London’s late night economy is in “severe jeopardy” with widespread closures likely following the extra burden of costs imposed by the Budget, an industry body warned today.
The Night Time Industries Association (NTIA) said that its survey of more than 500 member bars, clubs and pubs found that almost 90% will suffer a downturn in profits as a result of Budget measures and 40% say they could close within the next six months.
Venues are facing extra costs as a result of the planned increase in employer National Insurance contributions and the National Living Wage revealed by Rachel Reeves last month.
At the same time duty on alcoholic drinks went up – with the exception of draught beer and cider – increasing the cost of a night out for customers.
According to the NTIA “with escalating costs and shrinking consumer spending, this once-thriving sector is now fighting for survival.
It added: “Consumer spending has fallen as disposable income decreases, resulting in reduced visit frequency, shorter dwell times, and lower spending per visit. With mounting costs and shrinking revenue, businesses are now struggling to sustain an environment that is increasingly unsustainable.”
The NTIA found that around three quarters of venues expect additional annual costs of at least £30,000 as a result of increases in energy prices, NI contributions, alcohol duties, and the minimum wage. Some businesses face annual hikes of more than £80,000.
Around nine out of ten businesses say they are resorting to measures such as raising prices, cutting staff hours, reducing operational hours, and delaying investments.
The Government has said the NI and other tax increases are essential to close the £22 billion “black hole” in the nation’s finances it inherited from the previous Government.
But NTIA boss Michael Kill said: “The Autumn Budget has effectively signed a death sentence for many night-time economy businesses across the UK. This sector, which contributes over £136 billion to the economy and employs over 2 million people — especially young people under 30 — is being pushed to the brink. The government’s ‘pro-growth’ claims ring hollow in the face of policies that are, in reality, crippling the very industries that drive economic vitality, social cohesion, and cultural richness.”
The NTIA has called for “immediate” Government help in the form of increased business rate relief; energy subsidies for nightlife venues; and “reconsideration of the hikes in alcohol duty and employer NI contributions”.
