UK live sector gives mixed reaction to 2021 budget
The UK’s live music industry has given a mixed response to chancellor Rishi Sunak’s budget, unveiled today (27 October) in the House of Commons.
The chancellor, who upgraded this year’s economic growth forecast from 4% to 6.5%, pledged an additional £850 million in culture sector funding, the majority of which is ring-fenced (including £2m earmarked for a new Beatles attraction on Liverpool Waterfront), alongside temporary business rates relief in England for eligible retail, hospitality, and leisure properties for 2022-23, worth almost £1.7 billion.
The government is also freezing the business rates multiplier in 2022-23 – a tax cut worth £4.6bn over the next five years, and has increased the headline rate of orchestra tax relief.
However, calls to extend the VAT break on tickets sales beyond next March fell on deaf ears, and no improvements to the government’s £800m insurance scheme for live events were forthcoming. In addition, no cash was allocated to help the sector deal with Brexit’s impact on touring, while the absence of the word ‘music’ from the budget document left a sour taste.
“We’re glad to see that live music will receive some benefit from today’s spending review – including tax relief, business rates, and some extension in terms of funding,” says a spokesperson for trade body LIVE (Live music Industry Venues and Entertainment).
We need government to give us the tools to make progress, which were, unfortunately, missing from today’s news
“However, with the word ‘music’ completely absent from today’s announcement, we remain steadfast in our drive to see government pay attention to the key issues we are facing: the impacts of Brexit, the recovery from Covid and the long-term growth of the sector. We need government to give us the tools to make progress, which were, unfortunately, missing from today’s news.”
It remains to be seen whether music will be eligible for the £52m of government funding set aside for museums and “cultural and sporting bodies” next year to support recovery from Covid-19, with an additional £49m allocated for 2024-25.
“We look forward to hearing more detail about some of the measures announced by the chancellor today, in particular the allocation of further Covid-19 recovery funding for the cultural sector,” says Association of Independent Festivals (AIF) CEO Paul Reed. “On the surface, however, it doesn’t go far enough in supporting our truly world-leading festival industry.
“It is clear that the most effective way for the government to support the industry’s recovery into 2022 and beyond would be to extend the VAT reduction on tickets, look closely at a permanent cultural VAT rate, and completely remove festivals based on agricultural land from the business rates system. Unfortunately, none of this was forthcoming today.”
Referencing UK Music’s latest This Is Music report, which revealed the impact of Covid-19 wiped out 69,000 music industry jobs – one in three of the total workforce – the organisation’s CEO, Jamie Njoku-Goodwin, says further action is needed to support the music sector’s post-pandemic recovery.
“It is crucial that we get government support to help us continue to rebuilding and hiring people who went so long without work due to the pandemic,” he says.
“Covid halved music’s economic contribution to the UK economy from almost £6 billion a year to £3.1 billion in 2020. If the government strikes the right note by delivering the support we need, our music industry will come back stronger and bigger than ever.”
The government has missed an opportunity
Setting out a three-point plan to boost the business, Njoku-Goodwin adds: “We are pleased to see the extension of the orchestras tax relief yet the government has missed an opportunity to not take forward further music tax incentives to help boost jobs and economic growth. Similarly, business rate relief for venues is very welcome yet we remain concerned about next April’s VAT hike for live events.
“Ministers must put turbo-chargers under the efforts to clear away the barriers that are still making it so hard and expensive for musicians and crew to tour easily in the EU. As the domestic music market recovers, the government should also build on recent trade deals by giving more funding and support for music exports.
“As well as music’s huge economic and cultural importance, we also need to see the government fully recognise its huge value to our wellbeing by properly funding music education to help nurture our talent pipeline and provide the stars of the future.”
AIM CEO Paul Pacifico welcomes new measures for venues and hospitality, but stresses the importance of a tax relief scheme for music.
“It’s encouraging to see the government recognise the serious blow Covid dealt to the UK’s music industry in today’s budget, discounting business rates for music and other hospitality venues and for premises improvements and green tech use as well as increasing tax reliefs for orchestras,” he says.
