Delegates at the Conservative conference were told this week that the live music sector could take a minimum of three years to recover from the pandemic lockdown.
Music industry campaigning and lobbying group UK Music assembled a panel of experts at the conference to discuss plans to help the music and events industry return to growth after the devastating impact of Covid-19.
Chaired by UK Music CEO Jamie Njoku-Goodwin, the audience at the Conservative conference was given the opportunity to question a panel featuring Parklife Festival (cap. 80,000) and Warehouse project (cap.16,000) co-creator Sacha Lord, Conservative MP and All-Party Parliamentary Group (APPG) for Events chair Theresa Villiers, chief Executive of UK Hospitality Kate Nicholls OBE, APPG on Music chair David Warburton MP and APPG on Music member Simon Baynes.
UK Music said the wide-ranging discussion saw broad agreement from both panellists and the audience about a number of issues where action is needed to help the music industry recover.
These included the critical importance of a permanent reduction in the pre-pandemic 20% VAT rate on ticket sales and hospitality – a key plank of UK Music’s Music Industry Strategic Recovery Plan.
VAT on hospitality stands at 12.5% at present, but the Government plans to restore the 20% rate next spring in what would be a major blow to the sector.
Panellists and audience members stressed the importance of music in education to protect the talent pipeline on which the industry relies and the vital role that music plays in improving mental health and wellbeing.
The discussion also covered the major hurdles facing musicians and crew planning to tour EU nations post-Brexit and the need for more Government action to resolve the problems.
Njoku-Goodwin outlined how the last 18 months had been about survival, but the next 18 months would see the sector focus on recovery as the music industry strived to return to the pre-pandemic £5.8bn contribution it made to the economy.
Lord warned it could take “a minimum of three years for the sector to recover” from the impact of Covid-19. He said that, while the system of visas and work permits to tour the EU needed simplifying, the big issue was VAT.
He added: “If there was one thing that I would ask of the Chancellor it would to freeze the VAT rate at 12.5% until at least the end of March 2024. I fear to jump to 20% in March is too soon, too quick. It would see endless businesses close, resulting in yet more job losses. It is far better (for the chancellor) to get 12.5% of something than 20% of nothing.”
Villiers stressed the incredible soft power and international influence of the UK music industry that generated £2.9bn in exports pre-Covid.
The former Cabinet minister said it was “deeply depressing” to know that the shutdown from March 2020 has seen big venues lose 75% of their income in 2020 and 70% of musicians had lost at least 75% of their work. However, she said many had been helped by the “unprecedented economic intervention by the Government” and support schemes such as the Culture Recovery Fund.
She added, “It’s crucial that we see financial support come back if the pandemic flares up again and Covid restrictions return.”
Warburton highlighted concerns over music education, which he said he was “very worried” about due to funding cuts. He added, “Music should be there for all of us. Music is not just a peripheral issue.”
On the issue of VAT, the Conservative MP said, “I have written and spoken to the Chancellor about this. We need to keep VAT as it is.”
He also raised the issue of touring in the EU and revealed this would be an area that the All-Party Parliamentary Group on Music, which he chairs, would be looking at.
Conservative MP Simon Baynes, a former church organist and classical music enthusiast, spoke about the charity that he had set up to bring music to people in care homes to help improve their wellbeing.
The Welsh MP also spoke about the huge value of music in education, adding, “Music should be available to everybody – from all backgrounds.”
UK Hospitality chief executive Kate Nicholls said many of her members were grassroots music venues that gave musicians opportunities at the start of their careers.
She also highlighted the £12bn spent by foreign tourists in the UK, many of whom cited the chance to hear live music as a reason for their trip and how this spending was almost eliminated by Covid-19.
When it came to the impact of Covid-19, Kate said, “18 months of losses is the equivalent of the previous five years of profits. It is going to take a long time for this sector to recover.”
She insisted the best way of creating the headroom for the hospitality sector to rebuild was to freeze the low rate of VAT, which would mean the UK was internationally competitive with other nations that had low rates of VAT.
On the topic of the importance of health and wellbeing, Njoku-Goodwin said, “It has been fascinating over the past year to hear from people about how listening to music had been one of the things that had helped them get through the pandemic.”
The UK Music CEO outlined the work that UK Music was undertaking in this area – including the organisation’s Power of Music project – which is an area that the Government, and new culture secretary Nadine Dorries are very interested in.
Rounding off the discussion, Warburton said that as well as the need for a VAT freeze, action to boost music education and resolve the issues around EU touring, he stressed the importance of keeping the sector open.
“No more closing down. Keep the show on the road and keep the bums on seats”, said the Conservative MP.