Economy: Creative Industries

Earl of Courtown Excerpts

Thursday 18th June 2015 Lords Chamber

[The Earl of Courtown (Con)]

My Lords, I join other noble Lords in thanking my noble friend for securing this debate, and I thank all noble Lords for their contributions in this very far-reaching debate on the creative industries.

The interest shown this afternoon is a testament to the essential role played by our creative industries in our national life. As my noble friend Lady Wheatcroft said in her opening remarks, and as many other noble Lords have said, the official figures published in January confirmed the leading role played by the creative industries in our economic recovery. The sector contributed £76.9 billion to the UK economy in 2013, 5% of the total UK economy. The year-on-year growth, from 2012 to 2013, was a staggering 9.9%, three times that of the economy as a whole, and higher than for any other Blue Book sector. In that year, the sector accounted for 171,000 more jobs, 5.6% of total UK jobs, and a 1.4% increase on the previous year. Over the longer term, there has been a 3.9% rise in the number of jobs in the creative industries each year between 1997 and 2013, compared with 0.6% in the UK economy as a whole.

[Lord Haskel]

Do the Minister’s figures include the non-creative part of the work that went on in those industries?

[The Earl of Courtown]

The noble Lord, Lord Haskel, mentioned having to define the creative industries in his speech, and the noble Baroness, Lady King of Bow, also read out a long list of creative industries. It is very difficult to compare the creative industries as I understand it, and I shall have to write to the noble Lord, Lord Haskel, on that issue.

The sector is also leading the way on exports. The value of services exported by the creative industries in 2012 was £17.3 billion, which is 8.8% of total UK service exports, and an incredible increase of 11.3% over 2011, compared with 2.8% for total UK service exports. As with the sector’s domestic performance, creative industries’ exports are playing a key role in our export drive. While the sector is showing impressive growth here in the UK, however, we do not exist in isolation, and cannot be complacent. Our global competitors are working hard, too. The Government are fully committed to helping the sector as it implements its strategy to maintain its global competitiveness, including through allowing the use of the Treasury building for the filming of the latest Bond film, as my noble friend Lady Wheatcroft said.

Over the past five years, the Government have showed their commitment to the sector through setting up the Creative Industries Council, as the noble Lord, Lord Clement-Jones, said. It will provide a strategic focus for industry and government. We also put in place a range of generic and sector-specific financing and fiscal measures, such as the creative content tax reliefs, as noble Lords have said. The film tax relief alone has generated over £7.8 billion of production spend in the UK, supporting over 1,200 films. We have expanded the original scope of the tax reliefs to cover the high-end TV, animation, video games, children’s TV and commercial theatre production sectors, with a new relief for orchestras due to come into force next year. We provide funding for agencies such as Arts Council England, the British Film Institute, Creative England and Innovate UK to invest in and support the creative industries. Arts Council England invested £1.4 billion of public money in arts organisations and cultural programmes between 2011 and 2015, and the BFI is investing nearly £500 million between 2012 and 2017 to help the film industry grow, build audiences and stimulate a vibrant film culture in the UK. Through the British Business Bank established by the Government, creative businesses have received more than £80 million of equity finance since May 2010, and through UKTI, in the financial year 2014-15 the Government have helped provide export support to around 13,000 creative companies, one-quarter of all companies assisted by UKTI, and delivered £467 million-worth of business wins.

On the education and skills front, we have supported the sector with over £400 million in our music and cultural education programmes, with a further £109 million available in 2015-16; £20 million co-investment funding in Channel 4/Creative Skillset’s industrial partnership; our co-investment in Creative Skillset’s skills investment fund, including a further £2 million each year in 2015-16 and 2016-17; and a new curriculum for IT in schools. Our £1.7 billion public investment in broadband infrastructure, as mentioned by the noble Lord, Lord Haskel, will greatly help creative businesses to set up in the regions and enable them to reach new customers around the UK and the globe. We are also committed to a fair and robust IP enforcement regime, touched on by the noble Lord, Lord Clement-Jones, with funding for the Police Intellectual Property Crime Unit up to 2017, backed up by a strong programme of consumer education, including £3.5 million for an education campaign to run alongside Creative Content UK.

