Leaving the EU: UK Orchestras

Debate between John Howell and Stephen Timms

Wednesday 19th December 2018 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House has considered the effect on UK orchestras of the UK leaving the EU.

I am delighted to be serving under your chairmanship this afternoon, Sir Christopher, and to see the Minister and the right hon. Member for Wantage (Mr Vaizey) and the hon. Member for Henley (John Howell) in their places.

British orchestras are a global success story. They tour around the world, forge new markets in emerging economies and contribute to UK soft power and cultural exchange, but Europe is their most important marketplace. They are particularly worried about the prospect of a no-deal Brexit, which could put the survival of some well-known British orchestras at risk. Even with a deal, if the UK is going to leave the EU, orchestras need assurances, particularly ahead of the forthcoming comprehensive spending review. I understand from the conversations I have had that the key concerns are: first, the risk and danger of increased bureaucracy and costs associated with European touring after Brexit; secondly, funding, particularly given constrained public support; and, thirdly, the difficulty in recruiting and retaining EU nationals. I will take each of those points in turn and put six specific questions to the Minister.

I turn first to the increased difficulties in touring. Touring is intrinsic to the business model of British orchestras. Additional costs from controls on migration could price UK orchestras out in quite a fragile marketplace. Extra costs could include medical insurance, because of the loss of the European health insurance card; carnets for transporting musical instruments, if we are not in the customs union; border delays; and the cost of work permits. The planning cycle for orchestras is often more than two years ahead of performance, so contracts with promoters in the European Union have already been signed far beyond March of next year. Fees have been fixed. Additional costs from Brexit could push already contracted tours into loss.

Recognising the additional costs that orchestras will face, has the Minister had any discussion with the Treasury about increased public funding? Some EU promoters have chosen not to book UK orchestras because of uncertainty about Brexit.

[John Howell (Henley) (Con)]

Fortunately, the instrument I play, the organ, cannot be put into the back of a van, but other instruments can. We need a firm indication that musicians will still be able to travel in order to make their concert schedules.

[Stephen Timms]

That is not the first issue that comes to mind when one thinks about the challenges ahead, but it is an important one, and it is absolutely right for the hon. Gentleman to raise it.

Public funding for British orchestras has been cut sharply since 2010, as has funding from devolved Governments and local authorities, and there has been a cut of up to 30% from Arts Council England. Since 2016, the orchestra tax relief—I have no doubt the right hon. Member for Wantage had something to do with that—has been vital to the financial sustainability of orchestras, but at the moment we do not know whether British organisations will continue to be eligible for funding through Creative Europe or the other EU programmes, so UK Government investment is absolutely vital to orchestras, concert halls, festivals and promoters. What assurances can the Minister give at this early stage about funding for culture in the forthcoming comprehensive spending review?

Corporate sponsorship is down since the 2008 downturn. Arts and business incentive schemes saw corporate sponsorship rise to a total of just over £170 million in 2006-07, but it fell after that. In 2011-12, it was down to £113 million. Figures have not been published since then, but reports from orchestras suggest that it has continued to decline since. Can we look at new opportunities for incentivising corporate sponsorship? The Association of British Orchestras has proposed a tax incentive for investment in cultural organisations along the lines of the existing tax credit for research and development. Is that an idea that is being pursued?

Unlike in other countries, orchestras from the UK do not get any financial support for touring. They tour on an entirely commercial basis, so they are relatively expensive for foreign promoters. That is particularly difficult in new markets where the costs and risks of touring are greater. Might there be consideration of a new international touring fund in the new era?

I turn to recruitment and retention, which we have been discussing in the House this afternoon with the Home Secretary as he published the migration White Paper. British orchestras, operas and ballet companies rely on guest artists, conductors, soloists, singers and dancers being able to travel in and out of the UK, often just for a single engagement. Orchestras may have to replace an artist who has cancelled because of illness or injury at very short notice, and the replacement artist needs to be somebody who knows the particular role or repertoire. There may well be nobody suitable in the UK.

A lot of orchestral musicians—permanent or freelancing —are overseas nationals. The average percentage of EU nationals in UK orchestras is 8.3%. In some well-known orchestras, they account for more than 20% of the permanent musicians. The Government have rightly included principal and sub-principal orchestral musicians on the shortage occupation list. That means that orchestras can recruit under the tier 2 points-based system from outside the European Economic Area without recourse to the resident labour market test. Other players are subject to such tests, but the Association of British Orchestras has secured an extension to the recruitment period of up to 24 months, recognising the rigorous and lengthy auditioning and trialling process that is required. Recruitment under the points-based system is bureaucratic and costly, and orchestras are worried that if that system is extended to Europe after Brexit, as is proposed, there will be major new red tape and costs for them.

The salary threshold for entering the UK with an initial job offer is £30,500, which is above the average starting salary for non-soloist musicians in lots of orchestras, particularly outside London. The threshold for obtaining indefinite leave after five years is £35,000 a year. Public spending cuts mean that orchestral salaries have flatlined and roles in orchestras may well not meet those thresholds. We have heard from the Home Secretary that there will be a year’s consultation around exactly how the arrangements will work, but I think the Minister will recognise the concerns that orchestras have, if they are to continue—as they must—to attract global talent. Orchestral musicians are highly skilled, but they are not highly paid.

The Association of British Orchestras, UK Theatre and One Dance UK have written to the Minister with responsibility for the arts, the hon. Member for Northampton North (Michael Ellis), urging him to work with the Home Office to secure an exemption for highly skilled performing arts workers who earn below the £30,000 threshold in the proposed Brexit system, and to clarify the position of freelance musicians. That letter requested a meeting. Will he or the Minister who is responding to the debate meet the organisations who signed the letter to discuss that concern?

There is a worry about social security contributions. In the EU, a UK orchestral musician uses an A1 form to prove that they pay social security contributions in the UK, which exempts them from paying social security and health insurance in other EU countries when they are on tour. If, after Brexit, UK musicians no longer have access to the A1 system, it is likely that additional social security deductions of 15% to 20% will be taken from their pay. The financial viability of touring might well be wrecked. Will Ministers seek to ensure continued access to the A1 system after Brexit, perhaps through a bilateral agreement of the kind that is already in place with Switzerland? The recent political declaration commits to maintain

“reciprocal arrangements on the future rules around some defined elements of social security coordination.”

That form of words is not binding, and it is not clear to which elements they refer. I wonder whether the Minister can assure us that the A1 system will be included in those elements that should have reciprocal arrangements, and that steps will be taken to ensure that there will be no additional delays to issuing A1 certificates, because delays could be problematic as well.

There is a longer-term worry that recruitment problems will be compounded as higher education institutions attract fewer students from the European Union. Like many specialist performing arts institutions, the Guildhall School of Music and Drama recruits 20% of its students from the European Union, but already the number of applications from the EU has fallen. It was 495 in 2015-16, but it is 385 in the current academic year. UK institutions’ ability to be world class will be reduced if the skills pipeline of the sector is diminished by our leaving the EU.

We have heard a lot about the impact of leaving the European Union on manufacturers and banks. There will also be a major impact on orchestras, but that has not been widely debated. I am grateful for the opportunity to air these important concerns. The arts and creative industries are estimated to account for 800,000 jobs in London alone.

Let me just recap my questions to the Minister. Has she had any discussions with the Treasury about higher public funding to offset new costs for orchestras that arise from our leaving the European Union? What assurances can the Minister give at this early stage on funding for culture in the spending review? What progress has been made in considering tax incentives to encourage support? What consideration has there been of the possibility of an international touring fund? Will Ministers meet relevant organisations and consult them on exemptions to the salary thresholds for visas?