Lord Clement-Jones
That this House takes note of the impact of Britain’s planned withdrawal from the European Union on the creative industries sector.
Lord Clement-Jones (LD)
My Lords, it is a privilege to introduce this debate on behalf of my noble friends but I regret the circumstances in which I am doing it.
Last July, when I took part in the two-day debate on the outcome of the European Union referendum, I talked about the implications of Brexit for the creative industries. Uncertainty about the future on the part of both government and those industries was understandable then, but the sad truth is that six months later, despite myriad representations from different parts of the industry, from the Creative Industries Council, the Creative Industries Federation, Arts Council England and many others, and even an extensive speech by the Prime Minister on Tuesday, we are still almost as much in the dark about the implications of Brexit for those industries—and whether the Government have taken on board the concerns of those industries—as we were then. Indeed, it was notable that the Prime Minister mentioned a number of sectors in her speech but not the creative industries.
Therefore, the purpose of those of us on these Benches today is to highlight in no uncertain terms the importance of these industries to our economy and our future, and the essential matters than must be safeguarded on Brexit. Lest we be accused of being miserable remoaners who cannot accept the outcome of the referendum, we also want to set out the opportunities in terms of industrial policy that the Government must grasp in order to make sure that those industries prosper in the future.
Before I go any further, I want to try to give a picture of the importance of these industries, which span such a broad range of creative endeavour. In the UK, we are a vital hub for the TV, design, games, visual effects, publishing, film, advertising, music and fashion industries. They make a contribution of over £87 billion to the UK economy, employ almost 2 million people and are growing at twice the rate of the rest of the economy. As a result, we are second in the world only to the US for cultural influence or soft power. After all, what other country has instantly recognisable characters such as Harry Potter, James Bond and Sherlock Holmes in quite the way we do? Their exports are worth £20 billion, and the fact is that Europe as a whole is the largest export market for the UK creative industries, accounting for 56% of their trade in the sector. That is not all digital or audio-visual. Europe, with 31% of the total, is the largest market for physical book exports. I could go on. However, I recommend the report from the industry members of the Creative Industries Council, and also the one from the Creative Industries Federation, which give a much better overview than I can in the time available.
The other aspect that is of key importance, but on which I will only touch today, is the relationship of this sector to the tech sector. That relationship and interdependence is becoming more and more important for Britain’s future. Increasingly, tech platforms need creative content, and both sectors rely on creative skills. They are both strongly impacted by government policies on superfast broadband rollout and spectrum allocation, and, of course, by the outcome of Brexit on our telecoms sector, whose consumers have benefited so strongly from an EU-wide regulatory regime. My noble friend Lord Foster will be expanding on this. Both too are going to be strongly affected if there is a change to the way that data can flow freely between the UK and other EU countries. This comes to a head in the games industry, but concerns all creative and tech industries that distribute content or software digitally. Ensuring continuing adequacy of data protection under EU law will therefore be crucial.
It is not always easy to generalise about the creative industries, since they have many individual characteristics. However, some very strong common themes emerge from the work that the creative industries have done so far in responding to the prospect of Brexit. The first and most crucial of these is the need for access to talent. Yes, we need to accelerate the development of our skills here in the UK, and the industries have not been slow in showing how that must be done over the middle and long term by adopting what we might call a full STEAM agenda. However, the fact is that in fast-changing markets, specialist skills are in short supply. The ability for small businesses to hire skilled freelancers is vital. Freedom of movement of people with those skills is crucial; including, for instance, music artists going on tour in Europe or to festivals. This is important also when considering film, games and advertising production, or fashion and publishing here in the UK, particularly when it comes to digital skills. The Prime Minister has promised that the brightest and best can come here, but current changes to the tier 2 visa regime are going in precisely the wrong direction—so much for being truly global. So, too, it is not enough just to recognise the need to guarantee the right of those EU citizens already here to remain in the UK. That is already within the gift of the Government and should be granted immediately.
Another common theme has been about the future of intellectual property enforcement and co-operation. Although the broad principles of IP law are covered by international treaties, the shape of copyright exceptions are largely determined at European level, and so too are the enforcement levers on matters such as breach of copyright and counterfeiting. For instance, European co-operation has been of huge importance to initiatives on infringing online sites, such as Follow the Money. Will this continue? Will we continue to treat historic decisions on IP matters by the ECJ as binding? Will European trademarks no longer have protection in the UK? Will our artists continue to have the benefit of artists’ resale rights? Then there is the community design right, which is so important for the fashion industry, giving much more extensive rights to designers than the UK design right. Will we preserve that?
There are many EU proposals currently afoot which will impact on our creative industries if we do not have a seat at the table to argue their corner. In that context, will the Government be publishing their response to the recent consultation on EU copyright reforms? In the same context of the creation of the EU strategy for a digital single market, will we be able, on the way out of the EU, to protect the territoriality of copyright, which is so important to the financing of our film and television productions, or take advantage of the new transparency rights for creators?
What is the Government’s response to the Arts Council’s suggestion of a review to see how our intellectual property can be enhanced and maintained outside the EU? Will we achieve the right result on the draft directive on online sales for our games industry? In its recent report, the BIS Select Committee said:
“The decision to leave the European Union risks undermining the United Kingdom’s dominance in this policy area. We could have led on the Digital Single Market, but instead we will be having to follow”.
Forty-two per cent of UK digital exports go to the EU. As the Select Committee asked itself, have the Government really started to get to grips with this? Is there any real appreciation in government about the implications of Brexit for the UK’s access to the digital single market?
There are the implications of the loss of funding from Creative Europe, the European Regional Development Fund and Horizon 2020, on which my noble friend Lady Bonham-Carter will expand. All the creative industries have real issues about the prospect of lack of access to EU markets but I want in particular to highlight the issues relating to the audio-visual industry—in other words, the film and television sector—which I know the noble Lord, Lord Puttnam will be focusing on later.
The Audiovisual Media Services directive sets out the vital country of origin principle which ensures that our television channels gain access to the EU market without further regulation. As all industry commentators have said, without it there would be significant harm to the industry, especially as the principle could be extended to satellite in future. However, its continuance would have to be negotiated—it cannot simply be preserved by a great European reform Bill—otherwise I can see television channels substantially relocating in order to stay within the AVMS directive. Likewise it is vital that the AVMS directive continues to classify programmes made in countries covered by the European Convention on Transfrontier Television, not purely the European Union, as European works. How alert are the Government to that?
Convinced leavers claim that the world is full of opportunity for trade deals to be done outside the EU but as CETA, the Canadian European Trade Agreement, exemplifies, cultural exceptions are a besetting aspect of trade agreements. What assurance can the Government give about how high up the agenda our creative industries will be in any trade negotiations? These industries need the maximum possible strategic certainty in order to minimise disruption to decision-making, investment and people’s jobs.
We need a commitment to action by the Government on Brexit which supports our creative industries. We need an industrial strategy for the creative industries which incorporates all the above elements. It should also include a raft of domestic action to extend the investment support through tax relief schemes—there is a good case to extend them to music—to build on the strengths of the different regions of the UK and their creative clusters, and on synergies between the creative industries and other sectors of the economy, particularly in the development of skills.
Everything I have outlined is not some special pleading but a hard-headed calculation of what is necessary for the continuing success of the UK creative industries after Brexit. They need to be able to compete in a global environment. We have competition from players operating with larger domestic markets and many up-and-coming agile competitors. Leaving the EU makes us vulnerable without robust action and negotiation, especially if the Prime Minister and Mr Davis envisage that we may leave without any deal at all or with minimal transitional arrangements. The Government need to demonstrate that they grasp these issues and are pursuing a strategy to deliver a trade agenda and an industrial strategy for the creative industries that meets the case.
I look forward to the debate. I beg to move.
Lord Blencathra (Con)
My Lords, I congratulate the noble Lord on moving this excellent and important debate. The UK creative industries are a tremendous British success story in terms of jobs created, growth, profits and exports. In 2014, the last year for which we have figures, they employed 1.8 million people, many of them in the north of England in the gaming industry. Their job creation has been running at 5% per annum. Over the last few years, their gross value added has grown by more than 4%—twice the rate of growth of the rest of the economy. That is £84 billion and more than 5% of our total economy. Their export achievement is phenomenal. It is £19 billion, with America accounting for 25% of that—our largest single market—at about £5 billion, followed by Germany and France at about £1 billion each.
The major sectors are: advertising and marketing at £13 billion; film, TV and video at £10 billion; IT software and computers at £36 billion; publishing at £10 billion; and music and performing arts at £5 billion. The UK is the third-largest gaming producer in the world after the USA and Japan. That is not going to change because of Brexit and our largest gaming export market is the USA. We apparently employ a lot of EU nationals and since they are highly skilled workers they will obviously qualify under any new type of visa regime we invent.
Of course, we also get EU funding from the Creative Europe stream, which boasts that the UK received the largest grant ever for any EU country. A lot of people have said that funding is vital for the gaming industry. So how much was the funding from Europe? It was £547,000, to be precise. But since 2014 the gaming industry has received £45 million in Treasury tax relief. So what if we leave the EU? The British Government’s support is worth 82 times the EU subsidy.
Then, take our film industry, which is the third-largest film entertainment market in the world after the USA and China, running at about £4.8 billion. It too gets funding from Creative Europe. That amounted to £3.8 million in 2014, but Treasury funding in 2014 was £414 million, or 110 times more. How can anyone make an argument that leaving the EU would deprive the film industry of vital public subsidy? All told, taxpayer support for the creative industries and the arts runs at more than £1 billion, whereas total EU funding through Creative Europe was a mere €40 million.
None of our export markets would dry up after Brexit, whether it is IT and software, accounting for 46% of our exports, or film and TV at 24%, or architecture, or publishing. They will all thrive. Our creative industries are the most innovative and can benefit from the most freedom. They are not making cast-iron widgets based on the technology of the last century, but are in the forefront of trying out exciting new ideas at which British innovators excel.
