The effects of a new Labour Budget on the publishing industry

The release of the budget at the end of October caused distress and relief alike in multiple different industries. One of the areas where there was the most unrest however, was the book-selling and publishing industries, as it seems the new budget might cause new problems and new benefits depending on the company.

The main concern shared by most book retailers is the decrease in business relief rates from 75% to 40%, alongside the rises in company’s contributions to national insurance, may mean a steep drop in profits. This is because, unlike other industries, companies in book-selling cannot just raise their prices to combat the fluctuations in inflation or the rises in tax and national insurance contributions. David Headley, the owner of Goldsboro books, an independent bookstore specialising in signed editions, has come forward and said that the budget has caused him a bit of worry as a smaller company, and that he hopes further details may be provided that prove to be more beneficial for small businesses and independent bookshops.

However, there are others who have suggested the budget, while not perfect, contains some good news for book retailers. The increase of the minimum wage for over 21s to £12.21 and hour has raised hopes that this will increase disposable income that the recipients may then choose to spend on books.

While the raising of the minimum wage is very positive, it can come with additional challenges for the smallest of bookshops

While the raising of the minimum wage is very positive, it can come with additional challenges for the smallest of bookshops, as it adds to the increasing costs of managing a small business that include business rates, utilities, rent, postage, and shop materials.

Focusing on the smaller booksellers, some of the changes to the national insurance framework should be beneficial. Claire Holubowskyj, a senior research analyst at Enders Analysis points out that these changes should be very positive for booksellers and publishers that employ less than 10 people. However, for larger booksellers and chain companies, this is likely to have a negative impact, given they will have to deal with the increase in national insurance and reduction in business relief rates, alongside the challenges of the current economic climate. The only hope for these larger shops and chains is that the aspects of the budget designed to increase economic growth and disposable income leads to more consumers being able to support the businesses that may begin to struggle.

Despite the varied impact on different businesses, the creative industries of the UK (this includes the publishing industry) have been recognised as an area of possibility for large and sustainable economic growth. Dan Conway, CEO of the Publishers Association has said that the ups and downs of the budget were to be expected, given the new government’s desire to properly address the nations funding gap: this is the gap between the amount of investment needed to achieve the Sustainable Global Development goals, and the amount of investment that is actually being put towards achieving them. Conway has stated as part of these efforts, the government has pledged to provide substantial funding to Research and Development within the UK’s creative industries to ensure that the UK remains a global leader when it comes to research.