[Relevant documents: Third Report of the Digital, Culture, Media and Sport Committee, Impact of COVID-19 on DCMS sectors: First Report, HC 291; Third Special Report of the Digital, Culture, Media and Sport Committee, Impact of Covid-19 on DCMS sectors: Government Response to Committee’s Third Report of Session 2019–21, HC 885.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2021, for expenditure by the Department for Digital, Culture, Media and Sport:
(1) further resources, not exceeding £2,092,692,000, be authorised for use for current purposes as set out in HC 1227,
(2) further resources, not exceeding £524,913,000, be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £2,246,268,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(David Duguid.)
The debate will be led by Julian Knight, but I remind hon. Members that, immediately after Julian Knight, a four-minute time limit will be in effect. A countdown clock will be visible on the screens of hon. Members participating virtually and a clock will obviously be on the screens in the Chamber.
2:43 pm
Julian Knight (Solihull) (Con) [V]
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.
It is a pleasure to follow the Chair of the Select Committee, the hon. Member for Solihull (Julian Knight). Although we are on different political sides, those of us who serve on the Committee are in complete agreement on these issues.
Last week, when we debated the cultural and entertainment sectors, I made a few points on which I thought the Government could act in the Budget. The first related to the plight of freelance musicians, artists and others who have been excluded from the Chancellor’s criteria for support. I pointed out that in Wales some funds have been set aside for support, but that what we really needed was cross-UK action from the Chancellor. The Chancellor has done the very minimum in his Budget, by simply recognising that it has been so long for some of the excluded—that is, the newer self-employed—that they have now become eligible for the self-employment income support scheme. He has done nothing to support those excluded by his arbitrary criteria. He has decided that they are to be treated as second-class citizens. It is deliberate and unjust, and it will not be forgotten by musicians, artists and others who have been snubbed.
My second point was on the need to help to restart the live music sector with, as the Select Committee Chair said, a Government-backed insurance scheme. Our Committee wrote to the Chancellor to call for such a scheme and the response from the Government was a classic example of blinkered Treasury thinking. The insurance market cannot provide the cover needed for festivals because of covid uncertainty. The Government say that they have an irreversible plan for reopening; were they to underwrite a scheme, that would show confidence in not only live music but their own pronouncements. If their own words turned out to be true, they would never have to pay out anything.
Other countries have taken similar action, with much lower vaccine roll-out rates, and of course it is being done for film and television. For the want of a tent peg, many festivals will have to be collapsed this summer. That is the Chancellor’s second failure of policy and action. As the Select Committee Chair pointed out, there are now opportunities for the scammers and outlaw companies such as Viagogo to take advantage by once again ripping off people who want to buy tickets for events that might never happen and might never exist.
The Government have provided substantial support for the cultural, sporting and creative sectors since the start of the covid pandemic. This has been welcome but also essential, as many organisations within these sectors rely on revenue from tickets and events to survive. Through no fault of their own, they have been required to close, and the cultural recovery fund, in addition to the funding to support sports and TV and film production, has helped many important bodies to keep going that otherwise might have closed for good.
However, we now need to focus on the road ahead, through to the lifting of the covid social contact restrictions on 21 June and beyond. Coronavirus has challenged the whole of our society, but it has also exposed further weaknesses in sectors that in some cases we already knew about. The point has been well made about the need for pandemic insurance for the events industry. Events and live performances have already become incredibly important to the music sector, because the remuneration that artists get from on-demand streaming services is relatively low, but these events will not take place unless an insurance scheme can be put in place.
This is not just about events that could be held this summer; it needs to be done on an ongoing basis. It could be some time before the industry has any certainty, because new variants of covid might require further restrictions on the capacity of audiences and therefore restrict the viability of the event itself. Just as, several years ago, the Government partnered with the insurance industry to create Flood Re to minimise the risk of flood insurance and reduce the costs, we need a similar scheme to help to make insuring live events viable and reduce the cost to people putting on those events.
In football, the lack of a strong national governing body for the sport that is able to ensure fair dealing in financial matters has been badly exposed. Many football clubs were in great distress before the pandemic struck. Clubs in the championship division of the English football league were routinely spending more than they earned each year on players’ salaries alone, and were running a financially unsustainable model. There has been no real recognition of the impact of the covid restrictions on professional football. The money within the game has not been enough to solve all the problems, and the support that has been given is minimal. Many clubs continue to rack up large debts. At the moment, a lot of the football league is being run on unpaid taxes. It is believed that the amount of unpaid taxes owed to HMRC by football clubs could be in the hundreds of millions of pounds. We need a proper financial regulator for football to ensure that clubs are run on a sustainable basis for the long term, but in the short term we may need to look at how some sort of financial assistance can be given to those most in distress. Clubs outside the premier league are largely community assets, and they need to be run in a sustainable way.
