Northern Ireland Hospitality Sector

Alex Easton Excerpts

Wednesday 15th July 2026 Westminster Hall

[Robin Swann]

I thank the hon. Member for raising that point, because we do share a land border with another jurisdiction. In the Republic of Ireland, hospitality businesses already benefit from a significantly lower VAT rate of 13.5%, but the Irish Government have gone further by moving towards a 9% rate for food-led hospitality, as he said. That creates a clear competitive imbalance.

[Alex Easton (North Down) (Ind)]

I thank the hon. Member for securing this debate on an important issue. Does he agree that in my constituency and right across Northern Ireland, many pubs, cafés, hotels, B&Bs and local attractions are operating on extremely narrow margins? Targeted VAT relief would improve cash flows and strengthen their resilience, particularly amid rising wage, energy, food and insurance costs.

[Robin Swann]

I agree with the hon. Member. That is why many representative organisations think that VAT reduction would be a key enabler. It would not solve all those problems, but it would definitely help.

With regard to the cross-border imbalance, a family deciding where to spend their money, a couple booking a wedding reception, an organisation booking an event or a visitor choosing accommodation is increasingly influenced by price. Businesses on the other side of the border enjoy a tax advantage that can amount to tens or even hundreds of thousands of pounds each year, depending on their size. The result is obvious. Northern Ireland businesses are competing with one hand tied behind their back, and the problem is about to get worse unless action is taken.

It is especially striking that the United Kingdom’s 20% VAT rate for hospitality is increasingly an outlier across Europe. France applies 10%, Italy 10%, Croatia 13% and Germany is moving towards a reduced hospitality rate. Across Europe, Governments recognise hospitality as a strategically important sector deserving of support because of its role in employment, tourism and local economic development.

The question we are asking the Government is simple: if other countries are using VAT policy to support growth, jobs and investment, why are they unwilling to even test whether such an approach could work in Northern Ireland? That is why the proposal for a Northern Ireland VAT pilot is so compelling. A pilot is not a permanent commitment or a leap in the dark; it is evidence-driven policymaking. It would allow the Treasury to assess whether a reduced rate increases economic activity, protects employment, boosts tourism and stimulates wider tax revenues through income tax, national insurance contributions and corporation tax.

The advantages could be substantial. First, it would help businesses remain viable. For many hospitality operators, a VAT reduction would improve margins at a time when costs are rising dramatically. Some businesses would pass savings directly to customers through lower prices, while others may reinvest those savings into staffing, wages, training or expansion. Either way, the money would remain within the real economy. Secondly, it would support jobs. Hospitality is one of the largest employers of our young people, and it provides opportunities for people entering the workforce, developing skills or returning to employment. Protecting hospitality means protecting livelihoods in every constituency across our country.

Thirdly, it would strengthen tourism. Visitors do not separate hotels, restaurants, cafés and attractions from their overall experience of Northern Ireland, so a more competitive hospitality sector would help to create a stronger visitor economy. Recent successes in attracting major international events have demonstrated Northern Ireland’s potential to attract visitors and generate significant economic returns, and a more competitive VAT regime would build on that success. Fourthly, it would support our high streets and local communities. Hospitality businesses create footfall, bring people into town centres and occupy premises that might otherwise stand vacant. Every restaurant, café or takeaway that survives and prospers contributes to the wider vitality of our communities.

However, there is another important question: can this be done legally? The answer is yes. Too often, discussions about Northern Ireland are dominated by what cannot be done because of the protocol or Windsor framework. On this occasion, the legal advice is clear that neither the VAT provisions that apply to Northern Ireland nor state aid considerations would prevent the UK Government from introducing a reduced VAT pilot for the hospitality sector in Northern Ireland. Indeed, article 8 of the Northern Ireland protocol specifically envisages a situation where VAT arrangements may diverge to address competitive imbalances with the Republic of Ireland, which is the case here. The legal route, the economic case and the practical mechanism exist. What is required now is the political will to act.

Of course, we have to be honest about the challenges. A reduction of VAT would have an up-front fiscal cost. The purpose of such a pilot is to measure whether increased economic activity could offset some or all of that additional revenue loss over time through growth, investment and employment. The question before us is not whether there is a cost, but whether the cost of doing nothing is greater. What is the cost of businesses closing? What is the cost of jobs being lost? What is the cost of investment leaving Northern Ireland? What is the cost of allowing a widening competitive gap between businesses north and south of the border? Those questions deserve answers, and a Northern Ireland pilot would provide them.

