Grassroots music venues like Portsmouth's The Wedgewood Rooms could gain from proposed levy on arena and stadium shows

Festivals, electronic music venues, academies and arenas “are not insulated from the impacts” of the crisis and “promoters are less able to put on shows or make them financially viable”, it said.

Recommendations by the Commons Culture, Media and Sport Committee, which is chaired by Gosport MP Dame Caroline Dinenage, state the Government should launch a comprehensive review of live and electronic music by the summer to “fully examine the long-term challenges to the live music ecosystem”.

The report, focusing on immediate solutions to support grassroots music also calls for a temporary VAT cut based on venue capacity to “stimulate grassroots music activity and help the sector through the current closure crisis”.

The committee has recommended a widespread voluntary levy to be in place no later than September, which should be followed with an effectiveness assessment by the Government.

It said the levy on arena and stadium concert tickets, which would create a support fund for venues, artists and promoters, should not be passed on to music fans.

The committee also said a trust led by a sector umbrella body, such as the Live Trust or Music Venues Trust (MVT), would be the best way to collect, manage and distribute the voluntary fund.

The MVT represents nearly 1,000 grassroots venues across the country, including Southsea’s The Wedgewood Rooms.

The report added that if there is no agreement by September, or if it fails to collect enough income to support the sector, the Government should step in and introduce a statutory levy.

Dame Dinenage said: “We are grateful to the many dedicated local venues who gave up their time to take part in our inquiry.

“They delivered the message loud and clear that grassroots music venues are in crisis. The ongoing wave of closures is not just a disaster for music, performers and supporters in local communities up and down the country, but also puts at risk the entire live music ecosystem.

“If the grassroots, where musicians, technicians, tour managers and promoters hone their craft, are allowed to wither and die, the UK’s position as a music powerhouse faces a bleak future.

“To stem the overwhelming, ongoing tide of closures, we urgently need a levy on arena and stadium concert tickets to fund financial support for the sector, alongside a VAT cut to help get more shows into venues.

“While the current focus is on the many grassroots music venues falling silent, those working in the live music sector across the board are also under extraordinary strain. It is time that the Government brought together everyone with a stake in the industry’s success, including music fans, to address the long-term challenges and ensure live music can thrive into the future.”

Mark Davyd, chief executive and founder of the MVT, welcomed the findings and thanked the committee for its recommendations. He said: “It has taken much longer than any of us would have liked to get the positive change we all wanted to see, but we could not have achieved this fantastic outcome without your continued support for your local live music venue.”

Jon Collins, chief executive of Live, also welcomed the “knowledgeable and wide-ranging” report.

“It’s clear that the committee has recognised the many challenges faced by venues, promoters, events and artists at the grassroots level, and the steps required to address them”, he said. Mr Collins added that Live is looking forward to working with the Government on the review of VAT.