Oral answer (Lords) on
Covid-19: Entertainment and Arts Venues
Asked by
The
To ask Her Majesty’s Government what further support they will
provide to entertainment and arts venues following the
introduction of new COVID-19 regulations.
The Parliamentary Under-Secretary of State, Department for
Digital, Culture, Media and Sport ( of Whitley Bay) (Con)
My Lords, Her Majesty’s Government are continuing to support the
sector through the Culture Recovery Fund, which has provided
nearly £2 billion of public support for arts and culture. To help
people over the winter, we have reopened the emergency resource
support strand of that programme, giving more applicants at risk
of financial failure an opportunity to bid for support. We
continue to work with our arm’s-length bodies and the sector to
understand the pressures being felt as a result of the pandemic
and the move to plan B.
The (CB)
My Lords, the Minister will be aware of the considerable
difficulties the arts are having getting back on their feet, with
many venues experiencing low ticket sales before the most
immediate crisis. Will the Minister look again at the Live Events
Reinsurance Scheme, which does not cover regulations that make
events financially unviable or where cancellations occur because
of staff contracting Covid? Will the Minister look as well at
extending the Culture Recovery Fund to creative freelancers, many
of whom, particularly in the music sector, did not receive help
under the Self-employment Income Support Scheme?
of Whitley Bay (Con)
My Lords, the noble Earl is right to point to the fact that we
are doing everything we can to support the sector to return to
doing what it loves and what people love to enjoy it doing. We
launched the live events reinsurance scheme in September, and I
will certainly look at examples where people are not able to
benefit from it. Self-employed people have been able to enjoy
some of the other support that has been given by the Treasury
but, again, I am very happy to hear from freelancers and those
representing them to make sure that the support is being
given.
(Con)
Does my noble friend acknowledge that English choral music is
particularly enriched by church music? Is the Royal School of
Church Music eligible for grants from the Culture Recovery
Fund?
of Whitley Bay (Con)
I do not know specifically, but I will follow up on my noble
friend’s request, find out whether it has bid for any of the
rounds of the Culture Recovery Fund and write to him with the
answer.
(Lab)
My Lords, I declare an interest as a director of Carlisle United
Football Club. What plans do the Government have to ensure that
places are available for away fans in football games which are
subject to the latest Covid regulations?
of Whitley Bay (Con)
I will discuss that matter with my honourable friend the Sports
Minister. Of course, the Culture Recovery Fund has been helping
organisations right across the wide range of things that people
enjoy.
(LD)
My Lords, yesterday’s newspapers reported on the new musical
“Cabaret”. These five-star reviews remind us what a magnificent
magnet our London theatres in particular are for inward
investment and tourism. However, the Society of London Theatre is
warning us that these new circumstances—and they are new; the
Prime Minister had to have a special broadcast, and we have to
have special legislation—mean that the theatres are now faced
with entirely new threats, yet from the department it still
sounds like it is business as usual, rather than action this
day.
of Whitley Bay (Con)
My Lords, the department, both at official level and
ministerially, has been speaking to the sector throughout the
pandemic. Of course, we have stepped that up since the move to
plan B. I have a meeting tomorrow with our venue steering group
so that I can hear from it myself. I have been to two theatres
since we moved into plan B: the Young Vic on Thursday, and the
Greenwich Theatre to see the pantomime at the weekend. I am
pleased to report that they were full houses of people wearing
masks. The most important thing we can do to support not just the
cultural sector but every part of our economy is to get our
boosters, wear our masks and have consideration for those around
us.
of Knighton (CB)
My Lords, given that so many freelancers fell through the
Government’s welcome support network during Covid, the noble
Baroness, Lady Stedman-Scott, promised from the Dispatch Box to
write to me about the rules concerning universal credit, because
she accepted that there was a problem. Would the Minister be kind
enough to fulfil that promise, as I have yet to hear from her?
