Hospitality only industry in a position to deliver post-pandemic growth

By Rebecca Weller contact

- Last updated on GMT

Kate Nicholls: “There is no other industry that will generate jobs, growth and investment at pace across the UK and deliver levelling up in practice.”
Kate Nicholls: “There is no other industry that will generate jobs, growth and investment at pace across the UK and deliver levelling up in practice.”

Related tags: ukhospitality, Kate nicholls, Legislation, Vat

Hospitality is the only industry in a position to deliver post-pandemic jobs, growth, and investment at speed, according to UKHospitality (UKH).

UKH chief executive Kate Nicholls told the Digital, Culture, Media, and Sport (DCMS) committee at its Promoting Britain Abroad inquiry on Tuesday 8 March, keeping VAT at 12.5% was vital.

She said: “There is no other industry that will generate jobs​, growth and investment at pace across the UK and deliver levelling up in practice.”

The inquiry was tasked with looking into how the tourism industry can be supported in its post-Covid recovery​ and how effective the Government has been in its pandemic support for the sector.

Keeping 12.5% VAT vital 

Nicholls explained keeping VAT at 12.5% for hospitality and tourism was vital if the UK was to remain competitive against international rivals, attract visitors from abroad and encourage Britons to go out and spend.

Contributing to an answer about how uncompetitive Britain is when it comes to price, Nicholls suggested retaining VAT at 12.5% would be an effective way of improving the UK’s competitiveness.

She said lowering VAT for hospitality and tourism during the pandemic had prompted “an immediate uptick in demand” and warned raising it “will significantly hurt the sector”.

According to UKH, hospitality creates £130bn in economic activity, generates £39bn of tax for the Exchequer, funding vital services, and represents 10% of UK employment, 6% of businesses and 5% of GDP.

Slower economic recovery 

The select committee contribution comes as the trade body intensifies its #VATsEnough campaign ahead of the Chancellor’s Spring Statement on 23 March.

#VATs Enough, which has the backing of leading hospitality operators, urges the Government to maintain VAT at 12.5%, and warns a return to 20% in April could be the final financial straw for many hospitality businesses already struggling to get back on their feet after two-years of devastating losses.

Nicholls added: “The more it costs people to go out the less they will do it, the less they have to spend, and the slower the economic recovery.”

Related topics: Legislation

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