Following the publication of my recent article on Monday literally pleading for Stormont to reallocate money from its capital budgets to stop the collapse of the local economy, it is pleasing to hear Westminster announce targeted financial support for Northern Ireland.
However, the pronouncements from our Politicians in recent days as to how they are going to spend these funds is however deeply worrying and their approach needs to be challenged and scrutinised to ensure these funds are not wasted and are then distributed fairly, efficiently and quickly.
The three months rates holiday proposed is a good start but is too short in duration. Its shows a lack of understanding of how business works in practice. It assumes that when this is all over in three months, that business will just suddenly return back to normal. This is not going to happen, and businesses will need at least a year to bounce back. Northern Ireland now needs the same business rates holiday as the rest of the UK.
The Assembly is proposing to give the supermarkets and large-scale convenience retail the same rates holiday as distressed sole traders when their businesses are booming, Why? This makes no sense considering there is so much distress elsewhere in the economy. These types of businesses should not benefit from business rates relief.
My first observation on the emergency funding provided by Westminster is that the NI Assembly seem to have held back the majority of the funds provided to it and seem to be treating these funds as the missing funds they previously requested to fill the holes in their existing budgets, I hope this is not the case and that the funds are spent as the Chancellor intended. These funds now need to be used to protect jobs and support the local Economy ensuring it does not collapse.
My second observation is the NI Assembly has literally no idea how to distribute these funds have come up with proposals to allocate the monies to businesses based on the rateable value of the premises they occupy. This is grossly unfair and needs to be rethought through.
These funds need to be allocated on the basis of need, not by the NAV of a property. On this basis, a small business, say a high-end Jeweller with three staff trading in a property with a NAV of greater than £15k and can continue to trade during this crisis would receive a cash payment of £25k whilst a hair salon in premises with an NAV of £12k employing say 12 staff which cannot trade as their staff have to physically touch customers would only receive £10k. This is wrong and not thought through.
Another real example would be self-employed businesses who are located in Flexible Office Accommodation such as Serviced Offices and Coworking Spaces would end up receiving nothing as they don’t pay the Business Rates, these are paid by their Landlord. This is wrong and certainly not the Chancellors intent.
You would have thought from RHI, that our Politicians and Civil Servants would have learned from their past mistakes about wasting money. However, from my reading of the proposals outlined by the Assembly, it appears they have not and that many of the businesses and the jobs they support and which are in distress will not receive the support they need.
Finally, from reading the Hansard for today’s proceedings at Stormont, the sense of urgency just is not there with our Politicians. Businesses shouldn’t expect this financial support anytime soon based on a reading of some of the debates that went on in there in recent days.
Our Politicians and Civil Servants need to regroup, talk to representatives of the various Trade Bodies, a sample of businesses and self-employed people from across NI and work out how they are going to give this money out on the basis of need, in an efficient way and above all, quickly.
And to the Slugger readers who accused me of being political in suggesting the funds allocated for capital projects such as Casement Park, should be reallocated to saving our local economy, I would still strongly argue this should still happen as it is going to take everything we have to stop our economy from collapsing.
The world has changed, this is all about survival now.
Photo by fotografierende is licensed under CC0
Patrick Murdock is a dual qualified Chartered Surveyor and qualified Tax Advisor original from and currently in based Newry. An independent free thinking liberal at heart, prior to establishing his own specialist consultancy, Patrick has built a twenty year career working for a number of global advisory firms and continues to work across markets in the construction, property and final services industries and has considerable experience and practical knowledge of working day today in the UK, Northern Ireland and ROI markets.
He is also Cofounder and operator – The Hub, Newry.