Autumn Budget 2025

Lord Freyberg Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Freyberg (CB)]

My Lords, the implications of this Budget for our arts and cultural sector are significant. While the Government have prioritised stabilising the public finances, we must be clear about what this means for a sector that is economically vital, globally respected and central to the cultural life of communities across the country. There are welcome elements: the continuation of enhanced creative industries tax reliefs for theatres and orchestras provides stability; the 40% business rates reduction for film studios until 2034 offers long-term certainty; and the additional funding for school libraries to buy books strengthens early cultural engagement. But these sit against a stark reality.

At the June spending review, the Chancellor announced that most departments will grow in real terms by 1.5% annually to 2028-29, while DCMS will see a 1.4% annual cut. At a time when inflation, wage pressures and incomplete post-pandemic recovery continue to strain the sector, culture is the only area scheduled to shrink. The question is whether we are building a coherent strategy for cultural investment or offering selective support while underlying infrastructure erodes.

I turn first to the tourism levy. The new power for mayors to introduce a modest levy on overnight stays could be transformative. Cities such as New York, Paris and Barcelona reinvest such levies directly into culture and the public realm. Edinburgh’s 5% levy is projected to raise £50 million a year; Liverpool expects around £17 million. If well designed, this could provide the stable, long-term cultural funding that the National Lottery developed and delivered a generation ago. Concerns from the hospitality sector, raised by the noble Baroness, Lady Neville-Rolfe, must be weighed carefully, but international evidence is clear: reasonable levies do not deter visitors. The current consultation is therefore welcome and necessary.

A more urgent challenge is the business rates change facing grass-roots music venues and, equally, artists’ studios and visual arts spaces. As Music Venue Trust and UK Music warn, removing rate relief results in effective increases of around 28%, with some venues reporting rises of up to 91%. Across roughly 600 venues, this is an additional £5.6 million burden after a £7 million increase last year, far exceeding the sector’s entire gross profit of £2.5 million. Between 200 and 300 closures are forecast over the next four to five years.

The same structural vulnerability applies to artists’ studios, small galleries and artist-run spaces, as CVAN highlights. Here, I declare an interest as a former studio-holder. These studios rely heavily on retail, hospitality and leisure relief to keep rents affordable. Its removal will force rent rises on artists already at breaking point or trigger studio closures, undermining the creative workforce, community provision and the Government’s own creative industries strategy. These are the spaces where new talent is forged. Without them, the pipeline dries up.

What assessment have the Government made of these impacts? Will temporary, targeted intervention, such as restoring relief or providing bridging support, be considered until the reformed rates system takes effect? The tourism levy offers promise, but the crisis facing grassroots venues and artist studios is immediate. I urge the Government to pursue the opportunity while acting urgently to prevent irreversible cultural loss.