Industry Leaders Demand Urgent Intervention to Avert Economic Crisis

Andrew Crook, President of the NFFF, is meeting this morning with Gareth Thomas, the Minister for Small Business and Hospitality, to discuss the urgent challenges facing the sector ahead of the government’s spring statement.

The meeting comes as a coalition of industry leaders issued a stark warning to the government, demanding immediate intervention “to prevent further economic decline and business closures.” In a joint letter sent to Chancellor Rachel Reeves, over 20 industry associations—representing more than 100,000 businesses across the UK’s night-time economy, cultural sector, and small-to-medium enterprises in hospitality, events, supply, and entertainment—outlined the acute pressures businesses are facing.

The letter calls for an immediate reduction of VAT to 15% for the hospitality, events, and cultural sectors, alongside the reversal of the recent national insurance contribution increase. Without this support, businesses are forecasting additional cost increases of up to £100,000 from April—an amount many say will push them beyond breaking point.

Industry leaders pointed to international examples as evidence that such measures can have significant positive impact. In Ireland, a hospitality VAT cut in 2011 led to a 30% increase in employment within five years, while Germany has continued to maintain a reduced VAT rate to support its hospitality sector.

Michael Kill, chief executive of the Night Time Industries Association (NTIA), warned: “Our industry is at breaking point. Without urgent intervention, the UK risks losing vital cultural institutions and creative spaces. We implore the chancellor to act swiftly to avert this crisis.”

NTIA chair Sacha Lord, also the former night-time economy adviser for Manchester, added: “Since 2019, more than 23,000 businesses have collapsed, stripping the economy of more than £95bn. Yet, instead of offering relief, the government continues to pile on pressure with tax hikes and rising costs.”

Stephen Montgomery, chief executive of the Scottish Hospitality Group, said: “The chancellor now has two choices. Either respect the contribution the sector makes to the economy, work with us to help it survive and grow by cutting VAT and reversing the employers’ national insurance contribution hike, or see the sector fade away, costing thousands of jobs and leaving behind vacant buildings across our villages, towns and cities.”

Colin Neill, chief executive of Hospitality Ulster, echoed the sentiment: “If the UK government is dependent on industry to grow the economy, then our problems are its problems, and it cannot simply wring its hands and ignore the challenges we face.”