What does the Chancellor’s Spring Statement mean for Equity members?

Updated 24 March 2022

Today (23 March) the Chancellor set out his Spring Statement. During his speech in Parliament, Rishi Sunak responded to the Ukraine crisis and the economic forecast. He also addressed the escalating cost of living, which is the cost of basic things we all need - such as food, housing, water, heating, transport and clothes.


What is the economic forecast?

According to the Office for Budget Responsibility, public finances have emerged from the pandemic in better shape than expected. However, Russia’s invasion of Ukraine is set to push inflation to a 40-year high, and living standards are set for a historic fall over the next 12 months.


Key announcements

Ahead of the statement Equity called for a package of measures to protect our members and safeguard our industry. Unfortunately the policies announced by the Chancellor fall short of our demands, and do not go far enough to ease the financial pressures facing the creative workforce and the economy as a whole.

Below is a summary of the key policy announcements:

Cost of living 

The Chancellor announced three key measures to support households:

  • A temporary cut to the fuel duty by 5p a litre for 12 months to reduce the impact of rising petrol prices. This will take effect from 6pm on 23 March on a UK-wide basis.
  • 0% VAT for home owners purchasing heat pumps, insulation and solar panels for the next five years.
  • A doubling of the household support fund - money for councils to support vulnerable households - from £500m to £1bn. Local councils will receive this funding from April.

Reducing energy bills is crucial but these measures are not sufficient to deal with soaring prices. Equity will continue to campaign for a windfall tax on fossil fuel giants. It cannot be right that the profits of oil and gas companies have rocketed while the price of energy is pushing millions more homes into fuel poverty.

VAT

The Chancellor did not announce any changes to his planned hike to VAT from 12.5% to 20% from April. This is a missed opportunity and hugely disappointing for the entertainment and hospitality industry who have campaigned tirelessly for this to be halted. It would have been a welcome measure that could have helped keep ticket prices down for audiences at concerts and live events and supported the entertainment industry’s recovery after the COVID-19 pandemic.

Tax  

The Chancellor announced various measures in relation to tax:

  • The government will be publishing a tax plan for cutting taxes.
  • The threshold for when people start paying their National Insurance will increase from £9,880 to £12,570 this July. This represents an increase of £3,000 and means that the threshold for National Insurance contributions and income tax are now on an equal footing.
  • From April, the Employment Allowance will increase from £4,000 to £5,000 for small businesses.
  • The basic rate of income tax will be cut from 20% to 19% from April 2024. This only applies to England, Wales and Northern Ireland as the Scottish Government have a different framework.

While these measures will provide some additional help, it is particularly disappointing that the government refused to scrap the planned 1.25% national insurance hike from April. A tax increase that disproportionately impacts younger and lower-paid workers is indefensible.

Universal Credit

Social security reform was notably absent from the Statement. We have long campaigned for the government to reinstate the Universal Credit £20 uplift and extend it to legacy benefits, such as Income Support and Housing Benefit . Our welfare system is broken, but this would have provided a vital lifeline for those on the lowest incomes who rely on Universal Credit to stay in our industry.

Workers’ rights

In the wake of the P&O scandal, it is disappointing but unsurprising that there was nothing in the Statement about workers' rights. We will continue to campaign for the government to repeal anti-trade union laws and strengthen workers' rights to organise, unionise and make agreements to improve their pay, terms and conditions and dignity at work across the economy.


"A flop for Equity members"

Equity General Secretary Paul W Fleming, responding to the Chancellor’s Spring Statement, said:

“The Chancellor’s attempt at show-stopping tax cuts is a flop for Equity members. Their approach to National Insurance, welfare provision and freelancer support keeps punishing our members for a crisis they did not create. The Chancellor could have changed course today with a bold, green vision to support artists, entertainers, their workplaces and their communities. But once again, the measures announced in his Spring Statement do not go far enough to help those struggling with energy costs, tax and price rises in our industry and beyond. We need our industry to unite against the failed agenda of tax hikes on workers whilst practicing austerity – the whole sector should join Equity and wider labour movement to win for justice for workers in the face of this cost of living crisis.”

Note that the text on this page has been updated following an analysis of the Treasury's documents.