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Westminster Hall

Thursday 20 March 2008

[Mr. Mike Weir in the Chair]

Creative Industries

[Relevant documents: Fifth Report from the Culture, Media and Sport Committee, Session 2006-07, on New Media and the Creative Industries, HC 509, and the Government’s response, Cm 7186.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Michael Foster.]

2.30 pm

The Minister of State, Department for Culture, Media and Sport (Margaret Hodge): It is delightful to have this debate under your very good chairmanship, Mr. Weir. I am truly grateful to all hon. Members for listening and contributing to it.

The debate has been inspired by the Government’s recently published strategy on the creative industries: “Creative Britain—New Talents for the New Economy.” The creative industries are a key part of the UK economy. According to our latest figures, they contribute 7.3 per cent. of UK gross value added, and have been growing at 6 per cent., which is double that of the UK economy as a whole. They export £14.5 billion of goods and employ nearly 2 million people. They are a key part of our knowledge-based economy, on which our future prosperity as a nation depends. The Government’s definition of the sector, and our specific work with it, is relatively new, but extremely important and constantly evolving.

Labour’s first Secretary of State for Culture, Media and Sport, now Lord Smith of Finsbury, created the Creative Industries Task Force, which produced the definition of the creative industries and the initial mapping document, which we published in 1998 with an update in 2001, and which set out the relative strengths of the 13 industries. We have retained that initial definition as the basis of our engagement and work with the sector, but no one in 1998 could have predicted the phenomena that are now part of that sector—YouTube, MySpace, Facebook and so on. As convergence increases, the gaps between the creative industries are blurring. Film, music, publishing and games can all be accessed and enjoyed on a range of platforms. The convergence of technologies creates new opportunities and new markets. Instead of referring to individual industries, it has become valid to see relevance in an overall creative economy, which recognises the economic potential of creative expression, whatever its form.

We launched the creative economy programme in November 2005, when the Secretary of State for Work and Pensions was Secretary of State for Culture, Media and Sport. He saw it as the next stage in Government involvement in the creative sector. The first part of the programme was talking, investigating and consulting. We formed a number of working groups to look at the key drivers of the UK’s creative economy, and ran a number of policy discussions and sector summits to obtain the views of industry stakeholders and others.

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Those groups produced a series of documents, which became the basis of a further consultation exercise in the summer of 2006. Those reports were then published in November 2006 and provided the solid base for the next phase of the programme. Many of the ideas and recommendations in the document that we are debating have been translated into commitments. I pay a warm tribute to those who were part of the working groups, with special praise to those who chaired them.

In late 2006, we approached Will Hutton of the Work Foundation to write an economic underpinning analysis of the creative economy in the UK so that we had a good context in which to take the work forward. His thesis was discussed during a series of seminars covering the entire creative industries, which enabled the sectors to raise their concerns with us. His work was published in June 2007 in “Staying Ahead: the economic performance of the UK’s creative industries”. That set out the great performance of the UK’s creative sector and attempted to capture the reasons for that success. Its publication is the basis on which we have taken forward the programme of work.

There is now growing recognition of the vital significance of the creative industries to the UK economy. Most recently, the Prime Minister recognised them as being in the premier league of the economy, and the Chancellor referred to their contribution in his Budget speech. Industry reaction to the creative economy programme has been extremely positive, and there has been no shortage of enthusiastic endorsers expressing their willingness to engage and give their views.

The creative industries share many features of other sectors of the economy, so what they ask of the Government in some ways is the same as other sectors. I shall give two examples. They depend, as does every other sector, on macro-economic stability.

Joan Walley (Stoke-on-Trent, North) (Lab): Does my right hon. Friend agree that in the various stages that her Department has gone through to reach the current policy position on creative industries, the reference to ceramics and textiles on page 64 of the document “Unlocking Talent” means that the ceramics industry is at the core of her commitment to creative industries?

Margaret Hodge: My hon. Friend is a constant and terrific campaigner on behalf of her constituents, including those who represent the ceramics industry. Indeed, I had the privilege of making a visit there last summer. I accept that the industry plays an important role in the creative economy, and that we must do a lot of work with it to maintain its international competitiveness, particularly with cheaper production costs in China and the far east in general. We share that commitment, as she encourages us to do. We will do all we can to work together to ensure its continued significance in her regional economy and its contribution to the UK economy.

Mr. Mark Field (Cities of London and Westminster) (Con): Given the immensely cheaper labour and other costs in places such as China, how can we ensure that the creative industries, such as those in the Potteries, will be maintained? Is that just wishful thinking, or will there be some Government action?

