One of the few rays of sunshine to emerge from the coronavirus pandemic so far has been the small number of theatres being forced to close their doors forever.
Many readers will recall that, as uncertainty grew last spring, there were dire predictions that up to 70% of all companies might have disappeared by the end of 2020. While a handful sadly did close, the rest have so far survived despite the lack of support from a government that has made its contempt for culture obvious throughout.
The cabinet reshuffle has replaced the totally uncaring and inappropriate Oliver Dowden as Secretary for Digital, Culture, Media and Sport. Time will tell us whether Nadine Dorries has any more interest in our area of her brief.
Despite the lack of adequate directed support, those in the cultural industries have benefited from schemes put in place to save the economy, particularly loans, temporary reductions in various types of taxation and the furlough scheme. However, chickens will always come home to roost and we are once more at a transitional moment where care (or prayer) may be required.
While it is obviously good to see theatres reopening and audiences paying good money to be entertained, as warnings from SAGE have made clear, we are not out of the woods yet and we all know that, if the COVID tide turns yet again, theatres could be in the firing line ahead of most other businesses. That is uncertain, but a combination of imminent financial changes could prove to be equally serious.
Various tax reliefs are being phased out, while some landlords could be itching to evict tenants who have been unable to pay the rent for the last 18 months, as the law permits them to do so. There are still approximately 1 million “workers” who remain on furlough. It seems a good bet that a number of them will be people who operate in and around the theatre industry. That scheme is closing at the end of this month and producers will have to decide whether to keep staff on and fund the full cost or make them redundant.
There can be little doubt that while some will be lucky, others might find themselves having to seek new employment. As we all know, the government believes that they would be far better off retraining as lorry drivers or shelf stackers, contributing to the Exchequer by paying higher taxes as result of earning more than many would receive working in front of or behind-the-scenes at the local palace of entertainment.
To compound this problem, the rate of inflation has now reached 3.2%, while wage inflation is running out of control. Companies needing lorry drivers are currently paying massive signing on fees and there has to be every chance that Amazon and its rivals, buoyed up by the knowledge that they pay negligible tax on profits, can afford to reward staff at much higher rates than most theatres could manage.
Everyone reading this column is probably sick of the term “a perfect storm” but, since it has become fashionable, it appears reasonable to suggest that that may be what theatres are going to face between now and the end of the year as they not only re-employ staff but also need to spend a higher proportion of their savings (profits are probably not in prospect in the short term).
It doesn’t take an economics graduate to work out that if costs are rising then, unless like Fagin they are going to pick a pocket or two, there are only two realistic solutions to stave off closure. The first is to cut costs even further, though that may no longer be realistic after years of austerity. The other is to increase ticket prices. You could probably hold your breath on that, since it is likely to be a standard response in the very near future.