My Lords, I am delighted to introduce this debate and am very grateful to all noble Lords who have signed up to speak. I declare my interests as a trustee of the Dartington Trust and a member of the Arts and Heritage APPG, the Royal Academy, the Tate, the National Trust, and Historic Houses. I am a lover of old buildings and an enthusiastic amateur artist. It is an honour to share this debate with so many noble Lords whose many years of experience in the arts and heritage will add far more than I can ever hope to do.
We are a country of deep-rooted cultural and artistic traditions. For many centuries, we have led the way. We are a proud nation where arts, heritage and culture are an essential part of the lifeblood of our country. The arts have an enormous societal impact on our health and well-being. A report by UCL for DCMS in April 2020 showed, for example, that exposure to the arts and cultural activities positively impacts social skills, language learning and overall mental health, particularly among adolescents and young people.
Our cultural contribution is not only about us in Britain. Our institutions are world leaders with global standing, attracting people from around the world, who visit Britain because of the richness, breadth and depth of our cultural offering, delivering a vibrant addition to our tourism and hospitality sectors. These cultural industries support our global soft power. According to the House of Lords Library briefing in January, the UK exported £7.2 billion of cultural goods and £9.3 billion of cultural services. Between 2016 and 2022, the cultural sector in the UK ran a consistent trade surplus. DCMS figures in 2022 reported that gross value added for the cultural sector as a whole was £34 billion, which confirms that the arts and cultural sectors are enormous contributors to the UK economy.
We all know that there is no free meal. There is a financial cost to supporting, maintaining and extending our cultural life. We rely on thousands of organisations and individuals in our globally renowned institutions, including our art galleries, museums, theatres, historic houses and buildings, dance and art production companies, orchestras, choirs, local community organisations and charities. But they all rely on some form of financial income or support, whether from organisations such as the Arts Council, the National Lottery Heritage Fund, the British Film Institute and English Heritage, public funding from local authorities, private philanthropic donations, or memberships or sponsorships from corporations and volunteers.
The most recent edition of the Art Fund’s research, published in June, reported that visitor numbers have been on the rise—which is good news—with over half of venues at or above pre-pandemic levels. However, it also found that local authority-reliant organisations were in a “perilous and uncertain state”. Post-pandemic financial fragility, real-terms funding cuts, ageing buildings and increased overheads were all found to be placing these organisations under “enormous strain”. In addition, the impact of the cost of living crisis on staff and audiences was recognised as the biggest collective challenge facing organisations, with increased outgoings and falling income identified as problems for the sector.
My Lords, I thank the noble Baroness, Lady Sater, for ensuring that we have this debate. We do not talk enough about the arts and cultural industries in our politics, and it is vital that we focus on the issues that she rightly highlighted.
For background, the Library note explains that public funding for the arts has, over the last 14 years, decreased by some 18%. Museums, in particular, have been hit hard, with 32% of them experiencing budget reductions. Overall, local government revenue funding dropped by 48% in that period, and Arts Council funding dropped by 18% in England and a whopping 66% in Northern Ireland. BBC public funding dropped by 23% and the national portfolio criteria were changed—public funding there dropped by 10%. Worse than that, libraries experienced cuts of some 53%. So, if we are asking why the arts are in peril as a result of changes in public funding, the answer is clear: the last Government took money away from arts and cultural industries. Our Government’s challenge is to find ways of ensuring that some of that damage is repaired.
In that context, the recent Budget is very welcome. The DCMS settlement brought an uplift of 2.6%, and the Treasury committed to ensuring that creative sector funding became one of the eight growth areas, because of the way in which arts and culture drive our economy and make an important contribution to our industrial strategy. As the noble Baroness said, another £3 million was put into the creative careers programme, signposting employment in the sector. The Budget also promised additional grant in aid for arts and culture for the long term, to sustain that sector. Most importantly, increased investment in cultural infrastructure was promised to bring in additional capital for cultural institutions. I do not know a museum that has not complained recently about a leaking roof, and there are plenty of them. Money is tight.
So, can we explore other ways of funding? To ensure long-term sustainability, one of those might be the smart fund, which has been proposed by many from DACS. It is a mechanism that compensates artists whose original work is copied or stored on electronic devices. This works in 45 other jurisdictions. A levy of between 1% and 3% on the sale price of electronic devices could fund some 1,200 cultural projects a year, as it does in France. I also recommend to the Government a music venues ticket levy, which might bring in new and very welcome additional revenues, and perhaps help cross-subsidise small venues where talent emerges and where research and development is important.
