TOURISM bosses and public figures are calling for the Government to permanently lower the VAT rate for the sector amid concerns many businesses remain in 'survival mode'.

There are fears that, despite a strong summer, the county's visitor economy has not recovered from its £1.5 billion losses over the pandemic, and many firms are now looking anxiously at the quieter winter period.

The Government is therefore being urged to make permanent the temporary 12.5 per cent VAT rate for tourism businesses, which is due to return to 20 per cent at the end of March of next year.

Jennifer Cormack, sales and marketing director at Windermere Lake Cruises (WLC), said the tourism sector could be in 'for quite a hard winter'.

She said WLC had been busy over summer but that it was 'nowhere near' recovering all its losses. She expressed concern about an expected reduction in winter international visitors from markets such as China and Japan due to the pandemic.

"Over the winter months, we usually have international coach tours that are on a UK-wide itinerary," she said.

"They book in advance with us and sail with us come rain or shine.

"Over the summer, the domestic business has replaced the international.

"We don't know if that's going to happen over winter because a lot of domestic business will now jet off to Spain or the Canaries."

Mrs Cormack said an end to lower VAT rates next year would come as 'another blow' to the hospitality sector and hoped the Government would keep VAT rates 'as low as they can'.

The VAT rate for hospitality businesses, holiday accommodation providers and tourism attractions rose to 12.5 per cent at the beginning of this month. The Government had temporarily set it at five per cent in July of last year.

A Treasury spokesman said the Government 'went long' with its support, citing measures such as the furlough scheme and grants.

But he stressed the Treasury had 'always been clear that the lower rate of VAT was a temporary measure to support businesses as they recover from the pandemic'.

Tim Farron, MP for Westmorland and Lonsdale, echoed calls for VAT to be permanently lowered in order to 'support the backbone of our economy here in the South Lakes'.

“As we emerge from the pandemic, it’s absolutely critical that these businesses are able to flourish so that our economy can bounce back and we create more jobs," he said.

He said lower VAT would give businesses the 'long-term certainty' they needed to 'carry on operating and continue to provide a wonderful, first-class service to locals and visitors alike'.

Gill Haigh, managing director of Cumbria Tourism, said: "Overall, it’s been a positive summer following the devastating impact of £1.5 billion losses for Cumbria’s visitor economy during the pandemic, but the visitor economy is highly seasonal and many operators are still in survival mode as we head into the crucial winter period.

“A commitment from the Government on VAT would protect local jobs and communities and help businesses to invest in their staff and longer-term sustainability.

"It is vital that the industry’s voice is heard and we are working closely with a range of regional and national trade partners to get this message across at the highest level.”

Joe Cobb, hotel group executive manager at Lake District Country House Hotels, welcomed calls for an extension of the reduced rate - which he said would 'allow businesses to continue to operate' amid the 'ever-changing world of staff shortages, supply-chain struggles and increased costs'.