A Government minister has promised to look at the arguments for cutting VAT for the hospitality sector, but stated reasons why it would be difficult to reduce the level.
David Gauke, exchequer secretary to the Treasury, was pressed on the issue in Parliament by Labour MP Anne McGuire, who highlighted how Ireland has reduced VAT for the sector to 9%, “realising that such a reduction has the potential to kick-start economic growth”.
McGuire, who said her Stirling constituency “has a large number of jobs tied up in tourism and hospitality”, asked: “Given stalling UK economic growth figures, does the minister not accept that he, too, should consider a temporary change in the rate for the sector, and if not, why not?”
Gauke responded: “I have had meetings with representatives from the tourism industry at which they have made their case.
“We will of course keep all taxes under review, but we have to bear in mind the state of the public finances, our limited room for manoeuvre and concerns about adding complexity to our VAT system. None the less, we will look at those arguments.”
The Government has previously ruled out reducing VAT for the sector in the near future, although McGuire’s comments show that the move does have some support in Parliament.
It comes as the hospitality industry in the UK campaigns to reduce VAT for the sector. The Publican’s Morning Advertiser, sister title to M&C Report, has lodged a petition for VAT for be cut to 5% for hospitality business.
- More than 2,700 people have signed the petition to date. It can be viewed here: http://epetitions.direct.gov.uk/petitions/1198