Saturday, March 2, 2024

Spring Budget draws a mixed response from Northern Ireland businesses

Must read

Warm welcome from Denroy

Producing Denman hairbrushes, as well as products for the industrial, aerospace and defence sectors, Denroy has a turnover of £40m and employs around 300 staff members.

Its fortunes were boosted in the pandemic by ecommerce sales for its haircare products, and PPE contracts for the health service, while industrial work has also picked up.

“Generally, it’s a really good budget for business here,” said CEO Kevin McNamee, who sits on the CBI Council and said many of its asks came through.

Mr McNamee said he was disappointed not to see any changes to the Apprenticeship levy and green business incentives, but delighted with the 100% expensing of capital allowances.

“That is really significant and welcome,” he said. “It really does incentivise us to spend more because it frees up cash for further investment. Labour costs are high, automation and productivity improvements are essential and that makes a whole lot of sense.”

Additional spending for the Ministry of Defence is also good news for Denroy.

“We supply components into the defence industry as a sub-contractor, and that extra spending is job- and wealth-creating in the UK.”

Mr McNamee also welcomed the extension of the energy price cap for consumers. “That helps take the heat out of wage demands,” he said.

“Universal support, returner-ships and childcare support — as an employer, that’s all very exciting.

“If we can attract more people into the workplace and better candidates, it’s hopefully taking the pressure off constraints in the workplace.”

Kaffe O owner not a fan

The chain has expanded over its nine years in business to encompass five Belfast outlets, one in Newcastle and a commercial kitchen, totalling 42 employees.

“It was absolutely atrocious for hospitality,” owner Orla Smyth said. “There was zero, nothing at all — no VAT, no business rates support and no discussion on business energy relief either.

“It’s the impact this has on a very small economy, Northern Ireland, which is made up of small independent businesses. Yes, there is some tax relief on R&D but you can’t invest when you’ve no money in the first place.

“I certainly would not recommend investing in hospitality in the UK to anybody.”

Sales are good for the chain, said Ms Smyth, but the business is getting hammered by costs from energy and ingredients to wages.

Paying above the living wage, Kaffe O has no problem recruiting or retaining staff. “Unfortunately, the cost of doing business is horrific at the minute,” she said. “Bills are two, three times what they were.”

Business rates relief was extended in England, but not in Northern Ireland, and the hospitality sector’s big hope of tourism VAT didn’t materialise.

“That 20% VAT could be going into wages and investment,” said Ms Smyth.

“The United Kingdom is not a welcoming environment for hospitality.”

Any further expansion plans are more likely to be in the Republic of Ireland, where “VAT is 9%, rates are cheaper and their rent isn’t that much more expensive so it’s an absolute no brainer,” she said.

Latest article