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Blue Highway Advisory's 2024 UK General Election Briefing for Clients, Partners and Followers
Introduction
Hot on the heels, as it were, of the second publishing of the Blue Highway Beacon just last week comes Beacon issue #3, our earlier-previewed and specifically drafted UK General Election briefing. We have no intention of taxing your mailboxes week-in, week-out, but with the election looming Thursday this week, (and with observers on the Western side of Atlantic stocking up for their 4th of July celebrations on that very same day), the arrival of another Beacon is more than necessary, as from it, readers should be able to determine at least part of our plans for strategic outreach and client service via our UK operations for the months ahead. With grateful recognition to James Matthewson and Amanda Harcourt for the mighty, wisdom-fueled heft of their pens – please enjoy this immersive read.
Until next time,
Ian Christopher McCaleb
Founder / Principal
Blue Highway Advisory
Political and social observers have long foreseen that 2024 was always going to be a year of great upheaval. From the outset, the world looked ahead to the US general elections, predictably scheduled for the first week of November. That anticipation was heightened by the May announcement of this week’s hastily scheduled UK national elections, the unexpected snap election that was announced in France by President Macron (the first round of which just occurred this last weekend), and the unfolding of a crucial slate elections in sovereign states as diverse as Taiwan and Switzerland. Even North Korea is in on the act, with parliamentary elections that were originally scheduled to take place this past Spring, now maybe-on, or maybe off, as the rest of the year draws on.
It's then no surprise that 2024 is being described worldwide as “the biggest election year in history.”
The worlds of Law, Public Affairs, Government Affairs and Media all share a united interest in the outcome of these elections. Client service agencies in the US and UK have begun briefing their clients on possible outcomes, and what these outcomes could mean for their respective sectors. As a Transatlantic specialist, Blue Highway Advisory has been monitoring the developing situation and analyzing the election campaigns in the UK as they fast-approach, with an aim to provide our clientele with unique insight that can be used to benefit our clients and their ongoing advocacy work.
This briefing is designed to give Blue Highway clients in particular special insight into three key areas of the UK Election Campaign. These areas have been picked by our team due to their relevance to you, but also to highlight important talking points which have been overlooked so far in this campaign – points that will certainly have to be addressed once a new government starts work.
Pondering the Polls
On the 22nd of May, a rain-soaked Prime Minister Rishi Sunak stood on the steps of 10 Downing Street and announced to the world that the long-anticipated UK General Election would be held on July 4th. Since that day, polls that already implied he was driving his Conservative Government toward a heavy loss have only worsened. At its most extreme, the poll lead for Sir Keir Starmer’s Labour Party has been as high as 27 points, suggesting an overwhelming landslide, which would eclipse even that of Tony Blair in 1997. Just about every domestic media outlet and political publication is now concluding that a Labour Government, in some form, is an inevitability.
However, strange things have been known to occur in the face of what might seem like comfortable polling, and no democratic election is ever plain sailing for any political party. In anticipation of a Labour Government, other outlying parties, including the Liberal Democrats, seem to be adapting their narrative for opposition. It is also unknown what the overall impact of figures such as Nigel Farage and his right-wing, anti-immigration ‘Reform’ party will be on the electorate.
For those clients wanting to read more into polling and for hour-by-hour updates as Thursday’s election races up to greet us, we recommend keeping up-to-speed with the following:
Survation, the pollsters who correctly predicted the unexpected results of the 2017 UK General Election; https://www.survation.com/
Electoral Calculus, who conduct a “poll of polls,” combining most major pollsters’ data and visually mapping out the effects in real time; https://www.electoralcalculus.co.uk/
About the Law: A Potential New Cabinet of LawyersWith the current UK Attorney General Victoria Prentis likely to find herself out of a job come the 5th of July, focus has now shifted to the most likely incoming replacement, Emily Thornberry. Thornberry, Labour's candidate for the job, has served for several years in (likely incoming Prime Minister) Sir Keir Starmer's shadow cabinet, and can boast of deep working experience within the British judiciary as a barrister and former human rights lawyer.
Thornberry isn’t the only expansively experienced attorney likely to be filling an incoming Labour government's front benches. Many other prospective cabinet members are inbound, including David Lammy, who once practiced so called Big Law in the United States, and of course Starmer himself, who rose to political prominence on his human rights and criminal defence record. When Labour’s expected Cabinet is assembled, it is nearly assured that this new group will be the most legally engaged front bench in quite some time.
The Pre-Election Party Manifestos
This election’s participating political parties’ manifestos were launched as the hastily scheduled campaign season was in full swing, and UK residents will attend the polls on Thursday at least partially informed by these documents. We’ve had our Blue Highway political analysts delve into the overlooked details of these party documents, and here pick out a handful of things that may matter to you.
