'Chancellor has missed an opportunity', says BHA

24th April 2009, 4:49pm

The Budget announcement caused outrage among the pub industry. But the tourism sector didn't even get a mention. Chief Executive of the British Hospitality Association, Bob Cotton describes why this is very much a missed opportunity.

"In his Commons speech, the Chancellor of the Exchequer said that his Budget would 'build on the strengths of the British economy and its people, speed the recovery, providing jobs and spreading prosperity'.

It is curious, therefore, that despite its size and importance, tourism didn't get a mention in the speech. It was an opportunity missed. 

Gordon Brown frequently insists that Britain must invest its way out of the economy – yet the Budget has done little to encourage this in tourism.

In 2007, the government abolished the Hotel Buildings Allowance and reduced other capital allowance (the main allowance was increased in this Budget – for one year only – to 40%).

Yet investment in tourism facilities – hotels, restaurants, attractions – is essentially long-term.

Frustratingly, the Government is investing heavily in green and hi-tech industries to pull the economy out of the recession (investments that take many years to produce a return) rather than investing in tourism which can produce a near instant return.

If government wants to encourage more new investment, it needs to restore the Hotel Buildings Allowance and the long-term cuts in capital allowances, stop the imposition of additional employment costs on businesses (particularly in business rates, employment and NI) and stanch the endless stream of new regulations."

Related Articles:

• 01 Oct 2009 - Business leaders join council in condemning £500m London rates hike
• 30 Sep 2009 - EXCLUSIVE: £500m business rate bombshell facing central London hospitality firms
• 26 Jun 2009 - New code of practice will restore hospitality industry's reputation
• 25 Jun 2009 - 'We must ensure that government takes tourism seriously'
• 29 Apr 2009 - Brakspear Pub Company to absorb Budget tax hike

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