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Westminster Hall

Thursday 10 May 2001

[Sir Alan Haselhurst in the Chair]

Creative Industries

Motion made, and Question proposed, That the sitting be now adjourned.--[Mr. Touhig.]

2.30 pm

The Minister for Tourism, Film and Broadcasting (Janet Anderson) : We warmly welcome the opportunity provided by this debate to highlight one of the best success stories in the United Kingdom. Until fairly recently, it has gone unsung, but thanks to the efforts of those in the creative industries, assisted by a supportive Government programme of action, it is now more widely recognised.

The term "creative industries" is now more widely used and understood. For too long, the view of our traditional cultural industries--those based on our long tradition of excellence in fields as diverse as literature, music, art and live performance--was that they were nice but not essential. They were often seen as elitist. It was too easy to dismiss their importance in enriching our quality of life, reflecting the vibrancy of our multicultural society and providing social cohesion and opportunity, but that analysis was wrong. If we consider what lies at the core of those industries, it is surely intellectual property.

We can all get our heads around widgets, but are we so comfortable with concepts and ideas? That is what we are talking about today. As we look at the shifts in our economy from manufacturing in the 19th century, to services in the 20th century and knowledge and information in the 21st century, one constant strand has been the UK's strength in original creativity. We are well known for our innovation and inventiveness, but we have not been so good at developing and maximising the potential benefits in the value chain. Too often, other countries have reaped the benefits of our original creativity.

Our need to maximise the benefits of our creativity lies behind our effort to support the creative industries--those industries that have original creativity at their heart and the potential to maximise revenue and generate employment through the exploitation of intellectual property. There was no clear strategy for engaging with those industries before we came to government. That is why the Prime Minister invited the Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), to set up the creative industries taskforce.

The taskforce's first job was to raise awareness of the importance of those industries, and to measure their contribution to the UK economy. Its findings in 1998 were updated earlier this year, and the figures that emerged surprised us all. The industries generate revenues of about £112 billion, export earnings of some £10.3 billion, provide employment for some 1.3 million people, account for more than 5 per cent. of GDP and,

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perhaps most important, are growing at twice the rate of the economy as a whole. They will be the source of many of tomorrow's new jobs, many of which will be highly skilled. They are industries in which the UK has a strong international reputation. We have a rich cultural heritage, and a reputation for excellence not only in the performing arts but in design and computer games. Moreover, in an information age, we have the added advantage that English is the first language of the internet.

For all those reasons, creative industries matter. That is why the Government have taken steps to work with them, to understand the challenges that they face and to develop solutions. It quickly became apparent that better careers advice on those industries was essential. We therefore set up a creative industries higher education forum to ensure better relations between education and the workplace, and opened a web portal, which provides access to information and advice on a wide range of intellectual property issues and averages 85,000 hits a week. We have undertaken more focused export promotion support and co-ordinated the efforts of many Departments and Government agencies to improve awareness at national, regional and local levels of the importance of the creative industries.

In the English regions, Northern Ireland, Scotland and Wales, there is growing recognition of the importance of the creative industries for wealth and job creation, of their contribution to social inclusion and regeneration strategies and of the way in which they foster creative talent and encourage those who are excluded to enter mainstream economic activity. The creative industries also make a substantial contribution to our regional economies. In London, they employ more people than does the manufacturing sector, and, in Manchester, they employ more than construction does.

We want to put creativity at the heart of education to encourage our children to develop their talents. That is why, last July, we allocated £40 million for the creative partnerships initiative to bring together schools, arts and other creative organisations and to provide improved opportunities for every schoolchild in 16 deprived areas. Our culture online initiative will help to open up arts and culture to new audiences. It aims to give schoolchildren and lifelong learners easy access to museums, galleries, arts organisations and libraries. Information is presented alongside explanatory materials to enrich the learning experience.

