Northern Ireland Affairs Committee
Oral evidence: The taxation of the hospitality and tourism sectors in Northern Ireland, HC 544
Wednesday 14 October 2026, Derry/Londonderry
Ordered by the House of Commons to be published on 14 October 2026.
Members present: Tonia Antoniazzi (Chair); Simon Hoare; Adam Jogee; Mike Kane; Mr Paul Kohler; Katrina Murray; Gavin Robinson.
Questions 65 - 116
Witnesses
I: Dr Joanne Stuart, Chief Executive Officer, Northern Ireland Tourism Alliance;
II: Aidan Lyons, Director, Indirect Tax, Grant Thornton Northern Ireland.
Written evidence from witnesses:
– Northern Ireland Tourism Alliance, [THT0015]
– Grant Thornton Ireland, [THT0023]
Examination of witnesses
Witnesses: Dr Joanne Stuart and Aidan Lyons.
Q65 Chair: Welcome to the final evidence session of our inquiry into taxation of the hospitality and tourism sectors in Northern Ireland. We are really pleased to be taking our evidence today from St Columb’s Hall in Derry/Londonderry. This is the first time that the Committee has taken public evidence in Northern Ireland since March 2024, and the first time outside Stormont since June 2018, so this is quite the achievement.
We are joined by Dr Joanne Stuart, chief exec of Northern Ireland Tourism Alliance, and Aidan Lyons, director of indirect tax at Grant Thornton Ireland. Thank you ever so much for joining us. How would you assess the financial health of the hospitality sector in Northern Ireland?
Dr Stuart: Thank you very much for the invitation to speak to you today. As you said, I represent the Northern Ireland Tourism Alliance, which represents the whole of the tourism ecosystem in Northern Ireland. We are the voice of tourism in Northern Ireland, and that covers everything from transport to tour guiding, accommodation, attractions and so on.
In July, we had the 2025 figures for tourism, which showed that tourism—the number of visits and trips—is growing. However, the associated spend and the associated days or nights that people are staying have not increased at the same level. We are doing well, but we have more work to do with regard to increasing the spend and giving visitors more reason to stay in Northern Ireland.
The latest Tourism NI industry survey ran to assess the first six months of this year. The majority of companies are doing the same as, if not better than, last year, but from a challenge perspective, we are looking at the value. An increase in visitors does not necessarily mean an increase in revenues, which goes through to the bottom line.
We have a number of challenges, particularly in the hospitality industry. I know that representatives from Hospitality Ulster have spoken to you. The challenges are things like business rates, the inflation costs in food and the increase in salaries and wages, which was a particular challenge for all businesses in the tourism industry. Primarily, we are made up of small and medium-sized enterprises, and the increase in the NIC threshold and the rate of NIC were huge costs to be assumed by the industry.
As a result, that did not leave companies with enough reserves to get into the investment that is needed, or to put forward competitive pricing, because of the costs that have to be assumed. I have prepared a more detailed brief for the Committee on the back of this, and I have given a full breakdown of the differentials between Northern Ireland and the Republic of Ireland across all the different operating costs. That is stark, with regard not just to VAT but to payroll, pensions and so on.
Q66 Chair: You have gone through basically what the problems are—the VAT, employer NI contributions, increases to the national minimum wage, businesses’ energy costs—but to what extent do you think difficulties are caused by the VAT rate, as opposed to the other factors?
Dr Stuart: VAT is one factor, but there are also a number of costs when you look at this from my perspective—I look at the whole trip. Our case is based on looking at it from the consumer perspective—the visitor, business viability and future investment. When we look at the visitor or the tour operator choosing where to go, VAT is one of the costs that potentially makes us less competitive. Then we are looking at the increase in travel costs—APD and ETA—and a number of aspects add costs on to our trip.
Chair: Which we will come to.
Dr Stuart: Therefore, because we have a higher rate of VAT, all that is coming together. We believe that we need a sustained reduction in VAT. However, that does not mean that we do not need to look at the costs that are within our control.
Chair: I will go to Aidan with the same question.
Aidan Lyons: I echo Joanne’s thanks for the invitation to appear before you today. I specialise in indirect tax, in VAT principally. The standard rate of VAT in the UK is 20%. There is a differentiation from the Republic of Ireland, where it is 13.5% and 9%—there is a difference.
It is a consumer tax, so it is the consumer who pays the tax, and it is added on to the cost or the price that they pay, whether that is staying at a hotel, going to a restaurant or whatever it may be. It can have an impact on the overall price paid. I am not an economist, although our submission included quite a lot of economic analysis and reference, so I would certainly defer to Joanne in that and in her understanding and knowledge of the sector. Potentially, a reduction in VAT might help—it can help—but there is a wider policy here. Clearly, costs are going up—utilities, wages and other costs that the sectors have to face—and they all factor into the overall position.
Q67 Chair: I suppose this is one for you, Joanne: would you say that tourism and hospitality businesses in Northern Ireland are struggling compared with similarly sized businesses in other sectors?
Dr Stuart: I could not say yes or no; I think it is different across the piece. We have some very successful tourism businesses, but smaller businesses can be struggling. That is common across the economy in Northern Ireland. The increase in NIC definitely had a major impact in tourism and hospitality. It really did halt investment and recruitment in those businesses. It was also difficult for businesses, because once you started to change at the lower end, there were increases all the way up. With the cost of pensions and so on, that made a big difference. Businesses have to think very carefully about recruiting people.
The Republic of Ireland has announced a budget, which we are working through at the moment, but certainly based on figures from before the budget came out, there was a difference of nearly 7% in the per-person cost. Those in Northern Ireland were paying 7% more than those in the Republic, and that makes a lot of difference when you are trying to recruit.
A lot of the costs that we are dealing with are similar across the economy. There are specific ones, like business rates for example, where there is support in the rest of the UK, but we do not have the same support here. Again, when we are looking at costs and where decisions can be made, they are divided between Westminster and the Northern Ireland Executive, which can cause a challenge.
Q68 Chair: On that note, Joanne, do you think that the tourism and hospitality sector requires more support from the UK Government than businesses in other sectors?
Dr Stuart: I do, because of the type of businesses we have. We are also very much people-focused and people-facing. Although we are utilising technology to make business efficiencies, we are never going to replace people; we would never want to do that. That is what creates the welcome for visitors, so we are an important sector for providing those jobs on a regional basis. As we start to see AI develop further, there will be people who need to look at different jobs and opportunities. That is where tourism and hospitality can step into the breach, but we have to make sure that our businesses are there and will have the capacity for investment.
