Tourism (VAT)

Mark Williams Excerpts

Tuesday 11th February 2014 Westminster Hall

[Mr Mark Williams (Ceredigion) (LD)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I, too, congratulate the hon. Member for South Down (Ms Ritchie) on securing this debate. She spoke as a Member for Northern Ireland, but she also took a UK perspective, and I will add a Welsh dimension to the debate. I suppose that the benefit of having a limit of three and a half minutes to speak is that we will not have huge opportunities to advertise the merits of our own constituencies, although both the hon. Members for Totnes (Dr Wollaston) and for Ynys Môn (Albert Owen) did a good job in advertising theirs. I look forward to going to Totnes to meet the members of the South Brent women’s institute in a week or so.

Ceredigion speaks for itself: there are huge opportunities for growth in our tourism sector. I reiterate the comments that have been made about flooding. Many Members will have seen on their TV screens the great Victorian promenade on our seafront in Aberystwyth being battered by the storms. That has caused significant damage, but the message from me, as from others, is that businesses in my area are open for business. I concur with what the hon. and learned Member for Torridge and West Devon (Mr Cox) said about the message that a reduction in VAT would send out to those businesses that have suffered recently.

In Wales, of course, the responsibility for tourism is shared—there is a partnership between our National Assembly Government and this place—but the taxation regime across the UK directly impedes the development of the tourism sector. Two years ago, the British Hospitality Association commissioned Oxford Economics to produce a report that specifically examined the impact of VAT on the tourist sector in Wales. The report was appropriately named, “Hospitality: driving local economies” and showed how hospitality underpins communities. It highlighted the importance of tourism and hospitality to jobs in Wales.

In Wales, more than 112,000 people are employed directly, and another 56,000 people are employed indirectly, in tourism and hospitality. In my constituency, 3,000 people are employed in the sector, which is about 8% of total employment in my constituency. If we take the big players out of our economy—our universities, our NHS and our local government—tourism is at the top of the list of employers.

As I say, 8% of people in Ceredigion are employed in the sector, and as we heard from the hon. Member for South Down, potentially another 80,000 jobs could be created in tourism. Therefore, 10,000 jobs could be created in Wales, which would mean 2,000 new jobs in my constituency. In turn, that would create opportunities for young people and keep people in our communities, rather than seeing them move away. The key phrase is giving the right support to the tourism sector, and I am very much of the opinion that the sector would be boosted if the 5% VAT rate was introduced.

My hon. Friend the Member for Wells (Tessa Munt) talked about the importance of caravans in her constituency, and they are important in my constituency, too. I will quote the Prime Minister, who has said:

“There are always good cases for cutting VAT on individual items. The leisure industry and the hotel industry make a very good argument”.

Of course, he is right on that and the Government were right to take the action that they took on the VAT rate for static caravans. I and many other Members who are here in Westminster Hall today presented petitions on that issue, making the point about the need to reduce VAT to stimulate our local economies, and of course that is what we are all calling on the Government to undertake to do today. We do so in the expectation that that move would be costly in the short term but that, further down the road, it would be cost-neutral, as well as being of huge benefit to the national economy and particularly to our local economies.