Fifty years after the summer of love, we still have the best musical talent in the world but it needs help to survive

Timothy Leary’s advice to “turn on, tune in, drop out” should have been the slogan for the Leave campaign. Love might be in short supply in the British summer of 2017 but there is one sector at least where there is still cause for optimism. Fifty years after the summer of love made counter-culture a serious commercial venture, popular music remains an art form that Britain creates to world standard.

Not many industries are as Brexit-proof as popular music. Here is something at which, truly, we can take on the rest of the European Union with confidence. In the 50 years since the summer of 1967, almost nothing of note, apart from the wonders of Abba, has come out of Europe. The best popular music ever written in a European city was David Bowie’s trilogy of Berlin albums. The Germans are not going to unearth an Ed Sheeran or the French find their own Adele. The trade negotiations of our departure from the EU are irrelevant to the distribution of music.

Yet that strength may also be a weakness. The way music is consumed might be leaving behind the era that was both begun and symbolised by the summer of 1967, when 100,000 hippies converged on Haight-Ashbury in San Francisco to reject the consumer society by wearing flowers in their hair and spending money on music. In Britain at the same time there were bands in the process of winning world renown.

The Beatles released Sgt Pepper’s Lonely Hearts Club Band in May of that year. The Kinks produced Waterloo Sunset. It was the summer of Love’s Forever Changes and Jimi Hendrix releasing Are You Experienced. Even Pink Floyd, with Syd Barrett’s epic The Piper At The Gates Of Dawn, had not yet become boring. Not everyone understood why popular music was to be admired rather than feared. Mick Jagger and Keith Richards were arrested on trumped-up drugs charges and it took The Times to come to their defence in William Rees-Mogg’s editorial “Who breaks a butterfly on a wheel?”

By 1967 the young form of popular music arrived at the centre of the national culture. Today, in mockery of the hippie hopes of Haight-Ashbury, the music industry is a vastly successful commercial enterprise. The UK is the largest producer of recorded music in Europe and the second largest in the world. One fact to warm the hearts of the Fun Boy Three (Johnson, Davis and Fox) is that British artists accounted for 17 per cent of global music sales in 2015. In eight of the past eleven years the bestselling album in the world has been by a British artist, and in 2015 five of the Top Ten were British.

British artists made up 17 per cent of global music sales in 2015

The pop charts is one arena in which immigration has posed no threat. In 2016 seven of the Top Ten bestselling albums in the UK were by a British act. It is a success story but it is not assured. If anything resembling an industrial strategy survives the wrecked May government, the music industry deserves its attention because the ecology is fragile. The process by which everything in the history of music is available to me, the consumer, is extremely complex. The musical world of 1967, by contrast, was simple. When, in September 1967, the BBC replaced the Light Programme with Radio 2 and Radio 1, on which DJs taken from Radio Caroline would play popular music, the new stations were all but guaranteed a large audience. The BBC remains the most important source of new music but listeners these days are more scattered and the entire back catalogue is available for nothing on YouTube.

The first culprit was piracy, which took out half of the market. Even though we are listening to more than ever before, consumer spending on music fell by half between 2000 and 2015. The casualty of that reduction is investment, which means A&R, which means the search for new bands. Typically, music has had an investment expenditure of quarter of its revenue, a lot more than in, say, pharmaceuticals. The collapse of this budget for experiments means that bands do not have long to make it. The appetite for risk-taking has fallen. The market has become more conservative, both splitting into niches by genre and tending towards the monopoly of the big artists. Solo artists are easier to market; the last big band to emerge were Gordon Brown’s favourite, Arctic Monkeys.

The biggest problem has been ensuring that the artist gets paid properly. I was the prime minister’s adviser on culture in 2004 when the first legitimate digital route to market was being developed. Bob Geldof came in to lobby about the royalties due to songwriters and brought Peter Gabriel with him. When I introduced myself as Phil Collins, Mr Gabriel noted that it was good to get the old band back together. Once we had got past the Genesis jokes the problem was a serious one. Artists were struggling to get paid.

YouTube is the land of plenty for the viewer, not so much for the artist

It is better than it was. The ingenuity of the music industry in responding to piracy was impressive, and there are now more than 50 legal routes for the digital age. Streaming is bringing growth back and music sales are up 11 per cent in the first half of 2017. British rap and grime is a new scene in the making. Of the Mercury-nominated albums that were shortlisted last week, seven were debut albums. There are a lot of good things still going on. However, there is still a problem. For the viewer, YouTube is the land of plenty but not so much for the artist. The music industry earns 20 times as much for every Spotify user as it does from YouTube. Of the Top Ten videos ever watched on YouTube, nine are music clips. In 2015 there were 27 billion music videos streamed in the UK but only £24 million was paid to labels and artists in royalties, which is less than was generated by the sale of vinyl records.

The specific problem is the way in which the large tech companies are interpreting the “safe harbour” provisions in EU legislation, which they take to mean that they are granted immunity from liability for copyright of anything that appears on their sites. That gives them free material but without an adequate stipend for the artists. The European Commission is in the process of clarifying the law. We could probably set our own rules as a member of the EU and we can, and should, certainly do so when we leave.

It is hard to fathom why the British should have proved to be good at writing three-minute pop songs to conquer the world, but it is true. It will not last without the incentives. Pop stars are not just artists; they are entrepreneurs too. The streaming algorithms that govern playlists have an inbuilt tendency to favour the established American artist over the new British act. This could be a summer of love, as long as the music industry sees off the algorithm and blues.