Creative Industries

Lord Clement-Jones Excerpts

Thursday 3rd November 2011 Lords Chamber

[Lord Clement-Jones]

My Lords, I warmly congratulate my noble friend, not only on initiating this debate, but on her tremendous opening speech. We need to recognise that our creativity, ideas and intellectual capital are what will increasingly drive our future prosperity. Increasingly, technologies are converging, and technology and content are aligning, so it is possible to draw the description of creative industry extremely widely, even to include industrial design in areas such as aerospace, automotive and advanced engineering.

We are pre-eminent in so many areas: in computer games and new media, architecture, design, fashion, animation, music, film, radio, television and advertising. Just take music: in per capita terms, we are one of the top three recorded music markets in the world. UK artists’ share of global sales is estimated to have been nearly 12 per cent in 2010, with one in 10 sales in the US being a UK act. However, the fact is that other countries are making substantial investment in their creative industries. So today I hope that we can celebrate some of the considerable achievements taking place to develop our creative industries, while at the same time combining this with further suggestions for action.

Like my noble friend, I welcome the formation of the Creative Industries Council, co-chaired by the Secretaries of State for Business, Innovation and Skills and for DCMS, which, I think, has met once so far. Last year the Liberal Democrat policy document The Power of Creativity emphasised the need for assistance with start-ups for many young creative industry companies by setting up a creative enterprise fund. Earlier this year, Dr Stuart Fraser, in his report Access to Finance for Creative Industry Businesses, commissioned by the DCMS, identified that finance was much slower coming forward for creative industry business than in other sectors. The Treasury Plan for Growth in March this year accepted this and the recent Demos report Risky Business confirmed it.

With this evidence, I hope that the Creative Industries Council will press for more assistance and will spur the Government to improve the enterprise finance guarantee scheme so that it can support new businesses in the creative industries and take other steps proposed by the CBI to ensure that other schemes, such as the R&D tax credit and the enterprise investment scheme, can be accessed. What plans are there to solve some of these financing issues for the creative industries?

Moving on to education and skills, we have some great higher and further education institutions. Indeed, overseas students beat a path to our door. As the UUK report Creating Prosperity at the end of last year makes clear, our higher and further education sector makes a major contribution to the development of skill and talent for the creative economy. It represents hubs for innovation and centres for research. Some 16 per cent of our students are engaged in courses relevant to the creative economy. However, as Fintan Donohue, the principal of North Hertfordshire College was recently describing, it needs to make sure that, as well as the formal academic aspect, it develops the enterprise and entrepreneurial skills of students in the creative arts sector.

I commend the work of Skillset, the sector skills council for some of the creative industries, such as advertising, animation, computer games, fashion, film and TV, and Creative & Cultural Skills, which represents design, literature, music and performing and visual arts. Both have identified that there is a significant shortage of skills in their sector, and both are tasked with ensuring that skills issues across the sector are properly tackled in a strategic way. However, there are still major issues, as the recent NESTA report on video games and visual effects, which was referred to by my noble friend, shows. We need to make sure that we have the right computer skills in particular. We have a positive story in some respects, but I am baffled why we have two skills councils for the creative industries. Should they not be doing more than simply working together? Should they not be a single body rolling out programmes right across the sector?

Then, of course, there is the vital question of intellectual property protection through copyright, a subject of increasing importance in the digital age. Combating piracy should not simply be a crime and punishment approach. We need to combat through education the idea that copyright infringement is socially acceptable, and we need to make sure that there are legal ways of accessing copyright works. I was nominated for an Internet Villain award last year for my efforts on the Digital Economy Act, but I am unrepentant about the need to protect intellectual property over the internet and to ensure that creative artists and the creative industries can enforce their copyright. It is all very well to talk about developing new models for exploitation of new work, but without the underpinning of copyright, creative artists cannot receive the proper reward for their efforts. There are some 50 different services giving legitimate access to recorded music, so there is no excuse for piracy.

The Hargreaves report, commissioned by this Government, has some good aspects, but it seems to think that some creators’ rights should be weakened. However, as pointed out by UK Music, its economic impact assessment of the growth impact of its recommendations is laughable and certainly a great deal more speculative than the cost of piracy estimates that Hargreaves criticised. For instance, how can format shifting add up to £2 billion to the economy? In reality, format shifting has been rife for years. MP3 players have already been invented, and very few of them are made in the UK.