The House does not need to take my word for it that the creative industries will thrive outside the EU. I have a document issued by the Creative Industries Council called 100 UK Creative Industry Wins in 100 days, on building on the success of the EU referendum. I will not read out all 100 wins, but here are just a dozen that the Creative Industries Council boasts about since 23 June. Australia and New Zealand networks have confirmed that Brexit will not affect their TV orders from UK. The UK and South Africa have co-signed a production treaty. AMC has bought UVI and Odeon cinemas for £921 million. Japan’s SoftBank has bought ARM for £24.3 billion. Gateshead architects have won a major contract in Mongolia. Foster Partners has won a major award in New York. Leach Design has won a contract for Kuwait National Museum. A UK firm has won a stadium project for the 2024 Los Angeles Olympics. The Chinese firm, Huawei, confirmed plans for a £1.3 billion investment in the UK. Google announced London as its European HQ. An Australian TV company chose Cardiff for its new European HQ. Dyson announced a £250 million investment in R&D in the Cotswolds. Apple is to create a spectacular UK HQ at Battersea power station. Disney has chosen Northern Ireland as a production home for TV and Salford’s Media City has had a £1 billion expansion plan approved.
Those were just 12 of the 100 good news announcements up to 1 October last year, since when there has been no slowdown in our creative industries expanding, winning new orders and exporting more, especially now that the pound is down to a more sensible level against the dollar and needs to drop a bit more still if our industry is to survive and export.
Therefore, we should welcome getting out of the EU. Our creative industries do not need an EU comfort blanket. An industry producing £84 billion per annum and exporting £19 billion does not need a paltry €40 million subsidy from the EU. We are better than that, so let us drive forward, maintaining and enhancing our hugely successful creative export market and showing a fraction of the courage demonstrated by the Prime Minister in her wonderful speech on Tuesday.
Lord Puttnam (Lab)
My Lords, I congratulate the noble Lord, Lord Clement-Jones, on securing and introducing this timely debate and thank him for it. I declare an interest both as a former film producer and president of the Film Distributors’ Association. Our screen industries, like the broader creative industries, have been among the great economic success stories of the past two decades, so it becomes imperative that we do everything in our power to minimise any harm that might arise from the Government’s decision to leave the EU single market.
In the short time available, I want to offer—in profound disagreement with the previous speaker—just two examples where reassurance and help are likely to be sorely needed. My first concerns the so-called country of origin principle, which was touched on by the noble Lord, Lord Clement-Jones. It forms part of the audio-visual media services—the so-called AVMS. It sounds intimidatingly technical but in truth it is very simple and is driven by the fact that internet and satellite TV signals cross national borders. The country of origin principle allows broadcasters to transmit across the entire EU, provided they comply with the rules of the country in which they originate. It is an excellent example of the way in which sensible EU regulation can reduce red tape and not add to it. By common consent, the UK is Europe’s most vibrant broadcasting hub, thanks to our attractive and successful regulatory regime.
According to the Commercial Broadcasters Association, some 1,100 television channels are based here in the UK—around three times as many as in our closest EU rival, France. Of these, up to 55% are non-domestic channels, broadcasting from the UK to other countries, meaning that international channels are key to the UK’s competitive advantage as Europe’s largest broadcasting centre.
Literally thousands of jobs are at stake here. A significant portion of the 12,000 people who work in the multichannel sector are employed at the European or international headquarters of media groups located here in Britain. Indeed, the number of international channels based in this country has been rising by around 17% every year.
The screen sector, supported by the regulator Ofcom, strongly believes that the country of origin principle must continue to operate in the UK after Brexit, so that media companies based here do not face new hurdles or feel compelled to move their operations to other European countries. Not only could that result in a loss of skilled jobs and of significant and hard-won investment; repercussions could be far greater than that. Needless to say, continuing as before will require the agreement of the remaining 27 member states, all of which would love to grab this asset. To retain it will not be easy and will require particularly skilful negotiation.
I want to focus on a vital but rapidly growing subsector of the screen industries, the visual effects and animation business. This relatively new sector has an annual turnover of £2.25 billion and employs in excess of 25,000 people. This all came about because in the late 1960s, a migrant named Stanley Kubrick came to London to make his film “2001: A Space Odyssey”. There was no suitable special effects business for his purposes so he had to invent one. That film’s success attracted the makers of the first “Star Wars” film—and the rest is history.
Over the past few years, as a result of continuing investment in technology, which in turn attracted creative talent from all over the world, we have emerged as the global leaders in a rapidly growing business. In the visual effects category at last year’s Oscars, five of the six nominees, including the eventual winner, were British. We employ the very best talent from around the world, regardless of nationality, and in very large numbers. Of the total workforce in the sector, depending on their grade, between 31% and 35% are EU nationals, and a further 12% are from non-EU countries. In our largest companies, the figures are even starker, ranging between 41% and 45% from the EU alone. Even these percentages increase, topping 50%, when you focus on ultra-high-end jobs in 3D and virtual reality. Are we seriously going to jeopardise a pre-eminence that has taken 50 years to build by requiring up to half the workforce to leave? Of course we are not. So why not dissolve their insecurity and tell them how very welcome and valuable they are to our society and our economy?
Finally, before this debate, like so many others, gets swamped by economic data, here is a flat-out plea to the Minister. As well as the economics, there is a huge moral issue at stake here. Let us be clear: we, Britain, caused this rift. Europe is the injured party. In such a situation surely we should seek to retain a little of the moral high ground by clearly and unequivocally guaranteeing the right to stay to those hundreds of thousands of hard-working, taxpaying, economically active people who add so much to the vibrancy of London in particular and the nation in general. At present we appear to be subjecting them to some form of prisoner exchange programme, treating them as high-stakes bargaining chips. These are people, not chips—people who last June’s unfortunate vote suddenly made vulnerable. As the noble Lord just said, surely as a nation we are better than that. Surely we should immediately and generously embrace them in the hope that Europe will see the good sense of doing likewise, which I suggest it unquestionably will.
In her speech this week the Prime Minister said:
“We will continue to attract the brightest and the best”,
ensuring that immigration continues to bring benefits in addressing skills shortages where they exist. Here is her golden opportunity, without delay, to put her words into action. I beg the Minister, when he replies, to add his voice to what is already a clear majority of the will of this House that we make an unequivocal declaration of the right to stay and remove uncertainty from so many valuable and entirely innocent lives. This we can and must do.
Lord Foster of Bath (LD)
My Lords, I, too, congratulate my noble friend Lord Clement-Jones on introducing this important debate. Many years ago, I was a teacher and I very quickly became disillusioned by participating in a system based on the industrial production line model of education. I started to develop ways of catering for the needs of individual pupils, not least to allow them to develop their own creativity. Later, as an MP and my party’s education spokesman, I wrote a book on the importance of developing creativity in education. It was not very good and is now out of print. But my passion for the need to insert the power of creativity into our education system is undimmed, and it helps explain why I am such a passionate supporter of the creative industries.
My noble friend Lord Clement-Jones and others have already highlighted the vital importance of the creative industries to our economy and our country’s future. I will not repeat all the statistics, but it is clear that the creative industries are a huge success story, punching above their weight. It is also clear that they have benefited enormously from our membership of the EU. These benefits are put at significant risk by the hard Brexit announced by the Prime Minister on Tuesday. Indeed, finding some glimmer of Brexit-related light for the creative industries is hard to come by, although I recommend, at least for a good laugh, “Brexit the Musical”, which I saw last weekend at the excellent Canal Café Theatre. Funny though it was, it intensified my worries about Brexit and Tuesday’s speech by the Prime Minister did little to allay them. It is clear that if the creative industries are so important we must, at the very least, ensure they have a voice at the top table during negotiations.
As Sir John Sorrell says, the creative industries are now,
“a key driver of wealth and global success”,
and imperilling them would, he went on,
“imperil our wider economy. That is why we need to be at the heart of the … government’s industrial strategy and negotiating priorities in coming months”.
Yet there is scant evidence that the Government are taking the creative industries seriously. As Monday’s Evening Standard said, the creative industries do not get much of a look-in—they certainly did not in the Prime Minister’s speech on Tuesday. The Government have promised to push hard for trade deals with the EU on the car industry and on the pharmaceutical and financial sectors. So far, no such promises have been made for the creative sector, and the DCMS Secretary of State is not even on the Government’s main Brexit committee. This does not bode well for the creative industries.
The negotiations will have to cover many matters, not least employment and skills. The creative industries have a higher than average percentage of non-UK EU nationals working for them: 10% of the publishing workforce; 25% in visual effects for film; and as high as 30% in computer gaming. All currently benefit from being able to attract a skilled workforce from the EU, from their variety and diversity and from the collaboration that freedom of movement has enabled. Already, uncertainty over the status of EU workers and the lack of clarity around future immigration policy has made it more difficult for them to attract the talent they need since the Brexit vote. I continue to believe that the best way to resolve the uncertainty is to remain in the single market, but if the Government insist on leaving, they must explain how they will resolve the uncertainty.
As the Creative Industries Federation said after the Prime Minister’s speech,
“the willingness to continue to welcome the ‘brightest and best’ begs the question as to how that will be interpreted in future as the UK updates its outdated immigration system”.
At the very least, we must surely guarantee the status of skilled EU nationals now and in the future. The Prime Minister says that she wants to deliver this, but she must do it quickly. Contrary to the comments of the noble Lord, Lord Blencathra, uncertainty already means that some are leaving, and it is getting harder to attract new talent from other EU countries to fill vacancies and support continued expansion. The Government should follow the clear advice of the noble Lord, Lord Puttnam.
We also have to address homegrown skill shortages. The Prime Minister talked of reforming our schools to achieve this, as if schools had not seen reforms enough already. Instead, she should look at funding and at reforming the curriculum. The Government have failed to protect funding on a per-pupil basis; it is now predicted to fall by 7.5% by 2021. Despite the need for creative subjects for a wide range of careers within and beyond the creative industries, entries for GCSEs in arts and creative subjects have fallen significantly, not least since the Government failed to include them within the EBacc. The EBacc is now interpreted as a signal of what matters and what is best for young people, and creative subjects are not a priority. This is leading to a mismatch between education policy and industry requirements. We surely need to unleash the creativity of pupils. We should learn from the recent writings of the noble Lord, Lord Baker of Dorking, recognise the importance of digital skills to the creative industries and take action to tackle the huge shortage of such skills.
Some good things are happening. There are changes to the IT curriculum to introduce coding. The BBC’s “Make it Digital” and micro:bit are helping people to get creative with coding, programming and digital technology. Today, on the day it launches its digital marketing strategy with Minister Matt Hancock, I especially welcome the efforts of “Do It Digital”, a not-for-profit, business-facing campaign to share, signpost and celebrate all things that help small businesses get more out of digital.
However, more is needed. With 10 million adults lacking basic digital skills, it is simply not a good enough response for the Government to announce free adult basic digital skills training but then expect it to be,
“funded from the existing Adult Education Budget”.
