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

Lord Freyberg Excerpts

Tuesday 10th February 2026 Grand Committee

[The Earl of Clancarty (CB)]

My Lords, I am very pleased that the noble Lord, Lord Clement-Jones, has called this debate, which is so important for the arts. He has summarised the arguments extremely well. I am grateful, too, to the noble Lord, Lord Livermore, for his introduction.

I am grateful for the briefings from both the Music Producers Guild and UK Music. I am particularly grateful for the conversation I had last week with Gaby Grafftey-Smith, who runs the prestigious Angelic Studios in Northamptonshire. Angelic was founded by musician Toby Smith of Jamiroquai—

“by a musician for musicians”,

as its website eloquently puts it. Since 2017, when Toby Smith sadly died, the studio has been run by Gaby. One of the first things that she told me was that no one runs a studio to make money; they do so out of a passion for music. It is less a business and much more a vocation. The artists and technicians themselves build up the heritage. A studio develops organically in a creative manner. In terms of business, the margins are tight, as the noble Lord, Lord Clement-Jones, said, and there is a ceiling on income, because only so many artists can be booked. The space itself often has to be for the desired sound, which may be created by choirs or a grand piano—a big space.

It is also precious. Gaby talks about the precise mix of cultural and technical specification that make up her recording studio and others. Trust is built up over time between the studio recording engineer and artist. Each recording studio will have a different character and a different sound; they are all individual. She told me about a drummer for a well-known band, who, having tried different studios across the country, has said that her studio is the only one that provides the right environment for the particular sound that the drummer is trying to achieve.

Angelic is also one of a few key residential studios, which further cements the crucial relationship between artist and studio. In particular, for major stars such as Harry Styles or Black Sabbath, it means, as Gaby puts it,

“a unique, rural, isolated space to work”.

If such artists cannot find such spaces in the UK, we will lose these stars to America. By their very nature, they are not spaces where public access is appropriate, but, as the noble Lord, Lord Clement-Jones, said, they can nevertheless be used by anyone.

Like other studios, Angelic also has an apprenticeship scheme, but Gaby points out that, if recording studios cannot afford to take on those who are learning what is a key craft in the music recording industry, those who come into the industry in the future are much more likely to be from a moneyed background. That is an effect that the Government ought to think hard about. The major effect would of course be on the artists themselves, with artists turning to studios in other countries, such as in New York or Paris, in the event of studios closing or booking charges increasing. Just as worrying is the possibility that new British artists would not get a rung on the ladder or be able to record in a professional environment alongside established musicians.

Like all recording studios, Angelic is extremely worried about the increase in business rates. The Music Producers Guild reports that, for Angelic, that increase would be 48%—slightly higher than the average predicted increase of 45%, itself a massive increase. On business rates, Gaby believes that, for the reasons that I have laid out, studios should have their own category and be linked to yearly turnover, rather than a square-footage rateable value. I have described the character of one recording studio to show how much creative effort goes into the provision of one important specialist facility that cannot be expected to grow and diversify like an ordinary office-based business—it grows in a different way.

It ought to be pointed out here that Abbey Road, with its mixed portfolio, is, for obvious reasons, an outlier. Abbey Road is far and away the most famous recording studios in the world and a tourist attraction, so identified is it globally with the Beatles—although, of course, those studios also have a remarkable classical legacy that stretches back to Elgar, as the noble Lord, Lord Berkeley of Knighton, will well know.

I hope that this debate will make it very clear how much our recording studios are as much critical creative infrastructure for the music industry as film studios are for the film industry. Yet film studios receive 40% relief on business rates without, of course, needing any public access. The loss of a single recording studio would be tragic, but the loss of possibly up to half of our recording studios would be catastrophic—a tragedy that would be writ large on the music industry.

[Lord Freyberg (CB)]

My Lords, I, too, add my thanks to the noble Lord, Lord Clement-Jones, for setting out the issues surrounding these regulations with such clarity. Like the noble Earl and the noble Lord, I wish to express my gratitude to the Music Venue Trust, UK Music and the Music Producers Guild for their helpful briefings and for joining several Members of this House —the noble Lords, Lord Clement-Jones, Lord Parkinson of Whitley Bay and Lord Bassam, and my noble friend Lord Clancarty—before Christmas to brief the Arts Minister, the noble Baroness, Lady Twycross, on the consequences of these measures for grass-roots music venues, recording studios and artists’ studios. Let me briefly set out how I see the key issues facing each of the sectors affected by these regulations.

For grass-roots music venues, the picture is stark. Despite contributing over £500 million to the UK economy in 2025, the sector remains structurally fragile, with an average profit margin of just 2.5% and over half of venues showing no profit at all. These venues face a collective £7.2 million increase in their tax base from the 2026 revaluation. Hundreds will see rateable values rise by over 50%, with some experiencing increases of 100% or more. The Music Venue Trust projects that between 200 and 300 venues could close over the next four to five years. For venues already operating on razor-thin margins, these are not merely bills; they are closure notices.

For recording studios, the situation is equally perilous. Around 250 studios—roughly half the UK’s commercial studio base—are at risk of closure without mitigation by April 2026. Studios are facing an average business rates increase of 45%, with some experiencing rises of up to 100%.

These are not marginal businesses. Dean Street Studios, created by Tony Visconti and used by artists from David Bowie to Adele, has already closed three of its commercial studios, sold equipment and cut staff by 80%. The Motor Museum in Liverpool, which has supported artists from Oasis to Arctic Monkeys, is fully booked seven days a week, yet it tells us that a mere £50 increase in daily rates would drive away the emerging artists it exists to support. The studio is on track to becoming unviable.

More than 75% of recording studios are outside London, in Manchester, Liverpool, Birmingham and beyond. This is not a London-centric problem; it is a crisis affecting local economies, regional talent development and cultural infrastructure across the entire country.

As the noble Lord, Lord Clement-Jones, highlighted, the visual arts sector faces the same structural vulnerability. Artists’ studios operate on extremely low margins, keeping rents deliberately below market rates to remain affordable. Like grass-roots music venues, they function as public-benefit cultural infrastructure, not commercial property. The removal of retail, hospitality and leisure relief, combined with the new multiplier, will force rent increases that artists already at breaking point cannot absorb—or it will trigger studio closures. We have already seen this pattern in major cities across the country.

As the noble Lord, Lord Clement-Jones, has also highlighted, the 40th report of the Secondary Legislation Scrutiny Committee drew attention to a notable contrast in the Government’s approach. It observed that film studios benefit from a specific business rates relief: a 40% reduction on gross bills until 2034, worth some £470 million over 10 years. Yet recording studios, which are equally critical creative infrastructure for the music industry, receive no equivalent support. Indeed, the regulations before us specifically exclude premises used for the production or recording of music. This makes little sense.

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[Lord Livermore (Lab)]

As my noble friend knows, some of the best songs are often on the B-side.

[Lord Freyberg (CB)]

Artists’ studios find dealing with the Valuation Office Agency very frustrating because when they approach it, it will not give them a model answer about how the square footage of their studios is calculated. It would be very helpful if the Valuation Office Agency could give a model or examples that other councils could follow, so that there is guidance on a national basis.

[Lord Livermore (Lab)]

I will put that to it. I have also committed to ask it to attend the meeting. If the noble Lord would like to attend that meeting as well, I am more than happy for that to happen.