Grassroots music venues

The crisis affecting grassroots music venues and the broader live music ecosystem, including artists, promoters and festivals, is of deep concern to music lovers, local communities and all those who depend on the sector’s economic and cultural success. We also recognise and share concerns that these issues are affecting the broader night-time venues that host music, including clubs and electronic music spaces. These sectors must not be allowed to continue to decline, but the current support is insufficient to prevent this.

While our work has focused on immediate solutions to support grassroots music, a comprehensive review of the live music ecosystem is needed to fully explore the long-term challenges and the interventions needed to protect it. We recommend that the Government launch a fan-led review of live and electronic music in the summer of 2024, to bring together all parts of the ecosystem and report within the next twelve months. (Paragraph 23) A live music levy

We are encouraged that stakeholders across the sector are taking a levy seriously and already coming together to propose solutions in good faith. While we agree with artists and managers that a compulsory levy on arena and stadium tickets would be the fairest and most sustainable mechanism to support grassroots music venues without requiring downward pressures on artists’ share of revenues, we accept that the urgency of the crisis in grassroots means that a voluntary levy is the most feasible way to have an immediate impact. If the live music sector is serious about creating an effective voluntary levy, it must be equitable for all stakeholders and in place as soon as possible.

We recommend that the live music industry introduce a voluntary levy on arena and stadium tickets no later than September 2024 to support grassroots music venues, artists and promoters.

We further recommend that the Government should undertake and publish an assessment of the effectiveness of the voluntary levy on grassroots music venues no later than 12 months after its establishment.

If a voluntary levy is unable to be agreed by September 2024, or if the assessment of the voluntary levy concludes it is not collecting the income required to support the GMV sector, the Government should introduce a statutory levy at the earliest subsequent opportunity.

There is broad consensus that a charitable organisation is best placed to administer the levy funds. While Arts Council England is already well-established and well- placed to distribute funding, we accept that a trust led by a sector umbrella body, such as the LIVE Trust or Music Venues Trust, is the best way to collect, manage and distribute a voluntary fund. For this to succeed, we recommend that it contains Grassroots music venues 37 broad representation for all stakeholders, including venues from GMVs to arenas, artists and their business partners and national and independent promoters among its trustees. A trust must provide the utmost transparency and due diligence for its decisions to ensure it can maintain the confidence of all stakeholders within the fragile live music ecosystem. (Paragraph 50) VAT and business rate relief

A targeted and temporary cut to VAT for grassroots music venues on tickets would help to improve the immediate risk-profile of live music for promoters and in-house programmers, who take on the financial risk, and help get more shows into venues. The Government should introduce a temporary cut to VAT, based on venue capacity, to stimulate grassroots music activity and the wider economic benefits to local areas that grassroots music shows provide.

We recognise that live music is one of many sectors calling for special treatment for VAT, and that the case for a long-term or permanent exemption requires a stronger evidence base for its economic impact than currently exists. We recommend that the Treasury and DCMS undertake a comprehensive economic analysis of the impact on a cut to VAT in line with recommendations made in this report, including modelling: a cut to a 10% rate, which is the European average, on tickets, as well as alternative approaches such as VAT on food and beverages; a targeted intervention for different sizes of venue; and the indirect impacts to VAT revenues of venue closures and a reduction in live and electronic music events.

We welcome the Government’s decision to extend business rates relief for grassroots music venues until the end of the 24/25 billing year. However, while we understand that the conventions around Budget announcements are well-established, this continued uncertainty creates a new cliff-edge for the already precarious grassroots music sector. We recommend that Government should ensure that any future fiscal policy decisions relating to grassroots music venues gives venues certainty and long- term security. If the Treasury intends to end business rates relief for GMVs, the reduction in relief should be tapered in order to avoid an immediate shock to the sector. (Paragraph 64) Public funding

We welcome the efforts by Arts Council England to address issues resulting from the live music sector’s ability to access public funding raised in our predecessor committee’s ‘Live music’ inquiry six years ago, and indeed grassroots music venues said that ACE funding through Covid had been a lifeline. However, we are concerned that perceptions and administrative burdens remain largely the same. We recommend that the Government and Arts Council work to reduce the administrative burden of applying for public funding. (Paragraph 75) Stakeholder disputes

We recognise that, in the current economic context and amidst a closure crisis, there are frustrations among venue operators and promoters with PRS for Music’s 38 Grassroots music venues fees and processes regarding licensing. We also recognise that PRS for Music has a responsibility to the songwriters, composers and music publishers it represents, and is a vital part of the music ecosystem. Songwriter rights and royalties should be protected but tariffs should be fair and terms reasonable for licensees.

The comprehensive Tariff Review, due to begin in summer 2024, is a useful opportunity to consider how concerns that have been raised with us, such as litigation, the ease of navigating processes and whether a GMV-specific tariff is feasible, can be mitigated or addressed for the next period. We recommend that our successor committee consider progress in the next Parliament.

Despite the welcome introduction of the agent of change principles, venues are still facing a widespread risk of closures due to planning and redevelopment-related issues. We recommend that the agent of change principles are put on a statutory footing at the earliest opportunity.

As the costs of touring have mounted and opportunities to perform live are becoming squeezed, merchandise revenues are increasingly important to sustain the livelihood of professional artists and their business partners. We welcome that grassroots music venues are committed to ensuring artists can retain all of their merchandise revenues, despite their own need for income.

We support the Featured Artists’ Coalition’s campaign for an end to punitive fees and its four principles on merchandise commissions, particularly given the current economic environment in which artists are trying to make a living. We call on all venues and trade bodies in the live music sector to follow the FAC’s merchandise principles. (Paragraph 101) Grassroots music venues 39