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I beg to move,
That this House has considered Government-backed insurance for live events.
Everybody here today will be aware that live performance production is an inherently risky economic activity, as the majority of capital is expended on pre-production and rehearsal prior to any income returns retrieved at the performance stage. In other words, as a business, it needs to invest money before it can take money back again. And therein lies the problem: for all the glorious music and theatre that live events offer, behind the scenes it is all about money and the integrity of the business. Organisers simply cannot get the ball rolling—by sourcing locations, paying performers, hiring equipment and so on—if they are not guaranteed that the show will go ahead.
I have heard the Government say many times that it would be too expensive to create an insurance scheme. I beg to disagree with that. I think there needs to be a perspective shift inside Government. Government must stop seeing our calls for an insurance scheme as expenditure and see this instead as an investment opportunity. I say that because ultimately, if they help facilitate the return of live events, the economic and cultural returns will end up paying for the initial investment—it will pay for itself.
We know the economic potential of the industry. The creative industry contributes—can you believe it?—£13 million every hour to the British economy, with the live events industry adding £70 billion to the UK economy every year. However, the significance of live events is not limited to the UK-wide economy. When events take place, local economies benefit, not only in direct revenue but through the increased use of hospitality or transport services. For example, and as I have said many times, the Edinburgh Festival Fringe generates no less than £500 million in direct spending, and a further £560 million goes into the Scottish economy indirectly.
Up in my own patch in the far north of Scotland, my beloved Highland games are worth an estimated £25 million. The House can imagine what that means to rural areas. With 25% of the people attending those games, they provide a much-needed economic boost to my constituency and to other Scottish constituencies. But they also allow us to share Scottish culture with people all around the world.
At a time when this nation needs to recover, and aligned to employment opportunities, increasing the consumption of hospitality and bringing tourism to every nook and cranny of the country will help us not only build back better, but build back together. As the House can imagine, I do not want to see my constituency being left behind in this regard, but that is exactly what is happening. I am hearing now that Highland games are being cancelled all over the highlands and Scotland because of uncertainty as to what the Government advice is.
I am asking for a scheme to be arranged whereby the Government would back insurance and underwrite it. I am asking our Government to underwrite their own policy. If the Government are confident enough about their handling of the pandemic to ease restrictions, and if they have promised an irreversible road map, meaning the industry should not have to worry about further lockdowns, why are they so reluctant to put their money where their promises are?
If all the things that insurers are worried about never come to be, the Treasury will never have to make a payment. What this really demonstrates is the Government’s lack of confidence in their own policies; either that or they have a different definition of what their responsibilities are.
I think every hon. Member here today must have expertise in the industry. I am no expert, but I listen to experts such as Tim Thornhill from Tysers Insurance Brokers when they tell me that insurance is the key to unlock the festival and live events door. On discussions with industry experts, the Minister promised my hon. Friend the Member for Richmond Park (Sarah Olney) last week that she would release documents relating to her discussion with industry experts and insurers. I am grateful that she has agreed to come and respond to our debate.
There is a precedent, with the Government underwriting insurance in the face of terrorism, and they make a lot of money on that—over £200 million in each of the two previous years. There is a precedent. I beg the Minister to listen to my plea.
It is nice to see you in the Chair, Mr Rosindell. I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for opening the debate today. I am co-sponsoring this debate with the hon. Member for Cardiff West (Kevin Brennan), with whom I serve on the Digital, Culture, Media and Sport Committee.
I want to focus again on the festival industry. I say “again” because I spoke about it in the DCMS estimates day debate a couple of weeks ago. The risks to events taking place this year revolve around three things: uncertainty, even with the road map; lack of working capital for our festivals; and the ongoing absence of the insurance solution.
There are, believe it or not, around 975 festivals in the UK every year—an incredible number. We reckon they generate around £1.75 billion to £1.8 billion for the UK economy every year and support around 85,000 jobs. According to the excellent UK Music, more than 5 million people attended a festival in 2019—including me. It was a Boomtown Fair in my Winchester constituency, and, for the record, Pattishall—a small community music festival in Northamptonshire. That really shows the difference between a very big event of tens of thousands of people and a very small village affair.
I would attest that a Government-backed insurance scheme is essential to the festival industry. I am not saying that insurance is the sole barrier to kickstarting festivals, and it is a leap of faith, in some respects, with taxpayers’ money. However, organisers cannot enter into the usual planning for 2021 without an insurance solution in place. It is simply the key that unlocks the process. As the hon. Member for Caithness, Sutherland and Easter Ross said, it is unfortunate that we have not yet managed to persuade the Government of the case. I have to say that it is almost too late for 2021, but we must try, and we will. That is the purpose of today.
The sector is not churlish; it very much welcomes the Prime Minister’s road map out of lockdown, that it has “no earlier than” dates, and the news that many festivals may be able to go ahead in some capacity later this year. However, we must understand that this is surrounded by caveats, and the problem is the planning cycle. There will be no more than a week’s notice of step 4 being brought in. If all factors line up and 21 June is possible, festivals may not get the go-ahead until 14 June. The Government’s event research programme—which I welcome very much—including the pilots, will need to be successfully completed by 21 June to enable step 4. Yet this does not start until 12 April. Clearly, that has a significant impact on whether some festivals can proceed with planning for July and August this year, given the timeline without an insurance solution and the average go/no-go cut-off point being the end of this month. That is why I say it is almost too late.
The insurance we are talking about does not exist in the commercial market, which is unlikely to mobilise this until at least 2022, so there is a market failure, or a market gap. Even if festivals sell out well ahead of time, many organisers cannot draw down the revenue from the ticketing companies, as it remains ring-fenced to be paid out, rightly, post event or refunded to customers if necessary. It remains an enormous risk for any independent festival to proceed with costs up to 14 June, without insurance and many just will not take it. Major festivals such as Reading and Leeds have said that they will go ahead this year—Glastonbury, of course, has not—but it is important to say that they are not the barometer for the entire festival industry.
