Live groups blast government’s energy relief plan
Live music organisations have reacted with disappointment to details of the UK government’s new Energy Bills Discount Scheme (EBDS).
Chancellor Jeremy Hunt unveiled the scaled-back initiative, which will replace the existing Energy Bill Relief Scheme from 1 April and will run for 12 months, earlier this week.
Sky News reports the EBDS will cost taxpayers £12.5 billion less and will reduce rather than cap energy cost. Businesses will only able to benefit from the scheme when bills reach £302 and £107 per MWh for electricity and gas, respectively.
Previously, wholesale prices were 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 government has been clear that such levels of support were time-limited and intended as a bridge to allow businesses to adapt,” says a statement from HM Treasury. “The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.
“The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets.”
“The average energy bill for live music venues has gone up by nearly 300% which is leading to permanent venue closures as owners struggle to cover costs”
However, Jon Collins, CEO of trade body LIVE, says the latest measures have increased the level of uncertainty for venue operators.
“The average energy bill for live music venues has gone up by nearly 300% which is leading to permanent venue closures as owners struggle to cover costs,” he says. “This decision further jeopardises these well-loved establishments – restricting access to live music, inhibiting venues’ ability to turn a profit, and damaging town and city centres at a time when we desperately need growth.”
Mark Davyd, CEO of grassroots venues organisation Music Venue Trust, describes the latest measures as “bizarre” and is calling for further clarification from the chancellor.
“The challenges caused by energy bills to grassroots music venues is understood by Jeremy Hunt and the government to be so bad that he has been compelled to write to Ofgem asking that they take action and do something about it,” says Davyd. “That’s good – something does need to be done, because the charges and conditions being forced upon the sector are absurd. The average increase in the sector is 278%. Demands are being made for excessive deposits, suppliers don’t actually want to supply and frankly, there is no market. There is simply an expensive monopoly with extraordinary prices and conditions.
“However, apparently the same evidence that has caused Jeremy Hunt to send the letter to Ofgem laying out these issues was considered insufficient that it would cause him to include Grassroots Music Venues within the specific support he subsequently announced. Venues, alongside the whole of hospitality, have been dumped into a general category of support that is so insufficient that it must inevitably result in permanent closures of venues.
“We are therefore forced to conclude that whilst Jeremy Hunt fully accepts that these energy bills will close music venues, he is not prepared to do anything concrete about it… except send letters”
“We are therefore forced to conclude that whilst Jeremy Hunt fully accepts that these energy bills will close music venues, he is not prepared to do anything concrete about it… except send letters.”
He continues: “The package of supported industries includes libraries and museums, who have neither comparatively high energy bills nor a non-functioning energy market and the basis on which he seems to have made the decisions on what would and would not be included in a package of support from 1 April are, at best, highly unusual.
“Mr Hunt has told Ofgem he would like to see the results of the investigation he has asked for in time for the budget. We would strongly urge them to complete that work with sufficient expediency that the chancellor can revisit the support in that budget and recognise that grassroots music venues should have been included within the exceptional support he has offered to libraries and museums.”
Elsewhere, Night-Time Industries Association chief Michael Kill says the announcement highlights that the government is “out of touch” with businesses.
“The scaling back of the energy relief scheme by government at the end of April will without doubt mean thousands of businesses and jobs will be lost in the coming months,” he adds.
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Budget prompts call for UK live music commission
The UK’s Music Venue Trust (MVT) is calling on the government to set up a live music commission after criticising the “missed opportunities” of today’s budget presented by chancellor Jeremy Hunt.
The organisation welcomes Hunt’s announcement, delivered as part of his Autumn Statement, that business rates relief will be extended from 50% to 75% from 1 April 2023 and urges the chancellor and PM to bring forward a full review of the issue for grassroots venues “at the earliest opportunity”.
However there was further frustration for the industry, as pleas to reduce VAT on ticketing were ignored once more.
