The Key Challenges facing the Night-Time Economy

The key challenges facing the Night-Time Economy

VAT reduction

This topic would always dominate the Night-Time Economy Summit when coming into the two-day event. Sacha Lord has recently been tirelessly campaigning to reduce the 20% VAT currently imposed on the hospitality business to 12.5%. But the significance of the issue was telling when the CEOs of the NTIA, UKHospitality, BBPA and IOH all unanimously agreed that the stubbornly high VAT is the biggest challenge the sector faces. All three Metro Mayors also agreed to reduce VAT, with Andy Burnham, Tracy Brabin and Steve Rotheram backing the campaign, with the latter calling for a reduction to 10%.

But the CEO of the NTIA, Michael Kill, shared that all aspects have to be encompassed for a reduction in VAT to work, which includes alcohol. As we enter a key year for politics with a general election looming, Labour MP, Jeff Smith stated that the party is committed to “The radical reinvention of business rates. We hope the next government will have a different approach to how we deal with those issues.”

To harbour support for the industry, the night-time economy has to be under the Department for Culture, Media and Sport

It is incredibly confusing that of all the departments that regulate the night-time economy, it’s the Home Office. A responsibility it has held since the 2003 Licensing Act. Currently, the Home Office regulates terrorism, crime, illegal immigration, and, of course, the NTE. As the author of the ‘Darkest Before The Dawn Manifesto’, Philip Kolvin, “We are not an organised crime gang.” As the sector is seen exclusively as needing regulation, the Home Office is seemingly best suited to do that. Sam Tarry, MP for Ilford South, believes there needs to be a change in attitude on the industry, and one way of shifting that is to move it to the DCMS.

By making the DCMS ultimately responsible for all forms of culture in the UK, the night-time economy would support the industry, and it would be responsible for promoting the creative, cultural and tourism sectors. The department still regulates but would find the balance between promotion too, which is seen with sports stadia and gambling.

The night-time economy goes unrecognised

For a sector that generates 10% of the UK economy, you’d expect to have 10% of support received, however, the answer to that is a clear no. With a lack of support in reducing the cost of doing business, whether that be VAT, business rates and duty rates, or the support received during the pandemic, the sector is underappreciated.

But before the sector gains that support, Mike Grieve said: “We need to recognise the importance of our culture to the economy. We need the economy to thrive and to get that appreciation from the government. Especially at the grassroots level as it is on life support.”

Closures are scarring the industry

Coming off the back of another difficult year for hospitality, we saw 6,000 venues close their doors for good in the last 12 months. With that statistic looming over the speakers, their resolutions and anecdotes seemed to offer damage control rather than growing the sector. It is probably because the sector is in such a bleak position that damage control is the best we can do at the current moment.

An anecdote which was posed by Sunil Sharpe was when you attend a larger event, support a smaller venue too. “A one for one I like to call it. Big promoters have to have that responsibility.”

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