Brexit: Creative Industries

Lord Clement-Jones Excerpts

Thursday 19th January 2017 Lords Chamber

Moved by

[Lord Clement-Jones]

That this House takes note of the impact of Britain’s planned withdrawal from the European Union on the creative industries sector.

[Lord Clement-Jones (LD)]

My Lords, it is a privilege to introduce this debate on behalf of my noble friends but I regret the circumstances in which I am doing it.

Last July, when I took part in the two-day debate on the outcome of the European Union referendum, I talked about the implications of Brexit for the creative industries. Uncertainty about the future on the part of both government and those industries was understandable then, but the sad truth is that six months later, despite myriad representations from different parts of the industry, from the Creative Industries Council, the Creative Industries Federation, Arts Council England and many others, and even an extensive speech by the Prime Minister on Tuesday, we are still almost as much in the dark about the implications of Brexit for those industries—and whether the Government have taken on board the concerns of those industries—as we were then. Indeed, it was notable that the Prime Minister mentioned a number of sectors in her speech but not the creative industries.

Therefore, the purpose of those of us on these Benches today is to highlight in no uncertain terms the importance of these industries to our economy and our future, and the essential matters than must be safeguarded on Brexit. Lest we be accused of being miserable remoaners who cannot accept the outcome of the referendum, we also want to set out the opportunities in terms of industrial policy that the Government must grasp in order to make sure that those industries prosper in the future.

Before I go any further, I want to try to give a picture of the importance of these industries, which span such a broad range of creative endeavour. In the UK, we are a vital hub for the TV, design, games, visual effects, publishing, film, advertising, music and fashion industries. They make a contribution of over £87 billion to the UK economy, employ almost 2 million people and are growing at twice the rate of the rest of the economy. As a result, we are second in the world only to the US for cultural influence or soft power. After all, what other country has instantly recognisable characters such as Harry Potter, James Bond and Sherlock Holmes in quite the way we do? Their exports are worth £20 billion, and the fact is that Europe as a whole is the largest export market for the UK creative industries, accounting for 56% of their trade in the sector. That is not all digital or audio-visual. Europe, with 31% of the total, is the largest market for physical book exports. I could go on. However, I recommend the report from the industry members of the Creative Industries Council, and also the one from the Creative Industries Federation, which give a much better overview than I can in the time available.

The other aspect that is of key importance, but on which I will only touch today, is the relationship of this sector to the tech sector. That relationship and interdependence is becoming more and more important for Britain’s future. Increasingly, tech platforms need creative content, and both sectors rely on creative skills. They are both strongly impacted by government policies on superfast broadband rollout and spectrum allocation, and, of course, by the outcome of Brexit on our telecoms sector, whose consumers have benefited so strongly from an EU-wide regulatory regime. My noble friend Lord Foster will be expanding on this. Both too are going to be strongly affected if there is a change to the way that data can flow freely between the UK and other EU countries. This comes to a head in the games industry, but concerns all creative and tech industries that distribute content or software digitally. Ensuring continuing adequacy of data protection under EU law will therefore be crucial.

It is not always easy to generalise about the creative industries, since they have many individual characteristics. However, some very strong common themes emerge from the work that the creative industries have done so far in responding to the prospect of Brexit. The first and most crucial of these is the need for access to talent. Yes, we need to accelerate the development of our skills here in the UK, and the industries have not been slow in showing how that must be done over the middle and long term by adopting what we might call a full STEAM agenda. However, the fact is that in fast-changing markets, specialist skills are in short supply. The ability for small businesses to hire skilled freelancers is vital. Freedom of movement of people with those skills is crucial; including, for instance, music artists going on tour in Europe or to festivals. This is important also when considering film, games and advertising production, or fashion and publishing here in the UK, particularly when it comes to digital skills. The Prime Minister has promised that the brightest and best can come here, but current changes to the tier 2 visa regime are going in precisely the wrong direction—so much for being truly global. So, too, it is not enough just to recognise the need to guarantee the right of those EU citizens already here to remain in the UK. That is already within the gift of the Government and should be granted immediately.

Another common theme has been about the future of intellectual property enforcement and co-operation. Although the broad principles of IP law are covered by international treaties, the shape of copyright exceptions are largely determined at European level, and so too are the enforcement levers on matters such as breach of copyright and counterfeiting. For instance, European co-operation has been of huge importance to initiatives on infringing online sites, such as Follow the Money. Will this continue? Will we continue to treat historic decisions on IP matters by the ECJ as binding? Will European trademarks no longer have protection in the UK? Will our artists continue to have the benefit of artists’ resale rights? Then there is the community design right, which is so important for the fashion industry, giving much more extensive rights to designers than the UK design right. Will we preserve that?

There are many EU proposals currently afoot which will impact on our creative industries if we do not have a seat at the table to argue their corner. In that context, will the Government be publishing their response to the recent consultation on EU copyright reforms? In the same context of the creation of the EU strategy for a digital single market, will we be able, on the way out of the EU, to protect the territoriality of copyright, which is so important to the financing of our film and television productions, or take advantage of the new transparency rights for creators?

