Forget about VAT rate and offer value for money in Ciy of Culture

The Minister was speaking after the Londonderry MP raised the issue of the Republic of Ireland’s recent reduction of VAT in the tourist sector to 9 per cent.

Mr Swire said: “The hon. Gentleman’s city of Londonderry will be city of culture in 2013. We need to offer people value for money and good hospitality—that I am sure we can do—and the issue of VAT will then become secondary.”

Mr Durkan referred to the 18 month reduction in ROI and similar low rate incentives in Germany and France.

He asked: “Will he and the Secretary of State use their standing with their colleagues in the Treasury to commend a sectorally targeted VAT cut for tourism throughout the UK?”

Mr Swire replied: “The hon. Gentleman knows that the EU average for VAT is 20.8 per cent, whereas VAT in the UK is 20%. Germany’s lower rate is simply a mechanism to redistribute money from the centre to the Länder, as Germany has many local tourist—or ‘bed’—taxes.

“We would all like lower taxation and we would all like the deficit to be addressed, which is what we are seeking to do, but this is not just about the rates of VAT. London hotels are doing better than they have done for some time, there are more tourist visitors to Northern Ireland than there have been for some time and the hon. Gentleman’s city of Londonderry will be city of culture in 2013. We need to offer people value for money and good hospitality—that I am sure we can do—and the issue of VAT will then become secondary.”