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Lord Oakeshott of Seagrove Bay moved Amendment No. 79:
The Secretary of State shall by regulations ensure that payments made to any person under the Financial Assistance Scheme as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2006/1986) shall equal the amount that would be payable to that person if that person were entitled to receive benefits under the Pensions Protection Fund.”
On Question, amendment agreed to.
The Chairman of Committees (Lord Brabazon of Tara): Does the noble Lord, Lord Oakeshott, wish to move Amendment No. 80 formally?
Baroness Hollis of Heigham: It is not possible to accept Amendment No. 80 because a decision has already been made on a conflicting amendment.
Baroness Morgan of Drefelin: This might be an appropriate moment to resume the House. In doing so, I suggest that we resume the Committee no later than 8.30 pm.
Moved accordingly, and, on Question, Motion agreed to.
Business
Lord Davies of Oldham: My Lords, the next debate is somewhat crowded for business of only one hour. The rules of the House dictate that speakers should have only two minutes each. We can stretch that to three minutes, the Minister having agreed to forego two minutes. However, I must insist that three minutes is three minutes; the moment “three” appears on the clock, the Member speaking will have to sit down for us to be in order.
Economy: Creative Industries
7.29 pm
Baroness Bonham-Carter of Yarnbury asked Her Majesty’s Government what assessment they have made of the role and contribution of the creative industries to the economy and well-being of the United Kingdom.
The noble Baroness said: My Lords, I am extremely grateful that so many of your Lordships have turned up to take part in the debate. It makes the point that this is an interesting and important subject to which not enough time is given, not only tonight but in general. Noble Lords should not waste their precious minutes thanking me for the debate.
The creative industries are a central part of civic and community life, not an optional extra. They give people a place in which to exercise and enjoy their imagination. They define and bind communities, providing understanding of the world we inhabit and what makes us human. They spearhead regeneration, contribute to social cohesion and improve the quality of life, all of which enhances the well-being of the UK.
The creative industries are not a cultural sideshow. They are not trivial just because a lot of them relate to entertainment. They are a key economic driver; indeed, they are the fastest growing sector of the economy, growing at 5 per cent per annum and generating 7.3 per cent of the UK’s GDP. They are bigger than the financial services sector and provide jobs for around 2 million people. Recent technological advances—the internet, digitalisation and so on—are only increasing their potential. The UK has the third largest computer and video games market in the world, the third largest market for music sales and the economic benefit of the visual arts sector is estimated to be in the region of £1.5 billion per annum. In an era which has seen manufacturing jobs halved since 1997, the creative sector is the new economy. Real value nowadays lies in design, not manufacture.
I was recently in Sheffield, a case in point. The city’s economy was based on the industries of steel, cutlery and engineering. When these collapsed, Sheffield City Council was one of the first in the UK to turn to the cultural industries as an alternative source of employment creation and urban regeneration. There, it was discovered that putting money into culture became investment rather than subsidy. Jonathan Kestenbaum, chief executive of NESTA, has spotted this. The other day he said that,
- “as globalisation drives down the costs of manufacture, it is in the industries where creativity and tacit knowledge are at a premium that the value-add for UK plc lies”.
Despite this, creativity is not given the status it deserves.
It starts with education. Creativity needs to be nurtured from the beginning, yet creative skills are stifled in our schools by a system dominated by exams and league tables. Priority is given to what is measurable, not to open-ended exploration. With the rejection of the Tomlinson report, the national curriculum continues to undervalue vocational qualifications; I am obviously not talking about higher education here.
I was recently present at an interview with Jude Kelly, an exemplar of success in the creative industries, in which she made a very interesting point. In the past, the opportunity to read and write was not seen as a basic human entitlement. Nowadays, the opportunity to be creative is treated in this way. Her argument is that the nurturing, exercising and development of the imagination is as liberating as the ability to read and write. The Government’s Creative Partnerships scheme, which sends artists into schools to work with teachers and pupils, proves her point. It has been hugely successful. It helps teachers to teach more imaginatively, crucially across the whole curriculum, and to focus on developing creative skills that are fundamental to success in the 21st century; its 2006 Ofsted report was glowing. The Minister has said to me on many occasions that this scheme is safe, but further assurances are always welcome. The Government should readdress the balance and raise the profile of creativity within schools generally.