In that light, the Government's commitment to strengthen the IPO's economics team and the fact that it has begun an ambitious programme of economic research are very welcome. In the limited time available to me, I welcome the Technology Strategy Board and its research on metadata development, which may prove an extremely important development. I also mention the impressive story of how some of our major cities are becoming hubs. We have the East London Tech City, and Liverpool’s city of culture year resulted in an addition of £800 million to the economy of that city.

Finally, I cannot forbear to mention live music. I very much hope that the Government will give a fair wind to my Private Member's Bill in the House of Commons.

--- Later in debate ---

[Baroness Rawlings]

My Lords, I start by adding to the sentiments of all noble Lords who spoke in appreciation of my noble friend Lady Bonham-Carter having given us the opportunity to discuss the role of the creative industries in the United Kingdom. As we heard, not since the debate on the same subject in June 2009, secured by the noble Lord, Lord Bragg, have we been able to debate at length the importance of their impact. In 2009, it was clear that there was a vast knowledge and commitment in your Lordships' House; today, it is evident once again that your Lordships are as passionate and committed as ever to the creative industries and their contribution to the UK economy.

Perhaps I may especially commend the maiden speech of the noble Viscount, Lord Colville. It was delivered with great modesty. He highlighted the issue of unpaid internships, which is certainly a pressing challenge for these industries. The key will be to find a balance between making these valuable opportunities available to young people and making certain that they are not exploited and that these are genuine learning experiences. It is already clear that your Lordships' House will benefit from the noble Viscount's wide experience in areas ranging from his work as a BBC producer on “Newsnight” in Moscow during the collapse of the Soviet Union to his current projects, one of which is a programme about the physics of the climate. We wish him luck and look forward to hearing him very frequently in this House.

My noble friend Lord Grade, in his eloquent and naturally well informed speech, raised an important point about television advertising and the continuing competition remedy known as contract rights renewal. CRR has formed a major part of the recent Communications Select Committee’s inquiry and subsequent report on the regulation of TV advertising, which we will debate later today. I hope that my noble friend might be able to speak in that debate as he knows so much about the subject. My noble friend also raised the issue of “must carry”. I relished the reference to Ongar, which was part of my old Essex South West constituency, being “one station beyond Barking”. A number of responses to the Secretary of State’s open letter on the communications review raised the issue of transmission charges paid by the BBC and other PSBs to satellite operators. No doubt we will consider the issue in the communications review Green Paper.

I listened with great interest to my noble friend Lord Black's concern about the local press. The question we must consider is whether one reference decision by the Office of Fair Trading is enough to undermine the whole merger regime. Obviously this appears not to work for local newspapers, and I believe that the answer should be no.

The noble Lord, Lord Smith, answered many noble Lords' questions regarding the film industry's role within the creative industries. We are grateful to him for chairing a body with an eight-strong independent panel of industry experts. I will come back to further points made by the noble Lord later.

In answer to the question of my noble friend Lord Clement-Jones about economic contribution, the UK's creative industries are part of the digital economy to which we can look with confidence for growth in future. In these challenging economic times, that makes them particularly important. I will mention later what the Government are doing on this. However, the figures speak for themselves: the creative industries contribute 5.6 per cent to the UK economy as a whole—around £59 billion a year; 1.3 million people are employed in creative jobs; and UK creative exports were worth £17 billion in 2008, which represented around 4.1 per cent of all goods and services exported. Over the past decade, the creative industries have grown faster than the rest of the economy. Recent forecasts by PricewaterhouseCoopers suggest that the UK entertainment and media market will grow by an average of 3.7 per cent per year for the four years to 2014, compared with 2.6 per cent over the same period for the economy as a whole.

My noble friend Lord Fowler asked whether BBC Worldwide should be considered in the forthcoming communications Green Paper. We are discussing this and I hope that the Green Paper will be produced soon. It will look at whether any change is needed to the law. The Communications Act 2003 has held up well, but we need to give it a proper check-up, which will take into account works such as Hargreaves and the Leveson inquiry.

