Propel Legal Briefing: Hospitality silence in the manifestos by Michelle Hazlewood

First appearing for Propel Hospitality in their Legal Briefing on 12th June 2024.

Propel Legal Briefing: Hospitality silence in the manifestos by Michelle Hazlewood

In less than a month, a new government will take office. There is a lot of change and uncertainty on the horizon, but it is clear that a new round of leadership brings new opportunities for the industry. During this interim period when the legislative process is on hold, I wanted to reflect on opportunities that may have been missed and consider some of the potential indirect consequences of the various manifesto pledges.

I won’t speculate on which party will form the next government or whether it will have the majority needed to implement its manifesto promises – but I will have a good delve into what the results might mean to us on the ground and what we believe the new government should prioritise addressing.
Regardless of the election’s outcome, it’s a safe bet that the new government will focus on its headline-grabbing key policy initiatives during its first term. Historically, this often means that practical and common-sense amendments to existing legislation will be deprioritised, with some even at risk of being completely overlooked and put on the back burner. Unless the sector successfully lobbies to maintain its influence on the new ministers – and the role of the Manchester night-time economy adviser and London’s night czar will be fundamental in maintaining the position – I suspect they are more likely to remain unaddressed.

Interestingly, the manifestos of the key parties have been conspicuously silent on the hospitality industry so far. Some might say this is a blessing in disguise, sparing us the sweeping reforms like those in 2005, when new licensing legislation brought chaos and costs. In my view, we still deal with some of the “good ideas” from that time that provide no real benefit and, in fact, have proven to be a nightmare to deal with. 

The likelihood of any new government addressing the issue of the late-night levy, with its discriminatory additional operational costs on the late-night economy, is slim to none, unfortunately. This is particularly concerning given current evidence showing that many traditional late-night venues are struggling, with some even shutting their doors for good. It has been reported that since the start of the pandemic, 13,793 night-time economy businesses have been lost across the UK. This represents more than 15% of the total, marking an unprecedented wave of closures – and this data only spans up to December 2023, so you can imagine that even more have been lost since then.

Another example of an entity that I believe should be scrapped from the statute book is the early morning restriction order (EMRO). This has rarely been consulted upon and never implemented. An EMRO restricts the time after which alcohol may be sold or supplied, with the time being set by the licensing authority being between midnight and 6am, whether under a premises licence, club premises certificate or temporary event notice.

I’m also concerned about another issue that, despite gaining traction in the media recently with the famous Day & Night café case, may fall by the wayside – the agent of change principle. It requires those granting applications to consider whether existing commercial operations will prove to cause noise issues for the new neighbours further down the line. The agent of change principle works both ways, so that if a new venue or noise generating development is built near to an existing residential development, the onus will be on the new development to put in place noise mitigating measures. 
The agent of change principle is now referenced within the planning process and the Licensing Act 2003 Section 182 guidance. However, the commentary is still limited, and it’s an important topic that desperately needs building on. We need separate, detailed guidance on how these principles should be adopted and what should be expected from incoming developers to avoid negatively impacting existing businesses.

I have keenly watched the television debates between the two main party leaders, and as an individual, I was quite pleased to hear that neither intended to introduce new taxes or increase taxes on working people. I recall that during the ITV debate, neither party leader raised their hand when asked if they would increase income tax, national insurance or VAT.

However, we keep hearing about each party’s plans to spend in various areas, and it’s well-known that local authorities are strapped for cash. If local authorities are seeking increased revenue, there’s a compelling argument for raising the annual fee paid under each premises licence, which has remained static for 19 years.

I also worry that we might see “tax by the back door”, which could significantly impact hospitality. There is already considerable commentary and evidence on the impact of a tourist tax on the number of people visiting the UK, particularly the level of spending in London. We all know that big spenders on hospitality in many cities are tourists from abroad, and visiting a British pub is often at the top of their to-do list.

Moreover, the Scottish government has advanced the Visitor Levy (Scotland) Bill to stage three. The Visitor Levy (Scotland) Bill empowers local authorities to impose a levy on overnight stays, with the funds generated earmarked for reinvestment in services and facilities primarily utilised by tourists and business visitors.

This model mirrors existing levies in popular tourist destinations across Europe, like Amsterdam and Berlin, as well as in countries beyond Europe, such as Canada. There are ongoing discussions about whether to cap the number of nights and the level of the nightly fee. If this is seen as a significant income generator, similar legislation could be rolled out across the rest of the UK. The tourist levy will increase administration and may deter visitors or shorten their stays. 

There has also been a lot of conversation around young people’s futures, education and careers in recent months by the political parties, and a significant concern of mine is how politicians’ discourse might negatively impact the status of a career in hospitality. A manifesto pledge, whether enacted or not, to “outlaw” university courses labelled as “Mickey Mouse” degrees might be interpreted as being against hospitality.

We’re witnessing an increase in the number of improved and more diverse courses, up to a degree level, for young people pursuing careers in hospitality. It would be unfortunate if the tone of this language leads young people to switch courses, depriving them of the opportunity to equip themselves for advancement within the hospitality sector and preventing them from making a good career in this vibrant and ever-changing sector.

As we await the outcome of the upcoming changes in government, it’s crucial that the industry and its representatives advocate for policies that prioritise the resilience and prosperity of the hospitality industry. Clear guidance, proactive measures and a nuanced understanding of the sector’s needs are essential to ensure its continued success and contribution to the economy. Who knows what is ahead, but it is clear that hospitality deserves some well needed support and attention from the top down.

Michelle Hazlewood is a partner at John Gaunt & Partners