'Proactive response needed from Westminster to help tourism as Northern Ireland losing air passengers to Dublin'
The news that the Irish Government in its Budget has moved to further support tourism increases the urgency for a proactive response from Westminster.
The confirmation of the retention of the 9% VAT rate for the Irish hospitality sector has increased the urgent need for the Westminster government to reduce the VAT rate for Northern Ireland.
The hospitality sector in the south has benefited from this reduced rate and it has proved very successful. Hotels and restaurants, particularly along the border area are left trying to compete with a 20% VAT rate, one of the highest in Europe.
The Treasury in Westminster may object pointing out that the cost of reducing the hospitality VAT rate UK wide would be prohibitive but there is a strong case that Northern Ireland, sharing a border with the Republic, should be treated differently.
Tourism is a major employer across the north also, especially in rural areas where other work is not as readily available. As an MLA who helped to secure this year’s City of Culture I am confident that we have shown the potential and capacity that we have to attract tourists to the region.
There is another measure in the Irish Budget that also has the potential to impact our tourist industry. The Irish Government is reducing the Air Travel Tax to zero from April 2014. Northern Ireland is already losing significant numbers of passengers to Dublin and this will only increase the pressure on our airports.
For those visitors taking trips, this additional reduction to the cost of their air fare may make the difference for them in deciding to fly to Cork instead of Belfast or Derry.
SDLP MPs have argued in Westminster for the ability of the MLAs to set the rate of Air Passenger Duty not only on long-haul but short-haul flights.
With that responsibility we could fully co-ordinate our policy on Air Passenger Duty with our counterparts in Dublin to remove the disparity in rates for the benefit of the economy across this island.
Tourism is far too important to our economy not to be able to compete effectively with our nearest neighbours. It is time for Westminster to sit up and take notice and support the tourist industry with proactive measures that level the playing field.