Creative Industries (Communications and Digital Committee Report)
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The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, this has indeed been an excellent debate. I agree with the noble Lord, Lord Griffiths of Burry Port, that it has been an uplifting way to end what has been a long and busy week in your Lordships’ House. Like everyone who has spoken, I am very grateful to my noble friend Lady Stowell of Beeston for tabling this debate and for how she opened it and outlined the work of your Lordships’ committee. I am in the slightly unusual position of having been a DCMS Minister when the department began the inquiry and when it reported but having in the interim sat briefly on the committee, so I can join with the deserved plaudits which were raised for my noble friend on how she chairs that committee, the remarks that have been made about the cross-party and consensual way that it operates, and the regret which was shared by all that the noble Baroness, Lady Featherstone, could not be here to join in our debate today.
As everyone who has spoken knows, the creative industries make an invaluable contribution to this country, as an economic powerhouse and by enriching the lives of everyone that they touch in the UK and around the world. As many noble Lords have noted, the creative industries have grown one-and-a-half times as quickly as the rest of the economy between 2010 and 2019, generating £108 billion in GVA in 2021. Their growth in terms of jobs has been even more marked. Their strong performance and potential is why my right honourable friend the Chancellor selected them as one of his five priority sectors in the 2022 Autumn Statement. I am grateful to my noble friend Lady Stowell for her recognition of the renewed level of political attention and support that the creative industries have across government.
The report of your Lordships’ committee has been timely as well as important. We share a passion for ensuring that we have a thriving, growing creative sector. The Secretary of State and I were delighted to receive the committee’s letter welcoming the publication of the Government’s Creative Industries Sector Vision. I agree with my noble friend Lord Vaizey that it may not have the glitziest name, but the sector vision is just that. It is a forward look and a starting point for us to work with the industry on the goals and objectives outlined in it. It marks a commitment between government and industry, which come together through the Creative Industries Council, to take action, for us to build on the solid foundations of the sector deal which was announced in 2018 to meet our jointly agreed goals by 2030. These are to:
“Grow creative clusters across the UK, adding £50 billion more in Gross Value Added … Build a highly-skilled, productive and inclusive workforce for the future, supporting one million more jobs across the UK … Maximise the positive impact of the creative industries on people, communities, the environment, and the UK’s global standing”.
We have demonstrated our commitment to the sector by providing over £300 million in support since 2021. The sector vision itself was supported by a further £77 million of funding. This will go to supporting key industry priorities, including ones which noble Lords have highlighted today, such as the importance of live-music venues. We have provided £5 million to expand Arts Council England’s support for live-music venues. The noble Lord, Lord Watson of Invergowrie, is right to highlight the important work that it does in supporting emerging artists. As with the sector deal in 2018, we expect these public commitments to unleash even larger amounts of private investment across the sector.
I am delighted that my noble friend Lord Vaizey was here to remind us of how much positive news there is across the creative industries, as well as to issue the challenge for us to tell our story more proudly. I am grateful for his kind words and for jinxing my career prospects in government. I feel about him as TS Eliot did about Ezra Pound in his dedication to The Wasteland, “il miglior fabbro”.
But we know that this diverse and dynamic sector delivers high-value, high-skilled jobs, from advertising to theatre, publishing to film and much more besides. It sets us apart on the international stage, distributing British content across the globe and enhancing our soft power, through talent, cutting-edge technologies and infrastructure, and strong intellectual property frameworks. We have made great progress but, as your Lordships’ committee points out, there is more to do. I will pick up on some of the issues raised in the debate and in the committee’s report.
The creative industries are a remarkably innovative sector and have been at the forefront of developments in artificial intelligence and immersive technology for many years. This crossover, also known as “createch”, has become especially prominent in recent months, with advances in AI technology. As my noble friend Lady Stowell reminded us, Ai-Da the robot was a star witness in the committee’s proceedings. The creative industries have been key users of AI for many years, in sectors such as video games, publishing and advertising. AI has enormous potential to deliver high-quality jobs and opportunities and to enable further growth in the creative industries.
However, it is important that we harness the benefits of AI while also managing the risks, including in the domain of copyright, which many noble Lords spoke about. It is vital that creatives are fairly compensated for their work—the noble Lord, Lord Berkeley of Knighton, spoke powerfully about the challenges and some of the numbers involved in doing that. The UK has world-leading protections for copyright and intellectual property. We know how important maintaining these are for the success of our creative industries, and we understand creators’ concerns when their work is used by artificial intelligence without their consent.
The noble Earl, Lord Clancarty, asked for an update on our work in this area. The government response to the Vallance Pro-innovation Regulation of Technologies Review in March confirmed that we would seek to develop a code of practice on copyright and to allow AI innovators and the creative industries to grow together in partnership. We want rights holders to be assured that AI firms will use their content appropriately and lawfully, and we want to ensure that AI-generated outputs are labelled appropriately to provide confidence in the origin of creative content.
