Pubs, restaurants and other hospitality providers in Northern Ireland continue to pay higher wages, food, drink and energy costs than their counterparts in Britain, a UK-wide survey has shown.
And it has prompted renewed calls from the sector for both Westminster and Stormont to act immediately to change a situation where costs for a business in Limavady or Larne could eclipse those in London.
A survey by Hospitality Ulster, the British Beer and Pub Association, the British Institute of Innkeeping, and UKHospitality has revealed how almost every hospitality business in the UK has seen steep increases in wages and food costs.
But businesses in Northern Ireland are most pessimistic about the future of the sector.
Wages went up for 96% of hospitality businesses surveyed, and it’s a similar story on the cost of food and drink (93%), insurance (94%), and energy (61%).
Hospitality Ulster chief executive Colin Neill said: “Results of this survey will not be a surprise to anyone involved in the local hospitality sector. While hospitality in the UK as a whole has suffered due to inflation, our members have been found to suffer at a higher rate across all cost categories, from wages to food and drink, and energy costs.
“Northern Ireland has the highest energy costs of anywhere in Europe. Local business rates poundage levels are also much higher than in Britain, with many council areas here higher than the City of London.
“Couple that with the fact that our businesses are not subject to the same 75% rates relief initiatives as their counterparts in England and it is no wonder that both cost increases and pessimism for the sector were found to be higher in Northern Ireland.
“The lowering of VAT rates for hospitality also remains a key lever for easing the costs of doing business.
“All Executive parties have signalled their support for doing so. And while we appreciate that this would ultimately be a Westminster decision, we urge the Department of Finance to commission independent research into the effect this could have on our local economy as a means of informing the conversations they now must have with the new Labour government on this matter.”
In a joint statement, the four trade bodies which commissioned the study said: “It’s crystal clear there is an overwhelming desire from the hospitality sector that the government rapidly delivers on its manifesto commitment to replace business rates and reduce the burden on high street businesses.
“Hospitality continues to remain an outlier sector, with costs continuing to rise sharply compared to the rest of the economy.
“With cost increases affecting almost every venue, this vital sector is being prevented from investing in businesses and communities, which would boost economic growth and new jobs. Instead, they’re having to use all available cash just to pay the bills.
“The clock is ticking, with a cliff-edge looming on April 1 when relief ends and rates are set to increase again. Inaction would see bills spiral and venues under increased threat of closure.
“Alongside our members, we hope to see clear and decisive action toward delivering on its manifesto commitment from the Chancellor at the Budget in October.”
