Election 2015: Where do the parties stand on cutting tourism VAT?

By Sophie Witts contact

- Last updated on GMT

Election 2015: Where do the parties stand on cutting tourism VAT?

Related tags: Tourism vat, Tourism

Labour and the Conservatives have been accused of neglecting the travel industry following a review of the party manifestos by the Cut Tourism VAT campaign.

The group has ranked UK political parties according to their support for the industry’s call to reduce the tax from 20 per cent to 5 per cent.

The campaign, a coalition of 43,000 tourist accommodation and attractions businesses, argues that a cut in VAT would boost the UK economy by £4bn and create 120,000 jobs.

Smaller parties were found to be the most supportive with the SDLP, Alliance, DUP, UUP, Plaid Cymru​ and the Green Party​ ranked in joint first place scoring 10/10.

Cut Tourism VAT said the parties demonstrated a clear commitment to reducing tourism VAT and recognised its potential ‘positive impact on the industry and the economy’.

The SNP​ was ranked second, scoring 7/10, due to their commitment to examining a reduction, but falling short of pledging to reduce the rate.

The Liberal Democrats​ and UKIP​ were joint third with 5/10. The campaign noted that while Nick Clegg’s party recognised that tourism makes up 9 per cent of the economy, UKIP’s commitment to creating a Minister of State for Heritage and Tourism in the Cabinet Office could ‘help to improve the status of tourism’.

The Conservatives​ ranked fourth scoring 4/10. Though the party recognised the 3m employed by the tourism industry, it made no new pledges regarding tourism VAT.

The Chancellor recently faced criticism from the hospitality sector for failing to mention the tourism tax​ in the most recent budget.

Labour​ was ranked lowest with 2/10, only mentioning tourism in reference to public ownership.

Cut Tourism VAT noted this was disappointing given recent comments from Shadow Chancellor Ed Balls, who told the Western Morning News in March that his ‘door was open’ to the possibility of reducing the tax, and that he was ‘very happy to look and see what the evidence was from other countries’.

'Worrying result'

Cut Tourism VAT were concerned over the two largest parties failure to commit to a reduction.

“International competition for tourism is increasing and the UK’s share of the global tourism market is declining. Twenty-five of the other 27 EU countries have reduced rates of VAT on tourism not for altruistic reasons, but because they recognise this creates jobs and growth,” said Graham Wason, chairman of Cut Tourism VAT.

“This is an extremely important issue and one that deserves to be at the heart of every manifesto. The most worrying result was that the two main parties seem to have failed to recognise how much more tourism can contribute to the UK economy.”

Parliament’s Culture, Media and Sport Select Committee warned the Government​ in March that more needed to be done to cut food and tourism VAT and improve hospitality staff training.

Earlier this week The British Hospitality Association (BHA) welcomed the manifestos​ from several major political parties for acknowledging the hospitality and tourism industry for ‘the first time ever’.

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