Margaret Hodge: If the hon. Gentleman had read the report, he would know where the action is. In all sectors, we must analyse carefully where added value is and
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where the strengths are in the UK’s contribution to the industry. Some production may be outsourced, but the creativity is here, as is the marketing and selling of goods. In some instances, depending on the sector, the transport costs of producing goods in Asia and bringing them here may be a factor that we can use to our advantage to maintain some productive capacity. The better our innovation and new productive techniques, the more likely we are to maintain productive capacity in the UK economy. That is not easy, but it is doable.

How is the creative sector as a whole like other sectors? First, one obvious way is dependence on macro-economic stability and ensuring that the Government provide the conditions in which businesses can prosper. Even in the current turbulent times, our record is second to none. We have provided stability, growth, low inflation and increasing job opportunities in every year of this Administration. Given the way in which we strongly manage the macro-economy, we are well placed to withstand the challenges, especially those to the financial markets, from the credit crunch.

The second issue facing the creative sector which also faces other sectors is the opportunities and challenges from globalisation and the new markets that have suddenly opened to us. The challenges come from new competition. Yesterday, I was at a conference on the film industry where we considered inward and outward investment. Again, where is the added value from the UK film industry that we can capture and build on to ensure that we realise the opportunities from globalisation and meet the challenges of competitive costs elsewhere?

Some challenges are also specific to the creative industries. I shall give a couple of examples. Rapidly changing technology puts existing business models in the creative industries in greater stress than elsewhere. In particular, the protection of intellectual property is at the heart of what the creative industries are about, although they are dependent on copyright protection rather than patent protection, which is more easily and closely defined.

Mr. Don Foster (Bath) (LD): On that important point, the Minister will be aware that in response to a question asked by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), who is Chairman of the Select Committee on Culture, Media and Sport, she said that the Government continue to have an “open mind” on the issue of copyright. Despite having said that, she is well aware of the Gowers recommendation. Can she help us by being a little more forthright about her position and accepting once and for all that we need an extension of copyright with some additional protections?

Margaret Hodge: The hon. Gentleman refers to one copyright issue that is of particular importance to the music industry, which has done a lot of lobbying on extending copyright to 95 years, as it is in America. He will know that underpinning the Gowers recommendations not to extend copyright was Gowers’ research suggesting that doing so would not substantially increase the value to the individual from the exercise of their copyright. The hon. Gentleman will also know that research in Europe—the name of the man who did it escapes me—demonstrated that an extension of copyright was perhaps not the best way of adding value to the copyright of the individual. However—

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Mr. John Whittingdale (Maldon and East Chelmsford) (Con) rose—

Mr. Edward Vaizey (Wantage) (Con) rose—

Margaret Hodge: If I may just finish this point, I will then give way.

Mr. Foster: It is the “however”.

Margaret Hodge: That is why I thought that I had better finish my remarks.

However, we have listened to what the European Commissioner said. Clearly, we need to consider that matter. We are consulting to see how we should respond and what the Commission will do, because it is not 100 per cent. clear.

Mr. Whittingdale: Is the Minister aware of the analysis carried out by LECG into the economic model produced by the Gowers report? It shows that the model is based on a fundamental error and that the report’s conclusions on the economic benefit of extending the copyright term could not be made?

Margaret Hodge: I am aware of that analysis, and I know it was considered by the Culture, Media and Sport Committee, of which the hon. Gentleman is Chair. There is some dispute about the basis on which the various analyses have been undertaken. If we are to have further regulation, the research evidence on which we make policy must be properly underpinned and understood. I am aware of the report and we, too, are considering it.

We all accept that music in particular faces huge challenges from changes in technology. These days, about 90 per cent. of singles are downloaded, but in 2004 the figure was just 5 per cent. Research from the British Video Association puts the cost of piracy of audio-visual goods and the illegal downloading of those goods at around £460 million a year. There is a considerable challenge in relation to that.

Something that is specific to the creative industry sector is the emphasis on skills. The reason a creative industry prospers or does well is because of the creative and innovative skills of the individuals who are involved in the business. A disproportionate number of people with graduate skills are required by the industry. There are some interesting challenges in relation to higher education, such as the courses that are available and the extent to which the competences match the skills required by the industry. For example, 1,000 courses have the term “film” in the title and more than 350 have the word “television” in the title. Yet, we know from talking to industry colleagues that there are some questions about whether those courses provide the appropriate competences for people when they move into the industry.

