IPA Releases Statement on Autumn Budget

Paul Bainsfair, director general, IPA said, “At PMQs immediately before the Budget, the Prime Minister reiterated that his Government’s number one mission is growth. And the Chancellor opened her announcement by stating that the only way to drive growth and restore economic stability was to invest.

“Agencies are great growth engines and advertising spend has a multiplier effect on GDP. But the economics of agencies are dominated by payroll. The change to Employer National Insurance contributions represents a very significant increase in the cost base of agencies and threatens their ability to facilitate the growth the Government says it is prioritising.

“More broadly, agencies stand or fall on their talent. Moreover, shifts in employee rights, will significantly affect how agencies recruit, retain, and nurture the creative minds that are essential to our sector’s success.

“The Chancellor also announced increases in CGT and the tax paid on carried interest. We are concerned that this may lead to a reduction in appetite for investment in agency businesses, whether by individuals or by financial sponsors.

“We just have to hope that this short-term pain will, as the Chancellor suggested, ultimately unlock vital long-term growth for the UK economy.”