Westminster Hall

Thursday 13th February 2014 Westminster Hall

Thursday 13 February 2014

[Mr Joe Benton in the Chair]

Supporting the Creative Economy

Thursday 13th February 2014 Westminster Hall

[Relevant documents: Third Report of the Culture, Media and Sport Committee, Supporting the Creative Economy, HC 674, and the Government Response, HC 945.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Evennett.)

13:30

[Mr John Whittingdale (Maldon) (Con)]

Thank you, Mr Benton, for this opportunity to debate the Select Committee on Culture, Media and Sport report, “Supporting the Creative Economy”. It was the result of a major inquiry, in which we took a great deal of evidence and came up with a wide range of conclusions. There has been a lot of interest in some of our proposals across the industry and the House. I thank Elizabeth Flood, the Committee’s principal Clerk, and all the staff for their hard work on this inquiry and others.

We are debating a great success story. There is no question but that in this country we are very good at creative industries. Since the report was published, the Department for Culture, Media and Sport has published the latest figures, which show that the creative industries are worth £71.5 billion to the UK economy and generate around 1.68 million jobs. They are a substantial part of our economic activity and are growing steadily. We are achieving ever greater success.

Those bare figures conceal remarkable achievements. In almost every sector of the creative industries that we have examined, there have been fantastic successes. The British film industry continued to produce some great films, and we have some of the greatest talent in the world, but we have also been remarkably successful in attracting highly mobile international investment to the UK to make films.

[Mr Jim Cunningham (Coventry South) (Lab)]

I welcome the Committee’s report. Did the hon. Gentleman look at the arts and the financial contribution that they make to this country? He mentioned the film industry, but could he say something about the broader remit of the arts?

[Mr Whittingdale]

I am happy to, because I agree that the arts make a substantial contribution, not just to this country’s cultural life, but to our economic life, and provide an important economic stimulus. We are well aware of that, which is why, in a few weeks, the Committee will conduct an inquiry into arts funding in the UK, and will discuss with the Arts Council its priorities and how to ensure that the benefits are felt throughout the UK. Some hon. Members feel strongly about that, and it is very much a component of the creative economy’s success.

I have spoken a little about film, but the music industry is another enormous success for this country. The biggest selling artist last year was British: the band, One Direction. I may not have added to their album sales, but that is a huge success, which comes on top of another remarkable achievement: in five of the last six years, the best-selling album in the world has been by a British artist. This country continues to produce enormously successful artists, and it is worth noting that the music industry does that without any financial subsidy from the public.

The electronic games industry is another hugely important contributor to our economy. Some of the best-known games, including “Tomb Raider”, “Grand Theft Auto” and “Football Manager”, are British products. It is important that we continue to be a centre for the electronic games industry; that is another issue that I want to talk about.

I went to the MIPTV annual market in Cannes, where international buyers go to purchase TV programmes. There is no question but that the UK dominates that market. BBC Worldwide has a substantial presence at MIPTV, but independent production companies such as Shed Productions, Shine TV and All3Media, are also hugely successful at selling British products across the world. Then there are the fashion and design industries. Britain is in the lead in all those industries.

We started our inquiry on the basis that this country is remarkably good at the creative industries. Is there more that the Government could do to support those industries? Are there risks attached to that success? In each case we came up with recommendations. We started our inquiry on the back of the most extraordinary showcase for British talent—the 2012 Olympic and Paralympic games in London, where British talent, not only sporting but creative, was on display. That creative talent was on display not only in the Cultural Olympiad but in the games themselves, in the extraordinary opening ceremony by Danny Boyle, which gave us an opportunity to exhibit British creative talent to the world.

However, we were concerned to hear, when we received evidence, that some of the companies that played a key role in those events have not been able to take advantage by using that fact in their marketing campaigns. I am sure that the Minister will refer to the supplier recognition scheme, which is a huge step forward that gives companies an opportunity to market themselves on the back of their contribution to the Olympics, but we received evidence from the Professional Lighting and Sound Association, the trade body that represents the professional entertainment technology industry, which remains disappointed that it has not been able to publicise its involvement in the London 2012 games. PLASA gave as an example the fact that some of its members were responsible for the appearance of those rings out of the fire, for the 70,500 LED tablets that were placed on every single seat in the stadium ahead of the opening ceremony, and for the industrial chimneys that rose out of the ground. All of those were iconic moments in the opening ceremony, and the companies should have had an opportunity to make it clear that they were responsible. We still hope that the Government will reconsider the supplier recognition scheme and find a way to allow companies in such fields as audio, video and audiovisual equipment to promote their success in contributing to the games.

A key contributor to the success of the British creative industries is the tax credits offered by the Treasury, for which we give full credit both to this Government and the previous one. The film tax credit has been hugely successful. I understand that last year it generated almost £900 million in international investment in this country through just 37 feature films. I will always remember visiting Paramount Pictures to see the trailer for “World War Z”. There was astonishment on the faces of Committee members, particularly Scottish members, when we discovered that, although the film ostensibly showed Philadelphia being overcome by waves of zombies, it was not Philadelphia but Glasgow. Since then, several members of the Committee have been to a screening of “Jack Ryan: Shadow Recruit”, which is currently on at cinemas. That film is set in America and Moscow, but it was filmed in this country, mainly in London but also in a number of other places; locations included Barnet, Battersea, Islington, Tower Hamlets, Birkenhead, Liverpool, Hatfield, and a power station in Nottinghamshire.

[Tracey Crouch (Chatham and Aylesford) (Con)]

My hon. Friend has missed out the important role of Chatham, which has become a film set, having recently produced “Les Misérables” and various other vast-selling products. Is that not the tax regime at its best, bringing real benefit to local communities?

[Mr Whittingdale]

My hon. Friend is completely right. I apologise for not mentioning Chatham, and I am sure that the fact that it was chosen for “Les Misérables” is not a reflection on her constituents. There is no question but that every part of the country benefits from that kind of international investment. We have more to look forward to: “Mission: Impossible 5” will start filming in Britain soon, as will part of the next episode of “Star Wars”.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)]

On “Les Misérables”, I hope that my hon. Friend has noted that the stage production has brought in something north of £1 billion in revenue. At some point, he should acknowledge the important role of British theatre in our creative industries.

[Mr Whittingdale]

The Minister is entirely right. I am pleased that the Government are talking about extending the tax credit not only, as already proposed, to high-end television drama, animation and electronic games, but potentially to regional theatre, because theatre is the breeding ground for many of our greatest talents.

Still on film success, we talked to the film companies and asked why they came to make films in this country. A lot was to do with the extraordinary talent that we have here—the skills—but they also said that, without question, had the tax credit not been in place, they would not have been able to come here.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Might one of the other reasons film companies come here be our heritage? For instance, “Harry Potter” was filmed up in Northumberland at beautiful Alnwick castle. Looking around the world, or trying to build a set such as Alnwick, would have cost a fortune. Does he agree that that also can be a reason for people coming to this country to film?

[Mr Whittingdale]

Of course it is. In particular, historical dramas make use of some of our great heritage assets. There are a large number of reasons why people want to come to Britain to make films, but without the tax credit, they probably would not. We pay tribute to the previous Government for introducing it, and to this Government for continuing it.

I would be interested to hear from the Minister an update on the progress of discussions with the European Union on the introduction of the electronic games tax credit, because that, too, is welcome. The games industry is under pressure, and we have lost some companies already, so it is important for that tax credit to be achieved soon.

In examining the creative industries, we received a lot of evidence about an issue that lies at the absolute heart of their success: intellectual property rights. For a long time, Governments have sought to address some of the problems created by online distribution. In the previous Parliament, the Government passed the Digital Economy Act 2010, which was a valiant attempt to put in place measures to deter online piracy. Unfortunately, it has not come into force.

I will not recap the whole history of what has happened since the Act was passed—the judicial reviews, the arguments and so on. However, the principle behind it is that people who illegally download copyrighted material, and so jeopardise the success of the music, film, television, and, I suspect, in due course, games industries, need to be told that what they are doing is not only illegal, but poses a real threat to the economic viability and success of those industries. It was suggested that that should be done through the dispatch of warning letters. Once people were identified as serial downloaders, their internet protocol addresses should be identified and the internet service providers asked to send letters.

[Andrew Bingham (High Peak) (Con)]

Does my hon. Friend agree that some people download unwittingly—excuse the pun—because the websites all look plausible and completely legal? On the internet, there is no way to distinguish what is legal and illegal on occasions.

[Mr Whittingdale]

My hon. Friend is right. Some of the websites deliberately set out to appear legitimate. They might even make a small charge, although often they are distributing the content for free. Perhaps that would be another advantage of sending letters: it would increase awareness and oblige people to ensure that when they did download, they did so from a legal site, so that the artists and producers concerned received the remuneration due.

Despite the difficulties in enacting the DEA, the recent development of a voluntary agreement is in many ways preferable, if it can be made to work. In America, that is already working well. A voluntary copyright alert programme would involve an agreement between the rights owners and the ISPs that there would be a system through which letters were issued to those identified as illegally downloading. If that can be done voluntarily, that is preferable, and we should get on with that as quickly as possible. The Committee’s report is clear: we prefer a voluntary system, but if agreement cannot be reached, the Government need to stand by to bring into force the provisions of the Digital Economy Act 2010, and to use legislation.

Unfortunately, we were perhaps less optimistic on copyright law. The proposals on the modernisation of copyright law have given rise to huge controversy. The Minister will be only too aware of the concerns expressed right across the creative industries about the dangers of tampering. Copyright law supports the success story that I have described. The enormous economic contribution made to our GDP by the creative industries is possible because copyright law ensures that they receive the reward that they are due. Extending the exemptions on the basis that it might produce extra economic activity and income is dangerous if we do not take account of the risk of widened loopholes jeopardising existing success.

We viewed the Hargreaves report with some concern. When we tried to find out how Professor Hargreaves came up with the figures quoted in his report on the substantial potential benefits of some exceptions, we were concerned at the lack of hard evidence to support those figures, and no account was taken of the risk that widening exceptions poses to the industry’s success. That debate continues, and we await the statutory instruments implementing some of the exceptions. Great concern is still being expressed across the industry about the lack of clarity on some of the proposed exceptions, and on the loopholes that might be created. We are particularly concerned to ensure that Parliament has an opportunity to examine each exception in detail. There should be proper scrutiny.

The private copying exception has caused most concern, because it has the widest effect. No one would argue that transferring a piece of music that one has legally purchased from one device to another should not be permissible. Millions of people do that, and it is nonsense that putting a song on an iPod, for example, technically puts them in breach of copyright law. Legalising private copying, however, has to be done carefully. The Committee took evidence on that, and listened in particular to the concerns expressed by the film industry. Most of the rest of Europe has not applied a private copying exception to audiovisual material. The film industry said that the exception was unnecessary and that, in any case, legal means were already being developed through which consumers who purchased audiovisual material could store it in the cloud, or access it through different devices. The Minister will know that the film industry remains very concerned about the private copying exception. Perhaps he will say a few words on that in his speech.

We also talked to Google, which is responsible for some great successes and huge benefits; it is important to recognise that. The Committee visited the Google campus in east London, which is providing opportunities for start-up firms and app manufacturers to develop. It is at the forefront of the development of technology and making it available to entrepreneurs and small start-up firms. YouTube has been a great success in generating revenues for people who post material on it. More than £1 billion has already been generated in income.

The Committee was concerned about the issue of searching and the direction of people towards illegal download sites. Google has supplied us and, I am sure, other hon. Members present with statistics on how, if someone searches for an artist, most of the results that come up will be legal. Part of the argument is about the fact that Google is citing results of searches in which people simply put in the artist’s name, whereas the music industry points out that if, as well as naming the artist, people use the word “download” or “MP3”, that produces very different results. The latest figures that I have been given show that the proportion of links to infringing sites appearing in the top 10 search results remains roughly the same as before. The latest figure that I was given was 252 out of a possible 400, so 63% of results in the top 10 were illegal download sites.

