Last week, it was revealed that hundreds of venues in England and Wales are set to receive a 50% reduction in business rates.
The announcement by the government for small and medium grassroots venues stands to release more than £1.7 million back into the sector.
The news has already been welcomed by the Music Venue Trust, which has campaigned on the issue, citing that 35% of grassroots venues were lost in the last decade and now UK Music have joined in the celebration.
In an exclusive opinion piece for Music Week, UK Music acting CEO Tom Kiehl hails business rate cut for venues, but also looks towards some of the other challenges that still lay ahead…
The Government’s announcement last week that it was “happy hour” with its promised business rate cut was welcome news. The move during Independent Venue Week marked a brilliant triumph and the culmination of a three-year campaign by UK Music and our partners across the industry to deliver some much-needed help to smaller music venues across England.
It means the 50% reduction available to smaller retailers will be extended to around 230 small and medium-sized venues which have a rateable value of below £51,000.
The decision is a major victory for UK Music, all our members and everyone who fought so hard to get the Government to level the playing field and ensure live music keeps bringing pleasure to millions - not just at large arenas but at small and grassroots venues too.
It shows what the music industry can achieve when we work together and push Government ministers and policymakers to make decisions that will benefit not just the music industry but also the wider community and economy.
According to the Music Venue Trust, which also played a critical role in this seismic win, the business rate cut will save each venue an average of £7,500 each year and allow more than £1.7 million to be pumped back into the grassroots live music.
It is only a few weeks away, but the change as the new tax year begins in April cannot come soon enough. Around a third of music venues in England and Wales have been forced to shut their doors over the last decade.
However, this was not an overnight victory. It was years in the making and was a battle that straddled two different Governments, several ministerial changes, the deadlock at the heart of Government caused by Brexit and numerous other hurdles.
Business rates have always been a challenge for music venues, in particular at the grassroots end of the sector but the difficulties were accelerated in 2017. This is when the Government undertook a revaluation of business rates that resulted in huge increases in bills for many venues across the country.
Former UK Music CEO Jo Dipple recognised the challenge this presented and wrote to the Chancellor in March of that year to urge the Government to consider adopting measures to mitigate the adverse impact. Jo’s successor, Michael Dugher, quickly took up the mantle and provided new UK Music research to the Treasury in advance of the 2017 Autumn Budget that revealed some venues had experienced increases in their rateable value by as much as 118% as a result of the revaluation.
UK Music made similar interventions to coincide with key fiscal events throughout 2018 leading to a possible lifeline of hope in that year’s Autumn Budget with the creation of the Business Rate Retail Discount scheme. On the face of it a scheme designed to assist the high street and pubs with business rates would appear just the answer the music industry was looking for. Hopes were dashed, however, when Treasury officials later confirmed the scheme did not apply to music venues as they were not similar in nature to pubs.
This rationale was deeply discriminatory and failed to recognise the vital economic and social benefits that music venues provide. So, UK Music CEO Michael Dugher and Music Venue Trust CEO Mark Davyd kicked off 2019 by writing to the then Chancellor Philip Hammond to seek a reverse to this policy.
UK Music produced new data and research that revealed 124 music venues across England were being penalised by this policy and that the cost of reversing it would be £1 million over a two-year period – peanuts in the grand scheme of things!
Performers like Adele and Ed Sheeran would not be the stars they are today without those small venues that put them on the road to success
Tom Kiehl, acting CEO, UK Music
UK Music then took Shadow Culture Minister Kevin Brennan to Downing Street to meet with the Chancellor to make the case for the cut in business rates in the strongest possible terms. Following this, members of the APPG for Music, led by Chairman MP David Warburton, for which UK Music is the secretariat, wrote again to the Chancellor asking him to use his Spring Statement to ensure music venues would benefit from the new business rates retail discount scheme.
Following the formation of Prime Minister Boris Johnson’s Government, we again took up the case with advisers in Downing Street, the Department for Digital, Culture, Media and Sport where the newly appointed Creative Industries Minister Nigel Adams continued to express the strong support for British music he had previously shown as a backbench MP. Extending business rate relief to grassroots music venues appeared in the Conservative Party General Election manifesto and the Government confirmed its intention to take this forward in its Queens Speech at the end of 2019.
After three years of making our case right across Whitehall and Westminster on an issue where it is hardest to get Governments to bend - tax changes and rate reliefs - Chancellor Sajid Javid was finally persuaded and changed the rules.
The result is brilliant news for every aspiring creator and musician in the UK. It’s impossible to live out your dreams if there are no small venues left in which to start a career journey that might end in a sell-out stadium.
Performers like Adele and Ed Sheeran would not be the stars they are today without those small venues that put them on the road to success.
Our music industry generates £5.2 billion a year towards the economy. However, it is a fragile ecosystem that relies on the grassroots venues that will benefit from this new tax relief.
It is fantastic that we can chalk this big change up to the success of an industry working together towards a common goal. But this is just one battle. There are other equally tough challenges facing us as an industry.
There will be arguments ahead over the Government’s confirmation that it will not implement the Copyright Directive - even though the administration backed the changes and understood how important they are to creators in the music industry.
There is also the risk that post-Brexit changes on freedom of movement could have a hugely negative impact on the ability of musicians and others in the industry to tour.
We will have a far greater chance of success in these and other looming battles if we are united and work together to ensure the UK music industry remains the envy of the world.
Words: Tom Kiehl, acting CEO, UK Music