Economy: Culture and the Arts

Viscount Colville of Culross Excerpts

Thursday 13th June 2013 Lords Chamber

[Viscount Colville of Culross]

I, too, would like to congratulate the noble Baroness, Lady Wheatcroft, on securing this moment for us to celebrate culture and the arts in this country. I declare an interest as a director of the BBC in the history and science departments.

I want to concentrate on a very specific area of culture, film and television, which have already been mentioned by the noble Lords, Lord Puttnam and Lord Grade. As they both said, they are world-beating sectors of the economy, and they run a rare trade surplus. “Harry Potter and the Deathly Hallows—Part 2”, “The Pirates of the Caribbean: On Stranger Tides” and “The King’s Speech” have been the most successful British films worldwide. I am sure that many noble Lords have enjoyed watching them as much as I have.

The industry has been very dynamic in attracting foreign and domestic investment. Last year, Warner Bros opened the £100 million Leavesden studios with great studio space and workshop facilities, while Pinewood Studios has submitted a £200 million plan to double its filming facilities, which it says could create up to 3,000 new jobs in the industry. We are also seeing a flurry or cluster of television and film industries in the English regions, and also in Scotland, Wales and Northern Ireland, in an industry that has been traditionally based in London and the south-east. This must be seen by everybody as a great British success story.

However, I am concerned that the British Film Institute, the body which gives funds to the regional film development bodies and is responsible for encouraging exports of the film industry, is being severely constrained by a series of savage cuts made over the past few years. Most of its funding comes from a grant in aid direct from government, although the lottery also contributes valuable funds. In 2010, it was announced that the institute would have a 15% cut over four years; now it has been told that it has another cut of 2% and another one of 1% next year. Nick Mason Pearson, head of public affairs at the BFI, said that,

“any further cuts will have a seriously damaging effect on our ability to support our partners that help us deliver across the UK. That threatens the position of film as a whole and thus the economy”.

Creative England, which is responsible for investment in the development of the creative sectors in the regions, is facing a cut of over 40% of film investment outside London. As most private investment goes to London, we are once again seeing a move away from the regions back to London, which seems ironic at a time when so much political attention is going towards trying to create regional economic development in this country. I echo the words of the noble Lord, Lord Puttnam, that I would like the Minister to see whether he can push for a greater allocation of lottery funds to support film across the UK.

The Government may feel that the cuts in the BFI are fine, because they have done a very good job in extending the film tax relief benefit across the industry to cover film production money spent in this country. That has been rolled out this April to cover the high end of television animation and video game production. Despite this extraordinary support, parts of the industry are suffering. The noble Baroness, Lady Kennedy, mentioned the visual effects industry, which is based in Soho, in London, and after Hollywood is seen as world beating. It houses four of the largest visual effects companies, and is trusted globally for the ability to deliver complex sequences with cutting edge technology for new films. However, a number of these houses are relocating to Canada, which has extremely generous post-production incentives in place specifically aimed at attracting their business. One reason for this seems to be that there is an arbitrary 80% limit on the film tax relief, which particularly affects those visual effects houses, because they have become very much at the end of the spend on film production. It has been imposed by the EU Commission, but it is open for discussion in the new EU cinema communications consultation document. I know that the Government have tried to increase the limit but have been blocked by the EU competition commissioner; I ask them to redouble their efforts to ensure that all the film spend in this country is protected. It seems not to be in the interests of either Britain or the EU that our visual effects houses are relocating to North America, with the consequent loss to our economy and our global reputation.

The success of the film industry has been reflected in our other great media success story, television, with an increase in export in 2011 of 9%. The greatest market is North America, but exports to the rest of the world went up by 34%, and all the surveys show that British creativity is the most important factor driving the UK’s export success. It is a great story and we must go flat out to build on it.

I believe that the Government could still do more to promote television exports. I fear that at the highest level trade missions, the creative industries are not represented nearly strongly enough. On the Prime Minister’s recent trip to India, of the leaders of 40 British companies who accompanied him only one, Premier League, was from the creative industries. Will the Minister ensure that the Government promote one of the greatest economic success stories at the highest level to ensure that the export potential of our companies can be maximised in the future?

I am very proud to have spent my career in the creative industries. They are great centres of international, cultural and economic excellence. We must do everything we can to ensure that we continue to be the world beaters, entertaining and enthralling billions across the globe.