My Lords, I am grateful to the noble Baroness, Lady Sater, for securing this important debate, and I declare my interests as a composer and broadcaster. I was delighted that the Prime Minister said in the other place recently that it was a priority for his Government to get music back on to the curriculum in schools. In my view, this is the single most important step in music education—indeed, in music. It is an opportunity for the young to make music, to listen and to react to others: there I think we have an analogy with sport. But of course, the devil lies in the detail, and I look forward to hearing more on this from the Government.
What is really relevant to today’s debate is that we also need to think about the financial status of supporting organisations and venues where, once acquired, a musical curiosity can be developed. That brings in small venues and organisations that promote the arts, where funding is most urgently needed after many years of underfunding. I think of the English Symphony Orchestra in Worcester and the plight of Welsh National Opera, both of which have done so much good work in underprovided areas.
I congratulate the Government on the orchestra tax relief, a welcome support, although it still relies on the orchestra activity being able to go ahead in the first place and the money can be received only after a long process, which can cause significant cash-flow issues.
The rise in employers’ national insurance is, as the Government have acknowledged, a difficult burden at this time. One would have hoped that charities, especially small ones with, perhaps, under £1 million pounds in turnover, might have had a dispensation.
I thank the Government for listening to concerns about VAT on specialist performing arts schools and confirming that courses covering the music and dance scheme and the dance and drama awards scheme will not attract VAT.
My Lords, I too thank the noble Baroness, Lady Sater, for securing this debate.
A number of elements of the recent Budget are to be welcomed, such as the continuation of Museums and Galleries Exhibition Tax Relief and the cultural infrastructure funding. However, many of us were disappointed that there was no update on the Listed Places of Worship Grants Scheme, which is such a lifeline for so many of our historic buildings. The Church of England and other churches are trustees of some of the most important buildings in this country. We have to raise, voluntarily, tens of millions of pounds, and we really need to find ways to help very many pressurised local communities. These buildings are not used just for worship; many of them are the local concert venue. They have all sorts of music-making going on and they are places where music lessons are given. Many of our schools come into the churches, and they are used for all sorts of reasons beyond Sunday and midweek worship. I hope that DCMS will make a decision on this in the coming weeks, and I urge the Minister to ensure its future.
I want to say a few words about the impact of the introduction of VAT on school fees for cathedral choir schools. These schools are often not well known but, by and large, they are not in the top rank of schools for the privileged. Many of them offer an outstanding musical education for local pupils. Often, we have to raise money for bursaries to keep them going. They are running on very tight budgets, but they are a fundamental part of providing musical education. Many of this country’s leading composers over the last 200 years started their lives in church choirs, on organs or learning through local music-making. This pipeline is really important in bringing such people through.
There has already been a great deal of concern. The increase in employers’ national insurance contributions announced in the Budget has contributed further to the financial uncertainty facing these valuable institutions. I am sure the Minister will be aware of previous comments made by my colleague, the right reverend Prelate the Bishop of Southwark, and by John Glen, who spoke on this in the other place.
My Lords, the danger for the arts of economic growth being so central to the Government’s plan is that more high-profile commercialised creative industries and institutions get support while other of the arts and related cultural areas, particularly in the regions, as the noble Baroness, Lady Sater, has said, get neglected. Unfortunately, this Budget, while there are certainly good things in it, bears that out, with no emergency help for civic museums and a situation where our already struggling grass-roots music venues are in a worse position now than before the Budget. It is an elephant trap.
With respect to the arts, we need a plan for arts and cultural growth as much as we need one for economic growth, for three reasons. First, the arts are a good in their own right. Secondly, they are important socially and locally, in terms of both production and access. Thirdly, and crucially, they are the grass roots from which the commercial creative industries spring. The arts are an ecosystem.
I have some specific points to make. On Monday, the noble Lord, Lord Murphy of Torfaen, and I—as the noble Lord, Lord Berkeley, has done today—drew attention to the plight of the Welsh National Opera, which benefits both Wales and England. In a recent Answer to a Written Question by Liz Saville Roberts, Chris Bryant said that the WNO is in a “strong place to succeed”. Unfortunately, this is clearly not the case. The noble Lord, Lord Murphy, asked for the Westminster and Welsh Governments to get together on this. Will the Minister use her influence to enable that?
As big operators are now a major factor in the arts, we need to consider levies—and the noble Lord, Lord Bassam, has mentioned a couple. I welcome the introduction of the voluntary ticket levy on big arena gigs to help small venues, although I believe it should be mandatory. Will the Government also consider the smart fund, which the noble Lord, Lord Bassam, also mentioned. Would the Minister be willing to meet parliamentarians and interested parties who have proposed this scheme, including the Design and Artists Copyright Society?
