Support for Culture and Creative sectors: Letter to UK Secretary of State for Culture

To: Secretary of State for Culture

From: Minister for Culture, Europe and International Development

05 March 2024

I am writing to you ahead of the UK Government’s Spring Budget announcement this year to set out the Scottish Government’s concerns and priorities for supporting our culture and creative sectors. As you will be aware, Brexit has had and is continuing to have a devastating impact on a sector which is also struggling to recover from the pandemic. Like everyone else, arts and culture businesses and organisations are also suffering from cost of living pressures and inflation. At a time when individual artists, bands and groups are having to find more to feed themselves, to keep the lights and heating on and roofs over their heads, they find their ability to generate income compromised. It is simply not acceptable for the UK Government to continue to do nothing or little to address these pressures and issues.

The UK Government could help significantly in this Spring budget by responding positively to the priorities that I set out below. I would be very happy to discuss these with you.

THEATRE, ORCHESTRA AND MUSEUMS AND GALLERIES TAX RELIEF

There remains concern from stakeholders regarding the impending reduction in theatre, orchestra and museums and galleries tax relief from April 2025. Existing tax reliefs have been of great importance to the sector in helping to sustain organisations amid significantly increased operating costs and issues resulting from the COVID-19 pandemic. Retaining this this relief at the higher level beyond April 2025 would send a strong signal to this vital sector, which supports thousands of jobs and businesses, and provides cultural opportunities for people – including children and young people – from the UK and beyond, to enjoy.

VAT REDUCTION TO PROMOTE RENOVATION IN TRADITIONAL BUILDINGS

VAT could and should be reduced to encourage energy efficiency improvements in traditional homes as part of the UK’s commitment to reach net zero emissions by 2050.

Traditional buildings and structures currently face increasing effects of climate change as we experience more weather extremes in temperature and rainfall, which exacerbates the need for ongoing and regular programmes of maintenance and repair. The reuse and repair of existing assets offers opportunities for the historic environment to make a clear contribution to Scotland’s own ambitious target for net zero emissions by 2045. Energy efficiency measures and retrofit options can present challenges, however it is important that historic and traditional buildings are not seen as a barrier to achieving our targets and that the full benefits they present, particularly in terms of environmental and carbon impact, are recognised.

Given the number of traditional buildings in Scotland, property owners in all sectors are facing significant costs in meeting energy efficiency targets. The Scottish Government has recognised in its housing strategy, Housing to 2040, that reductions in VAT on household repairs would encourage home renovation in Scotland, and better equip homes for the challenges posed by climate change and the transition to net zero. The strategy highlights the importance of improving our existing housing stock, but current VAT charges act as a disincentive in comparison to new builds which have reduced VAT.

A targeted VAT reduction for the repair and maintenance of traditional buildings would send a clear message in response to the climate crisis that emphasises the importance of our heritage. I would hope that DCMS would wish to make a case to the Treasury for a change to VAT in this area, and can confirm that the Scottish Government would fully support it.

EU PROGRAMMES AND INTERNATIONAL MOBILITY

Finally, as indicated above, Brexit has had a profound impact across our culture and creative sectors. The Creative Europe programme had extensive benefits for the sector, including a vital source of funding and the facilitation of cross-border cultural collaboration. Ongoing participation in the programme following Brexit was demonstrated to represent good value for money. The Scottish Government remains profoundly disappointed at the UK Government’s decision not to continue participation. The UK Government needs to revisit that decision and seek talks with the EU about rejoining Creative Europe, which would bring benefits to both Parties.

Brexit has also had significant impacts on UK-based creative professionals’ ability to work internationally. While ongoing engagement with the EU and member states is welcome, I have heard from the sector that further immediate support to overcome barriers to activities such as touring is required. I would welcome further discussions with you on what options you are considering to mitigate these impacts. This would be a key area in which we could collaborate and demonstrate our support for this vital and dynamic industry by working together to find solutions.

I look forward to receiving your views on these priorities, and hopefully, I have encouraged you to raise them with the Chancellor of the Exchequer ahead of the UK budget.

At the very least, I hope we can discuss them and agree a joint position to take them forward with other devolved Ministers.