Another contribution the creative sector makes—it is a point of well-being—is in furthering people’s understanding of the communities they live in, the nation they inhabit and the world as a whole. Britain has historically recognised this. In 1753, the British Museum was created—the first national museum in the world. In the words of its present director, Neil MacGregor:
“It was a product of the Enlightenment—a conviction that knowledge and understanding were indispensable ingredients of civil society”.
Instead of dwelling on what makes us different, we should understand how we overlap.
Thanks to free admission to DCMS-sponsored museums and galleries, courtesy of the noble Lord, Lord Smith of Finsbury, capital investment due to lottery funding and the Renaissance in the Regions programme, many more people are able to benefit from this enlightenment, as well as the pleasures it offers. A visitor to the recently reopened Weston Park Museum in Sheffield wrote in the visitors’ book that,
- “the people responsible at the Museum have tried to be as inclusive as possible with all the different communities in Sheffield and the outcome is fantastic as no group feels excluded from visiting”.
An exhibition at Manchester Art Gallery, “Black Victorians”, inspired a young fashion designer whose resulting collection, also entitled “Black Victorians”, won an award at the recent London Fashion Week.
Across the country, our museums and galleries are contributing to regeneration and social cohesion. They are playing a role in the creative and cultural economy through employment, inspiration and the opportunities they give to learn and exercise the imagination. Yet core funding for our museums and galleries has not kept up with inflation, while costs have risen at a higher rate. The present grant formula does not include the extra wear and tear to the buildings caused by their success, through the ever increasing number of visitors. Why not? Tony Travers, who wrote a report published in December 2006, said:
“Without proper resources it is unlikely that the complex objectives now set for museums and galleries can be delivered”.
Yet they are such a success. The Minister reassured me the other day that the money already invested in Renaissance in the Regions was safe. But it is the funds that Renaissance has not yet received, and that are needed for the programme to be rolled out across the country as promised, that I am concerned about.
I recognise that the funding of these industries is a complex ecology, which must involve a mixed economy. But the contribution that the creative industries make to our quality of life in both various and specific ways is not sufficiently taken into account when the question of what they are literally worth is calculated. The DCMS struggles to get heard in the Government. Its budget is just 2 per cent of that of the Department of Health. Look how much money was wasted on Connecting for Health, the DoH’s IT programme. It was suggested in a recent Guardian report that the final bill will be £15 billion. Just a few million of that would so help the DCMS yet, instead, the Government have frozen the Arts Council’s budget for the next three years which, with inflation taken into account, means a real-terms cut in funding from now. On 6 March, Tony Blair said:
Yet only nine days later, Tessa Jowell announced a raid of £675 million more on the National Lottery good causes fund to pay for the increasing costs of the Olympics. All this is such short-sighted behaviour. As the Values and Vision manifesto of the cultural sector put it:
“In this 21st century, goods, services and industries driven by knowledge and creativity will define Britain’s competitive edge”.
A couple of weeks ago, Gordon Brown spoke these words:
“The legacy of any Government has got to be to take culture seriously, as it is at the heart of everything that being British is about. I see the huge range of British success: we are winning Oscars, Emmys. We've got great cultural centres including Brighton and now Gateshead ... We have an enormous amount of creative work that makes us the great creative centre in the world and we have got to back that”.
A decade of sustained funding under Labour has seen an explosion in creativity, for which the Government should be congratulated. So I suggest to the Prime Minister-designate that he fulfils his own words and, on 27 June or soon thereafter, makes the following his “independence of the Bank of England” moment: that his Government will commit to maintaining investment in the creative industries, beginning with an appropriate and sustained settlement in the current Comprehensive Spending Review—that not only will there be, in the words of his predecessor, no boom and bust, but no more fear of bust.