Northern Ireland has often been described as unique. In this case, our unique circumstances provide a unique opportunity. We have a clearly defined geographical market, face a distinct cross-border competitive challenge and have an obvious comparator in the Republic of Ireland. That makes Northern Ireland the ideal test bed for a hospitality VAT pilot. If successful, the lessons learned could inform policy across the wider United Kingdom. This proposal is pro-business, pro-worker, pro-tourism and pro-growth. More importantly, it is practical and evidence-based and deserves to be tested rather than dismissed.

The incoming Prime Minister talks of more devolution. Here is an opportunity for the Minister to put such a case in front of him. The Northern Ireland Affairs Committee has opened an evidence call for an inquiry on this subject, so it will not go away at the close of this debate. I therefore urge the Government and the Treasury to work with the Northern Ireland Executive, industry representatives and local businesses to establish a reduced VAT pilot for hospitality businesses in Northern Ireland. Let us give this vital sector a fair chance to compete, protect jobs and investment, strengthen our tourism offering and demonstrate that creative economic policy can help to unlock Northern Ireland’s full economic potential.

--- Later in debate ---

[Dan Tomlinson]

It is important that we return to the topic at hand, but I am very glad that my hon. Friend is happily married to, I am sure, a fantastic partner.

The Government recognise the important contribution that hospitality businesses make to jobs, growth and local communities across Northern Ireland and the United Kingdom as a whole. Cafés, pubs, restaurants and hotels support local economies and, as the hon. Member for South Antrim set out, are important for employment, particularly of young people who are trying to find their way in the jobs market, get experience, get a foot in the door and ready themselves for a career of productive work. They also play a vital role in our high streets and town centres.

I hear the concerns that have been raised about pressures facing the sector in Northern Ireland and across the wider country in terms of operating costs. I also understand the particular challenge in Northern Ireland from the comparisons with the hospitality VAT rate in the Republic of Ireland and cross-border competition. I recognise that the fact that consumers have that much more readily available choice is, as the hon. Gentleman said, a unique challenge facing businesses in Northern Ireland. I fully understand why he is raising the issue and campaigning on it on behalf of his constituents, and I commend him for his sterling work as a constituency MP.

[Alex Easton]

Will the Minister also acknowledge and comment on the added pressures of the Northern Ireland protocol and the Windsor framework, which add extra burdens to businesses in Northern Ireland?

[Dan Tomlinson]

There are a whole range of challenges and also benefits from the protocol and the Windsor framework. I agree with the hon. Member that they do not provide constraints on the policy choice on VAT. I always find it frustrating when Ministers hide behind legal constraints that perhaps are not always there, and I want to be up front with him: if a Government chose to do this, the protocol would not be a barrier.

Members have focused on the potential merits of a Northern Ireland VAT reduction pilot for hospitality, but VAT is a broad-based tax on consumption that applies to a range of sectors, and it also applies on a UK-wide basis. The Government’s view is that different VAT rates would create divergence between Great Britain and Northern Ireland, and impact the competitiveness of businesses between the two regions. I understand that Members are specifically talking about Northern Ireland, but across the country as a whole—some hon. Members did mention the broader campaign around reductions in VAT across the UK—a reduction to 10% in VAT for hospitality would cost around £11 billion a year, which is equivalent to the total expenditure on the Royal Navy or the annual child benefit bill.

There would be significant practical challenges associated with introducing a pilot for a different VAT treatment for hospitality in Northern Ireland only. Businesses, His Majesty’s Revenue and Customs, and consumers would then need to operate in a system that created different treatments for otherwise similar transactions. There would be boundary issues and administrative complexity to work through.

The fact that I am not announcing this change today does not mean that the Government do not take this issue seriously and understand the representations being made. We are also not standing aside. The Chancellor has introduced the Great British summer savings scheme, which is a temporary reduction in VAT on eligible family attractions and children’s meals over this summer, helping families with costs and encouraging footfall during the summer holidays. In England, the Government have also introduced new business rates multipliers for eligible retail, hospitality and leisure properties, a package of transitional reliefs, and the supporting small business scheme, which together amount to £4.3 billion of additional spending. The Barnett formula is applied in the normal way to those changes, so the Northern Ireland Executive received £185 million in consequentials as a result of those decisions.

The Government—and I personally, if I have the honour of staying in this role—will continue to listen carefully to representations from the hospitality sector, from the Northern Ireland Executive and, of course, from hon. Members. We will meet after the summer recess; I am as good as my word. However, we do not believe that a Northern Ireland-specific hospitality pilot is the right approach. As tempting as it is to burnish my devolution credentials ahead of an impending reshuffle, I will not make that commitment today.

I thank the hon. Member for South Antrim for securing this debate and for strongly representing his community. This is an important issue, and I am happy to continue discussing it.

