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Morning Briefing for pub, restaurant and food wervice operators

Wed 9th Sep 2020 - Legal Briefing

It’s now time to support nightclubs by Michelle Hazlewood

At last… having talked to my fellow partners over the past few days about how nightclubs – the seemingly forgotten members of the hospitality industry – can survive covid-19, momentum appears to be building behind plans to help them.

The Leadmill, a famous nightclub in the city in which we’re based, Sheffield, faces an uncertain future; and it was announced last week that Staffordshire’s Silks, thought to be the UK’s oldest independent nightclub, has been forced to close as a result of coronavirus.

But the effort to save nightclubs, which, unlike pubs, bars and restaurants, remain shut, had its profile raised when the Night Time Industries Association (NTIA) announced its backing of the Global Nighttime Recovery Plan.

That’s hugely encouraging, but we believe there’s an immediate and effective way in which local authorities could help nightclubs in their towns and cities, and that’s by abolishing the arbitrary late-night levy, the optional fee-gathering tool used by some local authorities, but not others.

Venues across England and Wales – already on their knees as a result of not having traded for months with many unsure they will ever be able to reopen – face being walloped by the levy. It’s the same for late-night bars, with clients of ours operating in London and two other cities liable for levies of £4,440 each. That’s on top of annual fees for their premises licence of £1,050, which are higher due to the application of the multiplier because they’re all wet-led venues.

Remove those costs, and they’d just have their £350 annual fee to pay for, which would go some way to helping them back on their feet. It would have to happen now though, because most annual fees fall due in September, October and November. Back in July, enlightened Aberdeen City Council capped annual fees payable by on-sales premises. This will help pubs, bars and nightclubs in October, when all annual fees in Scotland fall due.

When surviving nightclubs are able to reopen, it will surely be at reduced capacity at first. So, assuming that’s set at 50%, how about the government gives clubs, say, 25% of ticket sales for live music events, or render revenue from such events VAT-free?

But, by the time those nightclubs that can reopen and begin welcoming customers again, might people’s habits have changed as a result of not having been out until the early hours for so long? And though they’re seemingly less concerned about covid-19, the 18 to 30s, who typically frequent nightclubs, may not want to take the risk, and I’m aware of some who really don’t fancy the idea of taking taxis home.

So, could the virus see a pulling back of hours, with clubbers staying out until 1am or 2am, but not as late as 4am to 6am? It’ll be interesting to see whether there’s a reduction in the number of late licence applications, or if those with late licences actually continue to exercise them.

All this becomes academic until nightclubs are given the green light to reopen – not a quick or straightforward process for often large buildings that have been unused for months. But abolishing late-night levies and the multiplier, plus a government equivalent for nightclubs of Eat Out To Help Out would surely be welcomed by this overlooked part of the sector.

The NTIA, in its Nightclub & Venue Reopening Strategy, asserts that “… nightclubs are able to provide the same barriers and mitigations to risk that both the retail sector and others elements of the hospitality sector can provide”.

That’s surely right, and the sooner nightclubs are able to reopen, coupled with the help we’ve suggested, it will correct what has, so far, been a glaring omission in the slow, but sure, comeback being made by the hospitality sector. Through the Eat Out To Help Out scheme, pubs, bars and restaurants have had help. Now it’s the turn of nightclubs or thousands more jobs are going to be lost.
Michelle Hazlewood is a partner at John Gaunt & Partners
John Gaunt & Partners is a Propel BeatTheVirus campaign member

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