The cross-party Culture, Media and Sport Committee has backed calls for a levy on arena and stadium tickets, and a cut in VAT on tickets, in order to support grassroots music venues.

The Committee inquiry heard from industry bodies and representatives from across the grassroots venue sector about how the scale of the crisis has reached the point where small local venues are closing at a rate of two per week.

The Committee also heard that artists are facing a “cost of touring crisis”, while promoters are struggling to get shows off their spreadsheets and into venues.

Made up of 11 MPs, the Committee has issued a report that highlights it findings and recommendations including immediate financial help via a levy supported fund and a targeted temporary VAT cut to help stem the tide of closures. The report said a comprehensive fan-led review of live and electronic music should be set up this summer to examine the long-term challenges to the wider live music ecosystem.

The MPs said the levy cost should not be passed on to music fans, and that if there is no agreement by September or if it fails to collect enough income to support the sector, the Government should step in to introduce a statutory levy.

Dame Caroline Dinenage MP, chair of the Culture, Media and Sport Committee, said, “We are grateful to the many dedicated local venues who gave up their time to take part in our inquiry. They delivered the message loud and clear that grassroots music venues are in crisis. The ongoing wave of closures is not just a disaster for music, performers and supporters in local communities up and down the country, but also puts at risk the entire live music ecosystem. If the grassroots, where musicians, technicians, tour managers and promoters hone their craft, are allowed to wither and die, the UK’s position as a music powerhouse faces a bleak future.

“To stem the overwhelming ongoing tide of closures, we urgently need a levy on arena and stadium concert tickets to fund financial support for the sector, alongside a VAT cut to help get more shows into venues.”

Alongside Dinenage, the committee is made up of MPs including Labour’s Giles Watling, Alex Sobel and Dr Rupa Huq alongside Conservatives Steve Brine, Jane Stevenson and Damian Green.

The findings were welcomed by many in the industry including LIVE, the Music Venue Trust, Featured Artists Coalition and Music Managers Forum.

LIVE CEO Jon Collins said, “LIVE welcomes this considered, knowledgeable and wide-ranging report. It’s clear that the Committee has recognised the many challenges faced by venues, promoters, events and artists at the grassroots level, and the steps required to address them.

“LIVE set out to the committee the actions we believe that the government needs to take to help unleash the economic potential of the sector, such as a reduction in the damaging and uncompetitive rate of VAT on tickets, as well as the actions that sit with us as an industry, notably the creation of a charitable arm, the LIVE Trust.

“We are pleased that the committee’s report addresses both of these matters positively and has entrusted our sector to implement the industry-led solution of a voluntary levy on arena and stadium tickets, gathering and distributing funding that will benefit the whole grassroots music ecosystem. We look forward to working with government on the review of VAT and regularly updating on our progress on the LIVE Trust.”

MVT CEO Mark Davyd said the committee’s recommendations provide a clear pathway forward to a positive future for the UK’s grassroots music venues: “[They are] a set of actions that are deliverable, affordable, and will genuinely have a positive impact on live music in communities right across the country. We look forward to working with the music industry and with the government to deliver on these recommendations as swiftly as possible.”

Featured Artists Coalition CEO David Martin and Music Managers Forum CEO Annabella Coldrick issued a combined statement supporting the recommendations: “As the organisations representing artists and managers, we wholeheartedly endorse all the Committee’s recommendations.

“Most important is their recognition of the ‘cost of touring crisis’, and that the benefits of a ticket levy must flow down to artists, managers, and independent promoters – as well as to grassroots music venues. The entire ecosystem needs support. While we still believe this mechanism should be mandatory, the clock is now ticking to get a process in place before September 2024.

“We are also delighted to see the Committee endorse the 100% Venues campaign, and hope this will trigger action from the UK’s largest live music venues to overhaul outdated practices on merchandise commissions. The sale of T-shirts, vinyl and other physical products represent a crucial income stream for artists. It is only fair that they should retain the bulk of that revenue.”