This is Devon -- George Osborne has been urged to cut VAT for tourism businesses to lift the Westcountry's key industry as it is battered by storms and flooding.
Ministers have previously rejected calls to follow the lead of France, Germany and Ireland by slashing the sales tax on food and accommodation.
But the region's MPs have renewed pressure on the Government as Cornwall, Devon and Somerset have suffered major disruption since before Christmas, as they underlined hotels, restaurants and pubs remain "open for business".
In the House of Commons, Geoffrey Cox, Conservative MP for Torridge and West Devon, said the Chancellor could "help those who are shivering in the midst of the flooding" by contemplating slashing the rate.
Sarah Wollaston, Conservative MP for Totnes, said the sector "needs help" as "businesses are struggling" against competition from abroad.
Liberal Democrat MP Torbay, Adrian Sanders, said it was "puzzling" that the Government has "so strongly ruled out looking at how to help the tourism industry".
But, during the debate in Westminster Hall, Treasury Minister David Gauke said the department had "yet to find any evidence" a tax cut would boost the sector.
Tourism in Britain is subject to a 20% VAT rate, while rivals in Europe pay just 7% in some countries. Estimates have suggested reducing the duty to 15% could net the Westcountry an extra £160 million a year.
But the Treasury has argued 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.
Tourism is worth more than £2 billion annually to Devon and Cornwall.
In the debate, Mr Cox said: "I represent an area of the South West that is affected by flooding.
"If the Chancellor considered a cut in VAT, it would be a hugely welcome boost to the thousands of small tourist businesses on which the economy of the South West depends, and that it would help those who are shivering in the midst of the flooding."
Mr Sanders said: "We have seen that Ireland, France and many other countries have successfully used VAT reductions as a stimulus for tourism, which has been disproportionately affected by the recession, both overseas and here.
"There is no doubt but that such a reduction would help areas, especially coastal towns, that have particularly weak local economies.
"It is therefore puzzling that the Government have so strongly ruled out looking at how to help the tourism industry."
The MP went on VAT revenues would be regained within a few years by greater income tax revenue from the estimated 200,000 jobs that the reduction would create, and it would produce significant savings on out-of-work and low-wage benefits.
He added: "We have some of the toughest economic conditions in the UK, with the associated social ills of poor health and housing, high rates of teenage pregnancy and drug dependency, low educational achievement and aspiration, and so on. Driving local economic investment is the only way out."
Dr Wollaston argued a tax cut would help tackle ongoing youth unemployment as firms would be more willing to take on staff.
She continued: "What we need at the moment is help. We offer a fantastic range of opportunities for people who want to come to visit – if God made constituencies, he would have designed Totnes – and I hope that people will visit, but those businesses are struggling.
"I have heard from numerous business owners in my constituency about the effect of competition across Europe. As people decide where they will stay this summer, they are considering things such as food prices in restaurants and the cost of accommodation.
"Right now, our businesses are crying out for support from the Treasury. Can we consider seriously the impact that a 5% VAT rate would have, particularly if applied to hotel rooms and visitor attractions? It is not just competition across national boundaries that makes a difference; it is competition within the tourism sector."
She added: "The South West is open for business. I encourage anyone listening to this debate to come see what we have to offer, but I would also like the Government to do their bit by allowing businesses to offer lower prices, so that people will make the right decisions as the summer comes on."
But Mr Gauke argued funding the cut by additional borrowing would be contrary to the Government's long-term economic plan to get the deficit down and "put our public finances in a credible position".
He said: "Several other member states have chosen to implement a reduced rate of VAT on tourism, but the Government have yet to find any evidence of a causal link between VAT rates and tourism activity." Reported by This is 10 hours ago.
Ministers have previously rejected calls to follow the lead of France, Germany and Ireland by slashing the sales tax on food and accommodation.
But the region's MPs have renewed pressure on the Government as Cornwall, Devon and Somerset have suffered major disruption since before Christmas, as they underlined hotels, restaurants and pubs remain "open for business".
In the House of Commons, Geoffrey Cox, Conservative MP for Torridge and West Devon, said the Chancellor could "help those who are shivering in the midst of the flooding" by contemplating slashing the rate.
Sarah Wollaston, Conservative MP for Totnes, said the sector "needs help" as "businesses are struggling" against competition from abroad.
Liberal Democrat MP Torbay, Adrian Sanders, said it was "puzzling" that the Government has "so strongly ruled out looking at how to help the tourism industry".
But, during the debate in Westminster Hall, Treasury Minister David Gauke said the department had "yet to find any evidence" a tax cut would boost the sector.
Tourism in Britain is subject to a 20% VAT rate, while rivals in Europe pay just 7% in some countries. Estimates have suggested reducing the duty to 15% could net the Westcountry an extra £160 million a year.
But the Treasury has argued 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.
Tourism is worth more than £2 billion annually to Devon and Cornwall.
In the debate, Mr Cox said: "I represent an area of the South West that is affected by flooding.
"If the Chancellor considered a cut in VAT, it would be a hugely welcome boost to the thousands of small tourist businesses on which the economy of the South West depends, and that it would help those who are shivering in the midst of the flooding."
Mr Sanders said: "We have seen that Ireland, France and many other countries have successfully used VAT reductions as a stimulus for tourism, which has been disproportionately affected by the recession, both overseas and here.
"There is no doubt but that such a reduction would help areas, especially coastal towns, that have particularly weak local economies.
"It is therefore puzzling that the Government have so strongly ruled out looking at how to help the tourism industry."
The MP went on VAT revenues would be regained within a few years by greater income tax revenue from the estimated 200,000 jobs that the reduction would create, and it would produce significant savings on out-of-work and low-wage benefits.
He added: "We have some of the toughest economic conditions in the UK, with the associated social ills of poor health and housing, high rates of teenage pregnancy and drug dependency, low educational achievement and aspiration, and so on. Driving local economic investment is the only way out."
Dr Wollaston argued a tax cut would help tackle ongoing youth unemployment as firms would be more willing to take on staff.
She continued: "What we need at the moment is help. We offer a fantastic range of opportunities for people who want to come to visit – if God made constituencies, he would have designed Totnes – and I hope that people will visit, but those businesses are struggling.
"I have heard from numerous business owners in my constituency about the effect of competition across Europe. As people decide where they will stay this summer, they are considering things such as food prices in restaurants and the cost of accommodation.
"Right now, our businesses are crying out for support from the Treasury. Can we consider seriously the impact that a 5% VAT rate would have, particularly if applied to hotel rooms and visitor attractions? It is not just competition across national boundaries that makes a difference; it is competition within the tourism sector."
She added: "The South West is open for business. I encourage anyone listening to this debate to come see what we have to offer, but I would also like the Government to do their bit by allowing businesses to offer lower prices, so that people will make the right decisions as the summer comes on."
But Mr Gauke argued funding the cut by additional borrowing would be contrary to the Government's long-term economic plan to get the deficit down and "put our public finances in a credible position".
He said: "Several other member states have chosen to implement a reduced rate of VAT on tourism, but the Government have yet to find any evidence of a causal link between VAT rates and tourism activity." Reported by This is 10 hours ago.