Without intervention beyond what is currently scoped, it is estimated that there will still be 7.9 million adults without basic digital skills in 2025, and surely—and I hope the Minister agrees—additional action to upskill our workforce must be taken before we introduce measures to cut the supply of skilled people from the rest of the EU.
Without action in this and many other areas raised by my noble friend Lord Clement-Jones, the creative industries post-Brexit will be in severe difficulty. Sustaining their current position will be hard enough; expecting further growth will be unrealistic. To ensure that these issues are addressed, the creative industries must be given the priority they deserve during the negotiations and a seat at the top table.
The Earl of Clancarty (CB)
My Lords, I congratulate the noble Lord, Lord Clement-Jones, on introducing this important debate about a topic which is complicated because of the many different potential effects involved—and, indeed, on navigating so well through it. I will concentrate my remarks on the principle of free movement as it affects artists and performers as well as small businesses and, in particular, women, and I will end by making a more general point about the possible effect on the regions of the loss of the single market.
First, I shall mention some of the campaigns and comments made by artists before the referendum because they cast light on some of the ground rules under which the arts and creative industries to a certain extent operate and also tackle some of the Brexit statements on their own terms in a way that others at the time did not. Even if not a great deal of notice was taken then, they have resonance now.
Wolfgang Tillmans, the German fine-art photographer resident in Britain, adapted an English poem in his poster campaign by saying, “No man is an island. No country by itself”, and also, “We are the European family”. The Irish sculptor Eva Rothschild asked,
“why would we choose to distance ourselves from our closest neighbours and a whole community with a shared sense of history and identity?”.
The British artist Michael Tierney said:
“One of the biggest and best changes since my childhood has been the ease with which you can now travel between here and countries on the continent. Why on earth would you vote to go backwards?”.
Such statements directly confront the Brexit message of separation and the stated intent of “taking back control”.
The quite opposite interest of artists and creatives in being open to outside influence as a significant means of progressing their work lies at the heart of the principle of cultural exchange and, indeed, has a wider implication for the development of society as a whole. The desire of artists and performers, whatever medium they work in, to travel, study and work abroad at will can be a very important element of their personal development, and the “at will” part is in some ways the most crucial aspect. These artists will often be starting out on their careers and cannot afford to go further than countries in Europe, which is already a huge adventure. Of course, it is also true that we welcome artists from abroad, who often arrive originally as students, as did Wolfgang Tillmans, who went on to win the Turner Prize. It should be remembered how much many of the arts depend on a spirit of co-operation, even though there may be rivalry, too.
In response to the Prime Minister’s speech on Tuesday, the Creative Industries Federation said that,
“the willingness to continue to welcome the ‘brightest and best’ begs the question as to how that will be interpreted in future as the UK updates its outdated immigration system. Such judgments can be difficult to determine not least because, despite many well-paid workers in the creative sector, talent is not always commensurate with salary”.
The Minister may be aware that a number of us, including the noble Lord, Lord Clement-Jones, English PEN, the Manifesto Club, the author Kamila Shamsie and I have worked closely with the Home Office over a number of years to improve the visa system in this area, in particular for artists and performers from outside the EU visiting the UK. The Home Office has actually been very helpful and understanding about our concerns, and this led to the permitted paid engagement scheme. Things have improved in certain respects, even if they are by no means perfect, as the noble Lord, Lord Clement-Jones, noted. Artists coming to the UK from within the EU were, of course, never part of the discussion, but there is a fear that our work will take a step backwards. I very much hope that this will not be the case.
These concerns are also true for larger organisations and for the feasibility of future touring by British orchestras, theatre companies and dance troupes around Europe. The Incorporated Society of Musicians reports that in one survey, over half of musicians placed maintaining free movement as their number one priority for the music profession in negotiations relating to the UK leaving the EU. Opera and ballet companies, for instance, are able to call on singers and dancers from abroad at a moment’s notice to fill a gap if necessary, and of course that is true the other way round. But without the flexibility in terms of this last-minute decision-making that the single market allows, it is the arts, probably before any other sector, that will suffer the most if constraints are placed on movement. Can the Minister address these important concerns in his reply?
There are similar issues with small businesses. One particular thing that needs to be said, which I am not sure has been said yet, is how leaving the single market—if that happens—may have an inordinate effect on women, in particular those who run small businesses and also bear the brunt of juggling childcare, work and caring for elderly relatives. They may be able, just, to travel to Europe to do business, but anything over a two-hour flight throws enormous spanners in the works, both in terms of time and of cost. My wife runs a small media company. Before now she has, for example, gone to Copenhagen to work for a morning and has been able to get back in time—perhaps amazingly—for school pick-up. Of course, many women are not able even to do that, unless they are a City-based businesswoman—or indeed businessman—with 24-hour wraparound childcare. Trade with Europe cannot be replaced by trade with Australia or South America unless someone invents time travel. Shutting out interaction with our closest neighbours in favour of those further away would be an absurdity and an economic liability.
We should be immensely grateful for the significant support that the EU has given us over the years. The arts themselves in the UK are now fighting on more than one front, not least, in the regions, against local council funding cuts. This same policy of austerity, combined across every sector, was a contributing factor in the result of the referendum itself. Ultimately, for the arts and creative industries, particularly outside London, the concern will be that it will be the car industry and the financial sector which will be protected. Indeed, the Prime Minister hinted as much in her speech. But if this happens, the effect will surely be to skew an already distorted Britain—the one so many of those who voted for Brexit were protesting against—even further against the regions.
It seems to me that when rights and freedoms are removed—and we will lose rights and freedoms, even if, ironically, that removal is self-imposed—it will be the already disadvantaged who will suffer most. If the single market is removed—which, as others have pointed out, would break a clear manifesto commitment—and the worst fears are realised, it will be the regions that will suffer; less so London, which will no doubt to an extent have the power and nous to find a way around the system.
Baroness Chisholm of Owlpen (Con)
My Lords, I thank the noble Lord, Lord Clement-Jones, for initiating this important debate. I will talk briefly about museums, art galleries and commercial art galleries. Some have argued that these are not part of the creative industries, but surely exhibitions that bring together installations of art, music, video and photography have to be regarded as creative.
Museums and galleries play a central part in the cultural and creative life of our country and of our cities in particular. The role of culture and creativity in the social and economic future of our cities should be recognised and supported across government. For our cities throughout the UK to be truly successful, competitive and sustainable, they must be more than just hubs of commerce. Culture and creative industries are able to attract highly paid jobs and tourism to our cities. As businesses and the workplace become increasingly flexible and mobile, culture has a vital role to play in the appeal of a city for both employers and, critically, employees.
Culture can also support regeneration and development plans, as seen in areas such as London, Manchester and Dundee. Making this a reality across the country will require all parts of both the public and private sectors to recognise the value that culture and creativity play in the cities of the future. They operate in a global marketplace for creative, cultural and research talent. We have museum curators from Europe and further afield, and many of our museum and gallery employees have studied in Europe and in other parts of the world.
The museum sector is well placed to project an image of the country that is open, progressive and positively engaged. There is a real opportunity for museums and galleries to shape global perceptions of the country and, in doing so, help to encourage inbound tourism, trade and investment, as well as supporting the retention of global business. London’s unique collection of world-class museums is an essential part of its appeal to mobile and flexible global companies and employers who are choosing it as a place to work and live, against competition from other comparable global cities.
Of course there are uncertain times ahead for museums and art galleries. Leaving the EU could effectively remove the UK from the European loan circuit. The loan system as it stands has academic, social, economic and political advantages. Among many concerns are that costs will go up, and funding down. The Government must take note of the possible impact on UK museums and galleries. The laws in place at present are interrelated, and these will need to be in place when we leave to regulate such issues as the licensing and movement of cultural property, which at present is in EU law.
It is vital that museums continue to tour in Europe and bring objects, both ancient and modern, in and out of the country, enhancing the UK’s reputation abroad and all that they offer to people here in the UK. Now it is more important than ever that they continue to look and reach outwards and work with organisations in Europe and beyond, cementing the partnerships that have been built up. There is no doubt that our arts, creative and cultural organisations are in demand as partners, providers and destinations. As I have said, our creative and cultural strength is one of the UK’s trademarks globally.
Our departure from the EU will strip the UK of a layer of funding, but it need not mean that there should also be an end to culture collaboration. There may be uncertainty on the future of funding and free movement, but our creativity, museums and galleries remain vibrant. We are world leaders in culture and the arts. Innovative, challenging and exciting arts and culture are here to stay. They benefit the economy and attract tourists from all over the world.
The British Museum has a first-rate international programme that supports the UK’s soft-power capabilities, building networks and relationships throughout the world. The museum’s arm’s-length status enables it to continue to engage with countries such as Russia and Iran during moments of diplomatic difficulty, maintaining people-to-people contact. The museum also regularly receives ministerial and state visits, which emphasise its importance as one of the world’s leading attractions and a symbol of the UK’s openness to the world. Of course not all museums can operate on that scale, but it is important that museums and the cultural sector as a whole continue to engage and build networks, through research, exhibitions and collaboration with partners around the world, including throughout Europe.
The National Museum Directors’ Council stressed that EU funds provide structure and scale that individual member states cannot possibly replicate, and that private funding cannot replace public funding. Regional museums and galleries have always been under pressure and are particularly vulnerable. They need to rethink their way forward, sharing experience, expertise, resources, collections and skills. There must be collaboration with community organisations and connection with their local community. Could this be the time to consider a national strategy for museums and galleries? I would be interested to know how the Minister might feel about that.
I want to spend a couple of minutes on commercial galleries. The art market here in the UK is the second largest in the world, attracting high-spending individuals to buy and sell here, as well as setting up businesses and homes. They encourage and promote many of our artists in all areas of creativity. Commercial art galleries are small businesses and, as such, are no different from other businesses trading their wares in Europe and further afield. I hope that the Government’s industrial strategy will champion them in the same way that it does other businesses.
Anthony Browne, chairman of the British Art Market Federation, pointed out recently that all is not gloom and doom. The freer the trade, the more successful our art market can be. The Brexit vote could give London a competitive advantage over rivals in New York, Switzerland and Hong Kong. However, there is a caveat. Following Brexit, there is anxiety about freedom of movement and cross-border licensing, as well as favourable fiscal advantages to encourage a global market.
I am optimistic about the future of our museums and galleries. Let us remember that through the use of collections, public programmes and community engagement work, museums can connect diverse communities and provide safe civic spaces to help us consider and address the changing nature of our society and our relationships with the world. Exhibitions such as the British Museum’s “Hajj: Journey to the Heart of Islam” and the Sikh Fortress Turban touring exhibition, or the forthcoming South Asia partnership gallery in Manchester, demonstrate how collections can be used to engage with local communities and increase levels of understanding and tolerance.
