Tom Kiehl, acting chief executive officer, UK Music, has written about the gaps UK Music feels have appeared within Government support for the self-employed impacted by coronavirus.
He writes: ‘The British music industry was encouraged by Chancellor Rishi Sunak’s pledge to ‘stand behind businesses large and small’ when he unveiled Government loans worth £330 billion to tackle the coronavirus crisis.
‘Measures such as the extension of business rate relief as well as grants for both the employed and self-employed will be vital tools for many who face a battle for survival. However, worrying gaps are emerging in the unprecedented package revealed by the Chancellor last month in what he called the ‘economic fight against coronavirus’.
‘Almost a fifth of UK small and medium-sized businesses - an estimated one million firms - are at risk of collapse within the next month as they struggle to secure emergency funding from the Government and banks. The cash crisis could put up to four million jobs at risk.'
‘In another worrying sign, 950,000 people have applied for universal credit in the last fortnight, reflecting the big fall in income as well as a surge in unemployment as firms go bust or lay off staff because they cannot wait for the Treasury’s retention scheme to start paying out.
‘Many of those people seeking welfare support will be involved with the music industry which has been among the hardest hit sectors, especially since the ban on live events was introduced.
‘An estimated 72% of our industry are self-employed workers who face some of the toughest battles to secure the money they need to make ends meet or keep their small businesses afloat.
‘The scale of the crisis has been made clear by some of our members at my organisation UK Music, which is the umbrella body for the whole of the commercial music industry.
‘The Music Managers Forum and Featured Artists Coalition found £50 million has been lost due to the live sector shutdown - including £3.1 million lost to managers in commissions. A further £68 million losses are predicted if more events cancelled over next six months.
‘Almost a fifth of UK small and medium-sized businesses - an estimated one million firms - are at risk of collapse within the next month as they struggle to secure emergency funding from the Government and banks. The cash crisis could put up to four million jobs at risk.'
‘The Music Producers Guild found producers and sound engineers have lost an average 70% of their income. The average earnings loss in March was £3,300, rising to £4,300 in April. More than half of those surveyed say they will default on rent or mortgage payments. The Musicians’ Union said musicians had already lost £13.9 million in earnings due to Coronavirus by March 23.
‘There are a range of steps that the Government must take as a matter of urgency to throw a lifeline to the UK music industry which supports 190,000 jobs, contributes £5.2 billion a year to our economy and is a such an integral part of our culture.
‘We need clarity on the Coronavirus Self-Employment Income Support Scheme to ensure that support is available to all those who need it.
‘Many in the music industry are directors of their own small firms. For example, setting up on this basis eases the administrative burden for managers when planning overseas travel or applying for certain grants or funding structures.
'However, Company Directors are disqualified from the Self-Employed scheme and would be unable to furlough themselves under the current rules as this would see the company unable to function. We are urgently seeking Government help to make sure these individuals, often low earners, do not slip through the net and receive parity.
‘Another group that are currently not covered and need Government support are the recently self-employed. In order to qualify for the grants, workers need to have started their jobs by February 28th, meaning a significant number are not covered by this arbitrary and unjust cut-off.
‘We would ask the Chancellor to allow the newly self-employed to file their 2019-20 tax returns in April 2020 to qualify for the same help that other self-employed workers will get.
‘Mothers who have been on maternity leave are another group who appear to have fallen through the gaps in the Government scheme. They must be allowed to exempt those periods of maternity leave from their average earnings under the self-employed income support scheme.
‘Those involved in our industry are facing unprecedented hardship. We are strongly urge the Government to look at fixing the gaps in the support as swiftly as possible to avoid the loss of thousands of jobs and businesses.'
‘The Government must also acknowledge the portfolio nature of many careers in the music industry and allow those that less earn less 50% of their income through self-employed work to qualify for a mix of Government schemes designed to support the employed and self-employed.
‘It is also unfair that the Coronavirus Self-Employment Income Support Scheme is capped at those earning £50,000, yet a similar earnings eligibility does not exist for the support package available to workers that are not self-employed.
‘Crucially, the scheme is not set to go live until June, which means many self-employed people in the music industry still have an agonising few months. The music industry is doing its utmost to support for creators, musicians and songwriters and everyone else involved in the sector during this time.
‘For example, charities such as Help Musicians and the Music Venue Trust have developed funds to assist people and small businesses at this time of need.
‘The Musicians’ Union have opened a Coronarvirus Hardship Fund for members and PRS for Music has an immediate PRS Emergency Relief Fund, but more support is still needed to ensure people can pay bills, rents and mortgages.
‘More broadly, changes are also needed to the business support packages available. While the Chancellor has announced improvements to the Coronavirus Business Interruption Loans Scheme it remains to be seen whether these truly cater for the needs of music companies. The Government should go further and increase the list of those that can lend through the scheme so there is more experience of cultural lending, social enterprise loans and crisis loan lending.
‘The Chancellor should also look at granting a business rates holiday to private and commercial recording studios who are currently not covered by the rate relief scheme, as well as ensuring music SMEs that don’t pay business rates due to being in shared office space can still access the Small Business Grant Scheme.
‘Other countries appear to have better safety nets in place for their music industries than the UK. For instance, the Australian JobKeeper scheme is open to owner-run limited companies, which are administrative vehicles for many self-employed in the UK music industry.
‘The Irish Pandemic Unemployment Scheme does not penalise those with a mix of income streams from employment and self-employment by paying all applicants requiring support a flat rate. These schemes recognise the diverse nature of employment and will be paying out quicker than the UK schemes.
‘Those involved in our industry are facing unprecedented hardship. We are strongly urge the Government to look at fixing the gaps in the support as swiftly as possible to avoid the loss of thousands of jobs and businesses.
‘We want to work with the Government to deal with these shortfalls in the available support to avoid the risk of irreparable damage to our world-leading music industry.’