“However, more must be done to support the globally significant independent music sector to ensure a viable future for diverse music, creators and entrepreneurs. One key proposal is a tax relief scheme for music, like those successfully implemented in other creative industries such as film and games. This cost-effective measure could provide our sector with the boost it needs, attracting inward investment and creating a ripple effect across the wider music ecosystem. We urge government to include music in such schemes at the next opportunity.”
There were also contrasting emotions from Night Time Industries Association (NTIA) chief Michael Kill.
“The improved forecasts for growth announced by the chancellor today are good news, and the reopening of the night time economy has been a key part of this better-than-expected bounce back,” says Kill. “We were disappointed that the chancellor chose not to extend the 12.5% rate of VAT on hospitality – this is a missed opportunity, and it will prevent those forecasts from improving further still.”
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UK: 90,000 cultural jobs lost due to pandemic
Around 86,000 jobs in the UK’s cultural nighttime economy sector have been lost due to the Covid-19 pandemic, according to a new report.
The Night Time Industries Association (NTIA), which commissioned the report, says it has found that the sector has been “ravaged” by the pandemic.
The report shows for the first time the value of the UK’s nighttime cultural economy, which was 1.6% of GDP – or £36.4 billion – in 2019. This contribution accounted for 425,000 jobs across the UK.
The NTIA says there are fears that many of the jobs lost to the pandemic in the nighttime economy sector will be lost for good, with businesses closing and persistently lower demand for services.
The association has warned that it is “the worst possible time to introduce vaccine passports, which will further damage a sector essential to the economic recovery”.
“We are calling for [the chancellor] to extend the 12.5% rate of VAT on hospitality until 2024, including door sales”
“[This report is] timely because at this moment, governments in Scotland and Wales are pressing ahead with chaotic vaccine passport plans, and the UK government refuses to rule out their use in England,” says Michael Kill, CEO at NTIA.
“It is crucial the chancellor uses the upcoming Budget to support this beleaguered sector. We are calling for him to extend the 12.5% rate of VAT on hospitality until 2024, include door sales in that reduced rate of VAT, because the present system punishes nightclubs that rely on door sales rather than selling tickets, and for him to ensure there are no increases in alcohol duties – our sector really cannot afford any additional burdens.”
The last Budget took place on 3 March 2021 and included an extra £300 million for the Culture Recovery Fund (CRF), ‘restart grants’ for hospitality/leisure businesses, the extension of the coronavirus job retention scheme (furlough) and self-employed income support (SEISS) schemes, and business rate relief.
The budget also confirmed an extension of the 5% rate of VAT on ticket sales for a further six months, with an interim rate of 12.5% until April 2022.
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UK live industry cautiously welcomes 2021 budget
The UK’s live music industry has welcomed many of the provisions contained in the 2021 government budget, presented this afternoon by chancellor of the exchequer Rishi Sunak, but expressed its disappointment at the continued lack of a European-style insurance scheme for festival organisers.
Among the measures unveiled by Sunak in the Commons today (3 March) are an extra £300 million for the Culture Recovery Fund (CRF), ‘restart grants’ for hospitality/leisure businesses, the extension of the coronavirus job retention scheme (furlough) and self-employed income support (SEISS) schemes, and business rate relief.
The budget also confirmed an extension of the 5% rate of VAT on ticket sales – a key campaign focus for pan-industry group LIVE (Live music Industry Venues and Entertainment) and the whole UK concert industry – for a further six months, with an interim rate of 12.5% until April 2022.
Paul Reed, CEO of the Association of Independent Festivals, says: “We warmly welcome the extension to the reduced VAT rate on tickets, which will really help festivals during the 2021 sales cycle. For many AIF members, this is the first period in which they are selling tickets since the outset of the pandemic. We do, however, reiterate the recommendation of the DCMS select committee for VAT on ticket sales to remain at a reduced rate for three years so that the UK festival sector can fully recover.
