Chancellor must back live events in the Budget with an insurance scheme similar to that for terrorism losses, say cross-party MPs
A group of 34 MPs and Peers, led by Liberal Democrats Digital, Culture, Media, & Sports spokesperson, Jamie Stone MP, is calling for the Chancellor to include Government-backed insurance for live events in his forthcoming Budget.
The Chancellor has come under increasing pressure to underwrite insurance cover for the live events industry amid warnings that the festival summer season could be cancelled without sufficient Government support.
The cross-party letter warns that unless the Chancellor heeds the warnings from industry experts to facilitate the reopening of the sector, he could be responsible for plunging "the nation deeper into an existing jobs and mental health crisis."
After sending the letter, Jamie Stone MP commented:
"This cross-party effort demonstrates that the issue of live events impacts every part of the country. The industry has been brought to its knees over the past year and its only hope for a successful reopening is a Government-backed insurance scheme.
"We have seen warnings from the Association of Independent Festivals that 92.5 percent of its members say that they cannot stage events without insurance. It cannot be right that the country is robbed of an economic and cultural rejuvenation so desperately needed by all of us.
"The Government already has a scheme like this in place for terrorism losses. The knowledge and expertise is there, all they have to do is replicate this model for live events ahead of the summer."
The text of the letter is
Government-Backed Insurance for Live Events
In response to the mighty effort of the NHS and healthcare professionals across the UK in providing a first dose of the Covid-19 vaccine to over 20 million individuals, we write to you today regarding the live events industry.
Due to the pandemic, live events were amongst the first to be shut down and will be amongst the very last sectors of the economy to reopen. It has been an exceptionally difficult time for the industry, with some estimating losses of up to £58 billion in 2020.
The creative industry contributes £13 million every hour to the British economy, with the live events industry adding £70 billion to the UK economy every year.
However, the significance of live events is not limited to the UK-wide economy. Regional and local economies benefit significantly from live events. Boardmaster's Festival in 2017, for example, generated £45m in business revenue to the Cornish economy, whilst the 2019 Open Championship generated over £100m of economic benefit to Northern Ireland, including £45m in direct spending and £37.3m in destination marketing.
Local businesses benefit from live events through the multiplier effect, whereby the introduction of an event not only contributes directly to a regional economy, but also indirectly through increased footfall and use of hospitality or transport services. For example, the Edinburgh Festival Fringe generates £500 million in direct spending and injects a further £560 million into the Scottish economy.
Wrapped up in these numbers are jobs and livelihoods, with over 1 million people working in live events. Failure to achieve a proper and comprehensive reopening of this sector not only harms the economic recovery of the country, but also has the potential to plunge the nation deeper into an existing jobs and mental health crisis.
The Prime Minister's roadmap has allowed the industry to consider planning live events once again but the issue of insurance remains. The insurance market is currently providing no COVID-19 cover on any cancellation or business interruption. Industry experts do not expect this situation to change for some time as the insurance market recovers from significant losses.
As this is now the final barrier to live events going ahead, we are calling on you to include Government-backed insurance for live events in your forthcoming Budget on March 3rd.
There is precedent in the Treasury taking such action. An example of this is Pool Re, where the Government underwrites cover for terrorism losses. This Government-backed initiative has allowed access to adequate and affordable reinsurance cover for businesses. HM Treasury has also never once had to make a payment on a claim, instead, it received £270m in 2019 and £224m in 2020 from Pool Reinsurance Company Limited.
We believe this is a workable model for the Treasury to use in the case of live events. We would be more than happy to meet with you to discuss the details of any Government-backed insurance scheme.
MP for Caithness, Sutherland and Easter Ross
David Amess MP Harriet Harman MP
Paula Barker MP Claire Hanna MP
Hillary Benn MP Wera Hobhouse MP
Baroness Bonham-Carter George Howarth MP
Tracy Brabin MP Christine Jardine MP
Kevin Brennan MP Kim Johnson MP
Alistair Carmichael MP Ben Lake MP
Wendy Chamberlain MP Carla Lockhart MP
Lord Clement-Jones Caroline Lucas MP
Daisy Cooper MP Kenny MacAskill MP
Philip Davies MP Layla Moran MP
Allan Dorans MP Sarah Olney MP
Rosie Duffield MP Andrew Slaughter MP
Stephen Farry MP Alison Thewlis MP
Margaret Ferrier MP Richard Thomson MP
Lord Foster Mick Whitley MP
Sir Roger Gale MP Munira Wilson MP
Andrew Gwynne MP Julian Knight MP