Google will tell us about the huge number of pages that it takes down when it is notified that they contain copyrighted content being distributed illegally, but the notice refers to a single page, with the result that the music industry has sent more than 50 million notices to Google. Google does take the pages down when notified, but no sooner do they come down than they go up again. A much more sensible recommendation, which the music industry, among others, promotes, is that when a website is the subject of, say, more than 10,000 notices, it should be removed from the front page of search results, and when the figure of 100,000 notices is reached, it should be removed from the first 10 pages. Eventually, if that goes on, it should be blocked in its entirety, on the basis that it plainly consistently makes available copyrighted material illegally.

The Committee was persuaded that there was a very strong case for increasing the penalties for online copyright infringement from two years to 10 years, so that they were of the same severity as those for physical piracy. I know that the Government are looking at that. We were very impressed when we visited the new City of London police’s IP crime unit. That is an encouraging innovation. It is doing impressive work. However, there is a question about its long-term funding. I hope that the Minister can give some indication of whether the Government see it as a permanent part of our policing, with appropriate funding.

I now come to the final area that I want to discuss. I am sorry that the right hon. Member for Exeter (Mr Bradshaw) is not present, because he felt very strongly about it. I understand that the severe flooding in the west country prevents him from being with us. I am referring to education. It is obviously right that the Government focus on the promotion of the so-called STEM subjects—science, technology, engineering and maths—but, as the Minister knows, the debate is about whether STEM should in fact be STEAM. In other words, arts should be part of the core curriculum. I believe that the success of our creative industries is an ample demonstration of why it is so much in our interests to make arts a core part of the curriculum—so that this country can continue to produce the extraordinary talent that lies behind the success of all the industries that I have talked about.

I shall not go on talking any longer. I thank the Minister for the response that he has already given, but there are areas where we feel that he could go further, and I hope that he might be willing to do so later this afternoon.

13:54

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

It is a pleasure to follow the Chairman of the Select Committee, the hon. Member for Maldon (Mr Whittingdale). This is an excellent report. I welcome the Select Committee’s investigation of how we should best support our creative economy. The hon. Gentleman made the case very well in his opening speech.

The UK’s creative industries are known worldwide for their cultural capacity to shape, influence and inspire. As the hon. Gentleman covered in detail, the success of the British film industry and the choice of this country as a location is a great example of that, as is the British fashion industry. Our fashion designers dominate the catwalks of London, Paris, New York and Milan; British musicians, songwriters and composers top the charts and dominate the international airwaves; and British architects and designers shape skylines and create beauty all around the world. That is important for not just our international cultural presence but the benefits to our economy.

As we have heard, Britain’s creative industries account for more than 1.5 million jobs and contribute more than £70 billion to the economy. That should be all the reason we need to know why it is imperative that we do everything possible within our power to support such an increasingly crucial sector, and it is why the report is right to address issues that affect it, such as the protection of intellectual property, tax reliefs and education and skills.

I chair the all-party group on art, craft and design in education, which was set up to champion high-quality and inclusive arts education in our schools. I therefore particularly welcome the Select Committee’s recommendation, as well as the Secretary of State’s intervention during her speech at the British Museum last month, for STEM—the focus on science, technology, engineering and mathematics—to be expanded to STEAM, as we just heard from the Chair of the Select Committee, to improve the status of arts education in our schools. That recommendation must be supported, especially when there are concerns that changes being implemented by the Department for Education—such as those to discounting codes and the exclusion of creative subjects in the gold-standard English baccalaureate performance benchmark—will turn off the talent tap for our creative industries, so undermining their long-term development.

If we are to support and expand our creative industries, that must be through not just reforms to public funding and protection of intellectual property, as the report calls for, but investment in the future work force by ensuring that children not only have access to high-quality, inclusive arts education, but are positively encouraged and supported to develop their skills.

[Damian Collins (Folkestone and Hythe) (Con)]

It is said that many students who attend private schools have the opportunity to develop greatly their artistic talent and flair through their longer school day and study periods. Does the hon. Lady agree with the Secretary of State for Education that we should consider extending the school day to give more young people the opportunity to study the arts and creativity as part of their everyday studies?

[Mrs Hodgson]

I will come on to the difference between the state and the independent sector later in my speech, but I agree that there is room to extend the school day from, say, 8 am until 6 pm, especially with regard to child care. During that extra time, children can obviously be doing all the extra-curricular stuff that is available in the independent sector. That would be ideal, but the issue is how that is funded and who pays. We know that some schools currently offer extra-curricular lessons in music and other things, but they must be paid for. The divide is between who can and who cannot pay. Nevertheless, we should definitely debate and explore that idea further.

Although the traditional subjects of English, maths and the sciences are and will always be important, so that young people are numerically and scientifically literate in the 21st century, it is also important that young people are creatively and culturally literate. As we have heard, the gaming industry is a perfect example of where both the traditional and the creative can be merged to create competitively skilled employees.

At this point, I should declare an indirect interest as the mother of a young man currently at Teesside university studying computer games art, having done precursor courses at Gateshead college. According to figures cited in the Select Committee’s report, the boxed and digital UK video game retail market was worth almost £3 billion in 2011, so I hope that he is going into a thriving industry and will get a job after all his studies.

Web-based games such as “Moshi Monsters” and “RuneScape” have more than 100 million registered users between them. With two out of every three households playing video games—a number that I am sure will keep rising as they become an ever more pervasive feature of smartphones—it is an industry booming like never before, and it is crucial that our education system is geared towards creating the pioneers of tomorrow, including my son, I hope.

It is right that future games developers should be competent in maths and the sciences, and I welcome the introduction of computing to the English baccalaureate, to allow young people to become literate in coding from an earlier age, but we must remember the important creative aspects of the gaming industry such as drawing and design skills. Hence the title of my son’s course: games art. Those skills have created such British successes as “LittleBigPlanet”, “Tomb Raider” and “Grand Theft Audio”, as we heard from the Chairman of the Select Committee. The most recent edition of “Grand Theft Auto” has sold more than 30 million copies worldwide.

The value of creative subjects lies not only directly in supporting the creative industries, but in imparting the soft skills that benefit young people for employment in other sectors. That is precisely what we mean by a rounded education. As Josie Barnard, senior lecturer in creative writing at Middlesex university, said in evidence to the Select Committee:

“Students who are taught creative writing are taught creative thinking.”

That could be said of all creative subjects, from drama and art to music, all of which involve problem solving and the importance of practice, providing young people with the ability and confidence to overcome situations in the workplace creatively.

Despite all that, reforms implemented by the Department for Education over the past three years have made access to creative subjects harder for young people. According to the Cultural Learning Alliance, the impact of those changes is already being felt, with art GCSE take-up declining by 14% between 2010 and 2013, while geography take-up has risen by 15%. We cannot fail to be cognisant of the effects that the reforms are having.

One of those reforms involves changes to discounting codes, so that subjects such as fine art and photography will be credited as just one GCSE rather than two in the school league tables, even though they have different teaching pathways and practices and distinct teacher specialisms. How is that fair, when pupils are encouraged to take multiple sciences, humanities or languages, with good reason? We would find it absurd to restrict a child by discounting French and German or chemistry and physics, so why do we accept discrimination against creative subjects?

The impact of that discrimination is that schools are pressured to deter or even prevent students from doing similar creative subjects, so as not to effect their league table status. Alongside that has been the introduction of the English baccalaureate as the gold standard performance measure for schools, which has further compounded the focus on the traditional subjects of maths, science and geography, rather than on the creative subjects, to maintain or increase ranking in the school league tables.

In a recent letter to Rachel Payne, senior lecturer in education and media at Oxford Brookes university, the Department for Education stated that it

“recognises that the arts form an integral part of children’s development and believes that every child should experience a high-quality arts education throughout their time at school”.

That prompts the question: why is the Department knowingly and deliberately undermining creativity in our schools? That is not an unsubstantiated criticism. Recent research by Ipsos MORI found that 27% of schools withdrew non-EBacc subjects from their curriculum this academic year, and that art was one of the most commonly withdrawn subjects, at 17%.

Even the Government’s own figures have shown that the take-up of creative subjects decreased in 2012, with design and technology down by 5.1% and art and design down by 2.4% from the previous academic year, while others in the EBacc standard have increased. That decline has rightly drawn criticism from the great and the good of the cultural world. Martin Roth, director of the Victoria and Albert Museum, was recently quoted as saying that

“if subjects such as art, design, music, drama and dance are pushed out of the curriculum, Britain’s creative economy will be destroyed within a generation.”

That is quite a strong statement. Vikki Heywood, chair of the Royal Society of Arts, described the reforms as “half-baked” and warned that they will be detrimental to the potential of our creative industries.

Last November, the inaugural art party conference in Scarborough, organised by Bob and Roberta Smith, was held purely as a reaction to the DFE’s changes. It aimed to promote and celebrate art by providing a forum for discussing the future of art in the UK. That conference brought together organisations such as the National Society for Art and Design in Education, the Art Fund and the Cultural Learning Alliance.

Not only will including art within STEM allow children and young people to gain creative skills, to be dynamic players in the labour market, but it will allow young people from poorer backgrounds to experience the vast array of culture that this country has to offer, and even to have the opportunity to shape our national culture.

I raised this matter in correspondence with the Secretary of State for Culture, Media and Sport late last year, citing concerns that the National Youth Orchestra has been criticised for recruiting extensively from the independent school sector. This brings me to the point made by the hon. Member for Folkestone and Hythe (Damian Collins) some moments ago. This is not a criticism of the National Youth Orchestra, as all it is doing is recruiting the most talented kids, but this is a shocking indictment of the lack of opportunity and encouragement in our education system for involvement and progression in the arts. The independent sector, rightly, values such involvement highly and, of course, funds it.

Of course, this lack of involvement severely reduces diversity in our cultural sector. That was raised recently by Stephen McGann, who spoke about how young people from working class backgrounds struggle to enter the acting profession, owing to a preference for those in the independent sector who have had access to high-quality drama teaching throughout their school lives.

If the Secretary of State for Culture, Media and Sport is not successful in her campaign to change STEM to STEAM in the eyes of the Secretary of State for Education, the trend in downgrading arts education will continue and a two-tier system will be created, where arts and design subjects are seen as inferior to the traditional subjects, particularly in the state sector.

[Damian Collins]

Perhaps the hon. Lady is using too broad a brush. There are many excellent schools in the state sector. I highlight Brockhill Park school for the performing arts, in particular, which is a comprehensive school in my constituency with an outstanding record in the arts and in getting young people passionate and excited about them. There are many great successes across the state sector, still.

[Mrs Hodgson]

I agree. We can all highlight the exceptional state school that is really good at music, drama or dance, but regarding the majority, the figures speak for themselves. These subjects are being dropped, and in the teaching profession numbers are dropping in initial teacher training for arts and drama teachers. We have to look at this long term. In the short term, we will not see any damage, but if this trend continued in the long term, I definitely believe that we would.

If we are to have high-quality, inclusive arts education, we must have highly qualified teachers. However, there are concerns about the numbers of qualified art and design teachers entering the state system, with just 350 initial teacher education places allocated for art and design teachers in this academic year, compared with just short of 600 in 2009, which is much fewer than the vast majority of other subjects. To respond to the hon. Gentleman’s intervention, those figures show the decline. This is further proof that the Government and the Secretary of State for Education are marginalising creativity, because they regard creative subjects as soft and do not value the opportunities that studying these subjects can bring, and that is why I hope that the Minister can assure current and future parents that their child will be taught to a high standard by a professional teacher who knows how to do it, especially in subjects that not only fill their minds but feed their souls.

