Delyn MP David Hanson has today challenged the Tory-led Coalition about what effect the VAT rise will have on tourism.
David Hanson said:
“Our economy in North Wales benefits significantly from our tourism sector. It is certainly something that has expanded in recent years and has proved a real driver for economic growth in our region. In fact up to the end of 2010 there was a growth forecast of up to 60% across North Wales.
“I am concerned that the rise in VAT to 20% could put the brakes on this growth at such an important time for our economy. Companies will either have to absorb the costs or pass it on to consumers acting as a disincentive to visit North Wales.”
Notes to editors:
Mr David Hanson (Delyn) (Lab): What assessment has the Minister made of the rise in VAT on the potential for the promotion of tourism? Would he explain to people who provide tourism products whether they should absorb the cost of that rise, thereby cutting their profits, or pass it on to their customers, thereby offering a disincentive for tourism in the UK?
John Penrose: Clearly the rise in VAT is principally a matter for the Treasury, but it affects all economic sectors and every business in the country will have to make precisely the judgment that the right hon. Gentleman describes. As a politician, I would not dream of telling individual businesses how to run their business—it must rightly be a matter for them—but I am sure that, because they have skin in the game, they will make the right decision for their business in their particular sector.