London, 30th August 2022 UK Music Chief Executive Jamie Njoku-Goodwin has warned music venues, studios and other music businesses face closure without swift action to combat soaring energy bills.
He is calling on the Government to cut VAT from its current 20% and extend business rate help to give a lifeline to music businesses fighting for survival.
The energy price cap does not apply to businesses, which means that music venues are seeing their energy bills increase by an average of a crippling 300%, and in some cases 740%, adding tens of thousands of pounds to their running costs.
Based on a survey of its 941 venue members, the Music Venue Trust (MVT) has revealed venues face an average 316% rise in fuel bills – taking the average fuel bill cost to £5,179 per month per venue – up from the current average of £1,245.
MVT is now warning that the surge in energy bills means that around 30% of the entire network of venues face the threat of permanent closure.
One venue has been quoted an eye-watering £42,000 a year for fuel – more than treble its previous bill of £13,200 – with the supplier saying they will only accept full payment in advance.
It is a similar story for businesses right across the music industry. One major London recording studio expects its gas bill to rise by 600% and its electricity charge to rise by 80%, according to the Music Producers Guild (MPG). (See notes to editors for two recording studio case studies).
Some businesses are struggling to even find fuel suppliers after their previous energy firm collapsed.
Pre-pandemic, the UK music industry contributed £5.8 billion to the economy and supported almost 200,000 jobs. The sector is still in recovery after taking a huge hit due to the impact of COVID-19-enforced shutdowns.
The Government has promised to help domestic households hit by rocketing fuel bills after energy regulator Ofgem said last week that typical household energy bills will hit £3,549 from October 1.
However, ministers have yet to offer any specific support to the music, leisure and hospitality industries.
Jamie Njoku-Goodwin warned venues, studios and other music companies across the UK now faced an “existential threat” due to fuel crisis and urged the Government to take immediate action.
UK Music Chief Executive Jamie Njoku-Goodwin said:
“Spiralling energy costs have created an existential threat for venues and music studios. It’s urgent that Government takes action to support businesses with the costs the are facing.
“We all saw just how miserable life was without live music during the pandemic, when venues were closed for months – the high cost of energy bills could now close them forever.
“The new Prime Minister must ensure that music businesses are included in the support measures that are brought forward to deal with soaring energy costs.
“The Government should look at cutting VAT and extending business rate support to help music businesses that are fighting for their survival.”
Music Producers Guild Executive Director Cameron Craig said:
“As an industry hit particularly hard by the pandemic, we found out just how close to the bone most independent recording studios run financially.
“The unprecedented energy cost rises are just another body blow to a sector just finding its feet in a post-pandemic recovery once again creating an uncertain future.
“We call on the Government to help the recording sector or lose an integral part of the UK’s cultural and creative capital.”
Music Venue Trust CEO Mark Davyd said:
“Alongside the simply unaffordable increases to costs, the government must urgently address the fact that the market for energy supply has collapsed.”
“We have multiple examples where venues do not have any option other than to accept whatever price increases and tariffs are proposed by the sole supplier prepared to offer them power at all. The situation has rapidly deteriorated into a monopoly.”
ENDS
Notes to Editors
Information about the Music Producers Guild (MPG) can be found here:
https://mpg.org.uk/about-mpg/about-the-music-producers-guild/
Information about the Music Venue Trust (MVT) can be found here: https://www.musicvenuetrust.com
MPG Case study 1: A major London recording studio
“For our recording studio, energy costs are due to more than double in October. Gas is likely to go up 600% and electricity perhaps 80%. The result is going from £132,000 to £288,000 – a shocking £156,000 increase. There is no way they can significantly economise on usage or pass this increase on to their clients. It is a big hit in profitability at a point when there are cost pressures in nearly all other areas. As the price increase is unknown, it could get even worse between now and the renewal.”
MPG Case study 2: A major recording studio
“Across 2020/21 we were forced to close for six of the twelve months to help stop the spread of coronavirus. During this time, we still amassed energy bills, meters rolled over unobserved, triggering billing freeze periods and debt built up. No reliefs were granted by the energy companies. Subsequently, we now find ourselves in recovery, managing debt repayment plans on top of current usage and with tariffs of roughly double the price per unit since April 2022. As a recording studio and bar running 24 hours-a-day with large format consoles, commercial fridges, pumps, AC units etc, we have an astronomical energy spend in a critical period in which we are working back from the massive losses of 20/21, and with trade still impacted even today. There’s no scope to increase rates in a heavily disrupted sector and our residents are also struggling to keep up since our business rates relief was ended.”
About UK Music:
https://www.ukmusic.org/
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https://twitter.com/UK_Music
https://www.facebook.com/pages/UK-Music/185536271465393
