Lord Dodds of Duncairn
Main Page: Lord Dodds of Duncairn (Democratic Unionist Party - Life peer)Department Debates - View all Lord Dodds of Duncairn's debates with the HM Treasury
(10 years, 3 months ago)
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Ms Ritchie
I thank the hon. Gentleman for his helpful intervention, and I completely agree with him. In our nearest neighbour, the Republic of Ireland, VAT on tourism products is now 9%. Even in the difficult economic climate that the Republic has experienced—it has just come out of the bail-out situation—the VAT rate reduction has underpinned businesses in the tourism sector and encouraged new ones to emerge.
Mr Nigel Dodds (Belfast North) (DUP)
I, too, commend the hon. Lady and her colleagues on securing this important debate. To be parochial for a moment, in Northern Ireland the problem is our land frontier with the Irish Republic where, as she has just mentioned, there is a lower rate of VAT. Is that not a particular issue for the Province, given people’s propensity simply to go south to enjoy better VAT rates?
Ms Ritchie
I thank the right hon. Gentleman for his very helpful intervention. I absolutely agree with him. My constituency borders County Louth in the Republic of Ireland. Many people come to the island of Ireland via Dublin airport, where there will be a zero rate of air passenger duty from April this year. The lower VAT rate on tourism products encourages many of them to use their purchasing power on accommodation and restaurants in the Republic of Ireland, rather than travelling north, where they would have an opportunity to invest in our local economy.
As a labour-intensive industry, the tourism sector is a leading employer. In particular, it offers younger people entry-level jobs at the start of their careers, and more than 44% of people employed in the sector are less than 30 years old. We face a youth unemployment crisis, with more than one in four young people out of work, and the Government’s lack of support for the tourism sector is clearly impairing job creation. A cut in the rate of VAT would create demand, which would spur job creation and go some way towards reducing youth unemployment. In Ireland, the VAT cut for tourism has produced an extra 10,000 jobs in just over a year. A prominent report on the subject published by Deloitte produced evidence that a similar tourist VAT cut in the UK would create some 80,000 jobs.