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UK music industry welcomes COVID-19 measures and other commitments in government’s big budget statement

By | Published on Thursday 12 March 2020

Houses Of Parliament

The music industry has welcomed some of the announcements made by Rishi Sunak, the UK’s recently installed Chancellor Of The Exchequer, during his budget statement to Parliament yesterday. Sunak in essence made two budget speeches, one outlining the spending plans of ‘Boris’ Johnson’s still rather new majority government, and the other setting out some measures to help deal with the rapidly growing COVID-19 crisis.

Although so far the UK government hasn’t introduced restrictions to combat the spread of the coronavirus COVID-19, such measures could be incoming given that a rapid spread of the virus across the country is now expected. Meanwhile, official advice that people voluntarily self-isolate if they have symptoms linked to the virus is already raising questions about sick pay, as well as the specific challenges faced by the self-employed.

Even without official restrictions in place, concerns about the virus are negatively impacting high street and live entertainment businesses as people choose to stay home. And, from a music industry perspective, restrictions implemented aboard, and the resulting cancellation of shows and events, is already hitting certain companies and individuals.

Hence the various specific COVID-19 measures in Sunak’s budget. The headline-grabbing announcement for the music industry in that domain was a billion pound business rates break for small companies on the high street. Such businesses with a rateable value under £51,000 will not have to pay any business rates for the next year, which Sunak claimed would result in an average saving per company of £25,000.

Business rates have been a big talking point within the grassroots music community for years now of course, with many small venues facing significant and increased rates bills. Given the economics of grassroots live music, those business rates can jeopardise the viability of otherwise successful venues. The biggest criticism was that a rate relief scheme aimed at small businesses on the high street didn’t apply to music venues.

After much campaigning by the likes of the Music Venue Trust, the Musicians’ Union and UK Music, the government finally agreed to include venues in a 50% discount relief scheme earlier this year. Those venues will now benefit from the 100% discount for the year ahead. Which is good news for those grassroots music venues that qualify.

Welcoming the measure, the MVT said yesterday that “the announcement of a 100% cut to business rates for venues with a rateable value under £51,000 for 2020/21 is a very sensible step to protect this vulnerable sector during this current crisis”.

Not all grassroots venues will benefit from Sunak’s grand plan. Though, for those too small to benefit from the new tax break (businesses with rateable values under £12,000 already get 100% relief), Sunak did announce a grant scheme providing up to £3000 to help the smallest companies specifically deal with the impact of the coronavirus.

However, for those with a rateable value over £51,000 – which includes venues that are still small businesses with low profit margins and tight budgets – neither of these initiatives will provide any support. Which is a problem.

As MVT noted in its statement: “It remains the case that too many grassroots music venues in the UK have rateable valuations which are simply too high to benefit from either of these measures. Those venues will need additional measures bringing forward to enable them to withstand this crisis. Across the UK there are 132 grassroots music venues in this category. We will continue to consult with national, regional and local government to ensure those grassroots music venues also get the support they need”.

Given the high number of self-employed people working in the music industry – especially among artists, songwriters and musicians – Sunak’s announcements regarding support for those forced to self-isolate were also of great interest.

In its review of the budget statement, the Musicians’ Union cautiously welcomed some of the measures Sunak confirmed. It noted that “for the self-employed, the government will make benefits easier and quicker to apply for. They are temporarily removing the minimum income floor for universal credit and musicians will not need to attend a job centre in order to be able to claim. In addition, the Chancellor also announced welcome measures to allow the self-employed to defer tax payments”.

However, issues remain, said the union. Its statement continued: “The MU is calling on government to guarantee sick pay for all workers, including freelancers, from the first day of illness and is urging its members to write to their MPs and lobby for this”.

Meanwhile, the Union’s General Secretary, Horace Trubridge, said: ‘The measures announced in today’s budget are far from perfect, and the MU is aware that statutory sick pay and universal credit will not cover the loss of income faced by many members. We will continue to lobby the government for additional support for freelancers and will update members on a regular basis”.

The interim boss of cross-sector lobbying group UK Music, Tom Kiehl, also welcomed the COVID-19 specific measures announced yesterday. But he also asked the government “to constantly review financial support available to music businesses and employees in response to coronavirus and consider making further changes”.

“VAT holidays, extending statutory sick pay to the self-employed and the wider extension of business rate relief to other parts of the sector would go a long way to helping the music industry get through this difficult period”, he added.

Beyond the COVID-19 measures, Sunak also announced a general review of business rates; a new £90 million ‘arts premium’ initiative to help schools in England provide arts programmes and extracurricular activities for pupils; and that the government intends to implement the recommendations of last year’s Furman Review into how global digital companies are taxed and regulated.

The MVT welcomed the first of those promises, stating: “[We] will engage fully with government during this [business rates] review in the hope that [it] will finally result in the creation of an accurate and relevant classification for grassroots music venues that will see an end to all of them, big or small, being unfairly penalised in this outdated system”.

Meanwhile, Geoff Taylor, boss of record industry trade group the BPI, welcomed all those longer-term commitments, stating: “In addition to confirmation of the business rates discount for music venues, the £90 million per year funding for an arts premium from September 2021 is welcome. We will engage with the government as to how it can be spent effectively so as to enhance opportunities for young people to participate in music”.

“The government’s decision to accept all of the Furman Review recommendations for unlocking competition in digital markets could also ensure that platforms are held more accountable”, he then added, “which we welcome”.