Dave Thompson MSP

Highlands and Islands MSP Dave Thompson is to submit a business case to the UK Treasury calling for an end to a situation where Scottish ski centres are forced to pay a sales tax on ski lift passes from which their European competitors are largely exempt.

Last year Mr Thompson wrote to fellow Highland politician Danny Alexander (Lib Dem), who is now Cabinet Secretary to the Treasury, to ask him to end a situation where VAT is levied on sales of ski lift passes because of a Westminster ruling that an exemption for public transport applies only to vehicles capable of carrying more than 10 passengers and that each seat on a ski lift system has to be viewed as a separate vehicle.

However Mr Alexander passed the matter on to Treasury colleague Justine Greening (Con. Putney), the Economic Secretary to the Treasury, but she stated that European rules meant that Britain had no power to introduce a new area of VAT exemption, however she did admit that a reduction of VAT to five per cent was possible but stated that she and her colleagues were busy mainly with reducing the country's financial deficit.

"Ms Greening's acknowledgement that a reduction to five per cent would be possible is a major breakthrough," Mr Thompson said.

"However the accompanying change of subject to the financial plight Labour left Britain's finances in is less than encouraging. Ms Greening's letter does not reject any reduction in VAT for ski lifts but neither does her letter give any indication that the measure I have called for will actively be pursued.

"That is why I intend to reply to the minister with firm figures to demonstrate that, for potential clients from much of the UK, Scottish ski centres are in direct competition with others on mainland Europe where this sales tax is not collected.

"So anything that makes the price of a ski break in Scotland more expensive than a similar holiday in the French or Italian Alps for potential visitors from the South of England, who are equidistant between these two regions, puts our winter sports centres at an unfair disadvantage.

Mr Thompson continued: "Figures I have been given for VAT paid to the UK Treasury on ski lift passes for last season show that a reduction to five per cent would involve a loss of a few hundred thousand pounds to the Exchequer.

"That is a miniscule amount of money for the Treasury but a sum that would have a major impact on a struggling sector of the country's tourist economy. What we have to remember is that every visitor from the south of England will also spend hundreds of pounds on travel, accommodation, living costs and gifts in some of Scotland's most economically challenged areas and much of this expenditure will be taxed in the UK rather than in France, Austria or Spain, therefore the UK Treasury would stand to gain more than the relatively small sum it would forego by allowing a reduced rate of VAT.

"My assertion is that creating a level playing field for Scottish ski centres will lead to more enthusiasts choosing to holiday within the UK, creating an overall tax receipt well in excess of the small sum that would be lost by reducing VAT for this service to five per cent."

Mr Thompson added: "I had hoped that a Highland MP would have realised this and been prepared to take action now that he is in a post where such a move is within his power but sadly in this as in so many other areas where Danny Alexander has been able to benefit his constituents, no action has been forthcoming."