VAT on tourism businesses should be cut to five per cent to help boost the economy after Covid-19, says the Country Land and Business Association (CLA).
The call comes as the business group, which represents 30,000 rural businesses, farmers and landowners, releases a raft of new suggestions to get the rural economy moving.
CLA President Mark Bridgeman said: “Rural tourism businesses will see revenues fall by up to £17.6bn this year. It is right that, for the moment, people stay away and follow government guidelines. When the restrictions are lifted we are encouraging everyone to book their family holiday in the beauty and safety of the British landscape.
“We hope that people are looking forward to enjoying the tranquility and space that the rural and coastal areas have to offer and enjoy. There is nowhere better for a holiday than the Great British countryside.
“In the UK VAT on tourism businesses, at 20 per cent, is far higher than in many other countries, including France (ten per cent), Spain (ten per cent) and Greece (13 per cent).
“A reduction in VAT to levels seen in other countries will ensure that domestic tourism is competitive and affordable. Competitive pricing will significantly boost the economy and keep our carbon footprint down.”
The CLA published its paper ‘COVID-19: Restarting the economy in rural areas’ this week arguing that rural areas have an in-built advantage to implement social distancing thanks to lower population density, more space and less reliance on public transport.
Other measures should include:
- The tapering of furloughing schemes and other business support measures slowly to avoid a cliff edge
- Taking measures to create a more robust food supply chain, including efforts to encourage consumers to buy British and buy local
- Simplifying the planning system to give business start-ups in the rural economy greater flexibility in terms of the use of buildings.
The rural economy is 16 per cent less productive than the national average, and closing the gap could be worth an additional £43bn to the national economy in England alone.
Mr Bridgeman added: “Although the current situation is very difficult for rural businesses, there is also an opportunity to reflect and then to build a better rural economy on a sounder competitive basis.
“The rural economy has a huge amount to offer the country – economically, socially and environmentally. Government can show some real ambition in unleashing its potential.”
CLA South East represents thousands of farmers, landowners and rural businesses in Kent, Hampshire, Surrey, Sussex, Berkshire, Buckinghamshire, Oxfordshire and the Isle of Wight.
For more information about the CLA and its work, visit: cla.org.uk/your-area/south-east/regional-news