Government defends its refusal to provide COVID cancellation insurance for the festivals sector


March 25, 2021

Culture minister Caroline Dinenage has defended the UK government’s decision not to offer state-backed insurance to music festivals and other large-scale events that hope to take place later this year after COVID restrictions lift. Basically, she said that ministers didn’t want to provide such insurance while there was still a real risk that COVID restrictions could extend, causing those festivals to cancel. Though, of course, without that risk, no one would need the state-backed insurance in the first place.

Trade groups for the live sector have been increasingly calling for the government to launch such an insurance scheme in recent months. The current problem for promoters who hope that festivals can still go ahead later this year is that they are now in production mode and incurring costs.

With no cancellation insurance available on the commercial market, they face a difficult decision: do they carry on working on their events but run the risk of incurring major financial losses if COVID restrictions don’t – as currently hoped – lift in June, or do they cut their losses now and push everything back to 2022?

Many promoters already on the brink after having to cancel their 2020 festivals may have to go with the latter option, meaning that, even if COVID restrictions do lift in early summer, many major music events will not take place this year.

It would be a different story if the UK government – like governments in some other countries – would back an insurance scheme for festivals. In that case, if the current COVID targets are achieved, there can be lots of festivals for fans to attend, and those events would be able to begin their recovery by selling tickets rather than relying on further government subsidy.

However, despite extending various COVID support schemes earlier this month, the government has so far knocked back the insurance proposal.

Asked about that during a session instigated by Parliament’s culture select committee yesterday, Dinenage said: “The fact is, chairman, as the minister responsible for this I would much rather be able to make an announcement when I am absolutely certain things can go ahead, or at least in a much better sense of predictability that things can go ahead, than announce an indemnity scheme, give people the confidence in order to pull the rug out from underneath them again. I just wouldn’t be prepared to do that”.

So, yes, that was an incredibly long sentence that only partially made sense. Basically, she said that her preference is to make an announcement that things can go ahead when she’s certain that they can. An insurance scheme would just make people think that events might go ahead, and then they’d be disappointed if they don’t. People might also be disappointed if all those events go out of business before they get a chance to come back, but she doesn’t appear to have considered that.

Dineage was also asked about a support scheme the government has instigated to help get the film and TV industries back to work, and why the festivals sector isn’t being offered similar support. She said that the risks of ongoing COVID rules stopping filming projects are much lower than for large events, because there is no audience to factor in.

Prime Minister ‘Boris’ Johnson was also asked about a government-backed insurance scheme for festivals in Parliament yesterday. He conceded that getting the live events industry back up and running for late summer or autumn would take “a huge amount of time, preparation and expense”, but he added that “there are difficulties with this whole business of indemnifying the entire sector”.

He then waffled a bit about the government’s previous £1.57 billion of support for the COVID-hit cultural and heritage industries and how ministers are now in the process of topping that up.

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