I look forward to hearing my noble friend’s speech, in which I am sure there will be support for museums and galleries in this country.
Baroness Rebuck (Lab)
I, too, thank the noble Lord, Lord Clement-Jones, for initiating this debate, especially because I, too, heard nothing about the creative industries in the Prime Minister’s speech on Tuesday. As Rohan Silva, a former No. 10 adviser turned tech entrepreneur, reminded us recently, the Government have promised that they will push hard for special trade deals with the EU on financial services, pharmaceuticals and the car industry. Construction and global banking have also been reassured that they will continue to be able to access the global talent they need. But the creative industries, this unique melange of large and small businesses encompassing, as we have heard, music, fashion, television production, software development, performing arts and gaming to books—where I declare an interest as a publisher—have been given no such reassurances.
Is that because they consist of more than a quarter of a million businesses and, despite being the fastest growing sector of our economy and the source, as we have heard, of our soft power in the world, we rarely hear of their needs, as they do not employ the lobbying rights of other industries? We need to remember that the creative industries are our calling card to the world, vital to our future growth and competitiveness, alongside their role in social inclusion, connecting communities and bringing people from all walks of life together in creative empathy, engagement and experiences.
Adele is the world’s bestselling musical performer. The fashion label Burberry exports to the world. As we have heard, three of the highest grossing global film franchises of all time—Harry Potter, The Lord of the Rings and James Bond—were based on British books, but any film also highlights acting, producing and directing talents, and all the behind-the-scenes crafts, from costumes to special effects, that make the UK such a special creative hub. This importance can also be seen both in the West End and on Broadway, where hits such as “Matilda” and “The Curious Incident of the Dog in the Night-Time” were based on British novels. The Golden Globes also highlighted our creativity, from John Le Carré’s The Night Manager to Claire Foy’s portrayal of the Queen.
All of those industries share four key concerns in the light of our exit from the European Union. The first, as we have heard, is access to talent and skills. The Prime Minister has said that she wants us to be a magnet for international talent, yet whether you are a touring musical festival or a start-up app developer, you will share with other creative industries a skills shortage for a variety of jobs from design engineers to animation specialists, video game programmers to skilled musicians. Having an immigration process that sets an arbitrary salary threshold ignores the challenges involved for developing artists, when their initial income is not always equal to their talent, as we heard from the noble Earl. Although I welcome the news that EU workers already living in Britain will, we hope, have the right to continue to work here, what of the needs of the creative industries after Brexit?
Publishing has a particular interest, given that more than 10% of its workforce comes from Europe, contributing to both the generation of ideas and the simple language skills needed to sell our books to the rest of the world. As we have heard, at least a quarter of the specialists in visual effects are from the EU. Similarly, the gaming industry draws more than 25% of its staff from the EU.
The diversity of the workforce helps to inspire innovation and knowledge of other consumer markets, and helps our exports. Rather than impose limits, should we not be making it easier to recruit the right people, as my noble friend Lord Puttnam has argued?
The second concern is EU funding and access to grants such as Creative Europe which, in my industry, helps fund the translation of literary works. The UK receives some of the highest European cultural investments that fuel both our creative industries and help to regenerate our cities from Glasgow to Plymouth—and Liverpool, which in 2008 increased tourism by one-third as a European capital of culture. The UK is the second highest recipient of EU research, development and innovation funding, receiving a total of £8.8bn between 2007 and 2013—£3 billion more than we put in. I ask the Minister: how will those funds be replaced?
The third concern is the regulatory framework—copyright protection, trademarks, intellectual property rights and the single digital market. Copyright is vital for the creative industries. In publishing it is the mechanism by which publishers and authors can turn their creative endeavour into financial reward. We need to retain a stable framework to ensure continued investment with digitisation opening up global markets. We need a seat at the table to influence policy, such as protecting IP from online piracy.
Finally, there are our trading relationships and co-investments. In book publishing, any tariffs will be a real disincentive to the 35% of our exports to the EU. That we are aiming for tariff-free trade is hugely welcome but we need to ensure that there will be no non-tariff barriers too, with all the related delays and extra costs. We also need to consider the power of our audio-visual industry, as we have already heard, European creative collaborations and co-investments, and to continue to be able to qualify for European media slots at the same time as protecting territoriality of IP rights.
There is one other key issue for the creative industries, which is the central importance of the intellectual and research independence of our higher education sector. The Royal College of Art, in which I declare an interest, has been rated No. 1 in art and design in the world for two years, since the league tables were established. It sits at the heart of Albertopolis in London, flanked by Imperial College and the V&A. It launches more new businesses than any other university according to HEFCE, yet only science and innovation were mentioned in the Prime Minister’s speech, not the innovation that comes from STEAM—adding art and design to science, technology, engineering and maths. This is the space where some of the most exciting new businesses are born.
Will EU students still choose our universities if their fee structure changes or, as I heard one Minister say, will they be replaced by international students from outside the EU? I think not if our post-study work visa system remains so inflexible. The Economic and Social Research Council research centre on micro-social change reports that graduates from the EU are the highest achievers in UK universities and a tremendous resource to the workforce. What effect will a reduction of EU students have on our creative economy?
Our universities, writers, musicians, actors, producers, directors and designers all draw from a rich and diversified cultural heritage. That is how new ideas are produced that fuel our fastest growing sector. We need to be sure that the diverse needs of this sector are truly recognised and that everything possible is done to preserve and grow its vibrancy, contribution and its global impact.
Lord Wigley (PC)
My Lords, my first duty is to declare several interests. My wife, daughter, son, daughter-in-law and son-in-law are all involved in the creative industries in Wales. I thank the noble Lord, Lord Clement-Jones, for facilitating this debate and reiterate my unwavering commitment to European unity as a background to it.
The numbers employed in the creative industries in Wales has doubled over recent years. It is a vital part of our economy. Fears about the impact of Brexit have been well expressed by the Arts Council of Wales. The arts in Wales have a long-standing tradition of working internationally and this is particularly true of our links within Europe. They have benefited us both socially and culturally, as well as bringing very substantial European funding to support cultural activities in Wales. Over the past two decades the international arm of the Arts Council, Wales Arts International, has organised and participated in European cultural partnerships and exchanges. Any diminution of these would be a highly retrograde step.
I turn first to the question of funding. Many of the major UK orchestras, including the Welsh National Opera, are funded partly through European money. Will there be any guarantees that such important cultural ambassadors do not lose out financially as a result of Brexit? The current EU structural fund programme, over the period 2014-20, provides almost £60 million to third sector organisations in Wales, of which arts-related projects are a major component. These are focused on economically deprived communities. Creative Europe, which has already been mentioned—the EU programme that supports the cultural, creative and audio-visual sectors in Europe—is committed to investing almost €1.5 billion in creative industries between 2014 and 2020. During the first two years of the programme, it supported 230 cultural organisations and audio-visual companies in the UK, and assisted the cinema distribution of 84 UK films within other EU countries, with grants totalling £40 million. The creative industries are worth £87 billion to the UK economy and have been growing at about 9%, twice the rate of the overall economy.
The EU is Britain’s largest export market, taking 57% of our creative industry exports. Over the past five years, the Arts Council has invested heavily in opening up new European markets for Welsh artists and arts organisations in a wide range of cultural activity, whose livelihoods depend on such work and whose creativity has undoubtedly benefited from opening up such new horizons. The Welsh television series “Y Gwyll”, televised in English as “Hinterland”, was supported by €0.5 million from the EU’s media fund, which made it viable by increasing its non-recoverable finance from 57% to 67%. It has now sold to 180 countries. Without EU support, it would not have gone ahead. Creative Europe has non-EU countries such as Norway, Serbia and Iceland as fully participating nations. Can we therefore expect the Government to make a specific objective of negotiating to maintain the UK’s eligibility to participate fully in Creative Europe?
I understand that until 2020 the UK will be eligible to benefit from EU programmes, including Horizon 2020, Interreg, Erasmus+, Europe for Citizens and Creative Europe. After that, we are in a whole new world, with total uncertainty. It is incumbent on the Government to make it clear at the earliest possible opportunity how they intend to maintain or replace both for the UK as a whole and specifically for the devolved nations the sources of financial support currently provided by the EU, by funding from within the UK. If the Government feel that they are honour bound to carry out the outcome of the referendum, they have to honour the pledges given to deliver that outcome—no ifs, no buts—and deliver them in full.
I now want to address some practical problems. There can be no doubt whatever that, if barriers are erected which militate against the free movement of people, and indeed of cultural equipment, such as instruments, that will represent a huge backward step for practitioners in many aspects of the arts. I remember, back at university in the early 1960s, how one summer vacation, a group of seven or eight musicians with a dozen or so instruments went on a European tour. They had to secure in advance individual papers to allow them to work in each country, and entry documents for each of their instruments, and these had to be cleared at the borders of almost every country as they made their road journey around our continent. Heaven forbid that we go back to such a situation.
My daughter-in-law, international harpist Catrin Finch, has outlined to me her great fears at the adverse effects of Brexit on her performing colleagues. She tells me that for many musicians wishing to perform in the United States or other non-EU countries, the visa prices may be too high to make concerts worth while. There are disincentives by way of the time-consuming paperwork, which render tours impractical. If the EU was subject to similar restrictions, it would be a body-blow to artists and larger companies. Catrin also warns of the effect of Brexit on young musicians studying within Europe. At present, there are great cultural links with musical conservatoires around Europe. Many young musicians take advantage of the opportunities given to study in other countries as part of their course. This is a two-way process. Many of the students studying at the Royal Academy of Music and other colleges are from EU countries. Will such opportunities still be available after Brexit?
In its report to the Culture, Welsh Language and Communications Committee of the National Assembly last October, the Arts Council of Wales included evidence from Wales Arts International which warned of three specific dangers arising from Brexit. It was concerned about, in terms of employment, whether the UK would be able to attract and retain talent from around the world to underpin their high reputations; a reduced likelihood of bringing artists to perform in the UK; and the additional costs faced by those from the UK performing in continental Europe. There is also the general point about the cultural enrichment that comes from such mixing across our continent. People from Britain learn so much from the wonderful arts organisations right across Europe.
