Economy: Culture and the Arts

Lord Puttnam Excerpts

Thursday 13th June 2013 Lords Chamber

[Lord Puttnam]

My Lords, I am sure I speak for all noble Lords in thanking the noble Baroness for the way in which she has introduced this afternoon’s debate. Her enormous economic credibility as well as the perfect timing make being part of it very welcome.

One of the early and important achievements of the previous Labour Government—in fact, of the noble Lord, Lord Smith of Finsbury, who I am happy to see in his place—was to put the creative industries firmly on the map and to put in place effective policies which helped those industries to grow. That is one reason, for example, why the film industry is now able to contribute £4.6 billion to the GDP of this country—something like five times the comparable figure 20 years ago.

As I have argued previously in this House, the creative industries are sustainable and offer added value in a way that is simply not true of, for example, the financial services. The noble Lord, Lord Smith, was also able to put in place free admission for museums and galleries, and I was delighted to hear the noble Lord, Lord Gardiner, remind the House only yesterday that this remains his Government’s policy.

We should also give credit to the party opposite, notably the noble Lord, Lord Brooke of Sutton Mandeville, and Sir John Major, for ensuring that a portion of the proceeds of the National Lottery was made available to the arts. Later this year, we will be celebrating the 20th anniversary of the National Lottery and perhaps it is time that we took a fresh look at how the proceeds of the lottery are distributed so as to ensure that the arts, as one of the good causes, really is getting the greatest possible share.

Few would argue that the opening ceremony of last year’s London Olympics was anything other than a wonderful showcase for the energy and creativity of this country. That is why it grieves me to predict that history is likely to condemn us for what I believe to be our failure to build a significant legacy off the back of that extraordinary opportunity. Why does having the drive and determination to capitalise on the economic contribution offered by this nation’s creativity matter so much? It matters because other countries are investing considerable sums of money in their own cultural activity and they realise the impact it has on their reputations and their economic growth. Unless we are determined dramatically to raise our own game, we are likely to be condemning ourselves to the status of one of the global also rans.

Am I exaggerating? How about this for an example of seriousness of intent: about a dozen years ago, the South Korean Government, including their educational system, became concerned that while their industrial base was growing well, the creativity, within which so much intellectual property and value added reside, was not developing at anything like the same rate. They decided to invest around $1 billion over a number of years in developing and enhancing what was termed their creative capacity. This programme has been an unqualified success, to the point at which South Korea is now the powerhouse of the entire Asian entertainment products industry; everything from music, to movies, interactive games and television soap operas.

Far from becoming complacent, this year their Ministry of Culture, Tourism and Sport has been given a budget of $3.5 billion, of which $295 million is specifically earmarked for the promotion on the international stage of what they call Hallyu, or the Korean wave of entertainment products. That is almost $300 million simply for its international promotion. That is a very grown-up and serious competitor for the UK to think about taking on.

Here at home, as your Lordships heard from the noble Baroness, grant-in-aid is obviously in short supply. That is why lottery investment has become all the more important in nurturing and developing arts and culture, and driving the kind of innovation that we will need if we are to prove a match for the ambitions of South Korea, Singapore and other Asian nations.

However, we have another fantastic asset which we can draw upon to maximise our contribution to the arts. I refer, of course, to the BBC, which has been one of the cornerstones of support for every kind of art form—music, dance, drama—over many decades. The BBC’s current charter expires at the end of 2016 and, as with the lottery, I argue that this represents a perfect opportunity to review the way in which the corporation supports the nation’s cultural output, and to explore ways in which that contribution can be made even stronger and more effective, notably by helping to invest in new talent and new skills, both of which we are already desperately in need of. As I am sure the noble Lord, Lord Grade, and others will affirm, unless industry and government find ways of working together to invest in our skill and talent base, we will all too quickly become unfit for purpose in a digital world that is changing with quite ferocious speed.