“The Culture Recovery Fund has been a lifeline for many of our members so it’s greatly encouraging to see a further £300m invested into this, though we would appreciate some further detail on this additional round and the time period it will cover.
“Independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer”
“We also welcome the extension to the government’s furlough scheme and continued support for the self-employed. However, independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer. As we have repeatedly stressed, the only way they can do this is with a government-backed insurance scheme that covers Covid-19-related cancellation. The chancellor today confirmed the extension of the government backed restart scheme for film and TV productions – a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market.”
Lucy Noble, chair of the National Arenas Association, comments: “For the live music industry, today’s budget, and specifically the extension of furlough to September, is enormously welcome. The whole sector has been grateful for a 21 June ‘not before’ date for operating at full capacity, and the extension of the 5% VAT rate on tickets is something we had been hoping to see.
“Uncertainty remains, and the lack of insurance for Covid-related cancellation is a huge concern – what the entire live sector wants is to be allowed to trade safely out of this situation and once more welcome people to come together for extraordinary shared experiences.”
“Music Venue Trust welcomes the extensions to furlough, SEISS and the VAT cut on ticket sales,” says MVT CEO Mark Davyd. These measures are supportive of the next steps in the campaign to reopen every venue safely. On business rates, we note that the Chancellor has provided a 100% cut for the initial three-month period in which venues will not be trading. This period does not resolve the long running debate on business rates, and we look forward to a full discussion of this outdated and anachronistic taxation in the business rates review in Autumn 2021.
“The chancellor announced additional funding to be distributed by Arts Council England [ACE], but the purpose of this funding is unclear; we hope to work with ACE and DCMS to ensure it is effectively distributed, and includes sensible and structured capital investment that enables our music venues to become more Covid-secure.”
“The needs of those in mixed employment, and those individuals operating as limited companies, were not met”
Annabella Coldrick, chief executive of Music Managers Forum, says: “The MMF welcomes the extension of eligibility for support to the self-employed. This is a really important measure that should have an impact on our community and their clients, many of whom faced real hardship during the pandemic, although unfortunately directors of limited companies are still excluded. We also welcome the £300m Cultural Recovery Fund for reopening, although it was disappointing not to hear any developments on government-backed insurance for live music events which is urgently needed to get us back up and running in July.
For a full longer-term music recovery, to a place where artists can perform to full capacity crowds and tour internationally, we will need this kind of targeted and continued support reaching into 2022.”
“We welcome the continuation of support for employers and self-employed workers, as well as the addition of those newly self employed sole traders; this is tempered by the disappointment that the needs of those in mixed employment and those individuals operating as limited companies were not met,” adds Dave Keighley, chair of the Production Services Association.
“Support for companies is also broadly welcomed, although doubt over whether business rate relief applies to our members that support hospitality and leisure remains. Any discounts given to venues should be clearly extended to those companies that work in those venues, recognising that live events are an ecosystem that needs complete support. Although the extension of the 5% VAT rate helps, it needs to be extended to assist our sector’s recovery.
“The extension to the Culture Recovery Fund is encouraging, we hope that the current and subsequent rounds will support event more of our member companies that support cultural activity.”
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Indian budget “completely ignores” live events
Industry association EEMA has sharply criticised the Indian government for making no provisions in its most recent budget for the live entertainment sector, which has been devastated by the series of lockdowns and ‘unlocks’ imposed on the country since last March.
The 2021–22 Union Budget, presented to the Indian parliament by finance minister Nirmala Sitharaman earlier this week, “completely ignores” the events sector, as well as hospitality, tourism and other related industries, according to Siddhartha Chaturvedi, general secretary of the Events and Entertainment Management Association.
While cinemas are permitted to reopen at 100% capacity from 1 February under so-called ‘unlock 9.0’ guidelines (ie the ninth easing of lockdown), the live events sector has had “almost nil revenue” since the first lockdown came into effect” in March 2020, said the EEMA in a letter sent to Sitharaman (pictured) last month asking for relief for the industry.
The association had asked for wage subsidies, tax relief/refunds, free venue hire and interest-free loans, among other measures, to be included in the budget.
