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MPs debate tourism VAT cut for first time

Houses of Parliament

Houses of Parliament

Blackpool business leaders today joined forces to send a resounding message to MPs to slash VAT on tourism.

A landmark bid to cut the level of tax on attractions and accommodation from 20 per cent to five per cent is to be discussed in Parliament tomorrow.

On the eve of the crunch talks at Westminster, resort bosses heralded the debate as a major step in putting pressure on ministers to slash VAT and give resorts like Blackpool a welcome shot-in-the-arm.

Graham Watson, chairman of the campaign group Cut Tourism VAT, said: “This is the first ever debate focused exclusively on tourism VAT and it’s an important opportunity the industry must take advantage of.”

Attractions operator Merlin, which runs The Tower, Madame Tussauds and the Sea Life Centre in Blackpool, is among the companies to call for VAT to be cut.

Iain Hawkins, who heads up Merlin’s Blackpool cluster of attractions, said: “It’s all about having a level playing field because countries across Europe and the rest of the world have lower rates of VAT than we have.

“It’s absolutely key to allow us to effectively lower the cost of our products which will stimulate higher demand and a greater volume of tourists to stay in the UK.

“How often do people say ‘it is cheaper to go abroad’? That is what our resort is up against.

“Tourism is critical to seaside resorts in the UK, so getting this debate in Parliament is a big step forward.”

In France and Germany VAT is seven per cent, and in Spain and Italy it is 10 per cent.

The UK is also one of only 14 EU countries that apply the full rate of VAT on admissions to amusement parks and one of only nine countries that applies the full rate on admissions to cultural attractions.

Thirteen EU countries have a reduced VAT in restaurants.

Blackpool-based business leader Steve Pye said: “It’s very important this is being debated in Parliament, and I hope the Government decide to put it to some sort of vote and introduce it.

“It can only help the economy in seaside towns like Blackpool. Everyone else in the EU seems to have reduced VAT for tourism, and I think we should follow suit.”

Hotel boss and president of Stay Blackpool Claire Smith said: “This is something the tourism industry and the big players in Blackpool have been calling for a long time.

“I’m absolutely thrilled just to get people talking about this.

“I don’t get why tourism is not more of a big deal with the Government.”

She said the current VAT threshold – the amount of money a company can make before it has to pay the tax – is bad for the local economy.

She added: “You can have two B&Bs offering the same product but the one that is VAT registered is 20 per cent more expensive. Where is the customer going to go?

“There is no incentive to grow your business.

“If we can adjust the threshold or lower VAT for the tourism industry it would really kick-start things and mean our prices could be competitive.

“It would mean we can get more visitors in because they can get more for their money and if we get more visitors then we can employ more staff.

“And if my little B&B is busy then I’m supporting about eight different businesses in the area off that.”

Hugh Evans, policy director at the North and West Lancashire Chamber of Commerce, said: “When we are trying to attract visitors from overseas, I think the 20 per cent hike in what they are expected to pay seems a bit unfair.

“The tourism industry has suffered a great deal in recent years and I think we do need to look at innovative ways of bringing the cost down.

“I think the UK as a whole has a tremendous tourism offer but it is very difficult to compete on price.

“Some of the smaller operators in Blackpool have such wafer thin margins that it won’t take much to push them over the edge – but equally it won’t take much to make them profitable.”

The Gazette launched its ‘Slash the VAT’ campaign in March 2012 to call for a reduction in VAT on accommodation and ticket prices to bring them in line with rates across Europe.

Blackpool employs almost 11,000 people in the hospitality industry.

Blackpool South MP Gordon Marsden said: “Although there won’t be a vote, this debate is a real opportunity to have time with a minister on this issue who will have to respond.

“I certainly think the Treasury has got away with it far too long, saying it wouldn’t work.

“There is also a long-standing issue on the rate of VAT on repairs and renewals, and if this was reduced it would enable leisure businesses to carry out much more improvement on their properties and this would provide skills and jobs too.”

The Gazette revealed last week how this year’s Illuminations helped save the 2013 season, with four million people coming to see the Lights.

Around 10m people came to the resort last year – down from 10.3m in 2012.

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