I would like to outline just a few areas where the UK has demonstrated its particular strengths. The status of English as a global language has made the UK a world leader in creative content, giving UK producers a huge advantage in global markets. This is illustrated by the strength of our publishing and music industries, and the value of TV programming, both at home and especially in export sales. In 2010, the UK strengthened its position as one of the only two net exporters of music, growing its trade balance three times faster than the US. British talent is behind many iconic, globally successful games titles too. I am told that these include “Grand Theft Auto” and the UK online video game “Moshi Monsters”, now with 50 million users and one of the fastest growing children's entertainment brands in the world.

Among other topics, my noble friend Lady Randerson, the noble Earl, Lord Clancarty, and the noble Lord, Lord Bichard, mentioned the importance of fashion. I agree with them. The UK is at the cutting edge of international fashion and this year industry forecasters named London Fashion Week the number one fashion week in the world, overtaking Paris, New York and Milan. The noble Lord, Lord Bichard, referred to Vivienne Westwood. She even designed the graduation robes for King’s College, London.

Britain is one of the few countries in the world to have not one but five dedicated PSB broadcasters: BBC, ITV, Channel 4, channel Five and not forgetting S4C. British television produces programmes that are popular around the world, such as “Doctor Who” and “Downton Abbey”.

My noble friend Lord Razzall talked of our success in Cambridge. He is right about our many creative industries there. As we heard on the “Today” programme this week, ARM Holdings, a global company with its headquarters in Cambridge, is the world's leading semi-conductor intellectual property supplier and as such is at the heart of the development of digital electronic products. We need consistently to work to maintain these successes, and continue to retain our share of the growing global market, estimated by UNCTAD to be worth nearly $600 billion, for creative goods and services in an increasingly competitive world.

I can reassure the noble Baroness, Lady Jones, that the Government and especially the Secretary of State fully understand the importance of the arts, both culturally and economically. I suggest that the Arts Council’s settlement was not bad in the current circumstances. I am sorry that the noble Baroness, Lady Jones, felt a need to criticise the Secretary of State. Perhaps she needs to improve her computer skills as both the Secretary of State and the Minister Ed Vaizey are constantly producing new ideas and are on the wavelengths. As our Secretary of State Jeremy Hunt set out in his superb speech at the Royal Television Society conference this year, which is on the web, our first priority must be to capitalise on the extraordinary opportunity presented by our digital and creative industries to drive economic growth.

The noble Lord, Lord Bilimoria, wanted to know whether the Government had given this area top priority. I can say to him yes. In March this year The Plan for Growth included a package of support for the digital and creative industries. These measures are designed to achieve strong, long-term, balanced growth that is more evenly shared across the country and between industries. The Government have established the Creative Industries Council to be a voice for this most important area, and to be a place where Government and council members, who are leading figures drawn from across the creative and digital industries, can work together to tackle barriers to growth facing the sector.

My noble friend Lady Benjamin stressed the challenges identified by the council, including lack of access to finance, skills shortages, the need for better access to export markets and the need to improve the intellectual property regime. I know of the noble Baroness’s preoccupation with children’s programmes and I note her concerns. We have discussed this frequently and no doubt we will come back to it. The council has established working groups on skills and access to finance as a first priority and it will report in 2012, so I agree with the noble Lord, Lord Bilimoria, and the noble Lord, Lord Hollick.

My noble friend Lord Clement-Jones rightly lays emphasis on skills. In tandem with the skills working group of the council, a number of actions have been taken forward to improve skills in the digital and creative industries. These include identifying 360 science, technology, engineering and maths—STEM—ambassadors from the creative and digital industries, and encouraging graduates from the sciences, technology and maths to seek out careers in these sectors.

I have great sympathy with the worries of my noble friend Lady Bonham-Carter and of several others about not including the arts, such as music, and computer sciences in the EBacc. This is a matter for the Education Secretary, but it does not stop these subjects being taught in schools.

My noble friend Lady Randerson and several noble Lords were concerned about superfast broadband. Superfast broadband is a key business growth enabler, and £530 million is being invested over the next four years in order to create the best superfast broadband network in Europe by 2015. We heard the other day that one of Italy’s problems is that it has fallen behind with broadband compared with what we are doing here. The Government have taken further action towards the goal of making certain that all businesses in enterprise zones have access to superfast broadband by 2015, with Broadband Delivery UK considering and addressing where there are gaps in local broadband plans. I know this is an area in which the Secretary of State is particularly interested.