My Lords, I congratulate the noble Baroness, Lady Sater, on securing this important debate. I am a member of not nearly as many arts organisations as she is, but that is partly because I remain the king of the freebie—and in that sense I am completely aligned with government policy.
As I have said before, it always surprises me that the Tories get such a bad rap when it comes to the arts, compared to the party opposite. We created the DCMS, put in place the National Lottery as well as the museum and theatre tax relief—and there was also the superb support given by the noble Lord, Lord Parkinson, and his colleagues during Covid. Yet here we are today with only one Labour speaker on the Back Benches, and no Minister in the Lords who is in the actual department. The Budget has seen a real-terms cut to DCMS, a cut to the levelling-up funding, the removal of planned capital funds for the national museums of Liverpool and York and the Victoria and Albert Museum. I should declare that I am a trustee of the Tate—although maybe not for much longer after this speech.
With the ongoing impact of the Budget, the national insurance hike, the removal of business rates relief and the war on non-doms, many of whom give to arts organisations, it is not exactly what one would call a refreshing time to have a Labour Government in place for the arts. There have been some bits of good news hinted at in the Budget. The cultural infrastructure fund was mentioned, but we have no detail on that. As the right reverend Prelate pointed out, the listed places of worship scheme is so important, and we need its future to be guaranteed and established. There is, of course, some increase in grant in aid to the national museums, which it would be churlish of me not to recognise.
I give the same speech in this Chamber every time we have a debate on the arts, because securing the future of the arts in this country is such a simple and easy thing for any Government to do—believe me, I have fought those battles as well—by giving long-term and generous funding, which is still a rounding error on the overall budget of government, for all our national and regional institutions. It may be the time to experiment with some other form of funding. As somebody who believes in simplifying the tax system, it is perhaps counterintuitive, but I am interested in Manchester’s experiment with a tourist tax and whether that can make an impact. It is perhaps something that cities should be thinking about to embed the arts in health and education. Of course, we also talk about soft power and diplomacy, and the arts play such a vital role in that.
Does my noble friend agree that, in these difficult times, waste is to be avoided at all costs? We have the wonderful Imperial War Museum with the Holocaust galleries. The last thing that anybody wants is to waste over £30 million on a memorial museum in the beautiful Victoria Tower Gardens when that money could be spent—
She was stuck in traffic, which is a side effect of rapid economic growth. I take her point; it is a narrow and focused point, but all I say is that I referred to M&A in the arts. I would like to see museums working together, with perhaps some merging. That is the kind of thing that we should be thinking about.
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Against this backdrop, we welcome the Chancellor’s recent Budget announcement of keeping tax relief for theatres, orchestras and museums and galleries; the extension of the audiovisual creative tax relief, which helps the film and heritage sectors reduce their tax burden; and the addition of £3 million into the creative careers programme set up in 2018. We also welcome the increase of 16% in the capital budget for DCMS for the next year. However, less welcome is the announcement in the Autumn Budget that the day-to-day DCMS resource spending budget will stay year on year at £1.5 billion. In reality, this represents a 2.5% real-terms cut, accounting for inflation.
This will make it much harder for the department to fund the cultural institutions it supports, such as the 15 DCMS-sponsored museums and galleries, at a time when the Art Fund reports that 89% of adults agree that museums are important to UK culture. Although national museums and galleries saw increased grant-in-aid funding in the recent Budget, regional ones did not.
Visiting York last week, I was overwhelmed by the incredible preservation of the Roman, Viking and medieval city, and was proud to see how we are preserving our history. Tourism thrives in the regions and cities, substantially because of our cultural heritage. None of this is possible without funding in our regional and local communities, together with the support of the dedicated people and volunteers who care so much about our wonderful cultural life.
In the Spring Budget, the then Chancellor Jeremy Hunt announced £100 million of funding for levelling-up cultural projects. The money would have funded projects such as the British Library north in Leeds, the National Railway Museum in York, the Victoria and Albert Museum in Dundee, and the National Museums Liverpool. However, the recent Budget suggested that the Government were minded to cancel them. I ask the Minister: why do the Government not consider this investment to be an important part of their growth mission? Will they provide a commitment to investing in the arts across the entire country?
For the already financially challenged cultural sector, the Autumn Budget contained two further challenges. First, although relief for business rates has been extended, at the same time this is being reduced from 75% to 45% until March 2025, when it will cease. Many arts and cultural organisations operate from a physical location and will struggle significantly to foot the increased overall costs of business rates.
