The UK cuts taxes on leisure activities to boost tourism in the face of the effects of the war with Iran

The British government announced a series of exceptional measures on Thursday aimed at supporting household purchasing power and boosting the tourism sector this summer, amid an economic climate weakened by the fallout from the Iran-Iraq War. Chancellor Rachel Reeves unveiled a temporary reduction in VAT on tourist attractions, presented as a quick way to lower prices for families.

From June 25th to September 1st, the VAT rate applied to several leisure sites will be reduced from 20% to 5%. This reduction will notably affect amusement parks, zoos, museums, as well as certain cinema and theatre tickets for children. Children's meals in restaurants will also benefit from this tax cut.

The British government also announced that bus travel would be free for children under 15 during the month of August. Rachel Reeves told Parliament that these measures were intended to "help families and support the hospitality sector," which has been particularly hard hit by rising costs linked to international tensions and increasing energy prices.

This initiative comes as Labour Prime Minister Keir Starmer faces increasing pressure, including from within his own party, on managing the cost of living. London is seeking to avoid a deeper economic downturn after the disruptions caused by the conflict in the Middle East, which have affected energy markets and revived inflationary concerns.

The British hospitality industry welcomed the announcements, while urging the government to go further. Kate Nicholls, head of the trade association UKHospitality, said the VAT cut was "the quickest and easiest way to bring prices down and boost consumer confidence." She called for the measure to be extended to tourist accommodation and eventually become permanent for the entire sector.

Rachel Reeves also urged major retailers and supermarkets to pass on the savings to consumers to further ease the burden on household budgets. The minister added that the government was simultaneously working on contingency plans to secure the country's energy supplies amid a still volatile international environment.