Many of the points which I have outlined were highlighted by the Creative Industries Federation in October. It warned of the dangers of creative organisations in the UK being unable to recruit and keep key staff, of the increased administration costs both for those wishing to perform in continental Europe and for venues wishing to use EU-based performers, and of the dangers of losing protection for original designs. In its response to the Prime Minister’s statement this week, it has emphasised the need for a sector-by-sector approach, which I endorse. In that context, if the Government are hell-bent on the hardest of hard Brexits, they should aim at securing for those involved in the arts and creative industries a specific free-movement provision, which avoids all the bureaucracy, paperwork, and complexities which they may well otherwise face. This clearly must be reciprocated for those from EU countries coming to the UK.
I have not gone into the negative impact of Brexit on our universities, which is the subject of another day’s debate. Needless to say, our communities and our universities will suffer a major blow, as indeed will our creative industries. There are clearly major threats to the creative sector arising from Brexit and I appeal to the Government to take on board all the worries outlined in today’s debate and to bring forward a paper outlining the way in which they hope to address these issues in the context of their Brexit negotiations.
Lord Suri (Con)
The noble Lord, the Liberal Democrat spokesman for the creative industries has been working hard on this issue, as has the Under-Secretary of State for Culture, Media and Sport, for which I thank them. This is an extremely important debate, because post-Brexit Britain must play to its strengths to keep the economy growing at a decent rate. The creative industries are certainly in that category—growing three times as fast as the national average and generating £10 million an hour.
On the topic of social media, I have been heartened to see that Facebook is expanding and hiring at its London headquarters, which it describes as a global hub. Also, two weeks ago, Snapchat decided to base its European headquarters here, which proves the tremendous advantage we have in this city of cutting-edge media expertise and flexible labour markets. The type of Brexit that the Prime Minister outlined on Tuesday will not sink the creative industries, but it does threaten to impair them in some ways if not managed and mitigated. One very real threat is the removal of EU funding through the MEDIA programme, which goes to studios, the Creative Europe programme, which funds theatres, and the various funds that have helped to open museums like the Imperial War Museum North.
As I have said before in this House, one of the great shames of the leave campaign was the assumption that we would have £350 million a week to spend on the NHS when so much of our contribution flows back through various avenues. The Prime Minister was clear that a hard Brexit is her aim; Ministers will have to decide where to put this cash that we would otherwise have spent on EU membership. I urge them to step up and guarantee that EU arts funding will be met in the future. The Chancellor has confirmed this until 2020, but I urge all relevant Ministers to give longer-term assurances, so that investors and firms can move forward on a stable basis and lose the fog of uncertainty that is hanging over day-to-day spending decisions.
Even if the decisions made are not what the creative industries might like to hear, there will at least be some certainty, although they should note that many production houses now view EU funding and continued access to similar public funds as part of their basic model. The sharp rise in the pound on Tuesday is clear evidence that businesses want to hear news, even if it is bad news, so they can have the stability they crave and plan for the future.
I am also concerned about immigration and free movement. The Prime Minister stated clearly in her Lancaster House speech that,
“we will get control of the number of people coming to Britain from the EU”.
That is a sensible policy given the frustration many leave voters felt about immigration, but where will it leave the creative arts? Some UK dance companies source 80% of their staff from overseas, primarily European countries. Clamping down on soft targets such as travelling performers could cut numbers but would leave us culturally and financially poorer. I urge the Government to add more creative professions to the list of shortage professions, as these are not people whom we wish to ward off. The creative arts, along with agriculture and construction, are some of the industries most dependent on foreign labour, but creative industry workers tend to be very highly skilled and productive for the real economy. Take the current boom in West End tickets for theatre, opera and ballet following the drop in the pound. If a director has to source visas for up to 50% of their production, the cost and delay involved—as well as the possibility that they may not get the visas in any case—might drive them away. Tourists who are unable to see the shows they want to see may go to Paris or Vienna instead.
This country has always welcomed people who can plug gaps and who boost, not drain, public services. Creative professionals are the archetype of that category. I do not believe that the public voted for less cultural exchange with Europe. In her speech, the Prime Minister also said:
“Britain’s history and culture is profoundly internationalist. We are a European country—and proud of our shared European heritage”.
I agree with the sentiment expressed. We should pursue an internationalist vision while maintaining our strong cultural links to Europe, or risk becoming Little Britain.
This speech may sound gloomy but there are opportunities to grasp, too. Greater cultural exchange with some nations with which we may have interacted less during our period of EU membership is a definite bonus, and a weaker pound will help promote tourism to see Britain’s cultural offerings. However, the risks are significant and the industry stands to lose heavily if the wrong kind of deal is made and subsequent attitude taken. I am confident that the Government will view these issues with the importance they deserve.
Baroness Benjamin (LD)
My Lords I too congratulate my noble friend on securing this timely debate. I declare an interest as per the register.
I want to concentrate on the potential impact of Brexit on our talented children’s and animation production sector, and why this sector should be at the heart of the Government’s negotiations and post-Brexit planning. As we have heard, the creative industries overall are responsible for 8% of total UK gross value. The children’s production sector has played its part in this major contribution, selling the UK brand with global successes such as “Peppa Pig”, “Art Attack”, “Horrible Histories” and many, many more.
Children’s content production can be digital, interactive and delivered in some of the most creative and original styles imaginable, responding to the way children consume content in today’s world. This has been made possible because children’s content and animation producers have long been used to working both in Europe with European partners and beyond Europe. Both are also important export markets for the UK. Therefore, a fundamentally important issue that needs to be considered is freedom of movement. This is vital for the sector in the long term, as it allows short-term opportunities for creators to work on productions around Europe. Around 6% of jobs in the creative industries are filled by European migrants, many in the animation sector, where skills gaps are often identified and filled with European workers. Any additional burdens could harm the sector and content for the consumer, and increase costs for businesses.
The production sector in the UK has developed into a world-class sector precisely because it has been open to talent from both Europe and around the world. Importantly, this allows UK staff to learn and develop their skills with the best of global talent. There is also a case to be made for the importance of the children’s production sector for training and diversity. Countless times we see young talent, on and off screen, developing their skills and forging their careers from a positive start in children’s production.
All this is why the creative industries are calling for the Government to continue investment in the Creative Europe funding scheme. In its first two years, Creative Europe has provided some £40 million in grants, supporting some 230 different UK cultural and creative organisations. This funding is invaluable, particularly to children’s and animation producers, who work to tight budgets, and for whom completing the funding jigsaw is always a challenge, as broadcasters hardly ever fully fund productions.
No UK PSB provides 100% funding for animation; dramas do not always receive 100% funding, relying on co-production. Usually, only specialist UK-produced programmes are fully funded. That is why there is strong agreement throughout the creative industries that the Government should continue to pay into the Creative Europe scheme, as other non-EU countries do, given the clear benefits to the sector. The sector truly welcomes the Government’s recent commitment to honour funding for projects that have already been given the go-ahead. However, the production sector calls for equivalent levels of funding to support production and creative clusters around the UK if we do not continue our commitment to Creative Europe. Can the Minister say whether the Government will commit to this?
Children’s and animation producers are well placed to contribute to growth in exports by building on existing relationships, especially with co-productions within Europe and beyond. However, in recent years, government export support has been inconsistent and has sometimes been removed at short notice for some countries, particularly emerging markets. Will the Minister therefore give an assurance that the Government will work more closely with independent producers and the creative industries to ensure they get the sustainable support they require to secure the best business deals?
The children’s production sector is already under immense pressure, overall spend on children’s programming has declined by almost half since 2002, and spending by commercial public service broadcasters has fallen by 93%. This is all cause for concern because the cultural and development value of content for children and young people is crucial for their development. It is vital that they see themselves and their lives reflected on screen and in society. Our children’s production sector tries to do just that despite all the challenges it faces. But how much more it can endure, only time will tell.
The market for producing children’s programming is shrinking rapidly, while the demand for quality children’s programmes remains vigorous. Therefore, the loss of the Creative Europe fund would be yet another blow and would represent a significant commercial loss to the UK, as well as being incredibly detrimental to our country’s soft power. The government tax breaks given to the children’s programming production sector were most welcome, but ultimately, without the market demand, they do not make the pot bigger or ensure that investment levels are sustainable. Loss of Creative Europe funding would compound the sector’s struggles.
Our children did not have a vote in the referendum, nor did they have a voice in any of the Brexit negotiations. But creative content that is likely to be produced for them, to influence their imagination and thinking, their emotional, mental and inspirational well-being, is at stake here. This is why we must not let them down when we decide on plans for their future viewing, as we move forward. Remember: childhood lasts a lifetime, and children deserve high-quality content that will stay with them for ever.
Lord Taylor of Warwick (Non-Afl)
My Lords, I too thank the noble Lord, Lord Clement-Jones, for securing this important debate today.
What do the following British creative people: Charles Dickens, the Beatles, JK Rowling and Charlie Chaplin, all have in common? The answer is that they were all artistic failures—at least at first. Dickens left school early, had no formal education, and seemed destined for a life working in a grimy Victorian shoe factory. The Beatles were rejected by a record company, which said “We don’t like your sound, and guitar music is on the way out”; JK Rowling was unemployed, divorced, and raising her daughter on social security; and Chaplin was shown the exit door by unimpressed film executives who thought his comedy was too obscure for anyone to find funny. Yet each of these artists persevered and became an iconic example of what has become great about Britain’s creative industries, which are respected throughout the world.
However, to build upon this great legacy, we first need to refresh the education and training system to provide young people with the skills needed for great jobs in the creative sector. I had the privilege for five years to be the chancellor of Bournemouth University, which is a centre of excellence for business, especially film production. A number of its graduates have used their technical skills to make the “Lord of the Rings” films, which were such a visual success. But there is still a national shortage of skills in film animation and visual effects.
Secondly, Brexit provides the Government with the opportunity to create a visa system fit for the 21st century. The visa system should enable access to world-class talent to keep the British creative industries at the top. One of my daughters is a student at the London College of Fashion, and the international students there face a steep barrier in terms of the cost and complexity of obtaining tier 2 visas to study.
There needs to be an audit of existing EU funding to the UK creative sector, to identify old streams that should be replaced by the UK Government when the EU funding ends. There must also be ongoing protection of intellectual property rights, including copyright in the new trade deals. Other issues which need to be addressed will be the increased cost and administration for British artists touring the EU, and for British venues wanting to showcase non-UK EU nationals. There is also likely to be an impact on the finances and standing of British higher education because of the possible reduction in the number of EU students and academics. There are concerns too about the loss of rights protecting original designs, which could affect trade showcases such as London Fashion Week. There is also a question mark over whether the UK will proceed with hosting the European City of Culture in 2023.
