Simon Hart
Main Page: Simon Hart (Conservative - Carmarthen West and South Pembrokeshire)Department Debates - View all Simon Hart's debates with the HM Treasury
(10 years, 8 months ago)
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Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
About two years ago, I spoke to a Treasury Minister about this issue. He was a much more junior Treasury Minister than the one here today, but none the less he was a Treasury Minister. He simply said that the Treasury would dismiss any suggestion of a reduction in VAT because anything that contributes, even in the short term, to an increase in the deficit is a threat to interest rates. The Treasury therefore dismissed such a reduction out of hand, but times have changed. We have heard much about the Deloitte survey and about Professor Blake’s use of the Treasury’s model. We have a much enhanced and increased coalition of stakeholders and interests, which have put compelling evidence before all of us and, I think, before the Treasury. In the past few weeks we have seen a huge climatic impact on coastal communities such as mine, and on inland communities, and that has altered the outlook somewhat for tourism businesses in those areas.
I will quickly refer to a fairly formal letter that the Prime Minister wrote to the late John Cook, one of the three founding fathers of Bourne Leisure, the big holiday company, in October 2010. The little bit in the Prime Minister’s own handwriting at the bottom is interesting:
“The figures for other EU countries are—as you say—striking. But the fiscal challenge right now is so bad that it will be tough to persuade HMT, as you say, to accept short term loss for medium term gain. It is the early years where the need for deficit reduction is so great.”
Things have changed since October 2010, and I am not sure that the Treasury is able to argue with the force that it did then that such measures should be resisted. The Prime Minister, I thought, left the door open in his letter to Bourne Leisure and John Cook: a VAT reduction is not beyond the Treasury’s grip when economic conditions improve.
Not for the first time, it is the Treasury versus everyone else, including people in the tourism industry represented here, and many businesses dotted around various constituencies, represented here or not. It cannot be completely true that the Treasury is always right and the experts in the industry are always wrong. The circumstances have changed. They changed recently because of the weather, but they have changed over a longer period because of improved economic conditions, and because of the evidence put before us by experts in the field. I hope that the Treasury will take those changing circumstances into account. For the benefit of those in the tourism industry, whose representatives are here to make the case, the Treasury should not dismiss these matters out of hand, as it did quite reasonably three or four years ago.