The newly appointed chair of Hospitality Ulster, Stephen Magorrian of the Horatio Group, has said non-domestic rates in Northern Ireland remain a ‘wrecking ball’ for the hospitality sector, crippling businesses at a time when the government needs to provide support right across the industry.
Hospitality businesses in Northern Ireland are paying higher than average business rates per pound than similar businesses in the UK, including the City of London, who have experienced greater support in the form of a business rates relief scheme.
Concerns voiced at the Hospitality Ulster AGM also included the additional monies allocated to Northern Ireland under the Barnett Consequential for a 75% rates holiday in 2023/24. Members highlighted that these funds were absorbed into Northern Ireland’s budget ‘black hole’ rather than being passed on to the struggling hospitality businesses it was intended for.
Concerns also raised included the excessive hospitality VAT rate of 20%, inflationary pressures, and labour shortages as further existential threats to the hospitality industry’s survival.
Central to the issues raised by the membership of Hospitality Ulster was the need for the UK Chancellor to ease pressures on businesses by lowering the VAT rate, extending the rates holiday and ensuring it is passed on to businesses, and addressing spiralling costs to allow the sector some chance of breakeven during the incoming Christmas period.
Newly appointed chair of Hospitality Ulster, Stephen Magorrian, said: “The stark reality of the hospitality industry was laid bare at the AGM. Our latest industry survey has shown that only 22% of hospitality businesses are optimistic about the next twelve months, and listening to members about their concern over the future of the industry is a bleak reminder of the position we find ourselves in.
“People now have less to spend in the local pub, bar or restaurant, food costs are still spiralling and rising energy costs are only set to increase as we approach another winter of renewed geopolitical instability.
“Non-domestic rates remain one of the biggest threats to the hospitality sector in Northern Ireland, and it is astounding that we still find ourselves paying more than our counterparts elsewhere in the UK and receive little to no relief like they have in England.
“Business owners also have to grapple with one of the highest hospitality VAT rates in Western Europe. As we fast approach the Chancellor’s Autumn Statement, we need to see some recognition of this vital industry in the form of VAT reduction so that Northern Ireland’s hospitality sector can properly compete with the likes of the Republic of Ireland, who currently has a VAT rate of just 13.5%.
“The situation in our pub sector has been made even worse by the instability caused due to the ongoing review of the licensing structure which is being undertaken by the Department for Communities at a cost of £478,000. Following an amendment by the SDLP MLA Matthew O’Toole, the ongoing replaced a legal requirement on the DfC to undertake the review, which has now left the industry facing difficulties in financing as it leaves uncertainty and removes confidence for funders. These were difficulties which we highlighted at the time but were ignored.
“If elected representatives want to support our rural and community pubs, they should start by recognising their social value and make them more sustainable by exempting them from crippling business rates rather than wasting time and money on an expensive review. it is important that they also understand how different our market is compared to Great Britain; we have a pub industry built on independent publicans who are part of the community they serve and provide products driven by consumer demand.
“This is a time when we should be embracing this sector and using it to help kick start the economy again. We are the fourth largest private sector employer and a sector that can generate real revenue – we just need support when there are so many external factors applying so much pressure on us.
“I would like to thank our outgoing chair Tony O’Neill for his support and dedication over the past two years. Tony has served as chair in some of the most challenging times experienced by the sector and there is no doubt that we have all been able to learn from his extensive experience and expertise.”
Michael Cadden, owner of Lusty Beg Island Resort and Pat’s Bar in Enniskillen, appointed to the position of vice-chair at the Hospitality Ulster AGM, added:
“As a business owner, I know too well the pressures that other businesses are facing in what can only be described as a volatile environment. I look forward to working alongside Stephen and our team on the office to voice these very real concerns, advocating strongly for such a vital industry to our economy.”
Colin Neill, chief executive, Hospitality Ulster, added: “I reiterate Stephen’s thanks to Tony O’Neill as he ends his term as chair. Tony has been a great source of guidance and leadership through what has and continues to be a challenging period. He is an exemplar operator in the hospitality industry.
“I look forward to working with Stephen as he steps into the role as chair, and I am certain that his calm, strong presence will be able to continue to assure many within our industry and I look forward to working alongside both Stephen and our new vice-chair, Michael Cadden, as we continue to fight for the hospitality sector across Northern Ireland.”