According to the British Film Institute, the film industry is worth over £6 billion per year. For 10 years I was vice-president of the British Board of Film Classification, which has jurisdiction over cinema film, videos and computer games, and I can definitely say that during those 10 years the films that I found the most creative and groundbreaking were British-origin films, such as “In The Name of The Father”, “The English Patient”, “The Remains of The Day” and of course “Chariots of Fire”, produced by David Puttnam, now the noble Lord, Lord Puttnam. Then there are British actors who have conquered Hollywood, such as Benedict Cumberbatch, Idris Elba and Anthony Hopkins. But, moving forward, there is concern about the potential loss of funding for the film industry from the EU’s Creative Europe programme.
The UK music industry’s contribution to the UK economy is about £4.1 billion. British artists from Adele and Coldplay to One Direction sell out arenas all over the world. I spent some very happy years as a presenter for BBC Radio 2 playing music, which is very much part of the fabric of daily life for millions of the station’s listeners. I remember how delighted I was when I got my first big break there as a young presenter. I was given the four o’clock slot—all right, it turned out to be 4 am, not 4 pm, but it was a start and led eventually to more prominent slots in the afternoon and evening. Recently I have enjoyed hosting music shows for a London radio station, where they refer to me warmly as “The Soul Baron”. Again, it has reminded me that the music industry has an important role to play in British business and civic life.
The UK music business derives more than half its revenue from exports—to the tune of £2.2 billion. Its future is dependent on securing favourable trade conditions with overseas markets, so I would like the Government to at least think about the following. There are currently 21 trade envoys for the UK Government but none for America, India or China, which are huge markets. Perhaps the Government could think about creating trade envoys for those very important markets. They may also like to think about revitalising the city twinning system to link creative industries across countries and continents. We need to think afresh because of the opportunities that Brexit gives us.
The Government need to continue their dialogue with the Creative Industries Council and to listen to groups such as the Creative Industries Federation, the Publishers Association, the British film industry, the British Fashion Council, UK Music, the Commercial Broadcasters Association and the Arts Council.
We are on the eve of the inauguration of a new American President. I recently had the privilege of being interviewed on Fox News in America on the topic of Brexit. America is listening to Britain and watching how we embrace this European exit. Brexit may be a bumpy ride but it will provide positive opportunities for the creative industries in the long run. As the economist John Maynard Keynes once said, the difficulty lies not so much in developing new ideas as in escaping from old ones.
Lord Macdonald of Tradeston (Lab)
My Lords, I too thank the noble Lord, Lord Clement-Jones, for this timely opportunity to discuss the impact of Brexit on the creative industries.
As might be anticipated in sectors such as film and television, both of which are active in production and distribution internationally, the reaction to the EU referendum result was largely negative. A poll of PACT members showed that 85% were opposed to Brexit, and 59% of the members of the Independent Film & Television Alliance said that it would be “bad for business”. Its chairman said that the impact of Brexit was likely to be “devastating for us”.
Among the professional concerns of media executives were loss of membership of the European Commission’s framework programme for support for the culture and audio-visual industries, Creative Europe, as we have heard; exclusion from EU quotas; work permit and visa problems for cast and crews; and the loss of a seat at the table where EU members decide digital single market strategies. There are many more such concerns, as we have heard in this excellent debate.
Among the immediate impacts of the Brexit vote were falls in the share prices of media companies such as ITV and the trending downwards of television advertising revenues. However, the chief executive of ITV, Adam Crozier, identified the crucial factor in these falls as the uncertainty surrounding our exit from the European Union. This week, the Prime Minister dispelled some uncertainty but, sadly, not that for the creative industries.
However, as the months have passed, more emphasis is now being given to exploring how to make the most of Brexit, as we have heard today. Our creative industries must lobby hard to maintain or even expand our pan-European links, and my remarks relate mainly to film and television. As noble Lords have said, the Creative Europe programme is open to non-member states, ranging at present from Iceland and Norway in the north to Albania and Montenegro in the south as full members. The key point is that the programme is open to non-EU members, provided that they “pay additional appropriations”.
Over its first two years, financial support for creative projects in the UK totalled €40 million. The Creative Europe Desk UK says that UK participation can continue beyond Brexit. Given that background, it should not be too hard to negotiate arrangements that keep the UK in Creative Europe but, as the noble Lord, Lord Blencathra, said, vital though it is to many worthwhile cultural activities, in the great scheme of things the EU money involved does not add up to much in the context of rapid growth across the full range of British creative industries. Therefore, the UK Government could easily afford to fund a replacement programme if necessary.
It has been previously stated but is worth repeating that, measured by their gross value added, the creative industries account for £84 billion, or 5.2% of the UK economy. As has been argued, that should give the creative sector a potentially powerful role in shaping post-Brexit arrangements as a matter of some urgency. For instance, our creative and financial relationships with the United States go back to the beginning of film, then of television, and of course, later, to popular music, and these relationships may be stronger now than ever before. If President Trump wants an early trade deal with the UK, the creative industries should pull together their proposals and get working in collaboration with the Government, if they put their promises into practice. The DCMS Minister of State, Matt Hancock, has said that the creative industries,
“will be absolutely central to our post-Brexit future”,
and that Britain was at its best when,
“progressive and positively engaged in the world”,
adding:
“The creative industries are critical to securing that status”.
Those are encouraging words but the arguments of the noble Lord, Lord Clement-Jones, my noble friend Lord Puttnam and others demand a more detailed response very soon—perhaps this afternoon from the Minister.
We can also anticipate more detail on Brexit impacts and our options from the conclusions of the current inquiry of the Commons DCMS Committee, some of which may be positive, but at present it is not a long list. A fall in the value of the pound long term could boost the attraction of the UK as a production base. The increased cost of buying in non-British productions through the fall in the pound might even give us a marginal boost through their replacement in the schedules by domestic programming. Matt Hancock has also stated that leaving the EU would not affect existing creative sector tax reliefs. Let us hope that these can be maintained, and perhaps incentives even enhanced, after the lifting of EU restrictions on state-aid rules.
I trust that the Government will do the obvious when it comes to prioritising their sectoral strategy and see that, in giving strong support to the creative industries, they will be backing a winner.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I add my thanks to my noble friend Lord Clement-Jones for the opportunity to debate this very important topic.
We are a creative nation and so far as the creative industries are concerned we are ahead of the game. As many speakers have mentioned, they are the fastest-growing sector of the economy, and, as the noble Baroness, Lady Rebuck, said, they are an essential part of promoting the UK around the world.
The Prime Minister referred in her speech to our having the most effective “soft power”—she is right. In a study commissioned by Professor Joseph Nye, who coined the phrase, the UK comes out as global leader. What the Prime Minister did not say is that this is in large part down to the creative industries; that the UK’s cultural collections, institutions, industries and media create powerful channels of communication that help to increase the UK’s profile, forge links internationally and widen our sphere of influence. My noble friend Lord Clement-Jones did say this, but I feel compelled to add to his rather pale, male list of examples of those who spread the word about the UK so that it includes Adele—I think this is her third namecheck today—Idris Elba and Paddington Bear. Supporting and protecting this vital, vibrant sector is paramount to our economy, to our country’s sense of itself and to our place in the world.
Here, I take issue with the noble Lord, Lord Blencathra. Our creative industries have massively benefited from our membership of the EU. Take the British music industry. It contributes £3.8 billion to the UK economy, and Europe is its second-largest market. Take television. The UK is the second-largest exporter of television programmes and formats in the world, and the noble Lord, Lord Puttnam, eloquently enumerated specific concerns in this area. Take the fashion industry. London is Europe’s hub for first jobs and start-ups. Alexandra Shulman, the editor of Vogue, who should know, has expressed concern, saying that a lot of people working in the fashion houses are not British and,
“many of our fashion students when they graduate get great jobs working abroad … Versace, Prada, Yves Saint Laurent—they use our designers”.
Membership of the EU has meant that music and television producers and retailers can export and import freely across the continent. It has meant unrestricted access to the world’s largest trade area.
Crucially, as has been mentioned by the noble Lord, Lord Wigley, and my noble friends Lord Clement-Jones and Lord Foster, the free movement of people to work and travel across Europe without the need for visas has both facilitated and fuelled the exchange of culture, creativity and expertise, and generated commercial and artistic opportunities. Therefore, we welcome the Prime Minister’s recognition of the urgent need for a reciprocal arrangement with the EU on its nationals working in the UK and those British citizens currently employed in the EU. As the noble Lord, Lord Puttnam, so clearly stated, without the right deal on the movement of talent and skills, the creative industries will face big challenges. Will the Minister give his assurance that the Government understand that?
Creative skills do not sit easily with the traditional qualifications that the Home Office uses to evaluate visa applications. The noble Earl, Lord Clancarty, the noble Baroness, Lady Rebuck, and the noble Lord, Lord Taylor, all mentioned this. The contributions of those with creative skills cannot be as tangibly assessed. Many creative jobs are for small and medium-sized enterprises, which do not have the resources and back-up of big businesses, yet will be competing with them for a finite number of visas. There are also specific skills gaps that will need to be recognised and addressed, including the importance of freelancers.
As my noble friend Lord Foster mentioned, the Prime Minister acknowledged in her speech the need for investment in skills. Will the Minister ensure that this will involve the inclusion of creative subjects in the school curriculum—STEAM not STEM? The success of those in the creative industries lies in the fusion of creative and technological skills, and my noble friend Lord Clement-Jones referred to the relationship between creative and tech subjects. Schools need to be encouraged to promote not science or art but the art/science crossover. The Victorians understood this. They created the Science and Art Department and invested in what was to become the V&A, in order to develop the skills needed to feed British industry. The Prime Minister said in her speech:
“A global Britain must also be a country that looks to the future. That means being one of the best places in the world for science and innovation”.
I hope she recognises what the Victorians did and that the emphasis on science and innovation in post-Brexit Britain includes innovation in the creative industries.
