Written evidence submitted by UK Music

January 2022

DCMS Select Committee Submission - Promoting Britain Abroad

1.0 Introduction

1.1 UK Music is the collective voice of the UK’s world-leading music industry. UK Music represents all sectors of the music industry – bringing them together to collaborate, campaign and champion music. UK Music promotes the music industry as a key national asset to all levels of Government and publishes research on the economic and social value of music.

1.2 The industry we represent has a key role to play in promoting Britain abroad. Over the decades British music, like The Beatles, The Spice Girls and Adele have defined the global soundtrack and inspired people to visit Britain, emulate our music and consider the UK to be a place where innovation can flourish.

1.3 UK music is a national asset that can and should have a prominent role in encouraging inbound tourism, is the keystone of the UK’s soft power and can be a powerful economic export. However, the global music industry is a competitive place with a range of national music industries receiving strategic government support. Facing this competition has been made more difficult due to the fact that a third of jobs in the UK music sector were lost due to COVID-19, and UK music workers face difficulties engaging with key international markets due to the Trade and Co-operation Agreement.[1] 

1.4 Therefore, a key part of promoting Britain abroad should be promoting and supporting the UK’s world leading music sector to recover. Across governments in the UK there need to be Music Export Strategies to secure and build up the UK’s position as a hub for music tourism, a home of innovative music and one of the most important soft power players in the world. This strategy should include:

-          Cutting VAT on cultural tickets.

-          100% Business Rate Relief until the end of 2022/23.

-          Keeping COVID-19 restrictions in synch with COVID-19 support.

-          Dialogue with the sector on inbound immigration.

-          Establishing Music Export Office(s) and bolster existing Export Funds.

-          Establishing a Transitional Support Fund and work bilaterally and multilaterally to deal with barriers to music exports.

-          Protecting the talent pipeline.

1.5 It is important to note that tourism, culture and education are devolved matters, and therefore the preserve of the Welsh Parliament, Scottish Parliament and Northern Ireland Assembly in their respective nations and the UK Parliament in England. We would like to see a Music Tourism Strategy and a Music Export Strategy taken forward by each Parliament and the Assembly working collaboratively to ensure that music (and what makes it distinctive) across the UK is promoted to the world.

2.0 UK Music as a National Asset

2.1 UK music is a key national asset that should be a prominent part of promoting the UK abroad as an industry where the UK is a genuine world leader. According to the BPI 1 in 10 songs streamed globally in 2020 were by UK artists.[2] The UK is also a world leader in the live sector. Pre-pandemic the UK had the second largest live music scene in Europe (behind Germany) The European Commission has described UK acts as dominating the European live music scene, globally 4 of the top 10 grossing tours of 2019 were headlined by UK artists (Ed Sheeran (1), Elton John (4), Rolling Stones (5), Paul McCartney (8)).[3] The UK has one of the busiest live music venues in the world in the O2 Arena, as well as the largest greenfield festival in Glastonbury.[4] 12.6 million people visited UK music festivals and venues in 2019 (up 13% on 2018).[5] Despite large falls in 2020 due to COVID-19, since 2014 music has proportionately outperformed the economy as a whole, this suggests that with the correct support recovery will be rapid.[6]

2.2 Alongside other cultural outputs where the UK is strong, (e.g.TV and Film production), UK music is well placed to be at the cutting edge in any strategy for attracting tourists and promoting the UK abroad. We welcomed the multiple references to music in the recent Tourism Recovery Plan for England, but feel a specific strategy for supporting music could be of benefit.[7] Furthermore, given the interconnected nature of the sector any serious plan must also address how to ensure people have music skills and how the recorded sector could be supported.

2.3 This kind of action is doubly important due to the damage COVID-19 has wreaked on the music sector. The number of jobs in the sector fell 35% in 2020, and Gross Value Added (GVA) fell by 46%, with subsectors like Grassroots Music Venues and large venues seeing falls in income of around 75% and vital supply chain companies like those in technical supply losing 95% of their income.[8] This has left venues riddled with debt, many skilled music workers outside of the industry and any return of restrictions is likely to further dent consumer confidence, reducing profit margins when the sector needs them the most to invest in the recovery.

2.4 It’s also not just popular music which draws people to visit the UK. Music across all genres is a national asset, with opera and musical theatre being a popular pull for international tourists. Previous research has shown 24% of all holidaying visitors go to the theatre when they come to London.[9] Many of these will visit the West End, supporting the numerous performers and musicians who work in these settings. These visitors are likely to stay in hotels, visit other cultural attractions and contribute to the UK economy, but may have chosen another destination without the UK’s distinctive music offer.

