Sammy Wilson
Main Page: Sammy Wilson (Democratic Unionist Party - East Antrim)Department Debates - View all Sammy Wilson's debates with the HM Treasury
(10 years, 9 months ago)
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Sammy Wilson (East Antrim) (DUP)
I thank the hon. Member for South Down (Ms Ritchie) for her speech on the impact of VAT on tourism. I take issue with what she and my hon. Friend the Member for Strangford (Jim Shannon) said, because I look across the Belfast lough to their constituencies, which are shrouded in mist and doused in rain, from the stunning coastline and glens of Antrim, which are bathed in sunshine.
I understand the Minister’s dilemma. He is being battered in all directions by people pleading special cases. As he contemplates this issue, he should think of one thing: what principles have the Government and the Chancellor laid down on the tax regime? The first is that tax changes should be judged by their impact on growth and efficiency. As the Minister contemplates that, I draw three facts to his attention. First, 19 Governments across Europe have reduced VAT on tourism, and some of them have done that not when fiscal times were good, but when they were difficult. France in 2009, Germany in 2010 and the Irish Republic in 2011 all did that when facing the same problems as the Minister. They made a judgment that, because of the tax elasticity in demand for tourism, there were benefits, and that has proved to be the case. Some 28,200 new jobs have been created in France, with 15,000 businesses saved. Tourism in the Irish Republic is up 16%.
Secondly, I do not want to go into the issue of the model, which has been referred to time and again, but that model shows that a reduction in VAT on accommodation and tourist attractions would be four times more efficient at generating GDP increases than the 2p reduction in corporation tax that the Government have announced. Extending that VAT reduction to food would be three times more efficient at generating GDP than the corporation tax reduction.
Thirdly, to be parochial, the estimates for the Northern Ireland economy show that a VAT reduction could result in 10,000 new jobs in the tourism industry, a 50% increase in tourism revenue and a 40% increase in the number of hotel industry jobs. All those jobs would be available to young people and would help deal with youth unemployment. The reduction would also help increase investment in hotels. One hotel owner told me that they take £500,000 a year, and a 15% reduction in VAT would give them £75,000 to invest in facilities and to train and take on new staff. I hope that the Government will listen to those arguments.