The Stage

Tories say theatre subsidy is not the answer

Published Wednesday 6 October 2004 at 11:40 by Ruth Gillespie

EXCLUSIVE: Public funding has failed to provide a sustainable future for theatre according to shadow arts minister Boris Johnson, who has claimed that providing tax incentives for private investment is the only way to ensure growth.

Johnson told delegates attending an Arts Council England seminar during the Conservative Party Conference in Bournemouth that there was a need to generate more private investment through American-style tax breaks allowing 100% of money donated to be claimed back in tax relief.

Speaking later to The Stage he said: “We need to move towards the kind of culture they have across the Atlantic where philanthropists are encouraged to give money to the arts and have their contribution recognised.

“I accept the argument that London theatre does generate all sorts of revenue that isn’t immediately obvious. It is one of the reasons people come to the capital and it is invaluable in terms of the restaurant and hotel trade. But it is difficult to justify an increase in public funding because there are so many competing demands. Tax relief is the way to go.”

Johnson reassured delegates that he did believe in public subsidy for the arts and claimed that the budget for the Department for Culture, Media and Sport would not be cut under a Tory government.

Under the current system in the UK both investors and recipients can claim tax back on donations to charitable organisations through Gift Aid. For every £1 given by an individual donor the charity will receive an extra 28p while the investor can claim back 18p.

The Enterprise Investment Scheme was introduced in 1994 to encourage individuals to invest in small higher-risk companies, such as theatrical producers. Investors can obtain income tax relief at 20% on investments up to £150,000 in any tax year. However, as recipient companies must have been trading for a minimum of three years to qualify this is not beneficial to producers wishing to attract investment in one-off productions.

Theatre management consultant Anthony Field said: “The problem with the US scheme is that a lot depends on the idiosyncrasies of commercial organisations. Support isn’t consistent and this is the reason the US has never had a national theatre.”