The noble Lord, Lord Rowe-Beddoe, mentioned the importance of the Hargreaves review of intellectual property and growth, which set out recommendations for how the UK's intellectual property framework can further promote entrepreneurialism, economic growth and social and commercial innovation. The Government published on 3 August its response to the Hargreaves report. This included a commitment to establishing licensing and clearance procedures for orphan works. Government will shortly consult formally on proposals taking forward the Hargreaves recommendations. I am happy to address the noble Lord’s concerns on music and congratulate him on stressing the importance of the conservatoires.

The national plan for music education will be published shortly and will set out new arrangements for creating local music hubs expected to support all young people’s music making and offer routes for progression. These might include music industry-based provision and information. I am also fully aware of the importance of the jazz industry, mentioned by my noble friend Lord Colwyn, and I hope his suggestion of jazz will be included.

My noble friend Lord Colwyn also pointed out the need for clarification around the licensing of sites for live music. The Government remain committed to scrapping unnecessary red tape. We support the Bill introduced by my noble friend Lord Clement-Jones and are consulting on a broader approach. I will make sure that my noble friend’s concerns are made known, and I will take them back to my department. However, I must not pre-empt the consultation, and there are concerns on the other side.

This debate has highlighted the fact that the creative industries make a strong contribution to the UK economy. They are worth £59 billion to the economy, and a significant number of people are working to create a dynamic and innovative part of our economy. I wholly agree with the noble Lords, Lord Smith and Lord Stevenson, about the importance of the value of intellectual property in a digital world. We are committed to implementing the Digital Economy Act, and we hope that the initial obligations code will be abolished shortly.

The noble Lord, Lord Smith, also mentioned that it would be wrong to see the creative industries in purely economic terms. My noble friend Lord Shipley also explained this point very clearly. The creative industries make an enormous cultural contribution to this country and to the wider world, and what is being developed in Salford and the north-east is also important. Indeed, the creative industries enhance our reputation as a global creative and cultural leader. It is vital that we understand and continue to make the case for the importance of the close relationship between the arts and the creative industries.

I quite rightly pay tribute to our recent successes in the cultural sphere, which were mentioned by the noble Baroness, Lady McIntosh, whether they be the successes of UK-produced plays such “War Horse” or “Jerusalem” on Broadway, “Downton Abbey”, written by my noble friend Lord Fellowes, winning four Emmy awards, the Frieze Art Fair bringing the world’s collectors to London or the film “The King’s Speech” sweeping the board at the Oscars.

My noble friend Lord Glasgow and other noble Lords asked about the film industry. It is a cultural achievement of which we should be proud. It illustrates the strength of the UK’s creative industries.

The noble Lord, Lord Stevenson, asked about games tax relief. I will write to him with the details.

As we have heard in your Lordships' House today, the creative industries are a sector that we ought to celebrate as a nation. The Government will continue to play their full part in making certain that they remain a global success story. I thank all speakers in today’s extensive debate who have shown such an interest and offered such well informed views. I have certainly learnt a great deal, and in this short time I hope to have answered most noble Lords’ questions. I ask for forgiveness from the noble Earls, Lord Glasgow and Lord Clancarty, and the noble Lords, Lord Macdonald, Lord Sharkey and Lord Stevenson, if I have not answered all their questions. I will read Hansard, and I will, of course, write to any noble Lord who has not had their points addressed and put a copy of the letter in the Library.

In conclusion, I once again thank my noble friend Lady Bonham-Carter, who has brought this important topic to the House.

[Lord Clement-Jones]

My Lords, I apologise for interrupting the Minister but, specifically, I wonder whether she will write on the question of finance for start-ups in the creative industries. I did not hear anything specific on that, and that question was asked by a number of noble Lords and is crucial to the creative industries.

[Baroness Rawlings]

My noble friend raises the point at a very opportune moment, with my noble friend Lord Sassoon sitting next to me. No doubt it will be taken into account.

I applaud again the maiden speech by the noble Viscount, Lord Colville, on this important topic that my noble friend Lady Bonham-Carter raised, which has afforded your Lordships such a constructive and creative debate.