Shadow Finance Secretary Donald Cameron has welcomed the UK Government’s VAT cut for the hospitality and tourism sector describing it as “significant boost” for the economic  prospects of the Western Isles which is heavily dependent on tourism.

Mr Cameron, a Highlands and Islands MSP said: “The Chancellor’s initiative on VAT is a significant boost for the Western Isles where an estimated 2,300 jobs are linked to hospitality and tourism.

“Given that we have the added challenge of a late re-opening of the sector in Scotland, it is very important that we get on the front foot and make it clear that responsible visitors will receive a warm Highland welcome when they arrive here, and in so doing help the thousands of people here in the Western Isles who rely on tourism for their livelihoods.”

VAT for the hospitality in food, accommodation and attractions will be cut from 20% to 5% until 12 January. Chancellor Rishi Sunak also announced the launch of an ‘Eat out to help out’ scheme, which will provide everyone with a 50% discount to use in participating restaurants and is set to begin in August.   The scheme will provide a maximum discount of £10 per head for everyone, including children, the Chancellor confirmed.

Mark Tennant, chairman of Scottish Land & Estates, said: “The cut in VAT for tourism and hospitality is a measure that we have called for and is one we are delighted to see implemented for rural Scotland.

"The huge reduction in visitors has had a massive impact on the sector and if a greater recovery can be fostered for the rest of 2020, the real hope is that rural Scotland will be far better placed to move forward in 2021 and beyond. Both the VAT cut and the Eat Out To Help Out scheme can encourage people to sample more of Scotland’s outstanding hospitality, food and drink.

“We’re pleased also to see the new job retention bonus for employers who bring back furloughed staff. Whilst it does not provide a guarantee that every rural business can maintain each and every position, it provides a softer landing on the conclusion on the furlough scheme and will hopefully aid businesses in their quest to retain valued staff.

“This will be aided by the kickstart scheme for 16 to 24 year olds. All too often, young people are compelled to leave rural Scotland to access training or jobs this has a real effect on these communities. There is tangible hope that this may not only aid young people returning to the employment market but also increase the opportunities for their career path to be forged in our rural communities rather than purely urban settings.

“The £2billion grant scheme for energy efficiency improvements is also a very significant move for England, supporting jobs, homeowners and the environment in tandem. We would like to see a similar scheme for Scotland which would have real benefits for many rural homes which experience energy efficiency challenges, whether it be connection to the grid or problems faced by historic building standards.”

Commenting on the Chancellor’s Summer Statement, Angus MacNeil SNP MP for Na h-Eileanan an Iar said: “The Chancellor announced a range of measures in his statement to support the economic recovery, however, none of these go far enough. The Scottish Government called for an £80bn stimulus package which has been ignored and the Chancellor’s statement falls short of what is required to support our economy.

“In May, I called on the UK Treasury to take account of the health policies of the devolved nations when considering the furlough scheme, the Chancellor’s decision to end this scheme will be devastating for many.  It is essential that the Treasury supports business as the financial impact of this pandemic will be felt for a long time.

“On Tuesday, I participated in a cross-party online meeting of the ExcludedUK All-Party Parliamentary Group (APPG) to stand up for the 3 million people in the UK who are being excluded from receiving financial support from the Treasury. It is good to see that over a quarter of MPs in the House of Commons, from all parties support this campaign. Therefore, it is shameful that today the Chancellor made no announcement on extending the duration of The Self-Employment Income Support Scheme (SEISS) or to extend support to the millions of people who are currently excluded from receiving any financial support.

“A VAT cut from 20% to 5% for tourism is good news and something I have long campaigned for, but six-months is not long enough as this will end mid-winter when tourism is generally quiet.

“Scotland should not be at the mercy of the Tories economic policies.  It is only with independence that Scotland will be able to make its own financial decisions.”

(This reported has been extended to include the MP's comments since first being published.)