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Mini-budget ‘delivers little’ for UK live sector

UK live music trade bodies have expressed disappointment over chancellor Kwasi Kwarteng’s mini-budget.

Measures outlined by Kwarteng in the House of Commons today in a bid to boost growth included a 1p cut to the basic rate of income tax from April 2023, along with the abolition of the 45p tax rate for top earners over £150,000, while a planned rise on corporation tax from 19% to 25% has been scrapped and a 1.25% rise in National Insurance to be reversed.

But LIVE CEO Jon Collins, who wrote an open letter to the chancellor earlier this week calling for a reduction in VAT and business rates, says the announcement does little to help the live sector.

“Today’s announcement delivers little for the UK’s world leading live music industry”

“While we are pleased to see the government taking steps to alleviate the cost-of-living crisis, today’s announcement delivers little for the UK’s world leading live music industry,” he says. “Jobs are already on a knife edge, and we agree with the chancellor that there are too many barriers in sectors like ours where the UK leads the world. Combined with the impact of reduced public spending power and rising costs across the supply chain, businesses that are already struggling to turn a profit will face bankruptcy and closure.

“Only the emergency measures that we have suggested to government will prevent this – injecting cash into the bottom line of struggling businesses through a reduction in VAT on ticket sales, as well as major reform of business rates.”

Association of Independent Festivals (AIF) CEO Paul Reed adds his voice to the chorus of disapproval.

“Today’s announcement from the chancellor means very little for our £1.76bn UK festival industry,” he says. “We’ve faced unprecedented challenges on increased costs, supply chain and low consumer confidence, with audiences facing a social emergency. This shows no sign of relenting as we look to 2023.

“What we need is an urgent reduction of VAT on tickets to 5%, and an assurance that festival businesses will be classed as vulnerable and eligible for support with the energy crisis beyond March 2023.”

Night-Time Industries Association (NTIA) chief Michael Kill also shares his frustration at the mini-budget, which he says has left the night time economy in the cold.

“I would urge the chancellor and government to reconsider these measures, given the limited impacts of the current tax cuts on the immediate crisis for many businesses across the sector”

“We are extremely disappointed with the chancellor’s announcement this morning,” he says. “It will be seen as a missed opportunity to support businesses that have been hardest hit during this crisis, causing considerable anxiety, anger and frustration across the sector as once again they feel that many will have been left out in the cold.”

Earlier this week, the government revealed its Energy Bill Relief Scheme, which will see energy bills for UK businesses cut by around half of their expected level this winter. The news followed the revelation 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 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. Kwarteng says the subsidising of both domestic and business energy bills will cost £60 billion for the next six months.

But Kill stresses that the intervention is “unlikely to be enough to ensure businesses have the financial headroom to survive the winter”.

“I would urge the chancellor and government to reconsider these measures, given the limited impacts of the current tax cuts on the immediate crisis for many businesses across the sector, the extremely vulnerable position the night time economy and hospitality sectors remain in, and re-evaluate the inclusion of general business rates relief and the reduction of VAT within these measures,” he says.

 


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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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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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Scottish parliament approves vaccine passports

The Scottish parliament yesterday (9 September) approved plans for vaccine passports, which will come into force from 1 October for those seeking entry to nightclubs and ‘analogous venues’, as well as large-scale events.

Scotland is one of the few countries in the world to implement a vaccine passport that doesn’t include test results – following in the footsteps of Israel which also restricts entry to those who have been fully vaccinated.

The new vaccine certification rules will mean that anyone over the age of 18 will need to show they have had both doses of the vaccine before they are allowed entry to:

Exemptions will apply to under 18s (to be kept under review), participants in vaccine trials, people unable to be vaccinated for medical reasons and employees at venues within the scope of the scheme.

The Scottish government is yet to finalise a definition of ‘nightclubs and analogous venues’ prompting music industry bodies to criticise the lack of detail in the policy.

“[This policy] potentially disproportionately penalises young people, excluding one in four of them from the late-night economy”

Music Venue Trust CEO, Mark Davyd, says: “As it stands this Scottish government policy amounts to an attempt to exclude some people from going somewhere at some time, without proving adequate information on when, where, who or how.

“In doing so it potentially disproportionately penalises young people, excluding one in four of them from the late-night economy, and people from diverse backgrounds, excluding nearly 50% of them from the late-night economy.”

Davyd also complains that no financial support has been offered to deliver the policy, and none offered to mitigate the impacts it will have on business.

Affected venues will be required to download a free QR code verifier app to a smartphone or device and staff will be required to check a customer’s QR code to ensure the record of vaccination is genuine.

The cost of the app is free, but any additional staffing or infrastructure costs to deliver the scheme will be absorbed by the business.

“The Scottish government has targeted the late-night economy throughout this pandemic”

An overview on the government’s website suggests that the regulations should impose a legal obligation on the person responsible for operating the business or venue to ‘take all reasonable measures’ to restrict entry only to those fully vaccinated.

The Scottish government plans to publish guidance to set out what ‘reasonable measures’ would be proportionate in different settings with different capacities.

