Chancellor Cops Out On Chance To Boost NI Economy Says Hospitality Ulster

Chancellor Cops Out On Chance To Boost NI Economy Says Hospitality Ulster

30 October 2018

Chancellor cops out on chance to boost NI economy – fails to make commitment on Tourism VAT and Air Passenger Duty (APD) after yearlong consultations says Hospitality Ulster

Reacting to the UK Budget delivered by the Chancellor of the Exchequer this afternoon, Colin Neill, Chief Executive, Hospitality Ulster from Westminster said:

“We welcome some elements of the Budget outlined by the Chancellor this afternoon, but there are a range of topics that require more work and a doubling down of pressure, as Northern Ireland once again remains far down the pecking order for the Treasury.

The potential for this Budget to deliver for the Northern Ireland economy and the hospitality sector was great, but instead it has left so many issues hanging and many questions unanswered.”

On Beer and Spirit Duty Freeze

“We welcome the freeze on beer duty by the Chancellor which ends five years of successive increases in beer tax. We are also happy to see that duty on spirits will stay the same. This is important for the hospitality sector here in Northern Ireland as we need to encourage people to come out and socialise in pubs and enjoy themselves in a controlled environment, otherwise more pubs will close and problem drinking at home will continue to increase.”

On Tourism VAT

“We are dismayed that the Chancellor has failed to address the issue of tourism VAT stating that the existence of multiple VAT rates in the same territory would lead to additional administrative burdens for taxpayers and businesses.

The UK’s 20% Tourism VAT rate is one of the highest in Europe, and Northern Ireland hospitality and tourism businesses are particularly vulnerable as the Republic of Ireland is its second largest market and nearest competitor.

The disadvantage continues to be acutely felt right across Northern Ireland with the NI VAT rate acting as a brake on the growth of the hospitality and tourism sector.

How can the sector in NI be expected to compete when the UK government continues to tie the hands of the sector behind its back on this issue as the Republic pushes on, even at a new higher rate of 13.5% in the new year.

It is imperative that the rate is cut in Northern Ireland so we can continue to grow a vital part of the regional economy. The hospitality sector is an engine for growth and we can no longer suffocate it. This is a live and real problem which is crippling trade.”

On Air Passenger Duty (APD)

“We are disappointed that there has been no movement by the Chancellor today, but it is a result that a technical working group is to be established to examine the issue in detail.  We are hopeful that the group can come to a definitive and positive conclusion as soon as possible.

We live on an island, and in terms of business travel and tourists we need to maximise the opportunity that we have by lowering or eradicating barriers when it comes to getting on and off our island. Our airports have to compete internationally, and with the likes of Dublin airport only 100 miles down the road we have to pull every economic lever available to us when it comes to air travel. No change means that we continue to face the difficulties this tax presents. We need help to fill our hotels, pubs and restaurants the year round.”

Business Rates

“We look with some concern to the announcement by the Chancellor to provide all retailers in England with rateable value of £51,000 or less to have their business rates bill cut by a third and support from a £675m Future High Streets Fund to help councils there transform town centres.

Without an Assembly or Executive, we find ourselves in a very difficult position as Northern Ireland will not benefit from any of these financial injections due to the rating system being devolved.

The government has acknowledged at the highest level the need to deal with the rates problem crippling business elsewhere in the UK. Our devolved administration must also.

We now demand that Civil Servants here look at the policy developed under the previous Finance Minister Máirtín Ó Muilleoir to revamp the small business rates relief system to lessen the financial burden on small retailers and the hospitality sector in particular so that we are in line with the rest of the UK and not left hanging because of the current political paralysis.

We have invited the Permanent Secretary of the Department of Finance to meet with us to address this issue urgently.”