Saturday, 16 July 2016

Brexit, the Brum Music Biz and three wise men called John.

I can't believe it's only been three weeks.

I voted Remain, for what it's worth. I'm still gobsmacked I had to vote at all. Still stunned at David Cameron's catastrophic unleashing of a political and economic sh*t-storm.

It's been three convulsive, compulsive weeks. The Tories have slaughtered one another spectacularly and dishonourably. Labour is doing much the same thing, just more slowly and messily. Labour doesn't do clean-cut, but they match the Tories for dirt. Tragically, no matter who comes out on top in the Labour leadership race, the party will probably now never be a real-world, viable, opposition again. I really, really hope I'm wrong, but I won't hold my breath. Just do the math. 

Sorry, I realise I'm venting, and this is a music and radio blog. I don't usually touch on politics, but this is massive. It impacts on all of us.

Brexit and Brum music? 
It's not good news. John #1 says so. John #2 is cautious at best; John #3 has already taken the hit.

John #1

John Wormald - Chickenbone John - makes cigar box guitars. You'll see him at Moseley Folk, Moseley Jazz, or even Glastonbury. John imports parts, and has much of his stock made in China. The UK apart, he has a large chunk of overseas trade, 20% in Europe.
John Wormald: "I've just paid for a batch of guitars that I've had made in China, but due to the 15% fall in Sterling, its cost me a huge amount of extra money."

That's the bad news on importing - what about exports? 
"Unless the single market thing gets sorted, exporting to Europe will be more expensive if we get hit with different VAT, duty, tariffs etc. Shipping further afield is a non-starter - it costs 3 or 4 times as much to export to the USA and Canada as it does to Europe."
"No politician ever talks about the practical costs of exporting goods, because they have no experience or understanding of the real world. It's very reasonable to ship to the EU right now; duty and VAT are totally seamless. So it's not an issue now, but how long that will continue remains to be seen. I already sell into the North American market and I'm painfully aware that people in the States are already paying a premium to buy my products because of shipping costs. Now the fall in the pound has made UK products even more uncompetitive."

I hope someone gets to read this at Westminster. They probably won't, of course. Back to John, this time talking about working in Europe:
"I go to the EU to work several times a year, and make around 20% of my income there. Without free movement within the EU, that is likely to finish. I could end up needing work visas, and worse, if I do my guitar making workshops, I'd need carnets for my commercial vehicle and everything I carry - identifying everything I'm exporting - parts, materials, guitars - and all the stuff that I'll take back to the UK, like tools, sound kit and the like. That will be a time consuming nightmare, and is likely to kill off that aspect of my business in Europe."
"It's not looking good unless Theresa May can pull off a load of miraculous concessions from the EU. I'm not holding my breath. I'm not optimistic - it's going to be much more difficult for this small business. I am going to have to dig deep and work harder and longer. I have no other option."

Crikey. It's still early days, John. That bad - are you sure?
"It's my first reaction, and so much depends on what will happen if and when Article 50 is initiated. My worries could be unfounded, but I have to prepare for the worst and hope for the best."
"But the fall in the value of the Pound is a reality. I need the product, I've had to take a 15% increase in cost from Shanghai for thousands of pounds worth of custom guitars. Then it's my call whether I can pass that 15% onto my customers, or if I have to absorb it to price match my competitors who already carry stock here in the UK. The Pound has crept back a bit against the Dollar, but I can't wait until it improves significantly. And I can't keep people waiting for payment. I don't want to get too political about this..."
I do, John, I do...
...but on both sides, people aren't being helpful. There's Remain folk calling for a second referendum, bitterly disappointed and fearful for the future, There's a lot of "We won, you lost, shut up and stop whinging" from the Leavers. Neither attitude is helpful in moving forward for those of us who have to keep our businesses afloat and, hopefully, prospering."

So, as John explains, this could be hell for small music businesses. Now, what about promoters?

John #2

Every summer, loads of US acts come over to do UK and European festivals. Mostly Funk, Soul and Jazz is a heavy consumer of certified US vintage groove. This year, they were insulated by contracts agreed before Brexit kicked in. But the future?

