Sir Sadiq Khan could overturn decisions by London councils that block pubs and clubs from opening later under new powers given to him by the Government. Ministers are trying to boost the hospitality industry by allowing the capital’s Mayor to “call in” licensing decisions for key nightlife areas in the capital.

The move could result in bars opening later and more outdoor dining in London. If successful, it could be extended to other parts of the country such as Greater Manchester or the West Midlands. But the overhaul comes as firms struggle with minimum wage rises and National Insurance hikes. Andrew Griffith MP, Shadow Business Secretary, said: “The hypocrisy of this Labour Government is staggering.

“The Government claims it is looking to slash red tape on business whilst doing the exact opposite, with their smoking ban proposals, scrapping of takeaway pints, recycling tax and attack on free speech in venues all set to make life harder for our publicans – and that’s all before the impact of their jobs tax and Employment Rights Bill kicks in.

“But with Labour-run Westminster council trying to enforce ‘quiet spaces’ on the capital’s night-time economy, and Sadiq Khan’s former night tzar overseeing over 3,000 venue closures, it is clear Labour does not understand business.”

The announcement comes at a time when confidence in the hospitality industry has hit its lowest point in two years as rising wage costs, National Insurance contributions and business rates hit the sector this month.

UKHospitality, the industry trade body, has said the combination of rising costs would amount to a £3.4billion hit for the industry. It has called on the Government to come up with a plan for hospitality.

Chancellor Rachel Reeves said: “British businesses are the lifeblood of our communities. Our Plan for Change will make sure they have the conditions to grow – not be tied down by unnecessarily burdensome red tape.

“We’ve heard industry concerns and we’re partnering with businesses to understand what changes need to be made, because a thriving night-time economy is good for local economies, good for growth, and good for getting more money in people’s pockets.”

Deputy Prime Minister Angela Rayner added: “We promised to clear the way to economic growth in our Plan for Change and that’s exactly what we’re doing. We’re already reforming planning to back the builders, not the blockers. Now we want to do the same for the night-time economy which has been neglected for so long.

“Our pubs, restaurants, and live music venues are the beating heart of our cultural life, so it is vital they are given every chance to survive and thrive.

“That’s why it’s time to give the Mayor of London new powers to back the capital’s pubs and clubs, as part of our plan to give mayors the tools they need to drive growth. Too often, we have seen the complaints of a vocal minority of objectors promoted over the need for our country to grow – we are determined to change this.”