Lord Blencathra
Main Page: Lord Blencathra (Conservative - Life peer)(7 years, 11 months ago)
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Lord Blencathra (Con)
My Lords, I congratulate the noble Lord on moving this excellent and important debate. The UK creative industries are a tremendous British success story in terms of jobs created, growth, profits and exports. In 2014, the last year for which we have figures, they employed 1.8 million people, many of them in the north of England in the gaming industry. Their job creation has been running at 5% per annum. Over the last few years, their gross value added has grown by more than 4%—twice the rate of growth of the rest of the economy. That is £84 billion and more than 5% of our total economy. Their export achievement is phenomenal. It is £19 billion, with America accounting for 25% of that—our largest single market—at about £5 billion, followed by Germany and France at about £1 billion each.
The major sectors are: advertising and marketing at £13 billion; film, TV and video at £10 billion; IT software and computers at £36 billion; publishing at £10 billion; and music and performing arts at £5 billion. The UK is the third-largest gaming producer in the world after the USA and Japan. That is not going to change because of Brexit and our largest gaming export market is the USA. We apparently employ a lot of EU nationals and since they are highly skilled workers they will obviously qualify under any new type of visa regime we invent.
Of course, we also get EU funding from the Creative Europe stream, which boasts that the UK received the largest grant ever for any EU country. A lot of people have said that funding is vital for the gaming industry. So how much was the funding from Europe? It was £547,000, to be precise. But since 2014 the gaming industry has received £45 million in Treasury tax relief. So what if we leave the EU? The British Government’s support is worth 82 times the EU subsidy.
Then, take our film industry, which is the third-largest film entertainment market in the world after the USA and China, running at about £4.8 billion. It too gets funding from Creative Europe. That amounted to £3.8 million in 2014, but Treasury funding in 2014 was £414 million, or 110 times more. How can anyone make an argument that leaving the EU would deprive the film industry of vital public subsidy? All told, taxpayer support for the creative industries and the arts runs at more than £1 billion, whereas total EU funding through Creative Europe was a mere €40 million.
None of our export markets would dry up after Brexit, whether it is IT and software, accounting for 46% of our exports, or film and TV at 24%, or architecture, or publishing. They will all thrive. Our creative industries are the most innovative and can benefit from the most freedom. They are not making cast-iron widgets based on the technology of the last century, but are in the forefront of trying out exciting new ideas at which British innovators excel.
The House does not need to take my word for it that the creative industries will thrive outside the EU. I have a document issued by the Creative Industries Council called 100 UK Creative Industry Wins in 100 days, on building on the success of the EU referendum. I will not read out all 100 wins, but here are just a dozen that the Creative Industries Council boasts about since 23 June. Australia and New Zealand networks have confirmed that Brexit will not affect their TV orders from UK. The UK and South Africa have co-signed a production treaty. AMC has bought UVI and Odeon cinemas for £921 million. Japan’s SoftBank has bought ARM for £24.3 billion. Gateshead architects have won a major contract in Mongolia. Foster Partners has won a major award in New York. Leach Design has won a contract for Kuwait National Museum. A UK firm has won a stadium project for the 2024 Los Angeles Olympics. The Chinese firm, Huawei, confirmed plans for a £1.3 billion investment in the UK. Google announced London as its European HQ. An Australian TV company chose Cardiff for its new European HQ. Dyson announced a £250 million investment in R&D in the Cotswolds. Apple is to create a spectacular UK HQ at Battersea power station. Disney has chosen Northern Ireland as a production home for TV and Salford’s Media City has had a £1 billion expansion plan approved.
Those were just 12 of the 100 good news announcements up to 1 October last year, since when there has been no slowdown in our creative industries expanding, winning new orders and exporting more, especially now that the pound is down to a more sensible level against the dollar and needs to drop a bit more still if our industry is to survive and export.
Therefore, we should welcome getting out of the EU. Our creative industries do not need an EU comfort blanket. An industry producing £84 billion per annum and exporting £19 billion does not need a paltry €40 million subsidy from the EU. We are better than that, so let us drive forward, maintaining and enhancing our hugely successful creative export market and showing a fraction of the courage demonstrated by the Prime Minister in her wonderful speech on Tuesday.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, this has been a fascinating debate on important issues. It is also important for the kind of country that we want to be post Brexit. We therefore owe a debt of gratitude to the noble Lord, Lord Clement-Jones, for securing the debate. I am also grateful to all other noble Lords who have made thoughtful contributions about something we care about. This sector is important economically and to what we want our country to be like.
In some ways, what many noble Lords have asked me to do is difficult. I have been asked to give firm assurances on many things. The place I have to start, and I suggest all noble Lords start, is the Prime Minister’s speech, which aimed to set out as far as we can some of the positions we have taken and will take. I will not stray beyond that, but I will try to outline our thinking in some of these areas. Some noble Lords will be disappointed that I will not be able to give firm guarantees on things such as funding. For example, the noble Baroness, Lady Benjamin, asked for clear commitments and assurances. The noble Baroness, Lady Bonham-Carter, was much more reasonable. She asked for only an assurance that we were thinking about some of these things. I can of course give that immediately.
