Brexit could lead to tax on tourism and flights to north being slashed
BREXIT could lead to tax on tourism and flights in Northern Ireland being slashed, an influential committee of MPs has said.
The hospitality industry currently pays VAT at a rate more than twice that of competitors in the Republic.
Tourism-related businesses in Northern Ireland pay 20% VAT, compared with 9% paid by their counterparts in the Republic.
Under EU law, member states are prevented from varying levels of the charge for different regions.
Chairman of the Northern Ireland Affairs Committee, Laurence Robertson MP, said: "Levels of VAT and air passenger duty (APD) are making businesses less competitive than their equivalents in the Republic of Ireland.
"We are calling on the UK Government to examine options for reducing these tax burdens on tourism and creating the right environment for the sector to flourish."
Last year, 2.5 million visitors fuelled the tourism industry in the north, worth £0.8 billion and directly employing 43,000 people.
The committee said: "The tourism industry in Great Britain does not face the same form of competition and the government must now consider if a one-size-fits-all policy is any longer appropriate."
Similar concerns exist over the impact of air passenger duty on the competitiveness of airports, which the committee has called on the government to review and devolve to the Executive.
In the north, passengers pay a £13 short haul levy while in the Republic it has been abolished.
The committee said: "With two million passengers a year travelling to Northern Ireland via Dublin Airport, the UK's aviation tax system places Northern Ireland at a significant competitive disadvantage."
Cuts to APD, if introduced separately from the rest of the UK, would see the Treasury reducing the amount it provides the devolved administration to run public services.
Stormont's former Department of Enterprise, Trade and Investment (Deti) previously said reducing APD was not a strong tool for promoting economic development.
Meanwhile, former prime minister Tony Blair has said Labour should be prepared to offer voters the chance of staying in the European Union if the government fails to secure its promised trade deal with the remaining member states.
Mr Blair told the BBC: "What the Labour Party should say is....we are going to hold them to the test that they have set, and if they do not pass that test then we are going to retain the right to represent the people of this country should their will change, to offer them the option of staying."
Another former prime minister, Sir John Major, has attacked "ultra Brexiteers" within the Conservative Party whom he accused of having won the referendum with "fake facts and bogus promises" and were "shouting down anyone with an opposing view."
Mr Major wrote in The Mail on Sunday: "It was dishonest and wrong to promise the British people an easy, favourable deal with the EU, wrong to promise swift new trade deals, and wrong to state that the Irish peace process would not be unsettled by Brexit."