Eventprofs have had a mixed reaction to the budget, with one business owner claiming that the new government "doesn't understand or value" the sector.
EDGE Venues CEO Jacqui Kavanagh slammed the increase in employers' National Insurance contributions - and added that the move could see hospitality jobs replaced by AI.
She said: “Whilst support with business rates and investment in growth
are welcome, the impact of an increase in National Insurance contribution by up
to 15 per cent from April 2025, is a deep blow for a meetings and events sector
currently bucking the trend on growth. The hospitality sector by its very
nature provides specialist services – there is a threat that personal services
may have to be replaced by AI in some instances to reduce cost, dumbing down
the services that we offer.
“This was never going to be a budget full of giveaways, but
it is frustrating that the government is laying the burden of fixing the
economy on small businesses.
“These measures show that this new government doesn’t
understand, or value, the potential of the meetings and events sector, in
growth or the contribution of £60+bn a year that it currently provides to the
UK Exchequer.”
Cost increases
The Meetings Industry Association (MIA) welcomed the government’s promise of a “genuine living wage”, but added that these changes would reflect further cost increases to businesses and reinforce recruitment and staffing challenges
across the sector.
MIA chief executive Kerrin MacPhie said: “The rise of the
National Living Wage to £12.21 an hour for over 21s and the 16 per cent increase in
minimum wage for 18–20-year-olds will have implications for our sector,
increasing operating costs from April 2025 and further impacting pricing and
profitability.
“Given the
ongoing staff shortage in the sector we have been actively encouraging
organisations to consider the employment of apprentices to fill and grow into
roles. With it announced today that new and existing apprentices’ hourly wage
will raise from £6.50 to £7.55 an hour from April 2025, having already
increased from £5.28 earlier this year, this is becoming increasingly less
viable.”
MacPhie also lamented the increase in
employer’s National Insurance contributions from 13.8 per cent to 15 per cent, saying it reflected significant cost increases when spread across the average workforce –
particularly for large-scale conference centres and venues.
“While the
£5,500 increase to £10,500 Employment Allowance means those with a smaller
workforce will be less impacted by the rise in employers’ contributions,
increasing taxation on salaries could potentially stunt wage growth within the
sector", she said. "With tighter margins, employers may feel reluctant to increase wages at
the same rate as before given the increased investment this requires, which
could increase the appetite for careers in alternative industries as we
experienced during the pandemic.”
Chancellor Rachel Reeves announced that the 75 per cent discount on business rates for the retail, hospitality and leisure industries
will be replaced by a discount of 40 per cent, up to £110,000. MacPhie said that this would create a
significant increase in expenditure for those that have found much-welcome
relief in the scheme.
She said: “Currently,
event venues may be eligible for the scheme dependent upon their specific use
of the venue as well as local authorities’ interpretation of the scheme’s
guidance. We have long had challenges based on the definition of hospitality
and leisure and where business meetings and events sits, so we continue to ask
for clarity on this so that venues can understand whether they will be entitled
to some level of relief.”
However, MacPhie welcomed the £1bn
investment into aerospace, £2bn investment in automotive and £500m investment
in life sciences, hailing it as a positive step in positioning the UK at the
forefront of innovation while boosting inward investment.
Pivotal step
“Increasing the attractiveness
of the UK as a destination for business is a pivotal step in attracting
international conferences and exhibitions in these fields. Boosting inbound
tourism and showcasing UK event spaces on a global scale can only be a positive
for long-term growth as we strive to position the UK as the go-to event
destination.”
Joss Croft OBE,
CEO, UKinbound, the trade association for inbound tourism, said: “We welcome the increase in employment allowance, the
freeze on fuel duty and the investment in the regional rail networks, however
we are incredibly disappointed to see Air Passenger
Duty increase and that businesses
across the industry will see operating and staff costs rise.
"As the UK’s second largest service export
industry, inbound tourism is an incredibly powerful driver of economic growth
across the UK and has the potential to grow 20 per cent by 2027, but businesses in this
sector are now facing a new tide of challenges.
"We are however committed to developing a
strong working relationship with this Government and will continue to make the
case for specific policy changes, such as expanding passport-free travel
schemes for under 18-year-olds, enhancing our five-year visitor visa and
introducing tax-free shopping, which can deliver immediate growth across the
whole of the UK."