2.5 If growing this national asset is a priority it is also important that there is dynamic consideration of how broader policy decisions can affect the UK music industry. For example, current concerns about omicron and public health messaging to avoid crowded places has been followed by a sharp decline in attendance and live music events, hammering the sector at what should be a bumper time of year.[10] Yet because events have not been ordered to close in England support such as the Live Event Reinsurance Scheme or wage support has not come into effect despite 50% “no shows” at some events and 86% of musicians seeing work cancelled.[11]

3.0 Music Tourism Strategy

3.1 The UK’s very strong music offering attracts international tourists for experiences that they simply could not get anywhere else. In the last pre-pandemic year live events attracted 845,000 international visitors.[12] These visitors spent £899 each on average.[13] Glastonbury Festival estimates that people from over 50 countries (including Yemen and Afghanistan) attended the festival in 2019.

3.2 Even those that are not music tourists specifically may be partially attracted by music and take part in live music or music related events. Despite disbanding in 1970 The Beatles are still worth £80 million per year to the economy of Liverpool, and the global nature of this appeal is highlighted by the fact 1 in 20 visitors to The Beatles’ Story attraction in 2014 were Chinese.[14]

3.3 Live music events specifically also represent a very effective method of spreading tourist spending throughout the economy. They require a range of companies to be put on (security, technical staff, performers, venues) and generate revenue up the supply chain with royalties going to, for instance, non-performing songwriters. It can also play a role in the Levelling Up Agenda. The South West, North West and Scotland each saw over 1 million visitors in 2019, and Wales saw music tourism rise by 21% from 2018,[15] presenting an already successful base for attracting tourists either though UK-wide collaboration or the development of separate Music Export Plans by the UK Government and devolved administrations. 

3.4 It also stimulates broader activity. A music gig goer does not as a rule simply walk up to the concert, nod along and go home. They often pay into local transport networks to get to a gig, visit local hospitality businesses before the gig and perhaps visit other hospitality businesses afterwards. The venue will have suppliers and provide additional employment opportunities to local people. Research by UK Music suggests that a medium sized live music venue creates around £150,000 extra GVA for the UK economy per gig. Live music is an activity that is both meaningful and an economic motor. 

3.5 This creates a range of transactions that are UK taxable and are normally paid to UK based companies that in turn pay UK wages, increasing the value of the tourist spend to the UK economy, benefiting the Exchequer by boosting GVA and increasing tax take. For example, Ed Sheeran was one of the top 50 UK taxpayers of 2021 paying £28.3 million to HMRC, or enough to pay the salary of 1,000 teachers.[16] UK Music have calculated that music visitors spent £4.7 billion across the UK economy in 2019.[17]

3.6 Shrewd public investment can be critical to ensuring these events take place, as they are large scale and often vulnerable to shocks e.g., COVID-19. An example of the difference support can make can be found at Ipswich Council which invested £158,000 in ensuring an Ed Sheeran concert in Chantry Park could go ahead, this returned £9,233,541 to the local economy or £58.44 for every £1 that the Council invested.[18] Public investment can help attract major music events for the benefit of economies across the UK. This also highlights the benefit to regional economies these kinds of events can have: the majority of music tourists in the UK in 2019 were visiting acts in places other than London.[19]

3.7 As previously stated, COVID-19 and the associated restrictions were devastating for the live music industry, leaving all parts of the ecosystem with high debt levels and an urgent need to begin paying these off and reinvest in the sector. It will be critical to do this quickly to prevent a long term drag on growth. Therefore, it is vital that the Treasury ensures that so far as possible the tax burden on the live music sector is eased. The sector was the first into the crisis and will be one of the last to fully recover.

3.8 It was welcome that venues in England were given a 100% Business Rate discount for the first quarter of 2021/22, a 66% discount thereafter and a 50% discount up to £110,000 in 2022/23. That the VAT rate on culture tickets was cut from 20% to 5% between July 2020 and September 2021 was also partially useful to businesses, (rising to 12.5% in September with a return to 20% planned for April 2022).[20] Though the 100% discount rate for 2020/2021 and 2021/22 in Northern Ireland, Scotland and Wales for qualifying Businesses should be noted.[21]

3.9 However we strongly feel this should go further and that full Business Rate Relief should be provided for all music spaces until the end of 2022/23. This would ensure profits could be reinvested in sector activity and paying down debts to secure the long-term future of the sector. This also applies to music recording studios. The UK Government and devolved administrations should fully waive business rates from all music spaces until the end of 2022/23.

