The speech made by Julian Knight, the Conservative MP for Solihull, in the House of Commons on 10 March 2021.
This pandemic has highlighted just how widespread the responsibilities of the Department are: from our rich coastal communities that rely on tourism, to the world-renowned theatres, galleries and museums of our cities, our festivals and music events. They are all significant drivers not just of tourism spending, but of domestic spending. DCMS also has oversight of the charity sector, which has been ravaged by this pandemic.
Across the DCMS space, this has been the hardest hit of any sector in the economy. It was among the first to close and is likely to be the last to reopen. Covid is almost designed to damage the sector because it relies on the close interaction of people.
Many DCMS businesses are incredibly complex and, in the past, have not relied heavily on Government support; they have just got on making money and employing millions of people. This means, though, that the Treasury is perhaps less familiar with the intricacies of their work than with other more regulated businesses and industries such as financial services. It also means, to be frank, that there is less knowledge about how best to support them as we recover.
Before the pandemic, Britain’s DCMS sectors were some of the fastest growing, with the creative industries growing at three times the rate of the UK economy as a whole. The creative industries alone contributed over £115 billion to the UK in 2019. That is equivalent to £315 million almost every day, which is a phenomenal contribution. We have world leadership in many of the sectors, including games, music—we have 9% of global music sales—and, as I will return to shortly, festivals and live music events. Covid-19 has meant that most of those sectors have been shuttered for almost a year, with several months yet before they are able to reopen under the Government’s road map. The Prime Minister’s road map set out dates that can now be the target for entertainers, producers, technical staff and audiences alike to get their shows back on the road, so to speak.
The DCMS sectors are estimated to account for over a fifth of the UK economy. Without the growth from those sectors, the UK economy would have been in recession for three of the last four years; yet DCMS spends less than 1% of total Government spending. Although it has some very fine Ministers and officials, it is still seen as somewhat of a Cinderella Department within Westminster. That should not be the case, because those sectors are crucial to our aspirations for global Britain.
Approximately one third of our creatives have been unable to access any Government support during the pandemic, apart from universal credit. It has been difficult for them to meet the rules of the Treasury support schemes due to the fact that they may not have enough evidence of past income to prove what they need. Those excluded are still excluded, and I have to say that many of them are in a very desperate state indeed today.
The culture recovery fund, which the Minister will no doubt refer to, was incredibly welcome, with its £1.57 billion for the arts, but that money was less than half what the sector said that it needed. The second tranche of money is coming to the end of its allocation while thousands of creative businesses remain unable to operate, whereas the tranche of money announced in December still has not been fully distributed. There are question marks over the pattern of distribution, which my Committee will raise with the Arts Council on 12 April. There is a feeling that perhaps those with the sharpest elbows—those with the biggest names—have benefited the most.
I am hopeful, though, that the welcome extra £300 million of investment into the culture recovery fund that was announced in the Budget will mean, effectively, that some of the harder-to-reach community organisations that may not have benefited from the first tranche of cash will be able to benefit in the months ahead. They will help to rebuild our cultural recovery from the ground floor up. It is, however, probably still not enough to see our world-leading arts through the pandemic and post-pandemic period. It is therefore vital that the Department for Digital, Culture, Media and Sport gets the recovery right, and continues to provide sector-specific tailored support to those industries, which must be given the support and certainty to reopen as it becomes safe to do so.
There are questions to be asked about the support that those sectors are getting from DCMS, and how best it ought to be directed. For many months the Digital, Culture, Media and Sport Committee has been arguing for a number of measures, be it an extension of VAT relief so that companies are in a position to sell tickets and benefit from it, to the expansion of reinsurance schemes to cover live events, live performances and the music festival season.
It was a relief to see in the Budget last week that the Chancellor listened, and that an extension of the VAT cut has been announced. Undoubtedly, that will be the push needed over the summer for many of our hospitality and tourism businesses, which have suffered so greatly, but for cultural events and exhibitions alike that may not be enough. To benefit from the reduced rate, they must be able to sell tickets and, up to this point, events have not been happening.
