Brexit: Implications for the Music Industry

Last Thursday the country voted to leave the European Union with a majority of 51.9% to 48.1%. While politicians and markets grapple with the implications of this decision, here we examine some of the potential issues that may face musicians and look at reactions from the music industry.

British Conservatoires and Universities

British Conservatoires and music courses benefit from students and academics coming from across the EU. Professor Barry Ife of the Guildhall School has pointed out that the School has over 200 students from EU countries. Brexit could potentially reduce the number of EU students should those lose access to UK student loans and domestic fee levels. This in turn could also prevent British students from studying abroad and see the end of the UK’s participation in schemes such as the Erasmus+ Student Mobility Programme. Many Higher Education Institutions also rely on the EU’s research funding programme Horizon 2020, currently receiving £1.2 billion a year.

Orchestras

The ABO has expressed concerned that the economic effect of Brexit “may affect the implementation of Orchestra Tax Relief and lead to further reductions in public funding for the arts and local authorities.”  The unravelling of Pan-European Regulations such as the Noise at Work directive will also cause additional uncertainty.

Orchestras benefit from cultural exchange and free movement across the continent such as our Ambassador Simon Rattles’ position as Artistic director of the Berliner Philharmoniker and Birmingham Symphony Orchestra’s recent appointment Lithuanian born Mirga Gražinytė-Tyla as their Chief Conductor. It is unclear what effect Brexit will have on both EU nationals living in the country and those who move to the UK in the future as reducing immigration was central to the leave campaign.

EU Funding

National Campaign for the Arts chairman, Sam West, said the NCFA is now “very concerned about our ability to access important European funding, such as the €1.3bn Creative Europe programme”. The creative industry is also likely to lose access to European Regional Development Funding which, for example, helps to fund Sage Gateshead.

The Economy

Due to continuing cuts to arts funding as a result of austerity resulting from the 2008 financial crisis there is concern that a Brexit-induced recession could lead to further loses in funding for the arts. George Osborne has stated that tax rises and spending cuts will be required as a result of Brexit. It is possible that large infrastructure projects will be put on hold during this period of uncertainty, this could include London’s planned new concert hall.

The pound has also fallen to 31-year low against the dollar. Dr Krishna Thiagarajan, Chief Executive of RSNO has said: “We are heavily dependent on a strong pound sterling to keep pace with international fees. While a weaker pound opens up touring and recording possibilities it also affects our ability to secure top talent to remain in Britain.”

Live Music and Touring

Brexit could mean that musicians wishing to tour in Europe would need to apply for visas as well as carry a ‘carnet’ document which lists all of their equipment for inspection at each border.

Chris Sheehan of Karousel Music will be taking a detailed look on the possible implications of live music and touring musicians in a forthcoming blog. 

Recorded Music Sales

UK copyright law currently derives from Europe as part of the Copyright Framework which ensures that artist’s intellectual property rights are protected across the Union. The EU presents the main market for the British music industry and one in every six albums sold in the UK has been made by a British artist. Whether the UK can stay in the Single Market is dependent on Brexit negotiations.

The EU is currently reviewing regulation as part of a Digital Single Market Strategy. This will create the world’s largest music market. Brexit may mean that the UK will no longer be in line with new legislation or will be unable to take part in the negotiations that shape it.

Help Musicians UK’s future operation

In terms of our own operation, we understand that a Brexit-induced recession may pose new challenges for Help Musicians UK. Although investment returns make up a proportion of our income, our portfolio managers had plans for a possible Brexit and have since implemented these. We are also investing in a new five year fundraising strategy and have a robust reserves policy in place to ensure we can support all musicians who need our help.

Industry Reactions

Culture Secretary, John Whittingdale backed a Leave Vote stating: “it’s British artists who are conquering countries across the world. It’s because we are the most extraordinarily creative nation on the planet – and that has nothing to do with whether or not we are in the European Union.”

UK Music CEO Jo Dipple said: “Clearly, there are lots of very important decisions that will be made over the next few weeks. We will have a new Prime Minister in the autumn, there will be a new Government and UK Music will work very hard with the new administration to ensure the music industry continues to be well served by the British Government. We need a united business voice to ensure that, when renegotiations take place, markets continue to serve the music industry. In John Whittingdale, we have a politician who understands the creative and music sectors and [who] will have our best interests at heart.”

Veteran promoter Harvey Goldsmith told Music Week: "I don’t believe it’s going to affect the music business that much because we have to do enough paperwork as it is with taxes and all that kind of business that we have to deal with on the road in Europe. It’s still exactly the same from a live perspective and I personally hope that we end up with a strong enough leadership who can go in and completely renegotiate a proper deal with Europe, now we’re not paying for a bureaucracy that we don’t need."

John Smith, General Secretary of the MU, explains: “We suspect that this will be very bad news for musicians. Over the years MU members have benefited from open borders, a protective copyright regime and various directives which directly benefit them in their workplaces. We will no longer be able to jointly campaign with our former EU colleagues, nor will we be able to take part in the EU social dialogue committees on live performance and audio-visual. We must prepare for the introduction of border controls with the possibility of work permits and/or travel visas for musicians working in Europe. My initial reaction is one of profound depression, we will certainly have to be vigilant over the next crucial few months.”

Geoff Taylor, Chief Executive BPI & BRIT Awards, said: “The UK public has spoken, and once the short-term political and macro-economic consequences have played out, this decision will mean new priorities for the music industry in our work with Government. We will, of course, press the Government to swiftly negotiate trade deals that will ensure unimpeded access to EU markets for our music and our touring artists. Our Government will also now have the opportunity to legislate for stronger domestic copyright rules that encourage investment here in the UK and which will protect UK creators from piracy and from tech platforms siphoning off value through copyright loopholes. We are confident that British music will remain hugely popular across Europe and we will work hard to make sure UK labels are able to capitalise on that demand.”

Stephen Maddock, Chief Executive, City of Birmingham Symphony Orchestra said: “As things stand today, I see no specific grounds for optimism. I don’t see anything that looks easier as a result of this…The key issues for us are what this will mean for free movement of artists across Europe. Like all orchestras, we’ve benefitted from the two-way flow of musicians and the fact that European touring is very easy. If that’s going to become a lot harder that’s a major concern for us. Beyond that is the wider question of what now happens to the UK economy… all of our income streams rely on a better economy whether it’s public funding, ticket sales or fundraising. Quite how that will pan out is possibly the biggest concern for us.”

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