House of Lords
Introduction: Baroness Mills of Greenwich
Introduction: Lord Sanders of Hallingdal
Arts and Cultural Sector: Employers’ National Insurance
(1 day, 12 hours ago)
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Lord Vaizey of Didcot
To ask His Majesty’s Government what assessment they have made of the impact of increases to employer’s National Insurance on the arts and cultural sector.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Mackenzie of Sherwood) (Lab)
I thank the noble Lord for the Question and pay tribute to his unbroken record as the longest-serving Arts Minister. I am sure I will never match it.
The 2024 Budget required difficult decisions to fix the public finances. Like other employers, cultural organisations were subject to a 1.2 percentage point increase in employers’ national insurance. To protect the smallest businesses and charities, many of which are cultural or creative organisations, the employment allowance more than doubled from £5,000 to £10,500. This means that 900,000 employers have no employer national insurance liability at all. In addition, earlier this year, we announced a historic £1.5 billion Arts Everywhere package, which is expected to reach 1,000 cultural organisations.
Lord Vaizey of Didcot (Con)
My Lords, I do not wish to make my exchange with the Minister too cosy, but I pay tribute to her and welcome her to her position. She has a distinguished record in the arts, not least from stewarding the Cultural Olympiad during the London Olympics.
Nevertheless, I was at a conference yesterday, which was timely, as somebody pointed out that their arts organisation had secured a £50,000 donation that was immediately wiped out by the increase in national insurance contributions. To take one sector—grass-roots music venues—the latest statistics show that one in five people have left that sector because of the impact of national insurance and business rates. This Government seem to give with one hand but take very seriously with the other.
Baroness Mackenzie of Sherwood (Lab)
I thank the noble Lord. As we know, there have been many pressures on cultural and creative organisations. The noble Lord, from his role as a trustee of the Tate, is better placed than I am to comment on the detail of some of those organisations. The impact for many is that they have not yet recovered the audience levels, and therefore incomes, that they enjoyed before Covid. That is probably the biggest threat for many organisations. We are very aware of the many pressures and, as I said, the historic £1.5 billion Arts Everywhere package is a first step in helping to support those organisations.
Baroness Keeley (Lab)
Can my noble friend the Minister tell me her assessment of the damage to the arts and cultural sector if a future Government were to cut the DCMS budget by £1 billion, as was suggested by the Conservative leader Kemi Badenoch last week? Take just the music industry: it creates £8 billion a year for the economy and supports 22,000 jobs.
Baroness Mackenzie of Sherwood (Lab)
I thank my noble friend for that question. Like many in the House, I was very shocked by that announcement and that threat against the arts, cultural and creative sectors, which I know many noble Lords in this House support with passion. They contribute to making the creative industries the fastest-growing of the top eight priority business sectors, with a total contribution to the economy of £144 billion last year. I am not going to list their many other benefits on this occasion. I suggest that the best remedy to ensure that the £1 billion cut to the DCMS never happens is to encourage all noble Lords to help Labour win the next election.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I admire both the noble Lord, Lord Vaizey, and the noble Baroness, Lady Mackenzie, but I add my concern that the party of the noble Lord, Lord Vaizey, has decided to slash all this money for culture and arts. We welcome the Government’s commitment to extra funds for cultural infrastructure, but buildings need people to run them and artists to fill them to draw audiences. However, as we have heard, operating costs have increased significantly and they are struggling. Has the Minister considered something similar to the Irish basic income for artists? Indeed, the Scottish Government have announced plans to pilot an artist’s minimum wage.
Baroness Mackenzie of Sherwood (Lab)
I thank the noble Baroness for that excellent question. The Irish led the way in piloting the idea of an income for artists and there is now a pilot in Scotland. This is something I wish to follow with attention. It is obviously a proposal that is the source of active and enthusiastic lobbying from the arts sector, so I will be paying close attention to how it goes in Scotland.