3.10 Similarly freezing VAT on tickets at 12.5% would ensure that profit from sales could be reinvested in productions, paying down debts and ensure the sector could lay a firm long-term foundation for recovery. It should be noted that many music businesses were not able to return until summer 2021 and therefore missed out on much of the reduced VAT period. The need for this is more acute due to the uncertainty caused by the omicron variant and the return of restrictions on live music in places. The UK Government should scrap its planned rise in VAT in April 2022.

3.11 It is also vital that any reintroduction of COVID-19 restrictions is met by an increase in COVID-19 support for the live music sector. We appreciate that public health may necessitate restrictions but would emphasise that given the length of the crisis, the 2020 Culture Recovery Fund should not be regarded as silver bullet and may need further extension. Therefore COVID-19 restrictions on the live music sector should be matched by further support.

3.12 Attracting music workers from overseas is also important to many venues and festivals, as it allows consumers to be offered the broadest possible range of talent, raises the quality of performances and build vital creative links and synergies.

3.13 Therefore, it is important that the Government creates and maintains dialogue with the sector on the suitability of inbound immigration rules, as the current routes can be opaque. For short term engagements the Permitted Paid Engagement route can work well for some, but inexperienced Border Force Officers can undermine its utility.

3.14 There may also be issues regarding the fact that while hypothetically a citizen of almost any country can use Permitted Paid Engagement to perform in the UK, those coming from countries where the population is predominately Black or Asian can find themselves facing unequal treatment in comparison to other countries and may be more likely to be stopped and/or denied entry by Border Force. There can be issues with less mainstream artists not fitting what a Border Force Officer thinks of as a musician or music worker, and crew in particular can struggle.

3.15 To avoid some of these issues, UK Music would also welcome an expansion of the number of Permit Free Festivals to allow more artists to play UK festivals as easily as possible and maintain our global reputation for high quality festivals.

3.16 As part of a Music Tourism Strategy, UK Music would recommend to the UK Government and all the devolved administrations:

-          Cancelling the VAT rise on cultural tickets.

-          100% Business Rate Relief until the end of 2022/23.

-          Keeping COVID-19 restrictions in synch with COVID-19 support.

-          Dialogue with the sector on inbound immigration.

4.0 Music Export Strategy

4.1 UK music does not only inspire inbound tourism and spending in the UK, it also represents a vital source of soft power and is a key export. The UK is regularly one of the top three nations in the world in studies of “soft power”(non-economic influence/non-military influence) and music features prominently in these assessments with one study noting the “enormous global appeal” of UK musicians.[22] Only the UK, Japan and the United States are net exporters of music globally.[23] In film and TV the lives of British performers continue to be a global fascination with major films like Bohemian Rhapsody (Freddie Mercury/Queen), Rocket Man (Elton John) and Let It Be (The Beatles) all recent international hits. The UK music sector has had defining waves of popularity abroad, such as the “British Invasion” of American culture in the 1960s and has been at the forefront of formulating new genres including Britpop in the 1990s and Grime in the 2000s.[24]

4.2 Furthermore, UK based performances are also enduringly popular. A 2019 Glastonbury Highlights package was distributed by BBC Sales and Distribution and viewed in 69 countries across the world, and the Last Night of the Proms is broadcast live in 18 different countries on the radio and in 11 on TV.[25] Music makes Britain truly global.

4.3 It is important to note that known British artists performing implicitly presents an idea of the UK as somewhere the arts can be successful and where music can be created and cherished. Thereby implicitly projecting a positive image of the UK to listeners. In short being a nation renowned for its music is no bad thing, it implies creativity and the kind of legal and business networks needed for artists to create, produce and disseminate their work. The British public are intuitively aware of this, according to a recent survey conducted for UK Music by Public First finding that 59% of people believe music improves the UKs international reputation.[26]

4.4 For example at the death of David Bowie the German Foreign Ministry noted the cultural importance of his concert played at the Berlin Wall in 1987 in reducing barriers between East and West Germany.[27] This highlights the positive values that UK music can help promote, as well as the pluralistic vision of the UK and its people it can promote to the world.

