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European trade bodies rally governments for energy aid

The UK, Germany and the Netherlands say support measures are crucial to curb "disastrous" energy costs and prevent the sector from breakdown

By IQ on 21 Sep 2022


European live music trade bodies are lobbying for government-backed support packages to mitigate rocketing energy bills and prevent the sector from collapsing.

Last month, IQ heard from a number of European arenas who say that skyrocketing energy costs are emerging as the sector’s biggest challenge since the Covid-19 pandemic. ASM Global’s Marie Lindqvist said the prices for electricity and gas at the company’s venues have quadrupled since the beginning of the year, with the UK being hit the hardest.

UK live music trade bodies today (21 September) welcomed the government’s Energy Bill Relief Scheme for businesses but have called for further clarification of the details.

The scheme, revealed by the Department for Business, Energy and Industry, will see energy bills for UK businesses cut by around half of their expected level this winter.

The news comes after it was revealed that some UK live music venues are seeing their energy bills increase by an average of 300% –in some cases as much as 740% – adding tens of thousands of pounds to their running costs.

Under the new scheme, wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas for six months between 1 October and 31 March 2023.

The support is equivalent to the Energy Price Guarantee put in place for households and applies to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.

UK live music trade bodies today welcomed the government’s Energy Bill Relief Scheme for businesses

This scheme will apply to England, Scotland, and Wales, with a parallel scheme will be established in Northern Ireland, and will be reviewed after three months with an option to extend support for “vulnerable businesses”. However, it is not yet clear whether the live music sector falls into this category.

LIVE CEO Jon Collins welcomes the support but says the government must sustain it past the next six months. “Spiralling energy prices have already forced music venues up and down the country to close or curtail their programming and this will begin again as soon as this support is removed – it is plainly obvious that live music must be on the list of sectors considered ‘vulnerable’ by government.

“With our industry still hurting from the aftereffects of Covid and rising costs across the supply chain, we continue to make the case that our sector needs action on VAT and business rates if we are to keep all concert halls, arenas, festivals, and grassroots music venues open, bringing joy to millions and showcasing the best UK and international talent.”

Music Venue Trust (MVT) CEO and founder Mark Davyd has also warmly welcomed the package, saying the scheme “appears at face value to comprehensively tackle the immediate short-term energy crisis for grassroots music venues”.

“We await full details of the scheme and the method of implementation by the energy retailers and suppliers, but the base unit rate of 21.1p per kW/h laid out by these plans is sufficient to avert the collapse of the sector if it is fully delivered,” says Davyd.

“We understand that the government plans to bring forward controls to ensure that this target price is delivered and we look forward to reading their plans to implement this rate as a maximum for all music venues in the UK.”

The scheme “appears at face value to comprehensively tackle the immediate short-term energy crisis for GMVs”

However, MVT is also urging the government to clarify which sectors fall into the “vulnerable businesses” category: “The government has indicated that ‘pubs’ will attract support for longer than the six-month initial period based on the special circumstances of the energy crisis in relation to the operation of their business.

“We have asked for urgent clarification that the broad term ‘pub’ includes music venues and other licensed premises essential to the grassroots music ecosystem, and anticipate that this will be the case.”

The trade bodies have pointed out that further support is needed, in addition to the scheme, in order to stabilise the sector after the Covid-19 pandemic. The sector is calling on the Chancellor to reduce VAT on ticket sales to 5% and reform business rates in the mini-budget expected this Friday (23 September).

Elsewhere in Europe, markets including the Netherlands and Germany are still lobbying for critical support to curb “disastrous” energy costs for live music businesses.

In the Netherlands, the Association of Theatre and Concert Hall Directors (VSCD) says a large proportion of its 151 members are in danger of getting into financial trouble due to rising energy costs and inflation.

“For many venues, the rise in energy costs is disastrous. The expectation for next year is that we will be seven times more expensive. Even if we sell out every performance, this cost increase is impossible to absorb,” says Mirjam Radstake, director of Theater Hanzehof and Buitensociëteit in Zutphen.

VSCD is calling on the Dutch government to help local authorities subsidise venues’ energy bills

With only 7% of its members receiving some form of compensation to cover the costs, VSCD is calling on the Dutch government to make an extra contribution to the municipal fund so that local authorities can subsidise venues’ energy bills.

The association argues that, currently, subsidies do not reflect venues’ rising costs, which also include a 9.7% rise in rent and a 10% increase in the minimum wage, and that passing these costs onto the public is not an option.

“If we increase the ticket price, the public will drop out,” says Charles Droste, director of Cultuurbedrijf Amphion in Doetinchem.

“At the moment, 25% fewer tickets have been sold with us in September than in September 2019. The public seems to be waiting for rising energy costs and inflation.”

Earlier this week, the Taskforce Creative Culture and Media also sent a letter to the cabinet, containing a general plea to protect the sector against the current inflation and increased energy costs.

Meanwhile, Germany’s live association, the Federal Association of the Concert and Event Industry (BDKV), is calling on the federal government to design a special relief programme for the events industry to put forward to the EU Commission.

Germany’s live association is calling on the federal government to design a special relief programme for the events industry

Earlier this year, the EU Commission adopted a Temporary Crisis Framework which enabled member states to be more flexible with State aid rules in order to support the economy during Russia’s invasion of Ukraine.

Under the framework, member states could grant a limited amount of aid to companies affected by the crisis, or by the subsequent sanctions and countersanctions, up to the increased amount of €62,000 and €75,000 in the agriculture and fisheries and aquaculture sectors respectively, and up to €500,000 in all other sectors.

However, in the plan, the EU Commission does not count the events industry among the “systemically important” sectors eligible for aid. BDKV is now asking for a revision to the framework, to allow businesses in the events industry to receive up to €500,000.

“Without state support, there is a risk of the industry collapsing with bankruptcies, operational closures and further migration of skilled workers and the self-employed,” reads a statement from BDKV. “This special programme is needed now and not in the near future when such help is already too late.”

Timo Feuerbach, MD of the European Association of Event Centers (EVVC), says: “The events industry has not yet recovered from the corona-related restrictions of the past few years. The consequences of the war in Ukraine, high inflation and impending bottlenecks in the energy supply are also hitting us hard. Together with the disastrous communication from the federal government on the subject of Corona, which is unsettling customers and is already costing orders, our industry is in danger of being left behind in international competition.”

 


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