7.39 pm
Lord Smith of Finsbury: My Lords, I remind the House of my interests, among them my role as chairman-designate of the Advertising Standards Authority and as a non-executive director of Phonographic Performance Limited. I am particularly proud of having begun the work, when I was Secretary of State, that the Government have built on in establishing the importance of the creative industries and the creative sector of our economy, an increasingly important and growing part of the economy. I am also very pleased to note the excellent report of the Select Committee in another place on the creative industries, which was somewhat better than the Gowers report on intellectual property that also emerged recently.
In the brief time I have, I shall concentrate on where the Government can help. The creative sector is a success story for Britain, and the Government can and should help to sustain its growth and importance. There are five ways in which the Government can and should help. First, they can sustain a vibrant, active and creative artistic and cultural life in this country because the creative industries and the entrepreneurialism that leads to them spring out of a vibrant culture. That is why the Comprehensive Spending Review in relation to the arts is so important. I agree with the noble Baroness on that. Secondly, there is education; that is, making sure that the spirit of creativity is nurtured and developed in our children right the way through the educational process. Thirdly, there is access to affordable accommodation for young, start-up creative entrepreneurs who want to live and work in clusters in vibrant urban areas, often where rising property prices and rents are prohibitive. Fourthly, there is access to finance, which is vital in order to start up creative businesses. Fifthly, and perhaps most importantly, there is copyright protection; that is, making sure that intellectual property value can be properly protected. For example, we need to look at giving music performers equality in copyright terms with everyone else concerned with the production of music. More than that, we need the Government to be very clear about the importance of intellectual property. Making sure that we protect it properly is the way that we will ensure a continued flow of creative endeavour.
These are ways that the Government can help, and I urge them to sustain this success story by doing so.
7.42 pm
Baroness Buscombe: My Lords, I declare an interest in this welcome debate: I have been chief executive of the Advertising Association since January 2007. I want to passionately, positively and proactively assert the virtues of the advertising industry, a creative industry I know well from past and current experience. I entirely agree with the noble Lord, Lord Smith of Finsbury, particularly in relation to intellectual property and the protection of copyright, but we ought to be championing other aspects of creative industry, and I shall concentrate on advertising.
It is my strong belief that the creative industries are a huge and growing contributor to the economy by lifting horizons, enriching and improving the quality of life of British people and hugely benefiting society. The creative sectors are central to the economy. It is no accident that the creative industries are growing at twice the rate of the rest of the economy.
Advertising is the third largest creative industry, and advertising expenditure in the UK passed £19 billion in 2006, according to figures to be published in June. The UK is the largest advertising market in Europe; indeed, Britain’s advertising industry received more awards than that of any other nation in 2006. It is important to recognise the interdependence of the advertising industry and the rest of the economy. Advertising has, of course, a substantial impact on other creative sectors in the UK. Its supply chain includes activities such as graphic design, audio-visual production and interactive media. Given that the creative industries now represent 8 per cent of the UK economy, which means that they make a bigger contribution to the nation’s GDP than the construction industry, the key strategic importance of the ad industry to the British economy is undeniable.
Advertising is not only about generating wealth and selling products but also has intrinsic creative significance. It promotes innovation and increases and facilitates consumer choice. Indeed, advertising allows consumers to see the variety of choices available and to understand the differences between products. It drives competition, which drives down prices. There is a direct correlation between ad spend and economic growth, which leads to job creation. Public policy advertising campaigns raise awareness, inspire action and save lives. Indeed the Central Office of Information is consistently one of the top three biggest advertisers in the UK. We all remember campaigns on road safety, drink-driving, drugs and AIDS. They worked and informed because advertising works and informs. Advertising is used to showcase corporate green credentials, sustainable development and corporate social responsibility.
Advertising, in my opinion more than any other industry, champions creative values and inspirational and innovative ideas. It can be compared and paired with other aesthetic arts such as music recording, publishing, and film and video production. It also funds culture and groundbreaking events. As Michael Payne, who was the International Olympic Committee’s marketing director, said, there would be no Olympic Games without advertising.