The Nighttime Industries Association (NTIA) – the membership of which includes many clubbing businesses that will be affected by the new requirement – says the vote has “put an already fragile nighttime economy on a dangerous path to devastation”.

“The Scottish government has targeted the late-night economy throughout this pandemic,” says Michael Kill, CEO, NTIA. “Our industry has gone to exceptional lengths to support the public health strategy in Scotland, and have been led to believe that consultation would be considered and enacted upon, but instead, we have been met with empty promises and hollow words.”

“Thousands of people in Scotland’s nighttime economy have lost jobs, businesses are overburdened with debt and many have not survived.”

“The call for evidence from the Scottish government has been ignored, and has left us no option but to challenge this, as an industry in the coming weeks, or we will suffer the catastrophic consequences of ill-thought out policy.”

Elsewhere in the UK, the British government has said it will press ahead with plans to introduce vaccine passports for nightclubs and other crowded indoor venues from the end of next month. It is rumoured that Wales is also considering launching a vaccine-only passport this autumn.

 


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Unsung Heroes 2020: Michael Kill

Unsung Heroes 2020, published in IQ 95 just before Christmas, is a tribute to some of the organisations and individuals who have gone above and beyond to help others during a year unlike any other – be that through their efforts to protect the industry, or helping those who were in desperate need.

We turned to the readership and asked you to nominate worthy causes and personalities for consideration as the inaugural members of our Unsung Heroes awards. Now, IQ can reveal the dozen most-voted Unsung Heroes of 2020, continuing with Night Time Industry Association (NTIA) CEO, Michael Kill, who follows UK-based concert promoter Alexandra Ampofo.


As the CEO of the Night Time Industry Association (NTIA), Michael Kill’s primary goal is to ensure that both its members and the wider industry has a voice. “We aim to protect, serve, and redefine the narrative surrounding nightlife without being engulfed by restrictive government structures and assumptions,” he states.

“Needless to say, the arrival of Covid-19 in March has made the past eight months the most testing and demanding in the NTIA’s short, six-year history. Fortunately, myself and the majority of the team share over two decades’ worth of experience in the night time industries, and that’s positioned us well to tackle each obstacle as it arrives.”

Covid has taken a tremendous toll on the night-time economy in the UK, with tens of thousands of businesses and millions of employees facing hardship, as government restrictions time and again ignore their plight – until Kill and his NTIA team step in…

“From the beginning of campaigning, we realised that one of our biggest strengths was the night-time community itself”

“From the very beginning of campaigning, we realised that one of our biggest strengths was the night-time community itself, and so we’ve worked hard to bring together and support businesses and individuals at every level,” says Kill. “We’ve focused heavily on strong communications, not only to galvanise our own community but also to realign the night-time industries within a cultural context so it’s recognised for its achievements and gets the backing it deserves.”

He continues, “It has been a political rollercoaster. In a bid to secure financial support packages and government clarity, we’ve come up against various task forces and departments, many with their own differing objectives and opinions. Nevertheless, campaigns like #LetUsDance and #Savenightlife have secured vital funding for the electronic music scene, raising £350k [€390k] in support of venues across the country, and securing unrivalled visibility for the cause. And there’s much more to come.

“At the NTIA, we continue to work tirelessly on behalf of the industry so that future generations can build the same connections, experiences and values that have been so pivotal to all our lives. For me – both personally and professionally – I know I wouldn’t be the same without it.”

 


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Millions expected to attend illegal parties on NYE

More than 5,000 unlawful parties are expected to take place in the UK over the new year weekend, the Night Time Industries Association (NTIA) has warned.

The association, which represents more than 100 nightclubs, bars and music venues, says there is a risk of “millions of people converging across the UK” from 31 December–3 January, sparking fears of a fresh coronavirus outbreak in January.

The situation, it says, is exacerbated by the ongoing closure of most night-time businesses, which “would normally manage huge crowds of people through the new year’s celebrations”.

Illegal raves have been on the increase across Europe since the summer as frustration builds over coronavirus restrictions preventing legal gatherings.

“There is a growing concern that new year’s eve is going to culminate in social unrest”

“There is a growing concern that new year’s eve is going to culminate in social unrest and will see a substantial number of illegal parties and mass gatherings following the closure of businesses at 11pm, with a real risk of overwhelming the police and emergency services,” comments Michael Kill, CEO of the NTIA.

“We are estimating that the UK will be witness to over 5,000 illegal parties across new year’s eve weekend. The government needs to consider ways in which to manage this grave situation – people will want to celebrate the end of 2020 in their own way, so ignoring the issue will not resolve what will be a significant car crash in every sense of the term.”

Parklife promoter and Manchester night czar Sacha Lord adds: “The closure of hospitality venues in tier three, combined with the 11pm curfew elsewhere, only serves to encourage house parties and outdoor gatherings, and it’s inevitable we will see an increase of these on new year’s eve.

“I urge all those considering hosting or attending a gathering to think about those around them who may be vulnerable to Covid-19, and to put their health and safety first.”

 


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Dance music is art

Dance music has been gradually evolving since the 1970s, embedding its influence across generations. Dance music is continually changing, uniting multiple genres, cultures, nations, and histories to create a single art form.

