Conclusions and recommendations
Olympic and Paralympic legacy
1. We
welcome the efforts of UKTI to promote the UK creative industries
overseas and believe international trade missions should contain
wide cultural representation. The greatest effort should continue
to be directed towards ensuring that UK creative talent and businesses
are assiduously promoted not only by UKTI but in all work to promote
British business overseas. (Paragraph 14)
2. The excessive constraints
imposed by the Olympic No Marketing Rights Protocol and the inadequacy
of the Supplier Recognition Scheme mean that the benefits from
the participation of UK businesses in the 2012 Olympic and Paralympic
Games are not being properly realised. This deeply disappointing
state of affairs endangers the economic legacy that British companies
in the creative and allied sectors have a legitimate right to
benefit from. It reflects badly on the wider Olympic movement
that, in other contexts, is all too ready to celebrate individual
and collective achievement. (Paragraph 17)
3. We recommend that
the Government review, as a matter of urgency, whether the supplier
recognition scheme can be improved to meet the objective of allowing
British firms to promote their contributions to the 2012 Olympics
and Paralympics. This is all the more pressing as firms throughout
the UK seek to gain contracts for the next games in Rio de Janeiro.
(Paragraph 18)
Copyright protection
4. The
relationship between the strength of Britain's creative industries
and robust copyright laws is acknowledged by the Open Rights Group
which aims radically to liberalise the use and sharing of copyrighted
content. While we share the Open Rights Group's attachment to
freedom of expression via the internet, we firmly repudiate their
laissez-faire attitudes towards copyright infringement. (Paragraph
19)
5. We encourage businesses
to use the current law to bring claims wherever it is feasible
for them to do so. There nonetheless remains a systemic failure
to enforce the existing laws effectively against rife online piracy.
(Paragraph 28)
6. We strongly condemn
the failure of Google, notable among technology companies, to
provide an adequate response to creative industry requests to
prevent its search engine directing consumers to copyright-infringing
websites. We are unimpressed by their evident reluctance to block
infringing websites on the flimsy grounds that some operate under
the cover of hosting some legal content. The continuing promotion
by search engines of illegal content on the internet is unacceptable.
So far, their attempts to remedy this have been derisorily ineffective.
(Paragraph 31)
7. We do not believe
it to be beyond the wit of the engineers employed by Google and
others to demote and, ideally, remove copyright infringing material
from search engine results. Google co-operates with law enforcement
agencies to block child pornographic content from search results
and it has provided no coherent, responsible answer as to why
it cannot do the same for sites which blatantly, and illegally,
offer pirated content. (Paragraph 32)
8. There should be
within Government a powerful champion of IP with a duty to protect
and promote the interests of UK IP, to co-ordinate enforcement
of IP rights in the UK and overseas and to educate consumers on
the value of IP and the importance of respecting IP rights. Logically
the IPO should take on this role. Yet too often it is seen as
wishing to dilute copyright rather than defend and enforce it.
(Paragraph 34)
9. We recommend that
the Intellectual Property Office's annual reports include an assessment
of the degree of online copyright infringement and the extent
to which identified search engines and other internet services
facilitate this. We further recommend that the Government consider
how it might incentivise technology companies to hinder access
via the internet to copyright infringing material. (Paragraph
35)
10. We recommend that
the maximum penalty for serious online copyright theft be extended
to ten years' imprisonment. Criminal offences in the online world
should attract the same penalties as those provided for the physical
world by the Copyright, etc. and Trade Marks (Offences and Enforcement)
Act 2002. (Paragraph 37)
Discouraging piracy
11. While
the practical implementation of the Digital Economy Act continues
to be delayed, millions of pounds are being lost by the creative
industries with serious consequences for the wider economy. We
urge the Government to resolve the current impasse on implementing
the Online Copyright Infringement Code without further delay,
and in response to this Report to set out a clear timetable for
doing so. (Paragraph 41)
12. We recommend that
a copyright infringement notification system envisaged by the
Digital Economy Act be implemented with far greater speed than
the Government currently plans. By targeting information letters
to the worst infringers, early implementation will, we believe,
serve an important educative purpose which could percolate more
widely. (Paragraph 46)
13. We are encouraged
by the progress that has been made towards instituting a voluntary
system of warning letters following discussions involving internet
service providers and rights owners. If this can be achieved by
mutual cooperation rather than legislation, it will be a major
step forward. However, should voluntary initiatives such as this
prove unsuccessful then the Government should ensure that the
equivalent measures in the Digital Economy Act are promptly put
into effect. (Paragraph 47)
14. Following all
the evidence we have received, we think Hargreaves is wrong in
the benefits his report claims for his recommended changes to
UK copyright law. We regret that the Hargreaves report adopts
a significantly low standard in relation to the need for objective
evidence in determining copyright policy. We do not consider Professor
Hargreaves has adequately assessed the dangers of putting the
established system of copyright at risk for no obvious benefit.
