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Troubles hangover doing more damage to Northern Ireland tourism than high VAT, claims MP

By David Young

Published 03/12/2015

The levy can affect prices of drink in pubs
The levy can affect prices of drink in pubs

A negative image created by the legacy of the Troubles is doing more damage to our tourism and hospitality industry than high VAT rates, an MP has claimed.

It comes as members from Northern Ireland's pub, restaurant and hotel industry addressed a Westminster committee over fears that a higher Vat rate here than in the Republic was driving tourists across the border.

But Conservative MP Nigel Evans said convincing would-be visitors that the province was now a changed place was more important than cutting VAT to the rate levied across the Irish border.

Mr Evans is a member of the Northern Ireland Affairs Committee, which is conducting an inquiry into how the Government can support the tourism sector.

MPs are exploring whether the UK's 20% VAT rate is putting businesses at a competitive disadvantage, particularly in respect to the Republic of Ireland, where the VAT rate stands at 9%.

The Northern Ireland Hotels Federation was addressing the committee yesterday.

Mr Evans highlighted the potential image problem as the committee heard evidence from a range of hotelier and hospitality bodies at Westminster.

The committee also heard submissions on the VAT rate from the British Hospitality Association, Hospitality Ulster and the British Beer and Pub Association.

Hospitality Ulster previously claimed a VAT cut could enable the tourism sector to generate an additional 2,200 jobs a year.

Addressing Janice Gault, the chief executive of Northern Ireland Hotels Federation, the Tory MP said: "You have got an uphill struggle and it's because when people have an image of Belfast part of their brain goes back to the Troubles - the bombings and the shootings. It was a war zone for so many years, for decades. Clearly that's not the case any more, and your uphill struggle is to convince people that it's safe to go there, that it's a lovely place to go - it's got nothing to do with an 11% differential on VAT, to be honest."

Ms Gault acknowledged the province's troubled history was an issue, but said the VAT rate was hampering the tourism sector's efforts to break with the past. "I agree that there are issues in regard to our history," Ms Gault added. "We have had 30 years [of negative coverage in the media], which has not helped.

"We feel that there is an opportunity for us to actually rise above that and actually create a more vibrant economy."

She also claimed that the legacy of the Troubles was only one of a number of challenges facing the tourism sector. "Having VAT at 20% certainly doesn't help the situation," Ms Gault said.

"And that is the one difference we have [with the rest of the UK] - we are actually attached to somewhere that has recognised that a VAT reduction and a more effective tax system does actually help your tourism product grow."

Cutting the tourism VAT rate in Northern Ireland could enable the sector to generate an extra £25m a year, Hospitality Ulster has previously said. Ahead of the Westminster committee yesterday, the organisation's chief executive, Colin Neill, backed the VAT cut.

"Currently, 25 of 27 EU countries have reduced tourism VAT," he said. "The UK's rate of 20% is twice the average, which undermines competitiveness against countries with lower rates. The UK is 140 out of 141 countries for price competitiveness in tourism."

Belfast Telegraph

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