THE government has been urged to reconsider its stance on cutting tourism VAT as it emerged the policy could boost the city by £25 million.

In Brighton and Hove a reduction in tourism VAT of just five per cent could create an estimated 1,130 new jobs.

Brighton Pavilion MP Caroline Lucas urged Chancellor George Osborne to “score a win for families choosing a British holiday”.

The MP for Brighton Pavilion and long-standing supporter of the campaign said: “The Treasury could score a win for families choosing a British holiday – putting an end to the current situation where a family pays twice as much VAT on a UK break compared to a holiday in Italy or Spain.

“It would be brilliant for Brighton if the Chancellor would bring the UK in line with competitor destinations within the European Union.”

A tourism leader suggested the rising tide of devolution could be a chance for the city to set its own tourism VAT.

Soozie Campbell, chairwoman of the Brighton and Hove Tourism Alliance, said: “As our economy continues to strengthen it must be tempting for government to ignore our pleas to reduce VAT on tourism.

“But in fact we need it now more than ever because the strengthening pound is going to drive tourism abroad again and local destinations will need all the help they can get.”

She added: “Devolution could be an opportunity for Brighton and Hove to take the initiative and set its own Vat rate on tourism.”

The comments follow the release of the Cole Commission report, which highlights the importance of export-led growth.

The Campaign to Cut Tourism VAT argues a reduction of five per cent to 20 per cent for tourist attractions and accommodation could improve the UK’s Balance of Trade by more than £20 billion over ten years.

Analysis by Nevin Associates reveals a cut would also have a substantial effect on reducing the UK’s Balance of Trade deficit, by £632 million in year one, £1.5 billion in year three and £20.1 billion over 10 years, at 2015 prices.

The campaign argues a reduction would result in an increase in the UK’s foreign exchange earnings from overseas visitors, who account for about 40 per cent of all spending on visitor accommodation and attractions.