The National Endowment for Science, Technology and the Arts also actively contributes to the development of the creative industries. NESTA supports networking and business advice events for the new generation of cultural entrepreneurs in partnership with the Institute of Contemporary Arts and The Lighthouse in Scotland. It is helping to nurture the creative skills of pupils in a host of different areas, such as design and technology, animation, computer games, engineering, product design, drama online, music performance and fashion, to name but a few.

The contribution of the creative industries is quite astonishing. Clusters have sprung up throughout the United Kingdom, often around university towns, such as Sheffield, Edinburgh, Glasgow, Cardiff and Bristol. One example from Bristol clearly illustrates how fast these industries have developed. Aardman Animations produces "Wallace and Gromit" and recently produced

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its first full-length feature film, "Chicken Run", which was very successful. Aardman Animations started 10 years ago with about 15 people and now employs about 500. That is why the Government have taken steps to make people aware of the potential of the creative industries and to do what we can to assist them.

2.37 pm

Mr. John Greenway (Ryedale): I hope that I do not appear too uncharitable when I say that Conservative Members are a little surprised that the Government have chosen not to discuss tourism in a debate on one of the areas of responsibility of the Department for Culture, Media and Sport. I am equally surprised that, given the opportunity to debate the creative industries, no Liberal Democrat Members have bothered to grace us with their presence. We all understand why attendance is thin, and I will not detain hon. Members too long. However, one or two matters must be aired.

I suspected that the Government had called the debate to discuss the document "Culture and Creativity: The Next Ten Years", which was published on 20 March. I have read it twice, and it appears to be something of a wish list. However, its intentions and objectives are right, although we do not agree with all the recommendations.

Focusing my remarks on what the Minister said, I want to talk about two important areas. The first is the regulatory and business environment in which these important creative industries have to operate. The Minister made clear reference to that in her opening remarks. The business community, of which the creative industries are a part, has been swathed in red tape and suffered increased regulatory burdens during the past four years. Today the British Chambers of Commerce has issued a challenge for the election to the leaders of the three main parties on the £15 billion of extra regulatory burdens that have been placed on business. Creative businesses, just like others, are affected by those burdens.

I recommend the British Music Rights website to the Minister. The site includes a detailed review of the regulatory burdens affecting the music industry, in which music publishers, composers and songwriters tend to be small to medium-sized enterprises. Those businesses feel particularly aggrieved about the need to understand and comply with existing and new requirements on employment tax, national insurance and data protection rules. Various other taxes affect them, including withholding tax and taxation of intellectual property rights royalties, although, in fairness, they appreciate the current moves to simplify that matter. Many of those who design websites will be affected by IR35. That is one good example of the regulatory burden that the creative industries face.

Another large tome on the subject is the creative industries' mapping document. All Members of Parliament should examine it, because I found it fascinating to see the extent to which those industries have grown in the past few years. That augurs well for the future and highlights the importance of the design industry in the UK. I declare a past interest, in that I was once the director of a graphic design business. We know

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that fashion design is an important sector, and the design of goods generally is one of the main focuses of current arguments about parallel trading.

The regulation and business cost implications of any proposals to permit parallel trade worldwide must be considered. We understand and sympathise fully with the need to ensure that consumers are not ripped off. However, in the past two days the British Brands Group has written to me--I am not sure whether this letter has gone to all MPs--pointing out that, contrary to what the press said at the time, the recent and welcome price comparison study published by the Department of Trade and Industry does not make the case that changing trademark laws to allow worldwide parallel trade would reduce prices to consumers. It would shift profits from manufacturers and designers to traders and could make prospects for the UK textile industry, which is already in decline, considerably worse. I know that the Minister's constituency has a long-standing interest in that area.

The UK textile industry is increasingly a high-value, added-value industry and is dependent on creative design. Designers and manufacturers of high-quality products can ill afford additional cost burdens, and they can ill afford to lose their intellectual property rights. The Minister rightly said that those involve difficult concepts, because very often they appear to be intangible. However, we must protect those rights. This debate is a good opportunity for us to place those concerns on the record.

