Written by 12:00 am Europe Economy

British Music Economy In Partial Recovery But Demands More Government Help

The good news: the British music industry’s contribution to the UK’s economy in 2021 was up 26% from 2020. The bad news: it was still down 31% on its pre-pandemic peak in 2019.

These numbers were published by UK Music, the umbrella group for multiple sector-specific trade bodies in the country, in its new This Is Music 2022 report. It used the publication of the figures to call on the British government to provide greater support for the sector in order to avoid it collapsing, stressing how important it is in terms of the domestic economy as well as its export power.

The British music business – across all areas, including recorded music, music publishing and live – contributed £4 billion ($4.56 billion) to the UK economy in 2021. This was up from the £3.1 billion ($3.53 billion) generated in 2020. Both years were enormously affected by the pandemic, with restrictions applying at various stages on touring and festivals.

This growth, encouraging as it was, still fell drastically short of the £5.8 billion ($6.61 billion) generated in 2019 before the pandemic hit. This was an all-time high for the UK music business.

With parts of the industry being shut down entirely, over a third of workers were laid off as the pandemic hit in early 2020. That year there were 128,000 jobs across the sector. As part of the slow recovery, this figure rose to 145,000 in 2021. This, however, is still 26% down on the 197,000 jobs in the industry in 2019.

Exports in 2021 were £2.5 billion ($2.85 billion), up 10% from 2020 – but still down 15% from the £2.9 billion ($3.3 billion) reported in 2019.

Jamie Njoku-Goodwin, chief executive of UK Music, said government support is urgently needed as the industry still faces a “major threat from strong economic headwinds”.

The report notes, “While music studios were allowed to remain open with limitations, the Government-mandated restrictions meant that live venues spent a significant amount of the year closed or operating at limited capacity. This was a major factor in the drop in the music industry’s economic contribution.”

Njoku-Goodwin added, “It’s vital that Government acts to protect and support a sector that creates jobs, contributes to the economy and matters to millions of people across our country. The new Prime Minister [Liz Truss] has said she wants to cut taxes to stimulate growth. If she is serious about this, then she should use the emergency budget to reduce the tax burden on the music industry […] This would incentivise investment and boost exports of British music, which are at risk due to increasing international competition and issues following the UK’s exit from the European Union.”

There has been a triple threat facing the British music business in recent years.

First, the country’s departure from the European Union (aka Brexit) has made it increasingly difficult and expensive for British artists to tour in mainland Europe.

Second, the pandemic saw whole parts of the business shuttered and mass layoffs, with skilled professionals having to retrain and seek employment elsewhere, meaning there are serious staff shortages in certain sectors, particularly live music.

Thirdly, spiraling energy costs are expected to hit businesses hard, notably small venues which have been suffering anyway and now face mounting uncertainty. The government has confirmed that the Energy Bill Relief Scheme will cap wholesale energy prices for all firms for a six-month period from 1 October.

There are also huge concerns around the cost of living crisis in the UK, where food prices, energy prices, rent costs, mortgage rates and more are rising sharply, as is the rate of inflation. People will be forced to severely cut back on their expenditure across the board, with entertainment spending expected to be particularly impacted on.

The knock-on effect here will most obviously be on the live music business, especially grassroots venues, and this is something the Music Venue Trust has been lobbying on for several years.

“We have a music industry in the UK that is the envy of the world and a talent pipeline that continues to produce global stars and an army of highly skilled professionals,” said Jamie Njoku-Goodwin. “It is vital that the Government works with us to protect and nurture the music industry from the economic turbulence we face so we can pull through and create the jobs and investment to make it even stronger than it was before the pandemic.”

Source link

Close