As my noble friend Lady Wheatcroft said, we intend to build on this solid programme of support over the next five years. Our manifesto gave commitments to continue the existing creative content tax reliefs and expand them when possible; to back plans for the Factory in Manchester and a modern world-class concert hall for London; to continue to require ISPs to block sites that carry large amounts of illegal content; to build on progress made under voluntary anti-piracy projects to warn internet users when they breach copyright; and, through our review of the BBC’s royal charter, to recognise the important role played by the corporation in supporting our creative industries.

A number of noble Lords raised the issue of IP in relation to the digital single market. Last month, the European Commission published its strategy for developing the digital single market. This will involve some reform of the EU copyright framework with legislation expected at the end of the year. The Commission’s strategy document is at a high level and, of course, the detail will be all important. It is proposing not a full rewrite of the entire framework but targeted harmonisation measures that will still be of significant impact. Among these are measures to make it easier for businesses to provide portable services that people can access when they are travelling or on holiday and for people to buy copyright content across borders; to harmonise rules on the use of copyright material for specific purposes, such as research; and to clarify the rules on intermediaries using copyright content to ensure there is a level playing field. Proposals will also be made to modernise copyright enforcement focusing on commercial-scale infringement. In July last year, the European Commission announced a new action plan to tackle IP infringement. We fully support the plan. It provides a good mix of voluntary initiatives and awareness-raising activities and focuses on tackling commercial-scale infringement which causes the most harm to our economies. The digital single market package overall represents an important and timely opportunity to ensure that Europe is in the best possible position to take advantage of the digital revolution.

The noble Lord, Lord Berkeley, mentioned the importance of safeguarding IP. The Government recognise the challenges and importance of safeguarding intellectual property here and abroad. It is essential that rights can be enforced effectively, and we are taking a range of actions to address this. As I mentioned, in September 2013 we launched an online IP crime unit dedicated to tackling serious and organised online piracy and counterfeiting and protecting legitimate UK businesses. The unit has so far made 52 arrests and has also diverted more than 11 million views from copyright-infringing websites to an official police warning page since July last year.

Overseas IP regimes can be difficult for businesses to navigate and successfully enforce, so we provide specialist IP attachés to help UK businesses in some of the more important and challenging international markets: China, India, Brazil and south-east Asia. During a visit to China in 2014, the UK facilitated a landmark agreement between the China-Britain Business Council and Chinese e-commerce giant Alibaba that will help address the tens of millions of pounds lost to Chinese counterfeiting and piracy via the online platform each year. In June last year, the Government and the European Commission hosted the inaugural international IP enforcement summit in London, with great success. It was attended by experts from Governments, enforcement authorities and multinational businesses around the world. The summit discussions clearly demonstrated the unremitting desire of all those who attended to work together to overcome the challenges that we face around the world in tackling IP crime, whether by reducing the flow of funds to criminals, better customs enforcement at external borders or ensuring that IP rights work in the interest of employment and economic growth.

Several noble Lords mentioned issues relating to the status of the arts and education, and I will deal individually with as many of those as I can in the time that I have left. The Government have created a number of new programmes that give children the enriching experiences they need at a young age, such as music education hubs, a national youth dance company and the British Film Institute Film Academy. Such programmes develop the creative thinking that is powering the UK’s world-beating creative industries and spark a love of the arts that can last a lifetime.

My noble friend Lady Wheatcroft mentioned the supplier recognition scheme in relation to the Olympic site. The SRS is a first for the Olympic movement; it is the first time that the IOC has allowed such a scheme. More than 780 companies have benefited under the scheme. Some categories of companies, which my noble friend mentioned, were excluded from the scheme, but I am afraid that there is no scope for changing those categories. They are not dictated by the Government but relate to contracts between the IOC and the major international companies.

