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MPs, UK industry make fresh call for govt-backed insurance

The British parliament’s Digital, Culture, Media and Sport (DCMS) Committee has written to the chancellor of the exchequer to ask for a government-backed insurance scheme for concerts and festivals, or risk “a summer without festivals”.

In the letter to Rishi Sunak, the cross-party group of members of parliament warn that festival organisers and investors are unable to risk the repeating losses they sustained in 2020 unless events can be insured against cancellation. According to the committee, the commercial insurance market is not expected to offer Covid-19 cancellation cover until at least 2022.

To save the festival summer, the MPs, backed by 40 industry associations including industry umbrella groups LIVE (Live music Industry Venues and Entertainment) and UK Music, are urging government to extend existing underwriting schemes, such as the £500 million fund set up for the film and television sector, to “other creative industries”, including live music, to give festival operators the ability to get on with organising their events.

Julian Knight MP, chair of the DCMS Committee, comments: “The government is telling us that life should be getting back to normal by the summer, but unless it can provide a safety net it will be a summer without festivals. The industry says that without government-backed insurance, many festivals and live music events just won’t happen because organisers can’t risk getting their fingers burnt for a second year.

“The committee has heard from festival organisers that this is a matter of urgency. Insurance must be the first step in unlocking the huge contribution that festivals make to our economy, protecting not only the supply chains but the musicians who rely on them for work.

“Without a government-backed insurance scheme it will be impossible to get festivals back this summer”

“The government already offers a level of cover to the film and television industries; now is the time to extend support to other creative industries or risk losing some of our best loved and world-renowned festivals.”

Tim Thornhill, director of entertainment and port at Tysers Insurance Brokers, is similarly supportive. He says: “It has been estimated that over 40% of the insurer losses at Lloyd’s of London relating to coronavirus were as a result of event cancellation claims, which far outweighs the proportion of premium.

“Now is the time for the Treasury and other departments to proactively engage with insurance brokers and the live sector itself to come up with a solution.”

“We wholeheartedly support the DCMS Committee’s letter to the prime minster and chancellor calling on them to support UK festivals before it is too late,” says Greg Parmley, CEO of LIVE. “Our festivals are the envy of the world, contributing £1.76 billion to the economy and supporting 85,000 jobs every year.

“Without a government-backed insurance scheme it will be impossible to get festivals back this summer, as the months of planning and preparation it takes to create these culturally significant events means that decisions need be made now. We are grateful for the DCMS Committee for understanding the urgency of this issue, for listening to the sector and supporting our calls for further support.

Government-backed insurance funds for events are already in place in Austria and Germany, with the Netherlands also considering whether to adopt a similar scheme.

 


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DCMS criticises “failure” of UK govt to support live

The UK’s Digital, Culture, Media and Sport (DCMS) Committee has stated that the government’s support package for cultural industries came “too late for many”, and has called for further urgent sector-specific measures.

In the ‘Impact of Covid-19 on DCMS Sectors’ report, the committee states that the government’s recent £1.57 billion support package for the arts, while welcome, “will not be enough to stop mass redundancies and the permanent closure of our cultural infrastructure”.

In addition to the support package, which came after an intense day of lobbying from the UK live industry, the committee calls for an extension to the government’s furlough scheme – currently set to expire at the end of October – until mass gatherings are permitted; continued workforce support measures, including enhanced measures for freelancers and small companies; clear “if conditional” timelines for when events will be able to reopen, with a date for stage five of the government’s plan to reopen events set by 1 August at the latest; and “technological solutions”, such as app-based testing and tracking systems, to allow audiences to return without social distancing.

The committee also recommends the creation of a long-term pandemic reinsurance scheme, ensuring cultural industries are covered by “adequate insurance” in the future, as well as “long-term structural support” to rebuild audience figures, including sector-specific tax reliefs and a value-added tax (VAT) cut for the sector for the next three years. The British government has currently cut VAT on event tickets to 5% until the end of the year.

