Chancellor Rishi Sunak has announced the Jobs Support Scheme to replace the furlough programme, which ends on October 31.
However, there is no targeted support for struggling sectors such as live music during the Covid-19 pandemic.
Under the new scheme, workers will get at least 77% of their normal salaries for six months. It launches on November 1 and is forecast to cost the government around £300 million a month.
A cut in VAT from 20% to 5% for hospitality and tourism will be extended from January 12 until March. While that includes the live sector, the only likely benefit for firms will be on sales of tickets for concerts later in the year.
There has also been an extension on the repayment of ‘Bounce Back’ loads from six years to 10 years.
The self-employed grant scheme – key for the music industry workforce – is to be extended. It will cover 20% of average monthly profits, up to a total of £1,875, from November to January. An additional grant will be available from February 2021 to April. However, the previous grant covered 70% of average monthly profits.
UK Music acting CEO Tom Kiehl tweeted: “VAT reductions and deferrals aside there sadly appears to be little in the Chancellor’s statement to give comfort to the careers of the many talented people who are key to our entrepreneurial future. Special arrangements and sector specific support are necessary.”
VAT reductions & deferals aside there sadly appears to be little in the Chancellors statement to give comfort to the careers of the many talented people who are key to our entrepreneurial future. Special arrangements and sector specific support are necessary. https://t.co/yinTa0fxOo— Tom Kiehl (@Tomkiehl) September 24, 2020
AIF CEO Paul Reed said: "While the extension to the VAT cut is welcome, these measures are not even a band aid for a sector that remains severely wounded. Festivals support 85,000 jobs in the UK and our most recent member surveys suggest redundancies of at least 50.5% across the sector, some of which have unfortunately already taken place.
"With the sector still not generating any income at all this year, many employers will simply not be in a position to pay 55% of their employees' salaries to access the support offered by the government’s new job support scheme. This remains a broad brush approach, and we urgently need targeted support. We are awaiting the outcome of Cultural Recovery Fund applications on October 5 and this will determine if the independent festival sector will in fact receive the support that it urgently requires."
While the extension to the VAT cut is welcome, these measures are not even a band aid for a sector that remains severely wounded
Annabella Coldrick, CEO, MMF, said: "Unfortunately, the Chancellor's statement has only heightened the industry's state of distress, and especially across our live sector where hundreds of thousands of jobs remain in peril. Concerts and festivals are a cornerstone of UK culture, as well as an important engine of our economy. They are viable businesses, dealing with terrible and unforeseen circumstances.
"Without targeted support, the infrastructure and livelihoods that support live events will be irreparably damaged, along with the careers of artists and musicians. The MMF's membership is reliant on live music for 80% of their income, and through our ReBuild fund we are doing what we can to support music managers in need, but to prevent a full-on industry-wide catastrophe the Government will have to step in."
Incorporated Society of Musicians’ chief executive Deborah Annetts said: “While we welcome much of today’s announcement from the Chancellor, which will help our venues many of which are on a cliff edge, it is a devastating blow for the thousands of self-employed musicians who have had no income since March and still cannot return to work while venues remain closed. The UK music industry is a hotbed of world-leading talent which makes a huge contribution to our economy and global influence, so it is vital that freelancers are not forgotten and measures are put in place to help them until they can work again.
“Many musicians have already fallen through the gaps in the Self Employment Income Support Scheme and will continue to be excluded under the new measures. In addition, reducing support down to just 20% of average monthly trading profits will not provide an adequate safety net for our members when they are unable to generate any income at all.
“The government must deliver on its pledge to ensure there is parity between employees and the self-employed by maintaining the existing level of support provided by the SEISS and expanding the eligibility criteria. These are dynamic entrepreneurs who will be back on their feet as soon as the sector can reopen, so any support measures need only last until the necessary safety precautions are eased.”
Caroline Norbury, CEO, Creative Industries Federation, said: “We welcome the emergency measures announced by the Chancellor today, which will support many organisations, workers and freelancers in our sector that are still unable to operate at full capacity due to the pandemic.
“However, the eligibility criteria of the Self Employment Income Support Scheme remains unchanged, which means that many of the sector’s two million self-employed workers - including limited company contractors, PAYE freelancers and the newly self-employed - will continue to fall through the gaps in government support. Many of these people have seen all of their work dry up overnight and it remains vital that they are supported as a matter of urgency.”
Peter Heath, managing director of PLASA (Professional Lighting And Sound Association), and co-founder of #WeMakeEvents, said: “The live events industry welcomes the announcement of Sunak’s new job support scheme, which will provide some form of relief for companies in the sector. Yet, with the increased restrictions introduced by Government earlier this week, it’s looking unlikely that the sector will be able to return to work in a way that is financially viable over the next six months. There’s simply no work to return to, with demand drying up in line with social distancing measures.
“As a result, the majority of businesses in our sector will not be able to generate sufficient revenue to support their contribution towards employees’ salaries, nor will they be able to contract the huge self-employed community the events industry has become so dependent upon. This is why the #WeMakeEvents campaign will continue to highlight the plight of those affected until either government provides the requisite support or provides clarity on how current initiatives can benefit live events workers.”
DCMS Committee chair Julian Knight MP said: “We welcome this economy-wide intervention from the Chancellor. However, it still leaves many hundreds of thousands of workers in events, arts and cultural parts of the economy with a grim future.
“The truth is, three times as many people in these sectors are currently on furlough than the national average, which suggests that the Job Support Scheme may not be able to stop unprecedented redundancies and many organisations from facing extinction.”
How the Job Support Scheme works
Under the Job Support Scheme, the government will subsidise the pay of employees who are working a reduced amount of hours due to a lack of demand for a business’ services. It only applies to workers in viable jobs who can work at least a third of their normal hours.
Companies will pay staff for the hours they work, while a further 44% of their normal salaries will be split between the employer and the government. The grant will be capped at £697.92 a month.
All small and medium-sized businesses can apply for the scheme, though larger businesses will have to show their turnover has fallen.
Sunak said it was part of a “winter economy plan”.
"The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant," he said.
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