“A live music commission can provide the government with the tools it needs to be able to recognise the incredible asset the UK has in its grassroots music venues”
“Multiple opportunities to stabilise and grow the live music sector are being consistently missed,” says MVT CEO Mark Davyd. “Our grassroots music venue sector creates 29,000 jobs, delivering over 170,000 performances to more than 20 million people. It is a vital sector with real opportunities to deliver growth, but that is not recognised and acted upon in this Autumn Statement.
“In light of these missed opportunities, Music Venue Trust calls for the government to set up a live music commission. This body can be charged with considering the significant opportunities to stabilise and grow the live music sector, with the aim of informing future government policy so that these opportunities are not consistently missed.
“A live music commission can provide the government with the tools it needs to be able to recognise the incredible asset the UK has in its grassroots music venues and ensure that future policy protects, secures and improves them.”
“Unprecedented operating conditions are pushing our sector to the brink”
Jon Collins, CEO of trade body LIVE, acknowledges the government’s desire to bring stability to the UK economy, but says the budget offers “little help” to secure the future of the UK’s live industry.
“Unprecedented operating conditions are pushing our sector to the brink, as much-loved venues close their doors, tours are cancelled and artists drop out of the industry,” he says.
“The pandemic hangover combined with the increased cost of living has led to 54% of people stating they are less disposed to attending live entertainment, putting incredible pressure on the live music sector. Today, we renew our call for a reintroduction of a lower VAT rate on ticket sales to inject cash into the bottom line of struggling businesses, bring us in line with many other European countries, and secure the future of live music for all.”
“When businesses should be preparing for the busiest period of the year, they are now having to consider their future”
The Night Time Industries Association (NTIA), which has more than 1,400 members, including nightclubs, bars, casinos, festivals, and supply chain businesses ,also criticises the budget for a perceived lack of clarity and suggests the measures outlined do not gone far enough.
“This government is guilty of neglecting thousands of businesses and millions of employees and freelancers across the night time economy, this budget has not gone far enough and still lacks clarity, and will without doubt see a huge swathe of SMEs [small and medium enterprises] and independent businesses disappear in the coming months,” says NTIA chief Michael Kill.
“When businesses should be preparing for the busiest period of the year, they are now having to consider their future, and will remember the fourth failed attempt to deliver a budget to safeguard businesses at the sharpest end of the crisis. There is no consideration for the human impact, this will have a devastating effect on not only business owners, but the individuals and families who have committed their lives and livelihoods to this sector.”
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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 businesses face closure over energy crisis
Grassroots music venues are among the small and medium-sized businesses in the UK that are facing closure without immediate action to curb rocketing fuel bills.
With businesses excluded from the energy cap, some 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.
Based on a survey of its 941 venue members, Music Venue Trust (MVT) 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.
One venue has been quoted £42,000 a year for fuel – more than treble its previous bill of £13,200 – with the supplier saying they will only accept full payment in advance.
MVT is now warning that the surge in energy bills means that around 30% of the entire network of venues face the threat of permanent closure.
Around 30% of MVT’s entire network of venues face the threat of permanent closure
Pubs are also seeing energy costs soar by as much as 300%, with brewery bosses telling the BBC that the crisis would cause “real and serious irreversible” damage to the industry without support.
Both the hospitality and entertainment sectors are now urging the government to introduce a cap on the price of energy for businesses. The live music sector is also calling for VAT to be decreased from the current 20% to 12.5% and for business rates relief to be extended.
“Alongside the simply unaffordable increases to costs, the government must urgently address the fact that the market for energy supply has collapsed,” says 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.”
“The new prime minister must ensure that music businesses are included in the support measures”
UK Music chief executive Jamie Njoku-Goodwin adds: “Spiralling energy costs have created an existential threat for venues and music studios. It’s urgent that government takes action to support businesses with the costs they are facing.
“We all saw just how miserable life was without live music during the pandemic, when venues were closed for months – the high cost of energy bills could now close them forever.
“The new prime minister must ensure that music businesses are included in the support measures that are brought forward to deal with soaring energy costs.
