MA campaign to cut VAT to 5%

By Ewan Turney

- Last updated on GMT

Related tags: Morning advertiser, Hospitality sector, Olympic games

Thrive on Five: campaign to cut VAT
Thrive on Five: campaign to cut VAT
The Morning Advertiser is launching a campaign to reduce VAT to 5% for the hospitality sector. Travelodge chief executive Guy Parsons issued a...

The Morning Advertiser is launching a campaign to reduce VAT to 5% for the hospitality sector.

Travelodge chief executive Guy Parsons issued a rallying cry to the industry calling for a reduction at the Morning Advertiser and M&C Report's​ Getting in Shape for 2012 conference.

The budget hotel operator said the legacy of the 2012 Olympic Games should be the creation of 220,000 jobs in the post Olympic years fuelled by a VAT cut.

There are 21 countries in the EU that have a lower VAT rate for the hotel sector and 13 for the overall hospitality sector. In France, tax was reduced from 19.65% to 5% in restaurants alone and led to the creation of over 21,700 jobs in the first year.

Leadership

"Not many sectors can lead us out of this recession, but the hospitality sector can," said Parsons. "If the Government is talking about a lasting legacy from the games, what better way than to create 220,000 jobs?"

Travelodge hopes to get its customers to sign up to a national petition, launching at the end of February. Parsons feared Britain would price itself out of a lasting legacy from the games because visitors could be put off return visits by prices.

"It is no slam dunk we will get it down to 5%; we need enormous support to get there. We have got to talk to every MP about seven times.

"It will increase funds to the Exchequer and increase jobs." But he warned: "It will not be a quick win. We need the whole industry behind it."

Competitive disadvantage

British Hospitality Association chief executive Ufi Ibrahim said: "The UK is at a severe competitive disadvantage, which is damaging UK tourism even more since the rise in VAT to 20% ­— the third highest in the EU.

"In competitive terms, UK tourism is operating with one hand tied behind its back, and this will become ever more damaging if we don't do something about it."

Morning Advertiser editor The PMA Team said: "Thrive on Five is a campaign the whole industry can get behind. It will help create jobs and provide a welcome shot in the arm for the pub trade."

Huge support

JD Wetherspoon boss Tim Martin said a VAT reduction — even just on meals — could boost the pub trade by £600m. "To say it would help would be a massive understatement," he said. "Everyone in the industry should be backing this."

He added: "The logic is sound. If more people eat out, the Government gets that 5% VAT they don't get if people buy food in the supermarkets. That helps create more jobs in pubs and that reduces Government expenditure."

The British Beer & Pub Association is to raise the issue of a reduced VAT rate at a meeting with Treasury minister Justine Greening next week.

"Once the Government stops thinking about cuts and starts thinking job creation, this would be an excellent way to do it," said chief executive Brigid Simmonds.

• Would you back a VAT reduction to 5%? Let us know by emailing rjna.ghearl@jeoz.pb.hx​ or hitting Post a comment​ below.

Related topics: Legislation

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