Then there is the matter of funding, as mentioned by the noble Baroness, Lady Chisholm, and the noble Lord, Lord Wigley. Without the right deal, the UK’s creative industries will lose EU investment—investment which, by the way, also supports the development of creative skills. Across the country, there are examples of our membership of the EU enhancing UK culture. The Creative Europe programme has been referred to. UK applicants for this funding have a success rate almost double that of the EU average, and the programme is introducing a new bank guarantee, the cultural and creative sector guarantee facility, which is worth €121 million and will underwrite bank loans to creative businesses. The European Development Fund, also much mentioned, has supported cultural projects across the UK, such as Sage Gateshead, and has been critical to the growth in film production in the regions. Four British films, nominated for a total of 11 BAFTAs this year, have received EU funding. Will the Minister assure us that where access to EU funding is lost, the Government will seek to maintain investment through UK-based schemes? This request was also made by the noble Baroness, Lady Rebuck, and my noble friend Lady Benjamin, and my noble friend Lord Clement-Jones addressed this in detail, so I will not repeat what he said.
To conclude, in her speech the Prime Minister mentioned our “new modern industrial strategy”. The noble Lord, Lord Macdonald, the noble Baroness, Lady Rebuck, my noble friend Lord Clement-Jones and many other noble Lords mentioned that the strategy does not refer to the creative industries. Can the Minister confirm that they are recognised as central to this strategy and that, since there is to be a sector-by-sector approach to Brexit, the creative industries will be regarded as a key strategic sector with parity of esteem alongside the aerospace, finance and automotive sectors? As the Creative Industries Federation has said,
“the position of a government that prioritises controlling borders above all else to leave the single market”,
will make a,
“sector-by-sector approach to trade particularly critical … if the creative industries are to continue to thrive”.
Finally, in a survey conducted by the CIF of its members, 96% of those who took part supported remain. The Liberal Democrats have always been champions of creators and of their industries, and we call on the Government to listen to their concerns and ensure that the creative industries are at the top table when Brexit negotiations begin. Unless the interests of the creative industries are protected, leaving the single market will be a disaster for what I believe to be a jewel in the crown of our economy and a great British success story.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very grateful to the noble Lord, Lord Clement-Jones, for initiating this debate today. He and many other noble Lords have spoken very powerfully in what has been a very good debate about the significance of the creative industries not only to our economy going forward but to our fundamental culture and way of life, and how important they are now and will be in the future.
As noble Lords have said, the creative industries are our fastest-growing economic sector, worth around £87 billion to the economy. They support one in 10 jobs, with one in 17 people in the UK workforce directly employed in the sector—so we cannot ignore the economic significance that it brings. As the Creative Industries Federation has noted, and as my noble friend Lady Rebuck articulated very well, at an international level our creative output is known as our calling card around the globe. It means so much more than just an economic contribution. Perhaps that is why 96% of its membership supported staying in the EU.
As has been said, this is about more than just an economic trade benefit. We also lead the world in soft power and cultural influence. That is crucial but much harder to evaluate. Perhaps that is why that contribution is sometimes ignored.
It is understandable why the Brexit decision came as such a shock for a sector that has thrived on international collaboration and global mutual respect. It is to its credit that it has sought to find a positive narrative about the future of the creative sector outside the European family, which will prove a challenge to us all. However, the sector has good reason to be optimistic. Its reputation as our fastest-growing industry cannot easily be diminished. By its very nature it has some of the most imaginative and creative leaders, who are not daunted by a new challenge.
However, sadly, it is hampered by the failure of government to recognise its worth or to ensure that it has a place at the top table of the Brexit negotiations—a point that has been made a number of times today. As many noble Lords around the Chamber have said, the failure of the Prime Minister to mention the sector in her speech this week was very instrumental, and illustrative of the lack of understanding of the contribution it has made.
It will be interesting to see how much the creative industries figure in the modern industrial strategy, which is due to be published next week. I hope we will hear from the Minister that there will be a much stronger positioning and role for the sector in that strategy. I further hope that he will be able to give some guarantees on what sort of involvement we will have in the Brexit negotiations and discussions over the coming months, because the sector has identified some pressing and particular problems that will need to be addressed.
First, as we have heard, the sector would be particularly badly affected by constraints on freedom of movement. Estimates of the number of EU nationals in the creative industries workforce here vary from 10% to 40%. My noble friend Lord Puttnam made a compelling and passionate case as to why the Government should immediately guarantee the status of EU nationals already living and working in the UK and not treat them as a bargaining chip. We on these Benches have already called on the Government to end the damaging uncertainty for those people who have been living in, working in and contributing to our communities.
Beyond that, we need to recognise the international flow of workers and productions that underpin the success of the creative sector, as eloquently described by the noble Earl, Lord Clancarty, and others. Any tighter immigration rules and visa requirements could create an unsustainable cost and barrier, for example for UK companies touring abroad and for UK venues that regularly showcase European and international acts. They would also add complexities for those in the film and TV sectors, which have traditionally operated across borders, and could constrain people filming in Europe and European people filming in the UK.
If it is the Government’s intention that we should use more home-grown creative talent to fill some of those gaps, it remains unclear why the Government have consistently downgraded the arts and creativity in the school curriculum. It is not clear that we are training the next generation to fill those gaps.
All these issues need urgent clarification and I would be grateful if the Minister could set out the process by which the new freedom of movement rules will be agreed and how the particular concerns of this sector will be factored into the new discussions and final agreement.
Secondly, a number of noble Lords highlighted the access to EU funding for the arts, which will be lost. For example, as we have heard, Britain has been a net beneficiary of the Creative Europe fund, receiving more EU creative funding than any other country bar Germany. As we heard from the noble Lord, Lord Wigley, and others, much of this money has been crucially used to fund projects outside London and has played a significant role in wider urban regeneration.
In addition, the film sector also benefits from the EU media scheme, which provided more than €10 million between 2007 and 2013 to the UK film industry. This is being used to support the export of UK films to European cinema audiences and to support the release of European films in the UK. It is also used to subsidise the independent cinema network through the Europa Cinemas scheme. These arts projects are supported by a huge network of smaller and medium-sized creative enterprises as well. As we heard from my noble friend Lady Rebuck, this amounts to something like 250,000 businesses, many of which are small businesses.
Clearly there is an economic need to have the funding available to ensure that these activities are funded in the future. We should start with a full audit of the EU funding so that we know exactly what will need to be replaced. I hope the Minister will be able to confirm that the department is already beginning to audit exactly what is going on out there—the reach of those funds, how much is not only funded by EU funds but matched by local authority funds and so on. We need a full picture so that we know what will need to be replaced.
At the same time, there is concern about the future of the Horizon 2020 funding. The Government have quite rightly guaranteed those funds until 2020, but there is considerable concern about the longer-term future of innovative projects beyond that date. Again, I would be grateful if the Minister could clarify what guarantees the Government are able to give at this time and how he envisages those bids for funding happening in the future.
Thirdly, a number of noble Lords quite rightly raised concerns about the prospect of leaving the single market, which the Prime Minister has made clear is her intention. However, it is not so clear where the alternative markets will come from. Exports of creative services account for 9% of UK services exports. The EU is our largest trading partner for creative services, receiving more than 40% of our exports. Whatever replaces the single market, and whatever trade tariffs are agreed, it will undoubtedly raise barriers for those wanting to maintain those lucrative and collaborative links with our EU markets.
I hope the Minister will agree to work closely with organisations such as the Creative Industries Council that are exploring ways to cement the UK’s status as a global hub for commercial activity beyond Brexit. I further hope that he will recognise the need to shore up our status as the EU’s leading digital economy—a point made eloquently by the noble Lord, Lord Clement-Jones. We need to liaise with techUK, UK Music and others to ensure that we continue to have involvement in the EU’s harmonisation of regulations around intellectual property and digital content.
Finally, a number of noble Lords raised the wider question of intellectual property rights and copyright. The EU legal regime has provided an effective and efficient framework for registration and enforcement of IP rights. Organisations such as the British Fashion Council and the Design Council have raised concerns about what will replace the EU rules to guarantee future design protection. Can the Minister confirm that the great repeal Bill will ensure that existing creative rights will be protected and enhanced?
This has been an excellent debate. Like many other debates we are due to have in the coming months, it has highlighted the complexities of the task we are about to undertake. However, this sector is thriving and robust and we have no option but to aim for the best deal possible. We can do that if we genuinely harness the creativity of those who have made this sector a success. I hope the Minister will reassure the House that the future will be based on that essential collaboration. I look forward to his response.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, this has been a fascinating debate on important issues. It is also important for the kind of country that we want to be post Brexit. We therefore owe a debt of gratitude to the noble Lord, Lord Clement-Jones, for securing the debate. I am also grateful to all other noble Lords who have made thoughtful contributions about something we care about. This sector is important economically and to what we want our country to be like.
In some ways, what many noble Lords have asked me to do is difficult. I have been asked to give firm assurances on many things. The place I have to start, and I suggest all noble Lords start, is the Prime Minister’s speech, which aimed to set out as far as we can some of the positions we have taken and will take. I will not stray beyond that, but I will try to outline our thinking in some of these areas. Some noble Lords will be disappointed that I will not be able to give firm guarantees on things such as funding. For example, the noble Baroness, Lady Benjamin, asked for clear commitments and assurances. The noble Baroness, Lady Bonham-Carter, was much more reasonable. She asked for only an assurance that we were thinking about some of these things. I can of course give that immediately.
It is important to state for the record, and as many others have done—for example, my noble friend Lord Blencathra and the noble Lord, Lord Macdonald—how important the creative industries are to this country. They contribute more than £87 billion—5.7% of gross value added—and produce extraordinary talent. Home-grown stars did brilliantly at the recent Golden Globe awards. Five of the world’s best-selling albums in 2015 were by British artists: Adele, Coldplay, Ed Sheeran, Sam Smith, and, as the noble Lord, Lord Taylor of Warwick, reminded us, One Direction. The creative industries contributed nearly £20 billion in exports and accounted for 1.9 million jobs in 2015.
We want to ensure the best post-Brexit deal for Britain and provide certainty where we can. As I mentioned, the Prime Minister made clear in her keynote speech on Tuesday that that is what we want to do. The Government are working closely with the creative industries to understand the impact and opportunities that Brexit brings. The Culture Secretary has hosted round tables with a number of creative industry sectors, with more planned for early this year. I am grateful to the Creative Industries Council and Creative Industries Federation for their reports on Brexit, which have received close attention in my department.
The Government recognise that it is vital for the creative industries to be able to draw on the best talent and to move equipment between EU countries for film production and concert tours, for example. The noble Lord, Lord Puttnam, begged me to mention—he need not have begged; he only needed to ask, as I enjoy talking to him on this and other things—taking the moral high ground. We recognise the issue of guaranteeing the rights of EU nationals in Britain and British nationals in the EU. That is why the Prime Minister addressed it specifically in her speech. She used the words,
“as early as we can”.