We want to take a balanced and pragmatic approach. As my noble friend Lady Stowell noted, the Intellectual Property Office is working with representatives from across the creative industries, as well as AI firms, to develop good practice, guidance and other measures that support this goal. Those working-group meetings are happening as we speak, and officials from DCMS are observing them and attending an informal project board with colleagues from the Department for Science, Innovation and Technology and the Intellectual Property Office. The IPO is aiming to publish a principles-based code in draft before the Summer Recess, and it will outline next steps in this work.
Noble Lords talked about the importance of creator remuneration in music. We have always supported industry-led approaches—legislation is often not the best answer, and it is certainly rarely the swiftest. For example, with music streaming, the industry has worked together to produce an industry commitment to improve metadata and is close to reaching an agreement on transparency. Similarly, we think that an industry working group is the best way to reach a consensus on creator remuneration, building on the steps that individual companies have already taken.
The music industry is already a major driver of economic growth and investment in the UK, and the Government are eager to ensure that it remains globally competitive. That is why, in the sector vision, the Government trebled funding for the music exports growth scheme to £3.2 million over the next two years, helping emerging artists to break into new global markets and to ensure that the UK’s music sector remains one of the biggest music exporters in the world. This week, we had the very welcome news from the BPI that UK music exports jumped 20% last year to break £700 million for the first time.
Businesses also need to be able to invest in order to grow, and tax can be just as important in their growth cycle as access to finance. A number of noble Lords talked about the importance of tax reliefs. We recognise the importance of competitive creative industries tax reliefs to provide incentives in the screen sector in the UK. In 2021-22, a total of £989 million was paid out across our tax reliefs for film, television and video games, supporting over 1,800 productions and games.
The Government are committed to ensuring that our audiovisual tax reliefs remain world-leading and continue to best serve the needs of creative companies. Reforms to those tax reliefs, announced by the Chancellor at the Budget, will ensure that the tax system continues to drive growth and delivers on our commitment to build an enterprise economy, as well as bringing greater clarity to businesses about eligible productions. We want to work closely with the VFX sector on boosting growth and supporting a pipeline of talent into this cutting-edge UK industry.
Thanks to the redoubtable campaigning and effective evidence marshalling of the sector, the Budget this spring extended the higher rates of tax reliefs for theatres, orchestras, museums and galleries by two years, estimated to be worth £350 million collectively. I have already heard from theatres and producers about the difference it is making in terms of the creative risks they are able to take and the programming they are now doing for the months ahead.
My noble friend Lord Vaizey of Didcot asked about R&D tax reliefs, which are a vital part of growing businesses across the UK. As he knows, the UK is unique in having two R&D schemes: one for large businesses, and one for smaller businesses. Earlier this year, my noble friend will have seen that the Government ran a consultation which sought views on a simplified R&D tax relief scheme, merging the two schemes. The Government are considering their response to the consultation and will publish draft legislation on a merged scheme for the technical consultation. My noble friend, however, will have to wait for a fiscal event to hear more about the work which may flow from it.
My noble friend was also right to remind us of the importance of conservatoires and centres of excellence. Like the noble Baroness, Lady Merron, I look forward to the Yehudi Menuhin event later this year. I had the pleasure of going to one of the school leavers’ concerts with my noble friend Lord Blackwell last year. It really was remarkable. I began today by visiting Camberwell College of Arts, which has nurtured and developed world-leading arts and creativity in this country for 125 years. I went to its MA show to see some of the current postgraduate students’ work.
In the 2021-22 academic year, the Department for Education asked the Office for Students to invest an additional £10 million in our world-leading specialist providers. We have maintained that level of funding at £58 million for the current academic year.
Noble Lords rightly noted the creative industries’ impact on broad swathes of our lives as well as the economy. We know that this means it is more than just DCMS which has a role to play in providing support for our creative industries. I was much taken with the analogy given by the noble Lord, Lord Berkeley, of the Government as an orchestra and his desire to hear a more synchronous sound from us. The committee’s report is correct that a plan on its own is not enough and cross-departmental collaboration will be key to its success. However, I am delighted to say that we have made excellent progress in this area, as shown by the breadth of commitments contained in the sector vision. We are working with His Majesty’s Treasury on new funding for the sector; with the Department for Science, Innovation and Technology on cutting edge R&D through the CoSTAR programme and the next wave of creative clusters; with the Department for Business and Trade on boosting creative exports; and with the Department for Education to build the talent pipeline, through a range of skills and education initiatives.
