[Mr Peter Bone in the Chair]
I beg to move,
That this House has considered the effect of the UK leaving the EU on tourism and the creative industries.
It is a pleasure to serve under your chairmanship, Mr Bone, and to have the opportunity to debate the effect that Brexit could have on tourism and the creative industries in the UK. These are two vital and vibrant sectors of our economy, which I believe have largely been overlooked and underestimated in the Brexit debate. Their annual contribution to our economy needs to be acknowledged and protected. If Brexit goes ahead—I believe it is an “if”—these sectors will need special measures to prevent jobs from being lost and income draining from the economy.
It is no exaggeration to say that tourism and the creative industries are linchpins of our economy, which we cannot allow to be sacrificed on the Brexit altar of Conservative party self-preservation. Many of the millions of jobs and livelihoods that these industries support could be lost if we do not stop this dangerous economic self-harm. While they are significant separately, they also come together in some of our most iconic popular and cultural events, such as Glastonbury, the Proms and—for me, in my constituency, the most significant example—the Edinburgh International Festival and its Fringe. The Edinburgh festival is the biggest and most successful event of its type in the world, and has experienced seven decades of success—unending, growing success. It is a fantastic and awe-inspiring month-long festival of music, theatre, arts, books, comedy, street performers and now politics, but even it will not be immune to the threat posed by Brexit. You do not have to take my word for it, Mr Bone. The director of Festivals Edinburgh, which leads efforts to promote the city’s flagship events around the world, has said:
“There is a sense of threat and risk and making sure that Brexit doesn’t put us in a worse position.”
There are plenty of figures that illustrate the argument for both industries needing protection, but I will look first at tourism. Tourism encompasses about 250,000 small and medium-sized enterprises across the UK, and its growth is on a par with that of our digital industries. It supports approximately 3 million jobs, which are spread across every single local authority in Britain; this is not a problem that affects only one part of the country. Tourism brings in about £127 billion a year to the UK—9% of GDP. Around 37 million visitors come here every year, and in 2016 almost 70% of those visitors and 44% of what they spent came from other EU countries. Eight of our top 10 in-bound tourist markets are other EU states. Those visitors may now think twice about coming here. The UK’s tourism earnings from Europe will not be easily replaced by other markets, such as the USA and China, which require long-haul journeys and are much more difficult to access. In my own city of Edinburgh, almost 2 million international visitors spend £822 million a year—the figures are quite staggering. It is clear that if tourism begins to fail, or the industry begins to shrink, many areas, particularly our rural communities and parts of Scotland, will suffer badly. As I pointed out, jobs in every area of the country will be under threat.
There is a clear link to the hospitality industry and attractions, where, coincidentally, 50% of the workforce in Edinburgh come from other EU member countries. Those workers are now worried about their ability to stay and work in this country. The ripples of a decline in visitor numbers will reach far into other sectors of the economy—for example, aviation.
I congratulate the hon. Lady on securing this debate. As a remain voter, I am sympathetic to her position, but does she agree that sometimes one of the main drivers of tourism is the exchange rate, and one thing we have seen is increased tourism as a result of decreased value of the pound against the euro and other currencies, perhaps as a direct consequence of that Brexit vote? I know she will go on to develop this point, but does she also agree that the main concern is the workforce in the tourism industry—that so many workers in tourism are from Europe and overseas—and that, as in agriculture, that is a big problem that needs to be considered by the Government?
I do not agree that the decline in the value of the pound solves the problem, because it creates other problems elsewhere in the industry, as it suffered its biggest slump since the devaluation under Harold Wilson. However, I do agree that our main problem in this industry will be the workforce and how we will replace the workers who in parts of the country outside Edinburgh make up 20% of the workforce, but in Edinburgh and Glasgow in Scotland make up almost 50%.
Aviation is one of the UK’s success stories and supports 500,000 jobs in the tourism industry. The current ease of transit to and from the EU enables tourism to contribute £500 million a week to the economy, but 85% of the UK’s air traffic is through our EU membership.
On the first point, I think we are seeing record levels of tourism in this country, because the pound has dropped—I think that is more or less indisputable. On the aviation point, does the hon. Lady agree that abolishing air passenger duty would give a bigger boost to the UK economy with no cost? A number of studies show that if air passenger duty were abolished, Treasury income from other sources, because of increased economic activity, would benefit the UK as a whole.
While air passenger duty might have an economic impact, it cannot overcome the biggest single problem: it will not allow planes to take off. We need a deal on coming out of the EU that will allow our flights to continue to take off and land in Europe, and travel across Europe with the same ease that they do today.
For the creative industries, the figures are, if anything, even more impressive: these industries are worth an estimated £90 billion to the economy and account for one in every 11 jobs. That is something we often overlook. Those jobs are in fashion design, video games, television, theatre, furniture design, radio and many other sectors. International broadcasters alone invest more than £1 billion a year in Britain. It is our fastest growing sector and the UK is currently a world leader in the field, with creative exports from Stormzy and Shakespeare to “The Great British Bake Off”, which define what the UK is to visitors we want to attract from across the globe.
In the light of what the hon. Lady just listed and the importance of the creative industries to our wider economy, does she think it will be pertinent for the Government to appoint officials from the Department for Digital, Culture, Media and Sport to the Department for Exiting the European Union?
That is not a point that I had previously considered, but I think it is well made. Perhaps that would help to alleviate the problems those industries might face and actually draw attention to some of them.
As I said, international broadcasters contribute about £1 billion to the economy. All of that economic strength—jobs, growth and potential—is undermined by Brexit. If our creative industries are not protected, world-class events such as the Edinburgh festival, Glastonbury and many others, will find that for musicians and artists who used to tour Europe freely, with no issues over EU crew, equipment licences or visas, the whole process will become slower, more expensive and in some cases not possible at all. Fashion, lighting and furniture designers will lose the benefits of cross-EU design rights. The video games, advertising, publishing, television and film sectors will lose access to the talent that is their lifeblood. Funding from Creative Europe is at risk.
If the UK’s creative industries are threatened, there will be an impact on tourism. As I said, the Edinburgh International Festival is the biggest event of its kind in the world. To put it into context, if we imagine the FIFA World cup coming to the UK every summer, we begin to understand the value and impact on the country’s economy that the Edinburgh festival has. In 2016 it was estimated that festival audiences accounting for around 4.5 million ticket sales generated £300 million for the economy, and that is not unusual.
The festival is the biggest, most high profile and most diverse in its scale and scope, with everything from street theatre to major orchestral concerts. Because of that, it offers a unique insight into why organisations representing our musicians, hotels, venues and performers are campaigning hard for protection against the potential damage of Brexit. The festival is regarded as one of the most important cultural events in the world. The Fringe in its own right is the world’s largest arts event, and there are affiliated events in film, art, books, science and television. Together they guarantee that throughout the summer my city is awash with tourists, often visiting the festival as a gateway to the rest of Scotland and the UK. Only the Olympics and the FIFA World cup are bigger attractions.
I congratulate the hon. Lady on an excellent speech. Does she agree that sharing art, music, sport and culture enriches people’s lives and our communities? In St Helens, we have had a twinning arrangement with Stuttgart for 70 years. We are very proud that people from there come to visit us, we visit them and we work together. Brexit should not put any of that in jeopardy. It is important we work together to ensure those partnerships endure.
