Creative Industries: Research and Development

Baroness Bull Excerpts

Wednesday 8th January 2020 Lords Chamber

Asked by

[Baroness Bull]

To ask Her Majesty’s Government what consideration they have given to adopting a broader definition of research and development that includes, and incentivises, research and development investment in the creative industries.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)]

My Lords, the Government’s definition of research and development builds on the internationally recognised OECD definition. Following that definition, the UK offers relief to boost research and development through direct grants, support for universities and R&D tax credits. There are eight additional tax reliefs specific to the creative industries, which delivered over £1.1 billion of support in 2018-19 alone.

[Baroness Bull (CB)]

I thank the Minister for his engagement with this Question. However, I urge him to consider, in reviewing R&D definitions, the Government addressing current HMRC requirements that R&D relates specifically to scientific or technological discovery. The exclusion of work in the arts, humanities and social sciences means that much of the R&D taking place in the creative industries is ineligible for targeted tax relief, despite creative businesses undertaking almost as much R&D as manufacturing. Does the Minister agree that applying tax incentives equally to a sector that already represents the fastest-growing part of the UK economy would be an effective way to boost innovation and productivity?

[Lord Duncan of Springbank]

The noble Baroness is absolutely right that creative industries are at the heart of the improvements that we have seen across the UK’s global reach. We put a significant amount of money into research and development in the creative industries. Some £58 million has gone to research and development through the creative clusters, £39 million directly from government and £25 million from industry. But that does not answer the noble Baroness’s question, which regards the definition. I read with interest the paper by Hasan Bakhshi and Elizabeth Lomas, Defining R&D for the Creative Industries. If the noble Baroness is willing and amenable, I would like to sit with her and discuss this matter further.

Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019

Baroness Bull Excerpts

Wednesday 23rd October 2019 Lords Chamber

[The Earl of Clancarty]

My Lords, does the noble and learned Lord agree that there is one impact that we do know about, which is the impact of a climate of concern?

[Baroness Bull (CB)]

My Lords, the House has heard from many noble and noble and learned Lords. I rise briefly to add my support to this amendment and to put on record that the concerns set out by the noble Lord, Lord Stevenson, and which have been elucidated by so many distinguished and legal brains, are shared more broadly across the House. Those of us without legal backgrounds rely on the expertise of the House’s Secondary Legislation Scrutiny Committee, which has highlighted that removing treaty rights means that EU-plus citizens will no longer be able to use these rights to challenge new restrictions. It describes this as a, “significant reduction of rights”—yet, as we have heard, there has been no impact assessment, so we really do not know the scope and the extent of the impact of this reduction in rights.

I have two very simple questions, and they echo questions which have already been asked. First, what will be the impact of this on reciprocity and on the livelihoods of UK citizens who have established businesses in or provide services across other EU countries? Secondly, can the Minister clarify whether this does in effect apply retrospectively? As the noble Lords, Lord Oates and Lord Greaves, pointed out, paragraph 2.12 of the Explanatory Memorandum uses phrases such as, “It is anticipated” and “it is not expected”. To this non-legal brain, that does not seem very decisive.

Similarly, in paragraph 2.17 we read:

“This Instrument ensures that Swiss nationals operating a business or providing services in the UK immediately before exit day will not lose residence rights by virtue of the disapplication of the directly effective rights”.


That clarifies residence rights, but I would be grateful if the Minister could confirm that this extends to the right to carry on owning or managing businesses or providing services, because it is not clear.

Like the noble Lord, Lord Oates, I heard the Minister twice repeat that these groups would be able to live, work, study and access services and benefits, but he specifically did not say that they would be able to continue to be self-employed, own and manage companies or provide services. Can he clarify whether this will be the case?

None of this is particularly clear, and it is not surprising that I, like other noble Lords around the House, have been written to by members of the public asking, for example, whether this means that Turkish nationals will no longer be able to own and run a Turkish restaurant.

If there really is no problem here, perhaps the Minister might agree that the Government could be a little clearer about this and clarify the intention behind the SI and its impact on EU nationals who have made their home here. The memorandum says:

“Individuals and businesses will be able to check published no deal planning guidance on gov.uk”—


which is not particularly reassuring to the people around the UK who are concerned.

The Prime Minster has made much in recent speeches and statements about the contribution of EU nationals to the UK and its prosperity, success, culture and economy. This SI seems rather at odds with this newly warm and welcoming tone.

