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Cutting VAT on tourism services will be the key focus of a new All-Party Parliamentary Group on the Visitor Economy backed by the British Hospitality Association.
The BHA was appointed as secretariat to the APPG and will work with MPs to devise the group’s programme over the summer.
The association will work closely with the APPG to host a hospitality and tourism lobby day on September 16 where association members and other business leaders will visit Parliament to make their voices heard on key issues affecting the industry.
The APPG aims to enhance local economies through promoting measures and incentives, including a reduction of VAT on tourism, which would increase visitor numbers and investment in all parts of Britain and Northern Ireland.
The UK’s 20% rate of tourism VAT is almost twice the European average, which undermines competitiveness against countries with lower rates, the BHA claims.
A lowering of the tax would create 123,000 new jobs and improve the UK trade balance by £20 billion over 10 years. The BHA also claims more tax – £3.9 billion – would be raised by the Exchequer over the same period.
Currently 25 of 27 EU countries have reduced tourism VAT.
The Parliamentary group’s co-chairman, SDLP MP Margaret Ritchie MP, said: “The tourism industry is central to many sectors of the economy in Britain and Northern Ireland – in fact in some it can be the catalyst for economic growth and job creation. It provides enormous potential for growth and productivity.
“The APPG will focus on how we can enhance the UK’s local economy by discussing measures and incentives such as a reduction in tourism VAT.
“We have a real opportunity to boost tourism, and with the APPG’s cross party support, I have renewed confidence that our voice can be heard across Parliament, in the Treasury and in wider government circles.”
Conservative co-chairman Nigel Huddleston MP said: “The tourism industry is a crucial part of the UK economy and there is still much we can do to support it efficiently and effectively.
“We want to challenge the current perception of tourism in the UK by emphasising the many benefits that it provides to our economy.
“Whilst we recognise and celebrate the success of London’s booming tourism industry, we aim to raise the profile of other tourist destinations across the UK.”
Butlins managing director Dermot King, chairman of the Cut Tourism VAT Campaign, said: “The formation of the All-Party Parliamentary Group on the Visitor Economy is a further signal that momentum is building for a common-sense cut to tourism VAT for the benefit of all society.
“Our European counterparts have had the competitive advantage for far too long in attracting visitors that drive economic recovery.
“I invite politicians from across the political spectrum to speak to our campaign and learn about the case for boosting the UK economy through tourism.”
BHA chief executive, Ufi Ibrahim, said: “It is imperative that politicians mobilise to sustain pressure on both Parliament and Whitehall to deliver further economic success for the UK through the powerful potential of hospitality and tourism.
“There is a terrific opportunity to hold the prime minister to account on his recently announced plan to support our industry with a vision that creates more growth, jobs and security for working people.
“The private sector is ready to rise to this challenge and looks forward to working with politicians to make it a reality.”