CHANCELLOR FAILS TO BRING MUCH NEEDED RELIEF TO HOSPITALITY SECTOR

08 March 2024

While the Chancellor’s Budget might mean some extra cash in the pocket for workers with a cut to National Insurance, business owners in the hospitality sector have been left feeling disappointed and disheartened, with their hopes of some targeted support to help keep the lights on and the doors open effectively dashed.

It was a bland Budget, especially for one of the Chancellor’s last major fiscal rolls of the dice before an uphill electoral battle in the autumn over the next 8 months or so.

Without the delivery of some much-needed support, more communities are now at risk of losing their pubs and restaurants that not only contribute to the local economy, but are social hubs of our cities, towns, and villages right across Northern Ireland.

Spiralling costs, coupled with unjustifiably high VAT rates, have left our hospitality businesses languishing in the shadows of their counterparts in the Republic of Ireland, who enjoy a much lower VAT rate.

It’s clear that the UK government’s approach is out of kilter. To support growth and investment, it needs to tackle the perpetual rising costs, especially when this industry has proven time and again to be a real catalyst for growth and employment. 

Lowering VAT rates and overhauling business rates are measures that would certainly cost the government in the short-term, but it would help pubs, restaurants and hotels to overcome rising costs and prevent further price increases for consumers.

But with little hope coming from Westminster, our focus should shift to our devolved institutions where there may be some glimmer of hope. We’re now in the position to make meaningful representations to Ministers and our elected representatives.

Whilst the Barnett Consequential monies for hospitality and retail Rate Relief in 2024 (75% in England) was kept by the Northern Ireland Office and never reached here, the Barnett Consequential monies for the extension of that business rates relief until 2025 announced at the Autumn Statement, will now come to the Executive, and it is essential that it is passed on to the businesses that need it.

Like all things financial, the actual amount of that potential rate relief is unlikely to be 75% like England as we have many more qualifying businesses, but even a 50% reduction would be a life saver for many struggling hospitality businesses. Whilst we recognise pubs and hotels which have their rates calculated on their turnover (unlike restaurants) currently have a reduced NAV (-20% pubs & -30% hotels) due to a temporary reduction for Covid in the last revaluation, this cannot be used as an excuse to withhold the latest round of relief as they were given for two completely different reasons and the Covid relief will disappear at the next revaluation.

We also need to see the Executive recognise the importance of hospitality with a dedicated hospitality strategy for Northern Ireland amongst a host of other measures to ensure that support for hospitality does not simply vanish into our budget black hole. We cannot be found standing idle as businesses struggle; inaction threatens irreparable harm to the establishments that contribute so much to our economy and communities.