Members of the DCMS Committee wrote to the Treasury on 6 January. We reminded the Government that they have backed insurance for the film and television industry to the tune of some £500 million. It is now time to do this for other creative industries. That could take a number of forms: one requires no up-front contribution from the Government and utilises the existing Pool Re structure, developed in response to unpredictable and devastating acts of terrorism. That would leave the Treasury with a maximum liability, we think, of £1.5 billion and could be adapted to cover a range of sectors, including hospitality, sports and leisure, as well as festivals and live performances and events. The point is that none of this need ever be needed. As the hon. Member for Caithness, Sutherland and Easter Ross said on opening the debate, all the Government need to do is back their own road map. In his reply on 8 February, my hon. Friend the Economic Secretary to the Treasury said:
“My officials are working with DCMS officials to understand what a viable roadmap would be for the reopening of the events sector and therefore the right point to consider potential support options which could unlock a reopening of the sector, including insurance-based solutions.”
That sounded positive, but it was obviously over a month ago. Please will the Minister update us on that today?
The key question put by UK Music ahead of today’s debate is: do the Government believe that festivals should start planning for post-21 June without insurance in place? It made Government-backed insurance a key plank of its excellent “Let the Music Play: Save Our Summer 2021” report, which made it clear that it was welcome that the Government delivered on so many points in the report—an indicative date and extending financial support, to name but two. But without insurance, UK Music feels—and we agree—that the benefits to the sector are restricted.
The live sector desperately needs to return to work. The Minister is a great champion of that sector and she knows this. The Government have stated that they will do “whatever it takes” to support the economy and jobs and boy, have we done that. Seventy per cent. of musicians have seen their work fall by at least 75%; grassroots music venues, such as the Railway Inn in my constituency, have lost an average 75%—two thirds—of their income. Arenas are in the same position and technical companies have lost on average 95% of their income. This is devastation across the sector. The longer the live music sector is shut, the greater the damage and the more difficult the recovery. Therefore, quickly clearing this insurance barrier is key to guaranteeing recovery. UK Music has calculated that a £680 million Government-backed insurance scheme for music could underwrite £2 billion in activity.
The Government have stated that they are not intervening because insurance is not “the only barrier” to events taking place and has pointed to other interventions they have made, such as the job retention scheme, the self-employed scheme and the cultural recovery fund—all excellent schemes. The music sector is very grateful for those and other interventions, but they do not negate the need for insurance, and their utility in supporting reopening is less than it would be without an insurance solution.
It is unclear what the Government mean by “the only barrier”. If reopening goes ahead on 21 June, the only reason for live music events not to go ahead would be this inability to get the insurance—we keep coming back to that. If public health in defence of delaying reopening is the other barrier referred to, the industry is—let’s face it—in a Catch-22, because it is the possibility of that intervention that is distorting the commercial music market and raising the need for Government intervention in the first place.
In conclusion, this matters for all the reasons that I have touched on this morning, but it matters right now when events, short of insurance, short of certainty and short of cashflow, are selling tickets to young people desperate for something to look forward to.
We cannot have events that do not have a licence in place, as sometimes happens. I found one the other day that had not even contacted the safety advisory group of the respective local authority and was selling tickets—often at £100-plus a go—on the promise of hope alone. That will do the vast majority of this well-run and professional industry no favours whatsoever, but in many ways it is a symptom of the situation that we are in.
I appreciate that the insurance situation is difficult. It is not the only issue in play here and we do not pretend that it is, but it is the key that can unlock the door.
It is a pleasure to serve under your chairmanship, Mr Rosindell, and it is also a pleasure to be part of this cross-party supergroup this morning, which has got together to work across party lines and to argue for proper insurance indemnity for events this year from the Government.
I thank the Minister for her attendance, although, as the hon. Member for Winchester (Steve Brine)—who, like me, is on the Digital, Culture, Media and Sport Committee—has just said, we would really like to hear from the Treasury, because we would like to know what it has made of all the representations that have been made to it by the industries that we are talking about today. For fronting up for the Government time and again, the Minister deserves some kind of award, but we need to know the answers, and one wonders whether they are currently locked away in a vault somewhere across the road in the Treasury. We want to know what the Treasury really thinks.
As the hon. Member for Winchester did, I will focus today on festivals and live music events, but I will also say a little bit about theatre. I will not go through the whole set of statistics, as the hon. Members for Caithness, Sutherland and Easter Ross (Jamie Stone) and for Winchester have already done. Suffice it to say that one statistic for Cardiff is that across the river from my constituency, in the Principality Stadium, Ed Sheeran played four nights in a row in June 2018 to 60,000 people a night, which is nearly a quarter of a million people over the course of just a few nights. I do not need to spell out to hon. Members and to people watching this debate the economic impact of such events, and their importance to the economy of Cardiff and to the wider economy of south Wales.
In talking about festivals this morning, we want the Government to provide some clarity. If it is the case that it is not going to be possible for them to underwrite events and if it is going to be the case that they do not think that they will stick to their irreversible timetable and will probably have to impose further restrictions in the future, they should say so, because at the moment the sector is being led along on a string effectively and is unable to progress appropriately.
I have heard it said that the Government think that because festivals and live music events are selling tickets they do not need insurance, but of course normally—in a normal year—that ticket revenue would be used to do the build and provide the infrastructure to put on things such as festivals. However, this year is not a normal year, because festivals cannot get any cancellation insurance; they cannot get insurance against not being able to proceed, which would normally be available in the market, as the hon. Member for Winchester said. As a result, that money would have to be returned to ticket purchasers if the event was unable to go ahead and there would be a huge impact on those trying to put on festivals and also further down the supply chain.
