Caithness Chamber of Commerce comment on budget 2015
Published 19 Mar 2015Trudy Morris, chief executive of Caithness Chamber of Commerce, comments on Chancellor George Osborne’s Budget 2015 statement:
“Wednesday’s Budget statement offered good news in general for businesses in Caithness, yet also represented a missed opportunity to deliver support for some of our key growth sectors such as tourism.
“The continued increase in employment and projected continued growth in GDP represents a welcome return to overall economic stability following the financial crisis. However, it is clear that some way remains to go and strong Government support for businesses is essential to ensure robust, sustainable economic growth in the long term.
“With regards to changes in taxation for the oil and gas sector, we welcome the Chancellor’s announcement that the Supplementary Charge will be cut from 30% to 20% and that the Petroleum Revenue Tax will drop from 50% to 35%. These cuts, along with a simplification of the tax allowance regime, are a welcome recognition of the difficulties facing this sector and send the right signal to those looking to invest in the North Sea.
“We were also pleased to hear the Chancellor’s plans to reduce duty on beer, cider, whisky and other spirits. Food and drink is a key growth sector for Caithness – which is home to both well-established and up-and-coming spirits producers, in the form of Old Pulteney and Dunnet Bay Distillers respectively – and support for this innovative sector is good news.
“However, we are concerned that the Chancellor has yet again failed to address the issue of VAT, particularly with regards to the tourism industry. The UK is one of just four EU member states to charge the full rate of VAT on all tourist activities, including accommodation.
“Retaining one of the highest rates of tourism VAT in Europe puts our tourism industry is at a distinct disadvantage compared to its European counterparts. Most notably, it places the industry in a directly uncompetitive position compared to the Republic of Ireland, which in 2011 cut its VAT rate for tourism to just 9%.
“We are disappointed that the UK Government has once again failed to recognise the importance of tourism businesses to the economy – and particularly to rural areas such as Caithness. The tourism sector has huge potential for growth and it is essential that our local tourist industry is able to compete on an equal footing with the rest of Europe.”