When we launched our Next Generation Centre back in February, we made clear our intention to address the issues, both major and minor, facing young people in Britain today. Of course, big, existential challenges such as housing supply, family formation, and job opportunities are the main focus of our work - but we also recognise the importance of the smaller lifestyle considerations which influence the lives of young people. One such consideration is the state of the country’s nightlife, and broader hospitality sector. The opportunity to eat, drink, and socialise with friends, colleagues,  and loved ones is an important part of being young. But burdensome taxation, cumbersome regulation, and restrictive licensing rules are stifling the ability of hospitality businesses to provide this much-valued service.  

That’s why, in April, we released our ‘On The Rocks: London’s Nightlife in Crisis’ paper, analysing both the challenges and opportunities of London’s struggling nightlife scene. We highlighted the challenges that the sector is now facing, and proposed a number of policy solutions, including cuts to VAT and Alcohol Duty and enforcement of the ‘agent of change’ principle in planning decisions. 

Following on from this paper, it has been a privilege to strengthen our relationship with the Night-time Industries Association, the country’s leading advocacy body for night-time industries. We were also delighted to support  the NTIA’s Consumer Survey, which was launched back in June, and which aimed to identify the underlying reasons for changing consumer behaviour in this space, namely the relative decline in engagement with nightlife by younger people. Given that one of the core assumptions of our research was that young people are being deterred from enjoying the UK’s nightlife scene both by the general rising cost of living, which has left them with less disposable income, and the increasing cost of a night-out,  we were excited to have access to a quantitative assessment of whether or not this core assumption holds true in reality.

On behalf of NTIA, Obsurvant conducted 2,338 surveys amongst a nationally representative sample, on the 19th and 20th of June 2024. 56% of respondents reported participation in social activities out of the home several times a week, with this figure jumping to 68% amongst those under-25 - proof positive of our assumption that the state of the hospitality sector is having a disproportionate impact on younger people. 51% of respondents stated that they felt an increased desire to go out over the past year, with cost and poor public transport provision highlighted as the two biggest barriers to going out more often.

These trends are only reinforced by the responses to the question of ‘what changes in your personal circumstances have impacted how often you go out?’. 50% of respondents under 30 cited changes in their personal financial circumstances, a factor which cannot be disaggregated from rising costs in the hospitality sector, as the primary factor in shaping how often they go out. Since early 2022, energy prices for hospitality venues have risen by an average of 65 per cent, while rental prices in London for retail prices now sit an average of 3.8% higher than the pre-pandemic peak.  

Almost no respondents reported a change in circumstances as a result of a decision to stop drinking - 22% of respondents cited broad changes in health status, but a minority of these respondents have given up on drinking entirely.

From a qualitative perspective, the same trends abound. Many respondents cited lower tax and improved public transport as two ways in which Government could improve existing nightlife provision - one 18-24 year old in England specifically highlighted ‘lower tax on alcoholic drinks’ as their proposed solution, while one 31-40 year old in England mentioned ‘better and cheaper public transport provision to make it easier to get around.’ These findings mirror the recommendations of our ‘On The Rocks’ paper, which called for an expansion of the Night Tube, provision of late-night National Rail Services, cuts to Beer Duty and VAT, and a freezing of local alcohol levies.

Safety was also a concern for some respondents, who mentioned feeling intimidated when returning from a night out. Once again, this was a concern highlighted in our ‘On The Rocks’ research - we called for an increased police presence around major transport infrastructure at times of increased demand.

By and large, it’s encouraging to see yet more evidence for our prescriptions on London’s nightlife. If it wants to make an immediate impact on the lives of young people, and demonstrate the power of slashing tax and red tape, the Government should make an intervention in this space. In the long term, such a tax cut would result in no long term cost to the Treasury. According to dynamic analysis conducted by UK Hospitality, which studied the impact of VAT reductions over a ten-year period, a reduced rate of 12.5% would deliver a net fiscal gain for the Treasury of £4.6 billion, driven by additional hospitality trade amounting to £7.7 billion in value - if nothing else, this £4.6 billion could serve as a nice stop-gap for Rachel Reeves’ fiscal black hole.

A nightlife intervention would be popular, impactful, and fiscally prudent - what’s not to love? It’s time to cut back the red tape, and allow Britain to party again.