Last week the UK Chancellor Rishi Sunak announced another series of measures to help stimulate economic recovery. While the summer statement did not address some of the issues we have mentioned before, including the people who have fallen through the gaps, it should be widely welcomed.
The measures related to central fiscal controls not devolved powers so additional finance was assigned by treasury to implement in Northern Ireland. Along with other recent measures including arts sectors funding this adds a further £116 million to the NI budget. While now is not the time to be pessimistic I have no idea how we are ever going to pay even a percentage of this additional funding back.
The measures introduced last week include eliminating stamp duty up to £500,000. This is a great measure to stimulate the property market. Many critics have said this will not do much, but I was speaking to someone who was completing on their new house the very next day. This was putting more than £2,000 back into their pocket. As new homeowners the likelihood is, they will spend that unexpected bonus elsewhere in the local economy.
I do, however agree that for it to really make an impact it has to be accompanied by the ability for first time buyers to get a mortgage. There was a lot of discussion in the media last week about how banks have tightened up on their offering on 90 to 95% mortgages. It would be good to see if there can be any movement on this within the banking institutions to maximise the value of this stamp duty ‘holiday’.
Other measures include a kickstart scheme to create more jobs for young people which is widely welcome and additional payments in relation to the job retention scheme. This will see businesses paid a £1,000 for every employee they keep on for at least three months after October 2020- the end of the Furlough scheme. Many have said this will not encourage employers to keep on any additional staff and it is essentially ‘free money’. My view is that any ‘bonus’ for business at the end of January, typically a poor month anyway, is to be welcomed. This is not least at the end of January 2021 when if current Brexit negotiations and reports are anything to go by, we are going to be in the throes of absolute Brexit chaos.
One of the measures that we can maximise for the benefit of the local economy is the support for the hospitality and tourism sector. The cut in VAT from 20% to 5% is something that has long been lobbied for here, especially in relation to the disparity with the other side of the border. We now need to maximise this, especially in light of criticism of the cost of ‘staycations’ in the south of Ireland. Where possibly, this reduction should be passed onto the customer to give our local hospitality sector even a short-term advantage over our neighbours. I do appreciate however with rising costs and loss of revenue it may be difficult to do this.
We need to mobilise now around our hospitality sector to make the ‘Eat out in August Scheme’ work. This is a great opportunity for restaurants and cafes to get a quick bounce back on those typically quieter days. Here we, the customer will get 50% off (up to £10 per head) every time we purchase food or soft drinks in participating ‘sit in’ outlets Monday to Wednesday throughout the month of August. This makes it affordable for most people to treat themselves even to a coffee out or a snack to help support our local businesses. Who knows, if it is successful it may be replicated again or in other sectors?
Finally staying with hospitality, I would like to say congratulations to Killeavy Castle on winning ‘Castle Hotel of the Year’ at the Irish Hotel Awards. I also want to commend Art Bar Funkel for their innovative outdoor dining idea in Newry Market. It was sold out within hours. Best wishes to all our local businesses as they continue to open safely. I think we will see a big difference in atmosphere in the city centre when the lights come back on in The Canal Court Hotel. I for one will be glad to see it.
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