“We were really expecting some SOS measures for our industry in particular”
Chaturvedi says the industry has been left bitterly disappointed by the lack of support for what he describes an industry that is still “bleeding” money. “The budget has been extremely disappointing for us in events. The government has completely ignored this bleeding sector, and so is the case of the entire hospitality, tourism and aviation sectors, which are all related to each other,” he comments. “We were really looking forward to a helping hand from the government in these dire times.”
While the budget shows the government’s intent to “spend a lot to infuse economic activities”, EEMA was “really expecting some SOS measures for our industry in particular, and are extremely disappointed with this lack of empathy towards us.”
“The budget largely seems progressive for the economy,” adds Samit Garg, the association’s executive vice-president. “However, there is unfortunately nothing in there for our events and experiential industry. The only silver lining is the increased government expenditure, which may yield more business opportunities for us.”
EEMA represents more than 1,000 companies, including artist managers, talent agents, event organisers and event management companies.
UK govt abolishes business rates for small venues
Businesses with a rateable value of below £51,000 will not pay any business rates – the tax levied on non-domestic property in the UK – for the next year, in what comes as a boost to the country’s grassroots music sector.
UK chancellor Rishi Sunak announced the rates abolishment today (11 March) as part of the government’s budget for 2020, which focuses on how to ease the economic impact of the Covid-19 outbreak. The rates relief will run from April 2020 for twelve months.
Full business rates relief previously only applied to firms with a rateable value – the value used to determine payable business rates, based on size, location and other factors – of below £12,000.
“In our manifesto last year, the government promised to increase their business rates retail discount by 50%, but we can go further,” says the chancellor. “We are taking the exceptional step of abolishing business rates altogether.”
The tax cut, says Sunak, is worth over £1 billion and is set to save each business up to £25,000.
A review into the long-term future of business rates will be concluded by the autumn.
“We are taking the exceptional step of abolishing business rates altogether”
In 2017, a 4% hike in business rates saw the overheads paid by many small businesses across the UK skyrocket. Grassroots venues in particular have suffered, having remained exempt from the tax relief granted to other small retailers for years.
Venue operators across the UK celebrated a 50% cut in rates in January, calling it “a profound and positive step” for the sector.
That same month, iconic London music venue the 100 Club became the first venue in the country to receive full business rates relief, under a new scheme put forward by Westminster City Council.
The venue, which has played host to the Rolling Stones, Oasis and the Sex Pistols, has been on the brink of closure at least three times in the past decade, with a third of UK venues closing in the same time period.
Speaking at Futures Forum on Friday, Mumford & Sons’ Ben Lovett, who operates London venues Omeara and Lafayette, lamented the loss of many UK grassroots venues and stressed the importance of having venues of all sizes for artists to perform in.
Mark Davyd of the Music Venue Trust (MVT) comments: “Music Venue Trust very warmly welcomes additional measures announced by HM Government in the budget to tackle the developing crisis provoked by Covid-19. We are particularly pleased that alongside the additional cut to business rates, the challenges Covid-19 presents to the smallest grassroots music venues, many of whom are too small to be in the existing business rates system, will be addressed via the small business grant fund, providing grants of up to £3000 to manage the emerging negative impacts.
“The coronavirus outbreak presents a new challenge for the live music industry and this welcome step will be a lifeline for some at this critical time”
“It remains the case that too many grassroots music venues in the UK have rateable valuations which are simply too high to benefit from either of these measures,” continues Davyd, “and those venues will need additional measures bringing forward to enable them to withstand this crisis.
“We also welcome the commitment to a review of business rates to be carried out this year, with the hope that this review will finally result in the creation of an accurate and relevant classification for grassroots music venues that will see an end to them being unfairly penalised in this outdated system.”
Acting UK Music CEO Tom Kiehl adds that the chancellor should “be hugely congratulated” for scrapping business rates.
“Music venues are the lifeblood of our industry,” continues Kiehl. “However, many are fighting for survival and need all the help they can get to remain open.
