The A303: The Chancellor’s road to the few

One of the common challenges of living on the coast, or in the country, is the smaller size of the local economy. That can be partly a question of the nature of the land, or sea, and partly the smaller population of people to participate in that economy, as producers, sellers or buyers. Anything that can help expand those numbers offers an economic opportunity for working people of coast and country, and should, therefore, be something the Labour Party supports.

While some commentators consider road and rail infrastructure as the answer to improved economic opportunity, those types of enhancement only benefit a very specific location, or population, and often take decades to produce that benefit.

A better, more systemic way to enhance the economic potential, and benefit, of all communities across the UK, would be to provide decent broadband and mobile coverage. Another, even quicker approach, would be to look at enhancing tourism by reducing VAT on hotels, B&Bs and attractions, as proposed by the Cut Tourism VAT campaign. Their proposal, to cut VAT on tourism attractions and accommodation from 20% to 5%, would boost jobs and growth in all parts of the UK.

Their evidence shows that across Europe – from Greece to Germany, from Spain to Sweden – a cut in VAT has delivered results. In Ireland, a cut in tourism VAT from 13.5% to 9% in 2012 led to a significant increase in the number of international tourism receipts being taken and 20,000 direct tourism jobs being created. Cutting tourism VAT and attracting more international visitors will make a huge difference to plugging the UK’s current trade deficit.

And of course this is something that British families can also benefit from. Given the cost of living crisis they have experienced don’t they deserve a break? Don’t they deserve a level playing field with families in Europe? A recent survey by Mumsnet shows that mums think they do. An overwhelming majority (87%) feel that it is a good idea for UK rates of VAT to at least fall in line with European averages. Even better, a 2014 report by the Nevin Economic Research Institute praised the Irish reduction of tourism VAT as ‘notably progressive, impacting positively on lower-income households.”

Recently the Chancellor was asked a simple question: will the UK follow 25 other EU countries in reducing this rate of VAT? His answer, in short, was ‘no’, claiming that cutting VAT for attractions and accommodation had not led to a boost in economic activity in other countries (when the evidence suggests otherwise!)

His answer to boosting tourism is to just invest in the A303 to Devon. There is nothing wrong with improving a lifeline to Devon, a beating heart of the tourism industry, but he is missing a national opportunity, for communities of coast, country and also the nation – cutting tourism VAT, would, in the medium term increase tax revenues to the Treasury and enable the Government to invest in the A303, or indeed anywhere else, while also creating over 120,000 jobs nationwide.  And of course cutting tourism VAT will boost the entire industry in one or two years.

Thankfully Ed Balls gets it, and can see that there could be a place for cutting tourism VAT in Labour’s Better Plan, an opportunity to bring economic growth to all communities of the UK.

Hywel Lloyd is a Co-Founder of Labour:Coast & Country and previously an Advisor to Labour Defra and DCLG Ministers – he writes here in a personal capacity. 


The Rural Road Network

The Government recently announced the launch of a £168 million ‘Pothole Fund’ which will provide councils with funds to address the UK’s deteriorating roads.

While investment in infrastructure is always welcome this figure is far outweighed by the savage cuts that have had to have been forced on highways maintenance budgets. The LGA labelled this level of funding a ‘sticking plaster’ they recognise how important quality roads and services are to rural areas.

While the perception of rural and coastal roads sadly conjures up images of quaint single track country lanes filled with cyclists and ramblers. This is not the case, in reality the fortunes of rural and coastal communities are ultimately tied to the quality of their road networks.

Rural economies shouldered the brunt of the financial crisis and have struggled to recover in the subsequent years, the growth in jobs have been located in the south east and urban centres. Transport is the key to changing this trend.

Access to suppliers and markets will be at the forefront of the mind of any business when it is deciding where it wishes to locate itself. Decades of underinvestment has yielded a road network which is congested and vulnerable to poor weather. Businesses operating within this system will lose time and money with their unreliable access to wider markets.

The ability of local people to commute to the jobs created is also hamstrung by underinvestment, while the quality of roads is questionable, public transport is in certain areas non-existent. A company may offer many high quality apprenticeships but this is worthless to a young person who is able to reach it.

It is acknowledged by all sides that the economy will be a deciding factor in the next election, but while investing transport will have economic benefits, the social benefits that can be gained should not be forgotten.

Rural communities are spread over large areas and despite advances in communications technology many, especially older, individuals can feel isolated. Cheap and regular transport allows individuals to access groups and services which operate in their region.

The growth in those who cycle for pleasure and as a commute has grown, out of all those who use roads they are the most vulnerable when it is in poor condition. While a pothole may result in burst tyre or a cracked axel in a car, a break in the road surface can cause serious injury to cyclists and motorcyclists. High quality infrastructure has a role to play in reducing accidents.

Investing in transport, infrastructure and services, has the potential to exponentially improve rural economies and quality of life but in order to be done properly a long term plan must be put in place. Politicians of all colours are seduced by issues which can be addressed during a single Parliament.

A long term plan for investment in transport, which puts forward a programme for the next decade, rather than the next 12 months is desperately needed.

If it is run on a regional basis, it will allow the Government to abandon their current reactionary approach where attention is focused on big ticket items like the HS2 project and focus on local projects instead.

The pothole fund will not come close to making a real impact, there is a need for real long term investment. The Labour Party, by showing that they are prepared to invest in rural infrastructure, can demonstrate that they can represent communities across the UK.

Infrastructure will never be a ‘sexy’ policy area, but if as a party we wish to make a real difference to people’s lives, rural transport must move up our agenda.

Sam Hargreaves

Sam used to work within the office of Rob Flello MP as a transport policy researcher, running the All Party Parliamentary Group for Freight Transport. During this time he also assisted with the Integrated Transport APPG and the Fair Fuel UK Campaign. 

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, Labour: Coast & Country.