Orkney and Shetland MP and Scottish Liberal Democrat deputy leader, Alistair Carmichael, has today called for a bold cut in VAT on domestic tourism from 20% to 5% as part of a radical plan to save the tourism industry.
The hospitality and UK tourism industry are among the hardest hit by the necessary social distancing policies in place. Reports indicate that 80% of workers in the hotel and food industries are furloughed and up to a third may be at risk long term of losing their jobs. According to figures from Visit Britain, there will be 22 million fewer visitors to the UK this year.
Mr Carmichael said:
“In the Northern Isles and across Scotland, local hotels, B&Bs and tourist attractions play a vital role in our communities.
“The seasonal nature of tourism means that many businesses will not have the income to avoid closing down after the support packages end. With most of the summer already gone and many people still anxious about travel, these businesses face the prospect of “three winters in a row”. Furloughed workers have some security now but the potential for job losses in the immediate aftermath of the crisis is severe.
“Scottish Liberal Democrats believe that our vital tourism businesses deserve a bold VAT cut – as a sensible investment to ensure future success. The Chancellor should make this reduction as part of a comprehensive package of measures to tackle the growing economic crisis. At the moment people in the UK are being taxed harder than almost anyone else in Europe for simply supporting local tourism. This simply doesn’t make sense.
"Alongside a targeted extension of the Coronavirus Job Retention Scheme specifically for those unable to reopen, this VAT cut would give tourism and hospitality a crucial boost.”