fbpx

PROFILE

MY SUBSCRIPTION

LOGOUT

x

The latest industry news to your inbox.

    

I'd like to hear about marketing opportunities

    

I accept IQ Magazine's Terms and Conditions and Privacy Policy

Mini-budget ‘delivers little’ for UK live sector

UK live music trade bodies have expressed disappointment over chancellor Kwasi Kwarteng’s mini-budget.

Measures outlined by Kwarteng in the House of Commons today in a bid to boost growth included a 1p cut to the basic rate of income tax from April 2023, along with the abolition of the 45p tax rate for top earners over £150,000, while a planned rise on corporation tax from 19% to 25% has been scrapped and a 1.25% rise in National Insurance to be reversed.

But LIVE CEO Jon Collins, who wrote an open letter to the chancellor earlier this week calling for a reduction in VAT and business rates, says the announcement does little to help the live sector.

“Today’s announcement delivers little for the UK’s world leading live music industry”

“While we are pleased to see the government taking steps to alleviate the cost-of-living crisis, today’s announcement delivers little for the UK’s world leading live music industry,” he says. “Jobs are already on a knife edge, and we agree with the chancellor that there are too many barriers in sectors like ours where the UK leads the world. Combined with the impact of reduced public spending power and rising costs across the supply chain, businesses that are already struggling to turn a profit will face bankruptcy and closure.

“Only the emergency measures that we have suggested to government will prevent this – injecting cash into the bottom line of struggling businesses through a reduction in VAT on ticket sales, as well as major reform of business rates.”

Association of Independent Festivals (AIF) CEO Paul Reed adds his voice to the chorus of disapproval.

“Today’s announcement from the chancellor means very little for our £1.76bn UK festival industry,” he says. “We’ve faced unprecedented challenges on increased costs, supply chain and low consumer confidence, with audiences facing a social emergency. This shows no sign of relenting as we look to 2023.

“What we need is an urgent reduction of VAT on tickets to 5%, and an assurance that festival businesses will be classed as vulnerable and eligible for support with the energy crisis beyond March 2023.”

Night-Time Industries Association (NTIA) chief Michael Kill also shares his frustration at the mini-budget, which he says has left the night time economy in the cold.

“I would urge the chancellor and government to reconsider these measures, given the limited impacts of the current tax cuts on the immediate crisis for many businesses across the sector”

“We are extremely disappointed with the chancellor’s announcement this morning,” he says. “It will be seen as a missed opportunity to support businesses that have been hardest hit during this crisis, causing considerable anxiety, anger and frustration across the sector as once again they feel that many will have been left out in the cold.”

Earlier this week, the government revealed its Energy Bill Relief Scheme, which will see energy bills for UK businesses cut by around half of their expected level this winter. The news followed the revelation that some UK live music venues are seeing their energy bills increase by an average of 300% –in some cases as much as 740% – adding tens of thousands of pounds to their running costs.

Under the scheme, wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas for six months between 1 October and 31 March 2023. Kwarteng says the subsidising of both domestic and business energy bills will cost £60 billion for the next six months.

But Kill stresses that the intervention is “unlikely to be enough to ensure businesses have the financial headroom to survive the winter”.

“I would urge the chancellor and government to reconsider these measures, given the limited impacts of the current tax cuts on the immediate crisis for many businesses across the sector, the extremely vulnerable position the night time economy and hospitality sectors remain in, and re-evaluate the inclusion of general business rates relief and the reduction of VAT within these measures,” he says.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.