We are deeply concerned that there is an underlying agenda driven
at least partly by technology companies (Google foremost among
them) which, if pursued uncritically, could cause irreversible
damage to the creative sector on which the United Kingdom's future
prosperity will significantly depend. (Paragraph 55)
15. The Copyright
Hub is a welcome development which should prompt the Government
to redouble its efforts at working with industry to develop overseas
markets for British IP content. (Paragraph 58)
16. We believe participation
in a copyright exchange or membership of a collecting society
should both be voluntary, though the former will offer rights
holders the advantage of visibility and the latter can provide
an administratively convenient way of obtaining royalties. (Paragraph
60)
Exemptions from copyright law
17. We
are not persuaded that the introduction of new copyright exceptions
will bring the benefits claimed and believe that generally the
existing law works well. We recommend that the introduction or
amendment of copyright exceptions should be contemplated only
following detailed impact assessments and after proper parliamentary
scrutiny on an individual basis. (Paragraph 68)
18. We are not convinced
by Hargreaves' implication that a facility for private copying
is factored into the purchase either of music or devices that
store, play or copy it. (Paragraph 73)
19. Legal subscription-based
cloud services are already emerging from business-to-business
deals in which rights holders are properly rewarded. We consider
this to be a welcome development that should be encouraged and
we would not want it compromised by a hastily drawn private copying
exception that the Government might subsequently regret. (Paragraph
76)
20. We believe that
there needs to be far more detailed consideration before any private
copying exception is introduced. In particular, we recommend
that any changes to copyright law should take full account of
the material differences between the audiovisual and music sectors
and indeed current and likely future technological changes. We
do not believe a case has been made for applying a private copying
exception to audiovisual content and it should therefore be excluded.
(Paragraph 82)
Funding and finance
21. Increasing
use is being made of personal data to target online advertising
better. While concerns around this have prompted reviews of data
protection legislation, we do not think the targeting of appropriate
advertisingessential to so many business models represents
the greatest threat to privacy. (Paragraph 85)
22. We are disappointed
by the blinkered and unimaginative approach of lending institutions.
Investors need to talk to and engage with the creative industries
which represent no higher risk than many accepted by the banks
and which may produce considerable rewards. (Paragraph 87)
23. The Government
should vigorously promote both the Enterprise Investment Scheme
and the Seed Enterprise Investment Scheme. Given their particular
importance to creative industries it is essential that their availability,
and legitimacy, be communicated to the widest possible range of
potential investors. (Paragraph 91)
24. We believe that
crowd-funding has significant potential, not least in that it
might allow small creative start-up companies to retain control
of their IP. The Government needs to examine whether existing
financial regulation is hampering the growth of crowd-funding
and whether more guidance can be made available to potential investors.
(Paragraph 93)
25. We recommend that
the Government open and promote a clear channel of advice to creative
individuals interested in setting up businessa creative
business 'hub'. We anticipate this will include a key supporting
role for public libraries as long-established knowledge centres.
(Paragraph 95)
Tax régime
26. We
strongly support the film tax credit. The benefits it has brought
in terms of film production have spread across the country, from
Glasgow to Chatham, from London to Liverpool. (Paragraph 100)
27. Among the initiatives
we heard about during our visit to Paramount Pictures is a proposal
to include in the opening credits of films some information about
the economic benefits and job opportunities a given picture created.
