VAT RATE FOR TOURISM SECTOR

That this House notes that the Irish government has moved to reduce VAT on hotel accommodation and food to 9 per cent. 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 per cent. to 7 per cent. in January 2010 with successful results; recalls that France reduced VAT on restaurant meals from 19.6 per cent. to 5.5 per cent. 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 Chancellor to introduce such a measure to help the tourism sector and consumers in the UK; and points out that the IMF has said that the Government should consider some tax cuts to stimulate economic activity.