If we are to maintain our cultural importance around the world and the creative power of UK plc and, in addition, create a diverse cultural sector made up of people from all walks of life—not just as contributors, but as consumers—we must invest in high-quality, inclusive arts education and allow children to find and develop their talents or simply express themselves through the various artistic mediums available. If not, where will we find the next Julie Walters or Idris Elba—not from our state sector?

If we do not give children the opportunities to creatively express themselves, we will end up jeopardising recent growth and the substantial economic input from our creative industries, owing to a weakened and depleted creative labour market and, indeed, lessened patronage of creative works from a generation who have never been inspired.

The creative subjects feed our soul, so reminding us of the creative capacity of humanity. Why do we all love to listen to music, visit art galleries and see a play or a musical, a ballet or an opera? Because they move us in ways that nothing else can and connect us to our deepest emotions. I hope, therefore, that the Secretary of State for Culture, Media and Sport and this excellent Select Committee report prevail over her Cabinet colleagues on the issue and that the Government take seriously the Committee’s many other recommendations.

14:10

[Nigel Adams (Selby and Ainsty) (Con)]

I commend my hon. Friend the Member for Maldon (Mr Whittingdale) on his work as Chair of the Culture, Media and Sport Committee, and on a brilliant and powerful speech on the need for Government to provide adequate support to our creative industries. I shall keep my remarks brief, because many Members want to speak.

Although the UK’s creative industries, as we have heard, enjoy a pre-eminent position in the world, we must not be complacent. For that reason, I welcome many of the recommendations made by the Select Committee in its excellent report. In particular, I welcome suggestions that the Intellectual Property Office should become a more powerful champion for the creative industries and play a greater role in educating consumers on the value of intellectual property. The importance of a strong and secure rights regime to the success of our creative industries should not be underestimated. Where is the incentive, for example, for a songwriter, composer, or software developer to create content if their work can effectively be stolen online?

I note that the Government, in their response to the Committee’s report, provide evidence that many people still remain unsure about the legal status of the sites they access. I agree that that evidence is very clear. In fact, Ofcom commissioned research on copyright infringement that suggested that almost half of all users cannot confidently identify whether the online content that they download, stream or share is legal. In a YouGov survey last year, more than 2,000 UK adults were asked to differentiate illegal websites from legitimate retail sites; more than a third of parents were unable to spot pirate websites for music, film and TV content.

I am delighted that the Prime Minister has shown great interest in the issue and has appointed an IP adviser, my hon. Friend the Member for Hove (Mike Weatherley).

[Mrs Hodgson]

Jolly good man.

[Nigel Adams]

Yes, he is a jolly good chap.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Is he here?

[Nigel Adams]

I cannot spot him in the Chamber today, but I understand that he has a meeting with representatives of the music industry, so I am sure that he is doing great work on our behalf.

There is much important work going on to improve awareness of the importance of IP. I welcome the recent launch of a joint IPO and UK Music game, which educates young people about copyright in a fun and interesting way. I understand that the IPO’s karaoke shower is continuing its live tour of the UK and promoting the importance of IP, and that is very welcome. Through the Alliance for Intellectual Property, the industry has developed a content map, which allows users to check which services are licensed. Signposting and nudging consumers in the right direction is sensible, but we need further action to ensure that our creators are properly rewarded.

Those are all positive steps forward, but education will not tackle illegal content if it is not accompanied by mechanisms to ensure that consumers are able to make the right choices about where to get their content. Earlier this week, I and other colleagues here today were presented with a proposal from PRS for Music for an IP traffic light system for online content. That system would provide consumers with clear and visible indicators that would allow them to determine easily whether a website provided illegal or legal content before they entered the site. The merits of such a system are clear, and importantly, it would tackle the root of the problem, which is consumer confusion, while cutting off the traffic to illegal sites, and the revenues collected from advertising on them. In fact, in a survey by Harris, 91% of online downloaders said that they would welcome the introduction of a traffic light system to aid understanding of which sites were legal.

I encourage technology companies to work more closely with the creative industries to find a way of delivering such a system. The company whiteBULLET, which received a grant from the Intellectual Property Office, has being doing good work in that space, but more support should be encouraged. A signal today from our excellent Minister that he backs the principle behind the traffic light system, along with a commitment to support it going forward, would be welcome.

14:15

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

We are well used to Governments of all colours responding to Select Committee reports by saying that they take issue only with 10 out of 100 of the Committee’s recommendations and agree with the remaining 90. Usually, of course, those are the 90 places in which the report has agreed with the Government in the first place. The Government’s response to this report is firmly in that mould, and there is a general feeling on the Committee that it is perhaps the most disappointing response we have yet had from the Government to a major report. I do not blame the Minister for that; we have love and respect for him.

On all fronts, the response shows a determination to plough on regardless. All too often, such a determination is justified loosely by a wry reference to a previous Administration, either because the recommendation has cropped up before but was not, for whatever reason, pursued by the previous Government—that is the case with the sensible proposal to equalise penalties for copyright theft in the online and physical worlds—or because, as in the case of the private copying exception, the recommendation follows a course that was endorsed before 2010, but the then Government did not get round to implementing the proposal.

The impression from the response is that it is the first time in the history of the coalition Government that the previous Labour Government have been accorded the accolade of omniscience. It appears, for the first time, that we could do no policy wrong. But of course what is right or wrong is what suits the present, not the past, not least when digital technology and services are moving so quickly that they can often render a policy redundant, harmful or both.

In my short contribution I want to focus on two areas that are central to our inquiry: intellectual property and copyright, and education, which is so important to the strength of the industries. That strength is recognised worldwide. Just a fortnight ago I attended a discussion with the CBI and its German counterpart, the Federation of German Industries, which was held at the instigation of the German embassy. The federation’s director-general, Dr Markus Kerber, made the point that although Britain might be envious of Germany’s car makers, its household electricals manufacturing and its engineering prowess in general, we should realise that there is the same envy and appreciation in Germany of our creative industries—music, film, video games, and general digital and online UK consumer and business services. Our report cites a legion of statistics about how important the creative industries are to the economy, and ahead of this debate such statistics have been coming in thick and fast. I will not repeat them all, for lack of time.

Central to the submissions from the creative industries, during the inquiry and since, is the importance of copyright and of having a strong framework of intellectual property law and enforcement. That is the bedrock on which those industries’ success stands, and if we tinker with the framework rashly, we will weaken those foundations. Having heard the evidence, our Committee, in the report, takes issue with the direction of travel of the Hargreaves review in general—quite frankly, its quantification of the so-called benefits of relaxing copyright law simply vanishes under the slightest scrutiny—and questions the effect of the proposed copyright exceptions in particular.

In our conclusions, we agree with the creative industries that too often the changes seem to be driven by the commercial interests of digital technology giants. They were invariably American, and chief among them was Google. That company, as we have heard from the Chairman of the Committee, clearly does some good works. It has opened up the worldwide web, through YouTube in particular, an outlet that is much used by new talent. However, we must remember that like all those American digital giants, it goes to extraordinary lengths to avoid UK taxes, and indeed those of its own country and every other.

In their response, the Government highlighted the role of the Under-Secretary of State for Intellectual Property, Lord Younger, as the UK’s IP champion and guardian of our creative interests. The hon. Member for Selby and Ainsty (Nigel Adams) referred to the Prime Minister’s new IP tsar—that is my description—the hon. Member for Hove (Mike Weatherley). There is still no Liberal Democrat even on the fringes of the Department for Culture, Media and Sport.

It is worth repeating what the Minister, Viscount Younger, told us in his evidence. As stated in paragraph 52 of our report, he said:

“Google is one of several search engines, and I am very aware of their power, put it that way. I am also very aware, I think, that they have access, for whatever reason, to higher levels than me in No. 10”.

The industry’s concern about that influence does not stop at our shores. I will quote from a recent submission to us from the BPI, which represents the music industry. It is worried not only about the Government pressing ahead with their copyright exceptions in the UK, but Europe doing so under the EU’s copyright directive. It said:

“The UK has, for reasons the BPI doesn’t fully understand, achieved for itself a reputation in Europe as being hostile to copyright. This is despite the UK being one of the European economies that gains most from the creation of copyright content and has most to lose from hostile attacks on the copyright regime.”

It is time for the UK Government to act to dispel that reputation, and I hope the Minister will give us some comfort when he responds.

I will conclude with a few words about education, skills and training. On the education front, since 2010, there has been a history of repeated corrective actions. Whenever a light bulb goes off in the Secretary of State for Education’s head when he is in the bath, humming “Jerusalem” and mentally chiselling his epitaph for when he is in the Elysian fields, we have to take action to try to correct what he is doing. I will give a recent example. It has not had much coverage here, but it was important to those involved. It involves Japanese, the language of manga comics and of “My Neighbor Totoro”, which is perhaps the finest and most enchanting children’s animation of recent times.

You may be surprised, Mr Benton, to learn that quite a number of primary schools around the country teach Japanese. They tend to be clustered around factories, such as Toyota in Derby, where there is a lot of Japanese-related employment. Those schools do not have to teach Japanese. It is not statutory, but voluntary, and they should be commended for teaching any language. However, that was not good enough for our Secretary of State for Education, who is always on manoeuvres. Last year, he published a list of recommended languages for those primary schools. It included, of course, the ancients, German and French, but it did not include Japanese, so at a stroke, those schools felt that they were being discouraged from teaching Japanese. There was also the small matter of including Mandarin, and the resulting diplomatic incident. After concerted pressure, the Secretary of State was forced to change his mind. He may zig and occasionally zag, but he often returns to his same true course; it is veritably an exercise in constant vigilance.

The creative industries’ concern starts with the Secretary of State’s focus on the STEM subjects; he gives little place to the arts. After much concerted campaigning, the Government changed some of the plans for the curriculum. There have been changes to the EBacc, but the continuing concern is that schools will still encourage pupils to opt for what they believe they are being measured on most strongly, and that de facto choice is being driven out of the curriculum, leading to an ongoing downgrading, as we have heard, of the arts, design and technology of computing in the state curriculum, but not the private sector. The industry fears that that will lead to further narrowing of the social background of those in our creative industries, making it more dominant in the products of some of our excellent private schools.

I urge the Minister and the Secretary of State for Culture, Media and Sport to join us in our eternal vigil, and to give us comfort on the arguments that have been forcefully made on the importance of maintaining a robust, strong copyright framework, and of enforcement, which have been the bedrock of the success of our creative industries.

14:24

[Angie Bray (Ealing Central and Acton) (Con)]

The debate is important. It is clear that we need this opportunity to discuss the Government’s response to the Select Committee’s report on the shape of the creative industries in the UK. Our recommendations focus on how we can harness our extraordinary success and growth in the field, while ensuring that that welcome development is not compromised by any failure to tackle crucial issues such as copyright infringement. The UK has cemented its reputation in recent years as a leading light in the creative world, a place where talent in the creative industries is nurtured and allowed to develop and thrive, backed up by wide-ranging financial support and a sympathetic tax system. As a result, we are a destination on the film-maker’s map. We are a place to go to make films, where a director can come from abroad with the smallest of crews, because he or she can call on superb local technical talent to direct and produce, and where he or she can source some of the finest acting and musical talent. All that creative skill, know-how and nous boosts the Treasury’s coffers by nearly £40 billion a year.

I am lucky and proud to have a fantastic example of the recent renewed success of our creative economy on my doorstep in Ealing studios, the world’s best known and oldest continuously running film production studios. They showcase great British talent with, among other things, some of the “Downton Abbey” sets and the stunning Imaginarium studios, which use performance capture technology under the direction of one of our best exports, Andy Serkis. The Chancellor of the Exchequer recently paid a visit to see for himself the success story sitting at the heart of Ealing. He was keen to find out that the view of what the Treasury is doing is positive, and it is. The message that he got was that the film tax relief, the extension of which he announced in the autumn statement, is turning the UK into one of the most popular film locations.

