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Music industry criticises lack of support in Chancellor Jeremy Hunt’s first full UK budget

By | Published on Thursday 16 March 2023

Houses Of Parliament

Jeremy Hunt delivered his first full budget statement as the UK government’s Chancellor Of The Exchequer yesterday, with plans to boost pensions, provide better childcare support and ease the cost of living crisis.

These have drawn both criticism and praise. However, within the music industry, various organisations have been lining up to deride the politician for his failure to support the struggling live music sector. The Music Venue Trust says that this will “inevitably mean that 2023 will be the worst year for [grassroots music venue] closures since the creation of MVT in 2014”.

The live music industry has been calling for some time now, on successive chancellors, to put in place a variety of measures that would help venues and other live music companies survive the cost of living crisis and fully recover from the impact of the COVID-caused shutdowns. That included various proposals that were put forward after Hunt delivered a ‘mini-budget’ in November.

Hunt is now accused of missing “a golden opportunity” in his latest financial statement. There has been some praise – we should probably add – for his plans to extend tax relief for orchestras. But, when this is seemingly the only provision to specifically support music in the budget, it is nowhere near enough, or so say various music industry representatives.

“The government has missed a golden opportunity to support the hardest hit in our sector, as well as turbocharging the whole industry to programme more gigs, shows and festivals up and down the country”, says Jon Collins, CEO of live sector trade group LIVE. “This would deliver millions into local economies and support the Chancellor’s ambition for the UK to be a dynamic enterprise economy”.

“The government could have backed the grassroots of the UK’s live music sector”, he went on, “including a whole host of budding artists, SMEs and independent venues, as they recover from the damage inflicted by the pandemic; a recovery hampered by double digit inflation and the subsequent cost of production and cost-of-living crisis”.

“At the same time”, he went on, “the government could have taken steps to accelerate activity for more established artists, suppliers and venues that would have poured millions into local economies across the UK”.

Musicians Union General Secretary Naomi Pohl comments: “We are grateful that the government has listened to the MU and others in the creative sectors and extended the higher rate of tax relief for theatres and orchestras for another two years”.

“The cuts announced to the BBC Orchestras and Singers last week, along with those brought in by Arts Council England in the autumn, are a stark reminder of the difficulties currently being faced by arts organisations, so this extra injection of cash is a vital lifeline for an incredibly successful sector”.

“As noted by the Chancellor today, the creative industries are growing at twice the rate of the economy and the uplifted rate has been driving a much higher rate of activity and employment in the sector than would otherwise have been possible”, she goes on. “That said, at the MU we hope that the money provided by this extension of tax relief does filter down to the musicians, performers and other creatives who drive this exceptionally successful sector”.

The Association Of Independent Music’s CEO Silvia Montello says: “Although it’s encouraging to see the government extend help to small businesses, the lack of support for the UK music industry in today’s budget is worrying. The business currently faces an array of challenges – from increased costs of touring, to the negative effects of leaving the EU and continued economic pressures on our SMEs”.

She added that a lack of support more widely across the music industry was failing the independent music sector and reducing diversity among performers, stating: “Our competitive position within the global music market is in decline and requires urgent investment across our industry. This means introducing greater support for diverse and developing talent, much of which is nurtured within the independent sector that represents nearly 30% of the UK recordings business and 80% of new music releases”.

“Key measures must include fiscal incentives for music – on par with those already implemented across film, TV, animation and video games industries – to stimulate content creation and sector growth, and increased support for the live sector, such as reducing VAT on gig tickets in line with other European countries”, she continues.

“AIM would welcome the introduction of an ‘arts pupil premium’ to help lower the socio-economic barrier to music education in schools, and the creation of a national music export office to reflect the UK music industry’s position as a net exporter and help British talent continue to build global audiences”.

“As part of the UK’s commitment to growing AI and emerging technologies, it’s vital that music IP and copyright protections remain robust, to protect the income and livelihoods of our recorded music creators and performers”, she concludes.

As ever, some of the most damning criticism came from the Music Venue Trust, which laid out the bleak situation facing many of the grassroots music venues it represents – particularly in the face of surging energy prices, as support in that regard is reduced at the end of this month

“Music Venue Trust recently presented to Department For Digital, Culture, Media & Sport and HM Treasury details of the negative impacts that failure to extend the enhanced business energy relief scheme would have on grassroots music venues from 1 Apr 2023”, it says.

“Already in 2023 one grassroots music venue is closing every week. The budget was an opportunity to ensure that this number of closures did not explode from the 1 Apr when grassroots music venues will be hit by excessive and unaffordable energy bills. The Chancellor has failed to respond to the evidence we submitted. There is no additional support for music venues and the inevitable result will be mass closures of venues”.

“We note that, as per the last five years of budgets, significant opportunities to support the grassroots music venue sector have been overlooked”, it goes on. “This network of venues across the country is a prime opportunity to improve productivity, enhance local jobs, and support struggling communities. We welcome the support for theatres, museums, art galleries and orchestras, but once again we note that all the Chancellor’s announcements on tax relief for these sectors exclude grassroots music venues and artists”.

“We also note that the opportunities to support research and development in this sector has been once again missed; the research and development tax reliefs announced are not relevant to the grassroots music venue sector”, it adds. “We remain keen to work with the government to unlock the opportunity that the grassroots music venue sector presents. We hope that in the near future a budget statement will be made that recognises and acknowledges the economic, cultural and community opportunity these venues present”.

“Regrettably”, it concludes, “the failure to act on energy bills must inevitably mean that 2023 will be the worst year for closures since the creation of MVT in 2014. In the absence of any action to this challenge by the government we will once again be reaching out to the energy supply companies to try to avert closures”.

“It is plainly in no one’s interest to allow buildings that house grassroots music venues to become abandoned as the cost of energy needed to open those spaces to the public and performers cannot be met by any venue operator”.

Finally, UK Music Deputy Chief Executive Tom Kiehl ran though all the various proposals for government support that the cross-sector trade group believes are necessary, proposals which it recently set out in an eight-point plan.

“We are glad the government has listened to the calls from UK Music and our members for the orchestra tax relief to be extended”, says Kiehl. “However, there is still a serious threat from the planned BBC cuts to orchestras which we want to see reversed”.

“We remain firmly opposed to the need for a broad exception to copyright for text and data mining and are unconvinced of the need for new legislation in this area”, he continues. “We will continue to engage constructively with the government’s plans to provide clarity on the application of intellectual property law to the AI sector”.

“With the continued pressure on venues and studios, it’s disappointing that the government did not offer any further direct support on business rates, VAT and energy bills”, he adds.

Returning to that eight-point plan, he states: “We would urge the government to back the remaining parts of our eight-point plan that UK Music and our members have drawn up to help turbo-charge the music business and drive economic growth”.

“The music industry can play a vital role in helping spearhead growth, but we need government help to deliver thousands of new jobs, to boost UK exports and support music education. As the collective voice of the music industry, UK Music devised the eight-point blueprint for the government to help ensure the sector retains its competitive edge and continues to grow”.

In addition to its proposal relating to tax relief for orchestras, UK Music’s plan also called for: more support to venues, studios and other music spaces facing soaring energy bills; a cut to business rates for venues and studios; a reduction on VAT for tickets to 5%; a new tax relief for the music industry as a whole; the launch of a British music export office; an arts pupil premium to support students wishing to access music education; and a support package to hep the music industry deal with the extra costs of leaving the EU.

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