We think it is right that we can offer EU nationals this certainty as long as it is reciprocated for British citizens in EU countries. I do not know about other noble Lords, but I have received emails from UK citizens living in the EU complaining that we were using them as bargaining chips. In fact, we just want parity. I accept that this is a moral matter. It is something we are taking seriously. We want to get to an equitable agreement.
As the noble Baroness, Lady Benjamin, and many other noble Lords mentioned, access to European funding, in particular the Creative Europe programme, is also important to the sector. It has provided about €40 million to UK organisations between 2014 and 2016. UK businesses can still apply for this. Furthermore, the Treasury has confirmed it will guarantee funding for structural and investment fund projects that continue after we have left. Although the UK is a net beneficiary of these funds, it represents a small percentage of overall public funding to arts and culture.
Lord Blencathra
If our net contribution to the European budget is about £9 billion, would my noble friend accept that if we wished to replace the tiddly little €40 million we could do so in a mere 35 hours-worth of our net funding?
Lord Ashton of Hyde
The figures are as my noble friend has said. The decision-making process might take a bit longer than 35 hours, but I accept the point he makes and I agree with him. There are other reasons why Creative Europe is important, apart from the pure quantum of money. Collaboration and partnership are important. But, as the Prime Minister also indicated, she is keen on collaboration. We want to encourage this as part of the negotiations.
Leaving the EU will mean greater control over funding and make regulatory decisions subject to Parliament. As I just said, the UK has a long history of partnerships and co-operation with other countries within and outside the EU. Brexit presents an opportunity to forge new partnerships. For example, the Culture Secretary recently led the largest ever UK culture and creative industries delegation to China, during which she signed a landmark TV co-production treaty. We are only the second country in the world to hold both film and television co-production treaties with China, making us very well positioned to benefit from this massive and growing market.
The UK is home to a number of leading global companies, and investment continues. Google just announced the creation of 3,000 new jobs and a new headquarters in London. Snap—the parent company of Snapchat, as my noble friend Lord Suri reminded us—is moving its global headquarters to London, citing British creativity as the reason.
The Government are fostering an environment where the UK’s creative industries are world beating. Film tax relief, for example, supported more than £1 billion of expenditure in the UK in 2015-16. The new tax reliefs for high-end TV, video games and animation have been very successful too, with more than £417 million invested in the UK by video games companies and £947 million for TV since their introduction, supporting award-winning productions, which the noble Baroness, Lady Rebuck, mentioned, such as “The Crown” and “The Night Manager”. The reliefs have recently been extended to children’s TV, theatre productions and orchestras. All such tax reliefs are established in UK legislation and fully borne by the UK Exchequer. Therefore, they will not be affected by Brexit.
We understand that access to skilled workers is important to the creative industries. Equally, we have to heed the message from the referendum about control of immigration. The Government are investing in skills to increase the talent available to our creative industries, along with creating a pipeline of future talent. Since 2013, we have made available up to £20 million in match funding to the skills investment fund, helping employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.
By 2019, our £4 million UK Games Fund to promote regional growth in the video games sector is expected to have created more than 200 new jobs, with a GVA of more than £15 million. Our games sector is renowned for producing globally successful titles such as “Lego Dimensions”, “Batman: Arkham Knight” and the multi-BAFTA winners “Everybody’s Gone to the Rapture” and “Her Story”.
In reply to the request from the noble Lord, Lord Clement-Jones, for reassurance on where the creative industries sit, and to dispel the somewhat gloomy predictions from the noble Lord, Lord Foster, I say that it is not a coincidence that the Culture Secretary sits on the industrial strategy Cabinet sub-committee. Creative industries will be an important part of the strategy. We want to hear views from across the creative industries, especially once our Green Paper has been published. It is expected later this month.
The noble Baronesses, Lady Jones and Lady Rebuck, and the noble Lords, Lord Wigley and Lord Foster, argued broadly that we were not taking the creative industries seriously enough. They asked what the position of the creative industries was in the Government’s thinking. I can tell them by way of example that the Culture Secretary, Karen Bradley, said on 9 January to the Creative Industries Federation that one thing that Brexit would not change was the whole Government standing behind creative industries. She also said that creative industries would be at the heart of the industrial strategy. My noble friend Lord Suri’s confidence in the Government in this regard is well placed.
The noble Lords, Lord Puttnam and Lord Clement-Jones, spoke of the importance of the country of origin principles in broadcasting. We absolutely understand their importance to the AV sector. Our relationship with the EU market will be determined as part of our exit negotiations and I cannot give further reassurance at this stage, but we are working closely with the industry and meet it regularly. The upside, if we get this right, is the chance to expand as a truly global hub instead of an American and European hub, which we largely are at the moment. There is tremendous opportunity in that area.
The noble Lord, Lord Clement-Jones, asked about the Arts Council review of intellectual property. We are working with the Intellectual Property Office and industry to understand those impacts, and the opportunities for IP and copyright policy as a result of our exit from the EU. He asked when we would publish our response to the recent consultation on copyright. That was actually a call for evidence, but it will inform our EU negotiating position, and the industry’s input on that has been very helpful.
The noble Baroness, Lady Rebuck, and the noble Lord, Lord Clement-Jones, also talked about EU copyright and sought reassurances regarding the digital single market proposals on territoriality. The Intellectual Property Office is currently analysing feedback from its call for evidence on the digital single market copyright reform, but care needs to be taken to ensure that the impact of changes is fully understood and that they do not damage incentives to invest in the creation of copyright content.
As for the digital single market measures on fair remuneration and transparency for artists, mentioned by the noble Lord, Lord Clement-Jones, we want to see creators remunerated fairly while making sure that we continue to encourage investment in new content and innovative services—that would be good for everyone. We are aware that the Commission has proposed action in this area. We have engaged with the industry on these matters and look forward to discussing them at an EU level.
The noble Lord, Lord Foster, mentioned that the department does not have a seat on the main Cabinet committee overseeing Brexit. Nevertheless—and I mentioned the industrial strategy—officials in the department regularly engage with the Department for Exiting the EU. We are certain that it is constantly aware of DCMS’s priorities, reflected at all levels. We make sure that we are in touch with the creative industry sector by way of round tables, some of which are coming up at the end of this month.
There was talk, rightly, about education, the GCSE figures and the arts funding. We absolutely agree on the importance of the arts. It is true that the number of arts entries declined in 2016, but that was one year and we do not think that makes a trend. Between 2012 and 2015, the number of entries for arts subjects rose. Between 2012 and 2016, government invested more than £460 million in a diverse range of music and cultural education programmes. In November 2016, we announced a further £300 million for music and cultural education. In total, that is £685 million between 2012 and 2020. The noble Baroness, Lady Bonham-Carter, mentioned creative subjects in the curriculum. DCMS and the Department for Education are discussing the skills needs of the creative industries and the role of creativity in learning. It is important that we have the right mix of science and arts to meet the future needs of the industry, which she mentioned.
The noble Earl, Lord Clancarty, talked about local authority funding. As I said in answer to a Question from him a few days ago, many local authorities have continued to invest in arts and culture and have responded in innovative ways. We believe that funding decisions should be made at a local level and that local authorities are best placed to decide how to prioritise their spending.
My noble friend Lady Chisholm asked about support for museums and galleries and whether there was a government strategy. As we announced in the DCMS Culture White Paper last year, we are conducting a museums review to gain a deeper understanding of how that sector can best be supported. On timing, the public consultation closed in October and we aim to publish our report in the summer of this year.
The noble Lord, Lord Taylor of Warwick, asked about trade envoys in the US, India and China—that is, our biggest potential trading partners. The noble Lord is quite right that, because they have the largest presence of Foreign Office, trade and British Council staff, Ministers visit those countries regularly. However, we are constantly reviewing the value to the UK of trade envoys and how they relate to British ambassadors.
I have gone through as many questions as I can. There may be others that I have not answered and I will certainly write to those noble Lords who asked them. We agree with many of the issues that have been raised. I am sorry I have been unable to give complete assurances at this stage of the Brexit negotiations, but I emphasise that we fully support the creative industries. We understand their position in the economy and in how we want this country to be seen in the world as part of our soft power. They are central to the UK economy. We are committed to strengthening our international engagement and boosting exports to, and inward investments from, EU and non-EU markets. We intend to work closely with the creative industries and make a big success of Brexit.
Lord Clement-Jones
My Lords, I thank all noble Lords who have taken part in today’s debate. It has been hugely well informed. There are not many people I wish to mention by name, but I want to mention particularly the newly liberated noble Baroness, Lady Chisholm, who has made a great contribution today. It is great that she will take part in future debates on the creative industries. She reminded us of the sheer breadth of the subject matter: that it includes museums, galleries, photography, architecture and the arts more broadly. I thank her and look forward to her further contributions.
I also thank the Minister. It is clear that he is in the right job, because he has created mood music today that has answered as many of the questions as I think it was possible for him to do in the circumstances, given that a great number of uncertainties have been raised by so many of us in today’s debate. He was able to give us few specifics, but there were general bits of information and assurances that have been helpful.
When we look back on Hansard, I think that we will see that, between us, we have provided a blueprint for government on what it needs to include in our trade negotiations and in our industrial policy for the sector in the face of Brexit. I know that my noble friend Lady Bonham-Carter will shortly publish a pamphlet encapsulating many of the issues for the creative industries, which we hope government will take on board alongside those raised in today’s debate.
I do not deny that the creative industries are immensely resourceful, innovative and skilled and they will take every advantage they possibly can in the face of Brexit. Despite the tough rhetoric from the Prime Minister, however, it is almost impossible to see, in the light of what we heard today about the essentials for the continuing success of the creative industries, that any negotiation will ultimately produce a better outcome than continuing membership of the EU single market—sadly. We have heard that 90% of those involved in the creative industries voted to stay in and it is no surprise that they did, in those circumstances, but 100% are now waiting anxiously to see how effective this Government can be in making sure that the sector prospers post-Brexit. On the industrial strategy, seeing will be believing. We have heard assurances about the creative industries being on the top table. We very much hope that that will be the case.
The Prime Minister has promised a parliamentary vote at the end of the negotiation process. On these Benches we believe that a referendum of the people of the United Kingdom on the terms is vital. For many of those involved in the debate today, the litmus test, whatever mechanism on approval is finally decided, will be: is there a good deal in there for the creative industries? We will be looking very intently at the impact of the finally agreed terms on the creative industries and judging the exit package accordingly.
Again, I thank the Minister and all Members of the House who have taken part in this extremely good debate.