Helen Douglas: Tax that strangles our world-class tourist attractions

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ALTHOUGH the Commonwealth Games is in full swing, the glory of last month’s cycle-fest is still fresh in everyone’s minds. The Tour de France, the world’s most-watched annual sporting event, saw millions of jostling fans crowd the pavements from Leeds to Sheffield.

According to Tour chief Christian Prudhomme, it was the “grandest” Grand Départ in the event’s 111 year long history. But with 216 million annual visits to Yorkshire, according to Welcome to Yorkshire, I suspect this is something that many people have known for ages.

Yet despite being home to seven cities, six national museums, five Michelin-starred restaurants and three national parks, Yorkshire, like the rest of the UK, is hampered by Britain’s highly uncompetitive VAT regime.

Tourism is an integral part of the regional economy. It employs almost a quarter of a million people and contributes £7bn annually – just in Yorkshire.

But whenever we see Chancellor George Osborne on TV banging on about the economy and exports, he’s likely to be standing in front of a medical lab or a car plant with a hard hat on.

Somebody needs to remind our Government that tourism is not just a massive employer but an export – one of the very things which Prime Minister David Cameron vowed to boost when he came to office.

In spite of this – perhaps because nobody down in Whitehall really understands the value of the sector – VAT on tourism attractions and accommodation is levied at 20 per cent. This is higher than 24 out of 28 EU states, each of which have the power to cut VAT at will. Contrary to confused claims from Downing Street spin doctors, no renegotiation with EU bureaucrats is required. Countries can click their fingers and make this happen.

This is why we’re calling on our own MPs to join the growing crowd of politicians backing our campaign to cut our VAT on accommodation and attractions to five per cent. The Cut Tourism VAT campaign, a pressure group backed by thousands of UK businesses, big and small, has gained support from newspapers like The Sun and trade bodies such as the British Hospitality Association. According to new research handed in at Number 10 last Wednesday, the VAT reduction would create 120,000 jobs together with a £4bn windfall to GDP.

We need our MPs to stand up for a policy designed to benefit us. Yorkshire, like most of the UK, saw very little upswing from the London Olympics. While the Tour was amazing, what we need now is to bottle up this enthusiasm and positivity.

Crucially, tourism is the only export subject to VAT. It is senseless that we incentivise people to travel abroad.

Politically it makes sense too. Tourism is one of the biggest employers of young people. Many of the new jobs created from the increased demand generated by the VAT cut would fill the void of youth unemployment. According to recent government figures, youth unemployment stands at 17.8 per cent.

York Central MP Hugh Bayley and Cleethorpes MP Martin Vickers have already joined the merry throng of cross-party support. Together with major brands like Premier Inn, Butlins, Thorpe Park, Alton Towers, Booking.com, InterContinental Hotels and Hilton, thousands of B&Bs, piers and other attractions are urging the government to act.

The fact that Britain is just one of three EU member states to not apply a reduced rate of VAT to accommodation and attractions means we’re at a serious competitive disadvantage with Europe. In a global economy where you can fly internationally for less money than a domestic rail fare, price matters.

Since the VAT cut can be activated immediate under EU law, there’s no reason why Ministers cannot act. They already have in fact.

Boris Johnson, Mayor of London, managed to secure the reduced five per cent rate for his cable car over the River Thames. Meanwhile Danny Alexander, Chief Secretary to the Treasury, also bagged a five per cent rate for ski lifts in his Inverness constituency in Scotland.

There are no excuses left.

Unlike cable cars, tourism is the UK’s sixth biggest export, bringing in £24bn every year. No other export pays VAT at all. So cutting VAT, and boosting the tourism sector, would help close Britain’s widening trade deficit by upping visitor numbers.

The key thing now for politicians to stop inhibiting tourism and start supporting a sector which contributes so much. We want businesses and consumers to write to their MPs, to put pressure on all political parties to make a declaration in their manifestos to stop this suicidal approach and cut VAT to five per cent for accommodation and attractions.

• Helen Douglas is manager of York Dungeon. She is a member of the Cut Tourism Vat campaign. Further details can be found at www.cuttourismvat.co.uk