Debate contribution: VAT for Hospitality

Debate contribution by Mr Mike Nesbitt on 13 May 2024.

MLA

Mr Mike Nesbitt

Party at the time

Ulster Unionist Party

Date

13 May 2024

Type

Debate contribution

Business

Opposition Business

Heading

VAT for Hospitality

Assembly identifier

Official Report component 4489431

Read the official Assembly record

Text

So, the Opposition want to cuts taxes without telling us who will pay for it. Who knew, Deputy Speaker, who knew? I am sympathetic to the pressures that the sector is under. Hospitality Ulster often talks about having to explain why a pint of beer in a bar in the centre of Belfast costs the same as a pint in central London. It says that there are a number of reasons: Northern Ireland has the highest business rates; we have the highest energy costs in the UK; there is no relief on staffing costs, which are just the same; and so many of our pubs are small independents, meaning that they do not have the purchasing power of the big chains that have hundreds of pubs. That said, I wonder whether the party opposite, the Opposition, will explain its reaction to the fact that the Northern Ireland Committee, Irish Congress of Trade Unions (NIC-ICTU) said that it is "the wrong policy"; a policy that, if it benefits any customers in any way, it will be those who are in the highest income bracket. I leave it open to the Member to respond.

That is terribly responsible. Thank you.

There is another 5% VAT rate that has applied, so there is an evidence base on this. In 2000, the Isle of Man got a derogation, endorsed by the European Union, to lower the VAT rate on the repair, maintenance and improvement of existing dwellings to 5% because of the crisis in the construction industry. Over the next 10 years, there were two formal reviews, in 2003 and 2008, of the impact of that 5% rate on repair, maintenance and improvement. The benefits that were identified included stimulating the industry; retaining skills; creating new permanent jobs, including apprenticeships; offering citizens an affordable way to improve their dwelling when they could not afford to or were too scared to move; regenerating the existing housing stock; helping the Government achieve their target of reducing carbon emissions; and reducing the viability of the black or shadow market. Very few people were going to the black market, because they could afford to do otherwise. Also, there was an increase in business and an increase in the number of employees undertaking work that they would not have otherwise have done at that time. Customers were less inclined to request cash deals and were happier to look at small firms as a viable alternative to bigger ones. The reports estimate that, if it had been UK-wide, the lost revenue to the Treasury could have been between £102 million and £508 million. You will agree, Mr Deputy Speaker, that that is a lot of money, but, as a whole, there would have been an impetus to the economy generating £1·4 billion, more than double the lost revenue. Those are 2010 figures. In conclusion, I like the amendment, which the party will be happy to support. If the amendment is carried, we will support the motion as amended.

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

Assessment

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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.

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