Q69 Adam Jogee: Thank you both for coming this afternoon. It is good to be back here in Northern Ireland. Can you touch on the cost pressures facing the tourism and hospitality sectors in the United Kingdom and the Republic of Ireland? What do they look like? Give us a flavour of that comparison.
Dr Stuart: As Aidan set out, obviously there are the differences in VAT. It is more about food. Alcohol is charged at a higher VAT rate in the Republic of Ireland, so it does not include alcohol. We talked about wages and the differences. There is a slight difference in the minimum wage. I think the Republic of Ireland is more or less where we are now, but obviously national insurance and the minimum employer pension are both higher for businesses up here. It works out at roughly £1,800 more per employee in Northern Ireland.
Business energy prices in Northern Ireland are definitely different, whether that is for small or large users. I have included all my sources in the briefing paper. It is between 9% and 14% higher across those bands. Then we have inflation: overall consumer inflation in the UK is 3.1% and in the Republic of Ireland it is 3.7%. There are a number of different things.
One thing that I would say about VAT—I am sure Aidan agrees—is that it is very complicated and complex.
Aidan Lyons: Yes.
Dr Stuart: There are multiple different things, but we have tried to provide some information to simplify that. Does that answer your question?
Q70 Adam Jogee: It does. Out of interest, can you give us a flavour of how effective sharing best practice and mitigating the impact between businesses is? What is that relationship like? Is there one? Could it be better?
Dr Stuart: Between—?
Adam Jogee: Between business in the Republic of Ireland and in Northern Ireland, and some of their representative bodies.
Dr Stuart: Them supporting us?
Adam Jogee: No, sorry. You have just talked through some of the challenges felt by businesses on both sides of the border. I am interested in knowing what co-operation and engagement takes place between businesses and their representative organisations to mitigate some of that, to share best practice or to say, “This is how we should do things differently.”
Dr Stuart: I think there is a lot of collaboration and networking across the industry. Tourism NI has a workplace excellence programme—it is just about to announce 15 businesses going on to that—which is all about sharing best practice. NITA itself has our skills forum, which again is about bringing employers together to learn from each other and share. We have just launched the apprenticeship ambassador scheme, which is about trying to encourage businesses to look at different ways to bring in new staff and increase staff.
There are a number of costs that we cannot do anything about, such as ETA, APD and all that, but we come together so that we can understand what those costs are and how we can work on that. I work very closely with the Northern Ireland Hotels Federation, Visit Belfast, the councils and the Association of Leading Visitor Attractions so that we can find what the common themes are and what we need to do to make the case.
As I say, we have to work with three jurisdictions, obviously including Westminster and the Executive. We look at Tourism Ireland funding and what the Irish Government are doing to support tourism, and we are trying to leverage some of that. In the current budget, Fáilte Ireland has received an additional €6.5 million to promote the Republic of Ireland across the island of Ireland. Tourism Ireland has received more money, and rural pubs have received €15 million because they are seen as an important part of the ecosystem, and they really are struggling. It is sometimes hard for businesses up here to see the funding and support that is being given to their industry.
Adam Jogee: And there is the inevitable competition that goes with that. If you are not that far away, you can go and spend your money there.
Dr Stuart: Yes, that is the thing. We will probably come on to talk about the pilot. The thing we have to remember with Northern Ireland is that we are promoted as the island of Ireland. People come to the island of Ireland and then decide whether to spend time in Northern Ireland or in southern Ireland. We have that competition right on our doorstep, and people can make decisions at the last minute. That is why it is really important that we are able to articulate the value and the reasons that people come to Northern Ireland. That is why the promotion budget for Tourism Northern Ireland is really important. It is obviously very difficult at the moment, because we do not have a budget in Northern Ireland. We are talking about VAT, which is important, but it is also part of a larger problem.
Adam Jogee: Thank you; that is a really helpful answer. Aidan?
Aidan Lyons: There is not too much that I can add to that, because Joanne has set it out eloquently. It speaks to her experience, in terms of her role. We see from our clients that, across Northern Ireland, there are cost pressures, whether it is from utility bills or NIC. I think that is true of all businesses. There are some tremendously successful businesses in Northern Ireland. Clearly, the hospitality and tourism sector does have some specific pressures. There is a difference in the taxation rates as far as VAT is concerned between the Republic and Northern Ireland.
Q71 Adam Jogee: Do you think that it is helpful to make a comparison between the two?
Aidan Lyons: In terms of—?
Adam Jogee: The experiences of businesses in the sector on either side of the border. It is not a trick question; I am just interested.
Aidan Lyons: It is an interesting question, and I am sure that Joanne can bring something to it. If you are a tourist, I think you choose where you are going because there are things you want to see; that drives why you go to a certain place. On the island of Ireland, if you fly to Dublin, you can be in Belfast in an hour and three quarters. If you want to go to the Titanic museum, that is where you are going to go. If you are coming from the US to the island of Ireland, you might want to spend some time in Northern Ireland—why wouldn’t you, if you wanted to go to the Giant’s Causeway and are specifically driven by that? We should make that as attractive as possible.
Q72 Simon Hoare: Dr Stuart, I want to ask about the Great British summer savings scheme—although it should really have been called the “Great United Kingdom summer savings scheme”. You will remember that it introduced a temporary reduction of 5% of VAT on children’s meals, tickets and family attractions. The Committee is keen to hear, in broad terms, your members’ experience of the scheme, and in particular how many businesses participated, whether you are able to tell us what that is as a percentage of eligible businesses, and to what extent those VAT savings were passed on directly to customers through lower prices. Did the scheme lead to increased footfall, sales or visitor numbers?
Dr Stuart: I have done a lot of work to find information from our members on this. NITA had weekly calls with our members as soon as it was announced. Detail was quite sparse and difficult to get, to begin with, but it caused a lot of implementation problems. There was not a very big lead-in time, and businesses were therefore having to change prices. Also, for that summer period, there are a lot of incentives that go out, particularly from attractions, so you get a lot of pre-bookings. A lot of time was spent understanding the refunds and that type of thing. So there was a cost.
I also worked with ALVA. It looked at the UK and did a survey of UK members, which includes members from Northern Ireland. The implementation and additional business costs were highlighted by everybody who responded—I think it had 20 responses to its survey. Everybody passed through the full discount to the customers. However, the evidence showed that there was very little additional business to what would be expected over the summer period. It also seemed to catch the tourism agencies on the hop, so there was not very much promotion of it. A lot of customers were not aware of it. Obviously, the attractions had passed that on so were able to inform them when they arrived, but it was very hard to quantify real additional footfall to what would be expected at that time of year. The visitor was receiving the saving, but there was no significant increase seen coming through to the business as additional revenue or profit.