The Select Committee had in mind the question of what more might be done when we took the fascinating evidence sessions for our report on the creative economy. We carried out work here in London and on our Committee trip to the United States. The aim throughout was to get to the bottom of how we might best protect the livelihoods of the people and businesses that make such a massive contribution to our economy, and how we might help them to grow still further.

Several of the issues that we raised in our report stand out as being particularly important for the growth of our creative industries. The most significant, as other hon. Members have said, is the need to stand up for intellectual property rights in an ever-changing and increasingly challenging environment. The modern internet dictates most people’s daily movements, and it is all about accessing as much information as possible and sharing it as easily as possible. If proper protections are not put in place for those who create, we will not get much more creation. As those protections get weaker, the chances of proper recompense diminish, which is hardly an incentive to carry on creating. A critical balance must be found and maintained between free access and property rights, but the Government’s feedback on our report is not encouraging on that point.

That difficult subject provided the basis of our discussions when we visited film studios in Los Angeles, which are also battling with issues relating to copying and piracy. Whenever technology moves on, piracy moves with it, and it is always a problem. Creators need certainty that the Government will protect the principle that the right people must be rewarded properly. The danger, as I think is apparent in the Government’s response, is that standards may slip. For instance, when we met the chief executive of Fox, he spoke about his concern over plans to legalise the copying of audio-visual material on to other formats, which is illegal at the moment but everyone does it. Organisations such as Fox are well aware of that, but they choose to do very little about it, essentially because it is too difficult. He underlined the point that any change in the law that recognises the right to copy would be a slippery slope. That law may be rarely applied, but it serves an important purpose in limiting abuse. Meanwhile, he and others are working on legal mechanisms that would allow copying on to different formats but would still allow due financial reward for the creators. Unfortunately, the Government’s response suggests that they have no intention of listening to that message.

The name that always crops up in debates such as this is Google, as we have heard today. I wonder whether there is anyone here who does not spend a great deal of their time using Google to find any amount of easy-to-access information. There is a darker side, however, which is a major concern to those who worry about intellectual property rights. In providing easy-to-access information for nothing, Google’s search engine can take users through to sites that breach copyright regulations. Google told us that, wherever possible, it takes such offending sites down. It is hampered, however, by the many millions of pages that must be trawled through. The BPI alone sends Google well in excess of 2 million notices per month relating to individual pages on sites guilty of copyright infringement. Again, Google says that in many cases the pages are contained on sites that otherwise host legal content, making it difficult to take action. My view and that of my colleagues on the Select Committee is that that is a pretty flimsy excuse. It is not beyond the wit of Google and its engineers to devise proper solutions. It can certainly afford to do so.

[Helen Goodman (Bishop Auckland) (Lab)]

The hon. Lady makes a good point. When sites are found by the courts to be providing material that has not been paid for, Google is able to take action. Does that not demonstrate that it has the technological capacity to which she is referring?

[Angie Bray]

The hon. Lady makes a reasonable point, and I tend to agree with her.

There are many ways in which to provide a balance to help everyone. The Hargreaves report recommended the establishment of a digital copyright exchange, which got expanded into a copyright hub, set up in July 2013. The key point about it is that anyone may access it online to find out anything about the complexities of copyright and about who owns what rights. The idea was also to make licensing arrangements easier with a one-stop shop.

Our Committee has made plain its firm support for the establishment of a global repertoire database, based in the UK, making us a global centre for copyright exchanges. We remain of the view, however, that participation in a copyright exchange should preferably be voluntary.

It would be childish of me not to mention some areas in which the Government are showing a remarkable and positive lead in promoting and nurturing our home-grown creative industries. As I said earlier, the Chancellor has demonstrated his commitment and delighted the film and vision-effects industries with another dollop of tax relief, meaning that big-budget productions will get the same 25% tax relief that smaller firms already enjoy for the first £20 million that they spend. He has also widened the criteria for those who can apply for the relief.

All that is a huge encouragement to film makers to make their movies in the UK, thereby investing often considerable sums here. It is clear that such relief easily more than pays for itself. Other beneficiaries of the new points system, which will adjudicate the recipients, will be those who work in special and visual effects, again where the UK excels. We look forward to the Government’s introducing video games tax relief as soon as possible as well.

By the way, an interesting suggestion was put to us by Fox as a way of illustrating the economic value to countries and local communities of providing locations for film production. The idea would be to include in the opening credits of films some brief information about the economic benefits and job opportunities as a consequence of the film being made in a given location.

The Committee has expressed concerns, as we have heard repeatedly this afternoon, about the downgrading of arts subjects in the curriculum, although the Government have responded by stating that a key measurement of a school’s performance will continue to include art, design and music. I agree with my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who suggested that extending school hours would provide an opportunity for schools, which are perhaps sending children home at 3 o’clock in the afternoon, to introduce more arts, drama and music.

I put on record that one of my local schools, Twyford, has an excellent record in music. Indeed, I saw some of its members playing with the English Chamber Orchestra only last night. Some state schools still take arts and music seriously, but I want to see longer hours meaning that there is more opportunity, because we have to widen such opportunities. I have noticed recently that people have noted the fact that so many public school people are becoming the big names as actors and actresses, because they get the drama opportunities.

[Mrs Hodgson]

As I said earlier, I agree, but my concern is the funding for all the extra-curricular lessons and opportunities. Some of the necessary items, such as a musical instrument, are outside the reach of a lot of children. What solutions does the hon. Lady suggest to ensure equality, so that all children get those opportunities?

[Angie Bray]

I can assure the hon. Lady that last night all the children playing in the orchestra had their violins and cellos with them. Obviously, there must be access to musical instruments, and in the case of Twyford, there certainly is. We need to work that out. First, we need everyone to agree that we are going to have those longer hours. We must then ensure that we make the best use of them to build the skills base.

[Mr Vaizey]

Surely my hon. Friend, in welcoming many of the Government’s initiatives, will welcome the funding of music education by the Secretary of State for Education. He ring-fenced £170 million for music education. He has also provided financial support for the national plan for cultural education.

[Angie Bray]

I certainly do. I hope that music money will be spent wisely because, as someone who studied music, I am keen to ensure that nobody loses the opportunity to build their skills base, which is important for the country.

[Mrs Hodgson]

Does the hon. Lady share my concern about the discount codes? Although children might still be allowed to take creative GCSE subjects, some schools may have a perverse incentive to deter children from taking multiple GCSEs in creative subjects because they are discounted on the league tables.

[Angie Bray]

I am most concerned to ensure that we make full use of those longer hours for the arts.

Our report welcomes the greater focus on computing in schools as part of the digital age. There is no doubt that our video games and special effects industries will flourish even more with a new generation of creatives who have the highest level of IT and programming skills. We have a number of universities that are building a global reputation for media production, including Bournemouth university and the well-thought-of course at my local university of West London. We were given a strong impression on our trip to Los Angeles that, tax relief aside, the UK is such an appealing location for film making because the skills base is already available here. We need to build on that success story.

14:37

[Kerry McCarthy (Bristol East) (Lab)]

As ever, it is a pleasure to see you in the Chair, Mr Benton. I congratulate the Committee on its excellent and timely report. The Chair of the Committee has given a thorough account of the many issues covered in the report. I apologise in advance for focusing, perhaps in tedious detail, on one specific issue, but I think it is important to get my views on the record. The private copying exception, which the Government are due to introduce soon, has already been mentioned by a couple of speakers. The exception remains a considerable concern to musicians and other performers working in the creative industries, but it has not been much discussed in the Commons; it has been discussed more in the other place. As a result of the Committee’s findings, I hope that there might be a change from the draft version presented for technical review last year, as there will be no opportunity to improve the exception once it is introduced under the affirmative procedure.

The Committee adopts the Department’s definition of the creative industries:

“those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”.

In some circles, “intellectual property” has almost become a dirty word. There are people who evangelise that content ought to be freely available to anyone who wants to listen to it. Why should true music lovers have to pay for music? That is fine for consumers, but it is not so good for people who have expended time, effort and money to produce that work. I have always been baffled that people do not equate someone’s labour and input into artistic work with labour, time and money spent on producing something more tangible and less easily shared. IP and copyright are important. They allow musicians and artists to derive an income from their creativity and provide the basis for investment in one of the fastest-growing sectors of the economy. The CBI forecasts that the industry will play an even bigger role in our economy in the coming years.

The current working environment in the entertainment industry is one of worsening levels of pay, or indeed no pay at all, for many actors, musicians and writers. Research by the Musicians Union demonstrates that more than half of professional musicians work for less than £20,000 a year and that 60% have worked for free over the past year. Equity’s most recent survey of members found that 9.6% earn nothing from their work in the industry and more than 69% earn either nothing or less than £10,000 a year.

The Performers Alliance all-party group published a report late last year, and I declare an interest as its chair. “Work Not Play” sets out much more extensively than I can today the current state of play and the appallingly low pay in the industry. It is vital for us to get a grip on the situation, so that work in the sector will not become the preserve of the amateur, or those who are independently funded or from privileged backgrounds. It is also vital to the future of new music and drama that artists should be able to survive financially, and build sustainable careers.

In the environment that I have described, the loss of income from the right to be compensated for the copying of one’s work is significant. Artists are increasingly dependent on micro-payments from collective licensing agreements, and that is likely to increase. A few hundred extra pounds generated under a fair compensation scheme for format shifting would be significant for an individual musician or performer. The Government will argue that account is already taken of that in the purchase price, but the Committee was not convinced that a facility for private copying was factored into the purchase price either of music or of devices to store, play or copy it.

The introduction of an exception without fair compensation would leave UK artists worse off than their counterparts in 25 other EU countries. All 25 EU countries that have introduced private copying exceptions have also included fair compensation to rights holders by way of a small levy on certain hardware products that allow copying. Those countries have introduced exceptions to copyright granted under the European copyright directive, because they have decided, in interpreting the directive, that copying would result in economic harm to creators; so why is the UK, which has by far the biggest music scene of all EU countries, taking a different view, as flagged up by my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly)? What discussions has the Minister had with his EU counterparts about how the UK proposals will fit into the framework being set by the other 25 countries?

A process of reform of the levy system across Europe, which compensates creators for private copying of their work, is currently under way, and I fear that the UK proposals have the potential to undermine that. I understand that a legal opinion on how the private copying compensation system works in EU member states is likely to be given days before the measure is expected to come into force in the UK, although the Government currently have no plans to delay implementation. Have the Government received representations from UK collecting societies such as PPL, for British musicians, and the British Equity Collecting Society, for actors, which collect revenues from private copying levies in other European countries that operate such systems? I am concerned that what is happening is likely to put the relationship under strain, especially at a time when other European countries are already questioning the lack of reciprocity with the UK on the collection of levy payments.

Creators feel strongly that they should benefit from income streams to which their work gives value, when so much of the income generated by MP3 players, cloud storage and so on is derived from the value that consumers see in the music and films they hold on them. Research by UK Music shows that consumers ascribe between 32% and 53% of the value of an MP3 player to its ability to copy music. There is a need for balance between protecting creators’ rights and not placing inhibitions on innovation or on companies and technologies. People who work in the industry think that the balance has gone too far towards the technology industries. In her evidence to the Committee, Alison Wenham, chief executive of the Association of Independent Music, said:

“This is an opportunity to license so that the value that is created between industries can be shared and there is a balance of interests. At the moment what we are seeing is a race to the technology industries taking the value from the content industries, which would be a disaster for this country’s creativity at its root.”

It would be good to hear from the Minister why the Government are not taking the opportunity to compensate. I know from previous answers to written and oral questions that the Government’s argument is that private copying is factored into the price charged at the point of sale, that the exception is narrowly defined, and that economic harm would be minimal. The Minister nods, so I expect that I shall hear that again today when he makes his response. In their response to the Committee inquiry, the Government said that the proposed private copying exception will be the narrowest in Europe, but they have not provided sufficient evidence to support that. I asked them in a written question last year to substantiate that claim, and the answer referred to an out-of-date report more than six years old, which suggested that only two countries have wider exceptions, while the scheme in other EU countries was similar to that proposed for the UK.

