Lord Freyberg (CB)

My Lords, I, too, add my thanks to the noble Lord, Lord Clement-Jones, for setting out the issues surrounding these regulations with such clarity. Like the noble Earl and the noble Lord, I wish to express my gratitude to the Music Venue Trust, UK Music and the Music Producers Guild for their helpful briefings and for joining several Members of this House —the noble Lords, Lord Clement-Jones, Lord Parkinson of Whitley Bay and Lord Bassam, and my noble friend Lord Clancarty—before Christmas to brief the Arts Minister, the noble Baroness, Lady Twycross, on the consequences of these measures for grass-roots music venues, recording studios and artists’ studios. Let me briefly set out how I see the key issues facing each of the sectors affected by these regulations. For grass-roots music venues, the picture is stark. Despite contributing over £500 million to the UK economy in 2025, the sector remains structurally fragile, with an average profit margin of just 2.5% and over half of venues showing no profit at all. These venues face a collective £7.2 million increase in their tax base from the 2026 revaluation. Hundreds will see rateable values rise by over 50%, with some experiencing increases of 100% or more. The Music Venue Trust projects that between 200 and 300 venues could close over the next four to five years. For venues already operating on razor-thin margins, these are not merely bills; they are closure notices. For recording studios, the situation is equally perilous. Around 250 studios—roughly half the UK’s commercial studio base—are at risk of closure without mitigation by April 2026. Studios are facing an average business rates increase of 45%, with some experiencing rises of up to 100%. These are not marginal businesses. Dean Street Studios, created by Tony Visconti and used by artists from David Bowie to Adele, has already closed three of its commercial studios, sold equipment and cut staff by 80%. The Motor Museum in Liverpool, which has supported artists from Oasis to Arctic Monkeys, is fully booked seven days a week, yet it tells us that a mere £50 increase in daily rates would drive away the emerging artists it exists to support. The studio is on track to becoming unviable. More than 75% of recording studios are outside London, in Manchester, Liverpool, Birmingham and beyond. This is not a London-centric problem; it is a crisis affecting local economies, regional talent development and cultural infrastructure across the entire country. As the noble Lord, Lord Clement-Jones, highlighted, the visual arts sector faces the same structural vulnerability. Artists’ studios operate on extremely low margins, keeping rents deliberately below market rates to remain affordable. Like grass-roots music venues, they function as public-benefit cultural infrastructure, not commercial property. The removal of retail, hospitality and leisure relief, combined with the new multiplier, will force rent increases that artists already at breaking point cannot absorb—or it will trigger studio closures. We have already seen this pattern in major cities across the country. As the noble Lord, Lord Clement-Jones, has also highlighted, the 40th report of the Secondary Legislation Scrutiny Committee drew attention to a notable contrast in the Government’s approach. It observed that film studios benefit from a specific business rates relief: a 40% reduction on gross bills until 2034, worth some £470 million over 10 years. Yet recording studios, which are equally critical creative infrastructure for the music industry, receive no equivalent support. Indeed, the regulations before us specifically exclude premises used for the production or recording of music. This makes little sense.