CEO UPDATE ON UK CHANCELLOR BUDGET STATEMENT

CEO UPDATE ON UK CHANCELLOR BUDGET STATEMENT

27 October 2021

Reacting to the Budget delivered by Chancellor Rishi Sunak MP today, Chief Executive, Hospitality Ulster, Colin Neill said:

 

“It will take some time to look at the detail of the Budget document, but we are encouraged that there has been recognition by the Chancellor of the difficulties faced by the hospitality sector for the past 19 months or so. It is our hope that the content of his budget statement translates into direct support via the Barnett Consequential and that our own Executive follow his lead on business rates relief.”

 

“Over the past 19 months Hospitality Ulster, UK Hospitality, the BBPA and the BII have built on our existing relationships to deliver a strong united voice at Westminster. A voice that in this instance has been instrumental in securing some of the actions needed to support our industry."

 

“We welcome that alcohol duties will be frozen across the board for the third year running, however this on face-value might give a saving per pint, but it doesn’t address the fact that the hospitality sector is now facing further increases to overheads and bills such as significant price hikes in food and energy costs which will all have to be passed on to customers. These are elements that need to be addressed urgently.”

 

“We also welcome the fact that Air Passenger Duty will be reduced by 50% from April 2023 but we would encourage the government to bring that date forward and even consider scrapping the duty altogether – especially for Northern Ireland due to our circumstances with the UK. It is a positive start and will help greatly in encouraging more visitors and tourists here from other parts of Great Britain who will sleep, eat, drink and spend in with our hospitality businesses.”  

 

“Regrettably, the Chancellor did not move to permanently fix the hospitality and tourism VAT rate at 12.5%, but we will continue to make our case ahead of the spring budget when hospitality VAT will automatically return to 20% unless amended.

 

The one year 50% rates discount announced only applies to England and the NI Executive must now follow his lead and announce that they will pass this on our struggling businesses in hospitality as soon as possible so businesses can plan.

 

“We now look towards, and urge, the NI Executive to work with the hospitality sector on a strategy that will help businesses build back to pre-pandemic levels. A collaborative plan with crucial support measures is essential and will help ground businesses who are looking at new, creative ways to boost trade, but are struggling with the incredible financial burdens facing them in the months ahead.”

 

 

IN BRIEF

 

Chancellor Rishi Sunak MP has presented his Comprehensive Spending Review and Autumn Budget to Parliament, outlining money allocated to government departments, public services, and the devolved administrations.

 

  • The Spending Review commits £1.6bn for the Northern Ireland Executive on top of its annual baseline funding of £13.4bn. The Executive will also receive an additional £235m this year. The Department of Finance will now begin a process for allocating this to each Executive department.
  • The Chancellor has stated that the Office for Budget Responsibility (OBR) forecasts the economy will return to pre-Covid levels by the turn of the year. Economic growth will reach 6% in 2022, with inflation set to average 4% over the next 12 months.
  • The Executive is to be allocated an additional £50m on top of Barnett consequentials to support community projects as part of the Levelling Up Fund. This includes upgrading Northern Ireland’s electric vehicle charging network and creating a new bioscience research centre at Ulster University. £300,000 will be allocated to the Glens Digital Hub in Cushendall as part of the Community Ownership Fund.
  • A new trade and investment hub will be established in Belfast. Small and medium enterprises (SMEs) in Northern Ireland will receive £70m in funding through the British Business Bank.
  • The National Living Wage will increase to £9.50 for those aged 23 and over, with the pay freeze on public sector wages to end.
  • A 50% reduction in Air Passenger Duty will apply to UK domestic flights from April 2023.
  • A one year 50% rates discount (England Only)- rates are a devolved matter and any similar discount is up to the NI Executive
  • Alcohol duty will be reformed, with the 15% duty rate falling to 6% and higher strength drinks incurring an increased tax rate. Plus a 5% reduction on draft beer duty.
  • A Charter for Budget Responsibility will be published and will mandate that underlying public sector net debt must as a percentage of GDP be falling.
  • The Universal Credit taper rate will be cut 8pc to 55p.
  • The planned rise in fuel duty has been cancelled