“The coronavirus outbreak presents a new challenge for the live music industry and this welcome step will be a lifeline for some businesses at this critical time.
“We ask the Government to constantly review financial support available to music businesses and employees in response to coronavirus and consider making further changes.”
India mulls more foreign investment in music
The government of India hopes to open up its nascent music industry to more foreign direct investment (FDI), the country’s new finance minister has said.
Nirmala Sitharaman, who was appointed minister of finance and corporate affairs in May, presented her first budget to the parliament of India on Friday 5 July. Among other announcements, including tax relief on electric vehicles and an increase in the corporation tax threshold, Sitharaman pledged to further liberalise rules around FDI in the media and entertainment industries.
According to Sitharaman (pictured), India recorded an “upsplurge” in foreign investment in 2018–19, up 6% year on year to US$64.4 billion, and the BJP government wants to continue that momentum.
“I propose to further consolidate the gains in order to make India a more attractive FDI destination,” she said, reports RadioandMusic.com. “The government will examine suggestions of the further opening up of FDI in aviation, media, AVGC [animation, visual effects, gaming and comics] and the insurance sector in consultation with stakeholders.”
“I propose to further consolidate the gains in order to make India a more attractive FDI destination”
It is hoped the administration of recently reelected prime minister Narendra Modi will allow more foreign investment across the music/entertainment industry, including in radio, according to Nisha Narayan, director of Red FM and Magic FM. “Indian economy is all set to become a $3 trillion economy, and the first budget by the Modi government has introduced several benefits.
“It proposes more foreign investment in media. Currently, FDI stands at 49% for the private FM radio industry, which we now hope will be opened up to 100% like DTH [direct-to-home television] and entertainment. Liberalisation of the same will also majorly help in private FM station to reach the current media ‘dark’ cities in India and adapt new era digital technologies and best practices being followed globally.”
According to PwC, India’s growing live market is on track to reach nearly $125m in ticket sales in 2022.
More funding for Canadian live music industry
The federal government of Canada has announced significant budget increases for the Canada Arts Presentation Fund (CAPF), the Canada Music Fund and community arts and culture programmes over two years.
CAPF is to receive a budget increase of CAN$16 million and the Canada Music fund of $20 million. $24 million will go to the Building Communities Through Arts and Heritage and the Celebration and Commemoration programmes.
The Canadian Live Music Association (CLMA) says the changes to the CAPF program may positively impact many of its not-for-profit members, expanding opportunities for artists and audiences.
The national industry body says “we applaud the Honourable Pablo Rodríquez, minister of Canadian heritage and multiculturalism for his commitment to live music in Canada.”
“CAPF plays a vital role in promoting Canadian talent, and in turn, Canada’s ability to shine internationally,” comments CMLA president and chief executive Erin Benjamin.
“The Canada Arts Presentation Fund plays a vital role in promoting Canadian talent, and in turn, Canada’s ability to shine internationally”
“Thanks to the programme, our members ensure “homegrown talent” can be discovered, in our own backyards. Export strategies rely on that career growth that comes from domestic touring and local audience development. The touring landscape in Canada is an important breeding ground for the creation and dissemination of Canadian content, ” says Benjamin.
The association states that the government is signalling its growing understanding of Canada’s touring ecology and the importance of the people behind live music. CMLA urges the government to continue to collaborate and seek ways to broaden its support of Canada’s live music stakeholders.
The Canada Music Fund is not accessible to CLMA members.
Canada’s national industry association, previously known as Music Canada Live, has had a busy few months. The association rebranded for 2019 and appointed Benjamin – formerly executive director – president and chief executive.
Earlier this week, CMLA joined a coalition of Canadian music organisations in signing the country’s Creative Industries Code of Conduct, signalling its commitment to prevent harassment, discrimination and bullying within the industry.
UK Music calls for bringing forward of rates review
UK Music chief executive Michael Dugher has urged the chancellor of the exchequer to bring forward his planned review of business rates, saying many UK venues and recording studios are still “reeling” from last year’s rates increase and may not survive until 2021.