The Earl of Clancarty (CB)
My Lords, looking further at costs, the Minister will be aware of the now serious crisis in domestic touring of performing arts companies as a result of greatly increased costs, with a catastrophic 64% decline in touring drama since 2019, according to the Arts Council. Will the department impress on the Treasury the importance of expanding tax relief, including theatre tax relief, to make those unavoidable costs of touring fully eligible? Domestic touring is so important for the health of the country.
Baroness Mackenzie of Sherwood (Lab)
As some noble Lords will know, I started my career in touring theatre and worked for many years at a theatre that received touring theatre, so I absolutely understand the issue and its seriousness. It is a subject of lobbying from the sector and of discussion with the Government, and I am unable to comment further on any issue that might or might not appear in the Budget.
Lord Grayling (Con)
My Lords, I declare an interest as a trustee of the National Portrait Gallery. The Minister will be well aware of the importance of philanthropic donations to major institutions. Will she then make representations to the Chancellor to stop government policies that end up with wealthy people who could otherwise support the arts choosing to leave the country?
Baroness Mackenzie of Sherwood (Lab)
I support and publicly pay tribute to all the philanthropists, both those in this country and those based internationally, who support our cultural institutions and arts. It is one of the most important areas of partnership for cultural institutions. A brilliant project that the government art collection announced is the ninth iteration of the Robson-Orr TenTen Awards—an impeccable partnership between philanthropists and the government art collection, co-created and co-inspired by both the philanthropists and the Government. I should pay tribute to the Conservative Government for introducing its ninth iteration, although we celebrate and applaud its achievements to date.
The Lord Bishop of Manchester
My Lords, Britain’s heritage in culture and arts is world-class, but that depends on young people coming forward and having the training, often at a very young age. What more can be done to support the specialist music and dance schools, including Chetham’s School in Manchester, which have been very badly hit by VAT on school fees? That often affects choristers in our cathedrals, and I declare an interest as Bishop of one of those cathedrals. How can we better support those schools so they can survive and thrive and play an important part in bringing forward the next generation of excellent musicians and dancers?
Baroness Mackenzie of Sherwood (Lab)
I thank the right reverend Prelate for the question. I also pay tribute to the brilliant work of Chetham’s, which is an outstanding school. It is unfortunately not possible to exempt a particular sector of private schools from VAT, but for all of us a priority is to ensure that the arts are back in the school curriculum to enable everyone to start along a talent pathway. Not everyone will get into a specialist school like Chetham’s, but everyone should have the opportunity in every postcode to develop their creative talent, and that is a big priority for the Government.
Lord Brennan of Canton (Lab)
My Lords, I want to make two suggestions that the Government might take up to improve matters. One is to extend the sort of tax relief given to film production to our recording studios. A number of us, including the noble Earl, Lord Clancarty, and myself met with the Treasury Ministers earlier this year to discuss that. Will the Minister make representations to the Treasury in that regard? Secondly, something that would cost the Government nothing but that would work is to put the LIVE Trust levy on a statutory footing. Given that, on a voluntary basis, it is collecting less than half the money it could be collecting to support our grass-roots music venues, would she consider legislating in that regard when the Government bring forward their ticketing legislation?
Baroness Mackenzie of Sherwood (Lab)
I thank my noble friend for that. The history in the last 20 years of using tax credits for the benefit of the creative industries is something both sides of the House have greatly pursued, and that has been a very effective way of supporting different sectors within the creative industries. I am aware of the discussions my noble friend refers to. I am unable to comment at the moment on that, but I am happy to explore it further outside this House.
Welfare Expenditure
(1 day, 12 hours ago)
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Lord Balfe
To ask His Majesty’s Government what assessment they have made of the Office for Budget Responsibility’s forecast that welfare expenditure will reach £407 billion by 2030–31.
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, the Budget on 28 October will set out the latest forecast on government spending, including social security. This Government are prioritising welfare reform, putting work and opportunity at the centre. Our system should support people to get into work and get on in work, while ensuring that those who cannot work get the support they need. We have already introduced significant reforms through the Universal Credit Act 2025 and invested in employment support, while the Timms review and the Milburn review are considering further changes to ensure that the system is sustainable and focused on helping people who can work get into employment.
