Creating jobs is as easy as lowering VAT

November 30, 2010 10:20 AM

One simple solution to create jobs and revive the economy may be to cut VAT. At least that is what Andy Cosslett believes. Cosslett, Chief Executive of the Intercontinental Hotels Group, said that “cutting VAT will create jobs

After Christmas many consumers feel broke, but this year their pockets may be even emptier. VAT will rise from 17.5 per cent to 20 per cent in the New Year. This comes at a particularly bad time for consumers and businesses that may already have the post-Christmas blues.

In fact, Cosslett believes that with the VAT increase many smaller businesses won’t be able to compete. However, countries like France and Germany, who have reduced VAT on hotels, bars, and restaurants, have seen increased productivity and more employment in the hospitality sector.

The hospitality industry is set to boom in the coming decades as more consumers from countries like India and China enter the market.

We know that VAT hikes hit the poorest hardest, and Cosslett’s predictions show the various implications of a VAT hike for businesses too. The TPA has warned in the past that the rise “will cost jobs, limit economic growth and leave the government borrowing more than it otherwise would.”

In a competitive global economy Britain must do everything it can to compete and lowering VAT could be a simple way of employing people, generating revenue, and tapping into new, emerging markets in the East.One simple solution to create jobs and revive the economy may be to cut VAT. At least that is what Andy Cosslett believes. Cosslett, Chief Executive of the Intercontinental Hotels Group, said that “cutting VAT will create jobs

After Christmas many consumers feel broke, but this year their pockets may be even emptier. VAT will rise from 17.5 per cent to 20 per cent in the New Year. This comes at a particularly bad time for consumers and businesses that may already have the post-Christmas blues.

In fact, Cosslett believes that with the VAT increase many smaller businesses won’t be able to compete. However, countries like France and Germany, who have reduced VAT on hotels, bars, and restaurants, have seen increased productivity and more employment in the hospitality sector.

The hospitality industry is set to boom in the coming decades as more consumers from countries like India and China enter the market.

We know that VAT hikes hit the poorest hardest, and Cosslett’s predictions show the various implications of a VAT hike for businesses too. The TPA has warned in the past that the rise “will cost jobs, limit economic growth and leave the government borrowing more than it otherwise would.”

In a competitive global economy Britain must do everything it can to compete and lowering VAT could be a simple way of employing people, generating revenue, and tapping into new, emerging markets in the East.

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