For wide relevance to our specific audience, these examples are all from the two main Parties’ Manifestos: Conservative & Labour.
Music & The Arts
The Musician’s Union has welcomed the Labour Party’s ‘commitment to Musicians’ in various areas of its party manifesto. Whilst many of the policies they say will benefit musicians and performers are part of Labour’s wider overhaul of workers’ rights, the following policies have all been highlighted for those working in music, most especially:
Help break down barriers for artists touring in the EU
Implement a broader curriculum, including music education
Tackle late payments to help small businesses and the self-employed
Improve workers' rights with a New Deal for Working People.
*Information taken from the Labour Party Manifesto ‘Change’ 2024. https://labour.org.uk/change/
Meanwhile, the Conservative Party’s manifesto mentions music three times in its section about ‘culture,’ which is the responsibility of the government’s Department for Culture, Media and Sport.
The one solid pledge that doesn’t seem to be about ‘maintaining existing tax incentives’ is as follows;
“We will work with industry to deliver a dedicated flexible coordination service so that everyone who wants to work in the film, TV, gaming and music sectors can work on live productions whilst benefiting from at least 12 months of secure training”*
*Information taken from Conservative Party Manifesto 2024
Technology
A hot topic like Technology effects multiple areas of political, economic and legal interest, as it does parts of any prospective government.
The (possibly outgoing) Conservative Government have made technology a primary talking point for the duration of Rishi Sunak’s premiership. All world governments recognise the importance of technology writ large, but there will of course be changes in approach to how the technology sector is viewed, regulated and supported with a change of political party.
Labour have talked about challenging ‘Big Tech,’ and continue to use language suggesting a preference for de-centralized technology firms, as measured against the sector’s so-called heaviest hitters. In addition to this, many of Labour’s financial plans are dependent on increasing taxation rates for corporations and the highest-earning companies, and many of these are based in the Tech sector. Leaner, more innovative and more de-centralized operations may find a friendlier playing field laid out before them by an incoming Labour government.
Each major party manifesto’s overall sections on Technology demonstrate that they recognize the importance of talking about the vitality of a sector that seems to demonstrate limitless potential and the future world the expansive tech segment continues to help build. You can read both using the below links.
Conservative Manifesto: https://public.conservatives.com/static/documents/GE2024/Conservative-Manifesto-GE2024.pdf
Blue Highway Beacon Vol. 1, No. 3, Chapter 2
Spotlight Election Season Feature:
‘Fixing The Music Industry’
Amanda Harcourt, renowned music industry lawyer and Blue Highway IP Consultant, examines the pre-election landscape surrounding the worlds of the creative arts.
Electioneering, not love, is in the air and I am asked what neophyte MPs in an incoming UK government might do to help the music industry.
For a start, I would forget about the music industry per se and concentrate on the music itself. By that I mean the creators -- the thousands of people responsible; such as songwriters, composers, recording artists, session musicians and the huge back line of tech talent that moves the music from the spark of an idea to inspiring performances and recordings.
Of course, there are legislative tweaks that will improve the lot of creators whose livelihoods have been decimated by the digital delivery of their work. But to trawl those reading here through those would be dull. We don’t tend to specialize in or focus on the ‘dull’ at Blue Highway.
So instead, here’s a map of the plumbing and a few ideas for beginners:
Most people do not realize that only a very few music creators make serious money out of their music. Advances against future royalties and paid by contractual partners go unrecouped over years. And session musicians are stuck in a system where they get NOTHING, that is nada and zilch, from the streaming services.
Surprised?
Poor quality copyright data at the record labels (for recording artists) and music publishers (for songwriters and composers) have the effect that the corporations’ shareholders and executives can trouser any money where the specific song or recording cannot be matched “directly and identifiably” to the cash. Yes, those three little words appear in every creator contract. … Kind of a baked in disincentive for the corporations to clean up their data, wouldn’t you say?
UK music sector lobbying is, in theory, performed by a body called UK Music. But check out its membership: https://www.ukmusic.org/about/members/
One wonders how creators can get a really improved shake when, for advocacy, they are in bed with the companies that own their rights and also have those three little words to play with?
So, new members of Parliament, please look no further than the Council of Music Makers: a band of passionate, committed, well-informed and hardworking creative people who can explain to you exactly what is needed to improve their lot.
Listen to them. And please listen well. https://councilmusicmakers.org/
The Council will confirm that any singer-songwriter on, say, Spotify, who owns 100 percent of their music worldwide gets a little over US $3 for 1000 streams, or US $0.003c per stream! Imagine what that figure becomes when all the band members or maybe a co-writer has to be paid a slice from that bounty! Imagine too how creators might feel when they find out Daniel Ek, who founded Spotify, is worth US $4.9 billion? That is four times Sir Paul McCartney’s net worth.
