Hospitality businesses face increasing UK regulation in 2024

New duties pertinent to venue safety, new rules relating to the sale of alcohol, changes to worker pay requirements, and wider environmental and property-related measures, are among the regulatory developments the industry will want to track this year.

Martyn's Law

On 7 November 2023, The Terrorism (Protection of Premises) Bill, also known as Martyn's Law, was included in the King’s speech as one of the pieces of legislation the UK government intends to pursue in this parliamentary session.

Applicable generally throughout the UK, the draft bill, if enacted in its current form, would impose new statutory duties on operators of sports stadia, concert venues, places of worship, hospitals, universities, and other public premises where people congregate, to assess and address the risk of terrorist attacks and to prepare and protect the public. Those responsible for those places will need to consider terrorism threat and implement mitigation measures.

Owners and operators of "qualifying public premises" and "qualifying public events" would be required to take proportionate steps, depending on the size and nature of the activities that take place there. Those in the scope of the “standard tier” duties would need to undertake simple activities to meet their obligations, such as completing a plan to ensure better preparedness, providing free training, engaging in awareness raising, and cascading of information to staff, as well as undertaking a standard terrorism evaluation in which they would have to consider how best to respond in the event of a terrorist event. Those in the scope of the “enhanced tier” duties would face the same requirements but have added obligations around risk assessment and security planning.

There is work still to be done, including an intended public consultation, but the government seems committed to introduce a ‘protect duty’, though what form that will take in the final legislation remains to be seen. 

Alcohol-related regulation

More onerous requirements are being imposed on licensed premises in England and Wales in respect of protecting customers from drink "spiking".  The Home Office previously consulted on whether to make changes to guidance on Section 182 of the Licensing Act 2003, with the government confirming the changes late last year. The move has knock-on implications for licensees in relation to the safeguards they need to put in place against spiking to satisfy local licensing authorities. Among related measures the Homes Office announced in December was more training for door staff on how to identify when customers have fallen victim to spiking.

In Scotland, the Scottish government is expected to make its decision on the future of minimum unit pricing in the coming weeks. The Scottish government consulted on raising the minimum unit price (MUP) of alcohol to 65 pence in the autumn, from the current 50 pence rate. The current MUP provisions in law are due to expire on 30 April 2024 unless Scottish ministers make new legislation to continue their effect. It is almost certain the legislation will be continued and expanded.

Also in Scotland, the Scottish government is expected to undertake targeted stakeholder engagement on alcohol marketing early in 2024 following a broader consultation exercise in which, among other things, it proposed a ban on alcohol advertising on television, outdoor billboards, and through sports and event sponsorship. A summary of the responses to the consultation published by the Scottish government highlighted widespread opposition to the plans. The Scottish government has said it will undertake a further public consultation in 2024 on a narrower range of proposals following the targeted stakeholder engagement phase which are anticipated to focus on protecting children from harm.

Meantime, those involved in the wine industry, in particular those importing wine into England, will need to familiarise themselves with new labelling laws – and more helpful supporting guidance – which began to apply on 1 January 2024. This brings labelling regulation in the wine industry in line with other general food products.

Employment-related regulation

Attracting and retaining staff has been a constant challenge in recent years, with Brexit, Covid-19 restrictions, and the cost-of-living crisis all considered to be contributing factors. Whilst many businesses have coped by adapting staffing structures and opening hours, for most this was only ever viable as a temporary measure.

Part of the challenge in 2024 will be the minimum wage increases which come into effect from April. Those aged 21 and over will be entitled to the national minimum wage of £11.44. The charity, Living Wage Foundation, has calculated the minimum cost of living wage to be even higher – those organisations signed up to the relevant scheme in London currently pay a minimum living wage of £13.15 an hour. 

There will also be more red-tape for businesses, and associated administration costs, as the Employment (Allocation of Tips) Act 2023 on fair and transparent distribution of tips and service charges comes into force on 1 July 2024.

Hospitality businesses will also wish to monitor the impact of the government's planned increase in minimum earnings for ‘skilled worker’ visas and the potential knock-on effect that will have on the availability of staff, notwithstanding that the government is incrementally increasing the relevant minimum earnings threshold for family visas and not moving from an £18,600 threshold to a £38,700 threshold in one step as it originally indicated it would.

Broader regulation and its potential impact

There is currently divergence on business rates affecting hospitality businesses across the UK. Business rates relief remains at 75% in England but has been cut to 40% in Wales. In Scotland, apart from the Scottish islands, and Northern Ireland, there is no rates relief. Hospitality businesses in those countries will be hoping that changes in 2024. There have also been campaigns by parts of the sector in Scotland to reduce VAT rates for the hospitality and tourism sector, but to no avail yet.

Another area to watch is the impact of increasing numbers of ‘low emissions zones’ (LEZ) across city centres. 

In Glasgow, some businesses have claimed that they have experienced a drop in footfall since the LEZ came into effect last year. There was a campaign by Scottish hospitality leaders in summer 2023 and a judicial review action commenced by the owner of an affected business in the Court of Session in Edinburgh against the introduction of the LEZ in Glasgow. The court dismissed the petition and found the LEZ scheme to be lawful and proportionate. In London, five councils that unsuccessfully challenged the introduction of the Ultra Low Emission Zone (ULEZ) in the capital were left with a legal bill of £730,000.

Also on the theme of the environment, the industry in Scotland has had some respite in respect of the implementation of the Deposit Return Scheme, with a delay announced until October 2025 at the earliest. However, if the scheme proceeds according to the planned revised implementation date, hospitality businesses will need to begin to give it thought again before the end of 2024.

In some parts of the UK, the hospitality industry is heavily reliant on tourism, which is in turn reliant on short term let (STL) availability. Whilst a registration scheme has been implemented in Northern Ireland since 1992, this is an evolving area in other parts of the UK. Wales intends to introduce a scheme shortly, with legislation expected to be introduced to the Senedd in 2024. A consultation on the introduction of a similar scheme in England was held last year, with the outcome of it awaited.

In Scotland, the introduction of a registration scheme has experienced some challenges. Edinburgh City Council's 2022 policy on STLs, and increasing requirements for registration and associated planning consents, was thwarted somewhat by two successful legal challenges last year. The first challenge resulted in the Council having to remove a restriction on "tenement or shared main door accommodation" from their STL policy. The second challenge clarified that, in accordance with the proper interpretation of associated planning legislation, the policy was not to have retrospective effect. It remains to be seen if further changes or challenges to the policy will result, or if other cities will follow suit in an attempt to control the numbers of STLs.

Further new legislation applicable to Scottish pubs is anticipated in 2024. 

The Tied Pubs (Scotland) Act 2021 was passed by the Scottish Parliament in 2021, but implementation has stalled as a result of a legal challenge brought by three pub operators over whether the legislation was within the legislative competence of the Scottish Parliament.

The Act introduces the Scottish Pubs Code, which is intended to govern the landlord and tenant relationship; however, it was opposed by parts of the industry over risks it would harm investment into the sector.

With the judicial review now concluded and determining that the Act was within the legislative competence of the Scottish Parliament, it is likely that the Scottish government will introduce secondary legislation to give effect to the Scottish Pubs Code in the coming months.

Co-written by Hannah Burton, Kirsty Gallacher, and Scott Wright of Pinsent Masons.