UK BUDGET - WHERE DO WE GO FROM HERE
20 November 2024
'We have mobilised our most intensive, evidence-based lobby ever, but if they do not provide the support we deserve, we will seek the views and backing of our membership on our next course of action. Because our voice must be heard, and above all, listened to!'
As businesses across every sector continue to reel from the fallout of the UK Budget, Hospitality Ulster remains determined to keep every option open to us- nothing is off the table as we fight to ensure both the UK Government, and the NI Assembly know the damage the UK Budget will cause to businesses in the hospitality sector come April 2025.
Working hand in glove with UK Hospitality, we have mobilised the strongest possible lobby of both Governments, demonstrating the damage that the ENIC increase, compounded by what the significant increase in the living wage will do to the hospitality industry.
Whilst the increases in ENIC and the Living Wage are solely under the control of Westminster, the NI Assembly cannot escape the consequences of its refusal to pass on the Barnet Consequential money that came to Northern Ireland when English hospitality and retail businesses were given a rates reduction (due to the cost-of-living crisis), which has left the Northern Ireland hospitality industry in an even a worse position to deal with the fallout of the budget.
We know that there is no legal requirement for the Barnet Consequential money received by the NI Assembly to be passed on as rate relief, and like Wales (who got 50% rates relief), even if passed on, it would not have been enough to give us the same 75% level of relief as England. We also know the English rate relief is capped at £110,000 per business, per year, and that the NI Assembly has a huge budget deficit.
But we cannot accept that equally struggling hospitality businesses in Northern Ireland, having been ignored for the past two years, again get nothing in April 2025 when English hospitality and retail business receive 40% rates relief, and when NI hospitality businesses are facing the same, if not an even worse, financial situation.
Our Budget Response Group was formed in the aftermath of the UK Budget statement and consists of NI operators plus financial experts BDO NI, legal experts MTB Solicitors and UK Hospitality CEO Kate Nicholls. It has built a strong evidence-based case as to why hospitality is different than many of the other impacted sectors facing the same increases.
The UK Budget has now made Northern Ireland a more expensive place than the Republic of Ireland to employ staff, and with a further reduction of VAT likely, ROI has now a competitive advantage over NI. This will not only drive investment from the North to the South, but also consumers as our hospitality businesses will not be able to compete with our ROI counterparts. In the simplest example, if you get married in Enniskillen, a significantly cheaper wedding reception is just a few miles away across the border.
Phase one of our action is an intense lobby of the Finance and Economy Ministers, and First and deputy First Ministers - making the case as to why we are different. This is backed by an intensive lobby of Westminster in partnership with UK Hospitality.
We are calling on Westminster:
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To create a new employer NICs band from £5,000 to £9,000 with a lower rate of 5%.
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To implement an exception for lower band taxpayers working fewer than 20 hours per week, targeting support for part-time and lower paid workers.
We are calling on the NI Assembly:
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To provide hospitality and tourism businesses with financial support to help offset the damaging impact of the UK Budget until the planned restructure of the business rates system in Northern Ireland.
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To use the restructure of the business rates system to move to a fairer, banded business rate system (variable multiplier), that better recognises the different sectors’ profitability.
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For the NI Executive to make an evidence-based case to Treasury, to reduce the hospitality & tourism VAT rate in Northern Ireland as a pilot, as part of the Economic Investment Zone which is to be established following the implementation of the Windsor Framework.
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To introduce a District Rates Cap to curb excessive rises in district rates by Local Authorities, forcing them to make savings rather than further burden businesses with the increased costs due to inefficiencies.
If they do not provide the support we deserve, we will seek the views and backing of our membership on our next course of action. Because our voice must be heard and, above all, listened to!
To support our campaign, we are calling on all hospitality businesses to email your MLA and let them know just how bad the situation is for you personally. They say all politics are local- so let’s make sure they know that this is a local issue that won’t go away!
To do this:
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Enter your postcode
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Select ‘write to all your MLAs’
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Compose your message and fill in your details
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Preview and send message
Research shows that there is continued consumer demand and a future for hospitality businesses, but the numbers simply will not add up come April 2025.
With the media carrying news of the challenges and with the continued labour shortages across the industry, we must also work to reassure our staff that they have a future in hospitality and more importantly your business. With that in mind, despite the challenges we face come April 2025, we have decided, after lengthy deliberation to proceed with the Carnival event in February 2025 as a way of rewarding the people we all rely on- your staff.