The decision follows campaigning by NE1 – Newcastle’s Business Improvement District (BID) – which sought to end the LNL that saw venues operating post-midnight charged an annual fee of between £299 and £4,400 and had raised more than £3m since its introduction in 2013.
Vaulkhard was one of the campaigners who put his points across publicly as the pandemic drew towards a close in 2021.
The north-east city’s new Liberal Democrat administration at Newcastle City Council listened and voted unanimously to axe the charge on Wednesday (7 October).
Vaulkhard, whose group runs five sites in the city, told The Morning Advertiser the move not only removes an outdated financial burden but also signals a new era of constructive dialogue between the council and the hospitality sector.
“It was a victory for common sense and the politicians and NE1 should all get credit for it,” he said. “Certainly, those of us with late licences are very thankful for it but also a real win is the opening of positive dialogue with the council. We’re talking to them, we are interacting with them, and they are listening, and that I think bodes well for all of hospitality in the city.”
The Core, which is the Newcastle Hospitality Association (also known as the NE1 Hospitality Group) that is collective voice for city-centre and regional hospitality businesses in Newcastle upon Tyne was also pleased with the decision.
When the LNL was introduced in Newcastle, Vaulkhard admitted it had a clearer rationale. “It had merit [years before the pandemic] when the licensing environment [meant] a great big 2,500-person nightclub kicking out at 2.30am,” he said.
Challenges created
“We all know in hospitality that creates challenges in the middle of the night that need resourcing – whether that’s police resource or cleaning resource or taxi marshals. There is an argument to say ‘do your bit’. It’s £4,400 a year but you are benefiting from it and your customers are safer, happier and looked after.”
NE1 head of operations Nick Kemp added: “It is a positive step for the city’s hospitality businesses, which continue to operate under considerable financial pressure and face a significant burden from taxation, regulation, and rising costs.
“The levy had become increasingly difficult to justify in a late-night economy that has changed considerably since it was introduced, and its removal is welcome recognition of the realities facing businesses today.”
Late-night trading patterns have shifted – particularly post-Covid – with fewer traditional nightclubs and more pubs, bars and restaurants doing the bulk of their business well before midnight.
Despite that, the LNL remained tied to late licences and a site’s rateable value, not actual late-night trading. The most any venue would pay was £4,400 a year, with smaller sites still facing bills in the hundreds of pounds.
“We’re not a big company but it’s circa £20,000 a year, every year,” Vaulkhard said. “It’s not a seismic amount of money, but it’s a seismic amount of money when we really got absolutely no benefit for it.”
Vaulkhard added the system also caught operators who were not even trading late in some cases because they had venues that were closed and simply had to pay up or risk losing their licence.
It had become a difficult situation for the police and council to defend.
Credit to the council
“What is different at one minute past 12 than one minute to 12?” Vaulkhard argued. “What is fundamentally different that we have to pay this money?”
He pointed to the Theatre Royal as a particularly stark example and stated that venue would have been paying £4,500 (due to its high rateable value) but the need for late-night services such as police and calming measures were not relevant.
Vaulkhard understood 70% of the LNL income went to Northumbria Police and 30% to the council and although those authorities would want the extra income, it was simply not justified.
“Absolute credit to the council,” he said. “They came in, they listened to the argument, and they said, ‘Look, do we want to give up the budget? No. But is it a fair extra tax really for these venues? No, it isn’t, and therefore we’re going to have to resolve the budget issue elsewhere. But it isn’t right taxing these people.’ And then that was the end of it.”
Vaulkhard added: “So often we do often get the wrong end of a tax deal and it is quite nice to be told, ‘No, that’s not right, we’ll stop that’.
“There’s a recognition of us as an industry and a recognition of what is and isn’t fair and right, so hats off to them.”
Ne1’s Kemp concluded: “This has been a collective effort, with The Core’s members working hard alongside our BID colleagues at NE1 to make the case for change. We welcome the Council’s willingness to listen to those concerns and act on them. That is essential for Newcastle to maintain and strengthen our reputation as a great city to visit, work and enjoy everything our amazing hospitality sector has to offer.”