I also think that we will need to find new ways to help support the arts. As many of your Lordships will be aware, there is enormous growth in the gambling industry, particularly online gambling, perhaps even, to some extent, displacing money spent on our National Lottery. I would like to think that the proceeds of a point of consumption tax on online gambling could, for example, be used to supplement the nation’s investment in arts, sport and culture. Many of the companies that operate in the online gaming space are based offshore, therefore making very little contribution to the overall, long-term prosperity of the country. By finding an effective way to use the proceeds of an enhanced tax on gambling to support arts and sport, we would be harnessing what may well prove to be a worrying rise in gambling activity, and allow it to become something which is of economic, social and cultural value to the nation as a whole.

Obviously, any such proposal would require total cross-party support. However, a gambling Bill has just received its First Reading in another place, and I think we would be making a massive mistake if we were to allow that Bill to gain Royal Assent without at least considering its implications and the possibilities that I have just suggested.

I cannot close without reminding the House that the value of the arts and culture can never simply be reduced to economics. Forty years ago, conversations, and even policies regarding the arts and culture, were focused almost entirely on their social and educational value. By drawing attention to what we now call the creative industries, we managed to make the case that they were also making a significant economic contribution to the nation. The case has been made even more strongly by the noble Baroness.

However, I am concerned that this Government are in danger of allowing the pendulum to swing too far in the direction of measurement by balance sheet. This was exemplified for me by a recent speech by the Secretary of State for Culture, Media and Sport in which arts and culture appeared to be viewed almost exclusively through an economic prism. Important as their monetary contribution is, the value of arts and culture can never be reduced to pounds, shillings and pence. They represent something infinitely more valuable than that. They are one of the cornerstones of any society that wishes to consider itself truly civilised—the one important means by which we are able to improve the quality of life for every single member of society—and in debating their economic value, it is very important that we never allow ourselves to forget that.

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[Lord Gardiner of Kimble]

My Lords, I, too, congratulate my noble friend Lady Wheatcroft on securing this debate. On the fundamentals, I believe that we are all united. Be it dance, opera, theatre, museums, paintings, design, gardens, historic buildings, sculpture, photography, heritage, film, literature or television production, culture and the arts bring our country alive, stimulate creativity, inspire us, develop a strong sense of community, challenge and entertain us. They are essential to the fabric of our society. Alongside all these important features lies their enormous contribution to the economy.

The UK’s culture reaches out far beyond these shores. It attracts millions of tourists to our country every year, forging international relations and building trade links and greater collaboration with the rest of the world. Culture is GREAT is one of the pillars of the Government’s successful GREAT campaign aimed at promoting the UK internationally. The Government’s priority is growth. Heritage, the arts, the creative industries and tourism are essential to that success. My noble friend Lady Bonham-Carter spoke powerfully about that. The noble Lord, Lord Smith of Finsbury, reminded us, with all his experience and commitment how important the creative industries are. The UK’s cultural sector—both private and publicly funded—has a significant role to play in local and regional economic regeneration. In 2011, the Yorkshire Sculpture Park directly contributed to the employment of 108 full-time jobs and was worth at least £4.68 million to the local economy. We heard from my noble friend Lady Seccombe about Shakespeare and the beneficial impact of Stratford and beyond. Margate, St Ives, Gateshead, to name but a few, all have cultural projects making a huge difference.

This Government, in recognising the value of the arts and culture, increased the share of funding from the National Lottery to the arts so that the Arts Council England is now projected to receive £262 million of lottery funding in 2015 compared with £151 million in 2010-11. Many noble Lords, particularly the noble Lord, Lord Puttnam, and my noble friends Lord Grade of Yarmouth and Lord Maclennan of Rogart mentioned this. Arts and culture in the UK are supported by mixed sources of funding. Nearly £3 billion of public and lottery funding will go to the arts over the lifetime of this Parliament. In the current climate, I believe that that represents a positive settlement for the sector. Public funding of the arts remains a cornerstone and from this many benefits flow. It encourages innovation and that experimentalism drives creativity. Some go on to achieve huge commercial success. My noble friend Lord Grade of Yarmouth confirmed that. “War Horse”, which was mentioned by the noble Baroness, Lady Jones of Whitchurch, inspired by a puppetry show at the Battersea Arts Centre, then produced by the National Theatre, went on to achieve numerous awards and was an Oscar-nominated film.

