Creative Industries

Lord Stevenson of Balmacara Excerpts

Thursday 3rd November 2011 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Baroness, Lady Bonham-Carter, for securing this debate. As the noble Lord, Lord Grade, quipped, at a time of bad economic news it is a chance to celebrate a success story, and not just in TV. As the noble Baroness, Lady Randerson, said, the time has passed far too quickly and we could have gone on for much longer to discuss this. I also add my congratulations to the noble Viscount, Lord Colville, on his excellent maiden speech. I think it is one of the best of the year. It was gracious and wove personal experiences with wider perspectives, elegantly moving from a wide shot to a tight close-up when he pressed the case for looking again at internships and the whole question of cherishing our talent in this sector.

It is about two years since your Lordships’ House last discussed this topic, when my noble friend Lord Bragg introduced a similar debate. As then, we have had a very high-quality discussion, much enhanced by the contributions from noble Lords with direct experience in these industries, as well as from those with a passionate engagement with the sector. The main themes that seem to have emerged this morning are: a continuing concern to improve skills and training; worries about the way creativity is being squeezed out of the core curriculum, with particular reference to the EBacc; a decline in the arts and creative courses being taught in higher education because of the cut in the teaching grant; the need for an appropriate solution to stimulating finance for these high risk businesses, not that they are any more risky than others, but the risk is of a different quality—it is a “hit” industry that needs specific attention; how deregulation of the BBC and ITV might help; the need to preserve diversity on and off screen; the need to preserve live music and the performing arts more generally as the seed-bed of all these creative industries; and, as we have just heard, concern about preserving and ensuring that the IP that is created is well used and able to provide a return that is appropriate for its investment.

My noble friend Lord Macdonald of Tradeston raised the question of when the term “creative industries” was actually coined. It was certainly not around when I was working at the British Film Institute in the 1980s and 1990s. It seemed to arrive fully formed in 1997, so perhaps the then incoming Secretary of State, the noble Lord, Lord Smith of Finsbury, had more to do with it than his natural modesty permitted him to say.

Success has many parents so we will probably never know, but by any measure the UK creative industries grew considerably as an industrial sector between 1997 and 2010, sometimes growing at twice the rate of the national average. In London and in several other major cities such as Cardiff, Manchester and Salford, as we have heard, it has become a significant economic sector in its own right and is at the forefront of the UK’s international competitiveness. Data show that exports of services for radio and TV, advertising, architecture, film, video and photography doubled between 1997 and 2007, and almost quadrupled in the case of publishing and software, computer games and electronic publishing. Other figures are just as impressive. The sector as a whole saw an average GVA growth of 5 per cent per annum over that period, with computer games and electronic publishing rising annually at an average of 9 per cent, representing an increase in GVA of nearly 200 per cent over the 10 year period.

Mention has also been made of the fact that the UK has a strategic international lead in the production and export of creative goods and services. Although comparisons are complicated, Eurostat data appear to confirm that the UK is now the European leader on most indicators, while UNCTAD data show that this lead extends to the rest of the world, with the UK currently the second world exporter in cultural goods and services after the USA, which is an impressive achievement. However, as has been said in this debate, the UK’s position is under threat, with emerging economies in particular showing fast growth in all global sectors as a result of the major priority they gave to becoming new centres of growth for these sectors. In addition, the UK is vulnerable in globally mobile sectors, such as film, and in areas where world leadership rests elsewhere: for example software, which remains dominated by the US, and specialist sectors such as fashion.

Some noble Lords spoke about the wider economic and social challenges facing our country, and one of the main themes that emerged this morning was the need for an economy in the UK that looks and feels very different than what we see today, with more opportunities for more people to get better jobs in good companies. There is every reason to believe our cultural industries can play a major part in this recalibration. If that is to happen, we need an active intelligent Government who support an industrial strategy to foster good, high growth, high productivity companies that create great jobs. The challenge, and the opportunity, is significant. We need to equip ourselves with an understanding and commitment to those things that will drive creative, competitive success in a global context.

The last Government can be proud of their record on the creative industries. They recognised that the creative industries would quickly become an increasingly vital source of skilled jobs and economic growth. The coalition Government have said repeatedly that they view the creative industries as key drivers of jobs and growth, but on a number of critical issues they have been accused of failing to respond to the challenges threatening the future strength of the sector.

I will give three or four examples. The announcement of a creative industries council in the last Budget was welcomed, but it remains to be seen whether it is just a talking shop or a focal point for action in areas other than training and skills. This seems to be the one area that is making good progress, although it is hampered—as the noble Lord, Lord Clement-Jones, said—by the fact that there are two sector skills councils operating in a limited space when perhaps Skillset should be in the lead.

Why has there been such a delay in the rollout of universal broadband and a lack of progress in implementing the Digital Economy Act? As many noble Lords argued, intellectual property is at the heart of all that the sector has to offer and do. It must be supported. The Government's higher education plans are resulting in significant cuts in art and design education, and the changes to the EMA are denying many young people the chance to develop education and training opportunities linked to the creative industries. Britain's immigration rules are making it difficult to bring in artists and performers to study, perform and teach. Something must be done about this.

There must be some doubt about whether current government policies will nurture talent, foster growth and widen opportunity in the cultural industries. Clearly, DCMS cannot do this on its own. It is a cross-departmental challenge that requires bold leadership from DCMS. As the Minister is about to respond, perhaps I may suggest that these are the key questions that she and the department should address.

The skills required for the creative economy are changing. We must assess the suitability and impact of current schools policy for the creative industries. Can DCMS re-engineer the relationship between our education system and our support mechanisms for arts and culture so that we grow and nurture talent for the creative economy? The UK has a strong talent base but lacks some of the technical and business abilities required for a digital era, particularly if we want to see more microbusinesses grow. Can the DCMS bring forward an apprenticeship scheme, building on the work of the BBC in Wales that was described by the noble Lord, Lord Rowe-Beddoe? It might be tailored more appropriately for companies operating in the creative economy.

A major challenge for public policy is a shortage of risk capital for creative companies in the content sectors. There will be inevitable consequences for UK competitiveness if we fail to address those issues successfully. My noble friend Lord Hollick drew attention to the predisposition towards debt finance. This structural weakness prevents us from acquiring or owning the economic benefit of creative output, and confines us often to service company status. Will the DCMS work with the Treasury to ensure that appropriate new schemes to bring in risk capital are introduced, and to ensure that the current support through the tax system is not curtailed by the threatened introduction of new eligibility rules? Thirdly and finally, what can DCMS do to widen the UK creative talent pool? Without that, there may be significant detrimental impact in the longer term on a sector that prides itself on the generation of diverse creative content.

The Government need a coherent strategy for the creative industries. They are a key sector for jobs and growth, and the UK needs a framework that underpins confidence, investment and innovation. British young people in the creative sector have extraordinary talent. We must make it as easy as possible for them to flourish, if only to aid growth. I look forward to the Minister's response.