Film Industry

Lord Clement-Jones Excerpts

Thursday 10th October 2024 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

My Lords, this is my first chance—with a bit more time on the clock than we have at Questions, and certainly than we had for our heavily subscribed Question for Short Debate on libraries—properly to welcome the noble Baroness, Lady Twycross, to her place. I know that she has a busy time, speaking both for DCMS and for the Cabinet Office, but she has an excellent team around her, and I look forward to our exchanges on what I am sure she will agree is the far more interesting half of that deal, representing sectors that are a fast-growing part of the economy and enrich our lives in so many ways.

It is in that spirit that I welcome the Statement she has just repeated, but your Lordships might well expect me to, because it is simply confirming a policy that the Conservative Government announced in March. The statutory instrument that the Secretary of State trumpeted yesterday puts into effect the extra support for the independent film sector that my right honourable friend Jeremy Hunt brought in at the Budget this spring. I looked at the press release put out by the Minister’s department but, curiously, I could find no mention of that. Will she start by acknowledging the important role played by Jeremy Hunt, and, indeed, by Lucy Frazer, the former Secretary of State, in winning the argument at His Majesty’s Treasury for this dynamic tax stimulus?

The announcement that we made in March followed months of careful work with brilliant organisations from across the sector, such as Pact and the British Film Institute, and was welcomed by industry titans such as Sir Christopher Nolan, Barbara Broccoli, Sir Steve McQueen and that great Geordie, Sir Ridley Scott. At the time, the BFI described it as

“a game changer for UK filmmakers”

and British storytelling, and

“the most significant policy intervention since the 1990s”.

So the Government’s Statement this week is not so much an original production as a remake of a previous hit. If it were a film, my right honourable friends would surely appear in the credits, at least. Will the Minister give them the acknowledgement that they deserve when she stands up again?

Perhaps she can also tell us a little more about the timing of this Statement. I am very glad that the Government are supporting the London Film Festival; it is an incredible showcase for the brilliant film-making talent that we see on display right across the United Kingdom. That is why the last Conservative Government provided £1.7 million of support for this year’s festival through our creative industries sector vision, announced back in June 2023.

However, if the Secretary of State is going to be governing by gimmick and announcing fiscal policies based on the red-carpet events that she is invited to, would she also recognise that this week marks the start of Frieze London, one of the world’s most influential art fairs? The art world is waiting to see whether the Government will continue the museums and galleries exhibition tax relief at the extended rate and scrapping the sunset clause, as we committed to in the Budget in March? If the Government are recycling good news for the film sector, can the Minister put the art world out of its misery by confirming that today, too?

Every single evening, across the country, people are benefiting from brilliant new productions supported by the theatre tax relief, and astounding concerts supported by the orchestra tax relief. In the Budget in March, we announced that we would keep those at the extended rate permanently. Is the Minister able to give those vital sectors the certainty that they need to be able to continue programming excellent new plays and concerts? If not, why has her department chosen to give just one part of the creative industries special treatment ahead of October’s fiscal event?

But even the film sector is waiting for answers from our new Government in other areas. In another place yesterday, Dame Caroline Dinenage, the chair of the Select Committee, asked when the Government expect to confirm the introduction of the visual effects tax credits. These were also announced in the Budget in March and have been consulted on, and they are desperately needed and urgent. The Secretary of State was unable to give a clear answer in another place yesterday—perhaps the Minister can give your Lordships more information today.

My right honourable friend Sir John Whittingdale highlighted another area where clarity is needed from the noble Baroness’s department. He pointed out that investment in the film industry—and, indeed, across our creative industries—depends on confidence and certainty, not least in the copyright protection regime. He asked the Secretary of State to make it clear that the Government do not intend to extend copyright exceptions to text and data mining, which would damage both the creative and publishing industries massively. The Secretary of State was not able to give him a clear answer yesterday; perhaps the Minister can fill in the gaps today.

Sadly, this is becoming a bit of a picture from our new Government: failing to come up with answers to the big questions that they have had 14 years to think about, and failing to come forward with any new ideas of their own. We have not yet had 100 days of this Government, which is strange because, with all their miserable announcements, their descent into sleaze and the sacking of the Prime Minister’s chief of staff to try to signal a reset in Downing Street, it certainly feels like longer. But all they seem to be able to do is recycle Conservative policies. I welcome this Statement and I look forward to the introduction of the football governance Bill, which is another goal that we kindly set up for them. But I have to ask: when do they plan to start governing on their own?

[Lord Clement-Jones (LD)]

My Lords, I hope to strike a rather more positive note. I thank the Minister for repeating the Statement. On these Benches, as we did in the Commons, we welcome all the elements of the Statement; it is a really excellent way of marking the London Film Festival.

The confirmation of the IFTC is very welcome. On these Benches we are huge champions of the creative industries and we absolutely share the ambitions for the sector that the Minister has set out. Our film industry, particularly the independent sector—I pay tribute to PACT and the indefatigable CEO, John McVay— is dealing with a wide range of disruptive changes, from recovery from the pandemic to the rise of streaming platforms and AI.

The confirmation of the IFTC is a welcome first step, but we must also consider international competition. We have seen in the last week that the Irish Government have announced their own boosted tax incentive of 40% for films budgeted under €20 million. In that light, does the Minister consider that this level of tax relief goes far enough? As the Minister will have found, while giving support on these Benches, we always want even more ambition from the Government.

Another key issue that the industry is dealing with is that of a scarcity of skills. Inward investment in the film industry is very welcome, but the boom has also caused skills gaps and shortages for independent films, as the highly paid jobs in large productions are more attractive. This has created a destabilising and precarious production landscape in which smaller productions are struggling to hire the necessary talent to make a successful production. So will the Government address the skills deficit in the creative industries, including replacing the apprenticeship levy with a more flexible training and skills levy to suit the needs of the creative industries and increase take-up? Can the Minister confirm that we will soon see a full reform of the apprenticeship levy, and that she is confident that the reform will suit the needs of the creative industries?

