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Live and night-time industries criticise UK government’s budget announcement
By Chris Cooke | Published on Monday 26 September 2022
The live music and night-time sectors have criticised the UK government’s budget statement of Friday which, although announcing plenty of tax cuts, didn’t include the measures that industry representatives say are necessary to safeguard the future of venues, clubs and other live entertainment and hospitality businesses.
Ahead of the budget statement last week, groups representing the live and night-time sectors welcomed the government’s scheme to mitigate the impact of surging energy prices on businesses for at least the next six months.
However, they added that, following all the COVID lockdowns in 2020 and 2021, and with increased expenditure across the supply chain beyond energy prices, not to mention the cost of living crisis, additional government support is required.
Priorities for the live and night-time sectors include a cut to the VAT charged on events and tickets, similar to the reductions that were in place during the pandemic, plus an extension of business rates relief. Live and night-time businesses also argue that they will need support to combat the ongoing energy cost increases beyond the six months of the current scheme, and need reassurance that such support will be available sooner rather than later.
Friday’s budget included cuts – or the reversal of planned increases – to income tax, corporation tax, national insurance and stamp duty. And among the more controversial measures announced were the abolition of the highest tax rate that applies to income over £150,000 and the cap on bonuses in the banking sector. However, the measures lobbied for by the music and night-time sectors were not in there.
Responding, Jon Collins, the CEO of LIVE – which speaks for the wider live industry – said: “While we are pleased to see the government taking steps to alleviate the cost-of-living crisis, [the] announcement delivers little for the UK’s world leading live music industry”.
“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”, he added. “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”, he concluded, “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”.
Speaking for the festivals sector specifically, Paul Reed from the Association Of Independent Festivals said: “[The] announcement from the Chancellor means very little for our £1.76 billion UK festival industry”.
“We’ve faced unprecedented challenges on increased costs, supply chain and low consumer confidence, with audiences facing a social emergency”, he added. “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”.
And Michael Kill from the Night Time Industries Association stated: “We are extremely disappointed with the Chancellor’s announcement. 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”.
“We have been extremely clear with the government that the ‘energy bill relief scheme’ – even with the announcement of the limited tax cuts on national insurance, corporation tax and duty – is unlikely to be enough to ensure businesses have the financial headroom to survive the winter, especially with yesterday’s announcement of the rise in interest rates from the Bank Of England”.
“I would urge the Chancellor and government to reconsider these measures”, he went on, “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”.
