What does the Budget mean for independent publishers? IPG members share their thoughts
Martin Casimir, Maths No Problem! and IPG vice chair
“It certainly wasn't a budget for entrepreneurs or the self-employed, with both taking a hit through changes to dividends and National Insurance contributions respectively. It was good to hear that the economy is in better shape than expected, but the longer term looks more worrying, with growth rates predictions downgraded. Sins and pensions were largely untouched, and there were some significant investments in education, which is good news. But on balance, a boring Budget, though we can expect more sparks later in the year. Boring is good at the moment thank you.”
Jim Smith, Globe Law & Business and IPG Patron
“This was a slender event, perhaps in anticipation of something more substantial when the Budget moves to its new slot in the autumn. In an industry that relies heavily on freelancers, the hike in NI for the self-employed is disappointing. Some of the education initiatives may be useful in certain publishing sectors—for example the new T-levels and additional funding to support new PhD places. Business rates reliefs probably offer too little to make a significant difference for most.”
Di Page, Critical Publishing
“Overall it is hard to find anything to get excited about in this Budget. As is typical of most small publishers, we use plenty of freelance staff who will be hit by the rise in NI and the reduction in the dividend payments threshold. In our specific markets we wait to hear what the impact of the cash injection into social care, the introduction of T-level qualifications and potential for yet more free schools will be. The continuation of austerity means that budgets in the public sector, one of our key markets, will continue to be squeezed.”
Tim Davies, independent business consultant
“Notwithstanding the recently-reported and very good news of double-digit growth for a small number of IPG members, I’d be surprised if many identified strongly with ‘Spreadsheet Phil’'s comments about “robust growth.” Predictably, we’re none the wiser on Brexit strategy. Higher NI costs for the self-employed may well nudge up publishing freelancers' fees over time. In theory, the increase in personal tax-free allowances will benefit lower-earning salaried employees, but salary rises could be compromised if those freelance costs go up significantly.
Small business owners hoping to maximise their dividend on modest profits will be dismayed to see the reduction in tax-free dividend allowance from £5,000 to £2,000, particularly as the change will kick in as early as April next year. It’ll be interesting to see how the injection of £270m into ‘new technologies’, specifically to include ‘driverless vehicles’, will affect sales reps down the line!”
Kathryn Earle, Bloomsbury
“There is nothing specific to our sector in the Budget, but some changes will ramify. A new fund for discretionary local business rates relief (a ‘hardship fund’ if you like) will help some businesses—including bookshops, we hope—offset otherwise damaging recent rates rises. But as many have said, it doesn't resolve the basic unfairness of business rates—a job that has been in the ‘too difficult’ box for years.
Many city-centre publishers have seen the very real problems that staff can have in finding affordable housing. The Budget’s emphasis on building a Brexit 'war chest'—as Paul Johnson points out
, a slightly delusional concept given the size of the deficit—does not leave much hope of major changes from the forthcoming housing White Paper, despite promising noises from the minister, Gavin Barwell.
Perhaps most relevant to IPG members is the news that from April 2018 the total amount of tax-free dividends that company directors and shareholders can receive will reduce from £5,000 to £2,000. This is hardly incentivising to entrepreneurs looking to grow their businesses or attract investors."
Kate Wilson, Nosy Crow
“My main concern in relation to the Budget is the change to NI for people who are self-employed. Despite our small-ish size, Nosy Crow in fact works with relatively few freelancers: we like to maximise our brand and creative influence by keeping design and editorial in-house. But we do work with some freelancers and know how important they are to the publishing industry in general, so anything that hits them can’t be good.
More significant for us, though, is the potential negative impact of this on the authors and illustrators with whom we work who are self-employed. They aren’t all self-employed, but many, especially the illustrators, are. I can’t welcome anything that discourages creativity by taking a toll—and, given government promises, an unexpected toll—on the life-blood of our industry. I am not saying that the creative industries are unique in taking the pain of this, but I suspect we will be disproportionately affected.”
Richard Fisher, IPG academic and policy correspondent
“The Chancellor’s first (and last) spring Budget was in both tone and substance in sharp contrast with the febrile political mood of our age. Much of the meat of his statement had been carefully leaked beforehand, and there was a strong sense in which the whole event was a holding operation, pending the pushing of the Brexit button itself. From an IPG perspective, many members seem perhaps more likely to be impacted in their professional capacities indirectly by this Budget, inasmuch as some of their major suppliers—self-employed persons, including any number of freelance designers, illustrators, editors and similar—are potentially exposed to changes in their NI levies, and some of their customers—independent booksellers—are likewise exposed to the proposed changes in business rates (and the announcement of funds to ease the anticipated pain…). That said, there will be some members for whom the reduction in April 2018 in the tax-free allowance on share dividends from £5,000 to £2,000 will impinge: this is overtly a measure affecting small business owners and investors.
For educational publishers, and particularly those working in further and technical education in England, there was belated recognition of the long-term withdrawal of resources from this vital sector (highlit starkly in the IFS' report on educational spending
over the past two decades), and the announcement of the new T-level qualification. £320m of funding has also been announced for 110 new free schools and grammar schools, a project (we are told) very close to the heart of both the Prime Minster and her influential Special Advisor Nick Timothy.
In terms of the wider economy, an upgrading of the immediate growth forecast from 1.4% to 2% is a cheerful indicator, but more than matched by a rather less cheerful forecast rate of GDP growth after 2018. Estimates of an overall national debt of £1.7 trillion inevitably mitigate against the rapid creation of any kind of significant Brexit war chest, to ease the expected bumps in the road ahead. And that’s where we have to come back to: until the formal process of Brexit actually begins, and real decisions about real treaties and real deals and real jobs begin to be taken, the element of massive contingency around all of this will remain. Anybody who claims to know with any certainty what a post-Brexit economy will look like, for good or bad, is, to use an old-fashioned Anglo-Saxon phrase, fibbing.”
PKF Littlejohn has produced a summary of the Budget’s main points that can be accessed here