That was taken up in a debate in the other place in December. The Minister with responsibility for intellectual property, Viscount Younger of Leckie, wrote to participants in the debate following up on points that he did not have time to answer, and it seems from that letter that the Government intend to make the narrowest exception. However, the draft exception, which was open to technical review last summer, was as wide as most European exceptions. If the exception is not seen before it is laid before the House, there are concerns about whether the intention to have a narrow exception will actually match the wording of the legislation. Will the Minister commit to provide greater clarity to rights holders before legislation is published? That is particularly true of whether the exception will cover cloud services.

It was encouraging to read in the Government’s response to the Committee’s investigation that the private exception will not now cover cloud services. I presume that the Government were persuaded by the Committee’s findings and are keen to address the Committee’s serious concerns, including, for example, that if the exception includes cloud services, it could

“mutate into a new mechanism for illegal file-sharing, such as a cyber locker”

and could make it more difficult to take enforcement action against illegal downloading from the cloud. The Committee also concluded that a private copying exception could harm the development of legal, subscription-based cloud services, such as UltraViolet and iTunes, which are already emerging from business-to-business deals in which rights holders are properly rewarded.

As with iPods and other devices, musicians and rights holders in film and television feel that they should be able to gain some value from these income streams, because part of the service that they offer consumers, and the money that they generate, is around providing greater convenience when listening to music or playing films. Cloud services are likely to grow in use and are a potential replacement for current methods of storage and delivery. Andy Heath, chair of UK Music, expressed that in strong terms to the Committee when he said that

“Apple and Google are not creating Cloud storage lockers for fun. They are doing it for immense profit. It is another brick in their moneymaking machine, and it is completely immoral for the transfer of the value to occur without any level of compensation.”

In their response to the Committee, the Government said that cloud-based music services such as iTunes Match and Amazon Cloud Player are out of scope, which was much welcomed, but that cloud-based storage is within scope. I and others are not aware of any cloud-based storage facility, which include Dropbox and Google Docs, that does not allow an element of sharing. If it is to be the narrowest exception in Europe, it surely cannot include facilities such as those? If they are included, the concerns raised by the Committee still hold about how that could

“mutate into a new mechanism for illegal file-sharing, such as a cyber locker”

and could have a significant impact on the ability to license value-added services, such as the cloud. A music industry representative said to my office that

“the cloud is currently the biggest technological development happening at the moment…so for the Government to create uncertainty in this area at this point before that market is fully realised and understood is not helpful”.

I appreciate that my points have been rather technical and detailed, so I suspect that I know what the Minister’s response will be today, but I would be pleased if he wrote to me to address some of my concerns in more detail.

14:48

[Damian Collins (Folkestone and Hythe) (Con)]

It always seems when we debate the creative economy that it falls at a good time, because something interesting, exciting or dynamic is always happening. That is particularly true now, as we have the BAFTA film awards, where we anticipate British success, London fashion week, which has gone from strength to strength as one of the major international fashion weeks, and the BRIT awards, where British creativity and excellence is being celebrated. In the nearly four years of this Parliament, we have had many debates on the creative economy and industries. Warnings and concerns have often been raised, some of which have been legitimate and some less so, but we always have these debates in the context of increasing strength, popularity and ingenuity in the creative industries nationally, regionally and locally.

This debate has seen considerable discussion about copyright and IP, so I do not intend to dwell on them too much. Instead, I want to discuss the economic development of the creative industries and, in particular, the role of tax incentives for investment and of clustering, which was considered by the Culture, Media and Sport Committee in its report.

The bedrock of the underlying strength of the UK’s creative industries is Britain’s talent pool and unique heritage, as a recognised leading performer in music, film, drama and arts over many years. Why businesses are coming to this country and investing now has much to do with the tax regime that has been put in place. The production tax credits for film, video games and high-end television drama are bringing production to the UK, and it would not be unfair to say that those industries—in particular, film production and television production—are booming in this country. That is not only good for companies that work in that sector directly, but for the great infrastructure—the great web of businesses—that relies on that investment. The post-production, including the sound production, for a film shot at Pinewood studios would probably take place in Soho and use the talents of a great number of people in that production process, from technicians to musicians and artists, as well as actors.

[Mr Vaizey]

On that note, will my hon. Friend join me in welcoming the advent of the new Industrial Light & Magic base? ILM is the special effects house that grew out of Lucasfilm and it is setting up its UK base in Soho imminently to coincide with the imminent start of production of “Star Wars”.

[Damian Collins]

The Minister gives an excellent example of the sort of investment that the film industry and production industry are bringing to this country. Of course, as he will be aware, we anticipate success in the film awards this year for “12 Years A Slave”, which of course is a film that Britain can be proud of. It is based on a book published many years ago by Penguin. Writers involved in the film industry are an important part of the talent mix. Whether the writers of original scripts or writers who adapt books that have previously been published, they are all part of the same ecosystem.

When I worked in the adverting industry, I was always impressed that Soho could draw on the talents of such a broad base of people, which is why people from around the world come to be here. A film company seeking to make a big feature film can come to the UK and know that we have the facilities to make it and the talents to complete the job at every level. That is what makes working in the creative industry in the UK so exciting.

The development of creative centres of excellence, not only in London but around the country, is an important part of the ecology of the creative economy and its future success. We do not want our creative industries purely to be centred and located in the traditional centres of excellence in London and the south-east; we want to have a strong network of them right across the country. We can see that happening now. Particularly with the investment in Media City at Salford Quays and projects such as the Sharp Project, Manchester city council has come together with members of the business community to create a hub for creativity in that city. Such developments are helping to make Manchester the fastest growing media city, or creative city, in Europe. In Birmingham, there is an important and growing creative hub and community in Digbeth, and in Belfast, around the Titanic centre and the Titanic quarter, near the old Harland and Wolff shipyards, there is another important centre of the creative economy.

Yesterday, I attended an event focused on the creative industries in my constituency and the rest of east Kent, where we looked at the development of creative and digital clusters around the east Kent coast, particularly in Folkestone, Ramsgate and Canterbury. In my constituency of Folkestone and Hythe, we now have more than 200 businesses that can be considered as part of the creative technology economy, according to the Department for Culture, Media and Sport’s definition of that economy. It is a rapidly growing sector employing a large number of people, and that growth is only accelerating in the scope and range of the tasks that the sector is undertaking, as well as in the number of opportunities for work that exist within the sector.

One of the challenges is how we link together these different centres of excellence—these different hubs and clusters—and how we ensure that we have good links, both through broadband infrastructure and transport infrastructure, that connect the hubs in places such as east Kent to the centres of excellence in Tech City in London and elsewhere.

Sleeping Giant Media is a search engine optimisation and social media marketing campaign company based in Folkestone. A few years ago, it was started from nothing and it now employs more than 20 people. There are many reasons why such a company chooses to locate in Folkestone. The quality of life in Folkestone and the low cost of doing business there will be among them, but Folkestone is less than an hour by high-speed rail from one of the world centres of excellence in the creative economy—Tech City in London—and that is a key reason why those businesses are in Folkestone.

Businesses in Digbeth in Birmingham, working in places such as the Fazeley Studios and the Custard Factory, have a great place to do business and a great community of people to work alongside, but it is their proximity to a major global centre of excellence in London that makes it so attractive to be there.

We can have the physical infrastructure and facilities to support an expanding creative economy. The Select Committee underlines the importance of these hubs and clusters. It was right that the Committee visited silicon valley as part of its study tour, because that is a great example of a successful cluster that has given birth to a number of great companies.

It is interesting that companies such as Facebook and Google have been born out of research laboratories and facilities, not only of universities such as Stanford, but out of precursor companies in that industry, such as Hewlett-Packard and Xerox, the success of which spawned further companies. We hope that in London new businesses will come out of our creative and digital economy as it develops, in turn spawning the creation of further businesses down the line and employing yet more people.

The Chancellor of the Exchequer set out his ambition that London should be the tech hub and creative hub for Europe. We are well on the way to achieving that, if it has not already been achieved. One key aspect of making that possible is attracting businesses, investment and talent. We want to see as many people as possible born in Britain taking advantage of the opportunities to work in such a centre of excellence. We also need to ensure that we can bring in the best talent from around the world. At the moment, the industry is growing apace, but we do not currently have enough people to satisfy all the demand. Therefore, having the right policy on visas that allows the most talented people to work in the UK is a crucial issue facing development.

Another element of that development is ensuring that young people have the skills that they need and the understanding to take part in this growing sector of the economy. The importance of young people’s having the opportunity to develop their creative talents at a young age, when at school, through music and the arts has been discussed in this debate. I do not believe that the Secretary of State for Education’s focus on some core academic subjects in any way undermines that. People need good skills and qualifications in those core subjects to do almost anything that they would seek to do; that is an important part of a good education. There is no reason why creativity and artistic talent and flair cannot form part of the curriculum. Schools can do that. A longer school day will give schools many more options in pursuing that.

There are also uses for such talents in other sectors in the creative industry, particularly for young people who might want to work in the video game sector. We want a nation of young people who not only play video games, which are increasingly made in this country and exported around the world, but know how to build them. That is why bringing computer science into the science curriculum, as an equal science alongside chemistry, physics and biology, is an important step. We need more young people learning computer coding at school, so they know the building blocks of computer programming and the creativity needed to build websites, computer games and animation programmes. That should be an important part of the curriculum.

[Paul Farrelly]

I recently went through GCSE choices with my son and saw first hand how the school is being measured and how it felt that it would be measured in future. Once the subjects of that measurement are prescribed, there is a great limit on choice that drives subjects such as computing out of being an effective choice.

[Damian Collins]

I note the hon. Gentleman’s point, but that is why I said that it is important that computer science is given equal standing and equal weight, alongside other areas of the science curriculum, as part of the core science subjects that young people can study. However, we must also consider what people do a long time before they get to GCSE choices. That is why code clubs in primary schools are important.

I saw Google run one of its code club projects at the Folkestone primary academy school in my constituency, getting primary schoolchildren to learn basic programming techniques, which is something that those of us who are old enough to remember did on BBC Microcomputers and Spectrum computers back in the 1980s, although advances in software render that sort of programming redundant. Teaching coding is being brought back to young children of primary school age. Code clubs can be part of extra-curricular activities, as part of a longer school day, as well as being something that young people can do in evenings out of school.

[Sandra Osborne in the Chair]

In Hackney, with the support of Tech City and businesses in that area, a concerted effort is being made to take coding in particular into the schools that surround the Tech City area, so that young people do not grow up just seeing the new glass buildings and office blocks and understanding that people are working there but never acquiring the skills to take advantage of the jobs that are being created. It is very important that we focus on the educational element of developing talent to work not only on the artistic and creative side of the creative industries, but on the technical side, through coding and programme writing and making.

Another important development that the Government are supporting through the Department for Education is studio schools. In Folkestone, we are about to embark on a project to create a new studio school with a focus on the creative industries, where young people will not only learn subjects linked to the examinations that they will take and the qualifications that they will gain, but do so in conjunction with direct work experience as part of the ordinary school day. Studio schools linked to creative businesses in the towns and cities that they serve are an excellent way to provide that and are an important innovation, alongside having more of an emphasis on creativity and creative skills as part of the school curriculum.

