Tourism (VAT)

Tim Farron Excerpts

Tuesday 11th February 2014 Westminster Hall

[Ms Ritchie]

The right hon. Gentleman is absolutely correct. Other countries in the EU, including Belgium, the Netherlands and Germany, have much more competitive rates. In France, for example, there is a banking agreement between the Government and the industry. Such measures help to attract visitors and ensure that the money they spend is invested in the local economy.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I congratulate the hon. Lady on securing this incredibly important debate. She mentioned the possibility that a VAT rate reduction for the tourism industry would lead to increased job creation. Would she recognise that many people in the tourism industry—particularly in places such as my constituency, the Lake district, and the Yorkshire dales—are desperate not only to create more jobs but to ensure that jobs are better paid and that a living wage can be paid to people working in the tourism industry? Does she acknowledge that a cut to a fairer level of VAT would help to make tourism a more high-wage industry?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention and I agree with him. Many jobs in the tourism sector are quite low paid, but if there was a level playing field in taxation rates, that would afford the opportunity for employers to pay better rates. It would also ensure that people have confidence and trust, and would allow them to do a better job in promoting their local areas.

I would like to make a little progress. Will the Minister robustly consider the case for a reduction in VAT on hotel accommodation and visitor attractions from 20% to 5%? Would he also consider broadening that out in future to the wider hospitality sector, including to food served in pubs and restaurants? That would encourage many more foreign visitors and provide an incentive for staycations in the domestic market. It would boost coastal resorts, rural retreats and cities and towns that have been hit hard by the economic downturn since 2008.

The industry is significantly constrained by its lack of price competitiveness. The Chancellor is not long back from Davos. While there, he may have learned that the World Economic Forum places the UK in 138th place for price competitiveness for tourism, out of 140 countries. The UK sits at the bottom of the international league table, with businesses facing the challenge of the highest rates in the world for VAT, air passenger duty and visa charges. The purpose of today’s debate is not to rehearse the arguments on issues such as air passenger duty, but that placing shows that the Government’s lack of action on VAT forms part of a broader lethargy when it comes to supporting the tourism industry.

The Government say that visitor numbers remain strong, but I would suggest that that is in spite of the current pricing policy, rather than because of it. The UK’s balance of payments for tourist products has declined steeply in the past 15 years, making it clear that tourism growth has not been what it could have been in recent years, and that we are not maximising the industry’s enormous potential to deliver revenue and jobs. I would argue that the blame for that lies with the policy regime, which is holding back the industry’s potential. Any argument from the Government based on the cost of a VAT cut being prohibitive is highly dubious.

There is strong evidence from the Treasury’s own economic modelling, as used by Professor Adam Blake in a study for the British Hospitality Association, that a VAT cut for the sector would benefit the whole economy. Yes, there might be a loss of some £640 million in the first year, but that would be comfortably offset by years 2 and 3 of the programme. Figures show that a 15% cut in tourism VAT would quickly become revenue-neutral and would result in a radically increased tax take of £2.6 billion over 10 years, delivering a £4 billion boost to the gross domestic product. I repeat: those figures do not come from the industry or lobbying consultants. They are derived from the Treasury’s own internal economic models.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 11th December 2012 Commons Chamber

[Tim Farron (Westmorland and Lonsdale) (LD)]

Cumbria’s health service is under immense pressure because of PFI deals going back a decade and more. What can the Chancellor do to go toe-to-toe with the private sector to renegotiate existing PFI deals to ensure that more money goes to front-line health services?

[Mr Osborne]

We are seeking to renegotiate existing contracts to get better value for money for taxpayers and local communities. I have a figure here showing that in north Cumbria the public were being charged £466 to replace a light fitting under the PFI contract that was signed. That is completely unacceptable—it is people being ripped off. That is what we are seeking to end.

Fuel Prices

Tim Farron Excerpts

Tuesday 15th November 2011 Commons Chamber

[Robert Halfon]

Let me carry on for a moment.

Big oil firms should not hide behind currency fluctuations. Statistics from the UK Petroleum Industry Association, which is funded by the major oil companies, show that in early 2010 the price of crude oil fell steadily, and yet retail fuel prices stayed high for months. Why was that? Ultimately, the only way to resolve this is through open-book accounting. If the big oil companies want to prove their innocence, why do not they volunteer to publish the financial data?

I want to turn to the financial impacts. Since 2008, our consumption of diesel and petrol has declined, and the Government forecast that it will continue to plummet next year.

[Tim Farron (Westmorland and Lonsdale) (LD)]

rose—

[Robert Halfon]

I give way to the president of the Liberal Democrats.

[Tim Farron]

My hon. Friend is being unfathomably but characteristically generous with his time. He says that consumption has gone down. Does he agree that consumption in rural areas has probably gone down as far as it is going to? Demand for petrol is so inelastic because people have only one way of getting to work, and that is by driving, even if they are on the minimum wage. This is now no longer an issue of environmental concern—it is about social justice.

[Robert Halfon]

I am pleased to say that I was also in the constituency of my hon. Friend for my holidays; it is such a wonderful part of the world. There is absolutely no doubt that fuel prices are threatening rural communities and preventing people from meeting and gathering together. Petrol is now so astronomically expensive that it is driving people off the roads and costing the Exchequer money.

Oral Answers to Questions

Tim Farron Excerpts

Tuesday 8th February 2011 Commons Chamber

[Mr Osborne]

As I said to the hon. Member for Ealing North, we are carefully considering the request. I am clear that security comes first. Of course the Treasury has to apply due diligence to any request from a Department or devolved authority, but she should take it from me that we put security first.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Our mountain rescue teams are staffed by outstanding volunteers doing professional work, but outrageously they have to pay VAT and vehicle excise duty on life-saving equipment. Is it not time that this Government put an end to this and refunded that VAT?

[Danny Alexander]

My hon. Friend is quite right to celebrate the work of the mountain rescue teams. Of course they face additional equipment costs, and that is why we allocated funds in the spending review to help to support mountain rescue teams with those costs. The Department concerned, the Department for Transport, will make an announcement on this in due course.

Equitable Life (Payments) Bill

Tim Farron Excerpts

Tuesday 14th September 2010 Commons Chamber

[Mr Hoban]

My hon. Friend will recognise that the spending review is not simply a linear process. Some projects will be scrapped completely; some will suffer a small cut. We need to look at each case on its merits, rather than assume that an across-the-board measure will apply to all spending bids in the spending review.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Without speculating what proportion of the £5 billion estimated losses will be compensated, does the Minister agree that, whatever payment is announced today, the Government will recognise that it is merely a first down-payment on returning the losses to policyholders, with a view to further payments being made in future years?

[Mr Hoban]

A number of hon. Friends have made that point, and a number of representations made to me put an alternative point of view—that what policyholders would like is rapid resolution and a swift payment scheme to bring closure to the matter. The spending review is to cover the lifetime of this Parliament, and the figure that is settled upon should reflect the coalition’s commitment to resolving the issue once and for all.