Debate contribution: Hospitality VAT Harmonisation

Debate contribution by Dr Steve Aiken OBE on 10 February 2025.

MLA

Dr Steve Aiken OBE

Party at the time

Ulster Unionist Party

Date

10 February 2025

Type

Debate contribution

Business

Private Members' Business

Heading

Hospitality VAT Harmonisation

Assembly identifier

Official Report component 4791001

Read the official Assembly record

Text

Thank you very much indeed, Madam Principal Deputy Speaker. I thank every Member for the debate and for its tone, which was very productive. It was important, because we recognised the central importance of the hospitality industry in Northern Ireland and the fact that it has the potential to grow considerably and needs support to do that. As I go through my contribution, I will not repeat what everybody said, because you all made your points very clearly and eloquently, but three key themes ran through the debate. Minister, I will address my remarks to you, because it will be quite germane to your work. Minister, you will be aware that the third paragraph of article 8 of the Northern Ireland protocol talks about a derogation to do with VAT and the importance of where that sits in the all-islands economy. I use that word "all-islands" very clearly. If we look specifically at where VAT is, we see that it is quite clear that there are issues that could and should be raised with the Joint Committee. I do not believe that that is an area with which the Joint Committee has engaged itself seriously. I know that the Minister, the leader of the Opposition and others present are fully aware of the protocol and some of the issues in it. Article 10, which talks about state aid and its implications, has been used previously as a reason not to look at making changes to APD and other issues. When one looks at the protocol, however, that is not what it states. If we look at article 11, the issue is how we engage with the Joint Committee. Article 11 specifically mentions necessary areas of cooperation, one of which is tourism, and it talks about the North/South issues involved. There is no doubt that a VAT rate that is currently at 15% but is to go down to 9·5% is anti-competitive. Indeed, if it were the other way around, we would be looking at taking a case, through the various structures available, to be able to engage on that issue. Other nations — for instance, Norway — have done similar things. That is therefore an area that we should be looking at pursuing through the Joint Committee. That is what we refer to in our motion, Minister. It is a question of using the protocol, as much as we like or dislike it — I know that Mr Gaston raised issues, and I have real concerns about the protocol and all the rest of it — to push the case for businesses in Northern Ireland in order to make them work.

No, I will not. Just wait. I will let you in later. That is important. Conversations are happening now in the lead-up up to next year's review of the trade and cooperation agreement (TCA), so the Minister, other Ministers and the Executive themselves should be making representations to the Joint Committee. As part of that conversation, it is key that we look at the whole idea of having a level playing field. Rightly, other Members have raised the issue of the rise in National Insurance contributions and the increase in the national living wage. Those are costs for businesses, but they are not the most significant costs with which our hospitality industry is having to deal. There are other issues involved as well. We have heard about air passenger duty. There are specific rules and regulations in the protocol and in the Treasury's own rules about looking at derogations when they come through. What is very clear is that there is a significant cost from the Irish Sea border, and that is a fiscal cost. As numerous Prime Ministers — there have been quite a few, some of whom are probably more akin to vegetables — have pointed out clearly, we should be looking at where the costs lie for things such as the Irish Sea border. There should be ameliorations made to where those costs lie, and those particular ameliorations could be looked for through the review of the TCA but also through the Joint Committee. Yes, please, Mr O'Toole, come and speak to me.

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

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 11:56 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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