Creative Industries: Creating Jobs and Productivity Growth

Baroness Goudie Excerpts

Thursday 6th February 2025 Lords Chamber

[Baroness Goudie (Lab)]

My Lords, I congratulate the three new Members of the House of Lords on their maiden speeches, which were exciting and interesting. I thank my noble friend Lady Thornton for securing the debate today and to see that she is so well, having been quite ill. It was quite worrying for all of us and it is a pleasure that she is back here today.

I will concentrate on the funding, growth, jobs and productivity that the creative industries bring to the country. The Government must continue to invest even more in the creative industries, including in education at the very beginning of schooling, from play schools right through, as that is where children learn to become interested and to use the skills they have inherited. I was lucky as a child to be brought up in a house that was full of music and Irish culture. My father also enjoyed taking us to the films he thought were educational. So I, like many people, was very lucky.

On the economic contribution, in 2023 the creative industries contributed £124 billion in gross value added to the UK economy, accounting for 5.2% of the total GVA. The largest subsector was IT, software and computer services, contributing £49.1 billion, or 2.07% of the total GVA. Other significant subsectors included advertising and marketing, and film, TV, radio and photography, which brought in £21.2 billion. These figures are large, I am sorry, but they are important to know, and to have in Hansard, for the Government to understand why they must continue to contribute and give support to these industries, so that we do not lose them. Between 2010 and 2023, the creative industries grew by 35%, adjusted for inflation, outpacing the overall UK economy’s growth of 22% during the same period.

On employment and earnings, we have heard from other noble Lords how important employment is and how worrying it is that people in certain industries are not being supported and that there is not funding for this. We must support and encourage the BBC and others to create and commission new works, besides the ones we continually see every week that are repeated round and round. We must have some new work produced, contracts let and so on. Also, these programmes are sold abroad, which brings a big income for the UK. I agree with my noble friend about people having to take other jobs when they are not being contracts to write.

The creative industries are predominantly composed of small and medium-sized enterprises, which are the backbone of the UK’s economy. In 2023, 95% of businesses in the sector had fewer than 10 employees. Despite their size, these businesses have made substantial contributions to the economy.

Productivity in the creative industries, measured at GVA per hour worked, was £46 in 2023, higher than the UK average of £40. This indicates that the sector is more productive than the economy as a whole. What this industry brings to the country has to be noted, because many people laugh and think it is somewhere over there; it is key to what this country has to do. We have to look again at the whole question of VAT and visas; that is for another debate, but it is important.

The UK exported £46 billion-worth of services from the creative industries in 2023, accounting for 12% of total service exports. The largest export markets were the USA and the EU. Foreign direct investment in the creative industries was £5.9 billion in 2023, representing 10% of the total investment to the UK. I got these figures from the Library or the Economist, if anybody wants to check them out.

Although London remains a central hub, other regions have seen significant growth in the creative industries. For instance, the north-west and the West Midlands experienced notable increases in both employment and contributions from the sector between 2010 and 2023.

There has also been high tourism to Scotland, as one of our colleagues mentioned, and to Northern Ireland, which is becoming quite a place for theatre and music. It is important that we make sure we give subsidies to there.