This is Cornwall --
The Government has firmly rejected calls for a VAT cut designed to boost tourism as it would jeopardise George Osborne's austerity programme.
Ministers are under pressure to follow the lead of France, Germany and Ireland by slashing VAT on food and accommodation to boost arguably the Westcountry's most vital industry.
But in a written ministerial question, junior Treasury Minister David Gauke said there is "no prospect" of a tax break as increasing Government borrowing could have a "far larger negative impact on the economy".
The snub comes ahead of the Chancellor's Autumn Statement next month, which sets out the Government's spending priorities.
The tourism sector in Britain is subject to a 20% VAT rate, while rivals in Europe pay just 7% in some countries. Estimates last year claimed reducing the duty to 15% could net the Westcountry an extra £160 million a year.
The CutTourismVAT campaign, which includes 500 groups, associations, individual hotels and attractions, is leading calls for a cut to improve the industry's international standing and help ease the cost of living burden for "staycationers".
But Mr Gauke outlined how the revenue foregone by reducing VAT to 5% on all hospitality – including rooms, food and alcohol – would cost the public purse up to £12 billion a year.
He added: "The analysis undertaken by the CutTourism VAT campaign assumes that the revenue shortfall associated with such a VAT cut should be met by increasing Government borrowing.
"This would undermine the Government's fiscal strategy, risking a loss of credibility that could have a far larger negative impact on the economy than the positive economic impact that might otherwise be expected as a result of a VAT cut."
He added: "I have written to the chairman of the Campaign for Reduced Tourism VAT explaining that while there is no prospect of a VAT cut for tourism, the Government is committed to a wide range of measures to support tourism that we believe are better targeted and more cost-effective, including the GREAT campaign [which promotes the UK as a destination for study] and initiatives designed to simplify the visa application process for Chinese tourists."
Tourism is worth more than £2 billion annually to Devon and Cornwall.
Adrian Sanders, Liberal Democrat MP for Torbay, said he was "not surprised" at the Treasury response, but thinks "they are wrong to include food and alcohol".
He said campaigns want a cut on accommodation only and "even proponents of this modest proposal admit there would be an upfront cost, but the longer-term view is that it should lead to more tax income over a period of time".
He added: "It's finding a chancellor who is prepared to take the risk that cutting VAT will lead to increased revenues. Perhaps he should recalculate just on accommodation."
Critics say Britain's is one of the most highly taxed tourist economies, and have broadly slammed the Government's tourism strategy. Reported by This is 50 minutes ago.
The Government has firmly rejected calls for a VAT cut designed to boost tourism as it would jeopardise George Osborne's austerity programme.
Ministers are under pressure to follow the lead of France, Germany and Ireland by slashing VAT on food and accommodation to boost arguably the Westcountry's most vital industry.
But in a written ministerial question, junior Treasury Minister David Gauke said there is "no prospect" of a tax break as increasing Government borrowing could have a "far larger negative impact on the economy".
The snub comes ahead of the Chancellor's Autumn Statement next month, which sets out the Government's spending priorities.
The tourism sector in Britain is subject to a 20% VAT rate, while rivals in Europe pay just 7% in some countries. Estimates last year claimed reducing the duty to 15% could net the Westcountry an extra £160 million a year.
The CutTourismVAT campaign, which includes 500 groups, associations, individual hotels and attractions, is leading calls for a cut to improve the industry's international standing and help ease the cost of living burden for "staycationers".
But Mr Gauke outlined how the revenue foregone by reducing VAT to 5% on all hospitality – including rooms, food and alcohol – would cost the public purse up to £12 billion a year.
He added: "The analysis undertaken by the CutTourism VAT campaign assumes that the revenue shortfall associated with such a VAT cut should be met by increasing Government borrowing.
"This would undermine the Government's fiscal strategy, risking a loss of credibility that could have a far larger negative impact on the economy than the positive economic impact that might otherwise be expected as a result of a VAT cut."
He added: "I have written to the chairman of the Campaign for Reduced Tourism VAT explaining that while there is no prospect of a VAT cut for tourism, the Government is committed to a wide range of measures to support tourism that we believe are better targeted and more cost-effective, including the GREAT campaign [which promotes the UK as a destination for study] and initiatives designed to simplify the visa application process for Chinese tourists."
Tourism is worth more than £2 billion annually to Devon and Cornwall.
Adrian Sanders, Liberal Democrat MP for Torbay, said he was "not surprised" at the Treasury response, but thinks "they are wrong to include food and alcohol".
He said campaigns want a cut on accommodation only and "even proponents of this modest proposal admit there would be an upfront cost, but the longer-term view is that it should lead to more tax income over a period of time".
He added: "It's finding a chancellor who is prepared to take the risk that cutting VAT will lead to increased revenues. Perhaps he should recalculate just on accommodation."
Critics say Britain's is one of the most highly taxed tourist economies, and have broadly slammed the Government's tourism strategy. Reported by This is 50 minutes ago.