In the context of skills, I welcome the plans put forward for the Marlow film studio site and the Government’s announcement in that respect. This grey-belt site is exactly the kind of location where we should be focusing growth and development. As a party, we support the proposal nationally and locally; the training and skills elements contained in the proposal are particularly welcome.

According to Creative UK, over 70% of creative businesses report not having enough finance. Today’s announcement will be helpful news for the film industry, but what steps are the Government taking to ensure that our creative industries more broadly can access the finance that they need to flourish? What steps, for instance, will the Government take to protect our independent television production companies, many of which are facing similar issues from the rise of streamers to competition from elsewhere in Europe? We need to establish creative enterprise zones beyond London to grow and regenerate the cultural output of areas across the UK. What are the Government’s plans for these?

Finally, Feryal Clark, the new Minister for AI and Digital Government, recently announced that she expects to resolve copyright disputes between British AI companies and the creative industries

“by the end of the year”,

saying that she wants to

“bring clarity to both the AI sector and also to creative industries”.

Does this mean that the Government plan to bring back a new text and data mining exception of the kind that was backed by the Pro-innovation Regulation of Technologies Review: Digital Technologies, from the noble Lord, Lord Vallance, or will they affirm, as they should, the rights of copyright holders such as film makers, faced with the ingestion of their material, or the performing rights of actors, artists and other creatives, and the need for licences to be taken by large language models? What consultations are the Government engaging in in this rather narrow timescale?

[Baroness Twycross (Lab)]

My Lords, as I hope your Lordships have understood from the Secretary of State’s Statement—I think there is consensus across the House— our film industry really is one of the UK’s true economic powerhouses. We are genuinely one of the best places in the world to make films, with our incredible talent and world-class studios and locations.

When I was repeating the Statement, I noted that “Paddington” got quite significant coverage in the debate yesterday, so before I answer the points raised by noble Lords, I just wanted to mention that my own personal favourites are “Suffragette” and “Brassed Off”. These and many other films are not only compelling entertainment but depict important cultural and social moments in our nation’s history. This Government want to make sure that our film sector goes from strength to strength and that we can attract more investment and make more exciting, diverse and original films than ever before.

We cannot be complacent, however, and we recognise the challenges facing the sector. That is why we laid the regulations yesterday, which will provide much-needed support to our independent film sector, providing an uplift to our existing audiovisual expenditure credit specifically targeted to support the growth and success of low-budget films.

Films can be a fantastic driver of regional growth, helping to spread opportunity across the country, but we know that access to and participation in this sector has in some ways become the preserve of the privileged few and we want to change that. We are committed to working with regional partners to create more growth, boost opportunities for all and support people to fulfil their creative potential.

Labour introduced the first film tax credit back in 2007. Since then, our industry has gone from strength to strength. I do not think we should make this a political knockabout around who supports the film industry more. The noble Lord, Lord Parkinson, asked for an acknowledgement that this was a policy of the previous Government and I refer him back to the Secretary of State’s Statement, which makes it clear that this is a continuation of that policy. It was a shame that he resorted to political jibes, when this should be something around which we have political consensus. Although the measure announced yesterday was announced by the previous Administration, it is this Government who have designed and laid the necessary regulations to ensure that companies, many of which are eagerly anticipating its introduction and welcomed it yesterday, are able to apply for independent film tax credit from the end of the month. This is the first DCMS SI of this Government and, as such, I believe it shows the priority that we on these Benches place on supporting the industry.

British indie films such as “Pride”, “Billy Elliot” and “Trainspotting” tell award-winning stories about our country, celebrating parts of our culture that often get less exposure. This relief will allow more stories like these to be told, enabling more people to see their lives and experiences reflected on the screen. Yesterday, the film sector reacted incredibly positively to this announcement, and we have already seen Pinewood, in response, announcing a new indie production hub. This relief is open to co-productions, which means it will also boost UK-international collaboration on film. The DCMS-funded UK Global Screen Fund helps British filmmakers co-produce films with international partners and distribute their films globally.

The noble Lord, Lord Clement-Jones, highlighted the issue of skills. The announcement yesterday is just the start of how this Government will be supporting our world-leading creative industries. We are reviewing the school curriculum, to put creative education back at its heart, which will boost the talent pipeline for our fantastic film sector, as well as looking at the apprenticeship levy he referred to. On his other points about support for television, we recognise that the last 18 months have been quite difficult for the TV production sector and we are committed to supporting it. The Government maintain a range of interventions to support independent TV production companies, including a system of quotas and the terms of trade regime. We are taking steps, through the Media Act, to retain, and as appropriate modernise, these to ensure that they remain fit for purpose. It is also worth noting that there are several existing tax reliefs that independent TV production companies can benefit from, covering animation, children’s TV and high-end TV.

In relation to specific measures and tax credits to support creative industries, I am afraid that I am not going to be able to give definitive answers today. As noble Lords will be aware, the Budget and the spending review are coming later this month: watch this space.

Briefly, the Government believe in human-centred creativity and the potential of AI to open up creative frontiers. Some 35.2% of creative industry businesses are currently using AI technology. We recognise its significance, but are committed to finding the right balance between fostering innovation and ensuring protection for creators. That requires thoughtful engagement with the creative industries and companies driving AI development.

Noble Lords will be aware that this Government have already launched Skills England to bring the skills we need for a decade of national renewal for our communities, businesses and country. Next week, the Government will host the International Investment Summit; we have big ambitions to ensure that the UK is back at the global table. Our creative industries, which reflect the best of this country, will be so important to that.