Want a VAT cut? Come back in three years

04 March 2011 by
Want a VAT cut? Come back in three years

A cut in VAT for hospitality businesses is off the agenda for the next several years.

That's the view of tourism minister John Penrose (pictured) as he launched the Government's Tourism Strategy, published today.

Hotel firms like Travelodge and Whitbread have been campaigning against the rate of VAT for hotel rooms - one of the highest in Western Europe - but Penrose warned that getting the public finances in order would take precedence.

"We are trying to get the overnment's finances back on an even keel after the last government managed to turn a structural surplus into a structural deficit in record time," he said. "That is the backdrop and it is going to make it difficult for anyone to start dishing out VAT reductions to anyone in the short- to medium-term."

"Going further, the Treasury will look carefully at proposals from anybody but they are very determindley playing a very straight bat to any proposals because we have to sort out the economic mess we have inherited first. Once we've done that, come back and ask me in about three years' time."

Meanwhile, VisitBritain chief executive Sandie Dawe pointed out that the UK had benefited from the weak pound, even if VAT was high. "We have been helped with the weak pound in terms of our value for money so one has to look at a range of factors," she said.

Despite proposing measures like moving the May Day bank holiday to St George's day or the autumn half term and creating a task force to cut red tape, the Tourism Strategy offered no proposals to lower VAT.

Tourism strategy ‘long on vision, short on implementation' - Ufi Ibrahim >>

Small businesses need help to deliver Tourism Strategy - ALMR >>

May bank holiday move and red tape task force proposed in tourism strategy >>

By Neil Gerrard

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