That is why the hon. Gentleman—who, as I have said, is on the DCMS Committee, like me—was quite right to draw the attention of that Committee and of the Minister to the possibility of money being taken from people that will never be returned to them, and potentially fraudulent activity taking place around the festival scene this year without the kind of certainty that insurance provides. So we need either insurance to be underwritten for the sector to be able to restart or a clear indication that festivals will not be able to take place and financial support to allow the sector to survive into 2022.
Other countries are doing things about this situation.
The hon. Gentleman is making a splendid contribution to the debate, which I really appreciate. Does he agree that the longer we delay in getting these events up and running, the more danger there is of people losing momentum and even deskilling, in terms of performance and generating public enthusiasm?
The hon. Gentleman is absolutely right. I have praised the investment in the culture recovery fund, which the Minister will mention in her remarks at the end of the debate—she has to do that; it is an important riff for her as the Minister. There are criticisms, however. In the 1980s, we had the concept of the neutron bomb, which was developed so that it would kill the enemy but not destroy the buildings all around. In a way, the culture recovery fund is a wonderful thing, but if it just saves the buildings and some infrastructure, but does not protect the people in the sector and the skills that the hon. Gentleman mentioned, that will be an additional cost. He is right to make that point.
I was going to mention what is happening in other countries. The Danish Government have announced an event cancellation fund of €67.2 million. The Dutch Government have just announced an insurance fund of €385 million. Finland’s Ministry of Economic Affairs and Employment is working on a Government-backed insurance scheme for summer events, to be finalised by the end of the month. The Estonian Government have a scheme. The Germans have a similar fund, of €2.5 billion, to cover promoter risk. I could also mention schemes proposed by the Austrian, Belgian and Norwegian Governments. Such a scheme is not without precedent, because there is a precedent in the creative industries in this country, in the film and television sector. All that many people in the industry are asking for is a similar scheme. It is vital for live music events and festivals that action is taken.
I want to speak briefly about theatre. The theatre sector, and UK Theatre, have been lobbying Government hard for months. Many people involved in theatre production are also involved in film and television production, and they do not understand why the Treasury could provide an insurance indemnity scheme for the film and television industry, but could not provide an identical scheme for the theatre sector, as UK Theatre is asking for. Without a return to normal for theatre production, there will be a huge negative impact on the total economy, including loss of tax revenues and economic activity. That will be felt particularly badly in city centres and some towns.
The insurance market is not offering a scheme of this kind, and it is clear that it will not offer one for the foreseeable future—into 2022 at the very least. The risk exposure figures have been provided to Her Majesty’s Government by, for example, UK Theatre and the new umbrella body for the live sector. The Treasury has not publicly said what is wrong with those figures, and that is what we need to know—if it does not agree with what the sector is saying, it should say so.
We need to hear from the Minister not only about the culture recovery fund, although we understand how important it has been, but about the discussions between her and the Secretary of State and the Treasury. What have the discussions been like, and what is the Treasury saying? If it will not be possible to provide an underwriting insurance scheme, the Government should come clean with the creative industries, so that they can plan accordingly, and Ministers should offer support to help them through to the next stage of this dreadful pandemic.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I commend my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this valuable debate. I share with him direct experience of involvement with the live events sector, and know how close it is to his heart, as a former performer. Although my hon. Friend and I represent the same party in Parliament, we represent very different constituencies. In both our constituencies—his in the far north, in the rural highlands, and mine on the outskirts of London—live events are an important part of the cultural experience. I am sure that that is the same for every constituency in the country and that live events, particularly in the summer, are part of the lifeblood of the community.
Other Members have talked about events in their constituencies. We have some fabulous events in Richmond Park. Kew Gardens, which I am privileged to represent, holds a wonderful live music concert called Kew the Music. We also have lots of little events going on. There is open-air cinema in Canbury Gardens, and there are fairs in all our neighbourhoods every year, but much of that is being put at risk this year.
There is so much pent-up demand, with people stuck at home all year. They have been staring at their laptops, as I am now, or their television screens. Live events are such an important part of the cultural and economic life of the country because nothing can replace that personal experience of theatre or live music. There is nothing like it. I am sure we can all remember our favourite gig, our best experience of live music, whether that is the Proms, Glastonbury, Glyndebourne or just a band in the local park. We will all remember that as an exciting experience that we long for more than ever after the terrible year we have had, which we are commemorating today.
That is why I wanted to be in this debate and to speak up for live events. I have had experience of appearing in theatre and putting on theatrical productions. I know that, above all, live events are risky—you have to take a chance. Planning will start in January or February, tickets will start to be sold, notice will be given of what will happen in June and the acts will be booked. Anything could go wrong in that time: the headline act could fall ill or encounter some other obstacle, or the weather might not be what was hoped for—any number of things could go wrong.
Paying for insurance is already a large part of the cost of putting on a live event. This year we have the additional massive uncertainty of whether the Government will allow live events to go ahead in the summer. I support the Government’s road map; I think it is right to be cautious, to take things slowly and not to make a decision until June on whether live events can go ahead. The frustration and tragedy is that we have great pent-up demand for live events. We have a huge number of people who are ready, able and willing to get out there and start performing again and putting on events. We just need to be able to bridge the risk gap, which is why I support calls for a Government-backed insurance scheme and think it is so important.
The sector supports a huge number of jobs. Obviously, a lot of that is unskilled seasonal work, but that is an important part of our economy, not just for students but for young people leaving school and those constrained from entering the regular workforce. The live events industry also gives opportunities to entrepreneurs, particularly in food and retail. There are lots of easy-to-access opportunities to sell directly to the general public, without some of the cost barriers that might be experienced in other retail.