My noble friend also mentioned the difficulty for creative SMEs in the export environment. UKTI provides tremendous support for creative businesses. Some 13,000 creative companies were helped in 2014-15—a quarter of all companies helped—and some £467 million of business was secured. UKTI set up a sector advisory group to gather creative industries together to advise it on prioritising export markets and exploiting inward investment opportunities.

My noble friend also mentioned cultural education, which concerned a number of noble Lords. As part of the Government’s plan for education, all pupils will experience a broad and balanced curriculum. The arts are a key part of this. Art and design and music are compulsory for five to 14 year-olds. In 2015-16, the Government will provide more than £109 million to support art and cultural education projects, an increase of £17 million from last year.

The noble Lord, Lord Bragg, mentioned his concern about the cuts in funding for the arts and creative industries, as did many other noble Lords. We absolutely recognise the intrinsic social and economic value of the arts to people of all backgrounds. Nevertheless, we all need to play our part in contributing to government savings—I know that the noble Earl, Lord Clancarty, and I will not have a meeting of minds on this issue. We are working with arts organisations to ensure that they have a broad funding base that incorporates public and private funding.

The noble Baroness, Lady Bonham-Carter, mentioned the need for more links between creative businesses and schools, and with careers advice, which I think the noble Viscount also mentioned. We agree that liaison between industry and education is important and welcome the recommendations in the Create UK strategy, which has been developed by industry members of the Creative Industries Council. This includes extending the role of the National Careers Service last year, which should help with the work. The new Careers and Enterprise Company will also strengthen links between employers and schools.

The noble Baroness also mentioned her diversity round table with the Minister in the department. The Minister for Culture, Media and Sport has taken an active interest in this issue, and I will speak to him about his plans to continue this group.

The noble Baroness also mentioned STEAM, not STEM. I realise that this area has concerned a number of noble Lords. The Government are strongly committed to arts and STEM subjects. Young people should have the opportunity to study arts subjects alongside an academic curriculum. Between 2012 and 2014, the number of pupils taking music and art and design GCSEs rose by 4% and 7.5% respectively.

The noble Lord, Lord Berkeley, mentioned the new London concert hall, which was also mentioned by the noble Lord, Lord Clement-Jones. The Government and the GLA are jointly funding a feasibility study into the case for a new concert hall for London. The study will examine how the hall might be funded.

My noble friend Lord Lloyd-Webber mentioned equality of opportunity in arts training. The organisations in the Arts Council’s 2015 to 2018 portfolio have committed to ensuring that their workforces are diverse. The creative employment programme will continue to offer the opportunity for paid internships in cultural organisations so that young people have a fair chance at opportunities, regardless of background.

The noble Viscount asked whether Netflix and similar services should be covered by rules to ensure fair payment for creators. Services such as Netflix and Spotify are very popular and have done much to encourage the lawful use of creative content on the internet, but the way these firms pay creators and copyright owners is highly debated, as I am sure he is aware. The European Commission has said that it will consider fair remuneration for creators in its review of EU copyright. The Government look forward to hearing the Commission’s proposals on the digital single market. The noble Viscount also mentioned the importance of SMEs and start-ups, and I could not agree more with what he said.

Time has caught up with me. I have not been able to answer a number of questions, for which I apologise, but I will write to noble Lords and place copies in the Library.

The Government are committed to continuing to support the UK’s creative industries at home and abroad. The UK’s creative industries are tremendous ambassadors for the wealth of creativity that exists on these islands. From One Direction to 007, from Sam Smith to Stella McCartney, “Game of Thrones” to Grayson Perry, these icons are known all over the world, and that is what makes Britain’s creative talent known and loved around the world. The Government are committed to helping the creative industries to make sure that they continue to be the envy of the world.