Oct 4, 2020

Industries are on bended knee before the state

written by Lisa Eason

For many people in business, the past six months have demonstrated the advantages of government lobbying. Certain industries have benefited from state subsidies, tax breaks and assorted support. And although schemes such as the government- backed emergency loans and furlough have been universal, others have left out some sectors. I suspect this has much to do with how well different industries have nobbled the media, the politicians and the civil servants.

Of the four sectors I know best — restaurants and pubs, nightlife, live performance, and travel — two have done well, two relatively badly.

I assume ministers and their staff will have made various calculations. They will have weighed up how many jobs are at stake in each case; whether the public feel the recipients of any taxpayer bungs deserve them; the media’s attitude; and, inevitably, the personal interests held by important politicians.

So theatre, opera and classical music did well: the cultural significance of their activities, many of which are already subsidised by the Arts Council, is deemed important. Many ultra-connected and erudite players in the arts applied pressure in every way they could — via the media, relationships with MPs and so forth. And, of course, plenty of MPs and Whitehall mandarins enjoy theatre and opera. Eventually, a £1.6bn special package of grants and loans was announced in July for theatres, museums, galleries and arthouse cinemas — because all such venues were forced to shut in March, and most remain closed.

By contrast, the so-called night-time industries have received no dedicated cash, beyond the furlough scheme, loans, VAT reductions and rates relief.

Nightclubs and festivals have been unable to trade at all for six months. They claim that their total employment is 1.3 million — almost twice the number working in the cultural and heritage sector. However, I doubt that many MPs go to late-night bars or music festivals, so these are seen as expendable. It seems the sector’s entrepreneurs and trade bodies were unable to get special attention from the political classes.

Similarly, the travel trade has not received exceptional treatment. Inbound tourism is worth £28bn a year but is on its knees. Hotels, airlines, tour operators and travel agents are mostly in deep trouble. Overall, it probably employs at least twice as many as people as the cultural/arts sector.

Admittedly, the government has turned a blind eye to complaints over customer refunds for unfulfilled holidays, which might be seen as a favour to the industry.

However, it has done nothing remotely on the scale of the €9bn (£8bn) bailout received by Lufthansa from the German government. Berlin saw the business as a strategic asset of the nation. Here, BA, Virgin Atlantic, easyJet and Ryanair are all expected to be rescued by the private sector. I suspect the government’s calculation is correct — all four are big companies, and three are quoted — and, amazingly, I can think of only one London-quoted company that has so far collapsed during the pandemic, Intu Properties.

The usual front line is the trade association, which is supposed to have high-level links with politicians. For the catering trade, UKHospitality did a good job of making a case to the policymakers over the lockdown — I’m sure its arguments helped to produce policies such as Eat Out to Help Out.

I have met a number of ministers over the decades, been to the odd reception and dinner, and even attended No 10 a few times, but I have never actively sought meetings with senior politicians or civil servants, or asked for favours.

In most of the sectors I know, interaction with central government wasn’t that important or helpful. The one exception was while I was chairman of Channel 4, which was actually a public corporation, hence owned by taxpayers. We did make requests for various concessions, most of which were ignored. I found all the polite grovelling an unpleasant aspect of the job, and, by nature, prefer to be involved in organisations that do not rely on largesse from the state and can fend for themselves.

However, during these extraordinary times, when so many are unable to do business properly, on pain of fines or closure by the state, industries have become supplicants. It is a grotesque state of affairs.

I pray all the lockdowns and restrictions are soon lifted, so we may once again compete for customers in free markets, without having to rely on handouts, like courtiers seeking benevolence from a grand emperor.