[Sir Christopher Chope in the Chair]
I beg to move,
That this House has considered the effect on UK orchestras of the UK leaving the EU.
I am delighted to be serving under your chairmanship this afternoon, Sir Christopher, and to see the Minister and the right hon. Member for Wantage (Mr Vaizey) and the hon. Member for Henley (John Howell) in their places.
British orchestras are a global success story. They tour around the world, forge new markets in emerging economies and contribute to UK soft power and cultural exchange, but Europe is their most important marketplace. They are particularly worried about the prospect of a no-deal Brexit, which could put the survival of some well-known British orchestras at risk. Even with a deal, if the UK is going to leave the EU, orchestras need assurances, particularly ahead of the forthcoming comprehensive spending review. I understand from the conversations I have had that the key concerns are: first, the risk and danger of increased bureaucracy and costs associated with European touring after Brexit; secondly, funding, particularly given constrained public support; and, thirdly, the difficulty in recruiting and retaining EU nationals. I will take each of those points in turn and put six specific questions to the Minister.
I turn first to the increased difficulties in touring. Touring is intrinsic to the business model of British orchestras. Additional costs from controls on migration could price UK orchestras out in quite a fragile marketplace. Extra costs could include medical insurance, because of the loss of the European health insurance card; carnets for transporting musical instruments, if we are not in the customs union; border delays; and the cost of work permits. The planning cycle for orchestras is often more than two years ahead of performance, so contracts with promoters in the European Union have already been signed far beyond March of next year. Fees have been fixed. Additional costs from Brexit could push already contracted tours into loss.
Recognising the additional costs that orchestras will face, has the Minister had any discussion with the Treasury about increased public funding? Some EU promoters have chosen not to book UK orchestras because of uncertainty about Brexit.
That is not the first issue that comes to mind when one thinks about the challenges ahead, but it is an important one, and it is absolutely right for the hon. Gentleman to raise it.
Public funding for British orchestras has been cut sharply since 2010, as has funding from devolved Governments and local authorities, and there has been a cut of up to 30% from Arts Council England. Since 2016, the orchestra tax relief—I have no doubt the right hon. Member for Wantage had something to do with that—has been vital to the financial sustainability of orchestras, but at the moment we do not know whether British organisations will continue to be eligible for funding through Creative Europe or the other EU programmes, so UK Government investment is absolutely vital to orchestras, concert halls, festivals and promoters. What assurances can the Minister give at this early stage about funding for culture in the forthcoming comprehensive spending review?
Corporate sponsorship is down since the 2008 downturn. Arts and business incentive schemes saw corporate sponsorship rise to a total of just over £170 million in 2006-07, but it fell after that. In 2011-12, it was down to £113 million. Figures have not been published since then, but reports from orchestras suggest that it has continued to decline since. Can we look at new opportunities for incentivising corporate sponsorship? The Association of British Orchestras has proposed a tax incentive for investment in cultural organisations along the lines of the existing tax credit for research and development. Is that an idea that is being pursued?
Unlike in other countries, orchestras from the UK do not get any financial support for touring. They tour on an entirely commercial basis, so they are relatively expensive for foreign promoters. That is particularly difficult in new markets where the costs and risks of touring are greater. Might there be consideration of a new international touring fund in the new era?
I turn to recruitment and retention, which we have been discussing in the House this afternoon with the Home Secretary as he published the migration White Paper. British orchestras, operas and ballet companies rely on guest artists, conductors, soloists, singers and dancers being able to travel in and out of the UK, often just for a single engagement. Orchestras may have to replace an artist who has cancelled because of illness or injury at very short notice, and the replacement artist needs to be somebody who knows the particular role or repertoire. There may well be nobody suitable in the UK.
A lot of orchestral musicians—permanent or freelancing —are overseas nationals. The average percentage of EU nationals in UK orchestras is 8.3%. In some well-known orchestras, they account for more than 20% of the permanent musicians. The Government have rightly included principal and sub-principal orchestral musicians on the shortage occupation list. That means that orchestras can recruit under the tier 2 points-based system from outside the European Economic Area without recourse to the resident labour market test. Other players are subject to such tests, but the Association of British Orchestras has secured an extension to the recruitment period of up to 24 months, recognising the rigorous and lengthy auditioning and trialling process that is required. Recruitment under the points-based system is bureaucratic and costly, and orchestras are worried that if that system is extended to Europe after Brexit, as is proposed, there will be major new red tape and costs for them.
