Autumn statement 2014: Industry reaction
by Jak Phillips | 03 Dec 2014
Chancellor George Osborne has delivered the final Autumn Statement of this parliament
George Osborne’s last Autumn Statement before the 2015 General Election brought good news for small businesses and the aviation industry, but calls for a VAT reduction for the tourism industry fell on deaf ears.
The Cut Tourism VAT campaign – which wants to see VAT cut from 20 per cent to five per cent for tourism businesses to place the UK on a level playing field against rival European destinations – last week urged Osborne to embrace a move it says would create more than 100,000 jobs in regions outside of London.
A spokesperson for the campaign told Leisure Opportunities that Osborne’s refusal to budge was “disappointing” and amounted to a “missed opportunity” to boost inbound tourism and create jobs in regions outside of London. Merlin Entertainments chair Nick Varney has been announced as chair of the British Hospitality Association (BHA) from next month, and has outlined gaining traction on the VAT issue ahead of the May General Election as one of his key priorities.
Another member of the campaign – B&B Association chief executive David Weston – said: "Despite considerable support from MPs for a tourism VAT cut, the chancellor has refused to introduce a policy that would allow B&B owners to expand, hire and invest, bringing immense benefits to their local communities."
Elsewhere, there was some cheer for tour operators as Osborne gave further ground on Air Passenger Duty (APD), announcing that it would be scrapped for children aged under 12 from May 2015. The chancellor added that the tax – which currently costs between £13 and £194 per passenger depending on the flight distance and the class of travel – would also be abolished for children under 16 from the following year. The news lifted share prices for a number of UK-based airlines and tour operators.
Meanwhile, the chancellor’s decision to extend small business rate relief was welcomed by the British Beer and Pubs Association, which said nearly two thirds of pubs would benefit.
“For pubs, the current Business Rates regime makes up ten per cent of costs,” said BBPA chief executive Brigid Simmonds.
“As well as getting bills down, we need to make it easier for pubs to appeal their rates bills and make the system more responsive to changing business conditions. The government is certainly giving increasing attention to this important issue for pubs.”
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George Osborne’s last Autumn Statement before the 2015 General Election brought good news for small businesses and the aviation industry, but calls for a VAT reduction for the tourism industry fell on deaf ears. The Cut Tourism VAT campaign – which wants to see VAT cut from 20 per cent to five per cent for tourism businesses to place the UK on a level playing field against rival European destinations
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