Mark Durkan
Main Page: Mark Durkan (Social Democratic & Labour Party - Foyle)Department Debates - View all Mark Durkan's debates with the Northern Ireland Office
(13 years, 4 months ago)
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Mark Durkan (Foyle) (SDLP)
4. What recent representations he has received on the rate of VAT applied to tourism activities in Northern Ireland.
The Minister of State, Northern Ireland Office (Mr Hugo Swire)
Northern Ireland has enormous attractions for tourists and we strongly support efforts to encourage them to visit. The hon. Member for South Down (Ms Ritchie) raised the issue of VAT rates at a recent meeting with my right hon. Friend the Secretary of State, but these matters are not our direct responsibility.
Mark Durkan
The Minister of State should be aware that as of last week, VAT in the tourism sector in the south of Ireland has been reduced to 9% for 18 months. Similar steps have been taken in France and Germany. Will he and the Secretary of State use their standing with their colleagues in the Treasury to commend a sectorally targeted VAT cut for tourism throughout the UK?
Mr Swire
The hon. Gentleman knows that the EU average for VAT is 20.8%, whereas VAT in the UK is 20%. Germany’s lower rate is simply a mechanism to redistribute money from the centre to the Länder, as Germany has many local tourist—or “bed”—taxes. We would all like lower taxation and we would all like the deficit to be addressed, which is what we are seeking to do, but this is not just about the rates of VAT. London hotels are doing better than they have done for some time, there are more tourist visitors to Northern Ireland than there have been for some time and the hon. Gentleman’s city of Londonderry will be city of culture in 2013. We need to offer people value for money and good hospitality—that I am sure we can do—and the issue of VAT will then become secondary.