A proposed return to 20 per cent VAT is causing huge concern for ‘struggling’ businesses in Cumbria after the ‘catastrophic’ impact Covid-19 had on the county.

Chancellor Rishi Sunak lowered the rate to 12.5 per cent to combat the effects of the pandemic but now plans to return the rate to 20 per cent in early April.

Tim Farron MP and Cumbria Tourism have joined forces against the proposed rise in VAT after a recent survey-conducted by Cumbria Tourism- of its circa 2500 member businesses revealed that the proposed VAT rise was the fourth biggest concern for members.

The pandemic is estimated to have cost Cumbria’s tourism industry around £2billion.

Tim Farron and Cumbria Tourism have called on the Chancellor to scrap the planned rise.

“The tourism and hospitality industries are fundamental to Cumbrian life,” said Mr Farron.

“The pandemic has been devastating on these industries and whilst the lowered VAT rate has helped boost the economy a little it is nowhere near recovered enough for the rates to return to 20 per cent.

“We also need to keep people in employment and these local businesses will not be able to do that if they have to keep raising prices to keep up with VAT and other rising costs of living. Keeping VAT low is fundamental to keeping our local high streets thriving.”

Gill Haigh, managing director of Cumbria Tourism, said: “The impact of Covid-19 had a catastrophic impact for the county’s tourism industry in 2020, wiping £2billion off the value of our visitor economy.

“Whilst Government support has been hugely welcomed, significant challenges remain – not least around recruitment, which is now potentially holding back future growth.

“Combined with rising costs and supply issues, many tourism and hospitality businesses continue to struggle, and we continue to urge Government to extend the discounted VAT rate.

“Now is the time to seize the moment, invest and really take tourism seriously as an economic driver for the UK and extending the discounted VAT rate would be one way the Government can help make that happen.”