Creative Industries (Communications and Digital Committee Report)

Baroness Bull Excerpts

Friday 7th July 2023 Lords Chamber

[Baroness Bull (CB)]

My Lords, I draw the House’s attention to my interests as set out in appendix 1 of this report and updated in the register.

It is a privilege to speak today as a member of the committee that produced this important report. The committee includes a wide range of experience and expertise. I also want to say how much we miss hearing today from the noble Baroness, Lady Featherstone, who always speaks with so much passion on these issues. Of course, the expertise of its members can make the chairing of any committee a challenge. I pay tribute to our chair, the noble Baroness, Lady Stowell, who navigated between different views with great skill and brought healthy and well-reasoned challenge to the arguments and assumptions of those of us who have been advocating for the sector for so long. This was genuinely welcome: it strengthened our arguments and made for a better report.

I acknowledge the superb clerking team and the first-class academic support we received from Professor Dave O’Brien. Their first contribution was to take the committee’s broad interests and ambitions and focus them into an inquiry that was achievable in the allotted time and would complement the many excellent reports and pieces of research on the sector that already exist. Over the course of the inquiry, we were fortunate to hear from the authors and generators of some of that existing material. I point in particular to the research from the AHRC-funded Creative Industries Policy and Evidence Centre, whose work is specifically calibrated to inform policy. This is not to undervalue the many submissions we received, from which we learned so much.

What they told us—and what we concluded—was that the UK’s creative industries continue to be an economic powerhouse. Our opening paragraph quotes the Government’s own figures—that they generate

“more value to the UK economy than the life sciences, aerospace and automotive industries combined”.

This comparison is so oft cited that I asked whether we might find an alternative expression of the nearly £116 billion GVA that the creative industries contribute, but I was rightly shouted down. It tells a compelling story and, besides, it was this well-established evidence of success, alongside the clear potential for growth, that led our chair to sum up the committee’s view by describing the Government’s failure to grasp the opportunities and risks for this sector as “baffling”.

From different witnesses we heard how the creative industries should be at the heart of government plans for economic growth. The sector has outpaced the general economy, it is growing in every part of the UK, and job growth over the decade from 2010 was five times higher than that of the UK overall. I am aware that this is a higher figure than the noble Baroness, Lady Stowell, quoted, but I am quoting the figure referenced in the sector vision. It is a sector that contributes to other national priorities, including health and well-being, civic engagement, social cohesion and place making.

Given these wide-ranging benefits, unlocking the potential of the creative industries will necessarily involve a level of policy coherence and departmental join-up that we did not find. Some of the disconnect and lack of engagement was, frankly, alarming. We noted a degree of complacency and, in some places, a regrettable sense that, despite all the evidence, the sector’s potential is still not taken seriously. I exempt the Minister at the Dispatch Box from this criticism; I think the whole House recognises his commitment to arts, culture and the creative industries.

We found blind spots in education, with a mismatch between careers guidance, apprenticeship schemes and sector skills shortages. We noted few incentives for young people to study the combination of creative and technical skills that the industry requires. We found a persistent and unhelpful rhetoric of “low-value” courses in higher education that fails to take into account the realities of work in the sector. We could not understand why a highly successful model of innovation, the creative clusters programme, was being discontinued. We heard that international tax relief schemes were undercutting the UK, making it less attractive for creative businesses.

What concerned us was not just the range of individual issues, important though they are; it was the policy incoherence, different levels of engagement among departments and repeatedly changing Ministers that formed the backdrop against which the impact of rapidly developing technologies on the creative industries will play out. These technologies will fundamentally change the way content is made, experienced and disseminated. Some of our most fascinating discussions were about how the opportunities for innovation and growth that this represents are balanced with the regulatory and rights issues that arise and the potential impact on creative jobs.

Some argued that the sector was less exposed than others because creativity is a uniquely human skill. Others were not so sure, arguing that if one definition of creativity is the ability to recombine knowledge in new and original ways, an AI tool—which has theoretical access to everything that humans have ever written or said—could, in theory, come up with something that is entirely novel, whether or not the machine knows it. This may be the 21st-century equivalent of the infinite monkey theorem.

The sector vision has set out how the Government plan to address some of the issues we raised, and I particularly welcome the announcement of renewed support for creative clusters. But other responses have been more disappointing, including to our recommendation that the R&D definition needs to change. While we argued that the Government’s definition is narrower than that in other OECD countries, the response claimed it to be consistent with the OECD Frascati standard. It is worth explaining exactly why this is not the case. There is an anomaly in UK policy in that HMRC also requires that R&D relates to scientific or technological delivery, despite the Frascati manual having a wider scope.

DSIT’s guidelines on the meaning of research and development for tax purposes specifically state:

“Work in the arts, humanities and social sciences … is not science for the purpose of these Guidelines”.


This means that R&D in the creative industries that draws on these disciplines is excluded from targeted R&D incentives, and this is not consistent with other OECD countries. I apologise for heading into the weeds on this point, but the sector vision’s ambition for increased R&D would carry more weight if HMRC did not dismiss the research on which much of it relies as ineligible for tax relief.

Our specific focus for this inquiry inevitably meant that we did not address all the issues that threaten the sector today. We did not comment on the disproportionate impact that Brexit is having on the next generation of talent. We did not discuss the distribution of arts funding. We touched on issues of inequality, specifically in relation to the ways in which automation could hit hardest those on lower salaries or insecure contracts, but our remit was not to investigate the reasons for stubbornly persistent inequalities of opportunity and access: the disparity of arts provision between independent and state schools, the reliance on freelancers and the precarity it breeds, the long hours and low pay—all the factors that risk widening the gap between those who can afford to work in the sector and those who cannot. I welcome, therefore, the specific focus on inclusivity in the workforce in the sector vision and look forward to seeing its ambitions turned into action.

The fact that these issues were not part of our inquiry does not mean that the committee does not recognise their importance—far from it. Many members wanted a broader remit than time would allow, and I hope that future inquiries will see the committee focus its efforts on these critical challenges.

I always find these debates on reports in which one has had a hand rather difficult to navigate. I have skated across the broad terrain and hovered briefly over one or two topics that were in—some out—of scope but everything that I want to say about this issue is in the pages of the report; I hope that Ministers across government will reflect carefully on what it says. Unless we address the current disconnect between the sector’s potential and cross-government priorities, and unless Ministers recognise the necessity of cross-departmental collaboration, the UK’s creative future and the well-evidenced contribution that the creative industries make to our economic, social and cultural well-being will remain very much at risk.