Almost 850 businesses in NI on the verge of closure due to financial distress according to new report
BBC Radio Ulster • The Nolan Show • 29 July 2025
On the 29th of July, Fish City owner John Lavery joined Stephen Nolan on the Nolan Show on BBC Radio to discuss the financial distress that local Northern Irish businesses are facing and some of the reasons behind the turbulence that local independents across the country are facing.
Almost 850 businesses in NI on the verge of closure due to financial distress according to new report. Stephen speaks with Lagan Valley MP Sorcha Eastwood.
Transcription
STEPHEN: Nearly 850 businesses in Northern Ireland are in critical financial distress and on the verge of closure, according to a new report which monitors UK corporate health. Bars and restaurants are the worst affected. Lagan Valley MP Sorcha Eastwood can get us across this. Good morning, Sorcha.
SORCHA: Good morning, Steve. How you doing?
STEPHEN: I'm doing all right. What's going on?
SORCHA: Steven, this is something that we've all known about for a long time. I think if you speak to anybody on the street at the minute, people in their family circles are talking about how really unsupported our hospitality and retail businesses are. One of the huge things that people constantly raise in Lagan Valley is the issue of towns and villages. Regeneration, trying to get people into them, all that sort of stuff. And if you look at this, we have a situation where last year the government came in, we all want a change, and unfortunately they have absolutely hammered our hospitality and small businesses, and obviously farmers, pensioners, the list goes on, it seems to get longer by the day. But I'm really concerned that that sort of discussion that people are having in towns and villages across Northern Ireland is now replicated through solid data that we have to say that many of them are in real distress.
STEPHEN: Well, your party, Sorcha, is part of the local government here. Your party's on the executive. What's the Alliance Party doing, and how are they using their power on the executive to help local business?
SORCHA: So the main reasons, Stephen, that businesses are citing are actually reserved. So that's in Westminster, and that's why I'm leading this campaign and leading this call.
STEPHEN: Now, now, Sorcha, rates would be quite a big cost to any business in Northern Ireland and that can be controlled in Northern Ireland, in Northern Ireland. And that can be controlled.
SORCHA: Rates is absolutely, and we'll come to that in a minute so if you want to work your way through the issues, one of the big issues that hospitality certainly is citing at the minute and that they're asking MPs across the UK to support is the issue of VAT. So we know that already in Northern Ireland, businesses are not on an equal playing field when it comes to the competitors in the south of Ireland, so that is something that's already out there that is completely set by Westminster. Second of all, you've got the issue of national insurance rises. I was the only Northern Irish MP to try and actually amend that legislation whenever it went through last December, and that has really devastated our small businesses, also our community and voluntary sector as well, but you're seeing particularly in those sectors. Rates– absolutely, that's something that's mentioned all the time and you're quite right that is in Northern Ireland and what I and what the Alliance Party would like to see certainly is definitely more targeted support to those hospitality and retail businesses. And actually, whenever you're talking about Stormont and the Assembly, and I'm always conscious that I'm not there anymore, so I certainly don't want to step on anyone's toes, but my party colleague David is our economy spokesperson, and this is something that we've been looking at a lot in Lagan Valley.
STEPHEN: But the reason, Sorcha…
SORCHA: And if you look at how we're actually directing that race support, I would say that it's not being done in the right way. We want to see more small and independent businesses. We don't necessarily want to see more huge, large retail chains, coffee chains. People talk about going to wee towns and say, oh, I'd like to go to Lisburn for this, or I'd like to go to Dromore for that, or whatever. That's what we want to see. But at the minute, that system is working against those retailers and those hospitality people. And you're absolutely right, there is a role. I want to see the stuff that was put through the High Street Task Force actually implemented. I want to see government, both in Westminster and in Stormont, being pro-business, supporting those small retailers. They're really struggling. These are not people that are loaded. These are not people that are big posh people driving about huge cars. These are people that are just like, you know, you and I, anyone else in our family, who simply had a dream and a vision. And unfortunately, a lot of that red tape, a lot of that bureaucracy and a lot of that poor decision-making from the UK government is making their life hell.
STEPHEN: The reason I raise rates is because if you look at the likes of England, there is a 40% rebate on the likes of retail and hospitality and leisure, and they don't get it here. Like, that's how different it is to Northern Ireland and across the water.
SORCHA: Absolutely, and I mean I'm sitting there, I’m sitting there, and you know we're having those discussions in Westminster, we're having those discussions, you know, with MPs across the UK, and it's about everything I mentioned– that, national insurance, all the rest of it, and then they talk about rates and then they go, ‘Well but we don't feel that we're so bad on rates it's not great, but you know we are getting a bit of targeted support,’ and then I look over here and go, ‘What are we doing? Why has no one asked those questions?’ Certainly in Alliance, David, my colleague, has been asking those questions repeatedly in Economy and I sat in that committee with him up the last year, so we are asking the questions and I have to be honest– we had a fantastic showcase at Northern Ireland at the Open the other week. We talked about the fantastic hospitality businesses, the small retailers getting a bit of a buck out of it. But at the same time, we're not actually seeing any concrete supports to them. And that needs to change. And it needs to change really, really quickly. Because my fear is that if we don't act now, both in Westminster and Stormont, see, this time next year, a lot of those 850 businesses that are in difficulty will have already gone to the wall. And I don't want to see that.