What is the Government’s response to the Arts Council’s suggestion of a review to see how our intellectual property can be enhanced and maintained outside the EU? Will we achieve the right result on the draft directive on online sales for our games industry? In its recent report, the BIS Select Committee said:

“The decision to leave the European Union risks undermining the United Kingdom’s dominance in this policy area. We could have led on the Digital Single Market, but instead we will be having to follow”.


Forty-two per cent of UK digital exports go to the EU. As the Select Committee asked itself, have the Government really started to get to grips with this? Is there any real appreciation in government about the implications of Brexit for the UK’s access to the digital single market?

There are the implications of the loss of funding from Creative Europe, the European Regional Development Fund and Horizon 2020, on which my noble friend Lady Bonham-Carter will expand. All the creative industries have real issues about the prospect of lack of access to EU markets but I want in particular to highlight the issues relating to the audio-visual industry—in other words, the film and television sector—which I know the noble Lord, Lord Puttnam will be focusing on later.

The Audiovisual Media Services directive sets out the vital country of origin principle which ensures that our television channels gain access to the EU market without further regulation. As all industry commentators have said, without it there would be significant harm to the industry, especially as the principle could be extended to satellite in future. However, its continuance would have to be negotiated—it cannot simply be preserved by a great European reform Bill—otherwise I can see television channels substantially relocating in order to stay within the AVMS directive. Likewise it is vital that the AVMS directive continues to classify programmes made in countries covered by the European Convention on Transfrontier Television, not purely the European Union, as European works. How alert are the Government to that?

Convinced leavers claim that the world is full of opportunity for trade deals to be done outside the EU but as CETA, the Canadian European Trade Agreement, exemplifies, cultural exceptions are a besetting aspect of trade agreements. What assurance can the Government give about how high up the agenda our creative industries will be in any trade negotiations? These industries need the maximum possible strategic certainty in order to minimise disruption to decision-making, investment and people’s jobs.

We need a commitment to action by the Government on Brexit which supports our creative industries. We need an industrial strategy for the creative industries which incorporates all the above elements. It should also include a raft of domestic action to extend the investment support through tax relief schemes—there is a good case to extend them to music—to build on the strengths of the different regions of the UK and their creative clusters, and on synergies between the creative industries and other sectors of the economy, particularly in the development of skills.

Everything I have outlined is not some special pleading but a hard-headed calculation of what is necessary for the continuing success of the UK creative industries after Brexit. They need to be able to compete in a global environment. We have competition from players operating with larger domestic markets and many up-and-coming agile competitors. Leaving the EU makes us vulnerable without robust action and negotiation, especially if the Prime Minister and Mr Davis envisage that we may leave without any deal at all or with minimal transitional arrangements. The Government need to demonstrate that they grasp these issues and are pursuing a strategy to deliver a trade agenda and an industrial strategy for the creative industries that meets the case.

I look forward to the debate. I beg to move.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, I thank all noble Lords who have taken part in today’s debate. It has been hugely well informed. There are not many people I wish to mention by name, but I want to mention particularly the newly liberated noble Baroness, Lady Chisholm, who has made a great contribution today. It is great that she will take part in future debates on the creative industries. She reminded us of the sheer breadth of the subject matter: that it includes museums, galleries, photography, architecture and the arts more broadly. I thank her and look forward to her further contributions.

I also thank the Minister. It is clear that he is in the right job, because he has created mood music today that has answered as many of the questions as I think it was possible for him to do in the circumstances, given that a great number of uncertainties have been raised by so many of us in today’s debate. He was able to give us few specifics, but there were general bits of information and assurances that have been helpful.

When we look back on Hansard, I think that we will see that, between us, we have provided a blueprint for government on what it needs to include in our trade negotiations and in our industrial policy for the sector in the face of Brexit. I know that my noble friend Lady Bonham-Carter will shortly publish a pamphlet encapsulating many of the issues for the creative industries, which we hope government will take on board alongside those raised in today’s debate.

I do not deny that the creative industries are immensely resourceful, innovative and skilled and they will take every advantage they possibly can in the face of Brexit. Despite the tough rhetoric from the Prime Minister, however, it is almost impossible to see, in the light of what we heard today about the essentials for the continuing success of the creative industries, that any negotiation will ultimately produce a better outcome than continuing membership of the EU single market—sadly. We have heard that 90% of those involved in the creative industries voted to stay in and it is no surprise that they did, in those circumstances, but 100% are now waiting anxiously to see how effective this Government can be in making sure that the sector prospers post-Brexit. On the industrial strategy, seeing will be believing. We have heard assurances about the creative industries being on the top table. We very much hope that that will be the case.

The Prime Minister has promised a parliamentary vote at the end of the negotiation process. On these Benches we believe that a referendum of the people of the United Kingdom on the terms is vital. For many of those involved in the debate today, the litmus test, whatever mechanism on approval is finally decided, will be: is there a good deal in there for the creative industries? We will be looking very intently at the impact of the finally agreed terms on the creative industries and judging the exit package accordingly.

Again, I thank the Minister and all Members of the House who have taken part in this extremely good debate.

Motion agreed.