Creative Industries

Lord Razzall Excerpts

Thursday 3rd November 2011 Lords Chamber

[Lord Razzall]

My Lords, I think it is common ground among all of us that the creative industries now represent a significant part of our industrial effort. If you add together software development, film, music, theatre, broadcasting, architecture, industrial design, the creative arts and video games, it is quite likely that, in some statistics, the creative industries have passed manufacturing in their contribution to Britain’s GDP and are fast pushing the declining financial services sector. This is an extremely important debate.

First, my noble friend Lady Bonham-Carter indicated some of the problems faced by some of these industries, but we ought to take a moment to reflect on some of the triumphs. Let us look, for example, at the acquisition of Autonomy by Hewlett Packard, one of the major worldwide computer companies. The sale was significant but, more significantly, Hewlett Packard will base the whole of its software development programme in Cambridge, based around the Autonomy structure. That is a huge triumph for Britain’s software industry. Look also at what has happened at Pinewood. No doubt my noble friend Lord Grade of Yarmouth will share with us the secrets of how he did it. As the noble Baroness, Lady Bonham-Carter, indicated, Warner Bros’ investment is a huge triumph for the British film industry. My noble friend Lord Clement-Jones spoke about the record industry, which now represents 12 per cent of global sales, notwithstanding the problems about copyright infringement, to which other people have referred. As my noble friend Lord Fowler indicated, we have a hugely successful television production industry, ranging from the BBC through to the independent sector, to Channel 4 and ITV, and even BSkyB is now making independent programmes. As this morning’s Times editorial indicated, the television industry in the UK, contrary to fears, has,

“dumbed us up, not down”.

The noble Lord, Lord Fowler indicated that, no doubt, a number of your Lordships would have a shopping list, which should be avoided. I have a shopping list of three things that I think the Government ought to be doing. First, on subsidies, I take the point put forward by the noble Lord, Lord Bilimoria, that the Government already provide significant subsidies for the creative industries. There is the grant, which no one has yet mentioned, for people involved in research and development through which companies can recover, from HMRC, the PAYE paid on such people’s salaries That is a very significant contribution towards the development of small software companies and that must be retained. I was very pleased that the coalition Government, notwithstanding one or two blandishments from my side of the political parties, have retained that R&D grant.

Secondly, there is the film grant, the EADY money which was replaced by the current film grant: as long as a film contains sufficient UK content, there is a cash grant which comes back to the makers of the film from HMRC. That must be retained.

Thirdly, there is the Arts Council. As we know, the Arts Council suffered a cutback in the amount of money that it could make available to the arts this year. Presumably, next year, once the Olympics are over, there will be more money available from the National Lottery Fund and it is important that, when that happens, the Government do not use the opportunity to take back the contribution that has been made from the Treasury, so that the Arts Council funding can be maintained at least at the same level as it is today. There must be no change in that.

Another area where I think the Government need to take some action is on immigration. There is internecine warfare, as noble Lords will appreciate, between the Home Office and DBIS with regard to how we get clever, talented people, who are necessary for the creative industries, into this country, often on a temporary basis. A company like BlackBerry, for example, is thinking of moving its European headquarters away from the UK into continental Europe because the Home Office will not allow it to bring in the sufficiently talented people that it needs to maintain that important centre for British industry. In my view, DBIS must carry on that battle with the Home Office, which I hope it wins, so that that can continue.

The third area, as my noble friend indicated, is, of course, education. As Eric Schmidt said in his famous speech in Edinburgh earlier this year, it is slightly ludicrous that we are teaching our 15 year-olds to plug things into computers but not how to program them. As the noble Baroness, Lady Bonham-Carter, indicated, we really need to change the educational structure in this country to ensure that computer science is in every student’s DNA.

In conclusion, as I indicated at the beginning, this is now a very serious industry. When the DCMS was started, it was termed “the Ministry for fun” and that was not only because David Mellor was the first Minister but because it was thought that that was all that it dealt with. That is not so. The DCMS is now responsible for a significant element of our industry.