Need to stimulate the hospitality sector as a boost to NI economy

Need to stimulate the hospitality sector as a boost to NI economy

24 September 2019

By Colin Neill, Chief Executive, Hospitality Ulster

Now is the time to stimulate the hospitality sector to help boost the Northern Ireland economy

To find opportunity in crisis is sometimes the only way things can get done. The fine detail in which our media is documenting the speed at which we are expecting to crash out of the European Union is frightening. The lack of an Assembly and Executive and the paralysis at Westminster really does leave us truly exposed.
The current state of the local economy and the bleak outlook for any level of respectable growth means that we could find ourselves regressing to the unhappy place we were several years ago.
Like all businesses here, we in the hospitality sector find ourselves at a pinch point. Rising costs, exorbitant rates, VAT, Air Passenger Duty, increasing workforce pressures, skills needs, and outdated legislation all add to the washing machine of issues that our members currently have to deal with or suffer from a lack of movement on.
We only have to look at the Budget laid out by the previous Chancellor of the Exchequer last year on the business rate subsidies given to the rest of Great Britain, but not specifically to Northern Ireland. Instead our share of the monies ended up in the big black hole of our NI Government budget and becomes largely ineffective against its intended target.
What the Irish government did for the hospitality sector in the south during the previous financial crash, is a good example of how opportunity was grasped at a time of national crisis. It recognised that the hospitality sector was an integral part to their tourism economy and global reputation and decided that it was too important to suffer the consequences of people not visiting Ireland or not going out for a pint and a bite to eat. They brought forward ideas and economic stimulus by lowering hospitality VAT to 9% at that time. This had a huge beneficial impact and assisted growth and job creation and has helped the sector and their economy come out the other side in prime position. With hospitality VAT at 20% in the north, we are at a competitive disadvantage on this issue alone and unfortunately have been for some time.

The Government urgently needs to look at our hospitality sector as a prime economic asset and wealth generator that can help boost the whole NI economy. Last week alongside our Trade NI alliance partners, Manufacturing NI and Retail NI, we launched a 10-year prosperity plan at Westminster with the Secretary of State for Northern Ireland, Julian Smith.
This was our way of coming up with a plan, policies and solutions to develop a prosperous society and vibrant communities. But that can only happen if we reduce the cost of doing business, increase our productivity and find innovative ways of stimulating investment.
The hospitality sector is critical to the health of the local economy. As a £1.6 billion contributor, it has expansive potential. Now is the time in the face of what can only be described as impending doom that we call loudly on our elected representatives and decision makers to put in place economic levers like reduced hospitality VAT, abolishing APD and reducing business rates to help us fulfil that ambition.