It is important to state for the record, and as many others have done—for example, my noble friend Lord Blencathra and the noble Lord, Lord Macdonald—how important the creative industries are to this country. They contribute more than £87 billion—5.7% of gross value added—and produce extraordinary talent. Home-grown stars did brilliantly at the recent Golden Globe awards. Five of the world’s best-selling albums in 2015 were by British artists: Adele, Coldplay, Ed Sheeran, Sam Smith, and, as the noble Lord, Lord Taylor of Warwick, reminded us, One Direction. The creative industries contributed nearly £20 billion in exports and accounted for 1.9 million jobs in 2015.
We want to ensure the best post-Brexit deal for Britain and provide certainty where we can. As I mentioned, the Prime Minister made clear in her keynote speech on Tuesday that that is what we want to do. The Government are working closely with the creative industries to understand the impact and opportunities that Brexit brings. The Culture Secretary has hosted round tables with a number of creative industry sectors, with more planned for early this year. I am grateful to the Creative Industries Council and Creative Industries Federation for their reports on Brexit, which have received close attention in my department.
The Government recognise that it is vital for the creative industries to be able to draw on the best talent and to move equipment between EU countries for film production and concert tours, for example. The noble Lord, Lord Puttnam, begged me to mention—he need not have begged; he only needed to ask, as I enjoy talking to him on this and other things—taking the moral high ground. We recognise the issue of guaranteeing the rights of EU nationals in Britain and British nationals in the EU. That is why the Prime Minister addressed it specifically in her speech. She used the words,
“as early as we can”.
We think it is right that we can offer EU nationals this certainty as long as it is reciprocated for British citizens in EU countries. I do not know about other noble Lords, but I have received emails from UK citizens living in the EU complaining that we were using them as bargaining chips. In fact, we just want parity. I accept that this is a moral matter. It is something we are taking seriously. We want to get to an equitable agreement.
As the noble Baroness, Lady Benjamin, and many other noble Lords mentioned, access to European funding, in particular the Creative Europe programme, is also important to the sector. It has provided about €40 million to UK organisations between 2014 and 2016. UK businesses can still apply for this. Furthermore, the Treasury has confirmed it will guarantee funding for structural and investment fund projects that continue after we have left. Although the UK is a net beneficiary of these funds, it represents a small percentage of overall public funding to arts and culture.
Lord Blencathra
If our net contribution to the European budget is about £9 billion, would my noble friend accept that if we wished to replace the tiddly little €40 million we could do so in a mere 35 hours-worth of our net funding?
Lord Ashton of Hyde
The figures are as my noble friend has said. The decision-making process might take a bit longer than 35 hours, but I accept the point he makes and I agree with him. There are other reasons why Creative Europe is important, apart from the pure quantum of money. Collaboration and partnership are important. But, as the Prime Minister also indicated, she is keen on collaboration. We want to encourage this as part of the negotiations.
Leaving the EU will mean greater control over funding and make regulatory decisions subject to Parliament. As I just said, the UK has a long history of partnerships and co-operation with other countries within and outside the EU. Brexit presents an opportunity to forge new partnerships. For example, the Culture Secretary recently led the largest ever UK culture and creative industries delegation to China, during which she signed a landmark TV co-production treaty. We are only the second country in the world to hold both film and television co-production treaties with China, making us very well positioned to benefit from this massive and growing market.
The UK is home to a number of leading global companies, and investment continues. Google just announced the creation of 3,000 new jobs and a new headquarters in London. Snap—the parent company of Snapchat, as my noble friend Lord Suri reminded us—is moving its global headquarters to London, citing British creativity as the reason.
The Government are fostering an environment where the UK’s creative industries are world beating. Film tax relief, for example, supported more than £1 billion of expenditure in the UK in 2015-16. The new tax reliefs for high-end TV, video games and animation have been very successful too, with more than £417 million invested in the UK by video games companies and £947 million for TV since their introduction, supporting award-winning productions, which the noble Baroness, Lady Rebuck, mentioned, such as “The Crown” and “The Night Manager”. The reliefs have recently been extended to children’s TV, theatre productions and orchestras. All such tax reliefs are established in UK legislation and fully borne by the UK Exchequer. Therefore, they will not be affected by Brexit.
We understand that access to skilled workers is important to the creative industries. Equally, we have to heed the message from the referendum about control of immigration. The Government are investing in skills to increase the talent available to our creative industries, along with creating a pipeline of future talent. Since 2013, we have made available up to £20 million in match funding to the skills investment fund, helping employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.
By 2019, our £4 million UK Games Fund to promote regional growth in the video games sector is expected to have created more than 200 new jobs, with a GVA of more than £15 million. Our games sector is renowned for producing globally successful titles such as “Lego Dimensions”, “Batman: Arkham Knight” and the multi-BAFTA winners “Everybody’s Gone to the Rapture” and “Her Story”.