Madam Deputy Speaker, first, can I refer you to my entry in the Register of Members’ Financial Interests? I do not think that my continuing association with the live entertainment industry represents any conflict of interest; rather, it gives me an insight into the trauma that this industry has faced during the pandemic.
Madam Deputy Speaker, I am speaking to you from the great city of Edinburgh, whose name is synonymous with cultural creativity, and has been since the days of the Scottish enlightenment. In the modern era, the city has become host to the world’s pre-eminent arts festivals, and every August more than 2 million people congregate on the streets of Scotland’s capital to celebrate, participate and perform—every August until last August. The Edinburgh festivals, and the fringe in particular, are not only the largest platform in the world for Scottish talent, but the largest platform anywhere in the world for English talent, which is a reason by itself for DCMS to be extremely concerned about its future.
As we debate this matter this week, people are meeting in Edinburgh and beyond—venues and producers are meeting with city and national Government—to see whether it will be possible for the 2021 festivals to go ahead. They are grappling with a terrible dilemma. How on the one hand do we respect, maintain and protect public health in a situation where the virus is still transmitting in the community, while at the same time trying to stage events that, by their very nature, are about bringing people together and causing human interaction? We do not yet know what is going to happen in 2021, but we do know that most of the activity will be outdoors, and it will be considerably smaller and shorter-lasting than before.
We must see this not as a return to normal, but as one step towards a recovery that will take several years. That means that we need to press for a commitment from this Government in the medium term—not just for months, but for years. It would be churlish not to recognise the great efforts that have been made by the UK and Scottish Governments towards the sector, and that is widely acknowledged, but just because it has been good, that does not mean it cannot be better, and there are three things that the DCMS really ought to consider doing as a matter of priority.
I want to begin by putting on record my thanks to the Department for its efforts during the pandemic. From my personal experience as chair of the all-party parliamentary group for museums, I know that the Minister for Digital and Culture, my hon. Friend the Member for Gosport (Caroline Dinenage), the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), and, indeed, the Secretary of State have made themselves readily available to discuss issues and concerns in the sector. I know that the National Museum Directors’ Council has felt able to raise issues and has found the Department to be a listening one.
The pandemic has meant that the Department has gone from being one of the Departments with the smallest budgets in Whitehall to effectively a delivery agency to keep our wonderful and important cultural institutions afloat. Without the culture recovery fund and other funds that the Department has allocated, I fear for the sustainability of our museums and vital cultural attractions. Clearly, there are issues about when museums, in particular, can open, and I urge that they are given the earliest opportunity to do so, as they have proven that they can be covid secure. However, I welcome the extension of the culture recovery fund to September, which will be a lifeline for organisations.
Financial support does not equal instant recovery. Restrictions will continue on income-generating activities for museums, and the lack of international tourism will affect museums well into 2022 if not into 2023. That will be the case, as has been mentioned, for all cultural events. Continued support from the Department will be needed to avoid closures and job losses.
If the Department is looking for additional policy ideas to enhance its already impressive levels of support, I want to put several on record. First, a sunset clause is approaching in April 2022 for the museums and galleries exhibition tax relief, which has been a huge enabler for the sector. I urge the Department gently to persuade the Treasury to extend the relief permanently. There is also the need to address underlying issues that were already in existence before the pandemic began, particularly the need for capital investment in museums that are in need of repair so that they can maintain their estates. The backlog is substantial. I request that the Department confirm as soon as possible when museums will receive money promised in the museums maintenance, estate and development fund, and whether this vital fund will continue into the next three years, as was originally planned before the pandemic began. It is vital that it does.
Let me thank and congratulate the Chair of the Digital, Culture, Media and Sport Committee and my hon. Friend the Member for Cardiff West (Kevin Brennan) for how they have jointly championed the sector on a cross-party basis. They have raised the issues of the lack of support for freelancers, the touring threat as a result of Brexit, and insurance. I fully support them in that. I urge the Minister and the Secretary of State to sit down with Equity, the trade union, to discuss a number of the issues, as the union has been developing solutions to them.
I am also a member of the PCS trade union parliamentary group. PCS represents members working in museums, the royal palaces, galleries and historical sites, and is now yet again faced with large numbers of job threats.
The Government have brought forward financial support, as we have heard, with £1.5 billion and an additional £400 million in the Budget, but as the Chair of the Select Committee has said, that is less than half what is needed. It is taking too long to arrive and too long to distribute, and as a result we heard this week that six out of 10 museums are fearful for their future. Charlotte Higgins, the chief culture writer for The Guardian, summed it up exactly right:
“the government has not exactly abandoned the arts so much as behaved in a hesitant, inconsistent and basically incompetent manner easily recognisable from its approach to Covid-19 as a whole.”
What we need now is a longer-term strategy, as a number of Members have said, because I am fearful.