There is also skilled work for technicians of all types in lighting, sound, logistics and freight. To pick up on the intervention made by my hon. Friend the Member for Caithness, Sutherland and Easter Ross, there is a risk that we will lose some of those skills. Once people find that they cannot earn a living doing what they trained for, they will do something else. Even more importantly, I am concerned that we will lose the pipeline, particularly in our creative industries. I am concerned for musicians, actors, set designers and costume designers, many of whom have been without work for 12 months.
I pay tribute to my hon. Friend the Member for Caithness, Sutherland and Easter Ross, who has done fantastic work as chairman of the all-party parliamentary group on gaps in support. We must not forget that a lot of those people who are waiting to hear whether they have work this summer have not had any financial support all year. They have often worked on a contract basis. As we all know, contractors have lost out on furlough and the self-employment income support scheme. Many of them have really had no support at all, so I urge the Treasury to look at what it can do to try to get the live events sector back up and running this summer, particularly to support those people.
I am very concerned for the creative sector in particular. It is such a strategic sector for our country in terms of what we export abroad. Our cultural products are among the best in the world, and it is absolutely essential that the Government maintain this pipeline. There will be young people leaving school or university this summer—talented musicians and aspiring actors—who will look at our cultural sector at the moment and think to themselves, “It’s too risky to try to earn a living. There isn’t enough economic support out there for musicians or actors.” Then they will go off and seek employment in other sectors. That will lead to the weakening of our cultural sector. I just want to reiterate that it is such an important sector for us in terms of projecting our values and our soft power around the world, and there is no more important time than now for us to be doing so.
I know that the Treasury is not present in this debate, but I take this opportunity to call on it to think strategically about supporting the cultural sector. I really value the work of many of those present in identifying the need for a Government-backed insurance scheme; it is a straightforward solution that can really help to kickstart things and remove some of the risks and barriers to getting live events back up and running this summer. That will be so important to so many people—both those working in these industries and those of us who have been stuck at home for a year and who just want to get back out there. It will be a massive boost to the mental health of the nation if live music events can take place again this summer.
It is a pleasure to serve under your chairmanship, Mr Rosindell. It is also a pleasure to follow the hon. Member for Richmond Park (Sarah Olney). I agree with one of the critical points that she made, which is about people involved in the arts, and support to the arts, having fared particularly badly in this pandemic. That has been an issue of real regret.
I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), my hon. Friend the Member for Winchester (Steve Brine) and the hon. Member for Cardiff West (Kevin Brennan) for leading this debate, and I agree very strongly with the points they made. I will not speak for too long, because I just want to echo some of those points, specifically in relation to festivals on the Isle of Wight.
The Isle of Wight is effectively Britain’s festival island; we are home to a new festival almost every weekend, over and above the significant, major festivals that we have hosted, such as the Isle of Wight festival and Cowes Week, which is the biggest sailing event in the world. Festivals contribute significant value to the island’s economy, although their value is wider than just economic. They support extensive supply chains, local businesses, equipment hire and similar areas of the economy. They also support the island’s visitor economy, such as shops, bars, restaurants and accommodation, and they also help local farmers to diversify their incomes. The funding and spend of almost all the smaller independent festivals also go directly into the local economy, employing hundreds, if not thousands, of people. As well as an economic impact, they also have a significant cultural impact on the island.
As has been pointed out, festivals are year-long endeavours; as soon as one festival is finished, those involved are already planning next year. A year’s worth of effort goes into something that is mostly only a weekend long. While other elements of the hospitality industry, such as pubs and restaurants, can turn off and on during lockdown—however inconvenient that is—it has been very difficult for the festival and arts industries to do that.
The hon. Member for Cardiff West eloquently explained why Government-backed insurance—pooled reinsurance, to use the term that was used in the IRA days—is a very good idea, and I fully support it. Given the long lead times, we need to help, and we need to give confidence to festival organisers, so that they know that their work will not be wasted. It is likely that festivals will be able to go ahead this summer, with all the new mitigations in place around testing and the vaccination process, so I do not quite understand why we cannot have a pooled reinsurance scheme, which could be relatively cheap but help to kickstart this element of our arts and entertainment industry.
What concerns me is that every day we are in lockdown, it costs us a minimum of half a billion pounds in lost economic output and cost to the Treasury. If we can come out of lockdown only a few days earlier, we could be billions of pounds better off. A very small percentage of that money could be used to provide a scheme of pooled reinsurance for festivals—not only on the Isle of Wight, but across Britain. As everybody who has spoken in the debate has said, we need those festivals for people’s mental health and for the enjoyment of arts, culture and music, including the music festivals that we have on the Island. We badly need those in our lives again, because we have missed them in the last year. As well as helping our economy, they enrich our souls.
I hope very much that the Minister, who I know is absolutely passionate about her role, can see her way to working on the Treasury a bit harder, so that we can have some kind of pooled reinsurance scheme to support all the great festival businesses and all the jobs that they support on the Isle of Wight and throughout the United Kingdom.
As always, it is a pleasure to serve under your chairmanship, Mr Rosindell. It is also a real pleasure to sum up the debate for the Scottish National party, and I congratulate our trio of trusty troubadours, led by the choirmaster, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), on bringing this important issue to the House. I refer to my entry in the Register of Members’ Financial Interests.
This is yet another instalment of the ongoing travails of our live music industry and the artists who are involved on the frontline of it—the next verse in the song entitled “The Worst of Times”. Live music is vulnerable, like no other sector, to the strictures and conditions of covid. It suffers probably more than any other sector under the requirement to keep people socially distanced as we get on top of this pandemic. Music is a social business: it involves people coming together, and it involves performance. It is all about community and coming together, and it is obvious that music will suffer as a result of people being restricted in coming together. Whereas other sectors can now look forward with a degree of optimism to the possibility of getting back to work and back to normal, live music can only surveil its future with continuing anxiety and concern, underpinned by the lack of clarity at the heart of the planning.
