Post-Brexit bump in UK – but no answers for live

Despite a shock ruling by the UK’s high court today that government will have to seek parliamentary approval for Brexit, it seems likely Britain will indeed still be leaving the EU by the end of the decade.

Just over four months after 52% of voters said ‘yes’ to a British exit (Brexit) from the European Union in a nationwide referendum, sending the pound sterling into a freefall from which it has yet to recover, the UK economy defied analysts – most of whom predicted modest growth of 0.3% in the third quarter (Q3) of 2016 – to grow 0.5% in the third quarter (Q3) of 2016, new Office for National Statistics (ONS) figures show, outstripping France and much of the rest of Europe.

The better-than-expected growth, says ONS, is attributable to the service industries, with agriculture, construction and manufacturing all contracting.

In services, ‘transport, storage and communication’ – which includes the creative industries – led the way, with 2.2% growth (it was 0.6% in Q2), indicating the Brexit vote has so far had little affect on the creative sectors (grouped together as ‘motion picture, video and TV programme production, sound recording and music publishing activities’ by ONS).

In spite of the unexpected good news, Britain hasn’t left yet – and won’t even begin the (at least) two-year process of doing so until March 2017 – and what the UK’s relationship with the rump EU will look like post-Brexit is a question that lies unanswered.

The Brexit vote has so far had little affect on the creative sectors

Music industry umbrella body UK Music was quick to convene a Brexit Working Group with representatives from across the industry, following the June referendum. Its report, Industrial Strategy for the Creative Industries 2016, was presented to Government, and highlights concerns across the music business eco system.

Within the report, a dedicated section on touring argues that, “To guarantee a framework to trade, the UK Government should support a system that introduces temporary short-term permissions and exemptions for musicians and crews whilst touring the European Union.”

On the subject of withholding tax, social security and VAT for touring artists and productions, the report states: “To guarantee a framework to trade, we need a system that does not subject touring artists and crews to double taxation or unfair deductions of expenses, social security or VAT.”

One area there should be little change is public performance royalties. Loïc Fouquet, of French law firm Nomos, tells IQ that in his view the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations should still apply, regardless of the UK’s EU membership, providing “UK law and PROs’ [performing rights organisations’] practice is compliant with this analysis”.

However, addressing the issue of performance rights in France specifically, Fouquet notes French law mandates “fair compensation” for “performers and producers for public representations […] fixed in an EU member state”, so “this renumeration could be challenged for […] the United Kingdom, since the United Kingdom will no longer be an EU member state”.

“They are trying to put a brave face on things but most are fearing the worst”

While the UK live music industry was, on the whole, bullish on the country’s prospects following its vote to leave, there are lingering concerns about the return of cross-border bureaucracy, in the form of visas and equipment carnets, for British artists touring Europe. Writing for The Guardian this week, IQ journalist Eamonn Forde says: “Touring agents and managers that I have spoken to off the record in recent months all revealed enormous uncertainty about what will happen to British acts playing shows and festivals across Europe in the aftershock of Brexit. They are trying to put a brave face on things but most are fearing the worst – namely the closure of opportunities and escalating running costs that could make touring utterly unsustainable.”

Forde quotes production manager Joel Stanley, speaking to IQ in March, as saying: “I think the biggest thing for me as a production manager would be the addition of a carnet for every show outside the UK. Currently we only ever have to show proof of ownership with the bond and have it stamped in and out if we go outside of the EU – mainly Switzerland – but [post-Brexit we’d need a carnet] even for a one-off show in France.”

Also worried is UK industry body Creative Industries Federation, whose Brexit Report, published last week, calls for “the creative industries to be put at the heart of government thinking as the country develops its new industrial strategy, forges new international trade deals and tackles the fractures in society exposed by June’s EU referendum vote”.

Among the report’s recommendations are to maintain the freedom of movement UK citizens currently enjoy with those of the EU’s 27 member states. “There is a very real risk that skills shortages in the UK will be made worse – at least in the short to medium term – by any restriction on freedom of movement that comes with tightening immigration laws and the UK leaving the European Union,” it reads.

Cutting immigration and ending freedom of movement, however, were key issues for much of the pro-leave campaign in the run-up to the referendum, making it unlikely the new, post-Brexit, British government will accede to the federation’s demands.

“The UK should secure continued ease of movement between UK and EU countries for time-limited activities, such as concert tours”

Many in the industry remain hopeful of the introduction of a special European visa for British citizens – “There’ll still be soft borders,” said The 1975’s Matt Healy in June. “I’m sure there’ll be a European visa” – but in the event of a ‘hard Brexit’, with no capacity for freedom of movement, the Creative Industries Federation believes international touring will become significantly more difficult – and far less lucrative, potentially pricing smaller tour promoters out of the market.

“Experience of other countries already illustrates the scale of additional staff and financial costs incurred,” it writes. “For example, the United States requires all visa applicants to visit its embassy in person to be processed. It costs either the touring organisation in terms of staffing, or the applicant in loss of earnings. A similar process is also operated by other non-EU markets, including China.”

In the medium term, the UK should, says the federation, make efforts to “secure continued ease of movement between UK and EU countries for time-limited activities, such as concert tours”, while in the long term Britain needs a “migration system to enable easy access to critical skills and talent from both EU and non-EU countries”.

But it has a warning for the British government as it seeks to forge new relationships outside the European Union: “The way the UK has made it harder for non-EU performers and talent – even from world-renowned companies – to visit our country in recent years, with visas rejected or delayed, [is] a potential hurdle to the UK creating good and simple reciprocal arrangements for our talent.”

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