Lord Balfe (Con)
I thank the Minister for her reply. This is not a problem of one party, but the fact of the matter is that over the last 15 years, welfare expenditure seems to have run completely out of control. It is now increasing at a rate that, frankly, is not affordable in the long run. Will the Government try to cut back on expenditure and find ways of getting people off benefits rather than piling more and more people on to benefits?
Baroness Sherlock (Lab)
My Lords, the noble Lord and I agree on one thing, which is that we have a shared objective—that all those who can work, should work. The job of the state is to make that possible, to give them the support they need and to help them get into jobs, and that is exactly what we are doing. We are investing £2.5 billion in the youth guarantee and expanding the growth and skills levy. We have already rebalanced universal credit to make sure that the incentives are in the right place, so that people are moving into work and are better off in work. We are overhauling jobcentres so that they are places where you go to sign up for work. We are investing in personalised work programmes for those who have health and skills challenges. I absolutely agree with the noble Lord, and that is exactly what this Government are doing.
Lord Bird (CB)
It is wonderful to hear all the things the Government are doing once people have fallen into poverty, but what are they doing, and what is their thinking, about the prevention of poverty—turning the tap off? I do not see much indication of thinking in this Government or the last Government about turning the tap off and stopping people slipping into the need for social security.
Baroness Sherlock (Lab)
My Lords, I know that this is something the noble Lord is passionate about. We have had many exchanges on this and I agree with him. I point him towards two examples of how this Government are taking that seriously. The first is our child poverty strategy, which is looking precisely at the full range of things that help stop people falling into poverty as well as lifting them out of it. Secondly, one of the reasons we prioritise young people in our welfare reform is precisely to get people right at the start of their adult life. We should not have 1 million young people who are not in employment, education or training. If they start their adult life like that, what hope is there to be able to keep them out of poverty throughout their life? That is why we have prioritised that and are investing so much money in making sure that they get the help they need. It is why we are making sure that the review coming forward from Alan Milburn will give us clear evidence for reform and clear recommendations. We can all get behind that, I hope.
Baroness Lister of Burtersett (Lab)
My Lords, given the threadbare nature of our social security system after years of Tory cuts and restrictions, it nevertheless has a crucial role in tackling child poverty and providing security for a wider population, thereby reducing pressure on services such as the NHS. Does my noble friend agree that we should now be looking at how to strengthen social security further, in addition to the improvements she has mentioned, rather than denigrating it as an easy target for more cuts in the false belief that current spending is, as the noble Lord said, out of control? It is not out of control.
Baroness Sherlock (Lab)
My Lords, my noble friend makes an excellent point, which is that the welfare state has always been a safety net. To function as a safety net, it needs to do its job properly. There are always going to be people in our society who cannot work and need help, and the state should support them properly. That is why sometimes in the past, when Governments have simply tried to slash all benefits and hope that that would make a difference, it has not only left lots of people in poverty but ended up with much bigger costs to the state down the line. It also has not worked. If we look at what happened to the number of people who were out of work because of sickness and health issues under the last Government, it was rising at much higher rates than it is now. It does not do the job. Simply cutting just moves costs around. Our job is to get people into work and get them on in work, so that they can have a sustainable life which they can build on and look after their families.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for her detailed reply and the information that she regularly sends us. But can she explain why it was reported today that a person on sickness benefits who has recovered from an operation and sought to come off sickness benefits is still waiting for a reassessment four years later? Despite being called for a telephone meeting, he was told that there was no set date for him to be reassessed. Despite what the Minister has said to the House, it is no surprise that welfare expenditure is at such a high level when someone cannot get reassessed. How common is that?
