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Alan Lane: Theatre tax relief is the graceful assault of an ideological ninja

George Osborne. Photo: HM Treasury George Osborne. Photo: HM Treasury
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Oh, theatre tax relief. I have attended briefings, met with my accountant (twice) and had so many patient mentors. God it’s so tedious. Surely it’s not important: nothing this boring could be important. It’s been a challenge to listen long enough to understand it.

But I think I do now. So let me explain it back, and then if I’ve misunderstood, one of you will tell me.

You make a show. You sell tickets to it. Imagine that up until press night you spend £100 making it, less marketing costs. The government will give you £16 back (20% of 80% of qualifying expenditure: or 16% put it more simply). Regardless of whether you make any money on the show or not, regardless of whether you pay any tax. (There are different rules for touring but one thing at a time, eh?)

It’s called the theatre tax relief but just to be clear, the £16 you get back is not in any way connected to any tax you pay. It’s different money. It’s ‘new’ money. It is, as it’s called in the excited briefings I sat in, magic money. Magic money from the magic money tree created by this progressive government.

In the past, up until recently, central government gave the money they had to support theatre mostly through Arts Council England. In order to get money from ACE, you have to fulfil some criteria. It can feel really annoying filling in the forms but ACE demands that you engage with things: are the arts trying to reach all of the community not just the rich part of it? Or the white part of it? Or the city-based part of it? Are you trying to be diverse? They check that the money is being given to fair employers and organisations that look to their impact on the environment and (this is one I think they could try harder at) that the money is going to artists who are any good.

As annoying as the forms and (literal) tick boxes are, it’s really hard to not feel fondly towards the ambition of an organisation whose mission is to spend public money in making sure that everyone in the country has access to really wonderful art. God knows it doesn’t always get it right – its obsession with paying for more than one opera company does my head in, it is far too reliant on the idea of funding producing theatres outside London as the mechanism of change for the industry – but you’ve got to admire the righteous zealotry of the mad buggers. Great art for everyone? Great? Everyone? What loveable, idealistic maniacs…

But that changed a bit a few years ago. There were cuts. There were cuts to ACE itself because, we were told, it had grown flabby on overpaid, underworked middle managers. (I hadn’t noticed any of them looking anything other than overworked and stressed, but whatever… everyone hates civil servants, don’t they?) And the money it had to hand out regularly was also cut; there was less money to give to arts organisations on an annual basis.

If you remember, this was because Labour had got drunk and run up a huge credit card debt on the nation’s American Express. So there was less money for culture, and less money for ACE to regularly fund art. As of the last budget, it’s at a standstill. More or less.

The government decided, as a token of how much it loves the arts, to introduce theatre tax relief. New money. Magic money from the magic money tree. If you make a show and it qualifies (which mostly means it plays 14 performances and you charge for the tickets) you can have back 16% of the cost of making that show.

Except that there is no cultural test in order to qualify for theatre tax relief. So anyone making theatre qualifies, right? That’s kind of cool – great magic money for everyone? Well, sort of.

Bill Kenwright? Yep. Various dubious international money men who ‘invest’ in the West End? Yep. That little new writing outfit you like that does a run in a room above a pub in Manchester? Well, no, not them, you need to do a 14-night run and that’s pretty unlikely. That small community outfit that make those fun shows with local youth groups? No probably not, some of the paperwork is pretty intense, and you definitely need a good accountant or a finance department. It’s also not for people who don’t charge for tickets, like those undertaking schemes to get new and disadvantaged audiences to the theatre. But it is for Andrew Lloyd Webber. This is public money for making theatre that is for Andrew Lloyd Webber. Shrek the Musical? Yes. Project performing Waiting for Godot in various prisons? Probably not.

And to get this money from the government – that it is using to encourage culture in the country – do you know what civic or societal ‘rules’ you have to obey? None. You don’t need to be interested in the diversity of your audience beyond the different types of wallet they have. You don’t need to be interested in anything other than the rules of the market. There is no cultural test.

And guess what, theatre pals? It’s not magic money. It’s money the government mugged from ACE a few years ago; it’s the money it cut from local councils and various departments. Money that would previously have been given to cultural activity that was forced to be societally minded, now given to producers who absolutely are not.

It is the cleverest, simplest shift in the role government money has in the arts. It is a graceful mugging. A ballet of societal change. What a man George Osborne is. Lick his face and taste the clever. Because of the rules of the scheme, charities wanting to claim – civic playhouses and subsidised dance companies – must create a non-charitable wing of their businesses: a separate business in order to claim the money. This is money that is officially unavailable to those with charitable ends. What an ideological ninja Osborne is. He has the industry press praising his progressive generosity while he redefines the central purpose of what government cash to support theatre is for and who can apply for it. Ninja.

And because it benefits (for now) so many of our large civic arts organisations, our sector leaders, as well as the commercial producer, the colossally wealthy musicals producer and the international investor, we’ve not heard that much discussion about it. And certainly no opposition to it.

It has undoubtedly helped large and mid-scale publicly-subsidised arts organisations, and made a real impact to their balance sheets this year, offsetting previous years’ cuts. But I think that undeniable benefit has come at a price, a surrendering of the principles of the nature of public money in the arts. There is not, as this Government loves telling us, a bottomless pit – money going to this cannot, by definition, be going somewhere else: projects qualifying for TTR have been prioritised for public money over the projects that do not. That is big news. And that feels like something that we should be talking about more. Rather than just being thankful that the chancellor, the ninja, didn’t cut us this time round.

But maybe I’m wrong. After all it’s taken me weeks to understand the scheme so maybe I’ve got the wrong end of the stick. After all when has this government ever used a barely publicly understood financial mechanism shift to change the ideology that underpins the nation? Exactly.

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