The salary threshold for entering the UK with an initial job offer is £30,500, which is above the average starting salary for non-soloist musicians in lots of orchestras, particularly outside London. The threshold for obtaining indefinite leave after five years is £35,000 a year. Public spending cuts mean that orchestral salaries have flatlined and roles in orchestras may well not meet those thresholds. We have heard from the Home Secretary that there will be a year’s consultation around exactly how the arrangements will work, but I think the Minister will recognise the concerns that orchestras have, if they are to continue—as they must—to attract global talent. Orchestral musicians are highly skilled, but they are not highly paid.
The Association of British Orchestras, UK Theatre and One Dance UK have written to the Minister with responsibility for the arts, the hon. Member for Northampton North (Michael Ellis), urging him to work with the Home Office to secure an exemption for highly skilled performing arts workers who earn below the £30,000 threshold in the proposed Brexit system, and to clarify the position of freelance musicians. That letter requested a meeting. Will he or the Minister who is responding to the debate meet the organisations who signed the letter to discuss that concern?
There is a worry about social security contributions. In the EU, a UK orchestral musician uses an A1 form to prove that they pay social security contributions in the UK, which exempts them from paying social security and health insurance in other EU countries when they are on tour. If, after Brexit, UK musicians no longer have access to the A1 system, it is likely that additional social security deductions of 15% to 20% will be taken from their pay. The financial viability of touring might well be wrecked. Will Ministers seek to ensure continued access to the A1 system after Brexit, perhaps through a bilateral agreement of the kind that is already in place with Switzerland? The recent political declaration commits to maintain
“reciprocal arrangements on the future rules around some defined elements of social security coordination.”
That form of words is not binding, and it is not clear to which elements they refer. I wonder whether the Minister can assure us that the A1 system will be included in those elements that should have reciprocal arrangements, and that steps will be taken to ensure that there will be no additional delays to issuing A1 certificates, because delays could be problematic as well.
There is a longer-term worry that recruitment problems will be compounded as higher education institutions attract fewer students from the European Union. Like many specialist performing arts institutions, the Guildhall School of Music and Drama recruits 20% of its students from the European Union, but already the number of applications from the EU has fallen. It was 495 in 2015-16, but it is 385 in the current academic year. UK institutions’ ability to be world class will be reduced if the skills pipeline of the sector is diminished by our leaving the EU.
We have heard a lot about the impact of leaving the European Union on manufacturers and banks. There will also be a major impact on orchestras, but that has not been widely debated. I am grateful for the opportunity to air these important concerns. The arts and creative industries are estimated to account for 800,000 jobs in London alone.
Let me just recap my questions to the Minister. Has she had any discussions with the Treasury about higher public funding to offset new costs for orchestras that arise from our leaving the European Union? What assurances can the Minister give at this early stage on funding for culture in the spending review? What progress has been made in considering tax incentives to encourage support? What consideration has there been of the possibility of an international touring fund? Will Ministers meet relevant organisations and consult them on exemptions to the salary thresholds for visas?
Thank you very much, Chair. It is a remarkable display of your flexibility, and another reason it is such a pleasure to serve under your chairmanship for the second day running. I congratulate the right hon. Member for East Ham (Stephen Timms) on securing this important debate and on putting the case for supporting our orchestras so effectively. I also congratulate the Minister—it is extraordinary that as the right hon. Gentleman was speaking, her Christmas card arrived in my inbox, drawn by Jessica Stinton of Ridgewood High School in Stourbridge. Jessica is now written into the record in Hansard for her beautiful picture of robins. The motto is:
“A time for everyone to come together.”
I think that this debate is a time for everyone to come together to support our orchestras, and the arts more generally, as we go through the turmoil of Brexit. The challenges that our orchestras face are also faced by many different arts organisations—perhaps not professional organ players, who might find it harder to tour, but certainly people in the visual arts—[Interruption.] I can feel that I have provoked my hon. Friend the Member for Henley (John Howell). If one wants to know about the quality of Oxfordshire’s cultural sensibilities, it is worth noting that only Oxfordshire MPs have turned up to this debate voluntarily.
My right hon. Friend is right to speak of the quality of Oxfordshire MPs and to say that I am an organist—I think that adds to our contribution to the arts as Oxfordshire’s dedicated MPs. I want just to correct him on one thing: he is right to say that I cannot fit my organ in the back of a trailer, but many churches and halls around Europe have organs that can be used, provided that it has been arranged in advance.