Q73 Simon Hoare: In terms of striking the balance between a beneficial financial outcome to the business as a result of an uptick in footfall, versus the costs of administering and understanding the scheme, making refunds, doing the paperwork and so on, was it financially neutral or was there a negative cost?
Dr Stuart: It is sort of anecdotal based on a survey, but for the majority of people I have spoken to, it was a cost.
Q74 Simon Hoare: I do not mean this question to be as anti-Treasury and churlish as possibly it sounds. There was very good intention from the Treasury, but the detail was very sketchy at the time of the announcement and there was not enough lead-in time. Is it too churlish to describe it as a bit of a damp squib and a gimmick on behalf of HMG?
Dr Stuart: The public were not really aware of it, so that was the challenge. We are certainly not saying that that is not something, but we think that if you are doing something like that, it has to be designed with business. This is part of the problem, and it was one of the problems that we faced with covid as well.
Businesses understand their business, and by working closer with business we can make the implementation easier and support it by having clear eligibility rules and sufficient lead-in time. We can then have co-ordinated promotion by the tourism agencies and the businesses, which we think would have a much bigger impact.
Q75 Simon Hoare: Although I do not want to be accused of leading the witness in any way, shape or form, I am going to suggest that your answer to this question will be yes.
I am not sure what answer I am going to get, but it links back to the Chair’s opening set of questions. Would my hunch be correct that in order to do what the Treasury wishes—to provide beneficial support to UK hospitality, but in the Northern Irish context here—an endemic, permanent, long-term approach to a differential on VAT for the hospitality sector, due to its permanence and ease of understanding and so on, would be a far greater benefit to NI hospitality than the scheme that we had this summer and indeed than any nascent successor schemes that Treasury Ministers may have in mind?
Dr Stuart: Any VAT reduction has to be sustained. There has been talk about a pilot, but you are talking about three to five years of that to really understand how things are feeding through—not just for the consumer, because that impact should be immediate, but to the businesses: are we seeing more investment and an increase in jobs and so on?
It is about engaging with business to ensure that we have ironed out any potential issues before starting, and about making sure the tourism agencies are also engaged so that everybody is lined up at the same time and we can get the best benefit from it.
Aidan Lyons: From a VAT perspective, for any VAT rate change there will be system changes that need to be implemented, and a determination has to be made whether to pass some or all of the savings on to the consumer. When you have a rate change for a short period, you are making a change to your systems at the start and then you have to change your systems back at the end of that pilot period. Clearly, there is a cost to doing that. It is probably easier for the larger corporates to deal with that; they may have more sophisticated systems and a bigger IT department and can therefore implement the sort of changes required. If you are a smaller business, it may be more challenging.
On the Great British summer savings scheme, there was a degree of complexity in what it did and did not apply to. It was very much aimed at families—children’s food and what have you—but from a VAT point of view, you need to understand which parts are in and which parts are out. I am a VAT adviser, so if the tax is complex that is great for me, because clients need more support. But you want it to be something that they can easily understand so they can implement those changes: what supplies are subject to the reduced rate and what supplies are outside?
You also need a lead-in period for this, as much as anything. For any IT change, you typically do not just ring up or email the IT department and say, “Can you make this change?”, because they have other things to do as well, so it needs to feed into their overall list of priorities.
It is about trying to understand that where there is a change, there is a time and cost commitment for the business to implement that change, and then it will have another, similar cost and time commitment at the end when it has to change it. It is very clear that if a reduced rate of VAT were to be introduced, you would want a good lead-in period. There would need to be a decent amount of time while that rate applies to understand the implications and whether it makes the changes that you want it to make. Then, at the end of the three years, five years or whatever it may be, you cannot leave businesses on a cliff edge, going, “Is it going to change? Is it going to go back? Is it not?” They need to know, and it feeds into their margin and has an impact as they plan for the future.
Q76 Chair: So it has to be long-term? Changing it just for the summer has no impact or little impact.
Aidan Lyons: I cannot talk to the economics, but I can certainly talk from a VAT perspective. If you were to make a change, you would want it to be over a longer period of time, because then you get a better idea of whether it is actually working.
Chair: It is very hard to measure the impact over such a short period of time.
Aidan Lyons: I think so. I think that is true of many things. It may be hard to determine the overall impact of a two-month or two-and-a-half-month sample period.
Q77 Mr Kohler: Thank you for joining us today. I am Paul Kohler, the MP for Wimbledon. I also own a bar in Covent Garden in central London, so I know all about the pressures that hospitality is facing across the UK. I also recognise that there are particular pressures in Northern Ireland because of the land border and competition from the south. While you were talking, I looked up Wetherspoons in Belfast and Wetherspoons in Dublin to see the difference in prices. It looks to me as if a pint is about 30% cheaper in Dublin. Is that right? If you buy a pint of Guinness in the north or the south, is there that sort of price differential?
Dr Stuart: I cannot talk to that from personal experience, but we know that the hospitality industry has been really struggling with the increase in costs. We came out of the back of covid with very low reserves, and, when you look at industry surveys, people have less and less of those reserves to call on, so costs cannot be brought in by the business. That may be seen in higher prices, but that is not my area of expertise.
Q78 Mr Kohler: I am going to ask you about costs and VAT in particular in a moment. I am just wondering: if a consumer walks into a comparable pub in the north or south, are they paying a lot less for their pint in the south than in the north? I am just wondering about that point, rather than looking at costs. Do you know?
Dr Stuart: I do know that alcohol VAT is higher in the south—
Mr Kohler: Not the cost; I mean what the consumer is spending on a pint. I want to get a feel for that.
Dr Stuart: I really cannot answer that.
Aidan Lyons: I can only talk as a consumer here, rather than on a professional basis. It depends on where you go. Dublin probably has a reputation for being quite expensive. Certainly, if you go to Temple Bar it is expensive.
Q79 Mr Kohler: What about for a comparable place, though? That is why I looked up Wetherspoons in Belfast and Dublin.
Aidan Lyons: But I also think that Belfast can be quite expensive as well.
Mr Kohler: Well, exactly.
Aidan Lyons: But that is because of the cost base and the pressures that are attached to it. I have friends who love coming over to Belfast, but in certain places it can be quite expensive. That is my anecdotal experience as a consumer, rather than as a tax adviser.
Q80 Mr Kohler: It would be interesting to know what the actual consumer is paying in both places, because on that competition argument, we need to compete with the south. Costs are one thing, but it would be really interesting to know what the consumer is paying in both those places. I would like to see that at some point. Is the call for a VAT rate the same as the south: 9% on hospitality?
