That the Council notes that the Irish government has moved to reduce VAT on hotel accommodation and food to 9% for at least 18 months from 1 July 2011; recognises that EU rules allow such a sectorally-targeted VAT reduction to support tourism; observes that Germany reduced VAT in hotels from 19% to 7% in January 2010 with successful results; recalls that France reduced VAT on restaurant meals from 19.6% to 5.5% from July 2009 saving businesses and creating jobs; further recognises that such targeted VAT reductions to help employment and private sector growth are also compatible with the deficit reduction programmes being pursued by the governments who have introduced them; calls on the Government to introduce such a measure to help the tourism sector and consumers in the UK; and points out that the International Monetary Fund has said that the Government should consider some tax cuts to stimulate economic activity.

Such tax break could significantly boost Torbay’s tourism industry and help 2012 be a ‘year of tourism’.

Submitted by Councillors Richards and Stringer

Members considered a motion in relation to cutting tourism VAT, notice of which was received in accordance with Standing Order A14.

It was proposed by Councillor McPhail (in the absence of Councillor Richards) and seconded by Councillor Stringer:

that the Council notes that the Irish government has moved to reduce VAT on hotel accommodation and food to 9% for at least 18 months from 1 July 2011; recognises that EU rules allow such a sectorally-targeted VAT reduction to support tourism; observes that Germany reduced VAT in hotels from 19% to 7% in January 2010 with successful results; recalls that France reduced VAT on restaurant meals from 19.6% to 5.5% from July 2009 saving businesses and creating jobs; further recognises that such targeted VAT reductions to help employment and private sector growth are also compatible with the deficit reduction programmes being pursued by the governments who have introduced them; calls on the Government to introduce such a measure to help the tourism sector and consumers in the UK; and points out that the International Monetary Fund has said that the Government should consider some tax cuts to stimulate economic activity.

Such tax break could significantly boost Torbay’s tourism industry and help 2012 be a ‘year of tourism’.

In accordance with Standing Order A14.3(b), the Chairman advised that the motion stood referred to the Mayor.  The Mayor considered the recommendation of the Council as set out above at the meeting and the record of his decision is attached to these Minutes.