Government urged to take action to boost UK visitor economy

A business leader has called on the government to reduce VAT for the hospitality sector, warning that current policies are holding back growth.

Frank McKenna, chief executive of Downtown in Business has joined forces with the Liverpool Business Improvement District (BID) to make a joint submission to the Culture, Media and Sport Select Committee’s inquiry into the future of UK tourism.

The organisations have set out a blueprint to unlock growth saying urgent action is needed to support the UK’s visitor economy, saying the UK’s high VAT rates are placing hospitality and tourism businesses at a significant disadvantage compared to European competitors.

Frank, who is also an Lancashire Business View columnist, said: “Put simply, the UK has a competitiveness problem, and VAT is at the heart of it.

“If the government is serious about growing the visitor economy, supporting high streets, and driving regional growth, then reducing VAT on hospitality is the single most effective step it can take.

“We are currently asking businesses to compete globally with one hand tied behind their back.”

The submission also warns against the introduction of a blanket ‘tourist tax’, arguing that imposing such a charge without a guarantee that the money raised will be invested back into supporting the sector would be a kick in the teeth for hotels and hospitality venues.

It also calls for the reintroduction of VAT-free shopping for international visitors, warning that its removal has reduced spending in UK cities and weakened the attractiveness of high streets.

Frank McKenna added: “This is not about one single policy. It is about creating the right conditions for growth.

“Cut VAT, back business-led investment, and give our cities the tools they need to compete, and the UK visitor economy will thrive.

“Get it wrong, and we will continue to lose ground to our international competitors.”

Downtown in Business is a leading business organisation connecting private sector leaders with key decision-makers across major UK city regions.