Budget slammed as a “missed opportunity” by UK live music industry

Representatives of the UK’s live music industry have slammed the recent government budget as a “missed opportunity”.

Yesterday, UK Chancellor Of The Exchequer Jeremy Hunt unveiled the latest government budget. Although it was revealed that there would be an extension of the orchestra tax relief, the budget did not deliver on a key demand – a cut in the VAT charged on tickets.

In response, several representatives from various live music organisations have responded negatively to the proposed budget.

Jon Collins, the CEO of Live (Live music Industry Venues & Entertainment), issued a statement expressing frustration on the lack of action in cutting VAT rates.

He said: “Today’s Budget represents yet another missed opportunity to accelerate the growth of the live music sector and the wider economy while also providing urgently needed support for grassroots music through the reintroduction of a lower VAT rate. 20% VAT on tickets in the UK is vastly out of step with our competitors in Europe and North America and has become a material factor limiting the number of gigs, tours and festivals our world class industry can put on.”

He continued: “Fewer shows mean reduced economic activity in towns and cities across the country – an estimated £1m is spent in local businesses for every 10,000 people who attend a gig – and heaps further pressure onto grassroots music venues that are closing down at an alarming rate. We need urgent action to ensure the whole sector can prosper in the long term.”

Meanwhile, John Rostron (CEO of the Association of Independent Festivals), called for the VAT reduction due to the impact of COVID and Brexit. The AIF recently held its own Five Per Cent For Festivals campaign.

Rostron said: “Festivals need a temporary reduction in VAT on ticket sales from 20% to 5% in order to recover from the impact of Covid and Brexit that has created a credit crunch that is seeing successful festivals having to postpone or cancel this year, months before their events are meant to take place.

“Yet another festival fell yesterday – the 15th event to fall already in 2024. Theatre has made the case for tax relief which is being extended indefinitely. We urge the Chancellor and the Treasury to now turn to festivals to offer a fraction of that support to ensure more events do not make 2024 their last.”

“We urge the Chancellor and the Treasury to now turn to festivals to offer a fraction of that support to ensure more events do not make 2024 their last.”

The Night Time Industries Association (NTIA) also expressed its “profound disappointment” over the government’s failure to cut VAT rates.

“The economic challenges faced by our sector are catastrophic, and following today’s spring budget announcement, the lack of support will have a profound impact on this sector for years to come,” said NTIA CEO Michael Kill. “For months, the entire sector has been providing the Government with critical information outlining our precarious situation and the urgent need for supportive measures to sustain businesses through these turbulent times.

“For months, the entire sector has been providing the government with critical information outlining our precarious situation and the urgent need for supportive measures to sustain businesses through these turbulent times.

Kill concluded: “In simple terms, it’s time for change. We have lost faith in the government. The livelihoods and businesses we represent are not political pawns but vital contributors to community well-being across the UK. It is imperative that the government recognises this and takes decisive steps to support the sector”.

The UK music industry called for VAT cuts last February, asking Hunt to throw the sector a “vital lifeline” to save venues from closure.

Figures such as Tom Kiehl, UK Music’s Interim Chief Executive, suggested that the VAT rate on tickets be reduced from the current 20 per cent to 10 per cent as a “boost for consumers, music professionals and venues”.

The news follows a report published last January discovering a “disaster” facing grassroots music venues. The Music Venues Trust (MVT) shared a report on the state of the sector for 2023, finding that soaring energy prices, landlords increasing rate amounts, supply costs, business rates, licensing issues, noise complaints and the continuing shockwaves of COVID-19 put increased pressure on the livelihoods of music venues.

As such, several festivals have either cancelled or taken a fallow year for 2024, with co-manager Oscar Matthew of Barn on the Farm telling NME: “From our perspective, the festival in 2023 itself was brilliant – it was a really successful year – but we were hit majorly on a financial level by a mix of increased production costs and a very big reduction in ticket sales. That hit us from both angles and meant we suffered quite substantial losses, despite the actual running of the festival going so well.”

The Night Time Industries Association (NTIA) also found that 31 per cent of UK nightclubs closed last year, with an average of two closures per week.