In reply to the request from the noble Lord, Lord Clement-Jones, for reassurance on where the creative industries sit, and to dispel the somewhat gloomy predictions from the noble Lord, Lord Foster, I say that it is not a coincidence that the Culture Secretary sits on the industrial strategy Cabinet sub-committee. Creative industries will be an important part of the strategy. We want to hear views from across the creative industries, especially once our Green Paper has been published. It is expected later this month.
The noble Baronesses, Lady Jones and Lady Rebuck, and the noble Lords, Lord Wigley and Lord Foster, argued broadly that we were not taking the creative industries seriously enough. They asked what the position of the creative industries was in the Government’s thinking. I can tell them by way of example that the Culture Secretary, Karen Bradley, said on 9 January to the Creative Industries Federation that one thing that Brexit would not change was the whole Government standing behind creative industries. She also said that creative industries would be at the heart of the industrial strategy. My noble friend Lord Suri’s confidence in the Government in this regard is well placed.
The noble Lords, Lord Puttnam and Lord Clement-Jones, spoke of the importance of the country of origin principles in broadcasting. We absolutely understand their importance to the AV sector. Our relationship with the EU market will be determined as part of our exit negotiations and I cannot give further reassurance at this stage, but we are working closely with the industry and meet it regularly. The upside, if we get this right, is the chance to expand as a truly global hub instead of an American and European hub, which we largely are at the moment. There is tremendous opportunity in that area.
The noble Lord, Lord Clement-Jones, asked about the Arts Council review of intellectual property. We are working with the Intellectual Property Office and industry to understand those impacts, and the opportunities for IP and copyright policy as a result of our exit from the EU. He asked when we would publish our response to the recent consultation on copyright. That was actually a call for evidence, but it will inform our EU negotiating position, and the industry’s input on that has been very helpful.
The noble Baroness, Lady Rebuck, and the noble Lord, Lord Clement-Jones, also talked about EU copyright and sought reassurances regarding the digital single market proposals on territoriality. The Intellectual Property Office is currently analysing feedback from its call for evidence on the digital single market copyright reform, but care needs to be taken to ensure that the impact of changes is fully understood and that they do not damage incentives to invest in the creation of copyright content.
As for the digital single market measures on fair remuneration and transparency for artists, mentioned by the noble Lord, Lord Clement-Jones, we want to see creators remunerated fairly while making sure that we continue to encourage investment in new content and innovative services—that would be good for everyone. We are aware that the Commission has proposed action in this area. We have engaged with the industry on these matters and look forward to discussing them at an EU level.
The noble Lord, Lord Foster, mentioned that the department does not have a seat on the main Cabinet committee overseeing Brexit. Nevertheless—and I mentioned the industrial strategy—officials in the department regularly engage with the Department for Exiting the EU. We are certain that it is constantly aware of DCMS’s priorities, reflected at all levels. We make sure that we are in touch with the creative industry sector by way of round tables, some of which are coming up at the end of this month.
There was talk, rightly, about education, the GCSE figures and the arts funding. We absolutely agree on the importance of the arts. It is true that the number of arts entries declined in 2016, but that was one year and we do not think that makes a trend. Between 2012 and 2015, the number of entries for arts subjects rose. Between 2012 and 2016, government invested more than £460 million in a diverse range of music and cultural education programmes. In November 2016, we announced a further £300 million for music and cultural education. In total, that is £685 million between 2012 and 2020. The noble Baroness, Lady Bonham-Carter, mentioned creative subjects in the curriculum. DCMS and the Department for Education are discussing the skills needs of the creative industries and the role of creativity in learning. It is important that we have the right mix of science and arts to meet the future needs of the industry, which she mentioned.
The noble Earl, Lord Clancarty, talked about local authority funding. As I said in answer to a Question from him a few days ago, many local authorities have continued to invest in arts and culture and have responded in innovative ways. We believe that funding decisions should be made at a local level and that local authorities are best placed to decide how to prioritise their spending.
My noble friend Lady Chisholm asked about support for museums and galleries and whether there was a government strategy. As we announced in the DCMS Culture White Paper last year, we are conducting a museums review to gain a deeper understanding of how that sector can best be supported. On timing, the public consultation closed in October and we aim to publish our report in the summer of this year.
The noble Lord, Lord Taylor of Warwick, asked about trade envoys in the US, India and China—that is, our biggest potential trading partners. The noble Lord is quite right that, because they have the largest presence of Foreign Office, trade and British Council staff, Ministers visit those countries regularly. However, we are constantly reviewing the value to the UK of trade envoys and how they relate to British ambassadors.
I have gone through as many questions as I can. There may be others that I have not answered and I will certainly write to those noble Lords who asked them. We agree with many of the issues that have been raised. I am sorry I have been unable to give complete assurances at this stage of the Brexit negotiations, but I emphasise that we fully support the creative industries. We understand their position in the economy and in how we want this country to be seen in the world as part of our soft power. They are central to the UK economy. We are committed to strengthening our international engagement and boosting exports to, and inward investments from, EU and non-EU markets. We intend to work closely with the creative industries and make a big success of Brexit.