That is true. Yesterday I was at the Battersea Arts Centre, which houses a Wurlitzer organ—the largest electric organ of its type in the UK. I hope that my hon. Friend will have the chance one day to play that organ, which is currently being restored.
I digress. The point that I wanted to make is that while I was delighted to receive the Minister’s Christmas card electronically, a physical Christmas card is more tangible—just as a wonderful recording of an orchestra is a brilliant thing, but we ultimately aim to see it perform live. That is why the touring of orchestras is so important, and why British orchestras have seen more than a million more people attend live performances in the past eight years. Another important point is that our orchestras are very much part of this country’s soft power, as are all the arts. In my role as trade envoy to Vietnam, I was lucky enough to see the London Symphony Orchestra perform in Hanoi this year—that is one example. That is why I hope that the Minister will focus on the arguments that have been put forward by the right hon. Member for East Ham on the need to support orchestras and their ability to tour once we have left the European Union.
The right hon. Member for East Ham put some questions to the Minister, and I want to quickly outline three important themes. The first is obviously the physical ability to tour. We know that some of our orchestras have already lost bookings in the EU because of uncertainty about Brexit. It is not clear what future work permits might look like or what impact future customs arrangements might have on the movement of instruments between borders. We do not know how delays at the borders might impact on touring or what additional costs might come about from the loss of access to the European health insurance card. A whole host of uncertainties surrounding the physical aspect of touring in the European Union after Brexit need to be addressed.
The second point that the right hon. Member for East Ham touched on is that there will no doubt be an increase in costs for our orchestras, should they wish to tour in the European Union. It costs a lot to go on tour—I think it cost the London Symphony Orchestra about £1 million to do their south-east Asian tour. The costs are relatively low to tour in the European Union at the moment, but they will increase. The right hon. Gentleman was right to call on the Government to start to look at a fund to support international touring, perhaps with support from the Foreign Office or even from the Department for International Development. I was lucky enough to see the London Symphony Orchestra teaching in Hanoi as well as performing.
The third point that the right hon. Member for East Ham made is that the physical movement of people is important for orchestras. Something like 20% of musicians in our top orchestras come from the European Union. The salary threshold of £30,000 does not necessarily reflect the kind of salaries that are earned by people who are starting up their careers, or even by senior members of orchestras. When I was a Minister, I experienced some of the difficulties of getting artists from outside the European Union into the UK to perform. Those kind of obstacles really need to be looked at and overcome. I hope that, as well as considering a touring fund, the Minister will work with the Arts Council England to ensure that there is a special immigration section staffed by experts, who are able to wave through visas as quickly as possible to ensure that touring can be as friction free as possible.
Mr Chope, I thank you for the opportunity to make my points in this very important debate—while focused on orchestras, it is also a model for the wider debate on the future of cultural exchange between the European Union and the UK after Brexit.
It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the right hon. Member for East Ham (Stephen Timms) on securing a debate on this very important matter. I thank him for advance sight of his speech and questions.
The Government take extremely seriously our responsibility to champion and support our world-leading orchestras, which connect us to more than 400 years of creativity from across the world—particularly within Europe. I agree profoundly with the right hon. Gentleman about the value, success and soft power that our orchestras represent. They help to educate young people and contribute significantly to our cultural life and economy. We take none of that for granted, and we have a range of policies that support our orchestras.
In England, the Arts Council invests more than £25 million a year in orchestras, and related classical music organisations and activities, through the national portfolio. In 2017-18, Arts Council England awarded more than £2.8 million to a range of classical music projects across England through its lottery-funded Grants for the Arts programme, and more than £10 million through strategic funding programmes.
The right hon. Gentleman asked about new tax reliefs. Although that is a matter for the Treasury, I will comment on it as much as I can. The Government keep all tax reliefs under review. Any proposal for a new tax relief must be assessed for its effectiveness, wider economic impact, ability to stand up against abuse, and cost to the Exchequer. I am pleased to note that the orchestra tax relief, available across the UK, was introduced in April 2016. The most recent statistics for the relief show that, since its introduction, 205 productions have benefited and have received £6.6 million-worth of support from the Government.
On other future funding, the spending review will set the first funding envelope after the UK has left the EU, and will look at all Government spending. It gives us the opportunity to look at UK priorities and argue significantly for the hugely important area of culture, including, of course, performing orchestras. The Government have made clear our intention to undertake that spending review in 2019. Leading up to the review, we will continue to listen to the concerns of the sector, and of course we will consider any spending in the light of implications following our exit from the European Union.
