The CLA is calling for the 5% VAT rate for tourism to be made permanent and for the government to produce a roadmap to economic recovery.
The Budget, which is due to be set in March, is likely to be focused on the pandemic and how to restart the economy. Our submission to the Treasury, which sets out the policies and priorities that we want the government to consider ahead of the budget, ensures that the rural economy will not be left behind in this economic recovery.
Tourism and hospitality remain a staple of the rural economy. In 2019, domestic tourism to the UK accounted for £76bn. However, with revenue losses estimated at £20bn in 2020, it is clear that the sector has a long path to recovery.
The CLA is calling for the 5% rate of VAT for tourism, which is due to come to an end in March, to be made permanent. This will encourage UK holidaymakers to holiday at home this year when it is safe to do so and gives these businesses a more level playing field to compete with international destinations.
The schemes put in place to aid businesses during the pandemic, such as the furlough scheme, business interruption loans, business rates and payment holidays, have been a lifeline. This help mustn't be snatched away overnight once the economy starts to open up again. This support needs to be tapered off to allow rural businesses to start making a profit before having to worry about repayments.
There needs to a period of stability after what I think everyone would agree was a traumatic year. We are urging the government to produce a roadmap to recovery to allow businesses to plan and adapt for the future.
Looking further into the future, we will continue to work on our Rural Powerhouse campaign, focused on closing the productivity gap between cities and our countryside. We have advocated for essential investment in rural connectivity and digital skills, as well as a clearly defined rural element of the new Shared Prosperity Fund.
You can read our submission here.