Campaigners back plans for tax cut to boost Weston tourism

12.00.00am BST (GMT +0100) Mon 6th Jul 2009

Campaigners have backed plans for a tax cut that could attract new visitors to Weston and create hundreds of jobs.

Under the plan, VAT on tourism related activities including accommodation and entrance to leisure parks, piers and other attractions could be slashed to 5% from the current 17.5% to boost the industry. (Note: the standard rate of VAT has currently been reduced from 17.5% to 15%. It is due to rise again to 17.5% on 31 December 2009.)

Mike Bell, the Liberal Democrat Prospective MP for Weston-super-Mare, met last week with Michelle Michael, co-owner of the resort's Grand Pier, to discuss the proposal which is being led by the British Association of Leisure Parks, Piers and Attractions.

Michelle Michael commented: "Tourism is a price sensitive industry and price is a key consideration people make when choosing a weekend break, holiday or even whether or not to take the kids to London for the day. Too often it is cheaper to visit France or Spain than it is to spend time and money here.

"The advent of cheap flights abroad alongside a reduction in investment in tourism by the Government has seen billions of pounds stream out of the UK and into resorts and attractions operated in Europe and further afield.

"A reduction in VAT would be tax positive, create jobs and provide a real signal from the Government that it values the tourism industry and the contribution it can make to strengthening the economy at this time of uncertainty."

Mike Bell added: "VAT on tourism related services is amongst the highest in Europe. Every tourism business in Weston must add 17.5% to the bill for their product or service. Even low cost items like an ice cream or postcards attract this high level of VAT.

"However, in seaside towns in France, the VAT rate is only 5.5%, in Spain 7% and in Italy 10%. Weston businesses are operating at a competitive disadvantage every day all thanks to the Government.

"Unlike many industries, tourism has been growing globally, yet Britain's share of the market has been falling. Tourism has the potential to play a major role in moving our economy in the right direction, but only with Government support."

BALPPA estimates that a targeted reduction in VAT for visitor attractions and accommodation to 5% would boost Treasury revenues and contribute to growth. Independent studies have shown it could create up to 23,000 new jobs.