Also, the double whammy of Covid and the restrictions on touring
have really hit the musical sector. Given that the Prime
Minister, , told us that the advantages
of Brexit would outweigh the disadvantages, could the Minister
enlighten me as to what advantages the creative sector has so far
garnered?
of Whitley Bay (Con)
My noble friend Lady Stedman-Scott has been away for a few days,
so I will certainly pick that up with her office to make sure
that the noble Lord gets the answer to his first question. I also
have a meeting with counterparts in the DWP to take up this issue
in response to a question we had in a debate recently with the
noble Lord, , and others. As the noble
Lord, of Knighton, knows, we
continue to work bilaterally on touring. We provide information
on GOV.UK to make sure that the sector has clarity about the
rules, and we are making progress with many other countries in
ensuring that they match the welcoming access we provide
to musicians who want to
come to the UK.
(Lab)
My Lords, many venues which took out government-backed Covid
loans early in the pandemic are either now starting to repay the
loans or are coming up to being asked to repay them. With the
continuation of the pandemic, are the Government looking at
whether those repayments can be deferred? Given the contribution
that live entertainment and the arts make to our well-being and
that of our communities, what work is being done across
government, including with the Treasury and the Department for
Levelling Up, Housing & Communities, to recognise that so
that this time, if needed, support measures can hit the ground
running?
of Whitley Bay (Con)
My Lords, the money continues to be disbursed. So far, we have
helped more than 5,000 organisations around the country and the
money continues to go out. As we set out in the accompanying fund
guidance documents, the Government will keep the delivery of the
funding under active review and will consider how best to adapt
it in line with the needs of the sector. We continue to work with
other departments to make sure that our response is
appropriate.
(Lab)
My Lords, many public houses have a tradition of providing live
music. That seems to have ceased since Covid. Have the Government
any measures whatever to try and encourage public houses to start
to open up as venues for live music?
of Whitley Bay (Con)
The rules on certification vary depending on the size of
establishments, their opening hours and whether they serve
alcohol after certain times. The noble Lord is right that live
music can be enjoyed in all sorts of settings and we want people
to get back to doing that safely. The best way for them to do
that is to help us by getting their boosters and wearing their
masks.
My Lords, does the Minister agree that the cultural venue future
for the north of England would be considerably enhanced if
communications were improved—that is, if you could actually get
to venues in the first place? What weight are he and his
department giving to discussions about northern rail and other
transport infrastructure?
of Whitley Bay (Con)
The right reverend Prelate makes an important point. We want to
ensure that people have access to entertainment, arts and culture
wherever they live and however they get there. We work with the
Department for Transport, local authorities and metro mayors to
deliver that.
of Hudnall (Lab)
My Lords, I remind the House of my interests. The noble Lord has
rightly focused on the enjoyment that people get from the arts
and of course I would be entirely in sympathy with that, but he
has not mentioned the economic benefit that comes to the country
from the success of the sector. That very much includes the
performing arts, particularly theatre. Have the Government made
any assessment of the likely impact on our economy if there is
serious damage to that sector over the next few months or
years?
of Whitley Bay (Con)
The noble Baroness is absolutely right. This is about not just
the enjoyment that the arts bring but the contribution they make
to our economy and society. The Culture Recovery Fund was
testament to that—money from the Treasury to make sure that our
vibrant and expanding cultural sector was still there and in good
health as we emerged from the pandemic. That is why we keep that
under review and are keen to ensure that it can continue to grow
as quickly as it has been.
(CB)
As most people get their entertainment from television and from
Netflix and Amazon, is there a way that we can tax these much
more severely because they take so much out of our live music,
our theatres and all sorts of things? Can the Minister not start
petitioning for a real tax of Amazon and all those others?
of Whitley Bay (Con)
My Lords, during the pandemic thanks to the Culture Recovery Fund
a lot of independent venues have been able to stream the work
that they have done, bringing it to people to enjoy in their
homes. A lot of the film and television production companies have
been working with us, making use of apprenticeships to help get
lots of people into the creative industries and taking up job
opportunities. They are part of the solution. We want a thousand
flowers to bloom.
