Last week, the council became the first in the country to announce that it will introduce a levy and key industry figures told the Publican’s Morning Advertiser it would be detrimental to the pub trade.
Councillors rubber-stamped proposals to introduce a levy in the city from 1 November 2013 for licensed premises operating between midnight and 6am.
The amount of the fee will depend on the rateable value of the affected premises, and range from £299 to £4,400 per year, or in daily terms from 82p to £12.16 per day.
Clare Eames, partner at Poppleston Allen licensing law firm, said Newcastle’s approval will encourage other local authorities to follow suit.
“It is very concerning they are ploughing ahead," she said. "For other licensing authorities waiting in the wings, so to speak, this may well give them the green light. I can’t see how this can have a positive impact on the trade.”
Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers (ALMR), also expressed concern and said she had urged the council to resist the proposals.
“A late-night levy could be dangerous and damaging to the trade’s interests in Newcastle and have unforeseen consequences,” she added.
Last year, the ALMR vowed to cover the cost of legal challenges to the introduction of such restrictions. However, Nicholls suggested that a legal challenge may be unsuccessful but said the ALMR would have to look into it.
Penalising pubs
Emotions were running high among licensees in Newcastle with many commenting that the levy could force some businesses to close.
Chris O’Connor, assistant manager of the Head of Steam in Newcastle, said the decision was like “putting a plaster on a bullet wound” and would not solve the problem of supermarkets, which generally close before midnight, charging “irresponsible” prices for alcohol.
He said: “It is penalising pubs and frankly it’s driving pubs out of business. We can’t absorb these kind of costs.” Head of Steam operates eight pubs, with four in Newcastle.
At a recent Newcastle City Pubwatch meeting, more than 100 voted unanimously against introducing a late-night levy in the city.
Chairman Damian Conway said: “We already pay through the nose - Newcastle has some of the highest rates in the country. We have a number of members planning to close earlier which will mean many won’t be financially viable in the future.”
He urged other councils to consider the impact that a levy would have, potentially resulting in empty properties after pubs are forced to close down.
Other licensees, however, agreed with the proposal saying the levy is needed to reduce crime and disorder in the city centre.
Chris Pritchett, partner at FootAnstey law firm, said Newcastle council need to think carefully how they will use this new tax.
“Extra levies of over £4000 per year for some premises will be a very hard pill to swallow, and in some cases impossible,” he said. “Pressure needs to be put on councils and the police to recycle these payments into the area in a way that doesn’t just defray policing costs, but goes into creating a better and more attractive night-time environment that encourages and supports business. I fear this may be wishful thinking.”