Dr Stuart: In our written submission, we called for 9% across the board with regard to tourism and hospitality, but we caveated that by saying that more work is required around the evaluation and what would work. I know that there are calls for 10%. Just thinking about the mechanics of that, 10% is probably more straightforward than 9%. We have said that a better understanding of the base is needed, as well as an understanding of any costs associated with a VAT that is capped. We would not want to see any impact on the block grant, for example. There is a bit more work to be done, but we are happy with 10% or 9%. That would sort of be where we are looking.
Q81 Mr Kohler: It looks like a back-of-the-envelope calculation, but the Treasury is saying that it would cost £300 million to £400 million a year. Does that sound right to you, as a gross cost for the VAT?
Dr Stuart: Is that across the UK?
Mr Kohler: No, it is £5 billion across the UK. It has said, in a very rough approximation, that it would be £300 million to £400 million pounds just in Northern Ireland. Does that sound right to you, or are you not able to say?
Dr Stuart: I would want to come back to you on that, to be honest. I do not know; I need to look at those figures. I have not actually seen that, so I apologise, but I will come back to the Committee on that. There are aspects here—again, I do not know how it has calculated them. Obviously, if we can make businesses more successful, there are more corporation tax receipts.
Q82 Mr Kohler: I want to ask you about that, because that was just, “How do we cost this, full stop.” Having gone back to 9% in the south in July, you have quoted that it will cost €633 million over the year. Again, that is just the headline cost of the VAT reduction. Has anyone done any studies on the overall cost-benefit analysis in the south? That would help us in our calculations about the north. Does that exist?
Dr Stuart: I don’t know, from an economic perspective. I know that some work was done, but I don’t know whether it was that detailed.
Aidan Lyons: I am not sure. There have certainly been a couple of reports on the impact of the changes in VAT rate and looking at pass-through, but also on whether it drives more investment and whether it increases tax receipts overall. I do not know whether there has been anything specific to look at the overall thing, but that is certainly something that we can check further.
Mr Kohler: That is absolutely crucial, isn’t it?
Dr Stuart: The other thing we are saying is that we need to see an increase in employment as well. There are taxes in regard to that. That is what I am saying: more evaluation is required. That is what we talk about. It is not just about the consumer; it is about business viability, but it is also about future investment. We need our businesses to be investing to develop that and make it more attractive to come to Northern Ireland so that you get longer stays and more money. When visitors come and stay, according to Tourism Ireland figures across the island, 37% of spend is in food and drink; over 25% is in accommodation, and you have retail and transport. If you can extend the stay and extend that value, that will create the add-on.
Q83 Mr Kohler: I hear all the arguments. You have a wonderful test bed in the south: that has happened, and it would be interesting to see all that analysed to see what it shows.
I have one last question and then I will shut up, because the Chair will tell me off. I see that, as I understand it, off sales in the south have a 23% VAT rate. Did that come in in tandem with the reduction in hospitality, or has it always been 23%?
Dr Stuart: It has always been 23%, but I would need to check that.
Aidan Lyons: Ireland obviously has the 23%, which is the standard rate of VAT.
Mr Kohler: Oh, it’s a standard rate?
Aidan Lyons: Yes, it is a standard rate of VAT at 23%. It is higher than the UK’s rate of 20%, but it has reduced rates of 13.5% and 9%, which apply to different parts of the two sectors that we are talking about. I suppose that is the other thing: there are two rates, which can bring complexity, both in terms of which sits where and in terms of the cost.
Q84 Mr Kohler: I was just wondering whether a solution for the whole of the UK would be upping the VAT on off-sale alcohol to pay for lowering it for hospitality. Has that ever been considered by anybody?
Aidan Lyons: I don’t know. It is not something I have been privy to.
Q85 Katrina Murray: Good afternoon. It is a pleasure to see you both today. I want to continue the discussion about VAT. I completely understand why the sector has identified VAT as the campaign. In a world of greater devolution, with different parts of the United Kingdom having different regimes and powers, this is a nice simple tax because it is all controlled by the Treasury. What I cannot understand is why it would be a better use of money than other interventions and options that might be more complex but are still on the table.
Dr Stuart: There are three aspects to the VAT that a consumer sees. There is the reduction in VAT, and maybe that encourages them to go out more. There is also the ability to have a blend, where you give a discount to the customer because of the VAT cut but you bring some of that discount into the business to enable us to develop and grow. It is about the perception of being really good value for money, which then helps us to attract visitors.
There are other things we need to look at. VAT is not the sole answer, but it goes a long way. We need to look at how we can mitigate the impact of the ETA; I have spoken to the Committee about it before and have done a lot of work on that. We are now starting to see more businesses and tour operators identifying ETA as one of the barriers to coming to Northern Ireland. The APD is another area. We need to look at all these aspects and who controls them.
Obviously business rates are a devolved matter, and the Northern Ireland Executive are in a very difficult position at the moment with regard to budget. I suppose the VAT is a headline; it is very easy to understand the concept of it, and it is something that everybody has got behind.
Q86 Katrina Murray: We are seeing reform on business rates in other parts of the UK, and the recognition that the value of some properties and establishments has increased considerably, which is having knock-on impacts on business rates. Could that be a priority for the Executive to support tourism and hospitality?
Dr Stuart: Yes, it is a very important aspect when you look at the operating costs of a business. We had the rates revaluation last year, which we then sort of overturned. Primarily, a lot of that was from the hospitality industry. That is now being reviewed to see whether we can have a rates system that is fairer across all sectors and reflects the challenges faced by tourism and hospitality businesses when it comes to business rates. That campaign has been going for a number of years. We did get support through covid, which was very welcome, and the campaign will continue. But that is another element, and it would not take away from saying that we think a VAT cut would bring more benefit to the whole of the tourism ecosystem and the consumers.
Katrina Murray: Aidan, what is your view?
Aidan Lyons: You are probably looking at a holistic approach again if you want to support the sector. VAT is clearly one element, and quite an obvious element, because as a consumer you are the one who pays the tax. It is a concept that is quite easy to get your head around when you say, “Well, if you reduce VAT, there should be a reduction in prices.” But it does give businesses a bit of flexibility. They can choose to pass the saving on, or they can choose to retain that for investment and what have you, so it does give them a bit of flexibility.
In terms of wider support to the sector, business rates is absolutely one thing, and in terms of supporting skills or supporting people entering the sector. There are a number of things that can be done to support it, but clearly VAT is something that has a lot of traction; I can understand that.
