HC Deb 10 July 1997 vol 297 cc1058-9
4. Mr. David Atkinson

To ask the Chancellor of the Exchequer what representations he has received on the level of VAT on tourism. [6180]

The Financial Secretary to the Treasury (Dawn Primarolo)

I have received a number of representations to the effect that the UK tourism industry suffers a competitive disadvantage as a result of VAT. Given the regular increases in recent years in the number of visitors to the UK and the amount of money they spend, there is nothing to suggest that the UK tourism industry is suffering, but I am keeping this matter under close review.

Mr. Atkinson

The Financial Secretary has acknowledged that this country's tourism industry, including our hotels, is at a competitive disadvantage compared with the tourism industries of other member states in the European Union. For example, the VAT level in France is 5.5 per cent.; in Belgium and Holland, 6 per cent.; in Greece, 8 per cent.; and, in Italy, 9 per cent. What initiatives does she propose to take to ensure a fair and level playing field for VAT on tourism throughout the European Union?

Dawn Primarolo

The tourism industry in the UK is not at a competitive disadvantage because of VAT. I draw the hon. Gentleman's attention to reports today in the Financial Times which said that the UK hotel industry has achieved record profits, higher even than in the late 1980s, and that those profits are expected to increase in the next year, in London and in the regions.

Mr. Flynn

Does my hon. Friend agree that VAT receipts from tourism would be greatly improved if we put to greater use our under-used large houses, including Chevening and Dorneywood? Does she realise that seven extremely large homes, one with 600 rooms, are occupied by a single family? Would it not be the greatest boost to tourism if we could persuade the royal family to live in just two palaces?

Dawn Primarolo

I am grateful for my hon. Friend's advice, and I am glad to hear that he, like the Government, is committed to encouraging tourism. I am sure that my right hon. Friend the Chancellor heard his comments and, as my hon. Friend probably knows, he has declared his intention to ensure that there is use by the public of government buildings.