VAT Reduction

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1. On January 4th 2011 the rate of VAT in the UK increases by 2.5% to 20%. This makes it one of the highest rates in Europe, despite considerable lobbying from industry. Specifically with regard to tourism, the VAT rise uniquely hits an export industry that has the potential to create thousands of new jobs more quickly than any other sector.

This decision will have a very real and significant negative impact on Britain’s competitiveness as a destination for overseas business and leisure visitors. Far from making the Top 5 tourist destinations list, as David Cameron predicted in a speech this summer, Britain has been slipping down the league table for some time and price competitiveness is the major cause. In 2008, according to the World Economic Forum Travel & Tourism Competitiveness Report we not only slipped to 11th place (from 6 in 2008), but in terms of price competitiveness, Britain was 133 out of 133, taking into account ticket taxes, airport charges, fuel prices, hotel price index and national purchasing power levels - And this before the new VAT increase.

Our European competitors enjoy lower rates of VAT on attraction entry; 6% in Belgium and Holland, 8% in Spain, 5.5% in France and 13.5% in Ireland are just a few examples.

DO YOU BELIEVE THAT THE VAT RATE ON ATTRACTION ENTRY SHOULD BE DECREASED TO BRING US INTO LINE WITH OUR EUROPEAN COMPETITORS?

On January 4th 2011 the rate of VAT in the UK increases by 2.5% to 20%. This makes it one of the highest rates in Europe, despite considerable lobbying from industry. Specifically with regard to tourism, the VAT rise uniquely hits an export industry that has the potential to create thousands of new jobs more quickly than any other sector. This decision will have a very real and significant negative impact on Britain’s competitiveness as a destination for overseas business and leisure visitors. Far from making the Top 5 tourist destinations list, as David Cameron predicted in a speech this summer, Britain has been slipping down the league table for some time and price competitiveness is the major cause. In 2008, according to the World Economic Forum Travel & Tourism Competitiveness Report we not only slipped to 11th place (from 6 in 2008), but in terms of price competitiveness, Britain was 133 out of 133, taking into account ticket taxes, airport charges, fuel prices, hotel price index and national purchasing power levels - And this before the new VAT increase. Our European competitors enjoy lower rates of VAT on attraction entry; 6% in Belgium and Holland, 8% in Spain, 5.5% in France and 13.5% in Ireland are just a few examples. DO YOU BELIEVE THAT THE VAT RATE ON ATTRACTION ENTRY SHOULD BE DECREASED TO BRING US INTO LINE WITH OUR EUROPEAN COMPETITORS?   YES NO