Oral Answers to Questions

Alex Easton Excerpts

Tuesday 23rd June 2026 Commons Chamber

[Rachel Reeves]

We timed the great British summer savings so that they start on the first day of the Scottish school holidays and continues to 1 September, when children in England, Wales and Northern Ireland return to school. We hope that the scheme has a big impact on families around the country, alongside the free bus travel in England in August.

We did not start the war in the middle east, we did not join it, and I have been clear about my views on it, but the war is clearly having consequences here at home. We will continue to monitor the situation and take every action necessary to support families.

[Alex Easton (North Down) (Ind)]

4. What assessment she has made of the adequacy of the temporary reduction in the rate of VAT in supporting the hospitality sector in Northern Ireland.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I thank the hon. Member for giving me another chance to talk about the great British summer savings scheme, which the Chancellor has just talked us through. It is fantastic that it is coming into place in just a couple of days’ time and will run until the end of the summer holidays. It extends across all four nations of the United Kingdon, benefiting businesses in Northern Ireland as well as in Great Britain.

[Alex Easton]

Given Northern Ireland’s unique position in the United Kingdom, sharing an open border with the Republic of Ireland where the VAT rate is 13.5% for the hospitality industry, will the Chancellor look to reduce the rate of VAT for the hospitality sector in Northern Ireland—at minimum for a trial, if not permanently—to maintain price competitiveness, safeguard UK jobs and businesses, and make us more competitive with the Republic of Ireland?

[Dan Tomlinson]

I understand that the VAT rate in Northern Ireland is different from the rate in Ireland—there are different rates of VAT across Europe. It is important to remember that VAT is a national tax in the UK, at 20% across the country. It is important to have consistency for businesses operating across the UK. Significant cuts to VAT come with significant fiscal costs. For example, halving the rate of VAT on hospitality would cost the Exchequer about £11 billion.

Oral Answers to Questions

Alex Easton Excerpts

Tuesday 10th March 2026 Commons Chamber

[Lucy Rigby]

As my hon. Friend knows, we are a strong supporter of the mutual sector, for exactly the reasons that she has given. As part of our financial inclusion strategy, we are backing the sector with initiatives such as the new £30 million credit union transformation fund and reform of the common bond, which I look forward to introducing shortly.

[Alex Easton (North Down) (Ind)]

Will the Minister join me in paying tribute to the work of the food banks, not only in my constituency but across the United Kingdom, in stepping up to plug gaps for families? Does she accept that urgent improvements in respect of benefit transitions and deductions are needed to prevent households from being pushed abruptly into crisis?

[Lucy Rigby]

As I have said, food banks should not need to exist, which is why this Government are committed to ending mass dependence on food parcels. I have also mentioned the importance of lifting the two-child limit on universal credit, which will result in the largest expected reduction in child poverty in a single Parliament since records began.

Oral Answers to Questions

Alex Easton Excerpts

Tuesday 1st July 2025 Commons Chamber

[James Murray]

It is excellent to hear my hon. Friend speak so passionately about Doncaster racecourse and the wider sector, and I reassure her that we will absolutely continue close dialogue with the horseracing industry on these proposals. I and my officials are working closely with the horseracing sector to identify any unintended consequences and possible mitigations. We intend to continue those conversations with the industry, and we welcome further engagement.

[Alex Easton (North Down) (Ind)]

How do the Government assess the implementation of a flat rate in terms of improving fairness and simplification for all involved, reducing administrative costs and encouraging compliance?

[James Murray]

One of the principles behind the reforms that we are looking to make to the gambling duty is to tackle issues of compliance by simplifying the system. The consultation is open at the moment, and I encourage the hon. Gentleman, and anyone else who is interested in contributing towards that, to make their views known.

Oral Answers to Questions

Alex Easton Excerpts

Tuesday 21st January 2025 Commons Chamber

[Darren Jones]

I thank my hon. Friend, who is an important champion for the Welsh economy. Wales can and will play a vital part in our growth mission. Our two Labour Governments continue to work together as we review the position inherited from the Conservative Government, including on rail infrastructure, and decisions will be set out in the spending review in June.

[Alex Easton (North Down) (Ind)]

Will the Chancellor advise businesses in my constituency that are having to make staff unemployed and stop expansion plans in order to pay for her increases in employer national insurance contributions?

