After a year of financial devastation for the live music industry, today’s Budget from the Chancellor has brought welcome confirmation that financial support will be available for businesses whilst they remain closed. This will include an additional £300 million for the Cultural Recovery Fund, as well as Restart Grants, the extension of the Coronavirus Job Retention Scheme, SEISS and business rate relief.
The Budget also confirmed an extension of the 5% rate of VAT on ticket sales, a key campaign focus for LIVE and the whole live music industry. Until now the industry has been unable to benefit from this policy, which was first introduced last year, as the almost total closure of the industry dramatically reduced ticket sales. Today’s extension of the 5% rate for a further six months, with an interim rate of 12.5% until April 2022, will provide crucial income to businesses across the live music ecosystem whilst they recover.
Live music will be closed, or uneconomical, for the months ahead, with a return to normality not possible until the summer at the earliest.
The industry was disappointed that today the Chancellor failed to announce a Government backed insurance scheme. This would provide businesses with the security and confidence they need and is vital to saving the summer and autumn for live music. Festivals and large events take months of preparation and the lack of insurance will lead to further cancellations.
The revenue in the live music industry has been almost zero since the beginning of Covid-19 restrictions, with 2020 revenue falling by 81% in comparison to 2019 and almost 155,000 roles effectively ceasing to exist. Prior to the outbreak of the pandemic, the UK’s creative industries were growing at five times the rate of the wider economy, generating £4.5 billion to the UK’s annual GVA.
Greg Parmley, CEO of LIVE, said: “We warmly welcome the additional financial support the Chancellor announced in his Budget today, which is due recognition from Government that the live music industry has been one of the hardest hit by the pandemic. The extension of the reduced 5% rate of VAT, in particular, will provide significant support to businesses who have had their revenue decimated over the past year. The extension of the furlough and other employment support schemes will also be hugely important across the industry.”
“Today’s budget focused on helping live music to survive the long months of closure still ahead of us – and we desperately need that. But we also call on the Chancellor to look again at a Government-backed insurance scheme, which would ensure we can recover, and get people back to work, as quickly as possible once it is safe to lift restrictions.”
Paul Reed, CEO of Assocation of Independent Festivals, said: “We warmly welcome the extension to the reduced VAT rate on tickets, which will really help festivals during the 2021 sales cycle. For many AIF members, this is the first period in which they are selling tickets since the outset of the pandemic. We do, however, reiterate the recommendation of the DCMS Select Committee for VAT on ticket sales to remain at a reduced rate for three years so that the UK festival sector can fully recover.”
“The Culture Recovery Fund has been a lifeline for many of our members so it’s greatly encouraging to see a further £300m invested into this, though we would appreciate some further detail on this additional round and the time period it will cover.”
“We also welcome the extension to the Government’s furlough scheme and continued support for the self-employed. However, independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer. As we have repeatedly stressed, the only way they can do this is with a Government-backed insurance scheme that covers COVID-19 related cancellation. The Chancellor today confirmed the extension of the Government backed restart scheme for film and TV productions- a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market.”
Lucy Noble, Chair of National Arenas Association, said: “For the live music industry, today’s budget, and specifically the extension of furlough to September, is enormously welcome. The whole sector has been grateful for a 21 June ‘not before’ date for operating at full capacity, and the extension of the 5% VAT rate on tickets is something we had been hoping to see. Uncertainty remains and the lack of insurance for Covid-related cancellation is a huge concern – what the entire live sector wants is to be allowed to trade safely out of this situation and once more welcome people to come together for extraordinary shared experiences.”
Mark Davyd, CEO of Music Venue Trust, said: “Music Venue Trust welcomes the extensions to Furlough, SEISS and the VAT cut on ticket sales. These measures are supportive of the next steps in the campaign to Reopen Every Venue Safely. On Business Rates, we note that the Chancellor has provided a 100% cut for the initial 3 month period in which venues will not be trading. This period does not resolve the long running debate on Business Rates, and we look forward to a full discussion of this outdated and anachronistic taxation in the Business Rates Review in Autumn 2021. The Chancellor announced additional funding to be distributed by Arts Council England, but the purpose of this funding is unclear; we hope to work with ACE and DCMS to ensure it is effectively distributed, and includes sensible and structured capital investment that enables our music venues to become more Covid Secure. We look forward to hearing more detail on the Community Fund, which may prove an important contribution to tackling the issue of ownership of our cultural spaces.”
Annabella Coldrick, Chief Executive of Music Managers Forum, said: “The MMF welcomes the extension of eligibility for support to the self-employed. This is an important measure that should have an impact on our community, many of whom faced real hardship during the pandemic, although unfortunately directors of limited companies are still excluded. We also welcome the £300m Cultural Recovery Fund for reopening and the extended VAT reduction on ticket sales, however it was disappointing not to hear any developments on Government-backed insurance for live music events which is urgently needed to get us back up and running in July. For a full longer-term music recovery, to a place where artists can perform to full capacity crowds and tour internationally, we will need this kind of targeted and continued support reaching into 2022.”
Phil Bowdery, Chair of the Concert Promoters Assocation, said: “As the CPA we welcome the extension to the furlough scheme to the end of September. We also welcome the reduction in the VAT rate of 5% continuing until September and then rising to 12.5% until next March, it will greatly benefit all those involved in entertainment in the UK. The business rate holiday remains in place until June and then discounted for the following nine months will also help our industry which has virtually stopped in the last twelve months.”
“It has to be said that we are disappointed that the Chancellor did not include an Insurance or Indemnity scheme in this budget. We will carry on our fight to get this massively needed help for our industry.”
Dave Keighley, Chair of Production Services Association, said: “We welcome the continuation of support for employers and self employed workers, as well as the addition of those newly self employed sole traders; this is tempered by the disappointment that the needs of those in mixed employment and those individuals operating as Ltd companies were not met.”
“Support for companies is also broadly welcomed, although doubt over whether business rate relief applies to our members that support hospitality and leisure remains. Any discounts given to venues should be clearly extended to those companies that work in those venues, recognising that live events are an ecosystem that needs complete support. Although the extension of the 5% Vat rate helps, it needs to be extended to assist our sector’s recovery.”
“The extension to the Culture Recovery Fund is encouraging, we hope that the current and subsequent rounds will support event more of our member companies that support cultural activity.”
Steve Heap, General Secretary of Association of Festival Organisers, said: “The chancellor appears to have heard our need for support and we welcome the holding of 5% VAT on ticket sales to 30 September 2021. This extension will give festivals the chance to sell tickets at the lower rate and provide much needed cash for our businesses.”
“Our industry needs a government backed insurance scheme to allow us to get back up and running in 2021. We will continue to campaign for this insurance support because without the certainty it provides the UK economy could lose most of our economic contribution to the economy.”
“We are disappointed that without Business Premises and without Business Tax Returns thousands of freelance festival staff will again fall down the cracks and to survive on Universal Credit with its £20 per week extension.”