4.5 While notions of “soft power” and the networks that good cultural diplomacy cultivates are inherently difficult to quantify, the hard cash value of UK music exports is not. 1 in 10 songs streamed globally are by UK artists, and UK artist made up 4 of the top 10 grossing acts in 2019, music exports showed strong growth pre-pandemic growing from £2.2 billion in 2014 to £2.9 billion in 2019, with 9% growth that year. It should be noted that this is higher than the “record breaking” 5% growth of UK exports overall in 2019.[28] While music exports fell to £2.3 billion due to the COVID-19 pandemic in 2020 there is no reason that these exports should not return to healthy growth, with the correct support.[29]

4.6 What should be emphasised is the UK’s strategic global position in the music sector. It is one of only three global net exporters of music, which makes it important internationally and it “dominates” the European live music scene according to the European Commission (pre-pandemic and pre-Brexit).[30] It is a strategically important industry that even after the losses of 2020 employs more people than the steel and fisheries industries combined: 128,000 versus 45,000.[31] It is impossible to disaggregate the domestic and the foreign dependence of those roles. However, it is worth keeping mind that this is an economically important industry and a national asset.

4.7 In keeping with that we believe the UK Government and devolved administrations should push forward with Music Export Strategies that recognise the national and global importance of UK music and work to build an environment where it can thrive. This should include:

-          Establishing Music Export Office(s) and bolster existing Export Funds.

-          Establishing a Transitional Support Fund.

-          Protecting the Talent Pipeline. 

-          Creating a fiscal incentive for UK based music production.

4.8 Music Export Offices could present a real chance to think strategically about growing the UK share of the global music market, which has declined in recent years and is increasingly reliant on pre-2000 acts, despite the recent successes of artists like Adele and Dua Lipa.[32] UK Music is agnostic on whether each UK Government should have its own or if there should be a form of overarching structure that recognises this is a devolved competence.

4.9 A Music Export Office(s) should act as a one stop shop for touring musicians and music workers to find out what they need to do to enter a specific country, provide information and work to build contacts in key emerging markets (e.g. South America), acting as a force multiplier for UK music businesses as we move into the recovery stage of the pandemic and beyond.

4.10 This would sit alongside existing export support programmes like the Music Export Growth Scheme and the International Showcase Fund that are run by the BPI and PRS Foundation respectively, with support from the Department for International Trade. These have a healthy return on public investment of £12 and £15.20 per pound respectively.[33] Allowing these schemes to be more aggressive could also boost UK music exports and all of the soft power, economic and tourism benefits previously outlined, for example Canada’s FACTOR partnership is allowed to fund exceptional talent up to 100% of their costs for a tour, opening up pathways to working class Canadian artists.[34] The UK Government should work to establish a Music Export Office(s) and bolster existing Export Funds.

4.11 An important disadvantage that music in the UK has, is that it has found touring the EU, the UKs most important live music market, increasingly complicated due to the EU-UK TCA. This issue has been discussed at great length elsewhere including by the DCMS Select Committee, so suffice to say here that touring EU Member States is now more complicated, difficult and expensive for UK musicians and music workers under the TCA.[35]

4.12 This is reducing economic opportunities for UK music workers, limiting flexibility, cutting into profit margins and creating barriers that many smaller acts will not be able to scale. There has been no compensatory increase in access for other markets and certain music businesses and music workers, e.g. specialist hauliers and opera singers, are relocating full time to the EU, and there is a very real risk that as international touring returns the UK will be decentred from European tours, with the attendant loss of jobs and income.

4.13 Furthermore, UK artists have lost a competitive advantage they previously held over American, Canadian and South Korean artists, and there are long term concerns that this will prevent new artists breaking through. The UK Government should look to tackle this issue on three levels, unilateral, what the UK can do itself, bilateral what the UK can negotiate with other individual countries and multilaterally what the UK can negotiate with the EU (or wider) as a whole. 

4.14 At a unilateral level a Transitional Support Fund could be brought forward. This fund could potentially be similar to the £23 million the Government provided to fisheries, the Government should also look to reduce barriers through negotiations both bilaterally and at an EU level, including looking at visa waivers, carnet waivers, making sure EU states offer the full amount of visa free work they are allowed under the TCA, cabotage derogation etc.[36] We do not consider other forms of funding that have been made available to mitigate disruption to have been much use for the sector as it has been focused on goods rather than services, not has the Government been forthcoming with advice (e.g. the Small and Medium Enterprise Fund).[37] The UK Government should establish a Transitional Support Fund and negotiate to remove barriers to music exports to Europe.

