Lindsay Roy
Main Page: Lindsay Roy (Labour - Glenrothes)Department Debates - View all Lindsay Roy's debates with the HM Treasury
(10 years, 3 months ago)
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Lindsay Roy (Glenrothes) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I commend the hon. Member for South Down (Ms Ritchie) on her powerful presentation. Many of the points I wish to make have already been raised, so I will concentrate on constructive reinforcement, rather than on unnecessary duplication. I hope hon. Members are able to distinguish between the two.
Commendably, the Prime Minister has been quoted as saying:
“There are always good cases for cutting VAT on individual items. The leisure industry and the hotel industry make a very good argument.”
I would go further: there is a compelling case. Indeed, it is extremely ironic that the Prime Minister, who wants to negotiate flexibility within the EU and to reduce bureaucratic orthodoxy, has failed to capitalise on one of the key areas on which there is considerable flexibility—the VAT charges on tourism, particularly on the hotel and leisure industries. Indeed, it is shocking that we are at such a disadvantage compared with other European countries, as was highlighted by a number of speakers, when the Government have the power to reduce VAT. It is all the more disturbing that a party that espouses the virtues of innovation, enterprise, grasping opportunity and promoting sustainable growth in business has so far failed to reduce VAT. UK tourism is almost at the bottom of the league table of international competitiveness —we are 138th out of 140—yet it is our economy’s sixth largest export earner.
The Chancellor pleads repeatedly for removing barriers to growth and for promoting investment. The conservative estimates of an independent and reputable academic highlight the potential to boost GDP by £4 billion a year, to create 80,000-plus jobs and to improve professionalism in the industry. Professor Blake confirms that such an initiative would be fiscally neutral, so what on earth is holding the Chancellor back? The tourism industry feels that it has to operate with one hand tied behind its back, with declining opportunities for sustainable growth.
It is economic madness not to reverse the long-term trend of decline in the UK’s tourism balance of payments. We are clearly not operating on a level playing field. My home county of Fife is the Mecca of world golf, yet tourist numbers are declining. In my neck of the woods in Glenrothes, the Balbirnie House hotel, a small country house hotel that achieves the highest standards of excellence and employs more than 100 people, is fleeced for more than £800,000 in tax and rates. That is more than £8,000 per employee, and it is only through innovative marketing, outstanding quality of service and tenacity in the face of adversity that the hotel has been able to consolidate its business.
We are clearly not on a level playing field, so a marked reduction in VAT on UK tourism is a no-brainer, to use a colloquial expression. I urge the Chancellor to heed the powerful arguments presented in this debate and reduce VAT on tourism. That would attract foreign investment and domestic tourists, create employment, encourage much-needed investment, promote sustainable growth and improve further standards in the industry. He must know that makes sense.