Q87 Chair: What has come out of the last couple of questions is that it is very hard to draw any parallels to see whether there would be a benefit in reducing VAT in Northern Ireland compared with the Republic, because the data is not there. Is the data there to show that it would be beneficial to cut it in Northern Ireland? That is basically a question for you, Aidan.
Aidan Lyons: The difference in the VAT rates is noticeable: 20% to 13.5% and 9% is a chunky number, whichever way you look at it. If there were a reduction in that VAT rate, it certainly would give a business in the sectors affected the ability to pass that on to the consumers.
Q88 Chair: In Ireland, when they reduced it to 9%, they specifically said that it was not to be necessarily passed on.
Aidan Lyons: Yes, in terms of restaurants and so on. Because they have had a lower rate of VAT for longer and more consistently, not just because of covid—the rates are longer-standing—I think they have identified that as a way of supporting the sector and making it more attractive to tourists. They have obviously made a strategic decision that if we can reduce VAT rates, that does have an advantageous impact on the sector.
Dr Stuart: From a Government perspective, they had that cut before, then it went back up again to 13.5%, and then they brought it back down again to 9%, so they have obviously seen that there was a positive impact in those businesses having the 9% VAT rate, because they have now put that back in place. I think there is more there to see on how that is helping.
Q89 Mike Kane: Before I start my questions, I wanted to take this opportunity to echo the words of the Prime Minister at the start of PMQs today.
I am deeply saddened at the death of my friend Pat Karney. Pat was one of those larger-than-life characters who made Manchester the city it is today, a proud Irishman and a proud Mancunian who dedicated almost half a century to serving the people of the great city of Manchester. I knew Pat for many years, and his warmth and wit always struck me, as did his absolute passion for the city. From helping to rebuild Manchester after the 1996 IRA bombing to championing our Christmas markets and introducing our annual Manchester Day, Pat’s fingerprints were all over our modern city. Manchester has lost a giant, and many of us have lost a good friend. My thoughts and prayers are with his family today. Thank you, Chair; it is very appropriate that I could say that at the Northern Ireland Affairs Committee.
Joanne and Aidan, thank you very much for being here. We know that Paul Kohler has a massive cash pile there in Covent Garden, which clearly pulls in more than £90,000 a year and more than meets the VAT threshold. Could I get a hint from you, even if it is a back-of-an-envelope analysis, as to what proportion of hospitality and tourism businesses would benefit from a VAT cut in Northern Ireland?
Dr Stuart: According to NISRA, there are just under 6,000 VAT-registered businesses in tourism and hospitality in Northern Ireland, so obviously they would benefit from a VAT cut. I think there are probably between 7,500 and 8,000 businesses in this sector in Northern Ireland, but 6,000 would be VAT-registered.
Q90 Mike Kane: Can you give the Committee a sense of how the Irish VAT registration threshold compares?
Aidan Lyons: The UK VAT registration threshold is £90,000 per annum. I cannot remember what the Irish one is, but it is lower. The UK traditionally had the highest threshold in the EU 27, before Brexit. Some EU member states have a threshold of zero, so if you make a sale you are in their VAT net. But with VAT, there are two things. If you are VAT-registered, you charge VAT on your sales, but it also gives you the ability to recover VAT on your costs, so clearly that gets factored into your cost of sales in terms of your profit margin.
Q91 Mike Kane: It might be useful, for the Committee to be able to compare pears and oranges, to know what the threshold in the Republic is.
The UK Government have said that restricting any VAT cut to Northern Ireland would introduce divergence. I cannot imagine why Treasury orthodoxy would say that—well, I can—“potentially weakening Northern Ireland’s place in the UK internal market.” What do you make of that argument? Do you want to put on the record your response to the UK Treasury?
Dr Stuart: There is diversification in other aspects. For example, you can look at APD. If we want to go to the UK mainland, flying is really our only option, and we have to pay APD on both—leaving Belfast or Derry, and landing in GB. So there are other areas where the UK has in some ways disadvantaged Northern Ireland. What we are saying is that with this sort of cut it makes sense to have a pilot, and we are suggesting that Northern Ireland would be a good location for that, because we are a shared-island destination. We are sitting with the land border; somebody can decide whether they want to come to Northern Ireland. And they can change their mind: they might decide, “No, I’m not going to go up.” I don’t think you get the same within any of the regions in GB, especially when you are looking at external visitors. You can see an immediate impact.
Tour operators that put itineraries together for the whole of the island make decisions. I know you have the results of the survey by the Inbound Tourism Operators Association of Ireland. VAT and the cost of a trip are one of the things that make their decision on whether they are going to come to Northern Ireland. Add ETA on top of that, and we have examples of tour operators deciding to drop Northern Ireland out of the itinerary.
A pilot ensures that you can see, in a shorter time, whether the VAT cut is having an impact, and then in the longer term it is about how our businesses are investing and employing people and what the impact is on the price to the customer. One of the things that we have to remember is that you do not want to get to a point where you are racing to the bottom. This is about how we ensure that businesses have the capability and the reserves to increase the value of any experience that people are having. What more can we add to that experience, so that people are prepared to pay for the experience? You need to invest, and businesses need to invest, as well as tourism agencies and so on, and Government. It is also sort of closed, in that you have a really good example of two different jurisdictions that you can measure.
Q92 Mike Kane: As somebody who represents an airport seat in Manchester, I am acutely aware of airport passenger duty. It was probably introduced in the ’90s to stem the overheating of Heathrow and other London airports. I would argue for APD holidays for new routes, which I think would hugely benefit a city like Derry/Londonderry, that could prove commercially that those routes could happen. I am sure the Treasury would also argue that we do not pay VAT on the tickets or the fuel, but a lack of a level playing field is a massive disincentive on the island of Ireland, when the Republic does not charge as much—or any APD at all. I do appreciate that.
Dr Stuart: The Dublin to Derry/Londonderry flight is going to have APD on it as well. Again, that will be both ways.
Mike Kane: But it is good news that you are getting that flight.
Dr Stuart: Absolutely: it is good news, but we are adding potentially another £18 or £30 to the cost of a return trip.
Q93 Mike Kane: I have strayed from VAT. Do you think that there would be any administrative burdens on your businesses from having a differential VAT tax burden in Northern Ireland?
Aidan Lyons: VAT is a UK tax, so there are no regional variations on it. When the British summer savings scheme came in, it was laid by statutory instrument and applied to the whole of the UK. I do not think that there has been an instance in which there has been a different VAT rate based on a region: that has not been done by the UK before. I do not see that they would devolve VAT decisions to Stormont, because it is a UK tax.