The UK Government value the UK’s thriving cultural landscape and have listened to the sector’s concerns about the European market. We will continue to be in close dialogue with the sector, and we will seek a far-reaching relationship on culture and education with the European Union that is mutual beneficial for the UK, the EU, our cultural communities, including orchestras, and our citizens.
Some leading classical musicians have expressed concerns about the future as we leave the European Union, and those concerns have been represented in this debate. I assure them that their voices are being heard. My Department is working hard to ensure that Departments across Whitehall understand what our orchestras need from our future relationship with the EU, and what they need in terms of contingency planning in the unlikely case that we leave the EU without a deal. In either case, we are confident that the creativity and resilience of our orchestras will continue and thrive.
Right hon. and hon. Members have touched on a range of challenges for orchestras, and I will address them in turn. It is tragic that some orchestras have lost bookings on account of Brexit, as we heard from the right hon. Gentleman and my right hon. Friend the Member for Wantage (Mr Vaizey). The movement of people is important. A key challenge for our orchestras is how the rules about the movement of people might change. Those concerns have been raised, and I want to address some of them, particularly in the light of the White Paper, which was published this afternoon.
The White Paper is an invitation to interested parties to express their views. I trust that the right hon. Member for East Ham will make his views on the issues pertaining to orchestras apparent during the consultation inspired by the White Paper. In the future, it will be for the UK Government and Parliament to determine the domestic immigration rules that will apply. The Immigration Bill will bring migration from the EU under UK law, enabling us to set out future immigration system in domestic legislation. The movement of people is clearly important to the orchestras of our country. We will continue to work with the Arts Council, and we will look at the proposals it is making for visa waivers in this sector.
In the immigration White Paper, we set out further detail on the system, taking into account the recommendations of the Migration Advisory Committee’s report on European Economic Area migration in the UK. The future system will focus on high skills and welcoming talented and hard-working individuals who will support the UK’s economy, enabling employers to compete on the world stage. The Home Office is launching a year-long engagement to enable business and other stakeholders, such as orchestras, to shape the final details of policy and process.
The right hon. Gentleman asked whether my colleague, the Minister for Arts, Heritage and Tourism, would meet with the Association of British Orchestras. Following the publication of the White Paper, he will certainly be able to meet the right hon. Gentleman and the Association of British Orchestras to discuss this matter in greater detail.
Orchestras have expressed concern about the salary threshold. Indeed, the right hon. Gentleman mentioned the Migration Advisory Committee threshold of £30,000. We will discuss with businesses what a suitable salary threshold should be. If a skilled job is considered to be in shortage in the UK, a lower salary threshold is likely to apply. The right hon. Gentleman mentioned that skills do not necessarily relate to salary, and my right hon. Friend the Home Secretary is well aware of that.
Sir Christopher, should I allow a little time for the right hon. Gentleman to sum up?
I apologise. I am never clear on that point.
As hon. Members pointed out, it is not only the movement of people, but the movement of objects, that is important to orchestras. They move a huge amount of equipment around with them, much of it valuable, historic or both. They work on tight timeframes and are under pressure not to separate musicians from their instruments for long periods. I am aware that some musicians are worried that new customs processes will lead to increased cost, delay and inconvenience, which could disrupt touring schedules.
Hon. Members will know that the Government’s plan for EU exit aims to preserve frictionless trade for the majority of UK goods. Furthermore, in the political declaration, the UK and the EU recognise the importance of the temporary movement of objects and equipment in enabling co-operation in the cultural and education sectors. That, of course, includes musical instruments.
Orchestras are also concerned about customs processes in the unlikely case that the UK leaves the European Union without a deal. I hope hon. Members will understand that the issue of customs processes in the event of no deal is a broader, but no less important, issue than the one before us today. My Department has been working closely with Her Majesty’s Revenue and Customs to understand the pressures on our orchestras to ensure that we are prepared and that communications reach the right people and contain the information they need to allow orchestras are prepare.
Another challenge that was raised is the importance and value of EU funding programmes to the UK’s cultural sector, including orchestras. Creative Europe provides support for international cultural relations and creative projects. Collaboration is vital for culture to thrive. Creative Europe has demonstrated that international partnership enables the cultural sectors to share expertise, build relationships and produce exemplary creative works.
As the Prime Minister made clear in the White Paper on our future relationship with the EU, the UK wants to build on our long history of working together to continue to produce and promote excellent culture.
Motion lapsed (Standing Order No. 10(6)).