Why does the OECD put us at the top of its list? It is because the UK is an exciting and innovative place for creative entrepreneurs to live and work in. The more I talk to people in the creative industry sector, the more I realise that the attractiveness of the UK is the key reason why they stay here. We must nurture that and hang onto it. We also have an open environment, in which we encourage innovation, and we have a talented, high-quality population. Businesses need those skills and we need to capture and use them.

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That, in summary, gives the context, and that context led to the development and production of the document, “Creative Britain—New Talents for the New Economy”, which I call the latest stage of the journey. The document has 26 specific commitments. They start with trying to ensure that children are given proper exposure to creative industries, and move on to ensuring that creative talent is used to its maximum potential, and to supporting the growth and development of creative businesses. Hon. Members will be pleased to hear that I will not mention every commitment, but I would like to draw their attention to what I think are the most important.

One of the most exciting commitments is the “Find Your Talent” programme. The best way to support the creative industries is to find and inspire the next generation of creative individuals. We are trying to build on the success of the programme for sport activities, which offers children two to five hours of sport a week. Around 80 per cent. of children now have two hours of sports activities a week, and we are using that as an example to ensure that they get experience in the cultural world. The programme is about experiencing and participating—going to a theatre as well as taking part in a piece of drama; listening to music as well as playing an instrument; visiting a gallery as well as creating a piece of visual art. This week we made an announcement about dance, and, from the investment that we are making nationally, we hope that dance will increase in importance in the life of schools and the curriculum.

Along with the other initiatives, we hope that the “Find Your Talent” programme will help young people to develop their creative talent, because it is that talent that is at the heart of the creative economy and will allow it to continue to thrive and prosper.

Mr. Don Foster: I share the view that that could be exciting. The various newspapers that have done an analysis in relation to it have pointed out that the funding proposed works out at £15 a pupil a year, or 29p a week. I did a further analysis, and at five hours a week, the funding works out at less than 6p an hour. Clearly, such figures are complete nonsense if the Minister is to deliver the sort of programmes to which she is referring. Can the she tell us where the newspapers have got their calculations wrong?

Margaret Hodge: The newspapers have got them wrong on the basis that they have assumed that those are the only resources available for that purpose. The hon. Gentleman will know that culture already forms an integral part of the experience of children in many schools—not in as ambitious a way as we would like, but it is an integral part of the school experience and the curriculum. He also knows that a number of programmes over recent years have encouraged that—for example, the investment of £320 million a year in the music programme. Friday before last, I was at a school in my constituency where I watched a whole class of nine-year-olds perform a concert for me. They had been learning their instruments once a week for about four months. It was terrific to see young, fairly tough lads playing their violins. It was great that they were moving in time to the music as well as playing together. That scheme captures all that is best about creativity. I thought that it was great, but to make a more serious point, there is an impact on standards generally, because
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involvement in music and other activities helps young people with team playing and helps them to think about shape and pattern, all of which are skills that they need to be successful learners.

Mr. Vaizey: I can see that the Minister is already benefiting from the Government’s dance programme. I think that the £320 million that she mentioned covers three years, but that is not why I am intervening. Can she clarify that Creative Partnerships will become the youth culture trust and, if that is correct, how the work of Creative Partnerships will change as it becomes the youth culture trust?

Margaret Hodge: We have to work our way through that issue. We certainly think that the youth culture trust ought to be a non-departmental public body, which takes responsibility for supporting the delivery of these programmes in schools, in the same way as the Youth Sport Trust is successfully doing for sport. The creative partnerships are very different. They have evolved in different ways throughout the country and some of them take a different approach in the work that they do, understanding creativity in a rather wider context, as a skill that they want to build into the curriculum. We do not want to lose that work, because it has been very valuable, particularly with disadvantaged children and children who may have been alienated from school. We just have to work it through. The creative partnerships budget is separate—it is £120 million or £130 million—but we want the youth culture trust to take responsibility for this. I accept the issue raised by the hon. Member for Wantage (Mr. Vaizey). We have not yet found the full answer to it.

Following on from the “Find Your Talent” programme—I am glad hon. Members on both sides of the Chamber think that it is a good idea—we have to ensure that career choices are got right. We talk about that in our paper. One initiative being developed is the “Creative Choices” website, which Creative & Cultural Skills, the sector skills council, is about to launch. We know from all the work that we have done that getting that career advice is imperative.

I have talked about ensuring that the skill sets of graduates match the needs of industries. We are hoping that the university of Brighton can do a piece of work for us to map the competences that come out of current degree provision and to find out whether we can work with our higher education institutions, the conservatoires and others to ensure that they are giving an appropriate and relevant offer that will enable individuals to exploit that learning and experience in the world of work.

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