I absolutely agree. The value of the creative industries to our economy is not simply in the money they bring in; it is in creating our culture and events for young people to enjoy, as well as bringing tourists to the country and maintaining that industry. The problem we face is that people might opt to take up opportunities on the continent or elsewhere after Brexit.
Music development organisations and other cultural groups might also find themselves without funding streams. That is the immediate effect, but collateral damage could be seen in other industries if the creative industries and tourism cease to be the cash cows the economy has come to depend on. Without freedom of movement, many of those who take part in these festivals may not wish, or be able, to stay. It is absolutely clear that if we are to protect those areas, which are central to not just our economy but our social and cultural wellbeing, our creative industries need changes now.
The hon. Lady makes a very good point about those working in the creative industries. Does she agree that without the right to work being protected, organisations such as Scottish Ballet in my constituency, which has a large international ensemble currently touring Scotland with the wonderful “Highland Fling”, might not be able to continue to attract the audiences it has or the talent it needs to put on such big performances?
The hon. Lady makes a very good point. It would not be stretching the point too far to say that not only Scottish Ballet, but Scottish Opera and every single arts event staged at the Edinburgh International Festival and other festivals in Scotland and elsewhere in the UK may face that problem.
The hon. Lady is from Glasgow. It is interesting to consider whether Glasgow would have benefited from the cultural renaissance that it has since 1990 if it had not been able to host the capital of culture that year. I was brought up in Glasgow. The difference that that single year of cultural events and the gathering of the creative industries in the city made cannot be overestimated.
We need to look hard at what the industries are asking for. Measures such as touring passports for musicians, special equipment licences and support for arts development are all ways that they can be helped. The creative industries must be at the top table. The hon. Member for Islwyn (Chris Evans) suggested that they should be represented in the Brexit Department. Indeed, they should. Membership of Creative Europe and Erasmus must be maintained, and the UK Government must agree to replace EU funding sources. Access to talent must be protected, touring performers must have a single EU-wide work permit, and mutual recognition of qualifications must be protected—the list is long.
There is a much simpler way of protecting not just the creative industries and tourism but every single industry in this country: taking the first opportunity we have to rethink the Brexit position completely. We must consider whether it is in fact better for all our industries for us to take an exit from Brexit and to allow the British people to decide whether it is what they actually want. The control that they desired might give them the opportunity to say, “Yes, we want to stay within the European Union.”
It is a great pleasure to appear under your chairmanship, Mr Bone. I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this important debate. Let me begin by echoing what she said about the Edinburgh International Festival: it is indeed the world’s largest festival of its kind, and the oldest. It is incumbent on us to remember that it was started just after the war, at a time of austerity. It is worth recalling that throughout our recent history we have invested in the arts, even at the most difficult times.
This debate gives us the opportunity to put on record how important the creative industries are to the whole of the UK economy and to raise issues as we approach Brexit. Much as I would love to reverse Brexit, I am not sure that I can agree with the hon. Lady that that is a likely outcome. We sad remainers are now focused—I certainly am—on making the best we can of a very unfortunate situation.
As a former Minister with responsibility for the creative industries, may I take this opportunity to welcome the current Minister to his position? I think that this is the first debate I have taken part in where he has been in his role. I can tell him privately, because I know that no one watches proceedings in Parliament, that he is already extremely popular because of how he has hit the ground running. It has been a great pleasure to me to see the importance of the creative industries rise up the policy agenda.
The creative industries were, in effect, put together by Chris Smith in 1997 when he became the Culture Secretary. He was the first to define what is quite a disparate sector, ranging from architecture to fashion, television and film, and to start to show the huge impact it has on every aspect of our lives. I am glad that under the previous Government we made great strides in supporting the creative industries. Some of that was basic policy infrastructure, such as the creation of the Creative Industries Council, which brought together the Departments responsible for business and for culture with the creative industries to looks at policies. I am very pleased to say that it has been carried on by the current Secretary of State for Business, Energy and Industrial Strategy with the publication of an industrial strategy for the creative industries.
The introduction of tax breaks for many of the creative industries has had a huge impact on their contribution to the economy. I was struck by statistical analysis showing that the service economy contributed the most to our economic growth in a recent quarter—I cannot remember which quarter it was, but it was two or three quarters ago—and that the second biggest contributor from the service economy was the film industry. The film tax break now sees something like £1 billion of investment coming into the UK.
It was always my mission—I am glad to say that I succeeded, although I did not meet too much resistance—to persuade the then Prime Minister and the then Chancellor to visit a film set occasionally as well as a factory. That recorded the fact that film sets often contribute a significant amount to our economy. We have seen studios and employment grow, and that tax break ecology has now been extended to video games, visual effects and animation, as well as the arts, through theatres, orchestras and exhibitions. It has made a real impact.
I was privileged recently to attend the opening of a new animation company in London, Locksmith Animation, which has been started by two distinguished people from the film industry, Sarah Smith and Julie Lockhart. Using the latest technology, the company has the potential to rival Pixar. No one can be in any doubt about the contribution of the creative industries to our economy.
I am following the right hon. Gentleman’s speech closely. I do not share his pessimism about the impact of Brexit on the creative industries. Sometime in the early 1980s, the number of people employed in the creative industries in Manchester and Lancashire surpassed the number of people employed in the traditional cotton industry, so it is an important economic generator in the north-west. As the former Minister, does he agree that this country does not invest in the creative industries in a fair way when it comes to the regions? Far too much goes to London.
The hon. Gentleman makes an important point. When I was the Minister, I was struck by how regionally diverse the creative industries were, particularly the video games industry. There are companies engaged in that pursuit in Leamington Spa, Manchester, Liverpool and Newcastle. It is a challenge. Sometimes it is straightforward economics: people want to base themselves in London to have access to the widest possible range of services, but it is incumbent on us—I am sure the Minister will respond to this—to recognise the diversity and talent in our regions. The recent merger of Tech North with Tech City UK has created a UK-wide tech quango, which is focused on highlighting tech success stories across the country. Different parts of the country have different specialisms in tech—I am moving slightly away from the creative industries.
The hon. Member for Blackley and Broughton (Graham Stringer) makes a valuable point, and the same criticism is often levelled at cultural funding. I am chairman of Creative Fuse North East, a project led by Newcastle University, which analyses the symbiosis between tech and culture. It is important to remember that culture is often a generator for success in the creative industries, so we must maintain a strong focus on investing in culture outside London. I am glad that the Arts Council has made great strides in doing that in recent years. We are very successful, and the creatives industries are now high on the policy agenda. I should give credit to the Creative Industries Federation, which was created two or three years ago to lobby on their behalf.
Tourism is a hugely important industry—the fourth or fifth most important in our country—that depends to a great extent on culture and heritage. By investing in and supporting culture and heritage, the Government support our tourism industry. We launched the tourism strategy in 2010, when the then Prime Minister gave a speech supporting tourism. One of my great bugbears is that far too few Prime Ministers—that is, none—ever make speeches about the arts. I hope that the Minister will continue to press the case to our Prime Minister that she should give a speech about the importance of culture and the arts in this country.
Despite the hon. Member for Blackley and Broughton trying to cheer me up, I am thoroughly depressed about Brexit. The small silver lining, which is worth recalling, is that our biggest export partner outside the EU is the USA, with whom we do not have a trade deal. A lot of that export investment depends on the creative industries, such as the film industry and the video games industry. Many of those creative industries are global service industries that will not necessarily be hugely affected by Brexit, such as advertising, architecture and publishing, where we lead the world. It is incumbent on us—including depressed remainers—to continue to beat the drum for the global success of the UK’s creative industries.
