As a knock-on effect from the cost-of-living emergency, businesses are seeing a fall in trade and customer levels. Coupled with raising inflation, a workforce crisis across the sectors, and remaining Covid pressures, many within hospitality and retail are struggling to remain viable with businesses shutting up shop every day.

Actions within the plan include:

• VAT to be reduced to 17%.
• Reinstate the reduced Tourism / Hospitality VAT rate to support businesses that rely on household discretionary disposable income and tourism spend.
• Restoration of the Business Rates Holiday which concluded in July 2022, running until April 2023.
• A UK wide reform of the business rates system to ensure online and out of town businesses are paying the same rate as high street businesses.
• Support from the UK Government for the devolved nations to reduce business rates by providing increased financial support through the block grants.
• The removal of VAT from energy bills to reduce energy costs.
• The Northern Ireland Executive to establish a Rural Town and Village Infrastructure Investment Fund to ensure our small and mid-sized towns and villages are supported during this economic crisis.

The action plan has been co-designed by Retail NI, Hospitality Ulster, Londonderry Chamber of Commerce, Bangor Chamber of Commerce, Ballycastle Chamber of Commerce, Ballymena Chamber of Commerce, Banbridge Chamber of Commerce, Belfast Chamber of Commerce, Causeway Chamber of Commerce, Lisburn Chamber of Commerce, NI Takeaway Association, Newry Chamber of Commerce, Newtownards Chamber of Trade, Omagh Chamber of Commerce, and Portadown Chamber of Commerce.

In a joint statement, the leaders of the 15 business organisations said: “We are at a critical juncture as a perfect storm of factors is causing devastation for the retail and hospitality sectors and could see thousands of businesses threatened over the next months if no action is taken.

“Out of control energy bill increases, labour shortages, inflation, National Insurance increases, and sky-high business rates – the highest in the UK – are risking the business climate of Northern Ireland. Fears that many will simply go under in the next months without government assistance are keenly felt and we cannot continue on this path of destruction any longer.

“We are pushing customers away due to having to raise prices to keep pace with these rising costs, which is therefore having a detrimental impact on trade and consumer confidence.

“Intervention is required by the UK Government, as well as the limited powers of NI Executive Ministers, to stave off the worst of this crisis on business owners and provide tangible support and resources that could keep trade viable.

“Our plan has achievable, tangible solutions that would support business from day one. Actions including a reduction in the VAT rate to 17% to encourage more households to spend on the high street; increased financial assistance through the block grant to alleviate the cost of business rates; and the implementation of the NI High Street Taskforce Report will help bolster business back to viable trading levels.

“We call on both Governments to consider our proposals and engage with the business community on how best to implement urgent actions that can alleviate these crippling pressures. It will support both businesses and consumers in this most pressing of times.”

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The group points to the economic uncertainty caused by Brexit and sterling devaluation as major factors for the government to consider in the 2018 Budget.

Retail Excellence’s deputy CEO, Lorraine Higgins, said the disparity between the UK and Ireland’s VAT rates is causing Irish retailers to lose out as consumers travel North to shop around for better deals.

Speaking earlier this summer, Ms Higgins said “Our priority is a reduction in the 23 per cent VAT rates which was introduced as a financial emergency measure some time ago. Such moves are critical for the wellbeing of Irish retail and the Exchequer. We are witnessing an increase in consumers travelling north of the border to shop with others buying over €14 million online from businesses operating outside of Ireland every single day.”

The Retail Excellence deputy chief cites the level of online spending as a drive behind the call for a 3 per cent VAT reduction in 2018, with upwards of €850,000 being spent online on foreign goods every hour.

“In relation to online spending this amounts to a loss of €1.2 billion in VAT receipts per annum for the Exchequer and this is only set to rise if corrective action is not taken,” she said.  As reported by Retail Excellence, 22 per cent of Irish SMEs do not have an online presence, while three quarters of those who do are unable to process payments on their website, making it difficult for them to remain competitive.

The deputy CEO believes the difficulty caused by the current VAT rates are further exemplified by the fact that some products in the UK attract 0 per-cent VAT, whereas customers in Ireland are expected to pay 23 per cent on the same item. Although other retail organisations such as Retail Ireland welcomed the 2017 budget for increasing disposable income and supporting consumer spending, Ms Higgins states not enough is being done to combat the economic insecurity faced by retailers in the wake of Brexit.

“Retail is often overlooked in favour of the other pillars linked to the economy; FDI and export-focused businesses,” she added. “We have brilliant retail entrepreneurs in this country who are resilient to the core and deserve to be supported and assisted to become bigger and better at all that they do but they need support and Budget 2018 provides an opportunity to help them on their way.”

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