If you are a business operating in Northern Ireland, England, Scotland and Wales, you would then have two different rates, so there would be a complexity there. Certainly, the larger businesses and more sophisticated systems would be able to make certain changes to do that, but if you were operating on a UK-wide basis, you would have a different rate of VAT applying in Northern Ireland as opposed to England, Scotland and Wales.
Q94 Gavin Robinson: Good afternoon to you both. You had the benefit of getting evidence from a former Aviation Minister there on the air passenger duty. Joanne, you know that this is an inquiry into hospitality and tourism, and you represent the Tourism Alliance, so tourism is your mainstay. What proportion of the money that would be saved in a VAT reduction would apply to tourists, and what proportion would be for general hospitality?
Dr Stuart: It is very hard to answer that, Gavin, because when you look at the different attractions, for example, and different organisations, they have a hospitality element to them—they would have restaurants, cafés and different things in them. Then you look at hotels, where it is accommodation, restaurants and so on, so hospitality is part of those businesses. I think that the reason from a tourism perspective is that tourism is about ensuring that we get the best value from our tourists—how do we attract more overseas tourists to Northern Ireland? When you look at hospitality from restaurants and pubs, they are primarily a domestic market, and it is tourism that brings the external visitors and more money in and increases the size of the pie.
Gavin Robinson: Aidan, do you know the answer to that question?
Aidan Lyons: No.
Q95 Gavin Robinson: I think it is an important question, because this would apply to every café, restaurant and bar, no matter where they are or who is going in. What the VAT rate is makes no material difference to where I as a Belfast-based person go for my tea—I am not driving across the border to save pennies in the pound on VAT—but in a cross-border area such as this city of Londonderry, it could make a material difference if you are organising a wedding and spending £20,000, £30,000 or even £40,000, so there are degrees to it all.
Dr Stuart: There are also business events, Gavin, where you are talking about 500 or 1,000 delegates, and catering is part of that, so that can make a significant difference.
Q96 Gavin Robinson: Of course, but there are degrees to all of this. It would be good to get a sense of the balance and to know where it sits between general hospitality, domestic spend and tourism.
Joanne, we have been asking this question of many, and you have given a taste of it in your written evidence. If there were a reduction in hospitality and tourism VAT, how should it be used by the businesses that save money?
Dr Stuart: That will differ per business.
Gavin Robinson: Let’s think first about how it should be used, and then about how it will be used.
Dr Stuart: Having talked to members, I think we would see a blended approach. Some of the VAT cut would go to the customer, so they would be able to see exactly the price that they are paying and the VAT, and some would remain in the business to handle the costs. The problem is that each business will be different depending on what situation they are in. We would look to have a blended approach where, depending on the business, you would see a reduction in costs to the customer, not an increase. However, we also need to make sure that our businesses are viable and have the reserves to spend to increase employment and investment. In the detailed brief, which we will send through, I have given some examples of how that may look with full pass-through, a lower level of pass-through and no pass-through.
Q97 Gavin Robinson: In your evidence, you said that 75% of respondents to a survey you did in 2026 stated that they would pass the VAT reduction through in reductions in price, but one third—that takes us over 100% already—would increase staffing, 25% would improve wages for staff and 83% would increase investment in the business. When you add all that together, we are well over 200%. When you say a blended approach, it really is people saying both. You might get a bit of a price reduction, a bit of investment, a bit of staffing and so on.
Dr Stuart: I think people had the choice to say which ones they would do, rather than split it out by percentage.
Q98 Gavin Robinson: There will be those who say that it is hard to stimulate increased business if the customer is not incentivised by reduced cost, yet we have had evidence from others during this inquiry that the bottom line is that it is not about reduced cost, but about increased margins, or at least making margins more sustainable—that is probably a fairer way to put it. People feel that they are not making a profit and that a reduction would at least allow them to make a profit. When you did your survey, did that come through as a damaging aspect to the argument to pursue a VAT reduction? The south had a reduction in 2011, and 88% of it was passed through. They had a reduction in 2019, and 50% of it was passed through. They had a reduction in 2020 and in 2023, and they stopped passing it through to consumers. If a credible argument is to be mounted, how should it be mounted to show that it would benefit not just the industry, but the economy?
Dr Stuart: That is what our case is around. We want to see businesses being able to invest. I understand the argument about a sustained margin, but it is what they do with that margin. It is not about creating profits that are not going anywhere. We want to see that margin being invested in the businesses, in creating jobs and in creating much better value. We want to create experiences that people want because they are prepared to pay for them, but we are not at that point yet. Northern Ireland tourism has a way to go before it is as mature at the Republic of Ireland. How do we prove our value so that people go, “Actually, I am prepared to pay for that because that is such a good experience”?
I cannot say that everybody will pass it on. It will very much depend on the businesses. Most of the businesses that we are talking to are those in which hospitality is an element but not necessarily the only thing they provide. Restaurants and pubs could be in a slightly different situation and could require the cut to be retained in the business. You will have heard about that from others.
Aidan Lyons: That could support business resilience. I suppose it is about trying to understand the clear objectives of a VAT reduction—if that is what happens—because it will depend on the business and its specific circumstances.
We referenced what was passed through in Ireland in 2011 and 2019. Circumstances were maybe different—they were coming out of a very challenging economic environment in 2011—but it gives a business a bit of flexibility to say, “I can retain some of that margin for myself so I can invest in the business, or get the business through this sticky stage.” If they get through that, the business can start to make other decisions beyond that, and it helps support the business going forward. Clearly, we want to have a thriving sector in the long term, and this is one element that can potentially help that.
Q99 Gavin Robinson: Aidan, tax is your bailiwick, so let me ask you this. The Tax Policy Associates said that a reduction in VAT for tourism and hospitality would cost more than all the reliefs that are currently applied put together, although that would probably apply to a greater degree in GB than in Northern Ireland. Do you agree with that?
Aidan Lyons: I have seen that. Clearly they have done their research, but I cannot say one way or the other because I do not have the detail that they have used to arrive at that.
Q100 Gavin Robinson: Have you given any consideration to whether blanket application to all businesses is the best approach? Should it be more targeted, whether towards tourism, hospitality or certain parts of the hospitality industry? Whenever I think about tourism, I think about how every global, multimillion-pound corporation would benefit from this—every Caffè Nero, Starbucks, KFC and McDonald’s. So would Michael Deane’s, but of all those, there is probably only one that you would travel to Belfast for.
Aidan Lyons: We have not done anything specific at this point, but you are absolutely right: it applies to everybody. When we are looking at a pilot scheme for a potential VAT reduction, it is about looking at which areas we are going to apply it to and what that looks like.
