Written by: Michael Kill, NTIA, CEO
Full Nightlife Article Newsletter series.
The autumn budget brings both welcome news and fresh challenges for the night-time economy. While the increase in the national minimum and living wages offers relief to millions of workers, the reality for many employers is that this budget intensifies the pressure on an industry already in crisis.
With nearly 70% of hospitality and nightlife businesses just breaking even or operating at a loss, costs have already surged by 30-40% since before the pandemic. The added weight of rising wages, higher National Insurance contributions (NICs), and scaled-back business rates relief may push many businesses beyond their limits. Some expect these changes to cost them an additional £50,000 to £150,000 per year, a figure that could prove fatal in an already struggling sector.
April 2025 will bring a tsunami of costs that could devastate employers in the night-time economy. The increase in employer NICs from 13.8% to 15%, along with a reduced secondary NICs threshold from £9,100 to £5,000, will pile extra expenses on businesses that are already hanging by a thread.
These changes coincide with a 6.7% rise in the national living wage, which will bring the hourly rate to £12.21. For small and independent venues, these combined expenses will make it difficult to maintain staffing levels, let alone hire or grow. Despite claims that raising wages can boost the economy, the immediate impact of this “tsunami” of employment costs will likely do more harm than good, forcing businesses to tighten budgets, reduce hours, or even consider job cuts.
The government’s long-term plan to reform business rates in hospitality holds potential, but it may come too late to offer real help to many businesses. The immediate reality is that from April 2025, the current 75% business rate relief for hospitality properties will drop to 40%. This reduction leaves many venues facing a substantial financial hit at a time when every penny counts.
While the government promises targeted relief for the future, the extended consultation period risks leaving too many businesses behind. In an industry where the margins are already razor-thin, delayed support could mean this relief comes too late to save those who need it most.
For workers in hospitality and nightlife, commuting costs are another hidden blow. While the budget maintains the fuel duty freeze for drivers, it raises the bus fare cap from £2 to £3. Many employees in the night-time sector depend on public transport, and for lower-paid workers, this fare increase will cut into any wage gains they see. Although the new £3 cap is set until the end of 2025, it may still be too short-term to offset the rising cost of public transportation for those who rely on it daily.
The government has offered some relief measures, such as increasing the employment allowance from £5,000 to £10,500, allowing over a million small businesses to reduce their NICs bill. Additionally, smaller businesses with properties valued under £110,000 will benefit from 40% business rate relief—a measure that could help some independent venues weather the storm. However, the halving of business rates relief from 75% to 40% next April will mean that, for many, this support falls short of the urgent assistance needed to offset the rising costs.
The government’s latest budget aims to balance wage increases with fiscal responsibility, yet the immediate impact for the night-time industries is overwhelmingly negative. Without targeted, timely support, this industry faces a bleak future. The promise of consultation and longer-term relief offers little reassurance when businesses are fighting for survival right now. If the government’s goal is to cultivate a thriving economy, the night-time sector needs direct, immediate action—not just delayed promises.
As CEO of the Night Time Industries Association, I urge policymakers to address the urgent needs of our sector. For an industry that is central to the UK’s culture, tourism, and local economies, our survival must become a priority. The resilience of our businesses, and the livelihoods of millions of workers, depend on swift, meaningful support that acknowledges the realities we’re up against.
