Debate contribution: VAT for Hospitality

Debate contribution by Ms Sinéad McLaughlin on 13 May 2024.

MLA

Ms Sinéad McLaughlin

Party at the time

Social Democratic and Labour Party

Date

13 May 2024

Type

Debate contribution

Business

Opposition Business

Heading

VAT for Hospitality

Assembly identifier

Official Report component 4489404

Read the official Assembly record

Text

I beg to move

The SDLP proposes the motion not only to advocate specific VAT and hospitality measures but to support our tourism and hospitality sectors more broadly. Our tourism sector is a critical driver for our economy, and there is no doubt that it is one of the biggest success stories of the peace process. Across this island, the tourism industry has gone from strength to strength in the past 26 years, and our part of the island is no exception. The industry is now worth more than £1 billion each year to the North and supports 330,000 jobs across this island — from the walls of Derry, steeped in history and recently immortalised by the comedy of Lisa McGee, to the wooded forests that captured imaginations in 'Game of Thrones' — in thousands of attractions, businesses and establishments across our counties. Tourism is one of the major selling points of this region and an industry that we should shout about from our rooftops at every chance we get. The industry has driven higher employment and economic productivity and better health and life outcomes for so many people. It has helped to change our reputation at home and around the world as somewhere to come, stay, work and visit. The same could be said of our hospitality industry, which plays a huge role in supporting the economy each and every day. Hospitality establishments and workers represent the lifeblood of a thriving economy, generating and driving wealth in each of our cities and towns. We know, of course, that things have been enormously difficult for both sectors over the past few years, with the impact of COVID being particularly acutely felt by businesses that rely on a steady stream of visitors and punters. As has been said many times, the inflation crisis was about not just the cost of living but the cost of doing business. The past few years have been extremely difficult for the tourism and hospitality sectors. Optimism about their prospects fell to just 13% in January of this year, and, although levels have recovered since, huge challenges remain. The impact of the pandemic, twinned with the uncertainty of Brexit, and the inflation crisis have created a perfect storm for businesses. Costs are simply out of control, and they have forced many of our businesses to shut their doors for good. Many areas of those industries are crying out for the relevant skills, and the Department really needs to step up to the mark and develop a pipeline for those businesses. Now that the institutions have finally been restored, we need to do better by the private sector so that it continues to be the major driver for our economy, as it is today. That includes using every lever that is at our disposal and advocating for those that need to be devolved in order to maximise the benefit of tourism and hospitality and to grow the industries.

No, I am sorry; I have a lot to get through. I thought that I had 10 minutes. No single measure will work in isolation, and we need to see a strategic approach through a new tourism strategy and action plan. That strategy must contain the investment that we need to see in those industries, and it must also commit to having concrete measures and targets for expanding our all-island offering, including a defined timeline on the extension, at long last, of the Wild Atlantic Way into the North, which our party has been advocating for many years. It also must recognise the reality across the island. Some 70% of our international visitors to Northern Ireland arrive via Dublin, and 72% of our tourism revenue in Northern Ireland comes from our out-of-state visitors. That is why it is so important that, when considering interventions to support the tourism and hospitality sector, we look at things in the all-island context within which we exist. The tourism industry has also been crystal clear about making its pleas to the Government regarding the electronic travel authorisation (ETA). That is not only unworkable but unacceptable, and the Government need to listen to industry to find a solution in order to finally negate the impacts of the scheme. We need a funded and regionally balanced strategy and action plan that can bring together all the interventions to be published without delay. We also need to look very closely at VAT — I am never going to get through all this. The Republic of Ireland's tourism and hospitality market is eight times the size of Northern Ireland's, even though its population is just three times the size. That is no accident. It has been the intentional policy of the Republic of Ireland to put in place measures that boost hospitality and seize the enormous potential of the island, including through VAT. The huge differential in the VAT charge creates an imbalance North and South. Oxford Economics has calculated that a 1% reduction in VAT has equated to a 1·2% increase in employment. My colleague Matthew O'Toole will take that point further as we go through the debate.

852 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 10:28 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification