder than almost anyone else in Europe for supporting local tourism.’

A spokesman for the Treasury said: ‘We have provided a generous and wideranging package of support for businesses and jobs, including our job retention scheme, bounce-back loans, VAT deferrals and protection against eviction.’