The right hon. Gentleman is very much missed from his former role, but during that time we had many discussions about the difficulties that artists, and musicians in particular, have in getting visas for the US. Does he share my concern that after Brexit they will have similar problems across Europe? What can we do to ensure that does not happen?
Yes, I do share the hon. Lady’s concern, but I must correct her: I do not think I am missed, because the new Minister is doing such an incredible job that he has wholly erased the memory of me. That is slightly irritating, but I am pleased that somebody as talented as him has taken on the role.
That concern goes both ways. The hon. Lady is incredibly perceptive, and I have worked with her very happily on many different issues. Talent is at the core of the success of our creative industries. If someone walks into the office of any successful business in any part of the country, they will hear a smorgasbord of different voices and meet people of a range of nationalities who have all been attracted by the success of the UK’s creative industries.
We simply cannot have a situation in which we make it as difficult as possible for talented people with the right skills to come to this country, and we must not find ourselves in a situation in which it is difficult for our successful companies to send their people abroad, whether that is a band of musicians or a team of people from an advertising or architecture firm. That must be at the front and centre of the Government’s thinking.
I was struck by an email I received today from a constituent, which is slightly tangential to the core subject of the debate. He runs a Brazilian management consultancy, which has an office in London because it believes in the openness of the UK economy. He cannot get a particular person with a speciality that would enhance the London business over from Brazil, and he has been trying for 12 months. It is a pathetic situation when the Home Office makes it so difficult for skilled people to come to this country and boost our economy.
The Minister should also keep an eye on the audiovisual media services directive. One of the UK’s success stories is that we have hundreds, if not thousands, of broadcasters based here, which can be regulated by Ofcom, the best communications regulator in Europe, and, as a result, transmit their services across Europe. As I was watching my BT Sport app in Europe last week, I was struck that, sadly, we cannot continue to take advantage of the digital single market, which allows portability for paid content. We will have to see what happens with that, but it is absolutely crucial.
The final hurdle—hon. Members will be pleased to know that I am coming to an end—is the French. They have carved culture out of every third-party free trade agreement between the EU and other countries. That was their No. 1 priority when the Transatlantic Trade and Investment Partnership was negotiated. As sure as oeufs is oeufs, the French will try to carve out culture in any free trade agreement between the UK and the European Union, and Ministers will have to be vigilant about the impact of any French agenda on the future of our creative industries.
It is a pleasure to serve under your chairmanship once again, Mr Bone, and I congratulate the right hon. Member for Wantage (Mr Vaizey). He and I are veterans of long standing of such debates, and we still bear the scars of the Digital Economy Act 2017, in which we both took a great interest. I also congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this important debate. I was intrigued to see how she would combine tourism and the creative industries, but she did it in such an elegant way that we can all forgive her for bringing together those awkward-sitting issues.
I will confine my remarks to the creative industries. I want to be as blunt as I can. Leaving the European Union will be an absolute and utter disaster for our creative industries. We cannot start to comprehend the predicament that we will soon find ourselves in. The sharing, collaboration and enjoyment of creativity is practically the antithesis of the central tenets of withdrawal, isolationism and the ending of free movement that are at the heart of the Government’s Brexit.
The creative industries are quite particular—they are industries like no other—because they are fired by imagination, talent, creativity and invention. They exist to be appreciated, enjoyed and transferred across audiences worldwide without regard to border or territory. For success, they require the maximum conditions for international exchange and co-operation, which will allow them to develop and continue to thrive.
When it comes to supporting creative endeavour, our job as legislators is simple; indeed, it is only one thing. It is to try to create the maximal and optimal conditions for creativity to continue to develop, thrive and succeed. Pursuing Brexit is almost the opposite of that objective and that endeavour.
Let us just have a little, casual look at what is at risk here. The hon. Member for Edinburgh West said it—£92 billion is now generated by the creative industries for the UK economy. That is more than the automotive, life sciences, aerospace, and oil and gas industries combined. The creative industries are perhaps the fastest growing sector of our economy and I always like to say that these industries, and the growth we see from them, are like growing our economy on the imagination, the invention and the creativity of the British people.
I am grateful to the hon. Lady for mentioning that point, and I will come on to discuss it, because I chair the all-party parliamentary group on intellectual property and I have a few choice words to say about where we are going with all this.
I want to say first, however, because it is important, that we are in the top three of all recognised sectors worldwide when it comes to the creative economy and creative industries. The hon. Lady is right that that has been achieved because we have a huge reservoir of talent and ability in these islands. However, we are not unique in that respect; the UK is not exceptional in having large swathes of talent. Lots of other nations have that, too, but we have harnessed that creativity, to ensure that it is supported, developed and allowed to thrive. We have created the conditions that have allowed creative endeavour to succeed.
As the hon. Lady suggested, one of those conditions is the environment that we have created. We have intellectual property arrangements, ensuring that copyright is protected and that our artists are able to secure a return for their endeavour, their ingenuity and their ability. We have created an effective business and support environment that has allowed our artists to develop and flourish. We have innovated, we have developed international relationships, we have collaborated and we have recognised and valued the international dimension of creativity. Brexit? It could make you cry, with the damage that it will do to all that.
The creative sector is very concerned about the impact of Brexit on our creative economy. The Creative Industries Federation has found that 96%—I repeat, 96%—of its members believe that Brexit is a fundamentally bad thing that will critically impact on the sector.
I listened to the Prime Minister’s Mansion House speech. There were lots and lots of things that I deplored in what she said, but the thing that sickened me most was the casual way she dismissed the digital single market, as if it was some sort of Brussels wheeze that got in the way of our national liberation. The digital single market is all about harmonising arrangements across the European Union. As the largest creator of content in the whole of the European Union, we designed the digital single market for goodness’ sake, and now we are joyfully leaving it. We will now be a third party when it comes to European arrangements, which is a profoundly bad position to be in, and we will not be looked at favourably by a European Union that we have so recently rejected.
Already, European nations are rubbing their hands and carving up all the institutions that they will acquire. The French are at it; the Germans are at it; and the eastern Europeans are practically gleeful about the opportunities that their content markets will now have, because we are leaving the European Union.
However, the biggest issue and the biggest threat that this ridiculous, chaotic Brexit will pose for our creative industries is the ending of freedom of movement. The creative industries probably need freedom of movement more than any other sector within our economy; the Department for Exiting the European Union itself found that, when it looked at all this sort of thing. For investment, harmonisation and collaboration in developing markets, we require the type of arrangements that exist within the EU, and to casually walk away as if the digital single market did not matter a fig is something that we should be appallingly ashamed at.
I believe there is only one thing we can do. We will never get back to the optimal arrangements of the European Union, of the digital single market, of harmonising across Europe and creating the conditions in which our creative industries can develop, thrive and grow markets. But what we have to do, Minister, is to stay as closely aligned as possible to the European Union. Even though we are now a third party, and it is likely that we will be rejected and treated poorly, the Minister must ensure that whatever the EU does in the digital single market is replicated within the United Kingdom, because if he does not, we will be in some serious trouble.
