The music industry has reacted to the news of the UK autumn budget, calling it a “hammer blow” to the future of grassroots music venues.
Yesterday (November 26), Chancellor Rachel Reeves unveiled the budget, which addressed national debt, pensions and property tax – but gave very little mention of the creative industries.
The budget follows a report from the Office for Budget Responsibility (OBR), which predicted the UK economy would grow by 1.5 per cent from its 1 per cent forecast last March. Inflation is also predicted to average 3.5 per cent this year, and expected to fall to the Bank Of England’s 2 per cent target by 2027.
Meanwhile, there will be an increase in the legal minimum wage, which will rise by 4.1 per cent to £12.71 per hour for over 21s and up to £10.85 per hour for 18 to 20 year olds. National Insurance (NI) and income tax thresholds will also be frozen until 2028.
A new mileage-based tax for electric vehicles and plug-in hybrid cars will commence in 2028. The tax will be about “half the fuel duty rate paid by drivers of petrol cars”, according to the Budget Responsibility (OBR), and could impact sustainable options for touring.
Now, key figures from the music industry have given their thoughts on the budget. Mark Davyd, CEO and Founder of the Music Venue Trust slammed it as “yet another episode in the long running saga of failures” to “seize opportunities to support Grassroots Music Venues”. “The Government’s rhetoric on their support for this vital sector is completely undone by the reality of their business rates decision,” he added, criticising their choice to move to a 12 per cent reduction in the Rateable Value multiplier.
He went on to criticise the budget and its lack of response to demands made by creative industries: “Nothing on VAT on tickets, nothing on investment, nothing on tax reliefs, nothing on cutting energy bills, intervening on rent, addressing Agent of Change flaws, or any of the multiple opportunities everyone keeps bringing to the Government that they don’t act on”.
“The Government currently insists on taking 20% from the Grassroots Levy in VAT,” he added. “Maybe at the very least we could have a conversation about how wildly inappropriate that is?”
Meanwhile, Michael Kill of the Night Time Industries Association called the budget “a hammer blow to an already fragile night-time economy”, adding: “Its impact will be felt across every high street and town centre in the UK”.
“With inflation now higher than its been for some months and the cost of living becoming increasingly unsustainable, disposable income has all but disappeared, swallowed up by rising everyday costs,” Kill continued. Citing concerns with the “scale of direct and indirect tax increases” which would impact the music sector, he said that “many venues are already operating on the edge, and we will inevitably see businesses handing back their keys by January, when VAT, quarterly rent payments, and other financial obligations collide. The pressure on both operators and consumers is now completely unsustainable.”
He added that while the rise in minimum wage “may sound positive on the surface”, it also “presents a serious challenge for a sector that employs a large proportion of young people. Without meaningful support for businesses, this risks devastating consequences for staffing, long-term sustainability, and job opportunities in the very communities the Government claims to champion”.
“The Chancellor has clearly not read the room. In fact, for many in our sector, it feels like the Government left the room a long time ago.”
Gee Davy, CEO of the Association of Independent Music, also welcomed the government’s “clear commitment to improving conditions for workers, especially young people”. However, she added that the budget would affect SMEs like grassroots venues, adding that they “risk being unable to help deliver this vision”.
“Grassroots and independent businesses and entrepreneurs – which release the majority of the UK’s new music – are under strain after years of rising costs post-Brexit and Covid, compounded by increased employment costs,” Davy went on to say. “Many are battening down hatches or downsizing just to stay afloat. Targeted support is needed now to prevent decline, and would deliver huge cultural and economic returns.”
Davy went on to call for measures including “a tax relief for new music creation, modelled on the successful film scheme, and unlocking unused apprenticeship levy funds for salary support would empower the independent music sector to create jobs, skills and growth across music communities throughout the UK”.
Finally, the CEO of Association of Independent Festivals John Rostron welcomed the rise in the national minimum wage, stating: “While we appreciate that this will put greater onus on businesses, ours is ultimately a people sector. We believe that fair pay creates greater access to culture, which is at the heart of everything our members work towards.”
The autumn budget follows frustrations about the “reckless dereliction of duty” shown by the Chancellor towards the music sector in the spring statement.
In the statement, Reeves announced a target that government departments, including the Department for Culture, Media and Sport (DCMS), reduce their administrative budgets by 15 per cent by the end of the decade.
At the time, Michael Kill stated he was “outraged” by the Chancellor’s latest Statement, which was described as a “reckless dereliction of duty that blatantly disregards the night-time economy’s desperate need for support”. Kill went on to stress that the government had ignored the mounting evidence of economic devastation in the sector, instead doubling down on “disastrous fiscal policies” rather than taking decisive action.
The budget comes amidst reports that if venues continue to close at the same alarming rate, UK nightclubs will be extinct by 2029. Meanwhile, a report showed a “disaster” had hit grassroots music venues in 2023, where 125 UK venues abandoned live music that year with over half shutting entirely – including the legendary Moles in Bath.
Elsewhere, a study has shown a living wage for creatives could boost the UK economy by £42million.
