Digital, Culture, Media and Sport: Support Measures

Part of the debate – in the House of Commons at 2:37 pm on 8th October 2020.

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Photo of Julian Knight Julian Knight Chair, Julian Knight MP Committee, Chair, Julian Knight MP Committee, Chair, Julian Knight MP Committee, Chair, Julian Knight MP Committee 2:37 pm, 8th October 2020

I beg to move,

That this House
has considered the spending of the Department for Digital, Culture, Media and Sport on support measures for DCMS sectors during and after the covid-19 pandemic.

I am truly grateful to the Backbench Business Committee for granting time for this important debate, which affects so many of our constituents. I also thank my co-sponsor, Kevin Brennan.

The past six months have presented us with the challenge of our lifetimes. From the moment the coronavirus pandemic took hold, it has posed an existential threat to the areas of the economy that enrich our lives the most—whether that is the ability to attend sporting events, the theatre, or a gig, to enjoy our world-class museums or galleries or to go on holiday somewhere in the UK, in one fell swoop we could not do any of those things anymore. The DCMS sectors faced a complete shutdown that, despite an easing of restrictions, largely remains.

Our world-leading cultural sectors have been on their knees as a result of covid-19, with their major source of funding cut off. Media and broadcasting organisations have struggled as advertising revenues have fallen off a cliff. The very existence of at least 10 to 15 of our professional football clubs lies in the balance. DCMS sectors also rely on freelancers more than any other sector, more than one third of whom were unable to access a penny of the Government support for the DCMS sector.

More than six months have now passed; many businesses remain unable to open due to Government restrictions, while the Treasury’s vital, job-saving furlough scheme is winding down. The arts and leisure sectors are disproportionately affected by that, as 30% of workers in those industries are still on furlough today. We do not yet know when crowds will be permitted to return to the football or when theatre performances will be able to take place without social distancing, which is the only way those performances can be viable. Many businesses face catastrophe, with recent figures showing that 155,000 jobs in the creative industries have effectively ceased to exist since March.

The Government have rightly taken steps to protect those sectors. The culture recovery fund is the largest ever investment in the arts, and I know how hard the Secretary of State personally worked to secure the £1.57 billion package. The furlough scheme gave those who could not work due to Government restrictions a chance to keep their jobs. There have been measures for charities on the covid frontline, but the money allocated fell £3 billion short of what the sector said that it needed for just a three-month period during lockdown. There has been a bespoke deal to ensure that film makers can access reinsurance and keep producing the films and television shows that we know and love, but that, too, took many months to get over the line and applications opened only last week.

I thank the Government for their efforts to support the sectors, but those measures do not go far enough. There remain large gaps in the Government’s response, and many industry figures are concerned that some within Government have failed to understand either the needs of the sectors or the immense value that they add to both our economy and lives. I, though, absolve individual DCMS Ministers of such a charge, because I know exactly the level of engagement that they have had with all those sectors and the hard work that they have put in.

My Committee conducted an exhaustive inquiry into the impact of covid-19 on the DCMS sectors. We found that no sector has been unaffected by this seismic shift in the way we work and live. We have had hundreds of conversations and received evidence from almost 700 organisations and individuals, including charities, tech companies, broadcasters and some of our most innovative businesses and best known public figures.

The contribution of the DCMS sectors individually is immense; yet charities not on the frontline in the fight against covid, for example, have been largely excluded from Government support, despite their work been indispensable in so many ways. Cancer Research UK, for example, which does vital, life-saving work, has told us that its research budget has been cut to the extent that 1,500 fewer scientists are now working on treatments and cures for cancer: a disease that statistically affects one in two of us.

The theatre industry, which was thriving before the pandemic, struggles to make performances viable if fewer than 70% of tickets are sold. Even at a metre, they are still running at 25% to 30% capacity. Although the UK is exceptional at fostering world-class music talent—9% of global music comes from this island—music venues also rely on selling 70% to 80% of tickets to sustain their businesses. News that the Royal Albert Hall may reopen for Christmas is welcome, but what about the many pantomimes that will not, and cannot, take place in regional theatres, some of which have now closed? That is up to 60% of their annual income.

