The gig economy - gauging the financial temperature through pop and rock.

As Taylor Swift's Eras tour draws to an end, will Oasis step up to keep the UK economy rocking?

Aug 29, 2024

The lime green tones of Brat summer are so done. If you defo want to get g-checked in your ends, it’s time to dig out your 90s parka and white Adidas trainers. Oasis are holding a series of concerts in 2025, and if the Daily Mirror showbiz section is still the trusted source of economic projections it’s always been, then each of the Gallagher brothers is due to make £400mm from the tour1. The Daily Mail puts the figure at a more conservative £50mm each2. Nice one, sorted our kid.

The modern concert tour is a remarkable thing. According to the papers, Taylor Swift’s Eras tour has pretty much kept the world economy going in the face of a US yield curve that’s been inverted for nearly two years now. Wherever she sings, Ms Swift seems to revitalise the economy. Even Japan, the home of deflation and old people, saw a $228mm boost from the singer3. Woodstock never did that.

Even Britain and its politicians were cool in the 90s (Photo source: BBC).

Will the Gallagher brothers’ reunion prove to be great news for Kier Starmer’s Britain? The last Oasis mega concerts were at Knebworth in 1996 on the eve of Tony Blair and New Labour’s assumption of power in May 1997. There is little doubt Labour’s victory was a genuinely popular event in the country, especially following the sleaze and infighting that characterised the end of nearly two decades of Conservative rule.

With Cool Britannia, the UK was in the rare position of being admired rather than universally loathed on the international scene, if only for its music and popular culture. Post Brexit, Britain once again seems to be a bit of a scumbag, often as much in the eyes of its own people as those of the rest of the world. Mr Starmer has a job on his hands.

What is the UK’s new Labour government proposing? In a largely humourless speech delivered in the Rose garden of 10 Downing Street this week, Kier Starmer admitted that “Frankly - things will get worse before they get better”. Cutting winter fuel payments to pensioners was a “difficult trade-off” to help balance the public finances, with “more to come”4 .

Mr Starmer didn’t expand on the details, but everyone knows what’s coming. Carried into power on a tide of indifference and protest-voting against the Tories, the Labour party’s election campaign maintained that national insurance and income taxes wouldn’t rise, but the party was ominously quiet on inheritance and capital gains taxes. This seems to be where the hammer is likely to fall.

The proportion of tax paid by the top 10% in the UK in 2023-4 was 60%5. A comparable figure in 1978-9 was 35%. In the UK, tax levels are already at multi-decade highs. The richer members of society are already paying a historically high proportion of these historically high levels of tax. Old Labour used to talk about ‘soaking the rich’. Perhaps this version of new Labour will couch its grabby tendencies in the more euphemistic terms of the ‘broadest shoulders’ taking the burden.

Pan’s People - definitive proof that taxes were too high in the 1960s and 70s (Photo source - BBC).

While the return of Oasis to the stage is great news for nostalgic 40 and 50-something Brits, Mr Starmer ought to be aware that overtaxing will likely raise the ire of the creative industries who are usually so gushing about Labour.

The 1970s was the age of the ‘tax exile’ in the UK, and this problem was at its most prominent in the music industry. Back in 1966, the Beatles recorded a track called ‘Taxman’ on their Revolver album in protest at Labour’s 95% supertax. When the Tories got into power in 1971, they cut the top rate of tax on earned income to 75% but kept a 15% surcharge on unearned income, making the marginal rate 90%. The Rolling Stones, now based in France, recorded a song, ‘Exile in Main Street’ as a result. When Labour won power in 1974, they raised the top bracket of income tax to 83%, making the marginal level a ‘hefty’ 98%. Gimme (tax) shelter.

Excessive taxation frightens away talent and can lead to a brain drain. On the BBC’s flagship music show ‘Top of the Pops’, 1970s viewers often heard new tracks from Britain’s top bands and artists, but the floor show was performed by an all-female dance troupe called Pan’s People (see photo above, with the ladies posing on the roof of BBC Television Centre in White City, London). None of the stars wanted to perform in the UK for fear of getting stung for tax.

It’s obviously absurd to suggest that Labour chancellor Rachel Reeve will announce a return to 1970s levels of taxation in her budget later this autumn. But the lessons of the 1970s, especially the flight of talent and of wealth more generally, ought always to act as a salutary reminder to governments that there are limits to their ambitions in terms of revenue raising.

This is especially true of the UK as a small, open economy, particularly in the post-Brexit era where far less foreign direct investment passes through the UK than it did when Britain was still part of Europe. Labour may have 412 seats in Parliament, but it only gained a meagre 34% of the popular vote. There are mandates and then there are mandates…

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