Extract from Committee
stage (Commons) of the Finance (No 2) Bill
Clause 17
Temporary increase in theatre tax credit
Question proposed, That the clause stand part of the
Bill.
The Chair
With this it will be convenient to discuss clauses 18 to 22 stand
part.
Clauses 17 to 22 make a series of changes to the creative
industry tax reliefs, in order to support the cultural sector as
it recovers from the effects of the pandemic. These changes
include temporary rate increases for theatre tax relief,
orchestra tax relief, museums and galleries exhibition relief and
an extension of the museum and exhibitions tax relief. The
changes ensure that reliefs remain targeted, free from abuse and
sustainable.
The effects of covid on the creative industries have varied
depending on the nature of the medium. Social distancing and
wider restrictions have had a particular impact on theatres,
orchestras, museums and galleries, as they rely on live
performances and exhibitions to generate revenue. Clauses 17 and
21 temporarily double the headline rate of relief for theatre tax
relief and museums and galleries exhibition tax relief, from 20%
for non-touring productions and 25% for touring productions to
45% and 50%, respectively. From April 2023, the rates will be
reduced to 30% and 35%, and they will return to 20% and 25% on 1
April 2024.
Clause 19 temporarily doubles the headline rate of relief for the
orchestra tax relief from 27 October 2021, from 25% to 50%,
reducing to 35% from 1 April 2023 and returning to 25% on 1 April
2024. The temporary higher rates of relief will provide a further
incentive for theatres, museums, galleries and orchestras to put
on new productions, exhibitions and concerts over the next two
and a half years. This is a tax relief for culture worth almost a
quarter of a billion pounds.
Clauses 18 and 20 make changes to theatre tax relief and
orchestra tax relief to help clear up areas of legislative
ambiguity and reinforce the original policy intent. The changes
will apply to any new productions commencing from 1 April 2022.
The clarifications are as follows: first, the commercial purpose
condition for theatre tax relief and orchestra tax relief will be
clarified so that productions must be separately ticketed to be
considered as having been performed before a paying audience.
Secondly, the educational purposes condition will clarify that it
is the audience that is being educated, not the performers.
Thirdly, the legislation clarifies that productions made for
training purposes will be excluded. Fourthly, teaching costs
incurred by educational establishments, which are not directly
related to performances, will be specifically excluded from
relief. Finally, the definition of a “dramatic piece” will be
clarified, so that to qualify for the relief, productions must
contain a story or a series of stories and must have an expected
audience of at least five people.
Clause 22 extends the sunset clause of museums and galleries
exhibition tax relief from April 2022 to April 2024 in order to
give certainty to museums and galleries through the recovery from
the effects of the pandemic. The Government will also take steps
to prevent abuse or attempted abuse of museums and galleries
exhibition relief by clarifying the existing legislation. The
clause makes minor changes to clear up areas of legislative
ambiguity and reinforce the original policy intent. The changes
will apply to any new exhibitions commencing from 1 April
2022.
The first clarification will be to the definition of an
exhibition, which will be clarified so that the
“display of an object or work”
cannot be secondary to another activity. Secondly, to prevent
private companies that are not museums or galleries from claiming
on temporary outdoor sites, it will be clarified that being
responsible for an exhibition is not sufficient for a company to
qualify as maintaining a museum or gallery. Finally, the
Government are relaxing the criteria for qualifying as a primary
production company to allow more flexibility for museums and
galleries scheduling touring exhibitions.
The changes will help UK theatres, orchestras, museums and
galleries bounce back by incentivising new productions over the
next two and a half years; continue Government support for
charitable companies to put on high-quality museum and gallery
exhibitions; and ensure that the relief is targeted and
sustainable.
