Energy crisis ‘existential challenge’ for live biz
UK live music trade bodies have warned the sector faces an “existential challenge” from the energy crisis after prime minister Liz Truss announced a temporary price cap for businesses.
The new PM unveiled an estimated £150 billion package today, which will see energy bills capped at £2,500 for households for next two years while the government gets the energy market “back on track”.
An equivalent price cap guarantee will be offered to all businesses, charities and public sector organisations for six months, after which a review will take place. Hospitality and other vulnerable sectors will be guaranteed additional support after the six-month period.
“We welcome the government’s energy announcement today and the measures outlined by the prime minister, but we urgently need more detail on how the government plans to support struggling businesses facing energy costs increasing by as much as 1,700%,” says LIVE CEO Jon Collins. “To support the live music industry, we also call on the government to introduce targeted action by reducing VAT on ticket sales to 5% and reforming business rates.”
“The triple threat of a cost-of-living crisis, the post-pandemic hangover, and skyrocketing energy prices could spell the end of the UK’s live music scene as we know it”
A recent industry survey revealed that music businesses across the country are currently facing enormous energy cost increases, forcing many to consider closing their doors and leading Collins to warn last week that the “triple threat of a cost-of-living crisis, the post-pandemic hangover, and skyrocketing energy prices could spell the end of the UK’s live music scene as we know it”.
“Millions of people have just enjoyed a spectacular summer of live music, but this is now under threat,” he said. “We face cuts to programming, venue closures and an unbearable strain on an already fragile industry. Government must act to protect this world-leading and uniquely British endeavour before it is too late.”
Responding to today’s intervention, Music Venue Trust venue support manager Clara Cullen stresses that a longer-term solution is required.
“The policy announced today only goes some way in alleviating the challenge”
“The financial impact of the energy price rises on the grassroots music venue sector presents an existential challenge,” she says. “For a sector with a total gross turnover of £399 million, the current rise equates to an additional £90m in costs.
“The policy announced today only goes some way in alleviating the challenge, in the very short-term, by creating an energy price cap for businesses that will be in place for an initial six months. The government has committed to reviewing this policy in conjunction with the hospitality sector. Music Venue Trust will contribute to this review to ensure the perspective of grassroots music venues is included in this decision-making process.
“As the policy announced today is only a temporary short-term measure, Music Venue Trust urges the government to take further action to ensure a long-term solution for energy provision for grassroots music venues providing an energy supply which is affordable, reliable and sustainable. We need this action to take place as soon as possible to protect, secure and improve our grassroots music venues.”
“This half measure package is tantamount to support experienced during the pandemic, but lacks considerable detail to alleviate current business concerns”
Michael Kill, CEO of the Night-Time Industries Association, believes the support package falls short of requirements.
“We are extremely disappointed at the announcement by the prime minister today,” he says. “This half measure package is tantamount to support experienced during the pandemic, but lacks considerable detail to alleviate current business concerns.”
“We have no time for drip fed support, or to await the impact assessment of incremental measures, this needs to be a concise and immediately accessible package, which is proportionate and scalable.
“As the first major announcement of the prime minister and chancellor’s tenure, the government has failed businesses today, and with mounting debt across the sector we will see many have no choice but to consider the future, placing thousands of jobs at risk in the coming weeks, without additional support.”
Last month, IQ heard from a number of European arenas who also 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.
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Nadine Dorries steps down as UK culture secretary
UK culture secretary Nadine Dorries has stepped down ahead of a cabinet reshuffle by new prime minister Liz Truss.
Dorries, a staunch ally of outgoing PM Boris Johnson, succeeded Oliver Dowden as culture secretary in September last year, becoming the seventh politician in less than five years to hold the post.
The Conservative MP, who is returning to the backbenches and is tipped to receive a peerage, says in her resignation letter that she was asked to stay on in the role by Truss, but felt she would be “better placed to support her from outside of the cabinet”.
Dorries’ controversial 12-month reign as head of the Department for Digital, Media, Culture and Sport (DCMS) has seen her attack the BBC’s licence fee model as “completely outdated“, led moves to privatise Channel 4 and draw up legislation for the Online Safety Bill.
Music Venue Trust (MVT) CEO Mark Davyd also revealed that Dorries was the first culture secretary to decline a meeting with the organisation since it was founded in 2014.
Her replacement, who is yet to be announced, will become the 11th culture secretary since the Conservatives came to power in 2010.
Truss, meanwhile, begins her term as the fourth Conservative prime minister in six years today after seeing off Rishi Sunak in a leadership contest in the wake of Johnson’s resignation.
“Without urgent action to help music venues, studios and other music businesses, there is a real risk that many will go to the wall”
She has vowed to set out a plan within a week to deal with the UK’s energy crisis, amid a warning from the MVT that the surge in energy bills means that around 30% of the entire network of venues face the threat of permanent closure.
Based on a survey of its 941 venue members, the organisation revealed that venues face an average 316% rise in fuel bills, taking the average cost to £5,179 per month per venue, up from the current average of £1,245.
“Alongside the simply unaffordable increases to costs, the government must urgently address the fact that the market for energy supply has collapsed,” said Music Venue Trust CEO Mark Davyd. “We have multiple examples where venues do not have any option other than to accept whatever price increases and tariffs are proposed by the sole supplier prepared to offer them power at all. The situation has rapidly deteriorated into a monopoly.”
UK Music chief Jamie Njoku-Goodwin is also urging Truss to make tackling the cost of living crisis facing the music industry a key priority, and called on the new PM to repeat the action the government took to help the music and hospitality sector during the pandemic, when the VAT rate was cut from 20% to 5%.
“During the campaign, Liz Truss rightly talked about the need to tackle the crippling cost of living – and she must now deliver on that commitment immediately,” he says. “Without urgent action to help music venues, studios and other music businesses, there is a real risk that many will go to the wall.”
Michael Kill, CEO of the Night-Time Industries Association (NTIA), congratulated Truss on her appointment, adding: “It is now vital that the new prime minister takes this opportunity to be decisive in tackling the cost inflation crisis, over the coming days, by reducing VAT across the board, extending business rates relief and implementing an energy cap for small medium enterprise businesses.”
“Over the coming weeks without an effective intervention from the government, we will see thousands of businesses go to the wall and millions of jobs lost.”
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