It is really important to have clarity: “These are the services, or the goods, that we are going to apply it to, and this is why.” If you have a reduction for restaurants, among others, then yes, Michael Deane will benefit from that, but so will the chains of restaurants, because they are present in Northern Ireland and provide services within the scope of VAT. I do not think that you could carve out chains, for one thing because of fiscal neutrality, never mind the level of complexity and the noise that would be associated with that.
Gavin Robinson: Thank you both very much indeed.
Q101 Mr Kohler: I am going to press you on a point I was exploring with you earlier. When you say, “Look, we need to cut VAT to compete with the south, where they have a lower VAT rate,” the crucial issue is what people are paying in the north and the south. I have just looked it up. Now, this is Copilot—it is AI, so I give that health warning—but it tells me that in Belfast it is £6 for a pint of Guinness and in Dublin it is €7, so it is comparable. Outside Belfast and Dublin, it is between £5.50 and £6.50 in the north, and €1 more in the south, so again it is comparable. It also says that comparable hotels tend to be more expensive in the south than the north. While there are many reasons to cut VAT across the UK, does that not undermine the argument that a VAT reduction is needed to put you on a level playing field with the south?
Dr Stuart: We have taken the perspective that it is about the cost of the whole trip. When tour operators are looking at it, they are looking at the cost of the whole trip, not just one element of it. We would have a higher VAT rate. Pricing also depends on where you are going. Obviously, Belfast is really important for our tourism, but it is also a gateway to the rest of Northern Ireland. We want to see a sharing out of that tourism, and regional growth as well as growth in the capital.
VAT applies to a number of aspects, so a VAT cut can really help to reduce the price of the whole visitor trip. That is what we are looking at. I do not think visitors are checking the price of a pint in Belfast compared with Dublin before they come and then deciding that they are going to stay in Dublin. They are looking at the whole piece. It is when you add them up that you start to see that difference.
Q102 Mr Kohler: I see all that, but surely to mount your case you have to show that the costs of hospitality are more expensive in the north than in the south. Otherwise, the argument that we need to get our VAT rates down to the same level does not work. If, for whatever reason, the cost of hotels is higher in the south than in the north, and the cost of alcohol is comparable, the argument is not there, is it?
Dr Stuart: We have looked at the different costs in the south compared with Northern Ireland, and when you take into account the fact that we have higher operating costs in Northern Ireland—
Mr Kohler: I do not doubt that, but I am asking about the person paying over the counter. If they are paying more in the south than the north, the argument that you need to reduce VAT to compete with the south doesn’t work, does it?
Dr Stuart: It does, because we are not in a position to reduce or maintain prices because of the operating costs of the business. That is where this has been looked at. We are saying that hospitality is one element of that, but you need to look at the whole trip and what we are able to change. When you look at the whole trip, that is where you start to see differences in cost. Yes, if you compare one hotel in Dublin with one hotel in Belfast, you may see that the Belfast one is less expensive, but when you put the whole trip together, the cost is higher.
Aidan Lyons: I don’t think I can add to that, because that is a fair comment. You are looking at the whole. Yes, there is a price that the consumer pays, but there is also a cost base.
Q103 Adam Jogee: Mr Robinson asked a number of my questions on passing through the impact to consumers, which hopefully demonstrates the consistency of interest among members of the Committee. I shall let him off because he lent me a tie today—just for clarity, if anyone wondered where I had bought a tie like this, I must attribute it to its owner.
In all seriousness, Aidan, will you give us a flavour of how VAT cuts have been used in other sectors of the economy and what impact they have had?
Aidan Lyons: Studies have been done on where VAT reductions have been made, and it does vary. Gavin referred to the cuts in Ireland, where more of it was passed on initially. I think there was a VAT rate reduction in Finland, and there was a pass-through, but it was quite low. It does vary, and it will typically depend on the amount of the reduction in VAT. If it is a low amount, it might be easier to make the decision to pass all of it on or none of it on, because the reduction does not make much difference. You will see that there is pass-through, but there is not a consistent approach across sectors, countries and the like.
Q104 Adam Jogee: So in some other sectors—my question was about how they have been used in other sectors—it has supported businesses as opposed to consumers, who have their role to play in spending their money, growth and the rest of it. So it is a mixture.
Aidan Lyons: Yes.
Q105 Adam Jogee: Would there be any other factors in that?
Aidan Lyons: If you look at the reduction of the VAT rate on domestic utility bills to zero, that is clearly designed to support consumers: rather than paying VAT at the reduced rate of 5%, we are paying it at 0%. If you are to have a VAT rate reduction, the policy objectives need to be clear. In that case, the 0% in GB is clearly designed to try to alleviate some of the pressures on households. Again, I do not think there is a one-size-fits-all solution; you will never get that. It depends on the rate reduction, and it depends on how it applies—is it industry specific? Does it impact everybody? Those things all play a role in how the rate is dealt with. But it is fair to say that generally, if there is a rate reduction, there can be pass-through, but there can also be retention to support further investment in the business or to provide business resilience.
Q106 Adam Jogee: Interesting—thank you. Can you give us a flavour of the lessons to learn and the trends to observe from the VAT cut in the UK from 2020 to 2022? What can we pick up from that?
Aidan Lyons: Clearly, that was designed during the covid pandemic, and there was some complexity to that. It was 5% for a period, then it went up to 12.5% for six months, I think, and then it ended in March 2022. There were some exceptions to the reduction in the VAT rate, for example alcoholic drinks—presumably there were public health reasons behind that. The other thing that you need to factor in is whether, if a combination of goods and services is bought, different VAT rates apply, and how you deal with that. That brings complexity from a VAT perspective as well.
A lesson you can draw, both from that specifically and more generally, is that, because it is a complex tax, you need to be clear about what is within the scope of the reduction, you need support from HMRC through clear guidance, and you need good timelines. I appreciate that in the pandemic people had to react quickly to an unprecedented position, but here you should clearly communicate any pilot scheme so that everybody knows, as much as possible, what is in and what is out, because it is a complex tax. It is about trying to bring simplicity to what could be complex.
Q107 Adam Jogee: That is very interesting. I have heard you very clearly on certainty, clarity and simplicity. With those three factors in mind, as well as your answers to my previous questions about how cuts have been used in other industries, and the balance between consumers and businesses in terms of whether they go further—this is not meant to be a silly question; I am interested in getting a snapshot response from you—would a VAT cut now be helpful, would it work, and if one were issued for this sector, would it do some of the things we have discussed around alleviating pressures and supporting growth?