Everybody just wants to get back to gigs. We have heard from hon. Members about how imperative that is and what it does, not just for the economy of this nation, but for our wellbeing, our sense of ourselves and our enjoyment of the things that we like to get out and do that make us feel normal. A YouGov survey that really struck me a couple of weeks ago showed that half the UK population want to go to live events this summer and that 75% believe that live events are a critical part of our culture. We know that the demand is there and that people are just waiting for the green light to go out and see their favourite bands once again.
Hon. Members are right to remind us of the contribution that live music brings to the economy and of the sense of joy that music gives us all. The Government can help unlock this boost to the economy, at no real cost to themselves, by giving a commitment to help underwrite the costs in case of any cancellations that might occur—cancellations that have nothing to do with the festivals, but that result from obeying the requirements set by the Government.
We recognise what the Government are doing, and we welcome the measures that have already been outlined—I am sure the Minister will tell us about them again, and there is no question about the fact that they have been thoroughly good. The expanded support for freelancers and the self-employed is a step in the right direction for an industry in which three quarters of the 200,000 workforce are self-employed. We welcome the £300 million boost to the culture recovery fund, but I still do not understand why it cannot be extended to include freelancers, which is how we operate our schemes in Scotland and Wales.
All of that is welcome and will help, but for live music, and particularly for our festivals, as we heard from hon. Members who discussed the festivals in their constituencies, there have to be guarantees and assurances so that events can go ahead, secure in the knowledge that, if there are covid events beyond their control, there will be somebody there to step in. There is only a period of weeks for staging live music events this summer. Organisers will have to make decisions in the next few days and weeks about whether they can proceed or whether they will be forced to cancel. It is all about having the confidence to proceed and the security to go ahead. The live music industry urgently needs this Government-backed insurance scheme to protect against the risk of losses if a festival or concert is forced to cancel due to covid.
Already, as we have heard, it is too late for some great music festivals across the UK. Some have decided that they just cannot take the risk; Glastonbury will not be going ahead for a second year this year. Others have decided that the risk is still worth taking, and are still planning to put on their festival events. Reading and Leeds festivals have been mentioned, and I really hope they are able to go ahead this year. Some are still assessing the risk. Festivals such as Latitude, Wireless and Download say that everything hangs in the balance, with the final choice dependent on whether an insurance scheme is in place.
It is worth recognising that, even without covid, festivals are already a risky business, and that risk could be of the order of millions of pounds. The fields of the UK are littered with failed festival enterprises. Every year, the margins get tighter and it gets tougher and tougher for festivals to prosper and succeed. The festival experience is variously a holiday, a rite of passage and an opportunity to participate in a little weekend of all-consuming hedonism. The general rule is that if you remember it, you were not really there.
I have been pretty lucky: I have seen festivals from both sides. I have played in most of the big festivals around Europe, and I know exactly what they mean to people—not just the people who go to see it, great as it is for them, but for the artists. I think it is only me and the right hon. Member for Islington North (Jeremy Corbyn) who have appeared live on the Pyramid stage at Glastonbury, though I think I am the only one who appeared there with a musical instrument. For the artist, it is the highlight of the live performance calendar, and for so many it is an essential source of income. If a new band is invited along to a festival such as T in the Park, Reading or Glastonbury, they share a stage with legends—people who have been in the business for decades. It is such an immense thrill and opportunity. Sometimes, they get the opportunity to play to tens of thousands of people, maybe after just performing in the local pub. They are tipped as being the next big thing, and it is a real opportunity to test their talents. For musicians, it is immense; it is such an important feature of the development of their career and the progression of what they have to offer.
It is not just about the musicians; it is also about the crew, the stage constructors, the security staff and the hundreds of members of the public recruited to ensure the success of the event. In fact, building a festival is like constructing a temporary large town or small city, with all the infrastructure that is required. I had T in the Park just next door to me in the Ochil and South Perthshire constituency, and for one weekend per year when T in the Park was on the go, it was the eighth-largest settlement in Scotland.
It is more than that; it is about what it delivers for the community in Perthshire. T in the Park was the second-biggest festival in the UK, and throughout the weekend when it was on, every single hotel and restaurant in Perth in my constituency was full. The communities of Kinross and Milnathort, which were a sort of base camp for T in the Park, were practically part of the festival. We need reassurance that these festivals can go ahead, not just for the artists, the musicians and the industry but for the communities we serve. They need to know that the festivals can go ahead with security. People need the confidence to put on festivals again.
I think it was the hon. Member for Cardiff West (Kevin Brennan)—it was certainly one of our trio—who said that other countries are able to do this. They think it is valuable. Last week, Denmark became the latest country to introduce Government-backed insurance for events. I know Danish festivals really well. Festivals are an intrinsic part of the music offer in Denmark. Every single town and city has a festival, so the Danish Government have moved in to protect their industry, and I congratulate them on that. It is not just Denmark; festival organisers have been supported in Germany, Norway, the Netherlands, Austria and Belgium. If all those countries right across Europe can do it, why cannot the UK?
It all starts with the UK Government engaging with the industry on how best to ensure that we get an insurance scheme that works for our live music sector. As we have heard, the Government have already backed the film industry with a bespoke insurance scheme. That is great: it is required and it needed to happen, but it needs to happen for music too. There is a proposal on the table. We know that several live events organisations have got together and worked to produce a scheme that is probably sitting on the Minister’s desk: all she needs to do is sign it off, and we are there.
