Tourism (VAT)
Debate between Baroness Ritchie of Downpatrick and Geoffrey Cox(10 years, 9 months ago)
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Ms Ritchie
I thank the right hon. Gentleman for his very helpful intervention. I absolutely agree with him. My constituency borders County Louth in the Republic of Ireland. Many people come to the island of Ireland via Dublin airport, where there will be a zero rate of air passenger duty from April this year. The lower VAT rate on tourism products encourages many of them to use their purchasing power on accommodation and restaurants in the Republic of Ireland, rather than travelling north, where they would have an opportunity to invest in our local economy.
As a labour-intensive industry, the tourism sector is a leading employer. In particular, it offers younger people entry-level jobs at the start of their careers, and more than 44% of people employed in the sector are less than 30 years old. We face a youth unemployment crisis, with more than one in four young people out of work, and the Government’s lack of support for the tourism sector is clearly impairing job creation. A cut in the rate of VAT would create demand, which would spur job creation and go some way towards reducing youth unemployment. In Ireland, the VAT cut for tourism has produced an extra 10,000 jobs in just over a year. A prominent report on the subject published by Deloitte produced evidence that a similar tourist VAT cut in the UK would create some 80,000 jobs.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
I congratulate the hon. Lady on securing this extremely important debate. I represent an area of the south-west that is affected by flooding. Does she empathise, and does she agree that if the Chancellor considered a cut in VAT, it would be a hugely welcome boost to the thousands of small tourist businesses on which the economy of the south-west depends, and that it would help those who are shivering in the midst of the flooding?
Ms Ritchie
I thank the hon. and learned Gentleman for his helpful intervention. My colleagues from Northern Ireland and I offer our sympathy, support and empathy to the people of the south-west. My aunt used to work in the hospitality industry in Plymouth many years ago, so I know it quite well. I suggest to the Minister that a cut in VAT would help those who are struggling economically, financially and emotionally at this difficult time.