4.15 This is all part of building a talent pipeline that ensures that the creative musicians, performers and music workers the UK produces can be promoted successfully to the world in a way that improves the UK economy and promotes a positive vision of the UK. Yet, this pipeline cannot function without talent and at the moment we are not sufficiently educating and giving skills to the people who could drive the UK music industry forward as we move towards the second half of the 21st Century. In particular this could help reverse the reliance on pre-2000 acts to hold up the UKs share of the global music market.

4.16 We have addressed this issue elsewhere, most notably in our Securing Our Talent Pipeline report.[38] However, action is still clearly needed. The most recent A-level and GCSE results showed that the numbers of children study music at GCSE and A-level in schools in England has dropped dramatically since 2014, falling 16.83% at GCSE level and 31.47%, in particular the number of male A-level music students has halved in that time.

4.17 In the long-term roles in the music industry are exactly the kind of creative jobs that are resilient to automation that should become the backbone of the UK economy. However, if our children are to fulfil those roles they need to be encouraged to take music as a subject, and given access to high quality teaching and equipment that will give the best chance of fulfilling their potential in that field.

5.0 Conclusion

5.1 The Governments of the UK have a unique chance to take advantage of the globally important nature of the UK music industry to promote tourism to the UK, promote UK values and promote the UK itself abroad. By bringing forward Music Tourism Strategies and Music Export Strategies the Governments can derive large economic and soft power benefits by preserving and helping to support recover an area where the UK is already very good but in danger of losing its edge. Governments across the UK need to ensure that we provide the quality music education the next generation of UK music workers need.

5.2 Music needs to be treated as a serious industry and business sector that also provides large soft power bonuses to the UK. This requires forward thinking and proactive engagement from Government in the age of COVID-19, Brexit and a relentless and growing global music sector. To secure the largest slice of the pie for UK artists, with all the attendant benefits we would advise:

A Music Tourism Strategy to:

-          Cut VAT on cultural tickets.

-          100% Business Rate Relief until the end of 2022/23.

-          Keep COVID-19 restrictions in synch with COVID-19 support.

-          Talk to the sector on inbound immigration.

A Music Export Strategy to:

-          Establish Music Export Office(s) and bolster existing Export Funds.

-          Establish a Transitional Support Fund and working bilaterally and multilaterally to deal with barriers to music exports.

-          Protect the talent pipeline.

5.3 The Government should also never lose sight of the power of music as a tool for exemplifying values, capturing a moment and promoting the UK across the globe.

Annex

UK Music’s membership comprises: -

• AIM – The Association of Independent Music – AIM – The Association of Independent Music – the trade body for the independent music community, representing 1000+ independent record labels and associated businesses, from globally recognised brands to the next generation of British music entrepreneurs.

• BPI - the trade body of the recorded music industry representing 3 major record labels and over 400 independent record labels.

• FAC – The Featured Artists Coalition is the UK trade body representing the specific rights and interests of music artists. A not-for-profit organisation, they represent a diverse, global membership of creators at all stages of their careers and provide a strong, collective voice for artists. 

• The Ivors Academy - The Ivors Academy is an independent association representing professional songwriters and composers. As champions of music creators for over 70 years, the organisation works to support, protect and celebrate music creators including its internationally respected Ivors Awards.

• MMF – Music Managers Forum - representing over 1000 UK managers of artists, songwriters and producers across the music industry with global businesses.

• MPG - Music Producers Guild - representing and promoting the interests of all those involved in the production of recorded music – including music studios, producers, engineers, mixers, remixers, programmers and mastering engineers.

• MPA - Music Publishers Association - with 260 major and independent music publishers in membership, representing close to 4,000 catalogues across all genres of music.

• Musicians’ Union - Representing over 32,000 musicians from all genres, both featured and non-featured.

• PPL is the music licensing company which works on behalf of over 110,000 record companies and performers to license recorded music played in public (at pubs, nightclubs, restaurants, shops, offices and many other business types) and broadcast (TV and radio) in the UK. PPL also collects royalties for members when their recorded music is played around the world through a network of international agreements with other collective management organisations (CMOs).

• PRS for Music is responsible for the collective licensing of rights in the musical works of 150,000 composers, songwriters and publishers and an international repertoire of 28 million songs.

• UK Music also has an informal association with LIVE (Live music Industry Venues & Entertainment), the voice of the UK’s live music and entertainment business. LIVE members are a federation of 13 live music industry associations representing 3,150 businesses, over 4,000 artists and 2,000 backstage workers.