The Minister must also ensure that the creative industries and intellectual property are at the heart of any bilateral trade arrangement that is put in place. As I said, I chair the all-party parliamentary group on intellectual property and I have seen the report from the Alliance for Intellectual Property that warns, once again, of a “cliff-edge” Brexit and the impact that it would have on IP rights, reciprocity and all the things to do with our audio-visual sector, with portability and all the good things that we have been able to secure. We will lose all that. It is not going to come back, but we have to make sure that we are properly aligned.
I want to put a question to the hon. Gentleman, not on IP but in his capacity as a well-known musician. Here, I am not talking about Runrig or Big Country, but—obviously—MP4. As a musician, he will probably know that only 2% of the music industry workforce has said that it feels Brexit will have a positive impact on their chances of work; 50% feared that it would have a negative impact. Does he agree that the Government should listen to their concerns and consider seeking a live music touring passport, which is one of several measures being discussed by the industry?
What we are now in the business of doing is finding solutions to mitigate the damage. The Minister will have to try and find ways to mitigate the loss of the optimal arrangements that we have in place now as members of the European Union. The touring passport is an example of how we can mitigate it. We are not going to get back to the ideal conditions. They have gone; for some reason, this Government are determined to pull us out of what is working for us, and is fundamentally and profoundly good for this sector. So arrangements will have to be put in place.
The hon. Lady will have seen the reports from UK Music, the Musicians’ Union and the Performers’ Alliance, which are all telling us that we are now in the position of trying to redress some of the damage.
What is important to consider when it comes to musicians and other creatives is that not everyone is from a huge money-making enterprise that can afford agents, lawyers and managers. It is the smaller musicians and, I would argue, the musicians in the better bands—rather than the Coldplays, Mumfords and Adeles of this world—who will really struggle with this extra bureaucracy, any extra cost and any difficulty that is put in their way.
There is also a particular concern about the European Health Insurance Card and people’s access to healthcare when they are travelling around Europe, which may also go out of the window. That is something else that may not be the most obvious thing for musicians, or actors, to worry about, but it will affect them.
The hon. Lady is absolutely right. The ending of freedom of movement will not impact that harshly on some of the bigger, multinational companies—the big tech giants that dominate the sector now. What it will impact on are the small and medium-sized enterprises within our creative sector. It will also have an impact on start-up businesses and it could result in impeding risk and innovation in the medium and long term, thereby hobbling the very drivers of our creativity.
It is profoundly disappointing that we are leaving the European Union. We will have to look for measures that will mitigate that, and that will ensure that we are aligned as closely as possible with EU partners. The thing that depresses me most is that we have carefully crafted and created this environment that lets our artists, creators, inventors and musicians succeed worldwide, and be the best in the world, and how we can so casually throw that away for nothing—absolutely nothing—disappoints me. It is something that I still hope we will have the opportunity to consider once again.
It might help the remaining two Members who wish to catch my eye to know that we have to start the wind-ups at 3.30. By my calculation that is about 10 minutes each. If there is a Division at 3.45, do not worry because we can add time.
It is a pleasure to serve under your chairmanship today, Mr Bone. I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this debate. It is also a pleasure to follow such a passionate speech from my fellow musician, the hon. Member for Perth and North Perthshire (Pete Wishart). It is unusual for us both to be on the same stage as we have been exchanging places in MP4 recently.
The United Kingdom is a powerhouse when it comes to the creative industries and tourism; we punch far above our weight and we lead the world with some of the most innovative and advanced thinking that is out there in the creative sector. In 2016 the creative industries contributed a staggering £91.8 billion to the UK economy. The sector grew by 7.5% compared with growth of 3.5% for the UK economy as a whole. The sector provides for 6% of all UK jobs, and the total employment in the creative economy is around 3 million people. That includes around 76,000 jobs in Scotland and rising, contributing more than £4.5 billion to the Scottish economy. We in Scotland are proud to be a major contributor towards those figures.
Scotland saw the fastest growth in creative industries employment of all nations in the UK from 2015 to 2016, at about 13%. That is almost three times as high as in England, and more than England, Wales and Northern Ireland combined. A report commissioned for Robert Gordon University in Aberdeen in 2014 found that the creative industries in the north-east of Scotland, where my constituency of Banff and Buchan is located, employ around 6,000 people in more than 1,500 businesses. In the north-east of Scotland alone the sector generated annual revenues in excess of £600 million. The hon. Member for Edinburgh West has called this debate to discuss the future of our creative industries and tourism after the UK leaves the EU. I agree that there are challenges to overcome.
The creative industries rely on cross-border working, and many people in those industries travel regularly for work in the EU, just as European citizens come here. We know that around 7% of people working in the creative sector are non-UK EU nationals, roughly in line with the average across all industries, but a significant number none the less. I ask the Government to keep the needs of this industry in mind when designing a future immigration system, whether that be the needs of the creative industry, tourism, hospitality or indeed those of the fishing and fish processing sectors and food and drink in general, which I have spoken up for in this place on several occasions.
So far I have talked mostly about the creative industries, but I also want to talk about tourism. For those who have not visited—I highly recommend that they do—my constituency of Banff and Buchan has 48 miles of stunning Scottish coastline, with one particular stretch, between Portsoy and Pennan, having been voted as one of the top 20 most iconic coastlines in the world. That stretch of coastline is interesting. My right hon. Friend the Member for Wantage (Mr Vaizey) talked extensively about the film industry. Portsoy was the site for the recent remake of the film “Whisky Galore!” and the old 17th-century harbour was almost a character in itself. Going back to the ’80s, “Local Hero”, a movie with Burt Lancaster, was set in Pennan. That goes to show how dramatic the coastline between those two villages is.
Also worth a special mention is the famous Aberdeenshire castle trail, which runs through my constituency via Duff House, Delgatie Castle and Fyvie Castle, among all the others across the north-east of Scotland. Banff and Buchan is also home to excellent heritage museums that highlight our traditional industries of fishing and farming. I should note that those museums show a living history, because those industries are far from dead in Banff and Buchan.
Golf is a popular pastime across Scotland—across the world, in fact—but Fraserburgh in my constituency has the seventh oldest, still operating, golf course in the world. National Geographic referred to the Banff and Buchan coast as
“one of the world’s outstanding coastlines”.
The local tourism board markets the area as “Scotland’s dolphin coast.” It is home to around 130 bottlenose dolphins, as well as 15 other species of cetaceans, including minke whales in the summer and autumn months. On a recent visit to Portsoy I saw someone with a telescope looking out to sea. I thought they were looking at dolphins, but it turned out they were looking for a bird that I had never heard of: the white-billed diver, which apparently comes south of Norway only very rarely. Portsoy is one of the few places south of Norway where that bird can be seen.
I very much hope that we can use Brexit as an opportunity to grow the industry and attract more visitors to our stunning shores. One example of this opportunity can be found in VAT rules. European VAT law currently limits the discretion of member states, including the UK before our exit, to set lower rates of VAT on some goods and services. That means we are limited in our ability to reduce so-called tourism tax below the current 20%. After we leave the EU, the Government will have the opportunity to reduce tourism VAT and make the UK an even more attractive destination for foreign visitors. I hope that they will consider seizing this opportunity and use Brexit as a springboard for our tourism industry.
