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Response to Chancellor's Economic Statement

Posted 24 Sep, 2020

Speaking after the Chancellor’s statement today, Joanne Stuart CEO NITA said,

‘We welcome the announcement from the Chancellor outlining a range of additional support measures for businesses.

We will need to scrutinise the details of the new Job Support Scheme which at first reading does not seem to provide the support that is needed for our Tourism Industry. This wage subsidy may provide a bridge for some businesses as we head into the Autumn/Winter, but for many others it will not be enough. The vast swathe of businesses who make up the tourism economy have been at the forefront on the economic impact from Covid-19. Reserves are low, cash flows are tight, and the requirement for businesses to pay more towards employee wages may be a step too far for a lot of businesses.

The Scheme will only provide support for those employees who are working reduced hours. In NI, we have over 78,000 employees on full time furlough, with Accommodation & Food and Tourism related Services accounting for around 20% which means we still have thousands of jobs at risk’

Speaking on the other measures outlined in the Chancellor’s statement, Joanne commented

‘At NITA, we have raised the issue of business debt. Tourism businesses have availed of over £172M in government backed loans and the announcement today that the length of loans can be extended from 6 years to 10 years, the option to move to interest-only repayments and the option for a 6-month payment holiday to be requested will provide businesses a number of options that they can avail of to help reduce costs during this difficult time.

The option to pay deferred VAT bills over 11 months and Self-Employed tax bills over 12 months, will help businesses with cash flow.

The 5% rate of VAT for tourism services introduced in July, has been of huge benefit to tourism businesses and the extension of the 5% rate to 31st March 2021 is to be welcomed. NITA were calling for a much longer extension and we will continue to make this case to the Treasury.

Overall, the Chancellor has again stepped up to the plate in providing significant support for the Economy.

With many private Tourism businesses in Northern Ireland facing closure we implore NI Executive Ministers to urgently release the estimated £150M in unspent monies to ensure that those sectors that are at most risk in the economy get the support and investment now to ensure survival.’