The latest report published by Arts Council England earlier this week clearly upholds this belief that public subsidy provides the space for innovation, talent development and risk. It shows that there is a significant amount of movement between publicly funded theatre and purely commercial theatre. Public investment today can lead to the blockbusters of tomorrow and the value this brings to our economy. London theatres grossed more than £0.5 billion in sales, selling 14 million tickets last year. Furthermore, 10.6 million people living outside London visit a theatre at least once a year. The UK’s creative industries contribute more than £36 billion or 2.9% to the UK economy; they export £8.9 billion and employ more than 1.5 million people, which is around 5% of the UK workforce.

The UK film industry goes from strength to strength with its Harry Potter films, and films such as “Skyfall”, “The King’s Speech” and “Les Miserables”. British Film Institute research shows that the industry contributes £4.6 billion to the economy, as the noble Lord, Lord Puttnam, highlighted There is a great history of public service broadcasting in this country, which means that the BBC, ITV, Channel 4 and Channel 5 can now invest more than £3 billion a year in TV programming across their channels. That supports the creative industries through direct investment and provides a degree of stability in the market. They commission innovative and culturally diverse programming, and bring the arts and our creative industries to a much wider audience. Furthermore, recently published research commissioned by Arts Council England shows that the UK arts and culture sector had a turnover of £12.4 billion and contributed £5.9 billion to the UK economy in 2011. Research suggests that for every £1 generated by the sector, an additional £1.43 is generated in the wider UK economy through suppliers to the sector and additional spending by those who work in the sector.

Perhaps I may give the noble Earl, Lord Clancarty, some reassurance. The Government recognise that public funding for the arts offers stability and unlocks further funding. Public funding in partnership with other funding streams is the most advantageous for the long-term sustainability of the arts in this country. This includes earned income from commercial activity, private giving and philanthropy, and access to the lottery. This mixed model of funding avoids reliance on any one form of income, allows for risk and builds resilience. I was interested in what my noble friend Lord Eccles said about independence and funding, and his experience of Kew and the Bowes Museum.

In 2014-15, Arts Council England will invest £345 million into the arts. As its chairman, Sir Peter Bazalgette, has said, this funding acts as venture capital, giving confidence to others to invest in the creativity and innovations of our cultural organisations. The creative employment programme, with funding from Arts Council England until March 2015, will provide up to 6,500 apprenticeship placements, helping young unemployed people enter the cultural workforce. The programme aims to approve the first 700 apprenticeships and 500 paid internships by 31 October this year. This is something that my noble friends Lord Grade of Yarmouth and Lord Brooke of Sutton Mandeville were particularly interested in.

The UK is home to a wide and varied cultural offer that distinguishes us from the rest of the world, be it historic ships like the “Mary Rose” and “HMS Victory” in Portsmouth, David Bowie’s clothes to world-renowned music festivals that take place up and down the country every summer. I was mindful of the speech by my noble friend Lady Sharp of Guildford on science heritage, particularly, as it is so current, about the development which has secured the future of the “Mary Rose”. The noble Baroness, Lady Kennedy of The Shaws, mentioned science and the arts and the importance of them riding together.

Four in 10 leisure visitors to the UK cite heritage and culture as the primary motivation for their visit. In 2011, more than 10 million inbound visitors to the UK engaged with some form of arts and culture. Research commissioned by Arts Council England estimates that £856 million per annum of visitor spend can be directly attributed to arts and culture. It is therefore no surprise that with more than 5.5 million visitors last year, the British Museum is the UK’s top visitor attraction and is ranked in the top five museums in the world. I acknowledge the great work which my noble friend Lady Wheatcroft and the noble Baroness, Lady Kennedy of The Shaws, have rightly highlighted. This work is, of course, replicated among the many museums across the land.

The Heritage Lottery Fund estimates that heritage tourism's direct annual impact on the economy is £4.3 billion. Including those that supply the sector and additional spending by those who work in the sector, heritage tourism contributes £11.9 billion annually to the economy. All this demonstrates the very clear benefits the cultural sector brings to our economy through tourism and the UK’s cultural status. This global status was amplified following the Olympic and Paralympic Games of last year. Britain’s overall nation brand improved, with Britain moving up one place to be ranked fourth out of 50 major countries around the world.

