Suffolk: Tourism bosses claim VAT cut would boost industry and jobs

Tourism Business Survey 2013 results at Ickworth House. Pictured is Chris Scargill form Larking Gowe

Tourism Business Survey 2013 results at Ickworth House. Pictured is Chris Scargill form Larking Gowen. - Credit: Archant

SLASHING tax on visitors to the UK will boost Suffolk’s tourism industry and possibly create hundreds of jobs.

The claim comes as tourism leaders in the county back a campaign to apply a reduced VAT rate on the industry and create a level playing field with the likes of France, Germany, Italy and Spain.

Christopher Scargill, Tourism and Leisure Partner for accountancy firm Larking Gowen, claimed the treasury’s actions would increase inbound and staycation tourism while providing numerous benefits to the region’s economy.

Mr Scargill, who this week described the East Anglia’s tourism industry as positive and strong in the Tourism Business Survey, said: “It is all about the value of inbound tourism and also UK staycation tourism.

“If Britain, when it is compared to the rest of Europe, is too expensive - then people will prefer to fly away and go somewhere different, somewhere with guaranteed sunshine.”

He added: “In Italy, for example, their VAT rate on restaurants, accommodation and attractions is only 10% compared to our 20%. If you take France and Germany the rates are 7% and Spain 8%. It simply creates an unfair advantage.”

Mr Scargill said the price of a low cost flight out of the UK could, in some cases, be equal to the price of VAT savings.

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He added: “So we lose that custom for the accommodation to overseas. If we had the accommodation in this country we would also get the secondary spend. They might shop in the town in the village or the coastal area they have gone to, they might dine out in the area. All those things benefit the economy.”

Mr Scargill said that research carried out by Deloitte and Tourism Respect said reducing VAT to 5% could trigger a boost to GDP of £4billion a year and generate 80,000 jobs in the UK over two to three years.

He added: “Although the figures are nationwide and the initial response is ‘Well that’s going to hit the key centres such as London’ it will create a ripple effect out. It will have a very positive effect on businesses in Suffolk and the county would certainly have its fair share of jobs.”

Keith Brown, chief executive of Visit East Anglia, said improving the financial proposition of Suffolk could only be positive.

He added: “Lowering VAT would help by making travelling to the UK, and more particularly our part of the world, more cost effective. With a VAT rate of 20%, automatically people are paying more to get here and stay here. Ireland have recently changed their VAT rate and they saw business increase.

“It’s not a discount to the treasury either, because by reducing the VAT rate we get more people, so the tax take will actually be greater.”

Mr Brown, who admitted the Government would have to make a “brave move”, said the increase in visitors would lead to more

people being employed at Suffolk’s hotels and attractions. He added: “That’s the arithmetic.”

Alex Paul, general manager of Suffolk Secrets, the county’s leading holiday cottage agency, said: “We would support anything that makes the tourism industry more competitive with our fellow European partners. It’s a global market place so we’re competing for business domestically and internationally, so anything that levels the playing field we would support.”

Therese Coffey, MP for Suffolk Coastal, said she would not be lobbying alongside the likes of the British Hospitality Association to cut tourism VAT.

She added: “The Government isn’t going to change VAT on different industry sectors. When there was a cut by Alistair Darling of 2.5% VAT there was no particular change to growth in any of these sectors. I think the Government’s focus is putting more money in people’s pockets and then they can choose to use that on the leisure industry as they wish.”

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