Clause 17 will temporarily increase the rate of theatre tax
credit for theatrical productions that commence production on or
after 27 October 2021. From 27 October 2021 to 31 March 2023,
companies will benefit from relief at a rate of 50% or 45% for
touring and non-touring productions. From 1 April 2024, the rates
of relief will return to the existing levels of 25% and 20%
respectively.
Companies qualifying for theatre tax relief can surrender losses
in exchange for a payable tax credit. The amount of loss able to
be surrendered in a period is dependent on several factors, but
will ultimately depend on the amount of core production
expenditure that has been incurred in the UK or European Economic
Area. A higher rate of relief is also available to theatrical
productions that take place at more than one premise and are
considered touring productions. I would be grateful if the
Minister could clarify how the definition of touring will be
applied.
Section 1217K(6) of the Corporation Tax Act 2009 defines touring
thus:
“A theatrical production is a ‘touring production’ only if the
company intends at the beginning of the production phase—
(a) that it will present performances of the production in 6 or
more separate premises, or
(b) that it will present performances of the production in at
least two separate premises and that the number of performances
will be at least 14.”
Paragraph (b) indicates that if a theatre company puts on 14
performances that were split between two venues—perhaps in the
same town, just round the corner from one another—it would be
eligible for 5% more tax credits than if it kept all 14
performances in the same venue. Perhaps the Minister could
confirm whether that is the case.
As we have heard, clause 18 concerns theatrical production tax
relief. It amends part 15C of the Corporation Tax Act 2009 to
clarify several areas of legislative ambiguity relating to
eligibility for theatre tax relief in relation to theatrical
productions where the production phase will begin on or after 1
April 2022. We understand that the amendments are made to narrow
the focus of the legislation and, according to the background of
its explanatory note, to
“reinforce the original policy intent”.
Subsection (2) requires the intended audience to number at least
five people for a production to be considered a “dramatic
production”. It also stipulates that for a dramatic piece to
qualify as a dramatic production, it must tell
“a story or a number of related or unrelated stories.”
Subsection (3) adds productions made for training purposes to the
list of productions that are not regarded as theatrical and do
not qualify for relief.
Subsection (4) amends the commercial purpose condition in section
1217GA of the 2009 Act so that a performance will not meet the
condition unless it is separately ticketed and such ticketing is
expected to make up a significant proportion of the performance’s
earnings. A ticket may cover things besides admission to the
performance, so long as such things are incidental to the
performance and it is possible to apportion the ticket price
between the performance and anything else included in the price.
The subsection additionally clarifies that for a performance to
meet the commercial purpose condition by being educational, it
must be provided mainly to educate the audience.
As we have heard, clause 19 provides a temporary increase to
orchestra tax credit. It temporarily increases the rate of
orchestra tax relief for concerts or concert series that commence
production on or after 27 October 2021. From 27 October 2021 to
31 March 2023, companies will benefit from relief at a rate of
50%. From 1 April 2023 to 31 March 2024, the rate of relief will
be set at 35%. From 1 April 2024, the rate of relief will return
to its existing level of 25%.
Companies qualifying for orchestra tax relief can surrender
losses in exchange for a payable tax credit. The amount of loss
that can be surrendered in a period is dependent on several
factors, but ultimately it depends on the amount of core
production expenditure that has been incurred in the UK and the
European Economic Area. This temporary rate rise is also being
introduced to theatre tax relief, in clause 17, and museums and
galleries exhibition tax relief in clause 21. It allows companies
to claim a larger tax credit and is designed to support the
industries as they recover from the adverse economic impact of
the covid-19 pandemic.
Orchestral productions are a tremendously important cultural
asset in this country, and we are pleased to support the clause,
which provides additional support to a cultural industry that has
been hit hard by the pandemic. However, will the Minister outline
what measures are in place to support musicians of other
genres, or who perform in non-orchestral configurations? This is
a welcome relief for orchestras, but other musical groups could
be left out.
