48 Hours to Avert Crisis: Industry Leaders Warn Chancellor on Spring Budget

Today, a coalition of trade bodies and associations representing over 100,000 businesses across the UK’s night-time economy, cultural sector, and small-to-medium enterprises (SMEs) in hospitality, events, supply and entertainment have formally written to the Chancellor of the Exchequer, urging immediate Government intervention to prevent further economic decline and business closures.
The letter, signed by over 20 key industry associations, outlines the severe challenges facing the sector, including unsustainable operating costs, plummeting consumer spending, and the mounting burden of taxation. It calls for an urgent meeting with the Chancellor to discuss immediate relief measures, specifically:

-An immediate reduction of VAT to 15% for the hospitality, events, and cultural sectors to align more closely with international best practices and provide essential breathing space.
-The reversal of the National Insurance Contribution (NIC) increase, which disproportionately impacts SMEs and businesses within the night-time economy, hospitality, and cultural industries.
A Sector at Breaking Point
The letter highlights the alarming financial pressures facing businesses:
-Energy prices, rents, supplier costs, and wage increases, combined with the repayment of legacy pandemic debt and rising NICs, have created an unsustainable trading environment.
-From April, additional cost increases of £30,000 to £100,000 per business are projected to push many beyond breaking point.
-A recent industry survey found that 92% of nightlife businesses have already cut staff, operating hours, or essential investments, while 40% warn they will close within six months without urgent support.

Economic and Cultural Consequences
Beyond the direct financial toll, the UK is losing vital cultural institutions, grassroots venues, and event spaces that contribute to the nation’s rich creative identity and global reputation. The closures not only impact local economies and tourism but also stifle opportunities for emerging talent.
The letter also points to international precedents: Ireland’s hospitality VAT cut in 2011 led to a 30% increase in employment within five years, while Germany has opted to maintain a lower VAT rate to sustain its hospitality sector. By contrast, the UK remains among the highest taxers of small businesses in Europe, putting the industry at a severe competitive disadvantage.
Michael Kill, CEO of the Night Time Industries Association (NTIA), stated: “The reduction of VAT to 15% for the hospitality, events, and cultural sectors is not just a financial necessity; it is a critical measure to avert a looming crisis. We urge the Chancellor to take action now to prevent widespread failure across the sector. The current tax burden places UK businesses at a severe disadvantage compared to their international counterparts, stifling growth and pushing many to the brink of collapse. Additionally, reversing the increase in National Insurance Contributions (NIC) is essential, as it disproportionately affects SMEs and businesses within the night-time economy, making it harder to retain staff and operate sustainably.
Our industry is at breaking point. Spiralling costs—energy prices, rent, supplier costs, wage increases, and pandemic debt repayments—are creating an unsustainable environment. Many businesses face additional cost hikes of up to £100,000 per year, risking devastating closures. Without urgent intervention, the UK risks losing vital cultural institutions and creative spaces. We implore the Chancellor to act swiftly to avert this crisis.

Colin Neill CEO Hospitality Ulster Stated “If the UK Government are dependent on industry to grow the economy, then our problems are their problems and they cannot simply wring their hands and ignore the challenges we face.”

John Bollom, Bacta President : 'April will be a cliff edge to the sector we represent at Bacta and it is vital that the Chancellor takes a proportionate, reconsidered approach to National Insurance increases, that will not deal a fatal blow to the night time economy.'

Stephen Montgomery CEO Scottish Hospitality Group stated "The licensed hospitality sector along with the nighttime economy plays a huge part within the UK economy. The sector has never had time to breath since coming out of the pandemic with the cost pressure it faces. The Scottish Hospitality Group warned governments that the sector would be more at risk post pandemic, than during, and now Rachel Reeves wants to punish it even more with her tax hikes at a time where it needs less. The Chancellor now has two choices. Either respect the contribution the sector makes to the economy, work with us to help it to survive and grow, by cutting VAT and reversing the Employer NIC hike, or see the sector fade away, with businesses closing, costing 1000's of jobs, leading to less tax take, and vacant buildings across our villages, towns and cities.

Sacha Lord NTIA Chair “The UK’s night-time economy and hospitality sector are at breaking point. Spiralling operational costs, falling consumer confidence, and a lack of government support have created an unsustainable environment. Since 2019, over 23,000 businesses have collapsed, stripping the economy of more than £95 billion. Yet, instead of offering relief, the government continues to pile on pressure with tax hikes and rising costs.
Independent hospitality businesses are the backbone of our high streets, communities, and culture. They drive economic growth, create jobs, and provide vital social spaces. But without urgent intervention—cutting VAT, reversing the Employer NIC hike, and offering real support—thousands more will shut their doors for good.
The Chancellor must recognise the sector’s value before it’s too late. This isn’t just about businesses; it’s about people, livelihoods, and the very fabric of our towns and cities. The time to act is now."

Alan Fox, NCASS CEO Stated: 'Independent hospitality businesses are vital to the UK’s economic and cultural landscape. With an estimated 400,000 such businesses in the UK, they form a significant portion of the 5.2 million microbusinesses that make up 95% of all UK enterprises. The sector contributes significantly to the UK economy and deserves to be treated as such.
We believe there is a lack of understanding of the independent hospitality sector across government and that the interests of small and micro businesses that make up the everyday economy are overlooked. By supporting independent hospitality, we are investing in the very fabric of our communities and the future of our economy. The economic contribution of these businesses is crucial, the health of our local neighbourhoods and the growth and regeneration of the everyday economy hinge on a thriving sector. Independent hospitality has suffered enough. Without profit, we are merely operating as tax collectors.'

A Coordinated Call for Government Action
The coalition of trade bodies warns that without intervention, the current trajectory will result in more grassroots, cultural and community business losses, job losses, and a long-term reduction in Treasury revenue, counter to Government priorities. The signatories are calling on the Government to work collaboratively with the sector to develop urgent policy measures that will safeguard businesses and jobs, ensuring the long-term prosperity of the UK’s night-time economy, supply and hospitality industry.

Signatories to the letter include:
Nationwide Caterers Association (NCASS) / UK Door Security Association (UKDSA) / We Group (WG) / Bradford at Night (BAN) / UK Music (UK Music) / Live Comedy Association (LCA) / Gamechangers (GC) Leeds Night Time Economy Group (LNEG) / Soho Business Alliance (SBA) / Institute of Hospitality (IOH) / International Professional Security Association (IPSA) / Institute of Licensed Trade Stock Auditors (ILTSA) / Association for Electronic Music (AFEM) / UK Cinema Association (UKCA) / Scottish Hospitality Group (SHG) / Night Time Industries Association Scotland (NTIAS) / National Union of Students (NUS) / Night Time Industries Association Wales (NTIAW) / Hospitality Ulster (HU) / Association of Town and City Management (ATCM) UK Crowd Management Association (UKCMA) / British Amusement Catering Trade Association (BACTA).