I welcome what the hon. Gentleman has said and congratulate him on painting a very attractive picture of his constituency. On the opportunities after Brexit with regard to VAT, as he knows, we have been promoting that issue in respect of Northern Ireland, but there can also be opportunities right across the United Kingdom. We have heard a lot of pessimism, but there are opportunities to be grasped, particularly in tourism, and I commend him for what he said about VAT.
The hon. Gentleman mentioned the possibility of varying VAT once we have left the European Union, but is he aware that 25 members of the European Union currently vary VAT on the tourism industry? In France, for example, it is only 9% for a hotel or a tourist attraction. It would be possible today for the UK Government to vary VAT on the tourism sector.
I have no reason to doubt the hon. Lady. That was not my understanding, but I will definitely look into that.
To conclude, we can be exceptionally proud of our creative and tourism industries in this country. I fully understand the concerns put forward by hon. Members as a result of Brexit, but I gently suggest that perhaps erring too much on the side of caution and pessimism is not necessarily the way to go. We are a world leader in this area, and that will not disappear overnight—far from it. The Government rightly speak about building a new global Britain after Brexit. Why not build it on the back of our sensational creative talent and beautiful destinations?
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing the debate and on a fantastic opening speech. I also want to express my disappointment that the right hon. Member for Wantage (Mr Vaizey) is not in the Cabinet. He was overlooked on several occasions by Prime Ministers and, as we heard in his speech, he speaks from a position of experience and understanding of the industry. I think I speak for a lot of people who said they felt they had a friend when he was the Minister. I also want to congratulate the hon. Member for Perth and North Perthshire (Pete Wishart), who is one half of the famous parliamentary rock band MP4: a classic line-up for a passionate speech. Once MP4 decide to go on that long-awaited British tour, we look forward to welcoming them to Blackwood Institute and Newbridge Memo and one of the larger venues that we can book.
We have to pay them.
Last month I met Gail Renard, chair of the Writers’ Guild. She was one of several people who came to meet me to talk about concerns about the impact of Brexit on the creative industries. Gail is a very interesting character. She met John and Yoko at one of their famous bed-ins. As I am a big fan of the Beatles, our meeting went on from half an hour to two hours while she told me everything about John and Yoko and their fantastic life together. But the one thing she wanted to get across to me was the real concern about freedom of movement.
The Creative Industries Federation has recommended that the Government implement sufficient structures to replace freedom of movement. The problem for those of us who were remain Members of Parliament in leave constituencies is that when we knocked on doors we were told that the No. 1 issue was freedom of movement—we were going to take back control of our borders. As we have seen, not only in the creative industries but in others, we were told that there were simple solutions to complex problems. Many people did not know about access to the single market or the customs union. The issues were not properly explained, and that was the problem with the Brexit debate.
That is why we are where we are. The problem is that selling freedom of movement to our constituents will be difficult. When they see “freedom of movement,” they think about immigration. They worry about immigration, and that is a problem for a British success story. Let there be no doubt: the creative industry is a growing sector of the economy. It is worth £92 billion—up from £85 billion in 2015. The sector makes more than 5% of the UK’s gross value added product. However, all that would be impossible without European funding. If we are to lose funding from streams such as Creative Europe, as well as part of the workforce, when there is no more freedom of movement, the future of the creative industries looks bleak.
Earlier this year, entertainment industry leaders expressed concerns about freedom of movement and other post-Brexit uncertainties at a House of Lords Committee sitting. It is high time the Government listened to them. The chief executive of One Dance UK has said that freedom of movement is a vital part of its business model. Its members travel to the EU for work eight times a year, on average. A poll conducted by the Musicians Union when it held an event here a year ago with Equity found that only 2% of the music industry believed that Brexit would be good for them. An industry that produced the Rolling Stones, the Beatles and countless other bands that broke America is worried about the future. However, the key issue expressed across the industry is that, because of unique working patterns that involve a lot of travel, freedom of movement is necessary for its continued success.
I agree with the right hon. Member for Wantage that Prime Ministers have not discussed the arts very seriously. The creative industries seem to be a bolt-on. They are not taken as a major contributor to the British economy. The sector provides a wide variety of jobs and career opportunities for people across the UK and Europe. Harry Potter, James Bond and Marvel films have been some of the highest grossing productions of the past decade. Only this week Robert Downey Jr. was welcomed to south Wales for the filming of a new Marvel film. We want to welcome more people like him. Many of those productions have been filmed primarily in the UK and across Europe, with a significant British and European workforce. In 2016 alone there were 131,000 EU nationals working in the British creative industries. Freedom of movement for workers in the creative industries is key to the success of those projects.
If we lose freedom of movement, we run the risk of limiting the production of international projects in the UK. Can you imagine, Mr Bone, if that situation affected the banking, construction or manufacturing industries? I am sure that the debate would be packed with speakers, but the creative industries seem to fall to the back of the queue. It can go on no longer. If international film production companies or musicians using large European workforces believe that it will be too difficult or costly for EU nationals to enter the UK to work, they will simply go elsewhere. I agree with the hon. Member for Perth and North Perthshire that there will be countries in Europe, and around the world, rubbing their hands together waiting for the creative industries to leave here and set up there.
Is my hon. Friend aware of the EU quota rules by which at the moment TV broadcasters are required to invest 20% of their revenues in making or commissioning original content, and to spend at least 50% of their time showing European works? If British works are no longer included in that 50% quota, companies with a choice as to where they make productions will not come to Britain. They will need to make sure they are made in a European country.
That is an extremely important point. What do we want to see on our television screens: low-budget foreign television productions or the high-quality drama and film productions we currently enjoy in this country? My hon. Friend the Member for Cardiff West (Kevin Brennan) will know that Wales has become a hub for BBC drama productions and for film, just as Scotland has—and Northern Ireland, with “Game of Thrones”. There is a real concern that we are almost gutting the industry.
There is also a knock-on effect. Music tours and festivals have a huge impact on larger companies but also on cafés, bars, hotels and other hospitality industries, and they attract huge crowds. We seem to be cutting our legs from under us. If limits are imposed, local enterprises will suffer. The Government need to ensure that there are either exemptions or sufficient structures in place to ensure continued employment and career growth for British and European workers in the entertainment and creative industries. The Government’s recent report on the creative industries gave absolutely no information on their plans for the sector’s future. The sector often has to plan out its projects far in advance, so it needs assurances now that its projects and workforces will not be hindered by our leaving the European Union.
There should be no doubt: there is a lot of money in the creative industries. Netflix and Amazon are competing for the same space; it is a great time for the industry. We must realise how important the creative industries are. Performing and visual arts, and film, TV and video are second and third respectively only to the IT, software and computer services sector. In 2015 those two sectors combined employed 517,000 people—20% of the entire creative industry workforce—and their economic outputs amounted to £24.4 billion, or 28% of the entire output. We cannot pretend that Brexit will not affect that. Many of those projects rely on freedom of movement. The Government should bring clarity to that.
I intervened earlier on the hon. Member for Edinburgh West. The Minister and I will probably bump into each other in the hallway tomorrow, as we are neighbours, and perhaps I can discuss the matter with him then. I would like the Government, if they take the creative industries seriously, to make two announcements. As I explained earlier, I would like officials from the Department for Digital, Culture, Media and Sport to be seconded to the Department for Exiting the European Union. I would also like the Culture Secretary to set up a Cabinet working group on Brexit, given the importance of the creative industries to the economy. Outside Parliament, I would like representatives of the creative workforce to be on the Creative Industries Council, which is currently chaired by John McVay of Pact. No creative trade unions are on it. I would like Equity, the Musicians Union and other creative industries unions to be invited on to it. The issue is too important. We are now perhaps 18 months away from Brexit. As in other areas, there is a need for certainty, and I look to the Minister to provide it.