In 2023, Sir Lucien Grange, Chairman and CEO of Universal Music Group, once knighted for his “accomplishments in the music industry” (not music, note), was awarded an annual pay package published as, directly and identifiably, €47 million. Plus, he has a US $100 million stock option to entice him to stay on for a further five years. Imagine his tax bill. Then, imagine the pile of money he’s left with, even after all of those taxes.
Nonetheless, while we are talking taxes, (because every aspiring MP is doing that up and down the country as Thursday draws ever nearer), consider where the taxes on profits go for the three major music companies. Together, they control nearly 70 percent of a global market worth US $28.6 billion in 2023. Sony Music Entertainment is owned by the Japanese Sony Group Corporation; Warner Music Group is headquartered in New York; Universal Music Group is headquartered in the Netherlands and has French, American and Chinese ownership. How much do you think these three giants are sending through to the UK’s fiscal supply lines?
In contrast, consider where the taxes of the 210,000 people, (real people, mind you) employed in the music industry are going. Only a very select few creators are rolling deep in the dough, but collectively they are the bedrock of the £6.7 billion UK industry (2022 figures) including £4 billion in exports. These 210,000 are the ones who will pay taxes into the coffers of UK plc.
Oh, and as for the word “employed” here’s another bit of fiscal madness that ties the hands of music creators.
Many, if not most music creators, are not employees. They are either self-employed or they operate via a service company that manages their various revenues sources (such as they are). Unless a music creator’s trade association is legally a trade union (such as the Musicians’ Union or Actors’ Equity), that association will encounter difficulties should it try to close a collective agreement containing basic terms on which their members shall provide their services. Any such attempt to conclude a collective agreement to help entry-level creators earn enough to eat and pay the rent (remember how that used to be possible for entry level workers?) is met with an unfriendly letter from the Competition and Markets Authority. Yes, folks, these self-employed creators are adjudged to be “undertakings” at law and their proposed collective agreements are labeled anti-competitive, as such agreements might, shock, horror, distort the market.
Move over Google, step away De Beers, a folk singer is wrecking the house.
There are two key de-facto monopolies based in the UK music industry, and both are not-for profit. Surprised? Thanks to the UK adopting EU legislation, these two collective management organizations (CMOs) are, in theory, the most highly regulated music companies out there, with transparency obligations that creators can only dream of being applied to their commercial partners:
These two music CMOs are membership organizations that issue licences and collect licence fees on behalf of music creators and their commercial partners for the use of music.
PRS for Music, which new MPs will doubtless have heard of, issues licences to music users that publicly perform or stream its members’ songs and compositions. Half the money collected in the UK is sent directly to the songwriters, lyricists and composers; the other half goes to their publishers, and if the contracts award more than 50 percent to the creator, the publisher sends them a quarterly or half yearly “top-up.” That is how it works for the UK money.
For license fees generated by UK creators works played abroad, PRS for Music is dependent upon reciprocal agreements with their equivalent societies overseas. The international song royalty plumbing system has one very important difference. The publishers’ halves of the foreign revenue are paid direct to music publishers’ local offices abroad, and it is only the creators’ shares that wander back to the UK through the network of societies. The commercial power of the English-language music repertoire means non-English-speaking countries are net exporters to the UK (and the USA, Canada, Australasia and South Africa). So, it is essential that relations worldwide are cordial and systems efficient. The publishers are getting their whack from their own overseas representatives. It is only the songwriters and composers who rely on PRS for Music for that vital foreign revenue.
The organization has been much beloved. Monies are paid quarterly directly to creator members, often serving as a lifeline as money managed under creators’ publisher contracts may be yet to recoup the advances. Shockingly and unusually, this year there are currently two legal claims having been served on PRS and both come from creator members. This should be a real concern for this century-old and vital institution. PRS for Music is not a Fortune 500 company, despite its impressive annual distribution of over £940 million, according to its most recent figures. One need only look across town to the Public Inquiry into the Post Office / Horizon scandal to be reminded of the dangers to which a large organization can be exposed when it forgets the hundreds, the thousands, of “little people;” the boots on the ground that form the core of their operations. Given the comprehensive CMO regulatory structure, MPs need to firmly remind this august body of its precious responsibilities to all its creator members equally and its clear statutory obligations.
Phonographic Performance Ltd (PPL), the other not-for profit CMO monopoly in the industry, collects money for broadcast and public performance, but for recordings and the performers on those recordings. But PPL does not license or collect money from the big streaming companies – they pay the record companies direct. That licence fee money is then distributed to recording artists, in sometimes “imaginative” percentages, according to the individual artist / label contract terms. But nothing goes to session musicians! As I noted earlier, they are all left out in the cold, dependent upon their session fees. Does that sound fair? There is a fix for the problem but that, readers, must wait for another day.
© Amanda Harcourt, for Blue Highway Advisory
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