Aidan Lyons: I think my Northern Irish client base would say yes.
Adam Jogee: Notwithstanding the various elements that go with—
Aidan Lyons: Yes—that is a simple answer to a complex question. It is complex, but are there benefits to business? Absolutely.
Dr Stuart: Going back to the previous VAT cut, we have to remember that people were not travelling then, so from a tourism perspective, even when we had the VAT cut, business was on its knees and we did not have the demand. The evaluation on that would probably show that it did not really have a big impact, because people were not travelling, so even though businesses may have been able to keep VAT within the business, they did not have the level of business needed for it to show a big impact.
Aidan Lyons: Yes, that is a fair point. People were not going out because they could not go out. There was a very particular reason behind that. It was designed to try to alleviate pressures on a sector that was facing an unprecedented situation.
Q108 Chair: And therefore any assessment of that VAT reduction during covid is not really comparable to today.
Aidan Lyons: That’s right.
Q109 Chair: Joanne, what impact, if any, has the VAT differential had on competitiveness between Northern Ireland and the Republic? What impact has it had on tour operators from Northern Ireland and from the Republic? We have the ITOA report here.
Dr Stuart: Yes, and that really helped to show that VAT is one element that is looked at, but it is the whole cost that tour operators are looking at. Again, the VAT cut would help to alleviate some of the other costs of a trip. We know that there is a £20 cost per person for ETA, and there is potentially APD. Having a VAT cut would help, when looking at the total cost, to mitigate those additional costs that people only have if they come to Northern Ireland.
Q110 Chair: Do you have evidence of coach companies from Northern Ireland missing out and losing business?
Dr Stuart: Yes. With the work that we did previously on ETA, we had specific examples where business had been lost due to ETA. Since we did that work, you have seen costs increasing anyway, so it is one of the factors. Tourism NI does its industry survey every six months; the last one covered the first six months of this year. When we did that last year, just 12% of people said ETA was having an impact on overseas visitors; that has jumped to 24% now. 2025 was the first full year—well, nearly a full year—since the ETA was implemented. It was implemented fully in April. We are starting to see businesses being able to say that there is a specific impact on them as that is rolled out.
Q111 Chair: Is there evidence that group tour operators are changing their itineraries to avoid requiring their customers to obtain an ETA?
Dr Stuart: Yes, and ITOA has said that. We have examples, especially where a tour operator had maybe only one or two days in Northern Ireland. The thing with tour operators is that they are offering services that include that administration. There were a number of problems. You usually have older people on the tours, and they need more support, but also, with the price increasing to £20 per person, that suddenly added a lot on to the cost of the trip, and we still had our normal costs. That is what I am saying: it is the whole trip that we are looking at. What are the costs that you do not have if you stay in the Republic? ETA is one of those, as is APD.
Q112 Chair: Should the Home Office introduce an exemption to the ETA scheme for group tour operators visiting Northern Ireland?
Dr Stuart: As you know, that is one of the things that we have discussed. Where we are at the moment is that I think the Home Office wants to see the economic impact. Obviously, it is very difficult to say, “This is the lost business,” because the people have not come. It is lost opportunity. Rather than someone saying to me, “I’m not coming because of the cost of the ETA,” they just decide not to come to Northern Ireland because of the administration, the cost and so on. All the information becomes quite anecdotal, which is very difficult. All I can say to you is that, much more than they were before, businesses are now saying that it is an issue. We are able to show where tour operators have changed itineraries and decided not to come to Northern Ireland.
We still do not know—again, it would be good to have information from the Home Office on how ETA is working—whether people are deciding not to bother with ETA. It is a very difficult one. As you know, we would like to see exemptions, because we do not think that it is stopping the type of people the Home Office wants to stop. These are tourism visitors, and they are probably the one set of people who will do what they have to do, but then they may make the decision not to bother.
Q113 Katrina Murray: Are people actually getting out of Dublin and the south-west? Are the tour groups that historically would have come to Belfast and here even avoiding Donegal, Galway and Sligo—the parts of the Republic that are literally within spitting distance of here?
Dr Stuart: That is part of the challenge. The sort of people we are talking about—visitors—want to make sure they are doing the right thing. You are obviously in Derry/Londonderry. You don’t know that you have really passed the border. This location would benefit from visitors from Donegal, across the border. The ETA does stop that, because if a family wants to come and spend a day or a night here, and they are staying in Donegal, suddenly you are talking about an extra £40 or £50 for an ETA, plus the administration in getting it, and that adds on to all your other costs. Once you have got it, you can use it multiple times, but when you are looking at overseas visitors, probably the highest return rate is from those from GB, where it doesn’t count.
Q114 Gavin Robinson: On ETA—we have talked about this for many a year, assisted in early engagement with the Home Office, talked about an exemption and so on—I think the exchange between you and the Chair has been quite illuminating, Joanne. The Home Office will ask for the economic impact, but is the truth not that, at least in the first year of operation, you cannot demonstrate anything because of sectoral growth? The one big tourist attraction that you and I both know in my constituency, which was most perplexed about the introduction of an ETA, had 100,000 additional visitors last year, in the first full operative year of ETA. While there might be anecdotal evidence, it will be hard to demonstrate economic loss when there has been sectoral growth.
Dr Stuart: If you look at our 2025 figures, the biggest overseas growth area is GB. We have seen a really significant increase, as has that attraction, but when we look at North America and Europe, we have not seen the growth, and we are not getting the spend from those markets. I agree with you that the sector has grown, but it is not necessarily in the market that we want to grow, which is the international market. GB is great; about 70% of the overseas business is from GB, which is brilliant. We have a challenge in sustaining that, but we also need to increase the other international markets, and that is not happening. That is where ETA could form part of the reason.
Q115 Gavin Robinson: I do not disagree with the point that there are challenges, but it is hard to demonstrate that it was as cataclysmic as was feared, when there are 100,000 additional visitors to one attraction alone in the first full year of operation.
Dr Stuart: Again, we want to see the additional visitors, but we need more diversity. GB visitors do not spend as much as a North American does when they come to stay. That is what I am saying. We have seen an increase in overnight trips, but not in the duration, in the spend or in the markets, such as North America and Europe, that spend more. I get your point; it is just about having to go down into more detail of where that growth is coming from.
Q116 Chair: It would have to be more granular, wouldn’t it? I have one final question. Sorry to use the pun, but for tourism and hospitality in Northern Ireland, is VAT the problem—yes or no?
Dr Stuart: It’s not “the” problem, but it is one of the problems.
Aidan Lyons: It is a contributory factor.
Chair: Thank you very much.