Oral Answers to Questions

Caroline Ansell Excerpts

Wednesday 21st July 2021 Commons Chamber

[Mr Walker]

Although tourism is a devolved matter, the Government continue to use every possible opportunity to promote Northern Ireland as a world-class tourist destination, and my hon. Friend is doing an excellent job of that himself. I am delighted to say that I have visited many of the places that he mentioned. I was very pleased to be over in Northern Ireland yesterday, meeting local business owners in Bangor to hear about their High Street Heroes Northern Ireland campaign, which celebrates the local independent retailers who are another fantastic part of Northern Ireland’s offer.

[Caroline Ansell (Eastbourne) (Con)]

What assessment he has made of trends in the level of economic support for businesses in Northern Ireland during the covid-19 outbreak.

[The Minister of State, Northern Ireland Office (Mr Robin Walker)]

Levels of support in Northern Ireland are similar to elsewhere in the UK, reflecting the common challenge that public health restrictions have posed to businesses. Government interventions such as the job retention scheme and the enterprise scheme operate UK-wide, and have together protected around one in four jobs. Support is devolved in some areas. The Executive received an additional £5 billion of Barnett funding for covid, funding a range of interventions including business rates holidays and small business grants—all providing crucial support to businesses.

[Caroline Ansell]

I thank my hon. Friend for his answer and for his support for the tourism sector. I am pleased to say that I have been to the Giant’s Causeway—and the most wonderful place it was. Of course, there is another way to support tourism in Northern Ireland. Treasury and Deloitte estimates show that over a 10-year period, VAT at 5% would deliver £4.6 billion in revenue to the Treasury. As my hon. Friend says, tourism is a key sector in Northern Ireland. In that light, does he agree that maintaining the current, very competitive 5% VAT rate for hospitality beyond the pandemic could create new jobs, add tremendous value and prove to be a powerful UK dividend for businesses in Northern Ireland?

[Mr Walker]

My hon. Friend makes a point that I have certainly heard from a number of businesses in Northern Ireland. The Government have taken unprecedented measures to support the UK economy through the pandemic, including a temporary VAT reduction to 5% for the tourism and hospitality sectors, extended until 30 September. To further help businesses to recover and transition back to the standard rate, an interim rate of 12.5% will apply until 31 March 2022. Raising £130 billion in 2019-20, VAT is an important source of revenue and vital for funding public services such as health, education and defence. The reduced rate is expensive, costing over £7 billion so far, so a permanently reduced or zero rate would further increase costs to UK taxpayers.