The Government’s mini-budget offers “little” for the UK’s live music industry and is a “missed opportunity” to help businesses struggling in the face of the cost-of-living crisis, groups have said.
Chancellor Kwasi Kwarteng announced on Friday that he was abolishing the top rate of income tax and adding restrictions to the welfare system.
Mr Kwarteng also said the Bank of England is taking further steps to control inflation, and the Government considers the Bank’s independence to be “sacrosanct”.
The chief executive of Live, which represents the UK’s live music sector, said businesses that are struggling already could “face bankruptcy and closure”.
“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.”
Michael Kill, chief executive of the Night Time Industries Association (NTIA), said he was “extremely disappointed” with the Chancellor’s announcement.
He added: “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.”
He added: “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.”
The night-time economy adviser for Greater Manchester, Sacha Lord, was also critical of the package.
Mr Lord, who is also co-founder of the city’s Parklife festival, tweeted: “Speechless. No VAT or biz rate support for hospitality.
“Corporation tax cuts are completely useless if businesses aren’t turning a profit, or worse, closed.
“These announcements will now mean last orders for thousands of hospitality businesses meaning mass redundancies.”
Responding to the mini-budget, Mark Davy, chief executive of the Music Venue Trust, said: “The measures in the budget on energy prices are welcome and we look forward to working with the government to ensure that the intent of those measures is delivered to consumers.
“Outside of those measures, this is a budget aimed at big business and large scale companies, with a focus on enabling them to keep more of their profit post tax.
“We hope that multiple opportunities to support small and medium enterprises by addressing pre-profit taxation, particularly VAT and business rates, will be forthcoming in the Autumn Statement.”
Hannah Essex, co-chief executive of the Society of London Theatre (Solt) and UK Theatre, noted how the UK’s creative and cultural sector “grew four times the rate of the UK economy before Covid-19”.
She said she was “concerned that the specific challenges faced by the sector were not addressed during the Chancellor’s statement, and the opportunity to commit to supply-side incentives, such as maintaining the higher rate of theatre tax relief, was missed”.