Business Confidence

Debate between Lord Stevenson of Balmacara and Lord Duncan of Springbank

Tuesday 28th January 2020 Lords Chamber

[Lord Duncan of Springbank]

The noble Lord will not be surprised to know that I agree with him on those points. It is important to stress, as Dr Johnson once said:

“Self-confidence is the first requisite to great undertakings.”


Now that we have a situation where that confidence can grow, we are already in a good place. We already have record levels of employment and record levels of unemployment; we already have faster growth anticipated in our country than in Germany, Japan or Italy; we already see the signs whereby we can begin those great undertakings.

[Lord Stevenson of Balmacara (Lab)]

My Lords, it is not all sweetness and light, as the noble Lord would wish us to see. The report to which the Question refers also carries a health warning, which the Government should listen to. I am sure the Minister will have read it carefully and will have a response, but can he give specific answers to the core points raised later in the report, which goes on to state:

“the sector is not yet out of the woods in terms of performance, which means that this optimism could prove to be short-lived unless the government … help address underlying issues holding back manufacturers”?

The list is long, but it includes addressing skills shortages and improving productivity. We have been told to expect government action on sustainability and climate change—indeed, we are anxiously waiting for that—but what practical steps will the Government take to address skills shortages and to increase productivity, which is now more than 30% behind that in the US and around 10% to 15% behind that in Germany?

[Lord Duncan of Springbank]

The first thing to note is that the report is positive, and the CBI has not always been the most positive in its analysis of the Government’s activities. Secondly, we have anticipated a number of the issues which the report has flagged up, not least productivity and investment in SMEs. In the calendar year ahead, we shall look at how to move these areas from where they are now to help them grow. I am tempted to cite Chauncey Gardiner on the notion that as long as the roots are still in the soil then all will be well in the garden. That might be a little optimistic because the year ahead will be a challenge, but the same thing is true: we have opportunities ahead which will do us well.

Creative Industries: Research and Development

Debate between Lord Stevenson of Balmacara and Lord Duncan of Springbank

Wednesday 8th January 2020 Lords Chamber

[Lord Duncan of Springbank]

On tax, it is important to stress that we offer a significant amount of tax relief that covers all the wider creative industries, from film animation to museums and galleries and the theatre, and so far it affects a significant proportion of those areas. The noble Baroness raised the exact definitions, which is important, because thus far we are bound by the Frascati convention of the OECD definition, which is tilted primarily towards technology and science. I will not go into too much detail, but this of course misses the epistemic and aleatory uncertainties inherent in this particular problem—you do not hear that every day.

[Lord Stevenson of Balmacara (Lab)]

Indeed, we need to pause after that. A round of applause would not be inappropriate.

My Lords, I am glad that the Minister mentioned the creative clusters, because they have been a huge success in bringing out the exact points made by the noble Baroness in her Question. However, does she not also raise a wider definitional issue—it does not have a grand name—which is that the creative industries are often structured around freelancers working in small industries and, as such, they cannot take advantage of some of the scale issues for which the Minister’s department is responsible? I think particularly of the way in which the apprenticeship levy cannot be applied in this case. Does the Minister have any plans to change that?

[Lord Duncan of Springbank]

The noble Lord makes an important point. I was curious about that this morning as well. I was fearful that a lot of these funds would end up in the larger businesses and industries but, in actual fact, SMEs are disproportionately affected in this area for the very reason that the arts, humanities and wider creative industries are usually small ventures. So there is a significant proportion of benefit in that regard. If the noble Lord will allow it, I will drop him a note on the exact figures and put it in the Library for the edification of all others.