Call for cut in VAT to boost tourism

Stirling’s MSP has called for a reduction in VAT to help boost tourism.

Bruce Crawford has written to Chancellor of the Exchequer, Philip Hammond, urging him to carry out a review of VAT that tourism-related businesses – such as pubs, restaurants, cafes, and other accommodation and sightseeing services – are liable.

According to campaign group, Cut Tourism VAT, a reduction in VAT for the hospitality and tourism sector would see an increase of £4.6 billion to the Treasury over the next decade and the creation of 121,000 jobs in the industry.

Former Stirling MP Steven Paterson conducted a consultation with local businesses last year in which 87 per cent of owners in the hospitality industry in Stirling agreed that a reduction would help growth and jobs creation.

In his letter to the Chancellor, Mr Crawford called on the UK Government to support the needs of businesses in Stirling.

He said:“The tourism and hospitality sector can often face seasonal periods of volatility, yet is such a major source of employment throughout the Stirling area. Whilst the Scottish Government is doing everything it can to support these businesses, it’s crucial that the UK Government implements changes to tax on business where it’s needed.

“The UK currently has one of the highest rates of VAT in Europe and in order to remain competitive and continue to encourage tourism trade, we must address this issue.

“The Stirling area benefits from an unrivalled history and landscape that attracts tourists from across the world.

“With the City Region Deal currently being negotiated by the Scottish and UK Governments with Stirling Council, we will see more investment into our local area and business growth as a result. However, we have to make this growth sustainable with competitive taxation.

“The current rate of VAT is strangling small hospitality businesses and preventing growth and the creation of jobs. Business owners are crying out for a reduction and the Chancellor must listen to their concerns.”

Mid-Scotland and Fife Tory MSP Dean Lockhart pointed the finger back at the Scottish Government, saying that the biggest threat to local business is‘crippling business rates’.

He said:“The irony of the SNP’s posturing on this issue beggars belief, given that the biggest threat facing businesses in Stirling and across Scotland are the crippling business rates imposed by the Scottish Government.

“After pressure from the Scottish Conservatives, the SNP were forced to provide business rate relief for the hospitality and tourism sector who were facing crippling three- to four-fold increases which could have left them facing closure.

“This relief was only provided for a year, with the reassurance that the upcoming review would provide clarity in the summer. Only last week we discovered that the review’s publication will be further delayed.

“It’s due to the SNP’s dithering on this issue that shops, hotels and restaurants are facing difficulties planning for the next financial year. Stirling cannot afford to risk these businesses leaving the high street.

“The SNP must do everything it can to provide the certainty these businesses desire and ensure the timely publication of the review, rather than chasing manufactured grievance with the UK Government.”

As part of the confidence and supply agreement between the Conservative Party and the DUP, the government has agreed to commission a report on the impact of VAT and APD on tourism in Northern Ireland to recommend how best to build upon the growing success of that sector. Further details on the review will be announced in due course.

The treasury were unable to comment on Mr Crawford’s letter until the Chancellor has received it.