The UK live music industry has hit back at the government’s Energy Bill Relief Scheme, details of which were announced by Chancellor Jeremy Hunt yesterday (January 9).
The government’s latest measure will see the previous Energy Bill Relief Scheme replaced with the Energy Bill Discount Scheme, which will reduce, rather than cap, energy costs for businesses.
The scheme will last for 12 months. Under the new scheme, gas and electricity prices will be reduced per unit of power. Energy bills will automatically be deducted by up to £6.97 per megawatt hour (MWh) for gas bills and up to £19.61 per MWh for electricity bills (via Sky News).
However, businesses will only receive the reductions when energy bills are high. Only when prices reach £107 per MWh for gas and £302 per MWh for electricity or higher will businesses receive any discounts.
In the hospitality sector, operators are now facing average annual bill increases in the region of at least 300 per cent, meaning that many businesses and jobs in the sector are at grave risk.
Responding to the latest measures, the Music Venues Trust said the “bizarre” measures will not go far enough to help grassroots music venues, many of whom will face closure if more extensive measures are provided to cut energy bills.
MVT CEO & Founder Mark Davyd said: “Yesterday the Chancellor Jeremy Hunt announced the details of the support that the Government proposes to offer from 1 April to manage the excessive and extortionate cost of Energy Supplies to Grassroots Music Venues. That statement needs further clarification, since the outcomes of it seem, politely, bizarre.”
He continued: “The challenges caused by Energy Bills to Grassroots Music Venues is understood by Jeremy Hunt and the Government to be so bad that he’s been compelled to write to Ofgem asking that they take action and do something about it. That’s good – something does need to be done, because the charges and conditions being forced upon the sector are absurd. The average increase in the sector is 278%. Demands are being made for excessive deposits.
“Suppliers don’t want to supply at all, there is no market – there’s just an expensive monopoly with extraordinary prices and conditions.
“However, apparently the same evidence that has caused Jeremy Hunt to send the letter to Ofgem laying out these issues was considered insufficient that it would cause him to include Grassroots Music Venues within the specific support he subsequently announced.
“Venues, alongside the whole of hospitality, have been dumped into a general category of support that is so insufficient that it must inevitably result in permanent closures of venues. And we don’t mean that the current venue operator will not be able to survive. We mean that whole buildings currently used for live music will become economically impossible to stage live music in, purely on the basis of the cost of the energy required.
“These two things seem to be in direct conflict, creating a ‘Schroedinger’s Venue’ which apparently cannot possibly afford these bills but also doesn’t need help with them. We are forced to conclude that while Jeremy Hunt fully accepts that these energy bills will close music venues, he is not prepared to do anything concrete about it… except send letters.
Meanwhile the package of supported industries includes Libraries and Museums, who have neither comparatively high energy bills nor a non-functioning energy market.
“The basis on which he seems to have made the decisions on what would and would not be included in a package of support from 1 April are, at best, highly unusual.
“Mr Hunt has told Ofgem he would like to see the results of the investigation he has asked for by the budget. We would strongly urge them to complete that work with sufficient expediency that the Chancellor can revisit the support in that budget and recognise that Grassroots Music Venues should have been included within the exceptional support he has offered to Libraries and Museums.”
Jon Collins, the CEO of LIVE, added: “The average energy bill for live music venues has gone up by nearly 300% which is leading to permanent venue closures as owners struggle to cover costs. This decision further jeopardises these well-loved establishments – restricting access to live music, inhibiting venues’ ability to turn a profit, and damaging town and city centres at a time when we desperately need growth. ”
NME has reached out to the treasury for comment.
Last August, five organisations representing the UK hospitality sector penned an open letter to the UK government, highlighting “rocketing energy prices” that were forecast to become “a matter of existential emergency” and demanding that the government act soon to prevent a catastrophe to UK culture.
Speaking to NME last year, MVT’s Davyd said: “Without action from the government, we are now modelling that this will close more venues than the pandemic,” he argued. “We don’t see any other outcome.”
He continued: “It feels weird to say it, but unlike during COVID when you could go, ‘OK, we need to raise some money now because in a year’s time the venues will be open’, we can’t do that now because they’ll have to pay another electricity bill next year and the year after that, obviously. I can’t see any end to this unless venues put their prices up.”
“…I imagine that venues may well suffer death by a thousand cuts. They won’t instinctively close down, and they’re more likely to go, ‘Let’s put £4 extra on an £8 ticket and see if people are prepared to pay for it’. I’ve got severe doubts about that.
“It’s a terrible time for new and emerging artists. Everyone needs to get out there and play for their audiences. What’s that going to feel like when ticket prices go up? The artist won’t be earning more. I had one venue who just honestly said, ‘There is no way I can put an electricity levy on the tickets’. You’d have to section that out across everything else.”