Delivering his spring statement yesterday, chancellor Philip Hammond announced that a planned revaluation of business rates – the tax levied on non-residential property in the UK – would be brought forward a year, to 2021. The change would be followed by revaluations every three years, with the next taking place in 2024.
Dugher (pictured) wrote to Hammond last November to ask for an urgent review of his plans to raise business rates by 4%, which the industry umbrella group says will disproportionately affect the music business and could leave many venues “fighting to survive”.
Responding to yesterday’s spring statement, Dugher welcomed plans bring forward the revaluation by one year, but says the move falls well short of a review “urgently needed to help thousands of businesses in the UK music industry”.
“Venues and studios need help now and can’t afford to wait until 2021”
“Many music venues and studios are still reeling from the huge hikes in business rates following last year’s revaluation,” he says. “Venues and studios need help now and can’t afford to wait until 2021.
“We need an urgent review of the disproportionate rates many venues and studios face if we are to maintain our vibrant and diverse music scene. The chancellor needs to press the fast-forward button and make that happen.
“It is plainly unfair, for example, that one small venue – the Lexington [200-cap.] in north London – has to endure a rise of 118% in its rateable value yet Arsenal FC’s 60,000-capacity Emirates Stadium nearby enjoyed a 7% cut in its rateable value.”
“We are in great danger of losing the bedrock that has enabled the UK to be one of the world’s great sources of forward-thinking music”
George Akins, owner of DHP Family, came out in support of Dugher’s call for an urgent review, commenting: “We welcome the fact that the government is looking more urgently at business rates for music venues. This is certainly an issue for many venues across the country but it is far from being the only issue. Rent increases, unhelpful bureaucracy and redevelopments are all hitting small venues especially in the capital.
“Fundamentally small venues showcasing grass roots, contemporary music should be seen as cultural venues – in the same way as concert halls and arts theatres – which are eligible for subsidies. We are in great danger of losing the bedrock that has enabled the UK to be one of the world’s great sources of forward-thinking music.”
Separately, Dugher welcomed a separate initiative by the chancellor to provide £80 million for small and medium businesses to recruit apprentices.
UK Music calls for review of “damaging” business rates
UK Music chief executive Michael Dugher has written to the chancellor of the exchequer, Philip Hammond, to ask for an urgent review of his plans to raise business rates, which the industry group says will disproportionately affect the music business and could leave many venues “fighting to survive”.
In the letter, Dugher warns that the planned 4% rise in business rates – the tax levied on non-residential property in the UK – coupled with the ‘revaluation’ announced in February, which has sent the rateable value of many music venues and recording studios to “catastrophic” and “woefully unjust” levels, risks harming Britain’s music business, “the jewel in the UK’s cultural crown”.
As evidence, Dugher attaches to the letter a table showing how the business rates revaluation, introduced in April, has sent taxes paid by both large and small venues skyrocketing: The O2, for instance, has seen its ‘rateable value’, which is used to calculate rates, increase 141%, while Manchester Arena’s has grown 80% and Leeds’ First Direct Arena 84%.
On the other end of the scale, the 200-capacity Lexington in London has seen an increase in 118%, with London’s 350-cap. Jazz Café (+73%) and 350-cap. 100 Club (+52%) and Norwich’s 260-cap. Arts Centre (+40%) hit similarly hard.
The chancellor should use his budget to make sure the venues and studios that gave artists like Adele, The Beatles and Oasis their big break are not put under threat because of soaring rate bills
“The Chancellor must rethink these changes, which are woefully unjust and could have a potentially catastrophic impact on some music venues and recording studios,” comments Dugher.
“The music industry contributes £4.4 billion to our economy, employs more than 142,000 people and generates exports of £2.5 billion.
“The chancellor should use his budget to make sure the venues and studios that gave artists like Adele, The Beatles and Oasis their big break are not put under threat because of soaring rate bills.
“Music is the jewel in the UK’s cultural crown. But we need to protect music venues are vital if we are continue to nurture the stars of tomorrow.
“The chancellor must think again and act before it is too late.”