John Fell at MoJazz and Moseley Folk is slightly more positive.
John Fell: "We pay in sterling, but the short term effects of Brexit will see fees increase as artists in America will still need to make their usual fee in dollars. I think next year will be ok... but yeah, it could be interesting to see where it goes. Especially when we leave. And where we stand with European artists."
"There's no guarantees here; we don't know what the exchange rate will be do, or if it will be helpful for MoFo and MoJazz in 2017."

Still not good. Really, still not good. And it's very early days. Even if the buffoons May has tasked with implementing Brexit succeed - and that's a big if - we're still years away from a stable business climate and an economy which will support music and the arts in general. Oh, and by the way, the Brexit team never actually had any plans, remember?

John #3

One more sad straw in the wind:

John Mostyn posted on Facebook on the 27th June, three days after the result was known. He has kindly agreed to let me reproduce his words. 
"So it is farewell to Highbury Studio.
Until last Friday, June 24th, we were still in with a good chance of restarting the studio with the help of some serious financiers." 
"(Conditions were) bad enough but as the results of the referendum came in on Friday morning it was clear that every musician in the UK is likely to be worse off in the near and long term. Income from sales will fall and income from those profitable shows in Europe could now well be eaten up by the extra cost of visas, carnets etc."
"So we've called it a day. Believe me, we tried damn hard. I'm sorry for us and our past and future customers who won't know what they missed. Off to new things, who knows where; but in these dreadful times let's celebrate the fun we had there, the great work that was done."
"Good luck everyone and 'bye for now until we see you again."

I can't tell you how sad and mad that made me feel. Goodbye Highbury Studio: a great place, and probably the first victim of the downturn. 

In sum...

Good Job! As they say in the States. Or as we might say in the UK: well done, you complacent, careerist, short-sighted backstabbing idiots. You've hammered a whole suite of completely unnecessary nails in the coffin of adventurous creativity. And you've raked up a world of hurt, suspicion and racism along the way. 

Nice work.


I was going to write a bit about radio as well, but the waters are still very muddy. Whittingdale and Osborne have been sharply relieved of their ministerial posts, so maybe there will be less vindictive pressure on the BBC. It's still going to be tough on commercial radio; recessions always are. Advertising budgets are quick to be cut, and Radio is always first in line. 

The new Culture Secretary, Karen Bradley, is an unknown quantity as of yet. But she is at least not part of the Kensington Tory boy club. She's from the Midlands - Staffordshire to be precise - so who knows? Possibly she might even look favourably on Midlands broadcast production. We live in hope.

Hope.... I think we're going to need quite a lot of that in the coming years. And a lot of hard work, just to stay where we are.

More music business posts on Radio To Go


Tue 19th, 4pm: Big Wheels: Joe Broughton

Wed 20th 11pm: Live and Local: Kim Lowings at the Blue Piano (repeated Sat 23rd at 11am)

Fri 22nd, 3 pm: In The Studio: Steve Gibbons and John Caswell 

After airing, these can be found on Brum Radio's Mixcloud page.

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Rock History said...

My wife is an academic and the European Universities all do cross-EU co-operative deals to bid for project funding. The rest of the EU is already not including UK universities in these proposals as they believe we will not be part of this in a few years time. This is the silent death of British University funding - it will take everyone years to see the impact but as you see it has already started.

Matt Burton (via Facebook) said...

Really interesting piece. Focus for remaining was always on big business and that has had some terrible press (some justified, much of it not). This piece really illuminates the effects on small businesses making their way in the world.

Maggie Dunne (via Facebook) said...

I worry for young up and coming bands who could be faced with carnets and visas just to play in Europe. The implications for small music businesses are quite dreadful

Ade Wakelin (via Facebook) said...

I've spent the last week in Palma and Ibiza and everyone I have spoken to thinks we're mad. However, I do understand that the massive division between rich and poor that has been widening post Thatcher, Blair, Cameron et al, has played some part in the disenfranchisement of many people, which may have strengthened the exit vote.

Ben Calvert (via Facebook) said...

I feel for John Mostyn at Highbury Studios. The model where bands pay outright for recording time then try to make a profit by selling their recordings just isn't viable anymore and studios will suffer, along with session musicians, pressing plants, music shops, magazines and the whole industry. That's a hard fact for all of us to swallow even before you consider the impact of England leaving the EU...