VAT (Tourism and Hospitality)

Oral Answers to Questions — Wales – in the House of Commons at 11:30 am on 12 February 2014.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn 11:30, 12 February 2014

What recent discussions he has had with his ministerial colleagues on the effects of VAT on the tourism and hospitality industry in Wales.

Photo of David Jones David Jones The Secretary of State for Wales

Tourism and hospitality play an important role in the economy in Wales, attracting more than 4 million people from across Great Britain between July and September last year. The World Economic Forum has recently ranked the UK fifth in Europe in its travel and tourism competitiveness index.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Our near neighbours, the Republic of Ireland, and most other European countries have reduced the level of value added tax in the tourism sector, boosting jobs, growth and investment in their countries. The United Kingdom and Wales are among those with the highest rates of VAT in Europe, and, according to an independent inquiry, that has led to the suppression of jobs and investment. Will the Secretary of State lobby the Treasury to ensure that we have a competitive rate of VAT and that we reduce VAT, which is a tax on jobs?

Photo of David Jones David Jones The Secretary of State for Wales

I am sure that the hon. Gentleman is as happy as I am that tourism expenditure in Wales increased by £746 million over the past year. The United Kingdom is highly competitive in the tourism market. As I said in my initial answer, the World Economic Forum has indicated that the UK is the fifth most competitive economy in Europe, ahead of France, Portugal and Italy.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

As in Scotland, VAT on tourism in Wales has a negative effect on the industry. Will he press his Treasury colleagues to ensure a reduction from 20% to 5%, as requested in yesterday’s debate in Westminster Hall, to benefit very scenic constituencies like mine and Carmarthen East and Dinefwr?

Photo of David Jones David Jones The Secretary of State for Wales

I am hugely grateful to the hon. Gentleman for the interest he shows in the Welsh tourism industry. I invite him to visit Wales and see what a competitive product we have there.