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Where Is the Music Industry Lobby? − Stewart McKie

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Our next guest writer, consultant and civil servant Stewart McKie, looks at the effects of the budget on the live music industry and looks at the possible benefits of collective action. 

“Like a boxer knocked down by his opponent, we refused to accept defeat and kept getting back in the ring.”

Richard Wilson, Chief Executive of Tiga (trade body for the games industry)

The Live Music Industry, like the music industry as a whole, is no doubt intimately aware of the effect the UK Government’s budget has on them each year. What it has failed to appreciate, unlike Tiga above (and also the patent-based industries), is that consistently and collectively campaigning for change can affect the budget, leading to real growth and taking industry forward in the 2012 budget.

Budgets give individuals, businesses and industries information on where and when to invest and spend, and if there will be any difference in the size of their wallet at the end of each month. This year, being a civil servant, it meant less: this budget has certainly affected me.

How have I affected the budget? First, voting in the last election; second, taking part in one day strike action with my union over pensions. My individual choice to act was not decisive.

What has my union done for me? It has secured a salary increase at the half-way point of my development programme despite a pay freeze, to represent the change in my job responsibilities during, not just after, the course. My representatives’ choice to act was decisive.

The lesson here is though individually we feel powerless to effect change, strong organisations can. What does this mean for music? Let’s take a look at three similar industries, and how they have influenced change: games, film (sharing with music entertainment at its core), and the patent industry (sharing with music intellectual property at its core).

The film industry has enjoyed a tax break through Film Tax Relief since 1992, which provides a Film Production Company making a culturally British film intended for cinematic release tax relief, to stimulate innovation and production in the UK of films. I’m confident that the policy wasn’t grabbed from the air by HM Treasury – input from the Film Industry no doubt had a leading role.

The games industry is to receive corporation tax relief from April 2013, the Chancellor stating that he wants to make the UK the technology centre of Europe. Richard Wilson, CEO of games industry trade body Tiga, said: “This is a brilliant decision by the government and terrific news for the UK video games industry. It is also a decisive victory won by Tiga through audacity, determination and endurance.” According to Tiga, the relief should generate and safeguard 4,661 direct and indirect jobs, offer £188m in investment expenditure by studios, increase the games development sector’s contribution to UK GDP by £283m and generate £172m for the Treasury. Perhaps to be taken with a pinch of salt, given the source, but it nonetheless points to the importance of Tiga in effectively lobbying, over time, for an industry-wide incentive, provided Treasury can be convinced of a likely gain to the economy.

Finally, those businesses which invest heavily in R&D will from April 2013 enjoy a corporation tax rate of 10% on income from patents, coined as the Patent Box. Upon this announcement in the budget, GlaxoSmithKlein announced inwards investment of £500m, creating up to 1000 jobs. In reality, a public consultation had led to this announcement, where organisations and individuals were offered the opportunity to provide evidence and determine the detail of the legislation. Again, at least in part, the story is one of industry getting organised and lobbying persuasively for positive change. As a type of intellectual property, why did those industries using copyright not get involved in the discussion at an early stage?

The truth is there was a lot for the live industry to be happy for from the Government’s budget in 2012, such as the increase in personal allowance, which will help those at an early stage of their career on the road, and a reduction in a corporation tax to 24% immediately, and 22% by 2014, helping venues, promoters and other important parts of the industry afloat at a time when live revenues are flattening, when compared to the previous periods of sustained growth. An article could be written detailing the impact of the budget on the live music industry. However, these policies are across-industry, and so the live industry, understandably, will take these as outside their control.

More interesting I feel is what the budget could have been. Similar industries have collectively campaigned for incentives targeted at their industry, why hasn’t the live or the wider music industry? The question to ask yourself as a reader, no doubt involved or interested in the live industry, is what have you, your unions, trade bodies and organisations done for you and the wider industry? What can the industry do, going forward, to secure similar incentives as other successful industries?

Disclaimer: The views of this author are not to be taken as constructive commentary on the budgetary and tax system, but rather a representation of facts which illustrate differences in lobbying for change within industries.

Stewart McKie is by day a civil servant, by night a freelance consultant, having recently graduated with first class honours from LSE and with distinction from Strathclyde Business School. He has previously worked with PRS for Music, contributing to Adding up the Industry 2009 and 2010 and also the Wallet Share Insight Paper earlier this year.

Please note that this is a forum for discussion, dialogue, and debate, and posts and comments on this blog represent only the author, not Live Music Exchange as a whole, or any other hosting or associated institutions.

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3 thoughts on “Where Is the Music Industry Lobby? − Stewart McKie

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  1. Martin Cloonan writes:

    Interesting piece. But let’s not forget that the wider music industries have actually been very effective in lobbying in recent years. Perhaps the most important example of this was the successful campaign to extend the copyright term of sound recordings from 50 to 70 years. Presumably UKMusic also think that it’s doing something along the lines called for here.

    • Thanks for the response. I congratulate UK Music, and others, in what they’ve achieved in positively influencing legislation.

      I’d draw a distinction between lobbying for budget, and lobbying for legislation; the article focusing on the former. On the latter, the music industry has certainly been successful. I’m a firm believer that success is measured relatively, and on the basis of very similar industries, there’s room for us to positively influence budgets, too.

  2. Cheers for the response. I plan to write an article on the live ticket market, building on work I’ve done elsewhere soon.

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