Local Government Finance Act 1988 (Prescription of Non-Domestic Rating Multipliers) (England) Regulations 2026

Debate between Lord Watson of Wyre Forest and Lord Fuller

Tuesday 10th February 2026 Grand Committee

[Lord Watson of Wyre Forest (Lab)]

My Lords, I declare my interest, as in the register, as the proud outgoing chair of UK Music, the umbrella body for the British music industry. I am sure I do not have to tell my noble friend that the United Kingdom is one of only three countries in the world that remain net exporters of commercial music. That is not an accident; it is the result of a delicate and highly successful ecosystem. After two terms and six years chairing UK Music, I have spent a great deal of time reflecting on what makes this country so distinctive in the breadth and quality of its music, and its renowned commercial success. There is no single explanation, but there are four essential pieces to that jigsaw.

The first is our songwriters. They are unique, special and precious. They are often contrarian, usually very clever, and sometimes fragile and tender, much like the songs they write. The second is our performers—the artists who wear their heart on their sleeve night after night, festival after festival. Last week, it was a pleasure to see British artists Lola Young and Olivia Dean win acclaim on the world stage at the Grammys. The third is our musicians. They are technically gifted, are often poorly paid and frequently struggle to make ends meet. Yet, for them, music is often not just a job but a vocation.

The fourth piece of that jigsaw, and often one of the most overlooked, is our producers and their recording studios. A few are famous, such as AIR Studios, founded by Sir George Martin, which still has trailblazing engineers such as Olga FitzRoy, who helped to give the London 2012 Olympic Games their music; she has also worked with Coldplay and my personal hero, George Michael. Then there is Mickie Most, the founder of RAK Studios, who worked with artists including Herman’s Hermits, The Animals and Jeff Beck.

However, there is also a generation of producers who are perhaps less well known but still highly regarded around the world. They include: Manon Grandjean, a leading figure from the grime scene, who has worked with Stormzy and Dave; Paul Epworth, a producer for both Adele and Florence and the Machine and the owner of the Eurythmics’ former studio; Catherine Marks, an award-winning producer who has worked with Alanis Morissette and Wolf Alice; and the great Cameron Craig, a mixer and producer for Grace Jones and Annie Lennox, with multiple Grammy awards to his name.

Together, these producers and studios shape the sound of modern Britain and underpin our global success. That is why I am extremely grateful to the noble Lord, Lord Clement-Jones, for bringing this important report from the Secondary Legislation Scrutiny Committee to the attention of the Committee.

One of the reasons given for excluding recording studios from this measure is that, unlike music venues, they are not accessible to the public. With respect, that suggests a misunderstanding at the Treasury of what recording studios are and the role they play in the music ecosystem. Recording studios are not private; they are not private members’ clubs. They are working spaces. They are social and cultural. Anyone can hire them—artists, musicians, producers and engineers do so every day. Some of them even have bars. The sector spans everything from a small studio on an industrial estate to large facilities capable of hosting orchestras, as well as landmark studios that are part of our national cultural heritage.

This matters far beyond London, too. A brief example illustrates the point. Habitat Studio, a short walk from Manchester Piccadilly station, hosts between 120 and 150 bands every month, around 80% of whom are grass-roots artists. Alongside this, it works with established touring acts, charities and universities. Facilities such as this operate seven days a week, with small teams providing professional, affordable and reliable spaces for recording and rehearsals, and food and drink. They are not marginal operations. They are busy, productive and deeply embedded in their local music economies and cultural scenes.

What concerns me most is the logic underpinning their exclusion. First, there is an economic inconsistency. Studios face the same pressures as venues, including high energy costs, specialist premises and skilled staff. Supporting one part of the supply chain while excluding another risks distorting behaviour and, over time, pushing recording activity overseas. Secondly, studios act as regional anchors. They sustain skilled employment, support freelancers and help create creative clusters in towns and cities across the country. Thirdly, studios are not peripheral. They are upstream infrastructure. Without studios, there is no recorded music. Without recorded music, there is no touring product. Without touring, there is no export success.

Britain’s music industry is one of the country’s great success stories. It depends on an ecosystem in which every part matters, from the songwriters to the performer, from the musician to the producer and the studio that brings that work to life. If we value that ecosystem, our tax and rating policies should reflect how it functions. To borrow a lyric from a song recorded by the Korgis at Crescent Studios in early 1980, I say to the Minister:

“Change your heart, look around you”.


Recording studios are not an optional extra. They are essential cultural and economic infrastructure and our policy should recognise them as such.

[Lord Fuller (Con)]

My Lords, having heard from the Deputy Chairman of Committees that we were going to the first Motion first, we have the second Motion first. I want to go back. I do not want to talk about studios. It is not that I do not know anything about recording studios; it is that I have nothing to add to what noble Lords have said.

I want to raise a wider point about what happens when you make changes in the business rates system. It is important that the business rates system has the right incentives and is fair to small businesses, particularly those on the high street that make such a cultural contribution to our nation. We have seen in the newspapers as well as in these regulations what happens when you make alterations to the business rates that pertain to pubs, hotels, restaurants, between retail and industrial, and to large businesses versus small. It is one of those truths that the winners tend to keep quiet, but it can be existential for losers. That is partly because the amount of money that is raised by business rates is fixed and, as you give a relief in one place, it pops up as additional burdens elsewhere. That is just the way the system works.

However, for local government, stability and buoyancy in the system are important. When you change the system, there are downstream consequences, because business rates very largely pay for the delivery of local government services. Yes, there is redistribution within the nation of the money that is raised. For example, we are in Westminster, which raises nearly £1 in every £12 raised in business rates in our nation, and that £2 billion or so is redistributed to Redcar, Redruth, Wroxham and all around the country with a complicated process of ceilings and floors. There are also systems within county areas, as they tend to be, so that all the councils can pool together to grow the economy. That is important, because the system is designed with powerful incentives for councils to grow the economy on the simple truth that the more you grow the economy, the more you keep. Of course, resets happen every now and again and they are a disincentive to grow. All that effort is wasted as the business rates baseline is washed away. That is the context within which I wish to make my subsequent remarks.

In the past few weeks, there have been technical changes in the way that baselines and pooling are done that would have had material effects on district councils. For most councils, about 10% of their net budget would have been swept away, badly impacting on homelessness, recycling, building and all the things that we need to get the economy going. That is especially germane because district councils outside the M25 and the urban metropolitan centres tend to be the planning authorities that get growth going.

I know that the District Councils’ Network and, more widely, the local government family are grateful that the technical changes that could have caused that 10% disaster have been fixed for the coming year, but for one year only. As we look at business rates more generally and at altering the application of business rates, we need to make sure that the Treasury and the local government department are better aligned in future years so that we avoid the perverse outcomes that we might have seen.

It is not fair on councils to have the uncertainty. It is certainly not the right thing for the economy, because confidence and long-term stability provide that central alignment between central and local government to generate wealth in these islands. It is incumbent on the national Government to ensure that they do not accidentally damage that delicate balance that keeps the economy growing, people in work and taxes paid.