Economist to join MA campaign
The Morning Advertiser is to invite Treasury ministers to meet influential French economist Jacques Borel — the man behind the VAT cut for the hospitality sector in France that has helped to create 28,000 jobs in the first year.
The invite comes as tourism minister John Penrose delivered a minor rebuff for the MA's Thrive on Five campaign as he unveiled the Government's new tourism strategy.
Penrose said the state of Government finances makes it "extremely difficult for anyone to start dishing out VAT reductions to anybody in the short to medium term". He added: "Come back in about three years time."
However, Morning Advertiser editor The PMA Team said the campaign was always a medium to long-term one. "The door is still very much open for the industry to convince the Government that a tax cut for the trade is absolutely the right thing to do.
"It could help create around 220,000 jobs in the post Olympic years. You just have to look at the impact in France where around
28,000 jobs were created in the first year of a VAT cut from 19.65% to 5%."
Proven logic
The Morning Advertiser is to ramp up its campaign, with Borel set to appear at the next meeting of the MA's Top 250 Independent Multiple Retailers on 11 May to explain how a tax cut will help rejuvenate the sector.
Borel claims that restaurateurs have repaid €2.9bn (£2.49bn) in return for the €2.6bn (£2.23bn) given by the Government in tax concessions in France. "The success of the VAT reduction measure is thus a proven fact," he said.
He predicts the French cut, which applies to meals and drinks except for spirits, will create 105,000 jobs over three years and lead to €5.2bn (£4.47bn) being repaid by restaurateurs in 2012 in return for a €2.6bn (£2.23bn) concession.
British Beer & Pub Association director of pubs Martin Rawlings said: "It'll take
a lot of work to convince the Government.
"There's no possibility of it being in the next Budget and it probably won't be in the one after that either.
"But we can lay the groundwork now, get together all the background that the Government knows diddly squat about."
He added: "Nothing is unchangeable. It won't be a five-minute job, but we can do better than 20%."
British Hospitality Association chief executive Ufi Ibrahim called for the Government to put its money where its mouth is.
"VAT has become one of the most pressing issues facing the industry," she said. "The present high rate is making UK tourism very uncompetitive."
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