Tysers is calling for the UK to support a £650 million insurance scheme to get our live sector back on its feet. This proposal could support the whole of the live events sector—promoters, venues and artists—and prevent job losses and economic inactivity. As an insurance fund, it has the added benefit that it may not even be used, making it even more cost effective than grants. The Government have absolutely nothing to lose from getting involved with the live music sector and going along with this. This package of support will be targeted directly at UK beneficiaries, providing them with the support and confidence they need to put on shows and events, and unleashing over £2 billion of economic potential. The Minister has nothing to lose, so I ask her to look at the scheme, and give it her backing and the green light.
The proposed scheme would have a timeframe only up to the end of 2022, and it would be available only to companies putting on shows in line with guidance. It would not cover non-coronavirus issues, and claims would be capped at a certain budget and must be justified. This is all in the Government’s hands—it is all there, ready to go, if there is the political will—and the benefit for the Minister is that this time around, she does not have to deal with the invidious EU. This is nothing to do with it; it is not a constraining feature or factor. She does not have to sit around the table to negotiate a visa arrangement with it: it is all about her and her Department. The only door she needs to knock on is that of the Treasury, to unlock this fund, give the assurance, the confidence and the backing, and get this unleashed. People want to go to gigs; let them go. The artists just cannot wait to get back to performing live. I have tried every week to watch a live show online, just to make sure that our artists are supported, but believe me, they want to play in front of audiences again. They have been deprived of that for a year, and they need to have that contact. They need to get those guitars, keyboards, drums, basses, or whatever in front of an audience and play them.
People want to get back to gigs. Live music is important to all the communities we represent, and live music and music tourism give a real boost to our economy. This is in the Government’s hands; they can give the reassurance that is required. Let us bring the music back.
It is a pleasure to serve virtually under your chairmanship, Mr Rosindell, and I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on having brought forward this important debate this morning.
The hon. Member for Perth and North Perthshire (Pete Wishart) has spoken extensively on the importance of live music; in fact, listening to him talk about Glastonbury made me feel quite unambitious in life, in comparison with the passion that many people feel about their opportunities to perform. I understand that because, as the hon. Member for Richmond Park (Sarah Olney) mentioned, nothing can replace live events. Most of us knew that before; we certainly know it after the past year of hell without them.
I also thank all members of the Select Committee on Digital, Culture, Media and Sport, particularly my hon. Friend the Member for Cardiff West (Kevin Brennan) and the hon. Member for Winchester (Steve Brine), who have spoken expertly on the issue of an insurance scheme. The Select Committee has done very good work on this, and I am sure the Minister will be looking very closely at what its members have said this morning, in addition to the extensive evidence that it has provided to the Government.
I want to ask one further thing on that, and then make two more brief points before we hear from the Minister. It does seem that the Treasury is the decision maker here, so I wonder why we have a Minister from DCMS before us this morning, not a Treasury Minister. It feels as though, on a number of issues, DCMS is essentially communicating messages from the Treasury, and it would be good to hear directly from the horse’s mouth.
On other support, Members also mentioned the way in which some Treasury schemes have not suited well those in the creative and cultural industries. I really hope that point has been heard and understood, not only by DCMS Ministers but by those in the Treasury; it would be good to hear directly from them on that.
Secondly, we know that events are crucial to our economy. Members also spoke this morning on the size, scale and centrality of creative industries generally, and the events industry specifically, in the UK. We currently have trial events taking place, and it would be good if the Minister could say a little bit more about the process for those, particularly as, again, some of the issues there will not necessarily be handled completely by DCMS; there will obviously be input from the Cabinet Office and potentially the Department of Health and Social Care. Will she talk about the process for reviewing those, who will be involved and who will be the decision makers in Government on the steps to move forward? Will the Minister also commit to an open-book approach? Will we be able to see and review evidence that the Government collect, because that would be helpful in building confidence in the process? A huge number of uncertainties face the events industry—as Members already covered; I will not go over them again—so making sure that we are all able to work together will be helpful.
Finally, we need to make sure that the current economic turbulence driven by covid does not reinforce any of the pre-existing structural inequalities that exist in the United Kingdom, whether that is labour force inequalities—unemployment statistics out today show the hugely disproportionate impact of covid on jobs for younger people—or places in our country that previously experienced deindustrialisation or other economic disadvantage. Several Members highlighted the important role that the live events sector plays in those places; many of the jobs that we are talking about are good jobs in areas that really need them. It would be terrible if the virus exacerbated any of the structural inequalities that previously held our country back, particularly over the past 10 years. What discussions has the Minister had with the Department for Work and Pensions and others to make sure that it is not only the Treasury that understands that its schemes and programmes need to better fit the creative industries?
I look forward to hearing from the Minister. I hope she listened carefully to all that those Select Committee members have said and will let us know how decisions on this will be taken from here.
It is such a pleasure to serve under your stewardship, Mr Rosindell, and to respond on behalf of the Government to this important debate. I start by heaping praise on to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this vital debate and enabling this discussion on a subject that is so important to such a vast number of our sectors. It is quite poignant that this debate comes a year since the lockdown started. What a horrible year it has been. So many speakers highlighted just what a huge loss it has been to so many of us to have live events missing from our lives.
The hon. Gentleman spoke with great passion about events in his part of Scotland, including the highland games, of course, which as well as being wonderful for local morale, spirit and wellbeing are a huge contributor to the local economy and a global phenomenon that really puts Scotland on the map; they are well known all around the world. I completely understand his desire to see them back up and running again as soon as possible. In fact, the strength of sentiment shown across the room demonstrates how desperately important the digital, culture, media and sport sectors are not just to our economy and our heritage, but to our sense of wellbeing as a nation. We are desperate to be able to return to live events.
