Figures from the live music, nighttime and hospitality industries have responded the UK government’s mini-budget announcement today (September 23).
This morning, Chancellor Of The Exchequer Kwasi Kwarteng delivered an official statement in the House Of Commons in which he outlined a series of tax cuts and new economic measures.
He began by addressing the rise in energy costs. For businesses, the Energy Bill Relief Scheme “will reduce wholesale gas and electricity prices”. “This will provide a price guarantee equivalent to the one provided for households,” Kwarteng said.
As announced earlier this week, the scheme will offer discounts for all firms for a six-month period from October 1. Prices will be fixed at 21.1p per kilowatt hours (kWh) for electricity and 7.5p per KWh for gas.
Companies are not required to contact their energy suppliers, as the discount will automatically be applied to bills.
Additionally, Kwarteng set out the government’s plan to increase economic growth in the UK. This will be built around three central priorities: reforming the supply-side of the economy, maintaining responsible approach to public finances, and cutting taxes.
There will be a cut in the basic rate of income tax to 19 per cent from April 2023, and a reversal of the recent increase in National Insurance from November 6. The government has also scrapped the rise in Corporation Tax (from 19 per cent to 25 percent), which had been due next April.
Jon Collins, CEO of Live Music Industry Venues & Entertainment (LIVE), said: “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.
“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.”
Collins added: “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 CEO of Night Time Industries Association (NTIA), said he was “extremely disappointed” with the contents of the Chancellor’s speech.
“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,” Kill continued.
Michael Kill CEO NTIA Says:
“We are extremely disappointed with the Chancellor’s #announcement this morning. It will be seen as a missed opportunity to #support businesses that have been hardest hit during this crisis…”https://t.co/MIsBAhVVUb
— Night Time Industries Association (@wearethentia) September 23, 2022
“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.”
Kill went on to urge the 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”.
He also called on the Chancellor to “re-evaluate the inclusion of general business rates relief and the reduction of VAT within these measures”.
Sacha Lord, the Night Time Economy Adviser for Greater Manchester, said that today’s announcement had left him “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.
— Sacha Lord (@Sacha_Lord) September 23, 2022
I’m absolutely clear. This Gov’t is just about big business, corporations and the fat cats.
They have just sent a strong message to the Hospitality industry: They don’t care.
They have just thrown small family run businesses to the wolves.
— Sacha Lord (@Sacha_Lord) September 23, 2022
“Corporation tax cuts are completely useless if businesses aren’t turning a profit, or worse, closed,” he tweeted. “These announcements will now mean last orders for thousands of hospitality businesses meaning mass redundancies.”
Lord went on: “I’m absolutely clear. This Gov’t is just about big business, corporations and the fat cats. They have just sent a strong message to the hospitality industry: They don’t care. They have just thrown small family run businesses to the wolves.”
Last month, five organisations representing the UK hospitality sector penned an open letter to the government amid the ongoing cost of living crisis. They highlighted “rocketing energy prices” that were forecast to become “a matter of existential emergency” this year, and demanded urgent government action to prevent a catastrophe to UK culture.
Mark Davyd, MVT CEO, spoke to NME at the time about the true threat posed by the looming price hike. He compared it to the COVID pandemic, which at one point saw 93 per cent of the UK’s grassroots music venues under threat of being closed forever due to losses caused by restrictions.
This week, , findings from a new flash poll conducted by the Night Time Industries Association (NTIA) indicated that three out of four night time economy businesses in the UK were on a “financial cliff edge” as a result of inflation.
Out of the 300 businesses surveyed, 47.7 per cent were barely breaking even while 24.8 per cent were losing money.
The post Mini-budget: Live music, nighttime and hospitality industries react appeared first on NME.