STEPHEN: Owner of Belfast restaurant Fish City, John Lavery, with us today. Morning, John.
JOHN: Morning, Stephen. How are you?
STEPHEN: I'm okay, thank you. And look, business is tough at any stage. Is it tougher... Is something happening? Is it tougher now than it's ever been or what's going on?
JOHN: Well, I've been in business, self-employed, for a very long time and been through foot-and-mouth, and mad cow, COVID, the property crash, and I would say I've never seen it as tough an environment as it is today.
STEPHEN: Why?
JOHN: I think we've seen a lot of headwinds coming at us all at once. During the last recession, for example, with regard to the property crisis, there were sectors out there that were unaffected. Anybody not involved in property, life continued… civil service, etc., many professions. However, this time around, everybody is affected. And we're seeing that on the high street.
STEPHEN: And so how tight is it?
JOHN: Well, COVID diminished a lot of business’s resources, and then obviously the Ukraine war came on. We've seen year-on-year ingredient costs increasing. Just this morning, we're sitting at four percent. I speak for ourselves. Since January of this year, we have seen cod and haddock prices increase 94 percent. I can't pass those increases on to the public.
STEPHEN: The cost of cod has doubled?!
JOHN: 94 percent.
STEPHEN: Aye, that's double, isn't it?
JOHN: Yes, almost, yeah. And that's down to some figures. In 2019, the quotas allowed for a million tonnes of cod to be caught. With the quota reduction this year, that has reduced to 350,000. We're looking at the science and it's likely to see another 10% reduction next year. So those pressures are not going to go away. So clearly on those numbers, supply and demand are dictating the cost.
STEPHEN: So what would help? What could Stormont do?
JOHN: Well, obviously, Sorcha, there was conversation there about rates relief, and that would be most welcome. However, it's not enough. Hospitality has been pleading for support for quite some time, and it hasn't happened. You've mentioned there the fact that in England, they've had rates relief, England-Wales rates relief in this last three years, and we haven't here in Northern Ireland received that. So that's compounded the problem. The minimum wage, national insurance, ingredient cost, energy.
STEPHEN: I think there is this perception that if people own their own business they're they're minted, they're rolling in it, and you know we're we're getting a sense from you today and other reporting obviously we've done that would contradict that. Managing director at the White Horse Hotel, Ulster Hospitality Board Member Selena Horshi. Good morning, Selina.
SELINA: Good morning, Stephen.
STEPHEN: Good morning. Well look, you got to turn out of the Open, you must have.
SELINA: We did, absolutely! I can't complain the Open was fabulous! And we've just had the Foyle Cup last week, and that's great, but busy doesn't necessarily translate into profitable at the minute because of the high cost pressures we're under. So like seasonal businesses have done for generations, we'll tuck away what profit we made over the past few weeks and over the summer months to see us through the quieter times that you expect over the winter, but it's getting harder and harder to survive those quieter times because the costs are just chipping and chipping away at any profit and any reserves that we have.
STEPHEN: So can you not just put your prices up?
SELINA: Well, there's only so much the market can bear because it's all very well saying, ‘Oh, there's people coming in from the Open, and they've got more money to spend than maybe the locals’ but we need our local trade as well. You know, it's not just about tourists coming in. There are local people that you want to be coming in for a meal throughout the year. They sustain your business throughout the entire year. So if you put your prices up too far, then it's not affordable to the person. Everybody can feel the pinch in their pocket because of increased energy and food prices. There just isn't the money to do that.
STEPHEN: And did you put your prices up much at the Open?
SELINA: We didn't. We understand the frustration that prices overall have gone up, but let's be really clear, this is not overcharging out of greed. We're trying to price in massive costs that we face, the 20% VAT rate, rising energy, food inflation, insurance, business rates, and the higher national insurance contributions. Really, if we had the VAT rate that they have in the Republic, we could probably reduce prices tomorrow and reinvest in facilities and still stay profitable. But right now, we're just charging enough to stay afloat. It's not about gouging, it's about survival.
STEPHEN: So do you think Stormont should look at the corporation tax rate which they've got the power to do, and to ask questions of Westminster, or what do you think is the game changer here?
SELINA: So the corporation tax rate is one thing, but that requires you to be making a profit to make that work. And at the minute, what we're seeing is those 841 businesses that are at risk aren't making a profit. And even those of us in stable businesses are getting it tighter and tighter as time goes by. So really, I think that the ask has got to be about a fair tax regime. Like we need VAT parity with the Republic. I'm sitting here five miles from the border. And it's really challenging because essentially I am sitting with a postcode penalty that I can't control. So if you're booking a night away, that difference in VAT could mean 15 or 20 pounds for your overnight stay. If you're booking a wedding, that could be thousands of pounds of difference in your price. So I am being really, really seriously penalized by having that difference in VAT. Rates, absolutely. Hotel rates were cut during COVID to support the industry, and those are due to go back up. So that's a 30% increase we're expecting to see in rates, plus the re-evaluation is also going to have an impact. So that's huge costs. So rates and VAT are massive costs.
STEPHEN: Okay, Selina and John, thank you very much indeed. Thanks to Sorcha Eastwood this morning as well.