Tax cut for hospitality plea

THE CHIEF executive of Scottish Chambers of Commerce (SCC) has called for a tax cut to boost the tourism and hospitality trades north of the border.

Liz Cameron said a reduction to 5% in VAT on accommodation providers, eateries and on admission charging for tourist attractions would help give a level playing f ield to Scottish service businesses in comparison with counterparts on the continent.

The plea came as SCC published its latest business survey which showed the Scottish economy had continued to strengthen in the third quarter of this year despite uncertainty created by last month’s independence referendum and continuing concerns over the stability of the European Union.

The document focuses on f ive key sectors spanning construction, financial and business services, manufacturing, retail and wholesale and tourism.

“Scottish businesses have performed strongly throughout the year with positive indications of further expansion throughout the economy,” Ms Cameron said.

“International events such as the Commonwealth Games and the Ryder Cup boosted tourism performance with average room rates increasing for the sixth consecutive quarter.

“This boost does not seem to have been replicated in the retail and wholesale sector, where more firms reported a fall in sales revenue than a rise — a trend that is expected to remain largely unchanged in the next quarter.

“It is important that Scotland builds upon the successes that the tourism industry has experienced in 2014 and this may be an opportune time for the UK Government to consider reducing the rate of VAT chargeable on accommodation, tourist attraction admission and restaurant services to 5%, in order to help our industry to compete on an even basis with other European nations.”

Separately, new official data for the second quarter of the year from the Scottish Index of Manufactured Exports was also released yesterday.

The index showed total export volumes increased by 0.5% year-on-year and were up 2.8% on the first quarter of this year.

MARKETS

Clothing and leather product volumes enjoyed a strong period with a 10.6% rise, non-metallic goods rose 11.4% while the metals sector was particularly strong with a 20.3% uplift.

However, the food and drink sector only edged 0.2% ahead after alcohol exports slid back by 0.3% in the period.

Finance Secretary John Swinney said manufactured exports had grown strongly.

“Latest f igures show there has been significant growth in the refined petroleum, chemical and pharmaceutical products sector, and the engineering and allied industries,” he said.

“These figures reinforce the belief that recovery is being felt across most industries and follows on from recent GDP figures which show he Scottish economy moved further beyond its pre-recession peak with GDP growing by 0.9% in the second quarter of 2014.”

Scottish Manufacturing Advisory Service director Nick Shields said: “Whilst it is encouraging to see growth and optimism returning, we still have a long way to go to meet our export targets.”