Derry’s Chamber of Commerce Chief welcomes VAT cut for hospitality sector

Londonderry Chamber Chief Executive Paul Clancy was reacting to a range of measures announced by the Chancellor Rishi Sunak yesterday during his Summer Statement to the House of Commons.

He called on the Chancellor to consider permanently reducing the VAT rate for hospitality and tourism businesses in the North to allow them to compete with counterparts in the South, who pay less VAT.

Other measures announced by the Chancellor include a £1,000 bonus for employers who bring back furloughed staff and retain them into next year and a scheme to give 50 per cent off to people dining out in August.

Mr Clancy said the statement from the Chancellor ‘provides some clarity over the next steps in the recovery of our economy post-coronavirus.

“A six-month cut in VAT from 20 per cent to 5 per cent will be a huge boost for our badly-hit hospitality and tourism businesses and the ‘Eat Out to Help Out’ voucher scheme will hopefully encourage customers back into our world-class restaurants and cafes.

“However, going forward, the Chancellor must consider permanently reducing the VAT rate for hospitality and tourism businesses as bars and restaurants in Northern Ireland, and particularly in the North West, are at a competitive disadvantage to their Republic of Ireland counterparts who are subject to a much lower VAT burden.”

Mr Clancy added: “The North West has a strong and growing tourism offer and these are significant and welcome support schemes which will help our bars, restaurants, hotels, and attractions get back on their feet.

He said that the £1,000 bonus for employers who retain furloughed staff is a ‘welcome initiative’.

“The Chancellor also provided further clarity on the future of the Job Retention Scheme. The new £1000 bonus for employers who bring back furloughed staff and retain them into 2021 is a welcome initiative which is designed to avoid large-scale redundancies, lay-offs, and unemployment.

“As a region which has historically had higher levels of unemployment, this new initiative will help the North West and businesses here to retain workers.”

Mr Clancy said that more financial support will be needed as the furlough scheme is gradually wound down to protect jobs and businesses.

“I hope any fresh funding which comes to the NI Executive as a result of the statement is aimed at protecting jobs, enhancing skills, and rebuilding our regional economy.”