Thursday 9 July 2020 11:50 am

Sunak’s spending spree ‘catastrophe’ for UK’s night time industry

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Casinos, comedy clubs and nightclubs have accused the chancellor of letting Britain’s night industry “slip through the cracks”, as a new wave of financial support for the hospitality industry failed to provide specific support for shuttered night time venues.

Chancellor Rishi Sunak unveiled a raft of measures in his £30bn mini-Budget yesterday, in a bid to revive the UK’s battered economy after months of closures during the coronavirus pandemic. 

Read more: London’s nightclubs and casinos slam ‘suicidal’ new coronavirus guidelines

Announcing his Summer Statement in the Commons yesterday, Sunak pledged to pause stamp duty, boost hiring, introduce “eating out” vouchers for every person in the UK and slash VAT for restaurants, cinemas, theatres and zoos. 

But businesses in the UK’s night time industry, most of which are still shuttered, have vented their fury that the chancellor’s spending spree will only apply to businesses that have been allowed to reopen.

Pubs, bars, restaurants, hotels, theme parks, galleries and hairdressers were allowed to reopen over the weekend following a relaxation of social distancing measures, but the bulk of the UK’s night time businesses have been snubbed from the list after being deemed “too unsafe” to reopen.

Michael Kill, chief executive of the Night Time Industries Association (NTIA), told City A.M: “Whilst there is much to be welcomed in this announcement for many businesses, particularly pubs and restaurants, it leaves many in our sector beleaguered. A VAT cut for some will help, but not when you can’t open your business. 

“This announcement will be a tragedy for many late night business owners, their staff and their customers. We again are now waiting for more clarity, and renew our call on the government, to help us with direct financial support”

Kill added: “It’s as if the government is letting us slip through the cracks between the various well-intentioned schemes. A VAT cut when you just can’t open at all is not of any help. Late night venues in towns and cities across the country are facing catastrophe.”

The night time economy is the UK’s fifth-biggest industry, accounting for at least eight per cent of the UK’s employment and annual revenues of £66bn, according to data from the NTIA.

And London’s night time economy directly supports 723,000 jobs — one in eight in the capital, according to the Office for National Statistics

Alex Proud, owner of several London nightclubs including Proud Camden, echoed Kill’s sentiments, adding that it was “extraordinary” that the night time industry was left out of the government support package.

“I think most of us in the night time industry have been pretty shocked. I feel like they had an open goal to support us with the amount of money they had going around and they totally missed it,” he told City A.M.

Proud added that he was “incredibly frustrated” that Sunak’s decision to slash VAT from 20 per cent to five per cent for the next six months will only apply to venues that serve food, and will not be applied to alcohol sales.

“The VAT cut doesn’t help many venues that are wet-led not food-led. I find it an extraordinarily strange decision — I’d love to have been in that meeting where they said ‘Oh let’s just stick it on food, not alcohol'”.

“I’m incredibly frustrated because I feel like [Sunak] wants to do the right thing and he’s clearly got bad advice… It’s bitterly disappointing, ill thought-out and really world-losing. It’s especially disappointing because the Treasury up to this point has been the best part of the government’s response to Covid”.

Michael Dugher, chief executive of the Betting and Gaming Council, said: “The chancellor’s decision to cut VAT for the hospitality and tourism sectors from 20 per cent to five per cent for the next six months will potentially be an enormous boost for bingo halls and casinos.

“However, in order to take advantage of this new policy, casinos must be given the green light to reopen as quickly as possible in July. At the moment, casinos are costing the exchequer around £5m a week while they are closed. Last year, they paid £5.7m a week in tax.”

Dugher added: “Casinos are part of our hospitality, leisure and entertainment industries, and they are also a significant attraction for tourists. They can reopen safely and it’s time now to let them do so.”

Simon Thomas, chief executive and owner of London’s Hippodrome Casino, told City A.M:  “As a casino operator, a VAT cut is not very relevant. We will be speaking to the Treasury about receiving a similar cut in gaming duty in our casino.

“We are in discussion with the Department for Health and Social Care and Public Health England to reopen, but for the moment we are forced to remain closed.”

A report released today by the Live Comedy Association (LCA) found that nearly 80 per cent of comedy clubs could shut permanently in the next year as cancellations and venue closures remain on the horizon long into the aftermath of the coronavirus crisis. 

Read more: Government to announce £1.57bn support for UK arts and culture industries

One third of live comedy venues believe they will be forced to close in the next six months without business, according to the survey, while almost 78 per cent say that they will be gone in a year.

Brid Kirby from the LCA told City A.M: “The LCA was disappointed to see that once again, there is no news on the vital funding needing to support the freelance workforce. As an industry where over 70 per cent are self-employed, time is running out to extend [support] and plug its gaps”.

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