Let us take the example of the National Gallery. PCS represents members there, and some of the services have been privatised. Securitas, the private company that provides security and front-of-house services at the National Gallery, has announced a 20% cut in staffing. Compulsory redundancies are not being ruled out, and this is an institution that has received Government support. That comes on top of redundancies that took place in 2019, when there was a restructuring. It is proposing the temporary closure of some of the rooms and putting an emphasis on paid exhibitions rather than free access. There is a view that when these cuts are rolled out, they will put the safety of the collection and visitors at risk.
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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 DCMS 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.
Thirdly, the Chancellor should have announced a scheme to ensure that musicians and artists could resume touring in EU countries. I note the launch of the “Carry on Touring” campaign’s website today. On social media today I saw the case of someone called Ed Lyon, a classical musician who has just spent six weeks and £945 to obtain a work permit for Belgium. Previously, in normal times, he could have just hopped on a train. The Chancellor is utterly complacent about the loss of export earnings to UK that this continuing fiasco will bring. Lord Frost is now his Cabinet colleague. Why has he not been told to do the job that he so abjectly failed to do in December when he delivered a no-deal Brexit for artists, musicians and their ancillary support industries?
This Budget, despite some investment, did not do nearly enough to save jobs and support growth in the creative industries—the sectors with the fastest growth potential. It has left freelance workers out in the cold, it has thrown a summer of music into a muddy field of uncertainty and it has closed the gate on touring for our creative artists and musicians. Far from doing “whatever it takes”, it has taken away the opportunity to create.
I want to make two other points briefly. The last 12 months have exposed just how influential disinformation and hate speech on social media can be, particularly in relation to anti-vaccine campaigns to undermine confidence in the vaccine and spread conspiracy theories about the pandemic. It makes the bringing forward of the online harms Bill this year so important for the Department, and we must also ensure that there are proper resources for Ofcom, as the regulator, to ensure that there can be proper auditing and inspection of the way social media companies respond to campaigns of disinformation and hate speech, and other speech that can cause harm through social media networks. We have been talking about this for many years and I am glad that the Bill is coming, but it is also an imperative.
Finally, the pandemic has also had a big impact on the advertising industry and broadcasting revenues from advertising, just as other media have struggled with revenue from advertising. There is no guarantee that this money will bounce back, particularly as audiences are increasingly diverting their attention to online services—social media to receive news and on-demand platforms to view content. Increasingly, many people spend time not watching broadcast material at all, but playing games and doing other things online. This potentially undermines the public service broadcasting model in this country. I welcome the fact that we have the PSB review, but we need to understand that the long-term impacts of rising production costs for television due to the impact of Netflix and Amazon Prime and of declining advertising revenues because of switching audience attention are fundamentally changing the market, and if we have media that—
The first thing is insurance. It is almost impossible now to get insurance against the cancellation of a live event because of covid-19. The Government should step in and either provide a scheme directly or underwrite one if they do want these events to go ahead, because producers simply cannot take the risk of committing vast sums of money to pre-production and planning.
Secondly, we need to continue business support not just for one year, but through at least until 2024. That means the Government must make funds available directly through funding in England and through consequential funding to the devolved Administrations in Scotland, Wales and Northern Ireland.
The third thing we need DCMS to do is to be much more of a champion for this sector. We have heard already how this Department is very much the Cinderella of Government Departments. That has to stop, and we need people who will stand up for the sector and advocate for what is necessary. That applies in particular in relation to the Treasury, which is responsible for most of the direct wage support. We need to try to get through the tin ear of the Treasury and make sure that it responds to the very great gaps in support that particularly afflict this sector more than others. If we do that, then when we come back in a year’s time, we may still have a sector to be proud of. If we do not, it may be very much in jeopardy.
It is a truism that our past points the direction to our future, and this is equally true when it comes to recovering from the pandemic. We cannot afford to lose our unique and wonderful cultural heritage, which needs our help now. In return, it will be there for us in the future, both as institutions that can help level up local communities and as something that can assist our educational recovery. These are internationally renowned cultural centres that I believe we have a duty of care to protect and preserve for future generations.
What has also angered staff is that, as a result of the privatisation, it is the lowest-paid staff who are being laid off or having their pay cut, as well as a higher proportion of black, Asian and minority ethnic staff. In addition, the National Gallery spending several million pounds on extensive refurbishment of the front entrance to the building is not going down well with staff or supporters. It has to be remembered that those staff who have been privatised receive only a quarter of what they would have received in redundancy pay if they were employed by the gallery. The union will oppose those cuts and seek to negotiate them—of course it will—but this emphasises the need for a longer-term strategy.
We have all acknowledged in the debate so far that the recovery in this sector will take longer than originally expected—it will take the next few years, if not longer—so there needs to be a longer-term plan. We urge the Secretary of State to bring together all the stakeholders in this sector with the trade unions and management of the galleries, museums and sites to ensure that we discuss what is really needed, plan the investment that is needed and its roll-out and distribution, and ensure that it goes as rapidly as possible to secure this sector, which does not just bring income to this country but improves the quality of all our lives.
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