This is likely to be an effective way of illustrating the economic
value of film productions. We endorse this approach and encourage
its wide adoption. Furthermore, we do not doubt that the more
people see how many livelihoods depend on receiving a fair reward
for intellectual property, the more copyright infringement will
become socially unacceptable as well as being illegal. (Paragraph
101)
28. We deeply regret
the European Commission's decision to investigate the validity
of the proposed tax relief for video games. Introduction of the
credit is long overdue, following its postponement by the Government
after the election in 2010. There is clear evidence that such
a tax credit would be of great benefit and delays in introducing
it are greatly harmful to the industry. We urge the Government
to make this point forcefully in its efforts to ensure the video
games tax relief gets the go-ahead from the European Commission.
(Paragraph 104)
29. We recommend that
the Government closely monitor the operation of the new tax reliefs
for animation, high-end television and video games. Consideration
should be given to applying a lower core expenditure cost to documentaries
if it becomes evident, as we believe likely, that they will fail
to qualify for relief on a significant scale. (Paragraph 106)
30. The income tax
system needs to better recognise the freelance nature of employment
in much of the creative sector, and the Government should demonstrate
how it will effectively acknowledge and respond to this. (Paragraph
109)
Education, skills and training
31. The
broader arts curriculum has been seriously hit by the Government's
approach to performance measurement which we deeply regret. The
danger remains that schools will in practice see a continued diminution
in the provision of dance, drama and other creative subjects.
We therefore recommend that arts are added to the five subject
areas currently on which the EBacc assessment is based. (Paragraph
114)
32. We welcome a greater
focus on computing in schools, not least because, in the digital
age, a practical ability to program computers amounts to basic
literacy. It is vital that enough teachers are trained to impart
to their students a solid grounding in IT and programming skills.
(Paragraph 115)
33. Our inquiry has
found clear evidence that the Government's focus on subjects like
science, technology, engineering and mathematics (STEM) is already
having a pronounced impact on the arts and other creative subjects.
We believe that the crucial role of arts subjects in a modern
education should be recognised and that art subjects should be
added to the STEM subjects, changing STEM to STEAM. (Paragraph
117)
34. As it continues
to introduce further changes to the national curriculum, the Government
must ensure that students up to key stage 3 receive a solid grounding
in the arts and design. We believe that students aged 14-16 (key
stage 4) must be able to access the widest possible programme
of creative subjects to prepare them to play a full part in the
knowledge economy. (Paragraph 118)
35. We recommend that
school children be introduced to the ideas of intellectual property
and the nature of business to gain a better understanding of the
importance of creativity both to the learning process and to wider
society and the economy. (Paragraph 121)
36. When it comes
to strengthening and nurturing apprenticeships, the Government
needs to do much more than exhort and encourage industry to participate.
Government has to communicate clearly and widely about the opportunities
that exist, giving examples of good practice. The case for tax
reliefs for companiesparticularly in the creative sectorshould
be examined more closely. (Paragraph 124)
37. Overseas students
make a vital contribution to the growth of the UK's creative economy
and there are signs that visa and employment restrictions sometimes
fail in practice to recognise this. We urge the Government to
take more account of the special situation of the creative individuals,
many of them uniquely talented, who wish to study and work in
the United Kingdom. (Paragraph 126)
Creative hubs
38. While
allowing for local concerns, the planning system should adequately
recognise the significance of creative industry infrastructure.
A useful initial step would be to revisit the advice to local
authorities given in the National Planning Policy Framework. (Paragraph
130)
Creative Industries Council
39. We
recommend that meetings of the Creative Industries Council should
always be attended by a Minister with direct policy responsibility
for intellectual property, given the central importance of this
to the creative industries. In practice this will mean either
the Minister for Intellectual Property or the Secretary of State
for Business, Innovation and Skills. (Paragraph 136)
40. We recommend that
a Treasury Minister and a Minister from the Department for Education
attend at least one meeting of the Creative Industries Council
annually. Ministers and officials from other Departments should
attend as determined by agenda items. (Paragraph 137)
41. The Creative Industries
Council should publish an annual report which includes an update
on the implementation of recommendations made by itself and its
sub-groups. Such an annual report should be laid before Parliament.
(Paragraph 138)
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