Economy, Welfare and Public Services

Alex Easton Excerpts

Monday 22nd July 2024 Commons Chamber

[Alex Easton (North Down) (Ind)]

Thank you, Mr Deputy Speaker. I want to say well done to the hon. Member for Morecambe and Lunesdale (Lizzi Collinge) for her maiden speech. Congratulations! I rise today to express my heartfelt gratitude to the electorate of North Down for the tremendous privilege of electing me to represent them in the House of Commons. I am so humbled and privileged, and I pledge before God to serve them to the best of my ability. I will always put you first. I would like to express my sincere appreciation for the work of my predecessor, Dr Stephen Farry. I wish him every success in his future endeavours.

I am a proud Ulsterman, and anyone who knows Ulstermen and Ulsterwomen will know that we are very generous and love to meet new people, so I would like to take this opportunity to invite everyone to visit North Down. It is the best part of the United Kingdom to live, work and invest in. Our stunning coastline features the beautiful city of Bangor and Crawfordsburn country park, alongside historical sites such as Bangor abbey and Grey Point fort. North Down is also home to exceptional golf courses, including the Holywood golf club, where the brilliant Rory McIlroy honed his skills from the age of seven. With excellent road and rail access to Belfast, North Down offers a perfect blend of natural beauty and modern amenities. Please come and visit; you will be welcome. Maybe not all at once, though.

I would like to extend a warm welcome to the distinguished right hon. Member for Leeds South (Hilary Benn) in his new role as Secretary of State for Northern Ireland. I wish him every success.

I fully support the plans laid out in the King’s Speech that aim to deliver economic prosperity and kick-start growth. The partnership approach with the Northern Ireland Assembly is particularly welcome, and I am encouraged by the figures from His Majesty’s Revenue and Customs showing that Northern Ireland has recorded the fastest year-on-year job growth for the second consecutive month, significantly outperforming other parts of the United Kingdom. Furthermore, I am encouraged to note that median monthly wage growth in Northern Ireland is outpacing that in other parts of the United Kingdom, positioning us fifth among the 12 UK regions. It is imperative that we build on this economic success and translate it into improved quality of life and regeneration in North Down.

We must also be mindful of the fact that most of Northern Ireland’s trade is across the vital east-west axis with Great Britain, alongside the important, albeit lesser, north-south corridor with the Republic of Ireland. According to the Northern Ireland Statistics and Research Agency, sales and exports along the east-west corridor between Great Britain and Northern Ireland were valued at £12.8 billion in 2021. In comparison, sales and exports between Northern Ireland and the Republic of Ireland totalled just £5.2 billion. This highlights why the Union of Great Britain and Northern Ireland is invaluable and should be cherished, as it enhances economic quality of life for all our people and communities across Northern Ireland.

We can look to our Ulster Scots heritage in Donaghadee and Millisle as prime examples of outstanding development, spearheaded in the early 17th century by two distinguished figures: Sir James Hamilton, first Viscount Claneboye, and Sir Hugh Montgomery, first Viscount Montgomery. Their legacy should serve as inspiration for the ongoing economic development of Donaghadee and North Down, particularly in areas of industry and infrastructure.

However, not all is well in my constituency. The Queen’s Parade project in Bangor has seen Queen’s Parade lying derelict for decades. Our minor injuries unit has been closed, and we have no open police station inquiry offices—I bet no one else in this Chamber has no open police station inquiry offices in their constituency.

People in my constituency cannot see their GP, the roads are full of potholes and there is a lack of social housing and new starter homes for young families who want to start on the housing ladder. I really hope that this Government will help to improve my constituents’ lives.

It is essential to note that the Northern Ireland protocol is fundamentally flawed. It creates a de facto border in the Irish sea, undermining the integrity of the UK by separating Northern Ireland from the rest of the UK. This arrangement has led to increased bureaucracy, hurdles and trade barriers, disrupting economic stability and supply chains. Furthermore, it has caused political and social tensions in Northern Ireland, raising legitimate concerns among Unionists about their place in the United Kingdom. I contend that by prioritising the EU’s regulatory framework over the wishes of the people of Northern Ireland to be a full part of the UK, the protocol disregards democratic principles and subjects us to foreign laws. It needs to be changed. It needs to go.

Finally, I want to mention my parents. My mum and dad were killed in a fire at their home in Bangor last year, and it caused a lot of heartache for me. I want to say that my dad believed in me. After four attempts to get to Westminster, I finally succeeded. Dad, I hope I made you proud.

When you have everything taken away from you like that, it makes you realise just how important your family are. It makes you see everything that you have taken for granted throughout your life, such as the health service, which has always been there for us. I appreciate the people in the health service and the Police Service of Northern Ireland who tried to help my mum and dad—I so much appreciate you. I also pay tribute to the Northern Ireland Fire Service, who did everything in their power to help my mum and dad. I just want to let you know that I appreciate everything you have done for my family. I mean that from the bottom of my heart.

[Several hon. Members rose—]