A report is to be commissioned into the impact of Air Passenger Duty and tourism VAT, as part of the deal between the Conservatives and Northern Ireland’s Democratic Unionist Party.
Prime minister Theresa May has pledged £1 billion in new taxpayers’ money to secure the support of the DUP’s 10 MPs in Westminster on issues such as Brexit, budgets and national security.
The parties’ agreement also said: “A detailed consultative report will be commissioned into the impact of VAT and APD on tourism in Northern Ireland to recommend how best to build upon the growing success of that sector.”
The Cut Tourism VAT campaign said VAT on tourism was a key issue in the negotiations between the minority Tory government and the DUP.
Dermot King, chairman of the Campaign to Cut Tourism VAT, said: “The commitment to consult on the impact of tourism VAT in the DUP-Conservative deal shows the importance of the growing and successful hospitality and tourism sector to the economies of Northern Ireland and the entire UK.
“I am confident the findings of this consultation will show that tourism VAT should be reduced to 5% across every part of the UK, creating 121,000 jobs, increasing UK export earnings from tourism and bringing in £4.6 billion to the Treasury over 10 years.”
Ufi Ibrahim, British Hospitality Association chief executive, added: “Reducing tourism VAT across the UK is a key pillar of the BHA’s recommendations to government to support the UK’s fourth largest industry and we look forward to working with the Treasury and leading the industry’s representations to this detailed report.
“Northern Ireland’s hospitality and tourism businesses risk losing customers to the Republic of Ireland where tourism VAT is 9%.”
The aviation industry in Northern Ireland has long been campaigning for the abolition of APD, claiming such a move would create thousands of jobs and enable the region to compete with airports in the Irish Republic, where the tax has been axed.
Karen Dee, chief executive of the Airport Operators Association (AOA), said that any cut in APD in one part of the UK should be “immediately matched everywhere else in the UK”.