30 April 2024

London’s nightlife is on the rocks


Have you tried to get a drink after 11pm in central London recently? If you’ve been finding it increasingly difficult, you’re not alone. Perhaps that the pub you thought you could sit at for a few hours longer now rings its ‘last orders’ bell at 10:30, or your favourite old haunt has closed down altogether.

Whatever the anecdotal annoyance, it is clear that the hospitality sector is an industry on the rocks. According to the Night-Time Industries Association, over 3,000 pubs, bars and restaurants have closed their doors altogether since the start of the pandemic in London alone.

This is partly a consequence of the rising costs imposed on our night-time businesses – from rising commercial rents, utilities and business rates, to taxes such as beer duty. The average pub in the UK is now operating with a 3% net margin, down from 8.5% in 2019, meaning that any small change in circumstances could force them to reduce staff, operating hours, and even pack up for good.

CapX readers won’t be surprised to hear that overzealous local councils in London in particular are making the problem even worse. Some, including Tower Hamlets, are imposing local alcohol duties on venues which are serving alcohol after midnight, on top of the taxes they already pay, further deterring them from staying open later in the evening.

But a poor economic outlook and unduly high taxes aren’t the only burdens these businesses face. As is so often the case, the last nail in the coffin is frequently the fault of a vocal minority of Nimbys.

Not content with preventing homes and infrastructure from being built in the first place, local residents living in – wait for it – central London, are trying to close down venues that already exist.

The good news is that, for once, the UK’s National Policy Planning Framework is already equipped to deal with this problem. Under the ‘agent of change’ principle, ‘existing businesses…should not have unreasonable restrictions placed on them as a result of development permitted after they were established’.

The bad news is that it’s clearly not being properly enforced. We constantly read about new residents filing noise complaints about venues that have been there for years; venues that are then the losers of this argument when councils restrict pavement licences and noise. The popular Jago Pub in Dalston, to take one example, which has existed for 16 years, began receiving noise complaints after many of the surrounding buildings were converted into residential properties. The impacts of the noise abatement fees the pub has been hit with total around £15,000, spent on legal fees, acoustic testing, sound-proofing and construction. For independent venues operating at tight margins, costs like these could send them straight to the chopping block.

Whilst Sadiq Khan’s Nightlife Czar Amy Lamé has been completely silent on one of the real structural problems facing the industry she is supposed to represent, in Greater Manchester, Night-Time Economic Adviser Sacha Lord is far more aware of the scale of the looming disaster. He’s campaigning for the ‘agent of change’ principle to be implemented across the whole of Greater Manchester, in order to prevent new residents threatening venues with closure.

This decline in London’s once great nightlife scene isn’t inevitable – and we partly know this because there are plenty of other lessons to be learned from the example of Greater Manchester, where nightlife is thriving. The city centre has eschewed restrictive measures like Cumulative Impact Policies, under which there is a presumption that venues applying for a new licence – or a change to their existing one to allow them to open for longer or let more people in – will be refused. Meanwhile, initiatives such as the Village Angel Programme and the pilot of the late-night Tram link are also making revellers feel safer when they eventually return home.

Back in Westminster, ministers need to start clamping down on the worst excesses of local planning puritanism, by charging City Hall to enforce permissive planning rules properly, ‘calling in’ restrictive decisions, and working with the Mayor of London to conduct a fulsome review of the myriad of stifling licensing laws.

If they don’t, it could be last orders for many of our favourite venues.

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Mimi Yates is Director of Engagement and Operations at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.