The final point that I want to add to the debate about IP is this. I followed very closely the argument made by the hon. Member for Bristol East (Kerry McCarthy) in the speech before mine. With regard to private copying, we can look at Nick Hornby’s book “High Fidelity” and the film made of it. In some ways, that book and that film celebrate private copying. That is an important part of the story in the book. It is something that everyone has done or certainly people who grew up with records and cassettes have done. Probably everyone in this room has breached copyright law by copying a record on to a cassette or by loading a CD into a computer and copying the contents on to the hard drive. Each time, they are infringing copyright. Some people may consider that once they have purchased an item of music—once they have paid the fee for it—it is theirs to enjoy personally. A change in the law that reflects something that is already commonplace—that people already do—is not necessarily something that we should be frightened of.

I agree with the hon. Lady, though, that when we get to a position where people can share music, in particular, or film or another form of content through the cloud and potentially with a wider audience, they are getting into a remit where they are no longer privately copying but, either intentionally or unintentionally, distributing content. That is a very different matter and something that we must be very careful of. The hon. Lady is right to raise that important point.

[Kerry McCarthy]

May I make it clear that what I suggested would not prevent people from copying things? It would just give the musicians and other artists some compensation by putting an additional levy on the devices that people would use to do that. Twenty-five other EU countries have decided that that is the right way to go. I hope that the Minister will explain just why the UK deserves different treatment.

[Damian Collins]

I understand the hon. Lady’s point. Of course, France has done what she describes for some time. Personally, I think that it is a blunt tool and that the key is to ensure that we do not, particularly as technology develops, make it easier for more people to distribute things. We have talked about the role that search engines play in taking people to sites where they can easily download music for free, in breach of copyright rules. We should clamp down on that.

We have only to look at the predictive search result that comes up when someone types the letters MP into Google. I did that earlier in the debate and the result was for an MP3 converter site where people can download tracks from YouTube directly on to their MP3 player. It is therefore right that we look at the various tools that exist in the internet world and that make it easier for people to infringe copyright. I believe that that is where our energies should lie. We should be careful that a private copying exemption does not have the unintended consequence of allowing people to distribute music through cloud systems such as Dropbox, as the hon. Lady mentioned. We should look at that technical aspect very carefully.

The Select Committee is looking at the role of the BBC in its current inquiry. Technology is playing an important role in how we consume television in particular. The distinctions between television that may be viewed through a portable device, through a satellite or cable subscription or through what we used to call terrestrial television are going. We have a single creative stream, which is distributing through multiple devices. That throws up not only long-term challenges for the role that the BBC licence fee can play in the future, because it is no longer wedded to the purchase of a television set. It also throws up challenges about the way in which different television companies—different content creators—distribute their content and pay a fair licensing fee for the distribution of that content through the multiple channels through which it is being used.

There is a debate to be had between the cable and satellite broadcasters, such as Sky and Virgin, and the old terrestrial television channels, such as the BBC, Channel 4 and ITV, about how they agree on a fair price to pay for distributing someone else’s content through their channels. That is particularly necessary if distributing through avenues where advertising is excluded or can easily be excluded by the consumer. As people consume television in ways that are very different from those in the past, we will have to debate the future of television and how it is funded through different revenue streams, such as the licence fee, advertising or subscription. I do not intend to go into that issue at great length now, but it is one for the future.

15:05

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Osborne, particularly as I want to make a few remarks with a Scottish dimension. It is also a pleasure to follow the hon. Member for Folkestone and Hythe (Damian Collins). He emphasised the importance of the cultural and creative industries, both to the entire UK and to different parts of the country. I represent Edinburgh, and the subject is of particular interest to me, my city and my constituency; Edinburgh North and Leith can claim to be a creative hub in many ways, as many who have visited it will know.

I will not run through all the positive features of my constituency, but I would like to mention a few. There have been a number of mentions of “Grand Theft Auto”. Of course, that game comes out of the Rockstar North stable, which is currently headquartered in my constituency. It is perhaps a sign of the times that, as I understand it, it is soon to move into the building occupied at the moment by The Scotsman Publications Ltd. That is an interesting example of how the emphasis in the different sections of the creative industry is moving from older to newer technologies.

I was told just this morning of the success of an e-publishing company in my constituency, so I will take the opportunity to mention that. APS Group Scotland has just won a prestigious award in the academic category at the digital book awards 2014 in New York, ahead of several hundred fellow international entrants. That is another example of success in my constituency. Of course, my city also hosts the Edinburgh festival in all its many guises.

[Mr Vaizey]

Hear, hear!

[Mark Lazarowicz]

The Minister clearly recognises that festival as a showcase of great importance, not just to Edinburgh and Scotland, but to the UK as a whole.

The main point that I want to make is that the report is about supporting the creative economy in the United Kingdom. It is important to make that point. Colleagues from outside Scotland will understand why the possible implications of Scottish independence are on the minds of most Members from Scotland—indeed, it is also quite rightly on the minds of many Members from the rest of the UK. One argument put forward by the Scottish Government in support of independence is that the cultural and creative sectors would gain more from independence than from the status quo. The Scottish Government do support the creative economy and cultural industries in many ways—I pay tribute to that—but so did previous Scottish Governments under different political leaderships.

Local authorities also recognise the incredible importance of the sector. My local authority, the Labour-led Edinburgh council—I must be fair: it is a Labour-Scottish National party council—has been supporting the creative economy in many ways for many years. That illustrates how the very success of the sector in Scotland underlines the fact that we are better together. We can be successful because we are part of the UK; we do not need an entirely separate state to nurture such successful parts of our economy. They are important for us, but they also benefit the economy of a much wider area and allow the UK as a whole to support and draw on what we are doing in Edinburgh, and in Scotland.

Some good examples of that are highlighted in the report, such as the international activities of UK Trade & Investment, which I am sure the Minister will refer to in his closing comments. Scottish creative activity can take part in that and draw from it. There is also support at the UK level for film, which benefits Scotland directly and indirectly. There is the very fact that we in Scotland have access to the UK market. Of course, if Scotland were independent, no one is suggesting that it would not be able to export from its creative economy to the rest of the UK, but the strong foundation in a UK-wide market, in which the cultural or creative economy is a major sector, is something on which we can base our activity. That applies to other sectors as well.

We also have the BBC. It is interesting to note that that is one of many areas in which those supporting independence suggest that not much would change; the BBC would just be slightly different. They are trying to get the best of the UK while also going for independence.

That is my picture of the benefits for Scotland of being part of the UK, but there are of course areas in which there could be improvements and more could be done. Mention was made of the importance of broadband. The Minister knows that I have for some time been pressing on the issue of superfast broadband in my city of Edinburgh. It is ironic that, apparently, part of Edinburgh city centre will not be included under the arrangements for additional superfast broadband that were recently announced.

The hon. Member for Folkestone and Hythe mentioned the advantages to his area from being close to high-speed rail. I will not hold the Minister and his Department responsible for High Speed 2, but I emphasise an important point: if the entire UK is to draw on the benefits of London’s role as a media centre for Europe, we need to have fast and efficient transport from the entire UK to London in as many ways as possible. That includes HS2 reaching Scotland and having direct high-speed lines at the earliest possible opportunity.

There are so many clear benefits to Scotland’s creative economy, and the rest of Scotland’s economy, being part of the UK. The Government have produced a wide range of useful papers by independent experts highlighting the benefits, for both Scotland and the rest of the UK, of Scotland’s involvement in the UK. It would be useful if the Minister’s Department were to consider something similar in the field of the creative economy. I put that challenge to him today. I ask him to think about it and to consider bringing forward such a report or study, allowing it to feed into the debate taking place in Scotland.

We have some travel difficulties at the moment from parts of the south to the north, but things are not too bad at the moment, so I hope that you will excuse me, Mrs Osborne, if I leave the debate a few minutes before the end of the sitting, if we go to full time. Having said that, I am glad that I have been able to contribute to the debate with something of a Scottish perspective on the creative economies of the entire UK.

15:14

[Helen Goodman (Bishop Auckland) (Lab)]

It is a great pleasure to see you in the Chair, Mrs Osborne.

I congratulate the Select Committee and in particular its Chair, the hon. Member for Maldon (Mr Whittingdale), on producing a thorough report on an extremely important subject. He waxed lyrical about the great quality of the British creative industries. Whether one looks at the economic or the artistic dimension, we have much to be proud of. That is one reason why Labour Members think it is extremely strange that the Department for Business, Innovation and Skills—not the Department for Culture, Media and Sport, of course—has not included the creative industries among its 11 priority sectors. The creative industries certainly should be a priority sector.

The hon. Gentleman began with a little reference to the Olympic legacy and the need to change the “no marketing rights” protocol to allow people who were involved in the productions for the Olympic and Paralympic games to exploit their success further. I agree with what he said, and I have met representatives from PLASA. In addition, some of my constituents were involved in the building and engineering aspects of the games, and they have also been prevented from exploiting their success to the full. That is a shame, and I hope that the Minister will look again at the matter.

In this debate, a lot of time has been devoted to the important question of copyright protection. I will not repeat in full the remarks I made on Second Reading of the Intellectual Property Bill on 20 January, but I want to highlight what I believe to be the priorities. I agree with the Select Committee that the law is not enforced adequately, and I agree with the remarks of my hon. Friend the Member for Stoke—[Interruption.] I apologise; I meant my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly). The Annunciator has not been working properly, so I have had to try to remember all my colleagues’ constituencies, and I clearly made a mistake on this occasion. The point is that the Government do not seem to understand that the copyright issue is urgent, and I am sorry to say that the Minister’s response to the Select Committee report did not demonstrate the necessary zing and zest. During this Parliament, the total cost to the creative industries in our country of people downloading films, television programmes and music will be some £1 billion, which is why it is so important to crack on energetically with tackling the problem.

The Select Committee highlighted the role of search engines and described Google’s efforts as “derisorily ineffective”. From the discussions I have had with both sides of the industry—the publishers and the search engines—I believe that that is a reasonable judgment. The Select Committee rightly states that the Intellectual Property Office should be beefed-up to make it a champion for intellectual property; at the moment, it really is not. My hon. Friend the Member for Bristol East (Kerry McCarthy) spoke eloquently about the impact that a failure to get to grips with the matter will have on individual artists, particularly when it comes to pay, and she emphasised that many people in the sector have extremely low incomes.

All the comments made about the different exceptions and exemptions, and the complexity of the issues, highlight the importance of dealing with the issues through separate statutory instruments, so that we can look at each matter individually. I hope that the Minister will discuss that with his colleagues in BIS, who will probably take the lead on producing those statutory instruments. I hope that the Government will adopt a joined-up approach. Surely it must be possible to have a regime that protects musicians but does not hinder, for example, scientific researchers in epidemiology departments. Their needs are not the same as the needs of people in the music sector.

I want to draw the attention of hon. Members to the remarks of Roly Keating, the chief executive of the British Library, who has said that the goal is to foster an environment that benefits researchers and creators. That is absolutely right. Separating out the statutory instruments and enabling us to look at them individually will give us a much better chance of producing that environment.

The Committee also looked at funding and finance. It was right to identify that issue, but I am not so confident that its solutions were commensurate with the scale of the problem. Investors are not well informed and do not have sufficient understanding of the value of intangible assets in the sector. The difficulty in securing finance in the sector was brought home to me by some film makers who came to my constituency surgery in Bishop Auckland. The people of Bishop Auckland are creative, imaginative and intelligent, but I have to say that the arrival of film makers at my surgery was a surprise. The film that they had made really could not be further from the “Grand Theft Auto” model—they had made a rather lyrical and poetic film about the lives of hill farmers. They are finding it extremely difficult to move from the first stage, which is having 60 hours’ worth of film, to the next stage of producing something that can be shown and watched. That highlighted for me the difficulties that people in the sector have, particularly outside the M25.

We need a more deliberate and proactive approach from the Government in building partnerships across sectors and skills. I was pleased to receive a briefing from Creative England, and to see the work that it has done in setting up accelerator programmes and commissioning, film innovation and enterprise funds. That is a model for what we need to do, but on a bigger scale.

