14/04/2020: UK Music has delivered a major submission to the House of Commons Digital, Culture, Media and Sport Select Committee.
As the voice of the commercial music industry, UK Music has delivered a major submission to the Department for Digital, Culture Media and Sport Select Committee for its inquiry into the impact of COVID-19.
It highlights the “catastrophic” impact on the live music sector which generated £1.1 billion a year for the UK economy before the virus struck and the lockdown was imposed.
Due to the restrictions on mass gatherings and rules on social distancing, the live sector has been shut down since mid-March in a move which UK Music estimates will wipe at least £900 million from the sector’s expected £1.1 billion contribution to the economy this year.
Our submission warns of the “high level of self-employment in the sector with an estimated 72% of the music industry being self-employed in 2018 compared to a national average of 14.7%, leaving workers particularly vulnerable to economic shocks”.
It adds that: “There are an estimated 52,240 workers in our sector who are not currently being reached by Government support schemes.”
The submission highlights those who currently fall in the gaps in the support packages drawn up by the Government.
They include the newly self-employed, small business owners who pay themselves in dividends in lieu of salary, those self-employed who earn just above the £50,000 threshold and those who earn less then 50% of their income via self-employment.
The submission highlights the challenges faced by recording studios which are not covered by the Government’s Business Rate Relief and Small Business Grants scheme.
The submission urges the Government to amend the relief to help studios and extend rate relief to the entire supply chain of the live sector including service companies, sound, lighting suppliers and others to ensure the sector is able to restart once restrictions lift.
The submission calls on the Government to give more clarity on social distancing.
It also urges the Government to take more action on the issue of commercial rents to afford businesses the necessary protections to survive in the longer term.
Record shops and grassroots music venues, for example, may be forced to close permanently if they continue to face rental demands while making no income during the lockdown period.
The submission says: “Retailers of physical music will require additional support to get through this crisis and a VAT exemption on physical music products for an initial 12 months would go some way to saving this key part of the sector.”
Urgent support is also needed to restart the live sector.
The submission warns: “There needs to be a recognition that certain sectors will be closed for longer than others due to the difficulties in arranging organised gatherings. Without long-term support many live music venues and festivals will not survive the winter of 2020/2021."
“Some venues have already carried out modelling which demonstrate that if they opened while applying current social distancing rules, they would run a loss. With bars unable to open, they will also lose important ancillary spend from food, drinks and merchandise.”
The submission outlines some proposals which could help the sector recover, including the introduction of VAT breaks on ticket sales.
It adds: “There is already precedent for this, as many types of tickets issued for certain cultural events and exhibits are already exempt. If this was carried forward, we would recommend an 18-month minimum period to ensure annual events like festivals, and music venues unable to open until the end of social distancing were also able to benefit.”
You can read UK Music’s full submission here