“The government should look at cutting VAT and extending business rate support to help music businesses that are fighting for their survival.”
Last week, 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. Read the full story here.
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Sacha Lord appointed chair of NTIA board
Parklife and The Warehouse Project co-founder Sacha Lord has been appointed chair of the UK’s Night Time Industries Association (NTIA) board of directors.
Lord, who is night time economy advisor for Greater Manchester, has worked with the NTIA and stakeholders across the UK over the last two years.
The trade association has been at the heart of the fight to gain representation and support for businesses throughout the pandemic.
“The Night Time Industries Association is a critical player in the sector, and has been a key voice in representing operators, not just in London but nationally across the UK,” says Lord.
“I am honoured to be joining as chair at this pivotal time in the sector’s recovery. There is still so much work to be done to help operators through these difficult times, and I wholly support the NTIA in their efforts to create better working practices for those in the industry, achieve greater funding for businesses nationwide, and develop vital initiatives to ensure everyone working within, or using the night time economy, gets home safely.”
“We are looking forward to harnessing his passion and drive in establishing a stronger voice for the sector”
NTIA CEO Michael Kill adds: “I have been lucky enough to have worked very closely with Sacha over the last three years, and alongside welcoming him as the chair of the board of directors at the Night Time Industries Association, would like to personally thank him on behalf of the industry for his exceptional work and support during the crisis.
“As a leading figurehead within our industry, we are looking forward to harnessing his passion and drive in establishing a stronger voice for the sector, adding another dimension to the public and political agenda to drive home positive change, and support an extremely ambitious strategy for the sector in the future. The unanimous appointment by the board is testament to the tireless work that he has put into representing this industry.”
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UK grassroots sector facing fresh Covid crisis
The Music Venue Trust (MVT) has warned the UK’s grassroots circuit is on the brink of collapse in the wake of fresh government restrictions.
The organisation reports that small venues have been hit by a catastrophic drop in attendance, advance ticket sales and spend per head since last Wednesday’s announcement of Plan B measures to tackle the spread of the Omicron variant, placing the entire sector back on red alert for the risk of permanent closures.
As a result, the MVT is calling on culture secretary Nadine Dorries to create a ring-fenced stabilisation fund to protect the sector, stressing that significant funding from the £1.7 billion Culture Recovery Fund remains unspent and unallocated.
“This is the busiest time of the year for grassroots music venues, representing more than 20% of their annual income being raised during the party season,” says MVT strategic director Beverley Whitrick.
“Rapid declines in attendance at this time of year represent an exponential threat to the whole sector, and losses of this magnitude cannot be sustained without throwing hundreds of music venues into crisis mode and at risk of permanent closure. A ‘no show’ isn’t just lost ticket income, it’s lost bar take and excess staff costs.”
It feels like we are back exactly where we were in March 2020
The MVT says losses over the last week were close to £2 million, with 86% of venues reporting negative impacts and 61% having to cancel at least one event. The biggest causes of cancellations were a performer/member of the touring party testing positive for Covid (35.6%), private hire bookings cancelled by the organiser (31.3%) and poor sales performance (23.6%).
MVT CEO Mark Davyd likens the predicament to the early days of the pandemic.
“It feels like we are back exactly where we were in March 2020, when confusing government messaging created a ‘stealth lockdown’ – venues apparently able to open but in reality haemorrhaging money at a rate that will inevitably result in permanent closures unless the government acts quickly to prevent it,” he says.
“We have been here before. This time the government already has all the tools in place that it needs to manage this impact and prevent permanent closures in the grassroots music venue sector. The Culture Recovery Fund can be swiftly adapted to mitigate this economic impact, the money is already there and waiting, we just need the secretary of state to act quickly.
“The government previously used business rate suspension and VAT cuts to support and sustain the sector. We don’t need to spend time considering the situation; the government already knows what can be done and can choose very quickly to do it.”
