Langholm hotelier backs VAT cut to five per cent

THE Chancellor Rishi Sunak’s package of measures, which he outlined last Wednesday, has attracted much comment, particularly the cut in VAT to five per cent for the hospitality industry and the 50 per cent discount on eating out.

John Galloway, co-owner of the Eskdale Hotel in Langholm, previously said he was hoping for a cut in VAT.

He said: “It’s a lifeline in the current climate. The only question is whether it should have lasted until the start of next season.

“That would have been more beneficial to businesses, knowing what they have lost in the past few months and will do in the next six months.

“They are also losing a lot of overseas visitors because of the travel restrictions. We get a lot of people from the USA and Australia, especially Armstrongs, as does most of Scotland.

“It’s quite a big market. The emerging market was going to be China but that’s been knocked on the head.

“It will be a very slow burn because they will have to operate with a reduced capacity and hope people will have the confidence to return in significant numbers.

“That’s why we’ve seen some businesses not reopen. It’s not worth their while to do so for practical reasons.”

John said he would also apply to register for the 50 per cent discount on meals during August but, as yet, the website was not live yet.

Mr Sunak says Scotland will receive £4.6bn in extra Barnett funding from the UK government.

The Scottish government welcomed some of Mr Sunak’s measures but accused him of showing a lack of ambition by not introducing the £80bn stimulus package it had called for.

Many measures will apply in Scotland, including the job retention bonus which will pay firms a £1,000 bonus for every employee kept on for at least three months when the furlough scheme ends in October.

VAT on food, accommodation and attractions is cut from 20 per cent until January 12.

The five per cent applies to eat-in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites and attractions like cinemas, theme parks and zoos.

Mr Sunak also unveiled a scheme to give 50 per cent off to people dining out in August and a £2bn kickstart scheme to help create more jobs for young people in Scotland.

David Mundell, Dumfriesshire, Clydesdale and Tweeddale MP, said: “I welcome this timely and substantial funding package.

“The VAT cuts in tourism and hospitality sectors will benefit many businesses in my constituency.

“The cut to five per cent will help give Scotland’s tourism and hospitality sector hope that they will still salvage a summer season and retain jobs.”

John Lamont, Berwickshire, Roxburgh and Selkirk MP, said: “The kickstart scheme will help young people gain vital training and work experience, while ensuring they get a wage.

“Unfortunately, young people are usually the hardest hit during an economic crisis. This should go some way to avoiding that.

“The VAT cut will be especially welcome here where large parts of the economy rely on tourism, with day trippers and tourists visiting restaurants and attractions.”

Rachael Hamilton, Ettrick, Roxburgh and Berwickshire MSP, added: “The tourism and hospitality industry has been given a lifeline to protect jobs and livelihoods and save businesses.

“The positive investment in retaining jobs and boosting economic growth from the UK is in sharp contrast to the grievance politics of the SNP. The Chancellor has risen to the occasion and has set Britain on course for recovery”.

Oliver Mundell, Dumfriesshire MSP, said: “The extra £800m heading to the Scottish government will bring its coronavirus support fund to £4.6bn.

“It is vital that support such as the stamp duty cut in England is matched by the raising of the Land and Buildings Transaction Tax threshold north of the border.

“This is especially important in our area where people have the choice to buy a home on either side of the border.

“The government now must now use these new funds wisely to maximise Scotland’s economic recovery.”