Late night levy ‘could be final nail in coffin’ for pubs

The levy that will apply to any business licensed to sell alcohol between 12midnight and 6am was approved by Southwark Borough Council on 17 July and will come into force on 1 September.

It is estimated the levy’s introduction will add more than £400,000 to the council’s coffers per year, with the funds raised intended to support a night-time economy team of police and council workers expected to cost £335,500. Use of remaining revenue will then be determined by a board of police, council staff, operators and residents.

Though the annual charge ranges from £229 to £1,365 depending on rateable value, amendments to initial plans mean that on-trade licence holders in receipt of small business rates relief and with a rateable value of less than £12,000 will receive a 30% reduction.

A review of the levy will be held after the first year.

With the decision, Southwark becomes only the 11th council to date to adopt a late-night levy – half of which are London boroughs such as Hackney​​ and Tower Hamlets​​. 

The announcement comes as the east London borough of Redbridge considers the introduction of its own levy. As reported by The Morning Advertiser​, the borough’s council recently extended its consultation​ on introducing a levy from 1 October for a second time – having previously extended talks until 16 May.

Both consultations had been met with fierce opposition from hospitality industry bodies who denounced the measures as antiquated and a “complete misstep”​. 

Only cares about revenue-raising

UKHospitality wrote to Southwark Council in the days leading up to the crucial vote urging it not to introduce the tax. The trade body also gathered the signatures of more than 200 local businesses, residents and customers, registering their opposition to what it considers an outdated measure.

“Obviously, we are incredibly disappointed Southwark Council has chosen to ignore the concerns of local businesses and residents,” UKHospitality chief executive Kate Nicholls explained.

“Pubs, bars and nightclubs that have helped drive the revitalisation of the area and foster a fantastic community spirit are now going to be penalised.

“By introducing a discredited tax, that the House of Lords recommended be abolished, Southwark Council has proven it only cares about revenue-raising, rather than supporting the local community.

“Local businesses, their employees and customers are the ones who will suffer.”

Final nail in the coffin 

The British Beer & Pub Association (BBPA), which had previously called on councillors to reconsider levy proposals in the south London borough, believes the measure could damage local pubs.

“Introducing a late-night levy is a backward step for Southwark,” Brigid Simmonds, chief executive of the British Beer & Pub Association, said. 

“Late-night levies don’t effectively address alcohol-related issues. Instead, they unfairly tax well-run and responsible businesses such as pubs – many of which are SMEs already struggling to get by.

“The late-night levy could be the final nail in the coffin for some of Southwark’s community pubs. 

“When business rates are the basis for the calculation, premises like pubs will pay a disproportionate share.”