MPs yesterday voted to back the government’s “Plan B” measures to tackle Omicron by introducing vaccine certificates or negative lateral flow tests to enter venues. The move was criticised by Night-Time Industries Association (NTIA) chief Michael Kill.
“We are disappointed that MPs have voted into law covid passports for nightclubs,” he says. “The NTIA have consistently opposed their introduction due to the many logistical challenges they pose for night time economy businesses and what we have seen in Scotland and Wales where they have dampened trade by 30% and 26% respectively.
“It is very disappointing that, after flip flopping on the issue twice, the government have decided to press ahead with the plans despite no evidence of their impact on transmission of the virus.”
IQ has compiled the latest live music restrictions affecting key international touring markets in Europe here, and the rest of the world here.
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Vaccine passports to be introduced in England
Vaccine passports and facemasks will be required in order to attend concerts in England as part of tougher restrictions unveiled by the government in response to the Omicron variant.
Speaking at a hastily arranged press conference in Downing Street, prime minister Boris Johnson said the rapid increase in infections meant it was necessary to implement its “Plan B” measures to combat the spread of the virus.
The new rules, he said, would “help to keep these events and venues open at full capacity, while giving everyone who attends them confidence that those around them have done the responsible thing to minimise risk to others”.
From next Wednesday (15 December), the wearing of face masks will be mandated in all venues where crowds gather, and Covid certificates will be needed for:
* Venues where large crowds gather, including nightclubs
* Unseated indoor venues with more than 500 people
* Unseated outdoor venues with more than 4,000 people
The introduction of a negative LFT in the certification scheme follows extended lobbying by the sector to include the measure in any new restrictions. Earlier this week the Scottish government also added LFTs to their own rules.
Johnson added that, “The NHS Covid Pass can still be obtained with two doses but we will keep this under review as the boosters roll out.”
The introduction of Plan B results in an unfair double standard
Reacting to the announcement, a spokesperson for music trade body LIVE said: “The introduction of Plan B results in an unfair double standard that allows people to go on all-day pub crawls in crowded bars without having to prove their Covid-19 status, whilst live music venues get hit with certification.
“Across the country, music venues and events already have tried, tested and workable systems in place to ensure that live events continue to be safe – and these remain effective. However, after such a prolonged closure throughout the pandemic it is important the industry is able to remain open and that the government have listened to the industry and included the use of lateral flow testing in covid certification.”
The botched rollout of Scotland’s vaccine passport app earlier this autumn cost venues £250,000 a week, according to the Music Venue Trust.
The Scottish Music Venues Alliance reported a 39% dip in business per week, amounting to £249,471.23, since vaccine certification became mandatory for large events and nightclubs on 1 October, while a vast majority of people experienced repeated problems in registering and uploading their personal vaccine status to the app.
Vaccine passports have a damaging impact on night-time economy businesses
Mark Davyd, CEO Music Venue Trust, says: “Whilst this is obviously a blow to the progress in the battle against the virus, we are pleased that the government has listened to the grassroots music venue sector and adopted a Covid Pass policy that recognises testing and applies to larger gatherings – those venues operating at above 500 capacity.
“MVT’s #TakeaTest policy has been extremely successful in limiting infection incidents in grassroots music venues, and we welcome the announcement that this has been recognised in the new policy. Regardless of the size of the event you are attending, we continue to urge music lovers to #TakeaTest”.
Michael Kill, CEO of the Night-time Industries Association (NTIA), adds: “Vaccine passports have a damaging impact on night-time economy businesses, as we seen in other parts of the UK where they have been implemented. Trade is down 30% in Scotland and 26% in Wales following their implementation.
“The UK government have twice ruled out vaccine passports before twice changing their mind. The mixed public health messages this week that have been coming out of the government have arrived at the worst possible time – the pre-Christmas period is absolutely crucial for our sector. And now it is announced damaging vaccine passports are to be implemented.”
Check out the latest information on certification schemes, social distancing requirements, mask mandates, capacity restrictions and lockdowns affecting key European markets here.
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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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