Recording studios used by Adele, Oasis and Arctic Monkeys are being put at risk by the “ridiculous burden of business rates”, the facilities’ owners have warned.
Almost 50 Labour MPs have written to Rachel Reeves urging the chancellor to reconsider changes, due to take effect in April, that industry representatives believe could impose a rise of 45 per cent for some of its members.
A letter sent to Reeves, co-ordinated by the Labour MP Anneliese Midgley, said that for some studios, the increase would be in excess of 90 per cent and, in a worst-case scenario, over 400 per cent.
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Matt Taylor, executive director of the Music Producers Guild (MPG), told The Times that without a change of direction on the chancellor’s part, “thousands of British artists won’t be recording their music in the UK but in places such as LA, Paris or New York … Our soft power will be diminished and we’ll miss out on getting the next Adele”.
Recording studios are classified as office space for business rates purposes and studio owners have said the lack of relief measures and these rocketing rates mean they are failing to make even or being forced closer to closure.
Jasmin Lee, the owner of Dean Street Studios in Soho, said that its business rates had tripled over the past few years and costs had risen by about 300 per cent. In April, she expects another increase, this time of about 28 per cent.
Tony Visconti, a producer for David Bowie, was a former owner of Dean Street Studios, which has counted Adele and Ed Sheeran among its clients.
Lee said “the biggest issue is that there’s no business rates classification for recording studios” and that the company pays almost as much in business rates as in rent. “We’re a client-facing business, and to carry this ridiculous burden of business rates when we received no relief throughout the whole of Covid is astounding,” she said.
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Lee fears that if recording studios such as Dean Street are no longer financially viable, then many young artists will miss the opportunity to seek advice from music icons. “It is so beneficial for these young artists to come into big recording studios that do have the big names in,” she said. “It’s about the relationships that are formed in these creative hubs, as if Adele is walking down the corridor and hears someone in another room then she’ll say hello and this gives them a leg up.”
Ed Sheeran is a former client of Dean Street Studios, which faces eyewatering rises to business rates
GETTY P WHITBY/GETTY IMAGES
Dean Street’s studios are booked out to about 20 artists each month. Lee said it was operating at capacity so there was no ability to compensate for the higher business rates by getting more artists through the door. “If we drop below 80 per cent capacity then we are not meeting our monthly costs — and that’s scary,” she said.
Taylor said that recording studios had reached a “breaking point” as they aren’t scalable like office-based businesses. “They are literally selling time inside a building, so there is a natural cap to how much they can earn,” he added. Many people are under the misconception that recording studios only exist in London but Taylor said that about three quarters are outside the capital.
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One of the most successful recording studios in the UK which was used by Oasis to record Supersonic, the band’s debut single, is the Motor Museum in Liverpool. Its owner, Al Groves, a producer who has run the studio for nearly 40 years, said he was being forced to turn down “significant international projects” because such a large proportion of his revenue was spent on business rates.
“I can’t afford to divert the income away from paying things like business rates to develop a studio to grow my business to capture more clients and to continually grow,” he said.
Oasis recorded their debut single at the Motor Museum in Liverpool
KAMIL KRZACZYNSKI/AFP
Groves said that the only lever he had left was to increase costs charged to artists but that this was something he was reluctant to do. He said he would lose the “emerging end of the market” and that these artists were the “next generation of music makers”.
“The irony is that if Oasis came now and are where they were at that time [an emerging band], then we might not be able to accommodate them for capacity reasons,” he said.
Artists from around the world get in contact with Groves to use his studios. Artists who have recorded at Motor Museum include Keane, Arctic Monkeys, the 1975, Two Door Cinema Club and Bring Me the Horizon.
The last time Groves faced a re-evaluation of his business rates, the rateable value increased by £1,500 and this increased his bill by about 50 per cent. The producer finds it frustrating that because business rates costs remain too high, he can’t employ more staff or build more studios.
Last week the government announced that pubs and music venues would be given a 15 per cent discount on their business rates bills from April but recording studios remain excluded from this help.
Arctic Monkeys have also used the studios, but its owner says emerging artists of the future will be less likely to do so if he is forced to put up costs
Midgley said these measures for music venues were “extremely welcome” but that the “government must do more to ensure that our world-leading recording studios have the support they need to survive”.
“Without studios, there will be nowhere for young musicians to learn their craft or for artists to create award-winning albums,” she added. Sharing this sentiment, Taylor said that there was “the risk that British music is not made in Britain and talent is driven away”.
A Treasury spokesman said: “We’re backing businesses with a £4.3 billion budget package to cap big bill hikes — stopping bills rising for over half of business properties. This is on top of capping corporation tax at 25 per cent, cutting red tape, and helping deliver six interest rate cuts, boosting businesses.”