Togather speaks to Michael Kill, CEO of the Night Time Industries Association

Hi Michael, thanks for joining us. So firstly, can you give a big of background on the work that the NTIA (Night Time Industries Association) do?

The NTIA is a trade association that represents around 11,000 businesses across the UK who operate between 6pm and 6am. We advocate for them not only at a national government level, at a local government and media perspective as well. Local government is particularly important because they all have different legislative instruments and we're able to communicate with them all.

We're a grassroots, very driven, very experienced group of people who just want the best for the nightlife industry within the UK and we're doing everything that we can we possibly can to help it. That means talking about economics, culture, social cohesion and mental health within the industry - we're integrated in all those areas and ensure that there are healthy conversations about all of it.

And what's the current situation of the Night Time economy?

It's been very well addressed that the sector is in a very challenging economic position. The problem is that even if you're going to a pub or club that seems full, its operating costs will be 30-40% higher than they were pre-pandemic. That means that lots of the profit that would've gone into long-term investment has completely disappeared.

This cost of living crisis's effect on consumers has had a big impact too, because our customers now have less disposable income - which means they're not able to spend as much or stay out as long as we, or they, would like.

There's a lot of uncertainty and I think the autumn budget is going to be a real benchmark for understanding the direction of travel for a new government. The good news is that the feeling is that it's definitely more personable than previously and it's already clear to see that it's more people than offices that you're dealing with. So that's a positive development, and we can pick up the phone and speak to people directly, which is a very different narrative compared to the 14 years of Conservative Party government.

That government was full of bureaucracy and different layers of civil servants and it could be very hard to get through to the people making decisions. So for us, it's positive, but tentative, with the understanding that there are some key moments that we need the new government to deliver to allow us a financial intervention.

What measures could the government take to ease the burden on businesses in the night time economy?

Ultimately what we need is an extension of business rates. This is absolutely key and will have a huge effect quickly for businesses.

Culture does also need a VAT cut, but it's also very important that we start looking at things like regulatory controls - which can have a big effect as well. We simply can't be as heavily regulated against because it's massively hindering investment and progression of trade, and there are a huge array of things which are completely cost prohibitive that are killing late night trade. This includes improving levy planning that can go on for months, which would take some pressure off, and allow them to be confident in investing and moving forward.

We can potentially start to recover, but with inflation at 2% we won't see the real effects of that for 6-12 months. So you can understand the industry is very fragile at the moment, and a lot of businesses are suffering. Ultimately we've seen a 13% contraction over the course of the last few years in independent businesses, and only a 3% contraction in managed businesses. Where our industry is made up of 70% independent it's a real worrying thought that either cannibalisation through corporates buying independents or gentrification of high streets we're losing that creativity that we're world-renowned for.

There are some huge concerns at the moment and some holes that need to be plugged, not only with fiscal but also legislative and operational problems that need to be dealt with by local authorities. There's still a lot of work to do but we're mindful and focused and working with our members to ensure that we're representing them well.

The one area that would have the most immediate effect would be reducing VAT down to 12.5%. Restaurants in Europe are at 5% VAT so I don't believe it's too much to ask.

And how much can the government do? Or will this be a case of too little too late?

For a lot of businesses I'm afraid to say it's already a case of too little too late. We've lost 23,000 of them over the last four years, which has been devastating.

But is there optimism? Optimism comes with certainty, and at the moment, there is still a lot of uncertainty. Without a doubt, a changing regime is it feels like it's a positive step forward with the approach they're taking so far.

As we've heard, Rachel Reeves has a 20 billion pounds black hole, so we're definitely not out of the woods.

Have you seen a change towards how younger generations, particularly Gen-Z are approaching nightlife and events?

It's been very frustrating watching the media suggesting that younger generations enjoy going out less, it's simply not the case. There are many reports, including one we've commissioned recently, saying the desire to go out is clearly there.

However, 60% of people who were surveyed have had to lower the frequency of how much they go out, and the time they spend when they're out based on their financial circumstances, which is obviously a shame for them and a problem for us.

So it's very clear that the the financial or economic impacts are impacting these generations, and they're unable to go out as frequently. But ultimately, I don't think the market shift is so much that we are sort of sat here talking about a very different dynamic.

And what do the next few years look like for the night time economy in the UK?

So it's really dependent on what the government do with the autumn and spring budgets. We are going to have to work towards things like deregulation and easements in terms of flexibility in the way that we approach licensing, planning, etc.

But everything really hinges on the economic recovery and how quickly that 2% inflation rate affects the frontline, because that's going to be the difference in in success and failure for many businesses. I see the next six months as a real challenge, and we could do with some wins, but I think the check the issue that we have is it really depends when inflation starts to bite to the front line.

I would include things like business rates, but they have to look at the event sector and cultural sector, and possibly look at a VAT cut that's going to allow.