As if to taunt me, we have had representatives from some of the areas where I was due to have seen live events last year. I was due to go to Kew the Music to see the Gipsy Kings. I was due to have been at Boomtown and at the Isle of Wight festival. All of that was taken away so I can completely understand people’s frustration from a personal perspective as well as a professional one. The hon. Member for Richmond Park (Sarah Olney) spoke about the pent-up demand and she hit the nail on the head. We are all desperate to be able to return to live events from festivals, gigs and theatre to business and sporting events, and we want to do that as soon as it is safe to do so.
Many hon. Members have highlighted the vast contribution that DCMS sectors make to the UK’s international standing, to all our lives and specifically to the economy—in 2019, £116 billion from the creative industries, £17 billion from sport, £151 billion from digital, and £75 billion from tourism. These sectors together support a total of around 6.9 million jobs. We have an economic imperative as well as a cultural one to stand by those industries.
We have our differences but I am grateful to have this conversation. I know the Minister’s personal support for the sector and she has rightly emphasised its economic value. Have the Government looked at the schemes in other European countries that I highlighted in my remarks, which are being put in place to underwrite the possibility of having events go ahead? What is her assessment of what other countries are doing and whether the UK could mirror that?
I am really pleased that the hon. Gentleman raised this because, of course, we are looking at all the schemes. I was coming on to say that the hon. Member for Richmond Park talked about that as a straightforward solution and the hon. Member for Perth and North Perthshire (Pete Wishart) said how we have nothing to lose, but the person who hit the nail on the head was my hon. Friend the Member for Winchester (Steve Brine), who said this is a leap of faith for the Government.
There have been different schemes announced around the world, but most recently the German scheme has now been stalled. The €2.5 billion that the Germans promised has been stalled in light of the public health situation as they have announced a third lockdown in Germany over Easter. That is the worst possible situation—to announce a package of support and then withdraw it. That is the situation that we want to avoid, which is why we are looking at this so carefully.
I understand more than anything the urgency of the situation when it comes to a decision on indemnity, and the hon. Member for Cardiff West (Kevin Brennan) said it is key that this decision is made soon. Like so many of the tough decisions that have been made over the last year, it is a really difficult one, and ultimately it is a decision for the Treasury because it is a financial one, as he pointed out. In DCMS, our job is to work very closely with the sector, as we have been doing right the way through this crisis, to figure out exactly what is needed, to gather all the evidence together and to present that to our colleagues in the Treasury.
As many colleagues have said today, the circumstances of the pandemic have left so many of the sectors that DCMS is proud to represent without the certainty they need to confidently reopen. Our engagement started from day one. Almost on a weekly basis, I am talking to one group or another from across our sectors. We have working groups and those that are bringing together guidance. I have met individually with representatives from various sectors. I met with my hon. Friend the Member for Isle of Wight (Bob Seely) along with all the festivals on the Island. I met with all the festivals in Edinburgh, for example. We are continually engaging with stakeholders throughout this period to understand what they need, what the barriers are to reopening, and what the challenges are, and that will, of course, include indemnity cover.
What I am saying is that the decision is with the Treasury right now. We are working very closely with the Treasury to provide the evidence it needs to make a financial decision on this, and it is a big financial decision. My hon. Friend the Member for Winchester hit the nail on the head when he said it is a leap of faith. It is obviously a big financial decision that the Treasury has to make. I am trying to articulate the background within which that decision will be made. But it is absolutely still on the table, and it is absolutely still a decision being looked at right now. In DCMS we are really keen to gather all the evidence that is needed to make that case.
I want to stiffen the argument that the Minister is making to the Treasury. It is about the supply chain, which the hon. Member for Cardiff West (Kevin Brennan) touched on. It is not simply the case that they are going to have another rotten year; for many in the supply chain, two years of this will end their business, and then they will fall into other support schemes. The calculation that the Department can make to Her Majesty’s Treasury, therefore, is of a reduction in other areas if it saves here. I think that there is very much an argument about investing to save that the Department can make to Treasury colleagues.
I understand exactly what my hon. Friend is saying. Another Member—I cannot remember who it was—said that this is, by definition, quite a precarious industry anyway. My eldest son was due to go to the Boardmasters festival down in Newquay the year before, which was tragically cancelled because of the weather. The festival organisers have had to put up with two years of cancellations already before 2021, so Members can see what a huge pressure has been put on them.
However, hon. Members will recognise that the bar for considering Government intervention is set extremely high, as of course it has to be, especially in light of the considerable extension to so many financial packages that have already been helping our sectors—the furlough scheme, the business rate relief, the VAT cuts and local business support. The key thing that will give us much more certainty as we move forward is our world-class vaccination roll-out, along with all the steps we have been taking to beat the virus. This, along with reopening when we are confident that it is safe to do so, will reduce the chance of cancellation and interruptions due to covid-19, creating a much more predictable and secure opening context for all sorts of events to take place. Hopefully that will de-risk the sector as well.
In that context, we are continuing to engage with organisations to work through all the barriers to staging events, and indemnity insurance is of course one of those. It is part of our wider drive to reopen our crucial sectors as quickly as it is safe to do so. We are also working with other Departments. The Opposition spokeswoman, the hon. Member for Wirral South (Alison McGovern), asked me about that. We do meet regularly with other Departments. I met with representatives from a number of Departments last week, and we worked very closely with them to talk about the public health context and ensure that we are in a good position. In an ideal world, the insurance sector itself would step up to the plate and support this vital part of our economy, but in the absence of that, any decision on a sponsor package rests with the Treasury.
The Government recognise the challenges that have been faced by organisations and individuals alike and have ensured that support is available. The hon. Member for Cardiff West trailed this, but I will now talk about some of the specific things that have taken place across the wider economy. A number of Members have spoken about freelancers, and we know that so many of our live events depend upon an army of really talented freelancers, who do a whole range of really skilled jobs. Our sectors rely on freelance work more than any other, and I am keenly aware of the financial needs that many have found themselves in. That is why I was really pleased that in his Budget speech the Chancellor extended the self-employed income support scheme, which means an additional 600,000 people can access support on top of those who have already received it. In addition, Arts Council England has so far awarded £51 million to individuals needing support. Those things are important as well, as we try to work our way back.
