07/02/12

'Cut VAT to create jobs'

Hospitality chiefs are calling on the Chancellor to slash VAT in the Olympic year to encourage more visitors and create 300,000 jobs.

Kent brewer and pub owner Shepherd Neame and hotel owner Gavin Oakley want to see VAT cut to 5% or 10% to boost jobs and investment.

The 300-year old Faversham-based brewer has joined a campaign launched ahead of the March 21 Budget by French leisure entrepreneur Jacques Borel.

It has been given £240,000 of funding by the Independent Family Brewers of Britain, representing nearly 30 private family-run brewers, including Shepherd Neame.

Campaigners claim 5% VAT on food, drink and accommodation would create up to 320,000 jobs, many in the 16 to 24-year-old age group which has been hardest hit by the jobs crisis, with more than a million now on the dole.

Shepherd Neame chief executive Jonathan Neame said 23 out of 27 EU countries had concessionary VAT rates for the hospitality industry.

He said: "The UK is the only country that has high excise rates on alcohol which is a key part of the sector and a very high VAT rate. Both are obstacles to jobs and investment.

"The hospitality sector is quite unusual in its ability to create jobs, particularly for young people, very quickly. A reduction in VAT will stimulate jobs and investment in local and rural communities. This approach has already created jobs in Germany, Belgium, Sweden and France and we think it will work here.

"We want the boundaries of tax and regulation pushed back right across the hospitality sector."

Mr Oakley, of Wallett's Court, a country house hotel at Westcliffe, near Dover, featured in the Kent Contemporary tourism promotion campaign, had heard Culture Secretary Jeremy Hunt's call in Canterbury for tourism businesses to cut prices by 20.12% in Olympic year.

But most businesses could not afford to do that without a similar gesture from the Chancellor. Mr Oakley would be hoping for a VAT rate of no more than 10%.

"We would meet them half way," he said. "We really do need the support from the government to help us re-invest and continue to grow. It's a no-brainer as far as I'm concerned."