Debate contribution: Hospitality VAT Harmonisation

Debate contribution by Mr Paul Frew on 10 February 2025.

MLA

Mr Paul Frew

Party at the time

Democratic Unionist Party

Date

10 February 2025

Type

Debate contribution

Business

Private Members' Business

Heading

Hospitality VAT Harmonisation

Assembly identifier

Official Report component 4790963

Read the official Assembly record

Text

I thank the Members who tabled the motion, because, at least, we are talking about something that is critical. There might be frustration in the Chamber as to what we can do about it. It may well be simply because we are a devolved Assembly and so there will be frustrations. We need the Labour Government to acknowledge the hurt that they are doing to business and people. This is a debate about VAT. Next week, we could have a debate on National Insurance contribution rises. The week after that, we could talk about the minimum living wage increases, noble as that is. When you add all those ingredients into one big pot, it is an absolute disaster. It is a disaster especially — David Honeyford made this point — for our independent retailers and hoteliers, the people who cannot rely on other branches or other parts of their business to cut fat. They are as lean as they can be; they are lean to the bone. When you have an increase in the minimum living wage, which is noble, and you have National Insurance contributions rise, the elastic will snap. We need the British Government to step in and rescue this, not only for our businesses, border regions and tourism industry but, in honesty, for all of the UK. They need to reverse the decision on National Insurance contributions. That is the only way.

Thank you for the extra minute, and I thank the Member for his contribution, because he is absolutely right: we are hurtling towards recession. We have had high inflation caused by the lockdown philosophy, which we cannot and have not recovered from, and now our businesses are hit with this. It is the cost of doing business. I think that it was David Honeyford who said that businesses do not care what taxation is or what it is called, but what we see here is independent retailers being hit from all sides: bottom, top, sideways, left field, right field. They are being hit everywhere. I can tell you now that our independent retailers are threadbare. They are trying to resolve their issues one by one. They are trying to downsize, and I can give you an example from my constituency. A company — an independent retailer — is trying to downsize, and it is thwarted in every way. It will cost that company more to downsize, and it will not get the rate relief that it requires. There are massive issues. Let us look at what is facing businesses. First of all, because of inflation, people do not go out and buy the same. The cost of food is sky-high, and then, when you go to a restaurant, you complain that the prices have gone up. That is because the restaurant has to pay for food at a higher rate too. There is a massive markup. Those businesses are very lean and have nowhere to go, except to put the cost on to the customer, which means that the customer stops going. We are in a dire situation. It is not only the VAT, the hike in wages and the minimal National Insurance contributions; it is the cost of doing business across the board. On energy costs, we know and have known for some time that Northern Ireland has faced the highest rates of commercial energy — electricity — on these islands and in Europe. We compete with Italy. That is a factor that rarely crosses the Government's threshold. We can do something here. We do not have to rely on the Labour Government, but it does not fill our retail sector or hospitality sector with much confidence when it will take 10 years — 10 years — to review all the rate reliefs, and I could nearly forecast that most of those rate reliefs will go away, as opposed to being enhanced. We look at the two areas that the Finance Committee has picked up on to date. They are going to take away savings from prompt payments. Again, that will not lead to a large amount of money being raised, but it will hurt people who have budgeted and saved up in order to pay their rates in full. That is in a domestic setting. What will it be like for commercial properties when they go through those rate reviews in the next 10 years? The fact that it will take 10 years tells businesses everything that they need to know about the speed of government and how we do things. Those businesses need something now. They need relief now. Where are the Executive?

771 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

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Assessed 21 October 2026 at 11:56 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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