As the Minister of State knows, the private bus and coach industry plays a substantial role in the Irish economy. The industry is made up of over 1,900 small to medium enterprises which operate in every county in Ireland and which between them employ somewhere between 6,500 and 7,000 people. The industry is a major provider of transport services, with 276 scheduled services, 220 student services and approximately 200 tour services. I wish to focus on the 200 tour services in this particular discussion.
Coach tourism services make a significant contribution to the Irish economy, with about 300,000 overseas coach tourists visiting Ireland in 2010, worth an estimated €180 million to the Irish economy and supporting employment in other sectors of the tourism sector. Private bus and coach tour operators account for approximately 80% of the school transport service. Unlike the haulage industry, coach and bus companies cannot reclaim VAT. The issue of VAT exemption for the haulage industry is a historic issue. This competitive disadvantage must also be viewed in the context that Northern Ireland based coach operators are zero rated for VAT and, therefore, can claim VAT back on all inputs. This puts southern operators, or Twenty-six Counties operators, at a distinct disadvantage, because they must include all the VAT they pay on the inputs and are not in a position to reclaim it, unlike their counterparts north of the Border. This places a significant competitive disadvantage on their shoulders.
While we are an all-island economy in some respects, there is no doubt the Border exists in this regard and this creates a great difficulty for those operators south of it to be able to compete effectively. This is why, in the past couple of years, we have seen a greater amount of Northern registered tour buses plying their trade south of the Border. This would be fine if we had a fair and open competitive environment, but we do not. It is incumbent on the Department of Finance to look at this situation and to try to assist those companies south of the Border which must operate within a different VAT regime to see if something can be put in place to resolve their issue.
I appeal to the Minister of State to take on board the concerns that have been raised. As he knows the coach tour part of many of these operators' businesses is important to their survival so they can provide the type of school services they do and other scheduled services. It is part of the mix of services they operate, but now it looks as if the pressure being put on them in this competitive environment will make it very difficult for them to survive long term. It is incumbent on the State to address the issue being brought to its attention.