Rates review update ‘too little too late’ for hospitality sector, warns Armstrong

Ulster Unionist Party Economy Spokesperson Diana Armstrong MLA has criticised the Finance Minister’s latest update on Northern Ireland’s business rates review, warning that the proposals offer “yet more reviews rather than delivering tangible support now” for firms already under intense financial strain.

Her comments follow a statement in the Assembly from Finance Minister John O’Dowd, who outlined plans to accelerate the strategic review of business rates, enhance Small Business Rate Relief, and tackle high vacancy levels in town and city centres.

‘Businesses are under severe pressure today’

Ms Armstrong said the hospitality industry in particular is running out of time, with many operators struggling under rising costs, VAT disparities, and supply price increases.

She said:

“While I welcome the Minister’s commitment to enhancing Small Business Rate Relief and introducing an accelerator scheme, I am deeply disappointed that the update signals yet more reviews rather than delivering tangible support now.

“Businesses across Northern Ireland are under severe pressure today, not in 2027 or 2028 and they need clarity and action, not prolonged consultation.”

She added that despite her efforts to secure assurances in the Assembly, there remains little clarity on what immediate benefits hospitality businesses can expect in the current mandate.

“This week in the Assembly, I pressed the Minister to outline what real, measurable benefits the hospitality sector will see before the end of this mandate. Promises of future reviews do not ease the concerns of businesses facing rising costs in November 2025.”

Armstrong questioned how broadening the rating base and lowering operating costs could be achieved simultaneously, saying:

“The Minister says he wants to lower operating costs and grow the tax base by bringing more businesses into the rating system. He must explain how this will alleviate current pressures rather than add to them.”

Potential for Scottish-style model

However, Armstrong welcomed one aspect of O’Dowd’s plans: a commitment to consider the Scottish model, where rateable values for pubs and hotels are based on turnover rather than floor space.

“I will say this that that it is encouraging to see a commitment to take note of the outcome of the Scottish Rates Review model where rateable values for pubs and hotels are based on turnover rather than square footage we see in Northern Ireland. This approach could deliver a fairer system for hospitality businesses here, and I would like to see the Minister move quickly on this.”

She warned that prolonged delays risk real economic damage.

“For years, businesses have been crying out for meaningful support. My fear is that this latest update simply delays real action. VAT disparities with the Republic remain a major concern in my constituency and many border communities, alongside soaring costs of goods.

“The Minister must take robust, immediate measures to protect jobs and sustain the hospitality sector.”

O’Dowd outlines long-term ambition for business rates overhaul

Setting out his plans in the Assembly, Finance Minister John O’Dowd said the Executive remained committed to delivering a “fairer, more progressive rating system” and confirmed that all existing support mechanisms will have been reviewed by the end of the 2027/28 rating year.

He told MLAs:

“Less than a year ago, my Department committed to reviewing all rates support to deliver positive and progressive change to the rating system. Today, I can announce that every single rates support will have been reviewed by the end of the 2027/28 rating year.”

Following summer review work, O’Dowd said his focus now is to enhance support for small businesses, reduce commercial vacancies, and help new enterprises grow.

“Small businesses are the backbone of our economy. I want to see extra help going to those businesses that provide vital employment supporting workers, families, and communities.”

He noted that Small Business Rate Relief has remained unchanged since 2012, and announced plans to consult on enhancements before the New Year.

Vacant properties in the spotlight

The Minister also confirmed he intends to increase rating liability for vacant non-domestic properties, raising it from 50% to 75%, and ultimately to 100%, a move he says could unlock up to £20m for central and local government.

“What was clear from the Review was the need to challenge the blight of vacant properties in our villages, towns and city centres. It is my view work now needs to begin to elevate Non-Domestic Vacant Rating liability from 50% to 75% and then to 100%.”

He said the reforms would only succeed with cooperation across government:

“Delivering positive change will require buy-in, partnership working and the backing of Ministerial colleagues and the Assembly.”

Immediate vs long-term support: the political divide

While O’Dowd’s roadmap signals significant structural reform, the split between long-term planning and immediate business needs remains at the centre of political debate. Armstrong’s intervention highlights increasing frustration within the hospitality sector, which argues it cannot wait years for relief while margins continue to erode.

As consultations begin ahead of the New Year, business groups will be watching closely to see whether the Department’s ambition translates into practical support — and whether the hospitality industry receives the targeted, urgent intervention it says it desperately needs.