As we have heard, clause 20 pertains to tax relief for
orchestras. This clause amends part 15D of the Corporation Tax
Act 2009 to clarify several areas of legislative ambiguity within
orchestra tax relief. These changes have effect in relation to
concerts or concert series where the production process begins on
or after 1 April 2022, and they are comparable to the changes
concerning theatre productions in clause 18, in so far as the
Bill clarifies that relief is not applicable to orchestral
productions that take place for training purposes. It amends the
Corporation Tax Act so that a concert will not meet the
definition unless it is separately ticketed and such ticketing is
expected to make up a significant proportion of the performance’s
earnings.
Those are uncontroversial provisions that we do not oppose,
because they reduce the risk of the tax relief being misused and
maintain the spirit in which the legislation was originally
developed. However, we note the Chartered Institute of Taxation’s
concern that orchestras that made a series election before the
Budget—for example, an orchestra that made a series election in
September for its whole annual season—would appear to lose out on
the higher rate of relief for their entire season. That is
perceived to be unfair, and we would welcome clarity over whether
that is the Government’s intention.
Clause 21 provides a temporary increase to the rate of relief
afforded to museums and gallery exhibitions that commence
production on or after 27 October 2021. From 27 October 2021 to
31 March 2023, companies will benefit from relief at a rate of
50% or 45% for touring and non-touring exhibitions respectively.
From 1 April 2023 to 31 March 2024, the rates of relief will be
set at 35% and 30%. From 1 April 2024, the rates of relief will
return to their existing levels of 25% and 20%.
Companies qualifying for this relief can surrender losses in
exchange for a payable tax credit. The amount of loss that can be
surrendered in a period is dependent on several factors, but it
ultimately depends on the amount of core production expenditure
that has been incurred in the UK and European Economic Area. We
do not oppose the measure, because it relates to another sector
that has been hurt by the pandemic and that we want to see back
on its feet, providing the best educational and cultural
enrichment that it can to the British people.
However, will the Minister clarify where world heritage sites fit
into the legislation, and whether they could be considered
museums or gallery exhibitions? According to UNESCO, the UK and
Northern Ireland have 33 world heritage sites: 28 cultural, four
natural and one mixed.
Finally, clause 22 concerns the aforementioned tax relief to
museums and gallery exhibitions, clarifying some legislative
ambiguities and amending criteria for primary production
companies. Those amendments have effect in relation to
exhibitions where the production stage begins on or after 1 April
2022. The relief was introduced with a sunset clause and was due
to expire from 1 April next year, but this clause extends the
relief for a further two years. Any expenditure incurred after 1
April 2024 will not qualify for relief unless there is a further
extension.
As we can see, subsection (1) amends the definition of an
exhibition so that a public display of an object is not an
exhibition if it is subordinate to the use of that object for
another purpose. For example, if a historic passenger train
offers rides between two towns, although the train may have
historical or cultural significance, its main purpose is to
provide passenger transport. This does not preclude the
possibility of there being an exhibition on board the train.
Finally, and more broadly, we are aware of concerns from within
the industry regarding productions that straddle the commencement
dates of these reliefs. For each relief, the increased rate
applies only to productions where the production stage for the
exhibition began on or after the Budget on 27 October 2021, when
the change was announced. So, a production that received the
green light on 26 October, or earlier, would not gain the benefit
of the increased rate, however long it ran for after the
commencement date for the increased rate. We understand there are
those in the sector who perceive that as harsh and arbitrary, and
we welcome the Minister’s thoughts on the matter.
10:45:00
Of course, I support the proposed tax credits. They will be a
useful part of the picture of support for theatres, museums and
orchestras, of which there are many in my constituency of Glasgow
Central—which is, of course, the best constituency in the
country, as I am sure everyone would agree. We have the Royal
Scottish National Orchestra, the BBC Scottish Symphony Orchestra
and Scottish Ballet, as well as Tron Theatre company and the
Citizens Theatre company. These proposals may be of assistance to
them, so I ask the Minister what communication has been put out
to the sector to ensure that it is aware of the relief and taking
it up as required.