I certainly agree with the noble Baroness, Lady Rebuck, that the skills pipeline is of critical importance to our creative industries. That is why I am delighted that this week we have announced further members of the panel who will be working with the wonderful noble Baroness, Lady Bull, to develop a cultural education plan for the Government. She has been working incredibly hard on it. I attended one of the listening exercises she held a few weeks ago and I was at the Royal Opera House to attend the head teachers’ symposium, where we gathered further thoughts to feed into it. I will begin next week at the Department for Education, meeting the whole panel with the noble Baroness. Furthermore, the upcoming round table on apprenticeships will be co-chaired by both the Education Secretary and my right honourable friend the Secretary of State for DCMS.
My department is working closely with the Department for Education and with the industry to drive forward the work to build a highly skilled workforce and support 1 million more jobs across the UK. We will publish the cultural education plan later this year and deliver the national plan for music education, driven by my noble friend Lady Fleet. That included £25 million in capital funding for musical instruments. We will explore opportunities for enrichment activities as part of our wraparound childcare provision. We will improve creative apprenticeships, with regards to small and medium enterprise engagement, training provision and the effectiveness and sustainability of the flexi-job model. We will support the rollout of T-levels, and complementary high-quality, employer-led level 3 qualifications, and we will work with the industry so that it can take advantage of skills boot camps at national and regional levels, and benefit from new local skills improvement plans and the lifelong loan entitlement in 2025.
Noble Lords asked for more detail on the creative careers programme. They are right that there can be a lack of understanding about jobs in the creative industries, such as over the sheer availability of roles that there are. For instance, it takes some 500 different jobs to make a single blockbuster movie. There are also misconceptions about the stability and accessibility of creative jobs, which is why the work that we are doing in the sector vision aims to improve understanding and challenge those misconceptions, including through the Discover Creative Careers programme.
The noble Lord, Lord Clement-Jones, was right to highlight the importance of freelancers in the creative industries. Last month we had a very good debate focused specifically on them. The policy and evidence centre delivered its independent review of job quality and working practices in the creative industries earlier this year, and that was co-funded by DCMS. The Government and the industry will set out an action plan to address the recommendations later in the year.
The noble Lord, Lord Foster of Bath, asked about the benefits system and how it interacts with freelancers in the creative sector. Again, we touched on that in the debate last month, and I know that Equity is holding an event next week. Unfortunately, I will be in the Chamber as we work on the Online Safety Bill, but I am glad that it is coming to engage colleagues from across the House and from the departments for work and education on it.
I will take back the idea from the noble Baroness, Lady Bonham-Carter, about the Education Secretary joining the Creative Industries Council but, as she may well know, Sir Peter Bazalgette, who jointly chairs it, is a non-executive director at the Department for Education, which helps with that join-up across government. I will also take back to colleagues in the Department for Education the point made by the noble Earl, Lord Clancarty, about the dichotomy with the Russell group universities.
Tackling skills gaps and shortages through all these initiatives is work that is being done. It requires significant evidence and data, which is another area on which we are working with the Department for Education. Our understanding of the creative industries through evidence and data is constantly expanding. Where gaps remain, such as forecasting skills needs, the DfE’s Unit for Future Skills is working to fill them, in partnership with analysts at DCMS and the Creative Industries Policy and Evidence Centre. Furthermore, inspired by the BFI’s film and high-end TV skills review, the Creative Industries Council has committed to delivering subsector skills reviews over the next year, giving a clearer picture of the gaps and shortages particular to each subsector of the creative industries.
I am incredibly proud of the creative industries sector—
Lord Clement-Jones (LD)
The Minister has covered a great deal of ground, but he has not covered the implementation of the Beijing treaty and the performing rights issues in the light of AI, or some of the other IP issues. Will he write?
Lord Parkinson of Whitley Bay (Con)
I will, although I may not be able to say much more than I am happy to say now in response to the noble Lord. The discussions on the code of practice are ongoing, and a public update will follow shortly; if it follows shortly enough for me to write with more detail, I will. If not, I hope he will be satisfied with that for now.
Many questions were noted in the debate over the past three hours, and I have tried to cover as many of them as I can. As noble Lords noted, the report touched on huge numbers of areas but also highlighted further areas for us all to explore in government and in your Lordships’ committee. I am very proud of the work that we are doing through the creative industries sector vision and, if I may say so, as a former member of the committee, I am very proud of the report that your Lordships’ committee has published.
The clear passion was evident from every noble Lord who spoke in this debate, and their anxiety to get this right for the future. Perhaps, on a sunny Friday, I may also say that I detected notes of optimism, both in the tributes being paid to new and established schools, at Old Street and in Camden. I hope that they will allow some of that optimism to extend to the work being done in government. I look forward to working with noble Lords from across the House to put it into action.