I also had an interesting meeting with an organisation called the Cultural Capital Exchange. It is a company—run, incidentally, entirely by women—that promotes exchange between universities and the creative and cultural sectors. It has been particularly productive in finding ideas from research for extremely interesting films and television programmes. A more active Government intervention of that kind would support the creative economy even further. It is what the economist Mariana Mazzucato has called “the entrepreneurial state”. We need specialists in finance advice, creative business and management to come together far more.

[Damian Collins]

Does the hon. Lady agree that, outside London, the regional growth funds are playing an active role in supporting creative businesses, and, in particular, that the various enterprise investment schemes have brought a huge amount of private investment into businesses right across the creative sector?

[Helen Goodman]

I was going to say that the demise of the regional development agency and the much reduced resources of the local enterprise partnerships have left rather a gap outside the M25. I know that in Folkestone in the hon. Gentleman’s constituency, people have benefited from a philanthropist whose name escapes me—

[Mr Vaizey]

Sir Roger de Haan.

[Helen Goodman]

As ever, the Minister is there, ready to help at any moment. Of course, that philanthropy has bolstered considerably what has been going on in the constituency of the hon. Member for Folkestone and Hythe (Damian Collins), but we need a more structured approach from Government. I will come on to talk about geography.

[Damian Collins]

I am glad that we have managed to get Roger de Haan into the debate somehow, even though, for once, I did not refer to him in my speech. If the hon. Lady wants to come to Folkestone, as she is more than welcome to, she will see that his work has created some of the infrastructure. Companies such as Cognitive Media—an animation company that is doing incredibly well—and other private people are renting office space that he created. They are raising their own money, winning business, growing and doing incredibly well. That story has been replicated right around the country.

[Helen Goodman]

I agree that the creative sector is one of the few sectors that is growing rapidly. I will make my points in a different order to deal with the hon. Gentleman’s intervention. Under the Labour Administration, culture was part of the regeneration programme in Liverpool, Gateshead, which was mentioned, Manchester and Salford; for example, there was the movement of the BBC. Those were big initiatives. The hon. Gentleman will be hard-pressed to find examples of such significance in the current climate. The Government do not have anything comparable to those initiatives that goes beyond the M25.

[Mr Vaizey]

Many of those initiatives were financed by the lottery, which was created by the Conservative Government who preceded the Labour Government.

[Helen Goodman]

I am sorry to disappoint the Minister, but a lot of the money was put into those initiatives by the regional development agencies. He needs to talk more to his colleagues in other Whitehall Departments, because those self-same big cities are seeing the biggest reductions in funding in their local government settlements. The reduction in Liverpool is somewhere between 30% and 60%, and the picture is similar in Gateshead and Manchester. He should be less complacent about the situation faced by the creative sectors beyond London. He cannot get away from giving the impression that the Government are not developing creative industries across the entire country because they are staying within their comfort zone.

[Angie Bray]

rose—

[Helen Goodman]

I will not take any further interventions on this point; otherwise, the debate will deteriorate in tone, and I would not want that to happen during my speech.

I was pleased by the Select Committee Chairman’s remarks on film tax credits. I never expected to hear Government Members praise tax credits, but there we have it; he has done so, at least for the film sector. I reiterate his request to the Minister: it would be good if the Minister brought us up to speed on his negotiations with the European Union. I also wholeheartedly agree with what the Select Committee said on education and skills:

“The broader arts curriculum has been seriously hit by the Government’s approach to performance measurement...The danger remains that schools will in practice see a continued diminution in the provision of dance, drama and other creative subjects.”

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who is doing an excellent job as chair of the all-party group on art, craft and design in education, made a well-informed and telling speech. Since 2010, there has been a 14% drop in the number of children taking arts subjects at GCSE. We must incorporate arts into the curriculum at the same level as other subjects. I cannot do better than quote a letter from my constituent, Jonathan Carney. He is head of visual arts and photography at Redcar academy and, in preparation for this debate, he wrote to me, saying:

“I am very concerned that the current disincentives to study arts subjects in schools will have a serious impact on the pipeline of UK workers in to employment in the Creative Industries and more broadly on our children’s ability to compete in the global jobs market. Employers look for well-balanced, well-rounded individuals who are capable of expressing themselves and thinking creatively.”

We would all agree with that; none of us could have put it better. One thing that is a bit worrying about the Secretary of State for Education’s approach is that he seems to think that those subjects are not intellectually rigorous. Has he not met an architect or listened to a jazz pianist? Of course those subjects are as intellectually rigorous as mathematics, Latin grammar and English literature. It is patently absurd to think that rigour is only in one part of the curriculum and not in another.

I hope that the Minister will go back to his colleagues in the Department for Education and reinforce the message that is coming from across the sectors. Everywhere I go, the one complaint I get that is common across the board, whether in theatre, music or museums, is about the narrowing of the curriculum.

I also want to take up with the Minister his remarks about music hubs. I do not think those are performing as intended. We hear many reports, particularly from the Musicians’ Union, of the undermining of music services, and of the fact that the music hubs are not making up for local authorities’ loss of direct funding as a result of reductions by the Secretary of State for Communities and Local Government. Once again, the Minister is too roseate in his picture of what is going on in the world.

Finally, I also agree with the Committee about the Creative Industry Council and the need for the Minister to go to the council’s meetings. Surely it is not too much to ask Ministers to go to their own meetings. However, the Committee might have looked more at two issues. One is geographical spread, which we have discussed; I will not go over that ground again. The other is the importance of widening access and opportunities to work in the cultural industries. That is partly about education, and it is partly a justice issue. These are good, fun jobs that people want, and it will not be satisfactory if, to borrow George Orwell’s phrase, they become of the preserve of

“the lower-upper-middle class”.

However, just as importantly, the arts need these people. The arts need the widest pool of talent.

I will give an example. I was talking to the director of one of our major dance companies, and he said that, to be frank, he did not need any more middle-class girls from the home counties coming into his theatre. When the company got boys from ethnic minorities in east London, they brought a lot more energy and innovation to the theatre. That is really positive and really great. We must have a much bigger picture of what is possible for people.

The Minister’s response to the Committee’s report is a bit disappointing. We do not want a global race to the bottom, with a few multi-millionaires and thousands of unpaid interns. The Opposition believe that creative Britain can do better than that.

15:34

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)]

I am pleased to have the chance to reply to this stimulating debate. It has been extremely wide-ranging, covering copyright, education, Scottish independence and the future of HS2—all four of which I am not formally responsible for, but I will try to address the points that were raised.

I particularly enjoyed the speech of the hon. Member for Washington and Sunderland West (Mrs Hodgson). It included extensive plugs for her son—I would have done the same thing—and his future career in the video games industry. Short of reading his CV into the record, I do not think she could have done more to bring the industry’s attention to the budding talents of Hodgson Junior, as I assume he is called.

The hon. Lady was followed by my hon. Friend the Member for Selby and Ainsty (Nigel Adams)—[Interruption.] He is over here now—he is the acting parliamentary private secretary; he was promoted in the middle of this debate. He refrained from mentioning the success and talents of his son, Ben Adams, in the soon-to-be-world-famous British band Summer City. I regretted that he did not mention it, because then we could have had a contest to decide in the course of this debate whether the offspring of Labour MPs are more creative than the offspring of Conservative MPs. I was particularly pleased to open a copy of my local newspaper to find that the son of my hon. Friend the Member for Henley (John Howell)—Conservative—has won the first scholarship from Sky Arts and been picked out by Quincy Jones as one of the most talented drummers he had ever seen. Let it not be said that MPs from all parties are not making their own direct contributions to the success of the creative industries.

It is a good thing that all of us who have spoken in this debate can point to the success of the creative industries. In the spirit of ecumenicalism that often surrounds such debates, I point out that the creative industries were identified by the former Secretary of State for Culture, Media and Sport, Lord Smith of Finsbury, who has managed to make an impact on other areas of public policy since then. That was the process by which the UK’s creative industries were put on the map. The process of identifying a rather disparate sector as a coherent whole has been followed by many other countries. Because of it, we can identify the success of the creative industries: more than 1.5 million jobs, over 5% of UK jobs; growth of 8.6% since 2011; a contribution of £70 billion to the UK economy.

This Government have built on the achievements of previous Governments in supporting the creative industries. I was particularly pleased that we have built on the success of the film tax credit, which now brings in roughly £1 billion annually of inward investment in the UK, with the introduction of a television tax credit for high-end drama and a tax credit for animation, which was responsible, incidentally, for more than £200 million in inward investment in its first year. To answer the first question posed, we are expecting an announcement shortly from the European Commission on the video games tax credit. I have been in discussions with the Commission for a time. It has a job to do, and the Government, particularly the Conservatives, recognise the importance of policing state aid and unfair and anti-competitive Government subsidies to industries. It is important that the Commission is convinced that a tax credit is the right thing to do, but we have made great progress and we expect an announcement shortly.

As well as the tax credit support—I was delighted when the Chancellor extended the film tax credit; it is particularly important to support the visual effects industry, in which the UK is among the leaders in the sector—there are other forms of support. I hear what the hon. Member for Bishop Auckland (Helen Goodman) asked about whether the Department for Business, Innovation and Skills has designated the creative industries as a priority sector. We are certainly the first Government to set up a sector council for the creative industries; we now have a Creative Industries Council, which is co-chaired by the Secretaries of State for Business, Innovation and Skills and for Culture, Media and Sport alongside Nicola Mendelsohn, the chief executive of Facebook in Europe.

Alongside that council, which considers a range of issues including access to finance, skills and exports, we have set up Creative England, which is designed to support the creative industries outside London. We take that support seriously. To respond to what my hon. Friend the Member for Folkestone and Hythe (Damian Collins) said, it has received significant support from the Department for Business, Innovation and Skills in terms of money from the regional growth fund.

There is also Tech City, which acts as a beacon to show this country’s support for the technology industry. It is important to recognise that Joanna Shields, the chairman of Tech City, has made it an imperative to reach out to all the other clusters across the UK, to bring them together as a coherent whole and to ensure that other parts of the UK also benefit from that extraordinary growth. I have written to the chairmen and chief executives of local enterprise partnerships—many of them already recognise this—to remind them of the importance of the creative industries when setting out their strategies. Some of the city deals, particularly the one in Brighton, have put the creative industries centre stage. With Tim Davie from BBC Worldwide, I co-chair UK Trade & Investment’s sector advisory group, which works to help the export of our successful creative industries and to attract inward investment. There is a hugely successful story to tell about Government support for the creative industries and about the ongoing activity to support the industries.

It is also important to stress that we should include the Arts Council in the mix. The hon. Member for Bishop Auckland talked earlier about the need to support people in employment. The Arts Council has set up a £15 million fund to fund apprenticeships in the creative industries, in addition to the £37 million creative people and places fund to help fund the arts in areas where they have previously been under-represented. The agenda is wide, but there is a huge range of activity to support that agenda.

I pay tribute to the fantastic Chairman of the Select Committee. He rules the Committee with an iron fist and directs it towards all the pertinent issues of the day. He has, as usual, produced a perspicacious and incisive report that focuses in particular on concerns about the changes to the copyright regime. As the Minister with responsibility for the creative industries, I understand the concern of many in the creative industries about copyright enforcement. I have tried to bring together the different sides of the debate—the rights holders, the internet service providers and the search engines. We take a wide range of action. Let us not forget that existing law has been used effectively by rights holders to seek and obtain injunctions against some of the biggest sites that exist for the sole purpose of distributing infringing material. We also work with City of London police and credit card companies to take down payment sites, and we have one of the most advanced systems, if not the most advanced system, working with the advertising industry to ensure that advertising is not present on many of those websites.

We take a wide range of action, but my response to the Select Committee, which seems to have got a resounding B+ from hon. Members here today—[Interruption.] I might be being optimistic. We want Google to do more, and we will continue to press it to do so.

[Paul Farrelly]

It is a Select Committee, so the B+ is cross-party.

