A county MP and Cumbria Tourism have joined forces against the proposed rise in VAT.
Chancellor, Rishi Sunak, lowered the rate to 12.5 per cent to combat the effects of the pandemic but plans to return the rate to 20 per cent early next month.
A recent survey by Cumbria Tourism of its 2,500 members found that the proposed VAT rise was the fourth biggest concern for members.
As the tourism and hospitality industries are one of the biggest employers within Cumbria the proposed rise is of particular concern following the COVID-19 pandemic and in the wake of the rising costs of living, it said.
In 2020 overseas residents flying to the UK fell by 96 per centr and overall, the pandemic is estimated to have cost the UK tourism industry £2 billion.
Tim Farron, who is the MP for Westmorland and Lonsdale, and Cumbria Tourism are calling on the Chancellor to not go ahead with the planned rise in VAT.
Mr Farron said: “The tourism and hospitality industries are fundamental to Cumbrian life. The pandemic has been devastating on these industries and whilst the lowered VAT rate has helped boost the economy a little it is nowhere near recovered enough for the rates to return to 20 per cent.
“We also need to keep people in employment and these local businesses will not be able to do that if they have to keep raising prices to keep up with VAT and other rising costs of living. Keeping VAT low is fundamental to keeping our local high streets thriving.”
Gill Haigh, managing director of Cumbria Tourism, added: “The impact of COVID-19 had a catastrophic impact for the county’s tourism industry in 2020, wiping £2 billion off the value of our visitor economy.
“Whilst Government support has been hugely welcomed, significant challenges remain – not least around recruitment, which is now potentially holding back future growth.
“Combined with rising costs and supply issues, many tourism and hospitality businesses continue to struggle and we continue to urge Government to extend the discounted VAT rate.
“At the same time, there is also huge opportunity. Looking ahead, there is the chance to capitalise on the new ‘staycation’ experience, convert the ‘new’ visitors we have attracted over the past 18 months into repeat custom and increase short breaks out of season.
“Now is the time to seize the moment, invest and really take tourism seriously as an economic driver for the UK and extending the discounted VAT rate would be one way the Government can help make that happen.”
