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Live music industry calls for support in new UK budget, including previously rejected and “desperately needed” insurance scheme

By | Published on Monday 1 March 2021

Houses Of Parliament

The music industry has urged UK Chancellor of The Exchequer Rishi Sunak to use his new budget announcement this week to ensure that the live music sector can thrive if, as it is hoped, gigs and festivals are allowed to return this summer. In particular, there are renewed calls for a government-backed insurance scheme, so that live events can be confident that they will not lose out if cancellations are forced by any new COVID restrictions later in the year.

A number of organisations have again stressed the importance of such an insurance scheme, after it emerged last week that this idea had previously been rejected by ministers.

Leading the calls for the government to reconsider, chair of Parliament’s Digital, Culture, Media And Sport Select Committee, Julian Knight MP, says: “The Treasury rejected our earlier call for a government-backed insurance scheme that would have provided a safety net for festivals to go ahead, saying the time was not right. While we’ve seen welcome news for fans that the Reading and Leeds festivals will happen, the rest of the sector needs more than a roadmap to give them the confidence it takes to get events underway. For some, like Glastonbury, it’s already too late”.

He continues: “We’re calling on the Chancellor to review that decision now that the government has a better sense of the road to recovery. There’s still time ahead of [the] budget to give the festivals’ industry, which makes a significant contribution to the economy, the helping hand it needs”.

That call has been echoed by the Association Of Independent Festivals, which says that 92.5% of its members have said that their events will not go ahead without such insurance. It notes that for an event taking place in early July, 40% of costs would need to be paid by mid-June. With an average cost of over £6 million for its members’ events, that is a sizeable chunk of money to risk if there is any chance of an uninsured cancellation.

AIF notes that Germany, Austria, Norway and the Netherlands have all launched government-backed insurance schemes like the one that is now being called for.

The organisation is also urging Sunak to extend the 5% VAT rate that currently applies to ticket sales. It says that while that rate was introduced, dropping it from 20%, as part of COVID support efforts back in July last year, festivals are only now being able to take advantage of it, as they announce plans to put on events this year.

Referencing the schedule for lifting COVID restrictions in England announced by UK Prime Minister ‘Boris’ Johnson last week – and the subsequent uplift in festival ticket sales – AIF CEO Paul Reed says: “The Prime Minister has set out a roadmap and a ‘no earlier than’ date for festivals, and audiences have responded, demonstrating a huge appetite to be back in the fields this summer. But we need government interventions on insurance and VAT before the end of this month when festivals will need to decide whether they can commit to serious amounts of upfront capital”.

“Now that we have a ‘no earlier than’ date, insurance is the last remaining barrier to planning”, he goes on. “We know that government is aware of the insurance issue and AIF has provided evidence and data to support the case. Having injected huge consumer confidence, government should intervene at this stage and ensure that our culture-defining independent festivals can mobilise and plan for this summer. With the cut-off point for many organisers at the end of the month, this really is the final countdown for many businesses”.

Cross-sector trade body UK Music, meanwhile, has published a three-point plan outlining what it says are necessary moves by Sunak to ensure that the live music industry at large can play its part in “driving the post-pandemic economic recovery”.

First, it says that existing support initiatives should be extended, including the furlough and job support schemes for employers and the self-employed, the current business rate relief, the aforementioned 5% VAT rate on ticket sales, and the sector-specific grants and loans made available to creative businesses via the Cultural Recovery Fund.

Secondly, its plan also calls for a “desperately needed” government-backed insurance scheme so that organisers can begin planning summer events knowing that there is a safety net if they do not go ahead. And finally, it says that the government should provide more support for UK music exports, including boosting the existing Music Export Growth Scheme and launching a music export office.

“Everyone is determined to deliver the truly memorable musical celebration that we all need as we emerge from the terrible impact of COVID-19”, says UK Music chief exec Jamie Njoku-Goodwin. “We want the Chancellor to use his budget to deliver the best of British sounds this summer and ensure live music is back to lift our spirits and help drive the post-pandemic recovery”.

Commenting on that need for an insurance scheme, he goes on: “We must have a government-backed insurance scheme so event organisers can plan with certainty and avoid financial ruin if COVID-19 forces fresh cancellations. With no insurance available, the risk of putting on events in June and July will be too great for many organisers to bear”.

“If we fail to follow other governments that are offering insurance schemes to safeguard live music and events, the UK runs the risk of standing at the side of the dancefloor as other nations party through the summer”, he concludes.

Meanwhile, turning attention fully to brick and mortar venues, the Night Time Industries Association has called for support to ensure the survival of all clubs, bars and venues in this budget.

“It is clear the Chancellor has an extremely difficult job in balancing the budget between regeneration and recuperation”, says NTIA CEO Michael Kill. “We would urge the government to consider some of the hardest hit industries, many of which have been unable to trade at all for over twelve months. These businesses and individuals have continued to be excluded from a government provision, and require proportionate and specific support, not broad brush provision to survive this very difficult period leading to re-engagement”.

Whether Sunak and the government will heed any of this remains to be seen. The budget is due to be announced on Wednesday.

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