Dan Tomlinson MP: speeches

Speeches

• 15 Jul 2026 · Northern Ireland Hospitality Sector · Hansard source

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  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.