[Mr Vaizey]

I am grateful for that clarification. My excellent officials have provided me with answers to most of the questions that have been posed in this debate. I feel like I should recreate the famous Bob Dylan video when I read them out, but I will address some of the excellent points that have been raised.

Copyright reform began with the Hargreaves review, which has been extensively consulted upon. Many views have been taken into account, and it is important to get the balance right. The hon. Member for Bristol East (Kerry McCarthy) knows that I am going to say that we believe that the private copying exception is the narrowest exception in Europe, so we do not think a levy is appropriate. I shall write to her as she invited me to, setting out in great detail why I think that.

[Helen Goodman]

When the Minister writes to my hon. Friend, will he copy me in?

[Mr Vaizey]

I shall certainly copy in the hon. Lady.

[Mr Whittingdale]

And, indeed, everyone.

[Mr Vaizey]

I will certainly copy the hon. Lady and the Chairman of the Select Committee into my reply.

Danish law allows sharing within a household; Polish law apparently allows sharing within social circles—so there are much wider exceptions in Europe, and we have been careful to draw ours as narrowly as possible.

My hon. Friend the Select Committee Chairman asked about the future funding of the Police Intellectual Property Crime Unit. The Intellectual Property Office funded the set-up costs and the initial period of operation, but I understand that the baton will pass to industry, and that has always been made clear. If the work is worth doing, the industry should support it. I am interested in the PRS proposal on traffic lights. We reached out to some of the relevant intermediaries but without success, but if PRS still believes that we could pursue that system, it is worth revisiting.

As to increasing the sentences for online copyright infringement, I understand that the Minister with responsibility for intellectual property said that it was worth looking into that, and we also said so in our response. Further, the Science Minister, who responded on Second Reading in the Commons, said that we would report our findings by the end of the year. We support industry initiatives to educate people about the complexities of copyright, and are in active discussions with the industry about how the Government can support more education initiatives.

Perhaps that is the appropriate moment for me to pick up the point that the Select Committee Chairman made about the VCAP proposals. It has been difficult to implement the details of the Digital Economy Act 2010. The Government have not resiled from it, but there are significant technical obstacles, including the fact that we were being sued by BT and TalkTalk for at least two years from the time when it was passed. Other technical obstacles have presented themselves, and we are actively seeking to overcome them, but nevertheless we welcome the industry initiative, not only because we hope it may be up and running before the end of the year, but because it requires a partnership between both sides of the debate, and because it brings important flexibility to make it possible to adapt. I suspect that it will be easier to adapt the system as technology changes.

The Select Committee’s position and that of many hon. Members who rightly act as strong advocates for the creative industries and rights holders is well known. The Government’s position is also well established, and there has been an extensive dialogue. I hear what has been said about the need for separate statutory instruments when the exceptions are debated, and I am sure that the Department responsible will listen carefully to that recommendation.

Another all-pervasive issue is the position of the arts in education. Hon. Members will know that I sought out the job as culture spokesman in opposition and was lucky enough to be appointed Minister when we came into office. I passionately support the arts and would be concerned if I thought that some of what people allege about the state of the arts in schools was genuine. The Secretary of State for Education is a fantastic supporter of the arts. I have no doubt about that, and I work closely with him, as I have done for several years. One of the first things that we did was jointly to commission Darren Henley to look at music education, to secure the ring-fenced funding of music education services at a time when most funding was being devolved to schools, and when schools were becoming academies, as they still are. I felt that it was important to take that strong position.

We want music services to change, which is why we re-christened them music hubs. Obviously, more has to be done than simply change the name. We want music organisations—orchestras, and so on—to be genuine partners with local authority music services and for music services to be able to call on the talents of a wide range of people who deliver music in different ways in any local area. That is why we introduced the qualified music educator status, to allow people who teach music but are not formally teachers to be recognised for their talents and skills. And that is why we extended the In Harmony programme, increased its funding and integrated it into a wider national music plan.

We are at the beginning of this journey. Nobody is expecting music hubs to spring fully formed from this policy change. We have achieved two important things: we have ring-fenced the money and established the principle that music organisations and music services should be partners. A third important principle is that the money is contestable; no one local music service or local authority should be complacent—a word that has been used in this debate in other contexts—and simply expect to receive that money every three years.

[Angie Bray]

My hon. Friend the Minister will recall launching the Ealing music and film festival this time last year. As I said earlier, on our first night of the festival, last night, the English chamber orchestra was partnering young musicians from Twyford school. Tonight it will be partnering young musicians from Ealing youth orchestra. Does he agree that it is good for young people that such an initiative can be promoted even by a festival?

[Mr Vaizey]

I do think it is a good thing for young people. That is absolutely brilliant. Again, we tend always to look at what we say is going wrong and not good enough and often fail to recognise what is right in front of us, which is that tens of thousands of our young people are brilliant musicians enjoying a brilliant music education. Funnily enough, I was lucky to visit Twyford school with Howard Goodall several years ago and watch its choir in action. It is a phenomenal state school—I emphasise that—with phenomenal music teaching. I recognise what my hon. Friend says.

That is where we are in terms of music education. But we went further and introduced the first national cultural education plan, which, again, has put on the table heritage schools. English Heritage is now working with schools to ensure that heritage is taught in our schools. There are many other initiatives to ensure that our children enjoy as wide a cultural education as possible.

Clearly, the Secretary of State for Education has his own agenda in terms of ensuring, rightly, that we continue to drive up standards in our schools. He is utterly passionate about education and about not leaving behind too many children who, in the past, for whatever reason, have been written off, as have their life chances. He has determined to introduce rigour into the curriculum. The Department for Education has listened to concerns that have been enunciated. We now have the new progress 8 system, which allows schools to take into account the arts and arts education.

There is an either/or element when we debate the arts in education. No one has made teaching the arts illegal in schools. The Secretary of State is also about empowering our teachers and head teachers to lead their schools. A good head teacher and a great teaching staff will recognise the importance of the arts and the fantastic bonus that great arts teaching brings, not just in introducing children to the arts, but enhancing their academic achievement in many other subjects.

[Mrs Hodgson]

Nobody doubts that the Secretary of State cares about all this. We are not saying that it is a competition or a matter of either/or. The fact is that there are unintended consequences to the baccalaureate. The number of art teachers being trained has dropped by 14%. The discount codes are deterring young people from taking more than one GCSE in arts subjects. This has to be looked at. The reality is there in black and white in the figures. Will the Minister say something about the proposal in the report for STEM to become STEAM and whether the Government will take that on board?

[Mr Vaizey]

The hon. Lady mentioned discount codes. The Government recognise the differences between artistic disciplines, and it is important to get it across that decisions on discount codes are made on the basis of a detailed scrutiny of the exam specifications, rather than on a general view of the subjects concerned. Where substantial overlap between two specifications exists, the subjects will be discounted. Those decisions can be reviewed and are being reviewed in the case of drama and dance. I emphasise again the Department for Education’s continued support for music and dance schemes, which equates to some £18 million-worth of bursaries over the next three years, which is a huge amount of support. The Department has also listened to concerns about the EBacc and that is why we now have the new progress 8 measure, which allows schools to have their teaching of arts subjects taken into account when measuring their progress and success.

We have had a lively and well-balanced debate with contributions from both sides of the House and from hon. Members who are passionate advocates and supporters of the creative industries, even when not taking part in this debate.

[Helen Goodman]

Before the Minister sits down, my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) asked whether he would look at the potential implications of Scottish independence on the cultural industries. It was a good suggestion, and I would be happy to co-operate with the Minister if he takes it forward.

[Mr Vaizey]

I hesitate to commit my Secretary of State or the Government to such a report, but given today’s important speech by the Chancellor about the future of currency in Scotland and the Prime Minister’s important speech about Scottish independence just under a week ago, I am sure that an opportunity will present itself between now and the vote for the Department for Culture, Media and Sport to highlight the effect that independence could have on the creative industries.

[Paul Farrelly]

rose—

[Mr Vaizey]

I now give way to the hon. Gentleman not from Stoke.

[Paul Farrelly]

It is almost a Stoke point. Before the Minister concludes, I want to take him back to the beginning and point out an anomaly that was discovered in the definitions and statistics—although I am not going to argue for the inclusion of ceramics in the statistics, which is a Stoke argument. When examining the statistics, we found that, of the £36 billion, £20 billion was attributed to the so-called fashion industry, so I asked the Chairman of the Committee why we were discussing music and film, but not clothes. It seems that the £20 billion attributed to the fashion industries includes pretty much everything that goes by the name of clothing on the high street, so the Minister may want to consider the statistics and how they are gathered and measured.

[Mr Vaizey]

I do not know why the Chairman of the Select Committee would not want to talk about fashion. I would have thought that it was his top subject. As my hon. Friend the Member for Folkestone and Hythe said, London fashion week begins tomorrow, and I know for a fact that the British Fashion Council would welcome the Chairman of the Committee at any of its events over the next five days.

[Mark Lazarowicz]

rose—

[Mr Vaizey]

I see that the hon. Member for Edinburgh North and Leith is keen to come in, but I must say that it is interesting that every element of the creative industries will publish reports about their value to the economy. I think that the British Fashion Council engaged Oxford Economics to make the serious point that the high-end, luxury fashion of the catwalk, which seems somewhat removed from our daily existence, sits at the apex or epicentre of a wide industry that includes photography, hairdressing, make-up and a whole range of things. Those are not official statistics, however. They come from a report produced by the British Fashion Council.

[Mark Lazarowicz]

To be clear, I was thinking of something more along the line of highlighting the positive advantages for the creative industries if Scotland remains in the UK. Instead of emphasising the negatives of independence, I would like to see something that highlights the positive advantages that are so clear to so many of us.

[Mr Vaizey]

I will happily do that. I have regular meetings with the Scottish Culture Minister, Fiona Hyslop, and know about the astonishing success of the creative industries in Scotland, the Edinburgh international festival being not just the oldest, but the largest arts festival of its kind. I am looking forward this year to the second summit of culture Ministers that will take place around the Edinburgh international festival. There is a lot to celebrate in the creative success of Scotland, and of the UK where Scotland and the rest of the UK are better together, as the hon. Member for Edinburgh North and Leith pointed out in his brilliant comments.

This has been a wide-ranging debate covering a wide range of issues, but at its heart sits a truth now universally acknowledged. I say that in the full knowledge that I will be going to Jane Austen’s house this evening after this debate to celebrate the keeping of her ring in the UK. I know that keeping cultural objects in this country is close to the heart of the hon. Member for Bishop Auckland. A truth that must be universally acknowledged is that Britain is fantastically successful in the creative industries, including television, film, animation, games, fashion, architecture, craft, the visual arts and the performing arts. We attract massive inward investment for the arts and we are known around the world for them.

The Government will continue to support the creative industries directly through tax credits and indirectly through policy changes and in our support for growth in the economy. If there is one thing I would like to see, it is more recognition in this country for our astonishing success and our global prominence thanks to our creative industries.

16:02

[Mr Whittingdale]

I had not anticipated commenting further, but this has been a very good debate. I am grateful to the members of my Committee who have come along to speak and to other hon. Members. That has demonstrated the degree of support and interest on both sides of the House and, indeed, in all parts of the country. As the Minister said, the debate has ranged into areas that perhaps go beyond his Department’s responsibilities, but I hope that he will consider carefully what has been said.

I echo everything the Minister said about the success of our creative industries. The Government are doing many good things, but the area that I remain concerned about and that several hon. Members raised is copyright. If there are to be modernisation changes, they should be made carefully, and we hope that there will be opportunities to look carefully at every proposed change. That will mean debates on the statutory instruments, if possible, as they appear.

I thank the Minister for his reply. His official response did not go as far as we might have hoped in some areas, but he has endeavoured in some way to make up for that this afternoon.

Question put and agreed to.

16:04

Sitting adjourned.