In recent correspondence on this issue, Martin Sorrell told me:
“For the future of advertising, globalisation, over-capacity and the shortage of skilled human capital, new technologies such as the web, internal communications, concentrating distribution and corporate social responsibility are all driving growth in the advertising and marketing services industry, not just in the UK but throughout the world. As a result, without exception, every company faces the challenge of geographical growth and capitalising on the changes that new technologies bring. Differentiation is the key and the advertising and marketing services industry provides both tangible and intangible differentiation to all companies’ goods and services”.
7.46 pm
Lord Patel: My Lords, I am sure that many noble Lords were surprised to see my name appear on the list of speakers in a debate on the creative industries. In previous debates relating to science and medicine and the contribution they make to economic growth, I have spoken about the need for funding at higher education level if we are to see growth in those industries, and that applies equally to the creative industries. I declare an interest as chancellor of the University of Dundee. The head of the strong school of art and design at my university tells me that it has difficulties getting undergraduates and, particularly, postgraduates trained to make them responsible for developing industries and taking sustainable creative design, for instance, to market.
I found interesting a recent paper by Stuart Macdonald of Gray’s School of Art at Robert Gordon University in Aberdeen that used design as an example. The paper states that design is the largest segment of the creative industries and represents 30 per cent of the sector and that Design Council research has found that companies that invest in design see that investment more than double in value. However, despite their growth, in the UK creative industries related to design remain a cottage industry dominated by small businesses that are also very young. The sector is unable to take up the new opportunities offered by sustainable design. Design graduates need business and financial planning skills, which they are not taught adequately because of the lack of resources. Postgraduate courses are needed, and Cox’s report recommended them in order to create design-literate managers and business-literate designers. It is important that the Government recognise that more funding is required at higher education levels and at universities if we are to see greater growth in the creative industries so that they can make a greater contribution to economic growth.
7.49 pm
Baroness Morris of Yardley: My Lords, I declare an interest as a director of the Performing Right Society. All noble Lords who have chosen to speak today understand the size of this sector and the growth we have seen in it in the past decade. If we combine the creative revolution with the technological revolution, the impact on our industry, economy and lives will be as great, if not greater, than the industrial revolution that occurred centuries ago.
There are two aspects to that. First, new industries such as games are being created, and traditional creative industries, such as music and film, are having to redo business completely. We often forget that the creative industry allows personalisation and people to be individuals through design at a time when we talk about the global economy, mass production, mass communication and everything being the same. If we understand the nature of the creative revolution and how drastically it is changing our world, we will begin to take advantage of it.
The second thing that is different about this revolution is that it is being driven by the consumer; it is being driven by individuals, particularly those under 21. It has happened in a very short time. All the changes we are talking about have come about within a decade. There is an argument that the market, consumers and those who can respond can drive the creative economy and the changes. There is almost an argument that we do not need government interference. The rapid change we have seen has done very well and contributed to the economy without too much interference by government. Like my noble friend Lord Smith, I think that the Government have a role, although so far they have been slow to respond and to realise what that role will be. That is understandable. When I think of ways to describe the creative industry, I think of people who work quickly, who break the rules, who look for an alternative way of doing things, who take risks and, when things go wrong, stand up and start again, and who are non-conformist rather than conformist. That is not a description of the way in which government works. It is bringing together two completely different cultures. That is why the Government sometimes take time to respond.
I congratulate the Government on the work that they have done in recent years, but they need to provide a legal framework in which this explosion of activity can take place. I subscribe to the view that we have to protect the creator as much as we provide for the consumer. Creators are the leadership of this industry; without them it does not exist. We need to protect the creator in the same way as we nurture leadership in any other sector of the economy or area of life.
7.52 pm
Lord Dearing: My Lords, 10 years ago I chaired a committee which recommended the creation of an Arts and Humanities Research Council with increased funding, especially for the arts, which had been much neglected. That came to pass, and I should like to concentrate my remarks on its contribution to the creative economy, with future funding in mind.
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