The Lib Dems adopted the new policy to reduce VAT on visitor accommodation and attractions at its conference in Bournemouth on Sunday, joining 125 MPs across all political parties who are in favour of the move.
According to the campaign, which is backed by the British Hospitality Association (BHA) and a large number of organisations and companies, including Accor, Travelodge and Butlins, reducing the rate to 5 per cent would create 123,000 jobs and £4bn of extra revenue for the Treasury over the next 10 years.
Lib Dem leader Tim Farron said: “Local hotels, B&Bs and tourist attractions are the backbone of our economy and I think they need more help and support. I would like the Government to reduce VAT for tourist attractions and accommodation to boost UK exports, create more jobs and support our local economy.”
Government lobby
The news comes following the BHA's first lobby day, held in Westminster last week. The event, which saw 33 MPs join policy-makers and businesses at Parliament, was designed to highlight the importance of hospitality and tourism to the British economy.
Green MP for Brighton Pavilion Caroline Lucas, a member of the All Party Parliamentary Group for the Visitor Economy, gave a speech at the day where she said having a reduced VAT rate would put the UK 'on a level playing field' with the majority of European countries where VAT rates are lower for accommodation and attractions.
"Cutting the rate of VAT would allow our growing tourism industry in the UK a chance to continue to shine," she said.
Lucas said cross party support was continuing to grow within the group, which is co-chaired by Conservative MP Nigel Huddleston and SDLP MP Margaret Ritchie and whose aim is to 'enhance the local economy by promoting measures and incentives, including a reduction of VAT on tourism'.
Growing support
BHA chief executive Ufi Ibrahim said Lib Dems decision to back the campaign was welcomed and demonstrated support was continuing to grow.
"The UK's Tourism deficit has been in excess of £10bn for far too long. It's time to ensure tourism taxes do not deter more Britons from enjoying the UK staycation, and do not impede our ability to attract greater numbers of international visitors, especially beyond London".
Dermot King, chairman of the Cut Tourism VAT campaign and managing director of Butlins said the evidence of the benefits of a VAT reduction for tourism for businesses, the economy and British families 'had never been clearer'.
"I am pleased to see the Liberal Democrats taking up the cause. We now need to win the hearts and minds of the British public who don’t realise that they are being taxed harder than almost anyone else in Europe for simply going on holiday in their own country," he said.
“We hope that the Chancellor will consider making this reduction, part of the Comprehensive Spending Review now underway."