Tag Archives: vat

Tourism is a major part of our economy, and one of the few industries which truly covers the whole of the UK. There isn’t a single Parliamentary seat which doesn’t benefit from tourism and it’s a sector with great potential for growth.

As Liberal Democrats I believe we should use the levers at our disposal to stimulate the economy and create opportunities for people to get on in life, no matter where they live. That is why, as a group of local parties from across the UK, we have brought this motion to conference. By reducing VAT to 5% for tourism businesses – bringing the UK into line with most of our European neighbours – we could do exactly that.

British tourism is at a competitive disadvantage, being perceived as an expensive holiday destination when compared to other EU countries. The impact of this on our tourism businesses is that it encourages UK customers to holiday abroad and deters visitors to the UK.

But price sensitivity in the tourism industry also acts in subtler ways. With UK hotels seen as more expensive than continental ones, visitors to Europe from the US and Far East spend less time here, ticking off the major sights in London and never stepping beyond the capitol. The higher upfront cost of staying here means that businesses in other parts of the UK don’t benefit, and those visitors that do come spend less in restaurants, shops and visitor attractions because they simply aren’t here very long.