HOSPITALITY ULSTER CALLS 1p REDUCTION IN DRAUGHT DUTY AN INSULT

22 January 2025

Hospitality Ulster calls 1p reduction in draught duty an insult as government-driven tax and wage increases fuel price increases.

Hospitality Ulster has today described the 1.7% reduction in draught duty introduced by Chancellor of the Exchequer Rachel Reeves MP as an insult while the hospitality industry prepares to face significant tax and cost increases brought in by the Chancellor’s budget.

The comments were made ahead of a meeting with the Minister of Finance, Dr Caoimhe Archibald MLA, and Minister for the Economy, Conor Murphy MLA, where Hospitality Ulster will lead a representative group of hospitality industry businesses to reinforce evidence with hospitality businesses giving their real-life experience of the challenges they face.

Hospitality Ulster has called on the UK Government to support the sector in Northern Ireland reducing the hospitality VAT rate and exempting Northern Ireland from the forthcoming Electronic Travel Authorisation and on the Northern Ireland Executive to support the industry if they are to deliver upon the tourism plans included in the Programme for Government.

Colin Neill, Chief Executive, Hospitality Ulster said:

"Chancellor Rachel Reeves's confirmation in the House of Commons that the 1.7% reduction in draught duty would 'shave a penny off a pint in the pub' did nothing but add insult to injury for publicans and indeed the entire hospitality industry which faces significant tax and cost increases due to her Budget in November past.

“The Chancellor knows fine well that the price of a pint will not be coming down, indeed due to her budget, pints along with everything else will be going up in price due to the significant increases in Employer National Insurance contributions and Living Wage.

“These government inflicted cost increases have already started to drive up supplier costs, with the recent announcements of supplier price increases, only the beginning of what will most likely be an avalanche of price increases on goods and services across the industry. The Chancellor knows this, and her colleagues in government know this too, despite their hollow cheers in the House of Commons.

“To make matters worse, the UKG has begun implementing its Electronic Travel Authorisation scheme which will see visitor numbers drop here while the cost of doing business increases. Meanwhile, the Republic of Ireland moves to reduce VAT on food-based hospitality to 9% and maintain accommodation VAT at 13.5%, making Northern Ireland more expensive and less competitive.

"We know ENIC and the wage rates are not a devolved matter and are making our case to the UK Government, but as the backbone of our tourism industry, which is part of the NI Executive’s Programme for Government, the NI Executive cannot simply point us in the direction of Westminster and wring their hands. Because our problems are their problems, they cannot deliver their plan to double tourism spend and at the same time sit back and watch the tourism infrastructure, which is hospitality, collapse.

"And if the Chancellor wants to see the price of a pint come down, we suggest she start listening to the people who pour them."