The leisure sector has taken a hit, too, with gyms shut at precisely the time that more and more people are looking to get fit and reduce their chance of suffering from the effects of covid. Travel restrictions are causing immense pain for the UK tourism industry, as inbound tourism numbers have plummeted to historic lows. UK tourist destinations, which draw millions from all over the world, face absolute ruin, and 7% of seaside businesses went under just during lockdown.

One perception of the DCMS sectors that I especially want to push back on is that these businesses do not hold their own or are not net contributors to the UK economy. They are growth sectors, and prior to the pandemic they were growing at twice the rate of the economy as a whole. In the creative industries, the rate was five times the economy as a whole. If those sectors had not been contributing in the way that they have been, we would have been in recession for three of the last four years.

For every pound spent in a theatre, another six is spent supporting the local night-time economy. The contribution of the DCMS sectors is so often overlooked, even by those in the Treasury. “Why are they giving money to the arts?” some people say. I will tell hon. Members why: because they make money back. The DCMS sectors are diverse and often composed of very small businesses. They are not regulated industries in the way that, for example, financial services are, which perhaps explains why their needs are not as well known to the Government, but they are no less in need of support as a result of a pandemic; in fact, they need it more.

These sectors, while representing a quarter of the economy, comprise only 0.5% of Government spending. Every single time, DCMS Ministers have to go cap in hand to the Treasury for even the smallest amount of governmental loose change. That cannot be right. DCMS needs to be able to punch its weight even more in the Government and to have a higher margin of spending and greater discretion. What can be done? Well, there are a number of steps my hon. Friend could take, starting with sector-specific support to protect jobs. As the furlough scheme winds down, it becomes clear that the job support scheme simply will not meet the needs of thousands of DCMS sector businesses, which remain unable to generate any income whatever. The sectors desperately need support that recognises the restrictions they are under.

Without restrictions, those businesses would be growing. These are not zombie jobs. Sector-specific support would mean that those who currently cannot work, but who have jobs that remain viable in normal times, are supported for longer. No support means those essential creative jobs could disappear, possibly forever, as more and more creative businesses fold as a result of not being able to generate any income.

The theatre tax credit could be repurposed for marketing to show what is on offer and to encourage people to come back once it is safe to do so. Reinsurance schemes would restore business confidence for organisations that are struggling and fearful of the risks of reopening only to be shut down again. We need clear timelines, with “no earlier than” dates to aid in planning for the next few months, as well as rapid and top-notch test and trace. Those are all changes that could make a big difference for businesses that lack certainty about the future. The reality is that we do not know what is around the corner. Whether a vaccine is or is not found, we need to find a safe, smart way for venues to open at or near capacity.

Perhaps the bigger question is the opportunities the pandemic presents to reshape our DCMS sectors. It is a chance to look at competitions, such as the premier league, and decide how we want them to look in the future. We can explore whether the current model of operating is right for the UK and its many millions of football fans, and whether the balance between the top tier and other tiers of football is fair. That is just one example. The pandemic is a real chance to improve standards in areas that have long raised concerns.

There is also a chance to drive more investment and innovation in areas such as tech, spurred on by the Government’s commitment to rolling out gigabit-capable broadband nationwide by 2025. There are new opportunities for tourism and industry, too, which are so often a Cinderella consideration.

Throughout the past six months, I have heard from cultural and creative businesses that even where they are likely to survive, the depletion in their resources means they will not be able to offer the same outreach programmes that directly contribute to the Government’s levelling up agenda and create opportunities for young people and black and minority ethnic communities across the country. Those who will suffer the most from the blow to our cultural sectors are the people who can least afford to do so.

Finally, it bears repeating that the DCMS sectors are one of the UK’s great success stories. Britain truly punches above its weight in all these sectors. The past few decades have cemented that success. Our artistic, cultural, sporting and touristic excellence is a source of great pride to me and, I am sure, to many Members of this House. The people who work in those sectors deserve our support. We simply cannot afford to put so many years of progress at risk.