The second issue is skills. That, too, has copyright implications. Thanks to the British Music Rights website, which I commend to the Minister and to all hon. Members who take the trouble to read the Hansard report of this short debate, we know that many of Europe's young people know how to play software games, download music and surf the net. However, do they realise that they could be creators, songwriters or website designers, and use their leisure skills to obtain employment and income? It is vital for Europe to convert such talent into productivity and to equip the next generation with the skills to create content and to exploit it.

The key is to re-evaluate approaches to intellectual property policy, particularly to copyright. The culture that regards free content on the net as a legitimate consumer right cannot be allowed to continue. It might appear to be free at the point of consumption, but it cannot be free in the pirated sense. Everyone in the music industry welcomed the decision in the United States courts in the case of Napster. We have also seen the adoption of the European Parliament's amendments to the copyright directive, clarifying the restrictions on private copying. Copyright is important. It enables creators and users of intellectual property to support themselves and their businesses by their artistic work, and creative entrepreneurs to generate profits to reinvest in tomorrow's creators. Those were clear objectives of the Government's 10-year preview.

The Green Paper rightly emphasises the significant role that education and training play in nurturing and fostering creative talent. Many of the creative industries have identified and complained of a serious skills gap. Although we agree on the objective, it is a cause of grave concern that creative activities such as art, music and technical design have been marginalised by

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an over-prescriptive national curriculum. I shall not prey on your patience, Mr. Deputy Speaker, by outlining our alternative education policy. However, I believe that children should be exposed to the arts and to culture from an early age and that, as teenagers, they should have the opportunity to see to what extent a career in the creative industries might be right for them. Proposals for widening participation and access must focus on the understanding and appreciation not just of culture and the arts but--and I am not sure that the Green Paper addresses this--of the creative activities that underpin so much of the success of business and commerce: design, graphic design, new technology, advertising and publishing.

The Minister mentioned the culture online initiative. She knows that we have considerable concerns about that, and we look forward to discussing the issue again in the new Parliament--should we be the Government, the discussion would be relatively short. We have always recognised that the creative industries are supremely important. It is clear that in the century ahead they will assume ever greater importance in the domestic and global economies. The key role of government is to create the business, cultural and artistic environment in which creative industries can flourish; the Conservative party is committed to that.

2.48 pm

Janet Anderson : With the leave of the House, Mr. Deputy Speaker, I will reply to the debate.

I thank the hon. Member for Ryedale (Mr. Greenway) for his contribution. I too am surprised and disappointed that the Liberal Democrats have not seen fit to send a representative to the debate. Like the hon. Gentleman and me, the Government recognise how important the creative industries are. He referred to some of the regulatory and business burdens on those industries. He will, of course, know that the Government set up the better regulation taskforce to

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keep a close watch on how regulation was affecting the industries in question, which include the creative industries.

The hon. Gentleman referred to the views of British Music Rights. It was to keep in touch with the music industry that we set up the music industry forum, which meets regularly under my chairmanship and that of my right hon. Friend the Secretary of State. However, the hon. Gentleman is right to say that intellectual property is a key aspect of this issue. That is a matter for the Department of Trade and Industry and a group in the Department, under the chairmanship of my hon. Friend the Minister for Competition and Consumer Affairs, has been studying it. We shall continue to monitor the situation and to do what we can to reduce burdens on the relevant industries.

The Green Paper "Culture and Creativity: The Next Ten Years" looks forward to a future in which individual creative talent is, from childhood, given the support that it needs to flourish; in which artists and cultural institutions are freed from bureaucratic controls; and in which freedom to explore and enjoy creativity and culture is available to all. The Green Paper emphasises the importance of childhood encounters with the arts, both at home and, of course, at school. It includes pledges to give every school pupil the chance to work with creative professionals and organisations, by extending the creative partnership scheme so that it operates nationwide; to give every child in primary school who wants it the chance to learn to play a musical instrument--as a pianist I welcome that; and to bring every public library in the country online by the end of the year.

I welcome the hon. Gentleman's support for the Green Paper and I look forward to further discussions and debates with him when we return in a few weeks.

Question put and agreed to.

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