For live events truly to survive this season, the reassurance of a Government-backed insurance scheme is key. It is estimated that a £650 million insurance scheme for live events would allow more than £2 billion of activity to go ahead. That is thousands of jobs across the country— 975 festivals. I know that everyone thinks of them as basically a bunch of kids in a muddy field in Glastonbury, but that is an outlier; we are talking about festivals of small, medium and large scale in all our constituencies across the country. We all know people who appreciate these cultural events—the way they feed into our cultural bloodstream and their vital importance to our way of life.
While there is any possibility of events being cancelled, the industry relies on Government-backed insurance. There is market failure; no one in the private sector is covering covid. The industry cannot survive without a second summer season in a row. It must be said that the live events sector, in which we are world leaders, is near vanishing point. I was pleased to see the extension of the film and TV production restart scheme, giving producers the confidence to return to production, yet the same confidence is key for live events to be able to survive.
At this juncture, I want to flag to the House an important matter that is increasingly coming to my attention. The uncertainty surrounding the live events sector and the increasing desperation of consumers to enjoy themselves once again is leading to the potential for real consumer detriment, with the sale of tickets for events that will not take place or have no possibility of taking place at full capacity.
I am increasingly getting reports of individuals who say that they are hosting a festival but have no permission to do so yet, yet they are selling tickets on the promise of live entertainment in the future. Even if they later have to cancel that festival, there is every chance that they will still make some money, because many people may not ask for their money back as a refund. I alert the House that, without the surety of an insurance scheme and getting everything in black and white, there is an opportunity for potentially less scrupulous individuals to make money out of our hopes and ambitions for a great summer.
That is without even looking into the tremendous knock-on effects on the local economies of places that play host to live events. As I referenced earlier, Glastonbury generates over £100 million for the south-west, but more generally, in all our constituencies, for every £10 spent on a live music ticket, £17 is spent in the local economy. Essentially, without the creative industries and live events, there will be no economic recovery from the pandemic.
The UK is poised to host COP26 later this year. The world will be watching on as we host that great event. It is key that we get the pilots up and running. The National Exhibition Centre, one of the largest organisers and hosts of events in the country, tells me that without the pilots—without ways of testing covid-security, access into events and the way they are organised, and without trying to get individuals re-involved in the supply chain—there is every chance that COP26 will be like the austerity games, the Olympic games post the second world war; they will not be the jamboree that the Prime Minister hopes for, because we do not have the wherewithal. We are losing muscle from these sectors, and we need to replenish it in short order. I therefore urge the Government to get a handle on this and to ensure that the pilots go ahead as quickly as possible—a date of May is mentioned to me as essential—to ensure success at the back end of the year.
The cultural and creative sectors are one of the UK’s greatest exports, but they do vital work in our communities too. Even among those institutions that will survive the pandemic, such as the Royal Shakespeare Company, there is likely to be a reduction in outreach programmes. Similarly, with another significant underspend in the National Citizen Service, poor and minority ethnic children, already worst affected by the prolonged closure of schools, will be those worst affected by a lack of outreach programmes and access.
Social mobility stands to suffer significantly as the arts and performance struggle. In normal times, Britain’s cultural and creative sectors are world-beating, thriving growth sectors; without significant support in the recovery, the damage of covid-19 will scar these industries for years to come.
Finally, I wish to touch on EU visas. Creatives and those in all the parts of the sectors covered by DCMS, including the games industry, performance, music, theatre and cultural events, are frankly bemused at the current arrangement—or lack thereof—with our partners in the EU. In effect, the industry has had a no-deal Brexit. Many Members represent fishing constituencies and we have spent a lot of time and bandwidth talking about that; however, we did not settle the issue of access for our creative people, in respect of whom we had an economic advantage over the EU and with the EU prior to departure. That is a major oversight.
We now face the prospect of having to go to each country in turn to negotiate visa arrangements individually. As yet, we do not know precisely what our asks are, which I find quite incredible considering our huge balance of trade surplus in the creative sectors. We really must ensure that individuals are able to travel as freely as possible and to take their equipment with them through cabotage. After all, the sector is all about people. It is about some of our most creative people—people who represent Britain on the world stage and make our lives better. Although the Government have offered a lot of support over the past 12 months—I acknowledge that—we cannot take our eye off the ball now. More work needs to be done and we all need to put our shoulders to the wheel.