It is, as always, a pleasure to serve under your chairmanship, Mr Bone.
I thank the hon. Member for Edinburgh West (Christine Jardine) for securing this important debate. As she said, tourism and the creative industries play a hugely significant part in the UK and Scottish economies. She is right to point out that Brexit could have hugely damaging consequences for both those sectors. It is incumbent on the UK Government to ensure that tourism and our creative industries are not damaged by Brexit.
My hon. Friend the Member for Perth and North Perthshire (Pete Wishart), who made an excellent speech, hit the nail on the head when he said the creative industries are like no other. They are fired by imagination, talent and invention, and they exist to be appreciated, enjoyed and transferred across audiences, without regard to frontiers or borders. I fear that he was right when he said that leaving the European Union will be an absolute disaster for our creative and tourism industries. As has been said often in the debate, my hon. Friend speaks not just from a wealth of political experience but as someone who enjoyed a highly successful career as a musician in two of Scotland’s finest bands—Runrig and Big Country—although his credentials are perhaps now in question as he is a member of MP4, along with the hon. Member for Cardiff West (Kevin Brennan). I suggest to both of them that they may want to get their European tour in sooner rather than later.
My hon. Friend and I, and indeed all SNP Members, desperately want Scotland to remain the inclusive, tolerant, outward-looking country that it is, and we are firmly of the opinion that that can best be done by protecting and maintaining our existing relationship with Europe. The free movement of people within the European Union—we have heard much about that today, including in the good contribution from the hon. Member for Islwyn (Chris Evans)—enriches the cultural life of everyone, not just in Scotland or the United Kingdom, but across the European continent. Anything that threatens that is, in my opinion, to be deeply regretted and is a backward and retrograde step.
Scotland’s creative community has benefited enormously from four decades of support and collaboration with our European partners. As well as culturally enriching us and bringing the welcome free movement of people, it has brought access to the European funding from which Scottish cultural and creative organisations have benefited over the past 40 years. It is entirely understandable that fear of losing access to that enormous pool of talent and vital pool of EU funding is causing huge concern in the creative sector. With restrictions likely to be placed on the free movement of people, including artists and performers, when asked before the EU referendum in 2016, 96% of members of the Creative Industries Federation stated that their preference was for the UK to remain in the European Union.
The latest figures released by the federation show that the concerns felt two years ago about Brexit are as strong as ever. In the most recent report, published in January, 80% of respondents said that they were not confident that Britain will maintain its leading global reputation post-Brexit—indeed, 21% said that a “no deal” outcome would make them consider moving part or all of their business out of the UK, and 40% said that a “no deal” outcome would be harmful to their ability to export. Grave concerns about the ability to continue to attract the best and brightest to work in the UK post-Brexit were laid out at the end of last year, with three quarters of firms surveyed saying that they employed EU nationals. A remarkable two thirds of those firms believed that they could not currently fill those posts with UK workers. Indeed, almost 60% of companies in the Creative Industries Federation survey said that they were already facing a skills shortage, even with current access to EU workers.
Those findings are not isolated examples of the grave concerns in the industry about Brexit. The significant skills shortages in the UK creative industries was also highlighted in a report by UK Music. As the hon. Member for Washington and Sunderland West (Mrs Hodgson) highlighted, when UK Music asked its members what impact the UK leaving the EU would have on them, only 2% thought that Brexit would have a positive impact on their chances of work, whereas 50% feared that leaving the EU would have a negative impact. Such findings are repeated across the sector. Equity, the trade union that represents more than 42,000 performers and creative workers, conducted a survey that showed that 46% of UK bids for European funding are accepted, making the UK second only to Germany. It also showed that the UK receives 24% of all European Research Council grants. The message coming loud and clear from our creative sector is that the UK benefits from being a full member of the European Union. There is consensus across our creative industries that Brexit will be very bad for business, and I urge the Government to listen, engage fully, and act on the well-founded concerns and well-documented reality facing our creative sector as we approach Brexit.
The hon. Member for Edinburgh West skilfully and rightly highlighted the link between tourism and the creative industries, and specifically the Edinburgh International Festival which, as she rightly said, is a gateway to the rest of Scotland and the UK, as hundreds of thousands of visitors disperse from Edinburgh to every corner of the country. Along with others, their presence has a massive impact on our hospitality sector. The hon. Member for Banff and Buchan (David Duguid) spoke about tourism in his constituency, which has 46 miles of coastline. I do not want to get into a debate or argument about whose coastline is bigger, but the coastline of Argyll and Bute is longer than the coastline of France. We know what we are talking about when it comes to having a coastline; we know what it is to have an important tourist industry.
Like much of Scotland, my constituency relies heavily on tourism, not just for the visitor pound, but for employment. We have some of the most breathtaking and unspoiled scenery anywhere in the world, and we are investing heavily in whisky tourism because massive numbers of European visitors come to Argyll and Bute every year to visit our vast range of distilleries. Indeed, whisky tourism is so great, and the whisky industry booming to such an extent, that no fewer than a dozen distilleries have opened across Scotland in the last few years and no fewer than 40 are in various stages of planning and construction, and hoping to come on stream in the next couple of decades. As we speak, tourism is booming. We in Argyll and Bute need those tourists to come, but I fear that Brexit will do nothing to help, and indeed will be hugely detrimental.
Just this week there was another significant investment in whisky tourism. That is welcome, but let us remember that there is hardly an hotel in Scotland that does not rely on the hard work of our EU nationals. Although it is not a patch on Argyll and Bute, Perth and North Perthshire is also a particularly beautiful part of the world, and my hon. Friend will be aware of the contribution made by the tourism industry and our highly valued EU nationals to the economy of his constituency. I commend him on his passionate defence of the digital single market, and I agree that the Prime Minister’s seeming delight at abandoning that vehicle for investment, harmonisation, collaboration and market development was bewildering to anyone who has ever engaged with the creative industries. I share the concerns of the right hon. Member for Wantage (Mr Vaizey) about leaving the digital single market, and I sincerely hope that his voice will be heard by those on his side of the House.
The UK’s creative and cultural industries have benefited greatly—economically, creatively, and culturally—from being part of the European Union for the past 40 years. Nothing will improve the arrangements that we currently enjoy as a member of the EU, and the Government must redouble their efforts to ensure that this world-class sector is not destroyed by Brexit. It is glaringly obvious that remaining a member of the single market at the very least is the best way to do that, so that this country is still able to attract and keep the creative talent that is vital to allow people in that industry to work, perform and exhibit in this country, free from unnecessary barriers. I look forward to hearing the Minister’s explanation for why leaving the single market could ever be good for the creative industries.
I apologise to the Minister and the House, but because the SNP spokesperson spoke for 11 minutes that leaves only 16 minutes before the Division, two of which must be devoted to the person who secured the debate, so it looks as though we will have to come back after the vote.
