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Tourism VAT cut could provide more than 2,000 jobs in Suffolk and north Essex

12:02 25 November 2014

Southwold beach on another warm sunny day in October.
Iona (left) and Isobel Jenkins enjoying the beach.

Southwold beach on another warm sunny day in October. Iona (left) and Isobel Jenkins enjoying the beach.

©archant2014

Suffolk and north Essex could enjoy a 2,000-strong job surge if a tax for tourism was put on a level playing field with some other parts of Europe, it is claimed.

The impact a VAT cut could have on each constituency

Bury St Edmunds: 248 new jobs and a £8.4m economic boost

Central Suffolk and North Ipswich: 96 new jobs and a £3m boost

Ipswich: 243 new jobs and £8.4m boost

Suffolk Coastal: 229 new jobs an a £8.4m boost

Waveney: 184 new jobs and a £6.9m boost

West Suffolk: 220 new jobs and a £3.8m boost

South Suffolk: 147 new jobs and a £5.3m boost

Witham: 115 new jobs and a £3.8m boost

Clacton: 128 new jobs and a £4.5m boost

Colchester: 225 new jobs and a ££7.6m boost

Harwich and North Essex: 151 new jobs and a £5.3m boost

Braintree: 138 jobs and a £4.5m boost

New figures reveal the extent to which a reduction in outgoings for tourism bosses could translate into a boost for the local economy if VAT on accommodation and attractions was slashed from 20%to 5%.

The report, commissioned by the Cut Tourism VAT campaign, found the East of England economy would enjoy a £355million boost.

The move is backed by some of our MPs and tourism bosses who claim the move would give hard-pressed regions outside London a much-needed “leg-up”, and would also get young people earning too.

But the Government says tourism industry jobs were already growing at twice the average rate of other industries, and it has no plans to introduce a VAT cut.

The Department for Culture, Media and Sport also said comparisons do not take into account the significant VAT reliefs that the UK provides for cultural attractions and public transport, or the other tourist taxes that other member states chose to levy.

But the campaign bosses say ministers had refused to engage with the idea and the figures had been tested on a Treasury economic model.

Chris Starkie, managing director of New Anglia LEP, said: “A reduction in VAT would not only give tourism businesses more confidence to invest and grow, but ensure the hard-saved holiday money for those visiting our region, would go further.”

While Chris Scargill, tourism and leisure specialist at Larking Gowen, Chartered Accountants said a change would benefit us all.

He said: “The industry has been calling out for more fairness, as current VAT rates make it more attractive to look overseas, restricting the full potential of the ‘staycation’ opportunity that has been building up over the last five or so years.”

Of the 28 EU member states, only Denmark, Lithuania, the UK and Slovakia do not have at least one reduced VAT rate for tourism. Lithuania will reduce the level of VAT on tourism in 2015.

Peter Aldous, MP for Waveney, said the “Chancellor should take note” as cutting VAT for the sector would allow for new jobs to be created and for millions of pounds to be injected into the wider regional economy.

While Sir Bob Russell, MP for Colchester, said he could not see a good reason for the move not to be included in the Autumn Statement.

“Cutting the rate of VAT on tourism would require no new legislation from the government, and is perfectly allowable under EU rules,” he said.

“It would also create thousands of jobs, and result in millions of pounds being added to regional economies outside of London – and it would help boost tourism in Colchester.”

Graham Wason, chairman of the Cut Tourism VAT campaign, said the move would inject millions of pounds into regional economies, and claimed it would ultimately result in a “fiscal surplus” for the Treasury.

He said the benefits would be felt as soon as the cut was announced.

1 comment

  • Is this completely batty? Regional VAT? VAT reduced for certain people? Lower VAT rate for all hotels and restaurants? It would be interesting to know exactly what is being suggested. I sympathise with the poor MPs who have to appear positive whatever crazy suggestion or projection is touted. I feel the need for a spoof campaign, before April if poss. Any ideas anyone?

    Report this comment

    Blackeye

    Tuesday, November 25, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

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