Therefore, not only should electronic music demand its own recognition within the arts, but it should be recognised as the one unique musical art form that acts as a conduit for all other music genres as it constantly reinvents itself.

Electronic music does not discriminate, rather it brings together, regardless of age and background. It has long been established that club and festival dance culture is a vital part of British heritage, as well as generating millions of pounds in revenue for the economy, it adds to the ever-growing nightlife tourism figures boasting 300 million visits a year across the UK.

Given the investment of many European countries in the arts sector specifically supporting and recognising the value of classic and contemporary art forms, the UK government has been under immense pressure to follow in the footsteps of their counterparts by properly funding a sector that generates significant revenues for the exchequer.

On 5 July 2020, an announcement was made by the UK culture secretary highlighting a £1.57billion (€1.73bn) arts and culture fund.

Oliver Dowden, secretary of state for digital, culture, media and sport, said, “Our arts and culture are the soul of our nation. They make our country great and are the lynchpin of our world-beating and fast-growing creative industries. I understand the grave challenges the arts face and we must protect and preserve all we can for future generations. Today we are announcing a huge support package of immediate funding to tackle the funding crisis they face. I said we would not let the arts down, and this massive investment shows our level of commitment.”

“Electronic music has always been a popular art form that reaches a diverse number of communities, but which now finds itself excluded, even if only by narrative”

But when asked about potential support for music venues and festivals on the 9 July during Parliament, he announced the fund would “cover grassroots music venues, concert halls and indoor arenas… those wholly or mainly used for performance of live music for the purposes of entertaining an audience,” with no mention of clubs or festivals.

Sector trade bodies have continually asked for clarification from the Department of Digital, Culture, Media and Sport, on whether dance music clubs, festivals and events will be included, but the department has so far failed to provide assurances or clarity, so we await the details of eligibility in the coming weeks.

The industry is astounded at the government’s failure to recognise dance music clubs and events within its narrative as part of arts and culture, and continues to drive a clear message regarding its eligibility to apply for the funding in line with the live sector.

What the government fails to understand is that much of the sector operates venues that house both live and dance/recorded music events, and in many cases, they survive symbiotically in support of each other with many successful examples within the market place.

Electronic music has always been a popular art form that reaches a diverse number of communities, but which now finds itself excluded, even if only by narrative!

Surely the Government can recognise the importance of this sector to youth culture, and through the rise of the illegal rave scene recognise the value of professional regulated spaces where people can enjoy themselves and the music safely.

The industry has to now drive the agenda, as we see the tide turn between removal of risk to management of risk, it’s time to get the science to work for us.

Dance music is the world’s third most popular music genre, with an estimated audience of over 1.5 billion. But, despite the global influence and economic importance of British dance music and culture, government support and clarity on the future of the sector has so far been very limited.

 


Michael Kill is CEO of the UK’s Night Time Industries Association.

UK biz awaits reopening info as sector faces ‘mass closures’

Industry associations in the UK have called on the government for sector-specific support and “absolute clarity” on reopening, as it is estimated that 90% of venues and festivals in the country face permanent closure.

According to the UK Live Music Group, which sits within trade body UK Music as the collective voice of promoters, festivals, agents, venues and production services, nearly a billion pounds will be wiped off the value of the UK music industry without state support and clarity on when – and how – live events will return.

Last week, grassroots venues representative the Music Venue Trust (MVT) asked for “an immediate cash injection” of £50 million, warning that a lack of immediate aid will result in “mass closures” of venues over the summer months.

The organisation also proposes a one-off cut in value-added tax (VAT) on ticket sales for the next three years for venues and promoters.

MVT states that the industry is currently facing “a substantial loss of infrastructure”, with nine out of ten venues and the festivals in the country at risk of permanent closure.

“Frustration and anger is growing within the sector to get some absolute clarity on when businesses will be able to reopen and what extended provision will be available to businesses unable to open under the measures presented by government”

The charity’s Save Our Venues campaign has so far raised £2m, providing short-term relief for many venues. However, “relying on donations simply isn’t sustainable as we move into a recovery phase”, says MVT CEO Mark Davyd, who recently spoke on an IQ Focus panel on the difficulties facing grassroots music venues.

The call comes as the UK’s Night Time Industries Association (NTIA) criticises the government for “procrastinating” over the future.

“Frustration and anger is growing within the sector to get some absolute clarity on when businesses will be able to reopen and what extended provision will be available to businesses unable to open under the measures presented by government,” comments NTIA CEO Michael Kill.

Kill says that “consistent ambiguous messaging” from the government has increased “the level of anxiety” amongst business owners.

“At what point is the government going to realise that we are playing with people’s livelihoods here, and businesses and jobs are being lost with every passing day?” asks Kill.

UK prime minister Boris Johnson is expected to announce details of the next phase of reopening – starting from 4 July – tomorrow (23 June), with updates anticipated for businesses across the hospitality sector.

The outcome of a review on the possible relaxation of the two metre social distancing rule is also expected in the coming days.

Photo: Maurice/Flickr (CC BY 2.0) (cropped)

 


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