I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing today’s debate. She rightly pointed out the huge workforce challenges that Brexit presents to the creative industries and tourism and she made important points about musicians and the need for a single EU work permit. I also congratulate the right hon. Member for Wantage (Mr Vaizey) who in his characteristically self-deprecatory, tongue-in-cheek speech made some serious points about the importance of the creative industries. Quite rightly, he spoke about the film tax relief in which he played a big part, as well as the importance of protecting the single digital market post-Brexit. I look forward to hearing what the Minister has to say about that.
I also congratulate my hon. Friend—I shall call him that—the Member for Perth and North Perthshire (Pete Wishart). He described tourism and the creative industries as sitting awkwardly together. I rarely disagree with him, but I do on that point because much tourism is driven by culture and our creative industries, including the music industry, which he knows well, theatre and television. In my constituency of Cardiff West, the production of programmes such as “Doctor Who” and “Sherlock” has drawn tourism into the area. I recently visited Belfast and saw the “Game of Thrones” studios, and although I cannot tell Members anything about the studios because I had to sign a non-disclosure agreement, I can say that they have brought many visitors into Northern Ireland.
The hon. Member for Perth and North Perthshire also rightly pointed out that the creative industries are the fastest growing sector of our economy, and he made a startling revelation. I have always wondered what makes him cry, and we now know it is Brexit that makes him weep when he is alone at home. He made a substantial case for our creative industries and rightly mentioned UK Music, ably led by its chief executive Michael Dugher, and the Musicians Union, under Horace Trubridge’s new leadership. He was rudely interrupted—or intervened on—by my hon. Friend the Member for Bristol East (Kerry McCarthy), who continued her vendetta against Coldplay. I think she should remember that many people are employed in our creative industries as a result of Coldplay’s success and be careful not to tarnish one of our strongest performing bands, lest she cause unemployment in those industries.
The hon. Member for Banff and Buchan (David Duguid), who, as he pointed out, has recently been super-subbing in MP4 on television, told us about his constituency, with its golf and its beautiful coastline and how it is the home of the white billed diver. His description made it sound like the garden of Eden, but if “Whisky Galore” was filmed there, it might also have been the place where they invented original sin. I congratulate him on a very good speech and on making the point about VAT—although, as was pointed out to him, that is actually within the gift of the Government, whether or not we are a member of the European Union.
My hon. Friend the Member for Islwyn (Chris Evans) mentioned the Blackwood Miners’ Institute—I was there with him at the Manic Street Preachers homecoming gig a few years ago—and made some very important points about freedom of movement and about arts and the creative industries. It is important not to make a distinction between the subsidised arts and the creative industries. One of the strengths of what has happened in recent years is that those two things have been brought together into one viewpoint. The film industry receives tax credits, as the right hon. Member for Wantage pointed out, and yes, some of our theatres receive subsidies via the Arts Council, but they are all part of the same ecology that produces our fantastic creative industries and makes us a world leader in music, theatre, film and so on. The right hon. Gentleman also made the very important point about ensuring that the Creative Industries Council has workforce representation on it, which I have been campaigning for from the Front Bench for some time. The Government said that once they had published their creative industries strategy they would encourage the Creative Industries Council to have that representation, and I hope to hear from the Minister what he now intends to do about that.
I will respond to the debate more broadly by saying that the creative industries obviously face a real challenge from Brexit, as does the tourism industry. Like many in this room, I voted remain—unlike you, Mr Bone.
And if you believe that, Mr Bone, you are an impartial Chair at all times. I completely accept that.
I also voted against triggering article 50, partly because of the huge challenges it presents to our creative industries. Just recently I met with a major broadcaster which, because of the loss of the status of licensing across the European Union single market, is moving 700 jobs out of the UK, to Amsterdam, Luxembourg or Dublin. It has already decided to do that because it needs to be sure that if it is licensed in one country it is licensed right across the European Union.
Since 2007, according to the Government’s own figures in an answer from the Minister, the creative industries sector has received something in the realm of £190 million in European Union funding from the European regional development fund alone, most of which has been spent in the nations and regions of the UK, including about £60 million in Yorkshire. That is much more redistributive spending on the creative industries and the arts sector that we often find from other sources of funding. Local authorities have suffered huge disproportionate cuts in the arts and in tourism. In tourism, the biggest cuts have been in local authorities, with more than 50% of cuts in tourism employees since 2009 being in local authorities. That is a huge issue.
My critique of the Government is that their recently announced sector deal for the creative industries is insufficient. They claim that it amounted to a £150-million package, but only £25 million or so is not money that has previously been announced. That is not the scale of ambition required. Also, announcements have been made recently about continuing with funding in relation to the music and dance scheme, the dance and drama awards, cultural programmes and so on, but none of that money is genuinely new either—it is just a continuation of what is already happening. The Government need to step up with greater ambition, along the lines of the Bazalgette report that was released last year. They need to do more on the workforce, on free movement, on skills and on freelancers. Lots of people working in the creative industries are freelancers; how about getting hold of the Bill that has been introduced by my hon. Friend the Member for Batley and Spen (Tracy Brabin) to give freelancers shared parental leave? That is a great campaign. The Government have said that they are reviewing that, and I urge the Minister to think more about it and talk with his colleagues, in order to make it a reality. The Government could do more by having a cultural capital fund, as the Labour party promised in our manifesto. They could do lots more on all those sorts of issues.
On tourism, I will obviously say that Cardiff is the most beautiful part of the country and encourage right hon. and hon. Members to visit but, on a serious note, I have been travelling around the country to different tourist locations to talk to the industry about Brexit and the issues faced. The industry was unanimous in that devaluation is not the way forward as a policy on tourism. Britain will not become the most successful tourism sector it can be simply by relying on devaluing the pound and going for a cheap offer. We must ensure we have quality, and that includes investment in skills, in our cultural heritage and in the workforce.
It is also about time to look again at the idea of social tourism, which was so interestingly and ably promoted by an all-party parliamentary group back in 2011. Its report, called “Giving Britain a break: inquiry into the social and economic benefits of social tourism”, was about ensuring that we use up the spare capacity in our domestic tourism industry to help those families who most need a break. It would be good to see the Government introduce a social element in to their tourism policy, to ensure that families really benefit and our tourism industry benefits from being able to use up its spare capacity.
I do not want to take up much more time, because time is pressing. If we are going down this road to Brexit, a road that many of us in this particular debate do not seem to have supported, we must ensure that the Government show a great deal more ambition in relation to our creative industry and tourism sectors.
It is a pleasure to serve under your chairmanship, Mr Bone. We probably have about four or five minutes before the Division bell goes.
I thank the hon. Member for Edinburgh West (Christine Jardine) and congratulate her on calling this important debate. I do not think I can do as well as the shadow Minister in name-dropping various pop groups and organisations that the hon. Member for Perth and North Perthshire (Pete Wishart) might have been a member of in his earlier and current days, but I can certainly say that Brexit is happening. The people have spoken in the referendum.
I am much more optimistic than the hon. Member for Edinburgh West and many in the Chamber at the moment. We have heard a good deal of negativity and pessimism this afternoon, but I much prefer the view taken by my right hon. Friend the Member for Belfast North (Nigel Dodds), who is no longer in his place, who spoke about the opportunities and the optimism. It is always helpful to see glasses as half full rather than half empty.
