Editorial: VAT cut campaign becoming desperate

UK governmentCalls for the UK government to cut VAT on tourist attractions and hotels rooms are continuing to fall on deaf ears.

Although the campaign has never gone away since it begin shortly after the Conservative and Liberal Democrat coalition was formed in 2010, there has been heightened press activity in recent weeks.

Led by Merlin Entertainments and its chief executive Nick Varney, the campaign knows that it is about to lose its window of opportunity.

With the government largely made up members of parliament representing the Conservatives – a party that traditionally gives business the easiest time – Varney will have identified this as the best time to lobby Westminster.

But be it due to the government being a fifth Liberal Democrat, or some other reason, the claims that the VAT cut from 20% to 5% would generate billions of pounds for the economy have continuously been rebuffed.

With the bookmakers predicting the next election producing another hung parliament – where no political party has a majority of MPs – with the biggest party being Labour, Varney and his campaigners know that however hard it might be to convince this government, the next one will likely be an even tougher nut to crack.

Resistance

The explanation for the resistance may be that the government is simply not convinced by Merlin’s claims that over a hundred thousand of new jobs would be created, and billions of pounds more income would be returned to the Chancellor of the Exchequer.

It may be that it is the Liberal Democrats that are against such a move and are vetoing it.

Another possibility is that the proposal is being hoarded and will be announced in the coming months, tactically close to the General Election which is to be held in May 2015.

The Conservatives and/or other political parties may attempt to pass off the idea as their own and feature it as a key manifesto pledge.

There is also the issue of how much of the savings from such a cut would be passed on to customers.

If VAT were to suddenly be reduced by 15%, would theme park admission prices also be cut by the same amount?

Some might elect to pass on only part of the cut, pocketing the rest – although it should be noted that this website has been told in no uncertain terms by campaigners that the savings would be passed on to customers.

It is not entirely clear how a campaign can speak for the entire tourism and hotel industry, and believing the claims at face value is a large leap of faith to make.

However one thing is clear, if the cut is not at least pledged come what May (literally), then Merlin and its co-campaigners’ dream may be gone for generation.

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