Last year’s Cultural Olympiad that accompanied the Games was a vast celebration of the UK as a centre for cultural innovation, creativity and a true showcase of Britain to the world. With more than 43 million visitors, participants, audience members and volunteers, the Cultural Olympiad engaged communities across the UK and inspired people to get involved in culture, including many who attended or participated in events for the first time. There was indeed something for everyone.

The Government are working to build on those great successes and it is essential that we create a lasting legacy from them. To harness all this success, we must look at ways of increasing financial resilience, by building skills in areas such as fundraising and ensuring our cultural sector continues to realise its artistic and economic value. The Government have demonstrated their commitment to the creative industries by working to introduce tax reliefs to support film, TV, animation and videogames, as the noble Viscount, Lord Colville of Culross, mentioned. In this year’s Budget, the Government also announced a package of measures to support growth and jobs in these industries through investing in the development of skills and technology. Cultural and the creative industries, including museums, libraries, publishing, designer fashion, technology and architecture, have been represented on many of the Prime Minister’s trade missions around the world. That has promoted Britain to global partners. I hope this reassures the noble Viscount, but I will look into the point that he made.

My noble friend Lord Brooke of Sutton Mandeville asked about philanthropy. The Government have introduced initiatives to boost philanthropy, including a reduced rate of inheritance tax for legacy giving and the recently launched cultural gifts scheme. This saw its first major gift, one of the best collections of Beatles lyrics and manuscripts, being made to the British Library only last month. We have simplified gift aid, while the Catalyst scheme has also been developed, under which £110 million has already been earmarked for arts and heritage organisations, which will unlock at least as much again from private donors. I hope it will also improve the fund-raising skills which my noble friend Lord Brooke mentioned. We should also applaud the profound generosity of those donors who have contributed almost £700 million to the cultural sector each year.

Another area in which the Government support world-class culture is through the Government Indemnity Scheme. This provides an alternative to the considerable cost of commercial insurance for museums, galleries, archives and libraries. The wonderful “Houghton Revisited” exhibition of paintings that are on loan to Houghton Hall from the Hermitage in St Petersburg is a recent example, and what an uplift that is to the economy of rural Norfolk as well. So from Sir Robert Walpole’s magnificent collection of old masters to digital innovation, there is a place for all kinds of creativity and endeavour.

This year, Derry/Londonderry is the UK’s City of Culture; the next City of Culture for 2017 is due to be selected later this year. Enlightened cities recognise the value which culture has as a driver for tourism in showcasing the best their city can offer. I am particularly mindful of the successes in Liverpool. I was glad to hear my noble friend Lord Maclennan raising the lord mayor of London’s initiative, which should surely be applauded. Beyond the City of Culture, councils across the country are in partnership with cultural groups to deliver music education hubs—a key component of the national plan for music education, which is seeing an investment of more than £200 million in music education. I listened carefully to what the noble Lord, Lord Berkeley of Knighton, said and I would like to consider very much what he said about some particular examples.

In response to the noble Baroness, Lady Jones of Whitchurch, the Government have been working closely with arts sector representatives and the Arts Council as part of the review of the national curriculum. We are due to publish the cultural education plan shortly; I know that my noble friend Lady Bonham-Carter referred to that.

While this Government do not seek to dictate to local authorities how they spend their money, DCMS Ministers are in discussion with the Local Government Association about how local authorities are approaching the pressures of existing budgets. I assure the noble Baroness, Lady Jones of Whitchurch, that Ministers and officials engage regularly with other government departments on cross-departmental policy.

Noble Lords have mentioned the forthcoming spending round and I want to reassure them, particularly the noble Baroness, Lady McIntosh, that I know from my discussions with Ministers that they are being absolutely robust about setting out the vital role that the cultural sector plays and about the manner in which it can contribute to the return to growth. Conversations are still ongoing.

We have had an exceptional debate. There is so much more to say. I have listened very carefully to what has been said and I thank my noble friend Lady Wheatcroft and all noble Lords for giving us this great opportunity to explore the considerable importance of culture and the arts.

[Lord Puttnam]

Before the Minister sits down—

[Baroness Northover]

There is not time, I am afraid. The Minister must finish and we have to conclude within a minute and a half.