I welcome the contributions from right hon. and hon. Members, and thank them for stimulating a lively debate in which the crucial role of the UK’s creative and tourism sectors has been recognised—I think that on that subject we are all in agreement. My right hon. Friend the Member for Wantage (Mr Vaizey) made his address to the Chamber—with his usual charm, if I may say so. He is certainly missed in the sector, contrary to his self-deprecating remarks. He was Minister for some six years, and I think I am right in saying that the industry wrote a group letter to a national newspaper saying just how very much he would be missed. Frankly, his departure provoked an extraordinary letter of appreciation.
My right hon. Friend and others mentioned supporting arts in the regions. In this coming financial year, 75% of Arts Council England’s funding will be going outside of the London area. The Department is supporting the cultural development fund and the northern cultural regeneration fund. A lot of money—rightly so—is going out of London and into the regions.
As the Minister for the arts, heritage and tourism, I am responding to this debate on the effects of the UK leaving the EU on the tourism and creative industry sectors. We have created the best in this country, as many Members from all parts of the House have mentioned. In my view, we had the best before 1973, and we will have the best after we leave. I am also happy to say that my Department already works across Government, including with civil servants at the Department for Exiting the European Union, and there is no reason to think that we will not continue to do so. In fact, we always look to work together.
I will make some overall points about the sectors and the challenges of EU exit, and I will then respond in turn to some of the key issues raised by colleagues. I recognise that there is particular interest in the devolved arrangements for both sectors following EU exit. I am keen that the future arrangement works for all sides. I am particularly looking forward to meeting colleagues from the devolved Administrations this Thursday in Edinburgh to discuss their particular concerns about tourism in more detail. I want it to be an ongoing discussion. If I do not have time to talk about that ongoing discussion in the limited time available this afternoon, I will be pleased to follow up in writing.
Members will be aware that the Digital, Culture, Media and Sport Committee recently published its report, “The potential impact of Brexit on the creative industries, tourism and the digital single market”. Some of the points raised in this debate echo the conclusions of that report. I have noted those conclusions, and the Government will submit our response in due course in the normal way.
To set the scene, Members will be aware that the sectors that DCMS represents are an absolutely huge success story for the UK—there is no doubt about that—and tourism and the creative industries are no exception. To a large degree, their success has gone hand in hand: tourism helps the creative industries thrive, as the shadow Minister mentioned, and vice versa. As an example of the close relationship, UK Music’s “Wish you were here” report for 2017 stated that there were 12.5 million music tourists in 2016—that is music tourists alone—and nearly 50,000 full-time jobs were sustained by music tourism. It is huge. In 2016, tourism was worth more than £65 billion to the economy, and it is still growing every year. In fact, it is growing exponentially. Provisional figures suggest that 2017—we have most of the figures—was a record-breaking year, with just under 39 million overseas visitors to the UK. That was an increase of 3% on 2016, which was itself a record year. The situation is extremely promising. The creative industries are also a major cultural and economic success for the UK. It is a high-value, high-growth sector that was worth nearly £92 billion to the economy in 2016.
These sectors play an important role in showing the world the very best of Britain and in strengthening global relationships. We are No. 1 in the world for soft power. There are many reasons for that, but one of the main ones is the strength of the sector. The sectors also play a role in demonstrating that we are open for business.
I am sorry, I do not have time.
We are not resting on our laurels. As Members will be aware, DCMS recently published its sector deal for the creative industries. That important piece of work sets out an ambitious proposal on how Government and industry will work together to accelerate growth and productivity. The sector deal is a landmark document, and I urge Members to look at it if they have not already. It recognises the critical importance of the creative industries to the UK’s economy, society and global influence. We intend to publish a similar deal for the tourism sector in due course.
I would now like to focus on the freedom of movement point that was raised by one or two Members, as it is a key issue that colleagues and stakeholders have raised. The UK tourism and creative industry sectors have strong ties with the European Union. There are a large number of international workers in both sectors and they regularly move across the EU. EU nationals form a significant proportion of the domestic tourism market.
Sitting suspended for a Division in the House.
[Mr Philip Hollobone in the Chair]
As I was saying, the UK’s creative industries likewise require access to skilled workers from the European Union. It is important that UK and EU workers can quickly and efficiently transfer across member states on time-limited projects such as film co-productions, or as touring musicians and performers.
I have spoken to a number of tourism industry leaders since taking on this role, to build a strong understanding of the challenges and opportunities on freedom of movement and to ensure that the sector can continue to have access to the necessary skills. We are working closely with the Home Office, Revenue and Customs and the Department for Exiting the European Union to ensure that they are well informed of these issues. The new immigration system will not come into place until 2021, following the agreed implementation period. During that time, existing arrangements will broadly continue to apply to EU citizens coming to the UK to visit, work or study.
I turn now to the UK’s reputation as a tourism destination. Tourism continues to be a significant success for the UK. In 2017, the World Economic Forum found that the UK had the fifth most competitive tourism market in the world. Europe is our key market. The projected figures for 2017 are that, of the 39 million visits to the UK, nearly two thirds were by EU residents. Outbound as well as inbound visits are important and, similarly, of the 71 million visits overseas by UK residents, it is projected that three quarters were to other EU countries. Clearly, it is in both the UK’s and the EU’s interests to maintain this ease of travel and smooth entry at the border. We are also working closely with industry partners to promote transparency for consumers, and internationally to promote open global markets.
We are pressed for time, but another matter that I want to mention is access to EU funding streams for tourism and the creative industries. To provide some certainty for our sectors in the near future, Members will know that at the joint press conference between the Secretary of State for Exiting the European Union and Michel Barnier on 19 March this year it was confirmed that UK organisations could continue to bid for EU programmes until December 2020. Details of the next multiannual financial framework are expected later this year, and that will provide greater clarity on our position. We will seek to stay beyond December 2020 in programmes that are mutually beneficial to the UK and EU and will continue to actively investigate the funding streams that support our sectors.
On the regulatory framework, the UK and EU already have close regulatory alignment built on trust in one another’s institutions. That co-operation will continue. Discussions include European legislation on consumer protection as well as regulations on temporary working arrangements.
Brexit presents both challenges and opportunities for these sectors, as it does for the whole of the United Kingdom. Although much of the public debate focuses on the challenge, I have huge confidence in the tourism and creative industry sectors and in their abilities to capitalise on the exciting opportunities. I am keen that the Government should continue to support tourism—they will, so long as I am Minister for tourism, and beyond—and the creative industries at this very important time, listening to the views of our stakeholders. I would likewise be pleased to stay engaged with parliamentary colleagues on this topic. I firmly believe that tourism and the creative industries will continue to be a major economic driver for the UK and will only grow in importance in the years ahead. There is no reason to believe that the upward trends will not continue as we exit the European Union. Our culture and creativity play a huge role in making the UK a highly attractive place to visit and work.
I thank right hon. and hon. Members who have taken part in this debate for rehearsing all the arguments and laying out clearly why tourism and the creative industries need protection and special measures to help them through the challenges they are going to face if Brexit goes ahead—everything from the impassioned plea from the hon. Member for Perth and North Perthshire (Pete Wishart) for our creative industries as world leaders, to the argument that I confess I did not mean to spark between the hon. Members for Banff and Buchan (David Duguid) and for Argyll and Bute (Brendan O'Hara) about who has the most beautiful constituency. I would not like to comment on either of them, except to say they are both wrong—it is Edinburgh.
I hope the Minister will take on board everything he has heard from this side of the Chamber today.
Motion lapsed (Standing Order No. 10(6)).