Measures announced in the Chancellor's spring statement could actually work against the sector's aims.
Number 10
A tax plan to address the cost of living crisis unveiled on Wednesday (March 23) is unlikely to do much to help economic recovery in the arts sector.
Among headline policies to raise the threshold for National Insurance contributions in July before cutting income tax in April 2024, Chancellor Rishi Sunak announced tax cuts for small businesses and research and development.
These could benefit the sector. A temporary 50% cut to business rates for "leisure" businesses from April is expected to save the average cinema £24,000, according to HM Treasury's estimations.
READ MORE:
- National Insurance hike 'deeply damaging' to creative freelancers
- Budget 2021 doubles creative sector tax relief rates
There will also be tax reliefs for R&D activity (though the creative industries have struggled to access such investment).
And a second round of the Levelling Up fund, which has so far promised £429m of investment in cultural projects, is being launched.
But the 'mini-Budget' did not delay plans to return VAT on live event ticket sales to 20% as unions had asked.
"The spring statement missed the opportunity to help the UK music industry at crucial point in its fight back from the impact of Covid-19," UK Music CEO Jame Njoku-Goodwin commented.
Levelling down
The National Insurance change offers the biggest benefit to top and middle income earners. The Resolution Foundation, an economic think tank, says only a third of the relief will go to the bottom half of earners, while the Institute of Fiscal Studies noted beneficiaries and pensioners will face escalating costs without aid.
With inflation expected to hit a high of 8.7% in the coming months, low income earners will have bigger priorities than the arts.
This poses a challenge to venues that are still attracting smaller audiences than before the pandemic.
Much of the £22bn in support the tax plan offers is being subsidised by reforms to encourage greater student loan repayment, placing an added burden on recent graduates.
Creative arts graduates have the lowest rate of return on their educational investment and could face acute financial insecurity at the start of their careers.
Freelancers lose out
About a third of arts companies have fewer than five people on staff, meaning they could benefit from a £1,000 boost to the Employment Allowance.
However, receipt of public funding could put some businesses above the threshold for this assistance.
What's more, the policy does nothing for the self-employed and limited company directors.
While many arts freelancers will recieve meaningful relief on their Class 4 National Insurance contributions, Creative UK Chief Executive Caroline Norbury said the "debilitating" rise in inflation will fall hardest on the self-employed, entrepreneurs and early career creatives.
"Vital safety nets – such as sick pay, parental pay and pensions – will be essential to sustain and grow our freelance workforce, and demand urgent review."