One of the most hotly debated topics following on from the success of the Olympics in 2012 was the concept of a legacy. That it would provide a significant and long-term boost to the country, in terms of sports, infrastructure, and tourism. Recent figures released by the International Passenger Survey showed that there has been a 23% boost in tourist spending this year.
However, is it enough to be sustained over the long term? Campaigners in the travel industry are claiming that Britain is at risk of being priced out of the market, as other European countries have lower VAT rates on tourism, and therefore can offer cheaper prices. With cost being described as the number one consideration when booking a holiday, the British tourism industry expects that it will struggle to keep up with mainland Europe, where, as our graphic depicts, VAT rates are less than half of the 20% charged in the UK.
The campaigners argue that they need support from the Government in order to remain competitive. And this is especially true of small businesses – the B&Bs and small hotels which rely on tourists for their livelihoods.
What do you think? Would a VAT cut help small businesses in the industry? What else could the Government do to support it?