Baroness Sherlock (Lab)
My Lords, obviously the noble Lord will understand that I cannot comment on an individual case. But I can assure him that the department is aware of cases and looks into them. There is no question that there had been backlogs on assessments building up for years. One of the problems we have is that the number of people applying for sickness and disability benefits has been going up steadily—at a very significant rate, as I said, under the last Government. We have begun to bend it under this one. The way we have to make a difference is by doing two things. One is to address the incentives at source. That is why we have rebalanced the universal credit rates to reduce the amount going to those on sickness and disability benefits compared with those who are not, to try to redirect people to make sure that they go into work. The second is to make sure that the system is fit for purpose. We know that PIP is not fit for purpose, the Timms review made that very clear, so when we get that report out, we will look at how the system is working and how we can put it right.
Baroness Stedman-Scott (Con)
My Lords, there is agreement among many in the House, but not all, that the welfare bill must be brought down. But when people who want to come off benefits are told, “No” or “Not yet”, how confident is the Minister that the Government will achieve this?
Baroness Sherlock (Lab)
One thing I would point out is that although overall spending on social security in this Parliament is still going up—the noble Baroness is right—it is rising at half the rate that it was in the last Parliament. The previous Government tried all kinds of things. They created PIP in the first place, to replace the previous system. What happened? The numbers and the spend simply kept going up. We have to get the system doing the right thing in the first place. We have to get people working, work out what is getting in the way and address that at root cause. We are doing lots of things in the short term, which I have already described at great length, and I have written to the noble Lord, Lord Palmer, many times, I accept that, but the reason we asked Alan Milburn and Stephen Timms to do reports is because we have to review things at source. We are going to be doing that, and we will respond in the near future.
Baroness Watkins of Tavistock (CB)
There is a great emphasis at the moment on the fact that people who can work, should work. I want to remove “should”. The vast majority of people who are unemployed want to work. A survey reported in the Times today shows that young people would value the opportunity to have a paid year of public service voluntary work. Will the Government seriously think about that, across a range of public services, so that people can get into the system of work rather than have two or three years of unemployment?
Baroness Sherlock (Lab)
The noble Baroness is absolutely right. We know that most young people want to work because our colleagues talk to them all the time. I am grateful to her for saying that. This is not a snowflake generation that does not want to work; of course they want to work. But they need a chance to get a start. We have already begun to do that through supported jobs and employer incentives. We have young people, often for the first time in their life, working for employers such as Boots and others—doing real jobs. Only this morning it was announced that there is a partnership between major hospitality employers, including Whitbread, McDonald’s and Nando’s, and UKHospitality. They ae going to create jobs and are committed to hiring 100,000 young people who are not in employment, education or training. Hospitality is a big employer of young people. Having these real jobs, whether work experience or actual jobs, is the way that we get young people into work, giving them the experience and the chance to get in there. Once they have done that, they can move onwards and upwards.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
It is the Conservatives’ turn, but could they please make their minds up?
Baroness Altmann (Non-Afl)
My Lords, we have heard a lot today—and it is important—about youth unemployment and getting the youth back into the workforce, but there is a serious problem at the other end of the scale with people in their 50s and into their 60s who face age discrimination, cannot get into work or are overlooked for training and are certainly not taken on in the recruitment process. Can the Government reassure the House about what they are doing to address the real problem for those people who do not have work and have to wait longer for their state pension?
Baroness Sherlock (Lab)
I am grateful to the noble Baroness for raising the important point about people who want to work but who may have lost a job towards the middle of their career, or later on, and are struggling to get back into it. We have a fantastic programme called Connect to Work, working with people who have faced barriers to getting back into work. Sometimes that help has to be about helping them to rethink what the next stage of life may look like, it may be about helping them to have the right skills to navigate changing recruitment processes—as we all know, it is not the way it was when we were setting out in life—or it may be about giving them additional skills or retraining to do something totally different. The key is a personalised conversation to understand their barriers and help them to get back into work. We cannot afford to write off young people, but we also certainly cannot afford to write off those who have years or decades of experience. The country cannot afford that.