I share the concerns expressed by the hon. Member for Ealing
North, and I, too, seek answers from the Minister to the
questions that the hon. Gentleman asked. It strikes me that many
of these proposals provide assistance for productions of some
kind, but that misses the other side of the equation. It is good
to support companies, but if the venues and theatres in which
they wish to perform go bust because they do not have the support
that they need, that will not solve the problems that the
companies have faced for the past year as a result of the
pandemic. I urge the Minister to look at support for the sector
more widely.
Many who work in the sector—in orchestras and in theatres, behind
the scenes and on the stage—are freelancers, and many have
received no support whatsoever from the Government during the
pandemic. They have faced a very difficult time, and the
Government need to resolve that part of the equation. They could
perhaps do so by looking at extending the VAT relief that they
introduced, as the SNP has called for.
We were very glad that the Government brought in the reduction in
the rate of VAT, but it would be useful to see that continued
beyond the cut-off in April next year. That would give a sector
that has faced such a difficult time a bit of extra support into
next year. It does not make much sense to me to cut that off, and
not to incentivise people to go out and make use of the theatres
and music venues we all have in our constituencies.
The sector has had a very difficult time. The proposed tax
credits are useful, but we need to look at the wider picture. If
there is no venue in which to perform or to showcase an
orchestra, ballet, theatre production or pantomime, because those
venues have gone bust and no longer exist, the Government are
missing a trick. It is important that we support the venues and
those who work in the sector, wherever that is, and that we look
at the wider picture, rather than at a narrow bracket of tax
reliefs.
The hon. Member for Ealing North asked about world heritage
sites. The answer to his question is that a world heritage site
would be considered to be a site of cultural significance. It
would be considered as an exhibition and would qualify, so long
as it is maintained by a charity or local authority.
The hon. Gentleman recognised that those who had commenced
productions before 27 October would not qualify for the relief.
He is right about that, although we have doubled relief until
2023 and increased it until 2024. Productions that started before
the announcement have been able to benefit from the normal rates
of relief and the comprehensive package of support provided for
the cultural sector over the pandemic. They will continue to
benefit from relief at the 2020-21 rates. It is important, and we
have made it clear, that these proposals relate to new activity,
because it is new activity that we want to support through this
particular relief.
The hon. Gentleman also asked about touring and musicians HMRC has
recently issued further guidance where industry has asked for it,
in relation to the interpretation of the legislation. I will get
back to him about those two points.
The hon. Member for Glasgow Central made a few points; I am
afraid I must challenge her on her statement that Glasgow Central
is the best constituency in the country. The best constituency
is, of course, South East Cambridgeshire—fortunately, no one will
have an opportunity to respond to that. She made an important
point about communication. The Chancellor mentioned these reliefs
in the Budget statement and they were included in all the
communications about it at the time, which were highly
publicised. The hon. Lady makes an important point, however, and
I will continue to ensure that when we make reliefs, those who
qualify for them are aware that they do. We are doing quite a lot
of work on how to spread the message more broadly to enable
companies to take up the reliefs that the Government offer.
The point is that large production companies will have
accountants who will know what those companies are eligible for,
but smaller companies might not even be aware of what is
available because they are too small to fill in the paperwork.
They may need extra support to do so. Anything the Government
could offer in that regard would be useful.
That is a valuable point. I know in my constituency that small
organisations got a variety of grants from the Arts Council and
were able to access those reliefs, but I will discuss that point
further with my officials. I thought the hon. Lady might want to
intervene on the question of which constituency is the best in
the country.
There is no question!
I commend the clauses to the Committee.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clauses 18 to 22 ordered to stand part of the Bill.
