Tomorrow’s VAT increase is set to hit the restaurant and tourism industry at a crucial time, especially in many western areas of Wales where these businesses form such a crucial part of the local economy.
Plaid Cymru’s Director of Policy Nerys Evans AM says that the New Year is traditionally a difficult time for tourism and eateries in areas such as Carmarthen and Pembrokeshire, and the tax hike risk making matters worse.
Plaid’s Mid and West Wales AM says that it was naïve to think installing a 20% VAT tax threshold so soon into the economic recovery would not threaten the very existence of some restaurants in Wales, a sector that are often the first into bankruptcy during tough economic times.
“Nerys Evans said that the Conservative and Lib Dem approach was about putting short term proposals in place, at the expense of the longer term ambitions, of supporting tourism in Wales and the economic support the sector gives to financial recovery.
Plaid’s Nerys Evans AM said:
We know that tourism is something that is a key driver in economic recovery. We are still a long way off getting through the recession and so it is more important than ever that we support areas within the Welsh economy that bring in tourism and custom, which ultimately have a very positive impact on wider businesses.
The New Year period can be difficult at the best of times tourism in Wales. Eateries in Wales have already expressed their concern that a hike in VAT to 20% will hit their sector particularly hard. There is a fear that the Tories and Lib Dems are going to strangle any potential economic success at birth and cut off support for the Welsh economy when it needs it most.
Expenditure on things such as eating out are always going to be looked at by families, and with this VAT increase it will become even more difficult to justify. However, there is a knock on impact to that which will see independent Welsh businesses really struggle. This will be evident right across the supply chain from the waiters and owners in restaurants to the local food and drink producers being squeezed. This all adds greater and greater pressure on the local economy in Wales.
I am particularly concerned about the smaller independent restaurants in Wales which rely on money being retained within the Welsh economy. They provide a vital service in terms of sourcing local produce and also in regards to bringing tourism into Wales.”