As for the previously announced funding, the committee demands the government “publish eligibility criteria and application guidance as soon as possible”, as well as “ensur[ing] that the funding reaches recipients no later than October 2020”.

“To reduce uncertainty, the government must publish eligibility criteria  as soon as possible”

The DCMS committee is calling for “sector-specific versions” of the current job retention and self-employed income support schemes to be implemented by October 2020 “at the latest” and kept open until income returns to “sustainable levels”. The committee notes that existing support schemes, such as the self-employed income support scheme and coronavirus business interruption loan scheme, do not cover many working in the live industry.

The report also points out that a large number of festivals, outdoor events and city centre venues have also been unable to access grants earmarked for the retail, hospitality and leisure industries, as the scheme requires businesses to occupy properties with a certain rateable value.

Using data gathered from across the live industry, the committe highlights the threats posed to the UK’s venues and festivals, with over 90% of grassroot music venues in Britain currently face permanent closure, as estimated by the Music Venue Trust (MVT), and the 23 UK arenas making up the National Arenas Association set to lose almost £235m in ticket sales over a six-month period.

As for the festival sector, the report state that: “The seasonality of the industry means that cancellations over spring and summer mean a complete loss of income for the year ahead, which could have devastating consequences for the SMEs and self-employed workers in the live events supply chain.”

The Association of Independent Festivals (AIF) has previously stated that 92% of its member festivals are facing permanent collapse.

“We are witnessing the biggest threat to our cultural landscape in a generation,” comments DCMS committee chair Julian Knight.

“We are witnessing the biggest threat to our cultural landscape in a generation”

“The failure of the government to act quickly has jeopardised the future of institutions that are part of our national life and the livelihoods of those who work for them. Our report points to a department that has been treated as a ‘Cinderella’ by government when it comes to spending, despite the enormous contribution that the DCMS sectors make to the economy and job creation.

“We can see the damaging effect that has had on the robustness and ability of these areas to recover from the Covid crisis. We urge the government to act on our recommendations, to recognise the value these sectors provide and imagine how much bleaker the outcome for all without their survival.”

Representatives from across the UK live industry have welcomed the DCMS recommendations. UK Music acting CEO Tom Kiehl has called the document a “watershed report in the fight for survival for many companies and individuals working across the music industry.”

“We fully support the conclusions of today’s important report and want to send out thanks to the committee for recognising the value in our industry,” comments Phil Bowdery, chairman of the Concert Promoters Association and executive president of Live Nation.

“This report demonstrates that a sector-specific deal to support the industry, conditional timelines for reopening without social distancing and long-term structural support are going to be vital in ensuring the survival of the live music in the UK.

“We look forward to continuing to work with the government to ensure that the entire sector can be supported through this time.”

“This report demonstrates that a sector-specific deal to support the industry is going to be vital in ensuring the survival of the live music in the UK”

Mark Davyd, CEO of MVT, commends the recognition of the “urgency of short-term measures to prevent the catastrophic loss of vital infrastructure”, as well as more long-term measures aimed at “restor[ing] the sector to health and to future proof it against threats”.

From a production point of view, Andy Lenthall, general manager of the Production Services Association (PSA) says it is “hugely heartening” that the DCMS has recognised the “vital part” suppliers and technicians play in the cultural ecosystem.

AIF CEO Paul Reed similarly welcomes the findings of the report “which specifically acknowledges that the UK’s thriving festival and live events sector has been particularly badly hit by this crisis”.

“We’re particularly pleased to see that our recommendations for long-term relief, including extensions of existing employment support schemes and an extended VAT cut, have been taken onboard,” says Reed.

“We look forward to working further with DCMS to ensure that the festival sector, which generates £1.75bn for the UK economy and supports 85,000 jobs, can survive and continue to thrive into 2021 and beyond.”

The report is available to read in full here.

Photo: Chris McAndrew/UK Parliament (CC BY 3.0) (cropped)

 


This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.

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