UK Music urges government to protect music industry as report reveals 'fragile pandemic recovery'

UK Music urges government to protect music industry as report reveals 'fragile pandemic recovery'

UK Music, the collective voice of the industry, publishes its This Is Music 2022 annual report today, which reveals how the sector began to recover from the initial impact of the pandemic. 

UK Music chief executive Jamie Njoku-Goodwin said the economic findings showed why the government should act to support the music industry, which still faces a “major threat from strong economic headwinds”. The report comes as the government announces measures to support businesses facing rapidly rising energy costs.

The key findings in This Is Music - based on data collated from across the music industry in 2021 - include:

• UK music industry’s contribution to UK economy in 2021 was £4 billion - up 26% on the £3.1 billion figure for 2020, but still down 31% on the pre-Covid all-time high of £5.8 billion in 2019.

• Employment in the music industry rose to 145,000 jobs in 2021 - up 14% on the 128,000 jobs in 2020, but still down 26% on the pre-Covid record of 197,000 jobs in 2019. 

• Exports in the sector rose in 2021 to £2.5 billion - up 10% on the £2.3 billion figure in 2020, but still down 15% on the £2.9 billion in 2019. 

UK Music’s report measures the health of the music business by collating data about the sector’s contribution in goods and services to the economy, defined as Gross Value Added (GVA). The data shows that in 2021 the sector was recovering from the initial impact of the pandemic, as the music industry adapted. 

Culture Secretary Michelle Donelan said: "Music is such a powerful force for good. It brings colour to our lives, it connects us with friends and family, and it makes a huge contribution to our economy - delivering real benefits that are seen and heard across the entire UK.
"The data that UK Music provides is invaluable in shaping the government’s ongoing support for our musicians and the people who work with them. Music is one of our country’s prized national assets, and I look forward to working with the industry to keep it at the centre of the global stage.”

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, which fell from its pre-pandemic high of £5.8 billion in 2019 to £4 billion in 2021.

The 2021 This is Music data also showed many of the music industry jobs wiped out by the pandemic, which saw employment in the sector drop by 35% from 197,000 in 2019 to 128,000 in 2020, had not returned in 2021.

While exports were still down on the 2019 pre-pandemic figures, year-on-year demand strengthened significantly in 2021, with a 10% rise from £2.3 billion to £2.5 billion. 

However, there were some British success stories. In 2021, the biggest selling album in the world was Adele's 30. Ed Sheeran's = was the fourth best-selling album and Dua Lipa's Future Nostalgia was in sixth place.

There is still some way to go to restore the jobs and growth lost during the pandemic

Jamie Njoku-Goodwin

UK Music’s chief executive Jamie Njoku-Goodwin said the report showed the urgent need for support from new PM Liz Truss and the government to reduce the tax burden on the music industry, incentivise investment and help boost exports.

Jamie Njoku-Goodwin said: “The UK music industry is working hard to recover after the catastrophic impact of Covid-19, but there is still some way to go to restore the jobs and growth lost during the pandemic. Our sector still faces a serious threat from the economic storm that could blow our fragile recovery off course without urgent government support. 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 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, for instance, by extending the hugely successful creative industry tax reliefs to 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.”

He added: “We welcome the government's announcement to combat the impact of soaring energy bills, which will give music businesses some urgently needed support. However, we need clarity about what happens after that support is withdrawn after six months. And we still need to see more assistance to secure our sector’s long-term recovery, including a significant cut in VAT from its current rate of 20% - something the government did in the pandemic to support the music sector.

“It is also essential that government recognises the importance of copyright to the creative sector and takes step to protect intellectual property rights. Proposals by the previous government to allow AI companies a copyright exception for text and data mining are an existential threat to our sector and must be stopped. These plans constitute a green light to music laundering and the whole industry is united in urging the government to scrap them.”

This Is Music 2022 outlines a five-step plan for government to support the music industry recovery:

• Protect and promote music made in the UK at home and abroad: Protect intellectual property, reduce red tape, establish a transitional support fund, increase export support programmes and establish an export office.

• Incentivise music activity in the UK: Create a fiscal incentive to encourage new UK music production and reform understanding of the potential for the sector.

• Support the music industry in delivering for society: Establish a government-industry working group on sustainability and appoint a commissioner to ensure music is included in health and social care provision.

• Building UK music careers and skills: Deliver the Arts Pupil Premium to support schools’ provision of music to all children and introduce parity of support for the self-employment.

• Support music spaces throughout the UK: In face of rising inflation reduce VAT, introduce business rates cuts and new duties to protect music.

“As we showed before the pandemic, the UK music industry can be world-leading,” said Njoku-Goodwin. “But without help from new Prime Minister Liz Truss and her ministerial team, there is the deeply worrying prospect that the billions spent supporting music businesses and cultural institutions during the lockdowns will be wasted. We cannot allow that to happen.

“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. 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.”



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