25/02/2019: Senior MPs from the main political parties have thrown their support behind a UK Music call on Chancellor Philip Hammond to end the “discrimination” that could force grassroots music venues out of business.
UK Music CEO Michael Dugher and Labour’s Shadow Culture Minister Kevin Brennan with Chancellor Philip Hammond
Their backing can be revealed as UK Music CEO Michael Dugher and Labour’s Shadow Culture Minister Kevin Brennan met Mr Hammond for urgent talks after some venues were hit by business rate rises of over 800%.
The meeting came after Mr Dugher and Music Venue Trust CEO Mark Davyd wrote to the Chancellor in January accusing him of discriminating against music venues over the issue of business rates and called for Treasury guidance to be changed.
Their request followed a letter from a Treasury official in December which said that grassroots music venues (see definition under notes to editors) – unlike bars and pubs – would not be eligible to apply for a discount on their business rates.
At the meeting - granted after Mr Brennan raised the industry’s concerns with the Chancellor in the House of Commons - UK Music’s CEO presented the Chancellor with a dossier outlining the impact of a revaluation of business rates in 2017.
The Music Venue Trust warned that 35% of music venues had closed in a decade and that the impact of the business rate hike could see more going dark within months without a Government rethink.
For example, Arsenal Football Club enjoyed a 7% cut in its business rates on its Emirates Stadium as a result of a revaluation in April 2017, whereas the nearby Nambucca music venue has been subject to a 44% per cent increase in its rateable value.
The rate hike means some venues such as The MacBeth in east London have been forced to endure a rate hike of a staggering £20,496 – a huge increase of 806%, taking their current business rate to £23,040.
Mr Dugher urged the Chancellor to add grassroots music venues within the qualifying value of between £12,001 and £50,999 within the retail discount, reducing their business rate bills by one-third.
UK Music said this would be a lifeline for small venues and play a vital part in nurturing the talent pipeline vital to the chances of creating the next Ed Sheeran, Stormzy or Adele.
According to UK Music estimates given to Mr Hammond, 124 grassroots venues face an average rate rise of 31%. They could potentially qualify for the new discount, saving them approximately £4,147 a year. Over two years, allowing music venues the discount would cost the Treasury £1 million.
Commenting, Michael Dugher said:
“I’m pleased that the Chancellor listened to what we had to say about why we need a specific targeted change on business rates to safeguard the future of so many of our cherished grassroots venues. Grassroots music venues are a crucial part of the music ecosystem that generates future talent for an industry that contributes £4.5 billion to our economy.
“The current position discriminates against music venues compared to pubs and bars. Unless the Chancellor revisits this issue, there is a very real danger that too many venues will have to turn off the music or even shut down for good.
“If UK plc wants to retain its preeminent position as being a world leader in music, our industry needs the strategic support of government”.
Shadow Culture Minister Kevin Brennan said:
“In last year’s UK Live Music Census, 33% of small music venues reported that business rates increases had an “extreme, strong or moderate” impact on their existence in the past 12 months. The Chancellor must recognise the importance of these venues as the R&D of the UK’s successful music industry and extend the rates discount given to pubs to protect their future.
“In an age where stadium gigs are increasingly expensive, independent music venues are accessible, inclusive and affordable places for everybody to experience live music.
“These venues are the lifeblood of the £4.5 billion music industry, providing much needed opportunities for up and comers and local talent to learn and develop their craft.”
Former Culture Minister and Conservative MP Ed Vaizey said:
"Grassroots music venues are the lifeblood of our music industry – but the existence of many is being threatened by rising business rates. If our creative industries are to continue their upward trajectory, the Treasury must reassess the eligibility of music venues for discounted rates in their own right. We need these venues to survive and thrive and they deserve our support to do so."
Baroness (Jane) Bonham-Carter of Yarnbury, Lib Dems DCMS Spokesperson said:
“Music venues provide tremendous social, cultural and economic benefits yet many operate at small margins meaning even the tiniest increase in bills could have a devastating impact. The Government must ensure their much trumpeted business rate retail discount scheme is amended so that music venues are given a much needed lifeline and can continue to nurture the nations creativity.”
Conservative MP and former Industry Minister Sir Greg Knight said:
“I am happy to back this campaign. Clearly, the current unsatisfactory situation needs to be reviewed. The system of taxation should not, inadvertently or otherwise penalise music venues. Indeed, there is a case for encouraging and nurturing such venues via a sympathetic tax regime and I hope that the Chancellor is able to offer hope for the future.”
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