Secondly, British cultural offering contributes significantly to employment, with 2.9 million people in full-time jobs, according to the DCMS creative industries subsector, and with nearly 700,000 in the cultural subsector from the data from April 2023 to April 2024. This is why the employer national insurance contributions rise is causing real concern. It will push up staffing costs for cultural organisations and may impact levels of employment and future pay rises for staff, hurting particularly the lower paid workers. The Southbank Centre in London’s initial calculations showed that these changes will cost it at least £700,000 in 2025. These are not small sums. As we all know, no one can fundraise for tax increases.
With 40% of theatre and performing arts venues at risk of closure over the next five years, according to the Society of London Theatre, and with two-thirds of museums being concerned about funding shortfalls this year—up from 50% in 2022—the future is looking challenging. This was the situation before the increase in NI and the minimum wage and the reduction in business rates relief. Have the Government done an impact assessment on the effects of these increases in NI, the minimum wage and the removal of business rates relief on the cultural sector? Is the Minister able to provide an assurance that the Government will increase funding to the cultural sector, similar to that provided to the public sector, protecting it from these unwelcome rises?
Local authorities are champions of local arts and are the lifeblood of many organisations, playing a huge role in creating a thriving arts and cultural environment for their communities. They are the biggest funders of culture, spending around £1 billion in England alone on services such as libraries, museums, heritage and the arts. It was suggested in the Autumn Budget that the UK shared prosperity fund will be phased out the year after next. It will continue at a reduced level for a transition year by providing £900 million for local authorities to invest.
However, the Government have not said how they will replace it, which makes it difficult for future planning of arts funding. It creates uncertainty at time when local councils’ core services funding is under pressure, putting cultural projects and institutions in increasing jeopardy. Could the Minister give the House assurances that a replacement funding model will be established as soon as possible to provide the security so desperately needed? I know we all share a desire for a long-term settlement for our cultural future for continuing sustainability and enduring creativity, and a major global role for the country.
Let us thank all the extraordinary and talented people who deliver our fantastic cultural life, be they paid or hugely committed volunteers, who are preserving our heritage. They are caretakers for our most amazing buildings and the institutions we enjoy today.
I urge the Government to look again at Nesta and at Arts Council funding, to see where the balance lies, and to find new sources of revenue so that cultural and arts institutions have a more certain funding base for the long term, in addition to what we make available through public funding.
On the other hand, as my noble friend Lord Clancarty pointed out a few days ago, the reduction in business rates relief will adversely affect the arts. The Music Venue Trust has calculated that it will place an additional £7 million burden on 350 grass-roots music venues, put at risk more than 12,000 jobs and cost more than £250 million in economic activity. While of course it is good news that the arts tax relief remains unchanged, it is sad that it has not been extended to choirs.
In terms of the arts generally, the exchange of ideas across borders is essential, and the loss of Erasmus tragic, so a new rapport and sense of good will towards and from Europe must be fostered to allow easier touring in both directions. I ask the Minister whether any replacement for Creative Europe has been found or whether we might rejoin it, since the rules allow us to do so.
About a decade ago, Country Lifepublished a list of 60 things that make Britain great, and the choral tradition was on that list. There is a real threat to this, as we look at the resources, and a danger that, should choir schools be forced to close, state-funded schools will not be able to plug the gap. Does the Minister appreciate that choral music is an essential part of our heritage and agree that we need to do all we can to ensure that it is preserved?
Thirdly, as discussed in the Channel 4 interview with Peter Kosminsky, director of the Hilary Mantel adaptations, there is the application of levies on the big streaming companies such as Netflix to help our film and TV production, which, like the private copy levy schemes, are already applied sucessfully in European countries. Will they consider such levies, too?
Last but not least, there is Brexit, which I mention because this is a Budget geared to a desire for economic growth. Brexit is not in the past but is lived on a daily basis by artists, and it continues to have a detrimental effect on opportunities for, and incomes of, musicians, visual artists and many others. The Government need to set out a coherent plan to address it, because the sector is waiting on that.
It is not a one-way street. There has to be some give and take for the arts. I became increasingly frustrated as Arts Minister that we lived in a world where no museum or no theatre should ever close. We celebrated the openings of numerous theatres and museums, which were never covered. The minute that one was under threat of closure, it was supposed to be a disaster for the arts. There should perhaps be more M&A in the arts and more co-operation.
Finally, I think that the national museum should be given independence and that the Parthenon sculptures should be returned to the Greeks—I give way to my noble friend.