The Chancellor’s decision to maintain rates of theatre and orchestra tax relief at their current levels has been “unequivocally welcomed” by some parts of the sector, while others have called for a “total reset of arts policy”.
Jeremy Hunt announced, while delivering his Budget, that the higher rates of 45% and 50% respectively will be extended for a further two years from April to help the industry amid the pandemic fallout and cost-of-living crisis.
Mr Hunt, on the film and TV industry, told the Commons: “To give even more momentum to this critical sector I will introduce an expenditure credit with a rate of 34% for film, high-end television and video games and 39% for the animation and children’s TV sectors.
“I will maintain the qualifying threshold for high-end television at £1 million.
“And because our theatres, orchestras and museums do such a brilliant job at attracting tourists to London and the UK, I will also extend for another two years their current 45% and 50% reliefs.”
Sir Howard Panter and Dame Rosemary Squire, joint chief executives of Trafalgar Entertainment, said they “unequivocally welcomed” the decision.
Trafalgar Entertainment is one of the biggest theatre companies in the UK, taking in the Trafalgar Theatre in the West End, the new Olympia Theatre in west London and HQ Theatres, which has a portfolio of more than a dozen regional venues.
They added: “This decision recognises the significance and cultural impact of the theatre industry in our society, and the importance of the sector’s valuable contributions to the wider economy.
“These higher rates of theatre tax relief will act as a stimulus for future investment, job growth, and economic prosperity, both locally and nationally. It will also provide a major boost to touring productions with increased producer confidence and greater choice overall for audiences.
“The news will be a welcome relief for the arts, tourism and hospitality sectors which have all suffered immeasurable blows in recent years as a result of the pandemic, the cost-of-living crisis and soaring energy prices.
“But most of all, it’s a huge win for the millions of people across the UK who access and enjoy cultural activities every week in their towns and cities.”
The Musicians’ Union (MU), which lobbied for the rates extension, also welcomed the announcement as a “vital lifeline”.
General secretary Naomi Pohl said: “We are grateful that the Government has listened to the MU and others in the creative sectors and extended the higher rate of tax relief for theatres and orchestras for another two years.
“The cuts announced to the BBC Orchestras and Singers last week, along with those brought in by Arts Council England in the autumn, are a stark reminder of the difficulties currently being faced by arts organisations, so this extra injection of cash is a vital lifeline for an incredibly successful sector.”
Pact, the UK trade body which represents independent production and distribution companies, said it “welcomes the outcome of the Government’s consultation on audio-visual tax reliefs” and is “particularly pleased that Government has listened to our concerns about the future of UK children’s TV production and has acted to support this critical part of the UK TV sector.”
It added: “Pact is also pleased that the Government has listened to concerns raised by both Pact and UK broadcasters about raising the minimum expenditure threshold for HETV tax relief.”
However, Paul W Fleming, general secretary of actors’ union Equity, was more critical and called for a “total reset of arts policy.
He said: “It is small comfort that the Government has continued its commitment to using theatre tax relief to plug the gaps created by austerity. However even this is only as a result of intense lobbying from Equity and the industry.
“Because while the Chancellor talks about a budget for growth, the reality is his Government has presided over a precipitous decline in arts funding, culminating in the closure of Oldham Coliseum and potential job losses at the English National Opera.”
“We need a total reset of arts policy, based on investment and good jobs – decent culture for all, not constant culture war.”
Jon Collins, chief executive of Live, which represents the UK’s live music sector, said the Government had “missed a golden opportunity” to support “the hardest hit in our sector, as well as turbocharging the whole industry to programme more gigs, shows and festivals up and down the country”.
He welcomed the extension of tax relief but added: “There is no reason it should not be extended to support the wider commercial music sector as well.
“This would drive further economic activity and tourism all over the country.”
Michael Kill, chief executive of the Night Time Industries Association, criticised the Government for failing to offer support to the UK’s “counter culture”.
He said: “It astounds me that this Government have such a narrow view of the arts and creative sectors, and readily exclude the importance of counter culture across the UK.
“The support of corporations and classic arts shows where this Governments true loyalties are, whilst Europe celebrate and value counter culture, we are slowly but surely being left behind.”
Silvia Montello, the chief executive of the Association of Independent Music, added: “Although encouraging to see the Government extend help to small businesses, the lack of support for the UK music industry in today’s Budget is worrying.
“The business currently faces an array of challenges — from increased costs of touring to the negative effects of leaving the EU and continued economic pressures on our SMEs.”
UK Music deputy chief executive Tom Kiehl said he was “glad” the government has listened to calls for the orchestra tax relief to be extended, but added “there is still a serious threat from the planned BBC cuts to orchestras which we want to see reversed”.
He added: “We remain firmly opposed to the need for a broad exception to copyright for text and data mining and are unconvinced of the need for new legislation in this area.
“We will continue to engage constructively with the Government’s plans to provide clarity on the application of intellectual property law to the AI sector.
“With the continued pressure on venues and studios, it’s disappointing that the Government did not offer any further direct support on business rates, VAT and energy bills.”