Families across NI promised cheaper summer days out as UK unveils cost-of-living rescue package

Families across Northern Ireland are set to see the cost of summer outings, meals and travel eased after Chancellor Rachel Reeves unveiled a major package of cost-of-living measures amid growing fears over the economic fallout from the conflict in the Middle East.

In a Commons statement on Thursday (21 May), the Chancellor warned that instability linked to the war in Iran posed “a significant challenge to the world economy”, with rising oil and gas prices threatening to put further pressure on household finances and businesses across the UK.

But alongside the warning came a sweeping support package targeting fuel costs, food prices, family spending and business energy pressures — including a temporary VAT cut on summer attractions and children’s meals that will apply across Northern Ireland.

The measures form part of the Government’s new “Great British Summer Savings” scheme, designed to reduce the cost of family days out during the school holidays while helping hospitality and leisure businesses attract customers during the peak summer period.

Summer VAT cut to apply across Northern Ireland

One of the biggest announcements for local families is a temporary reduction in VAT from 20% to 5% on a wide range of attractions, entertainment and hospitality spending from 25 June until 1 September 2026.

The scheme will run throughout the school holiday period across England, Scotland, Wales and Northern Ireland.

Eligible activities include:

• Children’s meals served from children’s menus in restaurants and cafés

• Children’s and family tickets for cinemas, theatres, concerts, shows and exhibitions

• Tickets for attractions including theme parks, fairs, museums, zoos, soft play centres, circuses, wildlife parks, nature reserves and adventure parks

The VAT reduction will apply to tickets for both adults and children at many attractions.

The Government said the scheme is intended to help families continue to enjoy “the little treats in life” despite ongoing cost-of-living pressures.

For households across Northern Ireland facing high grocery bills, energy costs and expensive summer childcare periods, the move could reduce the cost of outings during the school break — provided businesses pass savings directly on to consumers.

The Government said it expects firms to fully pass on the VAT reduction to customers.

Fuel duty freeze and food tariff cuts announced

UK Chancellor Rachel Reeves

The Chancellor also confirmed there will be no fuel duty rise this year, extending support already in place as fears grow over the impact of global oil price instability.

The move is expected to particularly affect rural parts of Northern Ireland, where many households rely heavily on private cars due to limited public transport options.

Alongside the fuel duty announcement, ministers confirmed tariffs on more than 100 supermarket food products would be temporarily suspended in an effort to ease pressure on household grocery bills.

The Government also announced tougher new powers for regulators including the Competition and Markets Authority to investigate firms accused of exploiting the crisis through excessive pricing.

Mileage rate increase to benefit workers using own cars

Rachel Reeves also confirmed a 10p-per-mile increase in tax-free mileage rates for the 2026-27 tax year, backdated to April 2026.

The Government estimates the measure will save around £120 annually for someone travelling 6,000 business miles using their own vehicle.

The increase could particularly benefit care workers, tradespeople and other employees across Northern Ireland who regularly use personal vehicles for work journeys.

Government prepares for possible energy price pressures

A significant part of the Chancellor’s statement focused on fears that continued instability in the Middle East could trigger another rise in energy prices later this year.

Ofgem is expected to confirm the next energy price cap level next week, covering prices from July onward.

While current forecasts suggest prices may remain similar to levels seen last April, the Chancellor admitted ministers are actively preparing contingency plans in case conditions worsen.

The Government said it stands ready to introduce further “targeted and temporary support” if energy markets deteriorate significantly.

The Chancellor defended the Government’s wider economic strategy, pointing to inflation falling faster than expected and the UK recording 0.6% economic growth during the first quarter of the year.

Ministers said Britain was currently the fastest-growing economy in the G7, with the International Monetary Fund also upgrading its UK growth forecast this week.

Business and industry support included in package

Alongside measures for households, the Government announced several targeted schemes aimed at sectors vulnerable to rising energy and fuel costs.

These include:

• A £350 million Critical Chemicals Resilience Fund for strategically important chemical producers

• A £120 million support package for the ceramics sector

• A 12-month road tax holiday for HGVs

• A cut of more than one-third in red diesel duty until the end of the year for farmers and rail freight operators

Northern Ireland businesses involved in manufacturing, logistics, farming and supply chains are expected to closely monitor whether additional support follows if global energy prices continue rising.

Tax reforms to help fund support measures

The Chancellor also announced reforms to the foreign branches exemption, which ministers said had allowed some multinational companies to reduce the amount of tax paid in the UK by offsetting overseas losses.

The Government expects the reforms to raise “hundreds of millions of pounds a year”, helping fund the support package announced this week.

Final costings for all measures are expected to be published at the next Budget following certification by the Office for Budget Responsibility.

Hospitality and entertainment sectors welcome move

The package was welcomed by hospitality and cinema industry leaders, who said the temporary VAT cut could help both families and businesses during the summer period.

Kate Nicholls, Chair of UKHospitality, said the move recognised “the importance of a lower rate of VAT for hospitality as the quickest and simplest way to lower prices and boost consumer confidence”.

Odeon Cinema Group managing director Mark Way said the announcement would help families enjoy “the big screen for less”, while Vue founder Tim Richards said the industry hoped the measures would encourage more people to return to cinemas over the summer holidays.

For many families across Northern Ireland, however, the success of the package may ultimately depend on whether visible price reductions appear quickly enough to offset continued pressure from food, fuel and energy costs over the months ahead.