The Chancellor also announced that the 100% business rates holiday for retail, hospitality and leisure in England has been extended by an additional three months. He has also extended the 5% VAT reduction until 30 September, before then tapering it for the rest of the financial year. It is worth saying that the VAT cut alone is forecast by the Office for Budget Responsibility to be worth around £4.7 billion for hospitality and tourism and visitor attractions. A new recovery loan scheme will also be launched to replace the existing Government guarantee schemes that close at the end of March, which have supported £73 billion of lending to date. This will help businesses of all sizes, including in our vital DCMS sectors and numerous live events, to take the next stage of recovery.
A total of £700 million of extra funding to support our world-leading arts, culture and sporting institutions was announced in the Budget, all serving to protect what makes the UK a world-leading destination. The levelling-up fund—45 new town deals and city growth deals in Scotland and Wales—shows how the Government are investing right across our Union.
The Minister is being generous in giving way; I am grateful. I understand that she has to outline the other things that the Government are doing—in another debate, many of us would argue that there are still a lot of gaps and that a lot of people are missing out—but the subject of today’s debate is Government-backed insurance for live events. Just to take her back to that for a moment, I listened to what she said earlier. Some in the creative industries feel that the Government might be delaying an announcement on this because they are going to cherry-pick which sectors they will be prepared to provide some insurance indemnity for eventually, and that the major victim of that will be live music and the festivals sector. That will just be filed in the drawer at the Treasury marked “Too difficult.” Are they wrong in thinking that?
The hon. Gentleman is slightly over-complicating this. I do not think that is the case at all. The film and TV restart scheme was something that many thought would be too difficult, but we were able to do that at pace last year, and by the last quarter of last year we were seeing more film and TV production than virtually any other quarter, so we know that these things can be done despite obstacles.
Also, the hon. Member for Cardiff West must be careful not to brush away the £65 billion-worth of measures announced in the Budget for this year and next, which will support the economy through the pandemic. Those things are literally saving livelihoods every single day, and of course that builds on the existing support already committed, which totalled £353 billion across the economy. The support that has been put in place is world leading and has been vital to the continued survival and recovery of our DCMS sectors. I meet parts of our sectors every week, and they have seen measures such as the furlough scheme and the business support measures as a lifeline allowing their survival.
The hon. Member for Cardiff West talks about bricks and mortar, but it is also about individuals, and there has been a lot of direct support for individuals. At the end of the day, however, the one thing that so many of our great performers, artists and professionals in these sectors want to do is get back to work as quickly as possible. They need to have venues in which to be able to do that. That is why it is important that that support is across the board and why the culture recovery fund has been so successful, with an additional £300 million dedicated to that in the Budget. That is an extension of the original £1.57 billion fund, which is unprecedented. That will safeguard our cultural and heritage organisations, while it also helps support supply chain organisations, which rely so much on them, with supply chain organisations able to apply for both of the rounds so far.
I want to talk a little about the road map and the reopening. The Prime Minister announced the scientific events research programme and a number of hon. Members have asked me about that. It is an integral part of the road map, which will explore how larger events across the cultural and entertainment sectors can reopen safely. Over the spring this will include a series of pilots that will use enhanced testing approaches and other measures to run events with larger crowd sizes and reduced social distancing and evaluate the outcomes. The road map sets out the planned caps on capacity for events when they reopen at stage 3, but the findings will come from all different sectors and settings to determine a consistent approach to lifting the restrictions when the time is right.
I am sure I speak for all of us when I say that I cannot wait to have our theatre, sport, festivals, live music venues and events open as soon as possible. As the Chancellor said in his Budget speech, the Government stand ready to do whatever it takes to help our country and our economy recover from the disruption of the coronavirus pandemic.
I rather fancied that my hon. Friend the Member for Richmond Park (Sarah Olney) was hinting, perhaps with tongue in cheek, at my role in events and festivals in the past. I therefore rise to my feet as a former panto dame—I have waited many years to utter those words. When I was in costume, I would have said that it was madness to suggest that I would ever be in the House of Commons to say that.
I thank all who have contributed to this debate. I am more grateful than I can say for their thoughtful contributions, and I am grateful to the Minister, who, within her role, has given us the best answer that she can, but I think it is a moving situation.
I want to touch on several points. In an answer to my hon. Friend the Member for Richmond Park, the Minister indicated that she might share the documentation of reasoning with my hon. Friend. May I appeal to her to share it with Members present here today? I say this not as an effort to try to score points, but to see whether we can work together constructively to see how we can get the industry back on its feet. I emphasise the point again that it is an investment that we seek. Money injected into an industry that desperately needs it will be a shot in the arm, and that money will in turn be recycled into not only the national economy, but local economies—a point made eloquently by the hon. Member for Isle of Wight (Bob Seely). The hon. Member for Cardiff West (Kevin Brennan) pointed out that other countries are putting into place such schemes, so I hope that we are on a road map to doing something similar as and when we can, or as soon as possible.
I want to end with this point: at the end of the day, we are all talking about something that is terribly important to the way we live our lives in the UK, because events and festivals brighten up people’s lives and they are fun. God only knows, after the horrific time we have had with the pandemic, we need some fun in this country, and it would make an enormous difference to everyone’s lives.
Finally, Mr Rosindell, apart from thanking your good self—it is always a pleasure to serve under your chairmanship—I say to the Minister that when we have the Tain highland gathering again, it will be my pleasure to buy her a glass of our excellent local beverage called Glenmorangie.
Question put and agreed to.
That this House has considered Government-backed insurance for live events.