Finance (No. 2) Bill

Nickie Aiken Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Nickie Aiken (Cities of London and Westminster) (Con)]

As I highlighted in my contribution to the spring Budget debate last month, I support the measures that the Government are taking to grow the economy, boost productivity and ensure long-term prosperity for families. Today, I will focus on two clauses in the Bill, which will have an extraordinarily positive impact on the art and culture sectors in the Cities of London and Westminster, as well as across the country.

First, clause 16 amends the Corporation Tax Act 2009 to permanently set the rate of credit to 45% for touring theatrical productions, and to 40% for non-touring theatrical productions. The rates were due to taper to 30% and 35% respectively in April next year, but will now be set permanently at 40% and 45% from that date. The Bill increases the tax relief available for theatre productions.

Secondly, clause 17 increases the tax credits available for orchestral companies and also amends the Corporation Tax Act 2009 to permanently set the tax credit rate at 45%, instead of there being the taper that was planned for the end of this financial year.

The performing arts sector plays a crucial role in the economy of the west end. According to the Office for National Statistics, 8% of the UK’s arts and cultural businesses in 2023 were based in the Cities of London and Westminster. That equates to around 2,500 businesses and thousands of jobs. World-renowned venues, including the Theatre Royal, Dury Lane, the London Palladium, the Royal Opera House and the Royal Albert Hall, attract audiences from not only around the country, but across the globe. The Society of London Theatre and UK Theatre recently produced a study that underscored the importance of the theatre sector to our economy. Their research showed that UK theatres generate £2.39 billion in gross value added, supporting more than 200,000 jobs and generating a total turnover of over £4.4 billion every year. I am in no doubt that this uplift in tax credits will have a positive impact on actors, musicians, costume designers, set creators, singers and those in a whole host of other jobs that rely on a strong and prosperous performing arts sector.

As we know, the past few years have been difficult for this industry; it first dealt with the shock of the covid pandemic, which closed all shows, and then slowly emerged out of the crisis and rebuilt its businesses and audiences. This Government have worked tirelessly to support the creative sector in the Cities of London and Westminster, and I was proud to work with the performing arts sector and others, such as UKHospitality, to secure the £1.57 billion cultural recovery fund to support large and small performing arts businesses throughout the dark times of the pandemic. I learned from that experience, and the whole pandemic in general, just how connected the west end economy is. It is a jigsaw of complementary pieces: theatres, restaurants, hotels, cafés and bars. During that time, we learned that for every £1 spent in the theatre, an incredible £5 was generated for hospitality and other businesses. The tax clauses in the Bill will not only support the performing arts, but have a positive effect on the wider hospitality and leisure sectors, which will benefit the UK economy as a whole.

While I fully support the Bill and the included changes to tax relief, there is one specific issue that I wish to raise. It concerns the new definition of theatre production that was introduced in the Finance Act 2024. The Society of London Theatre, UK Theatre and theatre companies based in the two cities have told me that immersive theatre companies will now not be eligible for the relief that the Bill offers, due to the new definition of theatre production. The new, narrow definition of an audience means that immersive theatre companies such as Little Lion Entertainment, based in the west end, will be ineligible for the tax relief provided in the Bill. Little Lion Entertainment has been a recipient of theatre tax relief for the past 10 years. It employs 350 people in London and Manchester, and during its time it has welcomed more than 2 million patrons to its performances. Yet because of the change in definition, it fears for its future and that of the entire immersive theatre industry. I would be grateful if the Minister would consider looking again at the definition of theatre production, so that companies such as Little Lion Entertainment are not excluded from the fantastic support that the Bill will provide.

I am proud of the Government’s continued support for the performing arts in the United Kingdom. The Bill will continue ensure that our world-renowned theatres and opera productions flourish, and will safeguard them for future generations.