[Lord Duncan of Springbank]

My Lords, this has been a complicated debate, but I am drawn to the remarks by the noble Lord, Lord Campbell-Savours, as a way of helping us step into the debate. Tam Dalyell was absolutely right: it is the person who will help us understand the reality who we need to hear today. The individual spoken of by the noble Lord, Lord Campbell-Savours, has lived in the UK for 24 years, has two children and is a photographer and athletics coach. He is an important citizen in this country. There will be no diminution of his rights—not just to study or live, but to be self-employed, to offer services or, indeed, to operate as he currently operates—as a consequence of this statutory instrument. The noble Baroness, Lady Bull, at the end mentioned Turkish people who may feel that they will have their rights to operate a Turkish restaurant in some way curtailed; that is also not true.

The noble Lord, Lord Purvis of Tweed, spoke of 2.3 million EU citizens in this country. A number of noble Lords have asked why, when so many people seem to be affected by this, the impact assessment has not been provided and has therefore not given due consideration to something that will impact 2.3 million people. The important thing to remember here is that the 2.3 million people derive their rights from that element of retained EU law that we have brought across in the previous withdrawal agreement. Each of the elements that enshrine their right to the employment they enjoy is contained not just in our domestic law but in our retained EU law.

The important thing to stress here is that there will be no impact on individuals such as the gentleman raised by the noble Lord, Lord Campbell-Savours. I am fully aware that my department has not been successful in making this clear. It is perfectly obvious that a number of noble Lords have received a number of letters stating these concerns. The very fact that my department has allowed that state to exist is a failing of my department. We need to be better at making sure that not just the legislation but the Explanatory Memorandum is adequate to ensure that people reading it—not just eminent lawyers but others—are able to understand. This is too important a moment to get this wrong.

It is a difficult piece of legislation in one respect only. There are a number of conditional elements contained within it, but they refer to future situations in which something might happen. I was going to say, “If we leave the EU”, but let me put that the other way around and get my tenses right. When we leave the EU, if there is no deal the reciprocity we enjoy today would simply fall away and not be there. Our courts would still be able to draw on the body of law that exists inside the EU, but the actual reciprocity element would not be there. Going forward, because we have retained the EU law into our own corpus of law, the reality would be that certain EU nationals might be able to invoke their existing—previous—rights as a means of confronting the Government as they sought to move future policy forward. Future policy, however, would not be determined on a whim, nor would it use a Henry VIII power. It would be determined by this House and the other place in the traditional way. That is how future policy in this area will happen.

This is the important thing to stress in talking about the impact this will have on WTO rules or the question of reciprocity. As regards WTO rules, the suggestion is that individuals in that situation, without this disapplication within this body of retained EU law, would still be able to draw on those rights in the retained EU law to challenge the UK Government. Some noble Lords may think that that is not a bad thing, but that alone is the reason for the disapplication.

--- Later in debate ---

[Lord Duncan of Springbank]

Those countries are, at present, unwilling to open discussions with this country and will not do so until the withdrawal agreement has been accepted and we move on to the future relationship negotiations. I hope that not just individual countries will seek to do this but the EU itself, collectively, to protect the rights of British citizens resident abroad—just as we will do exactly the same. I hope we would do so in the spirit of our withdrawal agreement’s evolution into that future relationship that delivers the very thing that each individual here would wish. However, at present, I cannot offer any guarantees in that regard.

[Baroness Bull]

To follow up the question of the noble Baroness, Lady McIntosh, we are looking today not at the scenario of a future agreement but at no-deal legislation. Surely reciprocity cannot be dependent, in this legislation, on the future relationship documentation because this is no-deal legislation. I echo the question: where is the conversation about reciprocity, should the unfortunate thing happen and we leave with no deal?

[Lord Duncan of Springbank]

The noble Baroness will be aware that the Government’s policy is to secure that deal. That is why we are here. The reason this has had to come forward in the manner in which it has is that, although this House and the other place have been clear that they do not wish the UK to leave with no deal—which I wholeheartedly share and endorse—that is not in our gift alone to ensure. The unintended consequences of actions that may unfold over the next few weeks could lead us into a scenario in which a no deal does emerge, and that scenario is the one we are touching on here. If it does not emerge, we will not have any of the risks we are touching on here because we will continue, I hope, to move into an implementation period during which we negotiate that future relationship. That is the point. This instrument is here because, in a scenario in which we end up outside the EU, these elements will be deemed necessary. As I said, the purpose is to ensure that in those small areas this aspect of the law is addressed.

I think I need to write—and am willing to do so—to every noble Lord who has received letters raising these concerns to set out the situation, in language clearer than my department has thus far achieved, to ensure that those individuals have confidence that they will not find themselves in any of the darker scenarios of which they may be fearful. That is critical and I give that commitment here at the Dispatch Box. If noble Lords will contact my office, I will write to every individual to ensure that they fully appreciate exactly what this suite of statutory instruments means and, in particular, what it does not mean. It is critical that that is done.