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.
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