Reducing VAT would create more jobs and lead to cheaper holidays

More than 100,000 new jobs could be created in the tourism industry, while consumers would also benefit from cheaper holidays if a reduction in VAT was implemented, it has been claimed.

Campaign to cut Tourism VAT visits Yarmouth. Chris Carter , Ricky Lark (Sealife Centre) and George Morris Seers. - Credit: Nick Butcher

The Campaign to Cut Tourism VAT was in Great Yarmouth and Lowestoft to highlight how a reduction in Tourism VAT from the current 20pc to 5pc would affect the tourism and hospitality industries. The campaign, which has three main backers in Merlin Entertainment, Butlins and Premier Inn, said the UK's VAT rate of 20pc was almost twice the European Union average, making it one of the most expensive countries to visit. Ricky Lark, the operations manager of the Sea Life centre in Great Yarmouth, which is owned by Merlin Entertainment, said around 200,000 visitors passed through their doors every year. 'The campaign is about making British tourism more attractive and affordable and the savings would all be passed on to the consumer,' he said. 'A family of six visiting us would save £10.80 if VAT were scrapped completely.'

Richardson's Lesiure, a member of the campaign, said a cut in VAT would allow the company to reduce the cost of its holiday and leisure products. 'At Richardson's we passed on the savings to our customers last time there was a VAT cut between December 1, 2008 to December 31, 2009 and in this time we saw real growth in our guest numbers resulting in higher revenues for this period,' said chief executive Greg Munford.

Visit East Anglia executive director Pete Waters said a cut could lead to more jobs. 'Research from Deloitte has found that a reduction in VAT to tourism businesses, as they have in France and Germany, would contribute an extra £4.6bn to HM Treasury over 10 years and create 121,000 jobs.'

David Moore, of Old Brick Kilns Caravan and Camping Park, said he would welcome a reduction. 'It would certainly make us more competitive with our European colleagues, some of whom pay as little as 6pc,' he said.

Campaign to cut Tourism VAT visits Yarmouth. George Morris Seers. - Credit: Nick Butcher

Waveney River Centre MD James Knight said: 'I would suggest that overall tax receipts would probably go up far more than the cost of cutting the VAT, due to the increased economic activity and job creation which would result.'