Orkney and Shetland MP, Alistair Carmichael, has welcomed the news today that the Liberal Democrat Federal Conference has backed measures to maintain the 5% VAT rate for hospitality and tourism. Mr Carmichael has been a longstanding advocate for a permanent cut to VAT for these sectors to encourage growth and employment for the tourism industry which is a vital part of the isles economy.
Commenting on the news, Mr Carmichael said:
“I am glad that my party has backed an extension of the reduced VAT rate for hospitality and tourism today. I have been campaigning on this issue for many years. It is a policy whose time, I believe, has come. We need a more open-minded approach from the Government to see the reduction extended.
“When I was a minister we cut the duty on spirits and instead of dropping, revenues went up. If crafted properly, studies show that a targeted cut to hospitality and tourism VAT can make a meaningful difference to growth. Small businesses which are at the heart of our rural and island communities should be the first priority.
“We have to put the recovery first, and maintaining the lower VAT rate could be an important part of this. If other parties take heed this could be a chance to give solid footing for the sector in building back in the years to come.”