"if an organiser only has to pay an artist 50 pounds,he wont put the same effort into promotion as if he has to pay 400 pounds"

Very true. But in London, the most expensive place to live in the whole world ever, the idea of regularly paying any musician anything even approaching £400 is simply a non-starter. (In my experience anyway. I'd be happy to be hear otherwise...)

You can find a room in the middle of nowhere for free – sometimes – but usually the lowest you can get away with paying for room hire is £50. (You may or may not have a PA and a soundman to pay for too.) I don't like charging more than £6 a ticket, I prefer £5, and I like to offer a concessions rate of, say, £4 or £3. You can cover your room hire cost, if it's as cheap as £50, quite easily on those terms: after 10 people come in, you can start paying the musician(s). That's the kind of model I vastly prefer.

But if you have to factor in a £200+ fee to a musician then that model is simply unworkable. You have to start doing things like paying that musician but not anyone else on the bill. Or electing to just have that one musician for the night and noone else. Or upping the ticket price. None of which I feel comfortable doing. Which I feel is my prerogative.