Insider Media Limited

The boss of Merlin Entertainments, the international leisure operator behind Alton Towers and Warwick Castle, has called on the government to cut the red tape that is hampering the growth of the tourism sector in the UK.

Nick Varney, the company's global chief executive, told Insider that a VAT cut for tourism businesses would boost domestic and inbound tourism and had the potential to create 80,000 private sector jobs.

“As a country, we need to get more Brits staying in the UK for their holidays and we need to attract more people from overseas," he said. "At the moment, five people go out for every two that come in.

“The government has outlined plans to correct that – and I’m very pleased they have – but we need to develop brands that can stand up and be internationally competitive. The biggest millstone around the neck of the UK tourism economy is the high rate of VAT.

"The UK and Denmark are the only two countries in the European Union that don’t have a preferential rate of VAT for tourism. We’re competing with the likes of France which has a 5.5 per cent VAT rate."

He added that the VAT rate was a major factor in the UK's fall from sixth to 11th place in the World Economic Forum’s Travel and Tourism Competitiveness Ratings between 2008 and 2009.

“We need to see a bit of enlightened government policy because tourism is one of the few industries that can turn on thousands of new jobs, particularly for young people, very quickly," said Varney.

"People talk about encouraging growth in the technology and specialist service sectors, but when you’ve got one in five 16 to 24-year-olds out of work, it’s tourism and hospitality that I think is the best place to start. Studies have been done which have found that 80,000 jobs are out there if you just move the VAT."

Merlin has 63 attractions in 14 countries across three continents and last year welcomed more than 38 million visitors.

Its portfolio of brands includes Madame Tussauds, the London Eye, Alton Towers, Thorpe Park, Legoland and Sea Life centres. It is second only to Disney in its field.

Varney was speaking to Insider ahead of the company's launch of the UK's second Maddam Tussauds in Blackpool next month.

The group plans to open six new attractions in 2011 and last year completed a deal to buy the attractions of Village Roadshow for £100m, giving it a route into the Australian and New Zealand markets.