The Government has announced an extension of its tax reliefs for theatres, orchestras, museum and gallery exhibitions for a further two years but live music industry representatives have expressed frustration that it has been overlooked by the chancellor in today’s Spring Budget, leaving the need for a return to a 5% VAT rate on tickets keenly felt.
Industry associations including LIVE, Music Venue Trust (MVT) and the Night Time Industries Association (NTIA) have all reacted strongly to Jeremy Hunt’s (pictured) announcement today, 15 March. LIVE CEO Jon Collins said the failure to reinstate a 5% rate of VAT on tickets in line with international comparisons, and fulfil the prime minister’s campaign promise to cut business rates will cause unnecessary damage to a sector which has a footprint in every city and town across the country.
He said the chancellor had missed a golden opportunity to support the hardest hit in the sector and ‘turbocharge’ the whole industry to programme more gigs, shows and festivals up and down the country. Which, as a result, would deliver millions of pounds into local economies and support the chancellor’s ambition for the UK to be a dynamic enterprise economy.
Said Collins, “The Government could have backed the grassroots of the UK’s live music sector, including a whole host of budding artists, SMEs and independent venues, as they recover from the damage inflicted by the pandemic; a recovery hampered by double-digit inflation and the subsequent cost of production and cost-of-living crisis.
“At the same time, the Government could have taken steps to accelerate activity for more established artists, suppliers and venues that would have poured millions into local economies across the UK.”
LIVE welcomed the extension of orchestra tax relief, but Collins said there is no reason it should not be extended to support the wider commercial music sector as well: “This would drive further economic activity and tourism all over the country.”
NTIA CEO Michael Kill welcomed the Government’s extension to the tax freeze on draught beer and the maintained 5p fuel duty cut, but said it continues to overlook thousands of independent businesses, including venues, festivals, events, suppliers, and millions of employees and freelancers across the night time economy.
Said Kill, “This budget has not gone far enough and will, without doubt, see a huge swathe of SMEs and independent businesses continue to struggle financially or disappear in the coming months.
“They are continually having to firefight crisis after crisis, from onerous operating costs to rail strikes, supply chain issues and workforce shortages, and no meaningful support to stem the immediate situation.”
With one grassroots venue closing every week, MVT issued a statement in which it said that the Government’s failure to extend the enhanced business energy relief scheme would result in the mass closures of venues.
It said, “The failure to act on energy bills must inevitably mean that 2023 will be the worst year for closures since the creation of MVT in 2014. In the absence of any action to this challenge by the Government we will once again be reaching out to the energy supply companies to try to avert closures. It is plainly in no one’s interest to allow buildings that house grass roots music venues to become abandoned as the cost of energy needed to open those spaces to the public and performers cannot be met by any venue operator.”
The Government issued a statement in which it said the continued tax breaks have helped the culture sector grow to be worth £7.1 billion a year to the UK economy.
Culture secretary Lucy Fraser said, “Today’s commitment from the Government recognises the importance of our theatres, orchestras and museums to our society as a whole. Not only do these industries contribute to our local communities and sense of wellbeing, they are also key sectors in our economy. Whether it is providing a fun day out with the kids at a museum or attracting millions of tourists to the Edinburgh Festival, these sectors provide interesting and entertaining experiences while making a wider contribution to society and economy.”