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Music and the Economy

Volume 536: debated on Tuesday 22 November 2011

I thank my hon. Friend the Minister and the many other hon. Members present for attending this very important debate. Unfortunately, we have only half an hour, so I shall have to crack on. I want to talk about the UK music industry and its importance to the British economy. The music industry mainly comprises small and medium-sized enterprises, micro-businesses and creative individuals; 92% of music businesses employ fewer than 10 people. In terms of the economy, it is invaluable. I want to focus on the positives that are coming out of the UK music industry, rather than the headline-grabbing negatives that we regularly hear about.

The UK music industry is a £3.9 billion business, employing more than 130,000 people. Additionally, UK artists are responsible for 12% of global album sales. That is a phenomenal figure. The music industry as a sector continues to outperform the rest of the economy, with the UK continuing to be one of only three countries that export more music than they import. The UK is the largest producer of recorded music in Europe and the second largest in the world. In 2007, 2008 and 2009, the top-selling global artist album was by a British act—Amy Winehouse, Coldplay and Susan Boyle respectively. In March this year, UK artists occupied the top three spots in the US album chart for the first time in 25 years. Again, that is a fantastic achievement for our industry.

As a country, we are also centre stage for live music, playing host to some of the world’s greatest music festivals. Many of us will have been to those festivals, which include Glastonbury, the V festival, Reading and Leeds. Hon. Members will no doubt have heard of the Selby fake festival. That enormous event attracts thousands of people to watch some of the best cover bands. This country is also home to the most successful ticketed venue in the world—the O2 arena in London. It is therefore vital that we make the most of the next big opportunity for music tourism—the 2012 Olympics.

I congratulate the hon. Gentleman on securing this very important debate. One of the most important factors in ensuring that bands progress is live music in pubs and clubs, where they can develop. Does the hon. Gentleman agree that more must be done to ensure that we have more live music, not less?

The hon. Gentleman is right. Live music is incredibly important to pubs as venues, not just for the pub’s business, but for the artist. It is incredibly important that young artists—people starting out—get an opportunity to play in pubs as venues. I shall talk about that later.

I am grateful to my hon. Friend for taking an early intervention. It is right that he concentrates on the great successes of the UK music industry, and I congratulate him on securing this very important debate. May I ask for his agreement on a couple of points? First, will he join me in paying tribute to Feargal Sharkey, who recently retired as the head of UK Music, and in welcoming Andy Heath of Beggars Banquet, one of our greatest independent labels, who is taking over that role? The debate seems an appropriate juncture at which to do that. Secondly, will my hon. Friend join me in expressing some fear about the success of the UK music industry being perhaps undermined, by the proposals in the Hargreaves report on format shifting? There is a great deal of support for format shifting for private use, but as the UK music industry moves into global leadership with cloud services, one would not wish—

I agree with my hon. Friend the Member for Corby (Louise Mensch). The Government broadly welcome the Hargreaves report—the Minister will no doubt talk about it—but in relation to cloud services, we must be mindful of anything that has an impact on growth. My hon. Friend is absolutely right about that. She also refers to the contribution that Feargal Sharkey has made, to UK Music in particular and to the industry as a whole. It is rare to switch the telly on and not hear one of his pieces of music being played in an advertisement. I certainly wish him well in whatever he does next as a venture. He has done a sterling job with UK Music in the past three and a half years. However, we can all agree that, with Andy Heath involved, UK Music is in very good hands.

Does the hon. Gentleman agree that one of the great achievements of UK Music under Feargal’s stewardship has been bringing diverse voices together in one organisation that has the ear of Government, Opposition parties and the public? That is a model that I suggest the rest of the creative industries could follow, because they have not always spoken with one voice as effectively as, for example, the CBI and other business organisations, although they are just as important.

Yes. The right hon. Gentleman is right about having someone such as Feargal Sharkey involved. He is a unique character because he brings experience of having done the job previously and he has enormous respect not only in the industry, but in both Houses and across—

I apologise; I know that the hon. Gentleman wants to make progress. May I add my own tribute to Feargal Sharkey? He has done an enormous service to music in this country. On the issue of live music, does the hon. Gentleman share my view that when on Friday I seek to steer my noble Friend Lord Clement-Jones’s Live Music Bill through the House of Commons, it would be a disgrace if any member of any party tried to object, preventing the Bill from making progress?

I certainly share that view and would support the right hon. Gentleman in that move. It is very important that the Bill is not talked out. The Minister might refer to that as well. I need to move on now, because one or two other hon. Members want to make a contribution.

It is vital that we make the most of the Olympics. Obviously, that is a sporting event, but we need to make the most of the opportunity to ensure that Britain continues to be, in the words of Danny Boyle, the film director, “a beacon of music.” UK Music’s report, “Destination: Music”, highlights the impact that festivals, which I have referred to, and other large-scale music events have on tourism, with such events contributing £864 million of gross value added to the national economy and the equivalent of 19,500 full-time jobs. Although the Olympics are not a music event, the opening ceremony offers us a huge opportunity to showcase our talent across the world.

In this difficult economic climate, it is refreshing to hear that businesses based on manufacturing the intangibles of intellectual property are the cornerstone of economic growth and, as things stand, one of the only parts of our economy that is growing. That is yet more evidence of how this diverse and uplifting industry can help our economy and must be allowed and, indeed, encouraged to do so.

I congratulate my hon. Friend on securing the debate. Does he agree that protecting intellectual property is very important for young and emerging acts as well? I am thinking particularly of young performers such as Zorzilla, Magnets and Daniel Addison in Folkestone in my constituency. They are writers and performers and need to know that their investment in their future is secure.

It is crucial that there is as much support as possible for those people, certainly when they are starting out. My hon. Friend is absolutely right.

I am pleased that the Conservative-led coalition has recognised the importance of the creative industries, specifically highlighting the industry in “The Plan for Growth.” I welcome the plans to remove live music in venues with audiences under 5,000 from the Licensing Act 2003. That policy has been detrimental to the music industry for too long. The change will enable pubs, which we have referred to, to host live music without navigating the red tape and regulation currently in place. The change is supported by the British Beer and Pub Association on behalf of its members. It will encourage musicians to perform in pubs as their venue of choice for small-scale events.

The creation of the Creative Industries Council has been well received by the industry and by UK Music in particular, and plans to reduce digital copyright infringement and further develop the digital market are also steps in the right direction. However, more can and should be done. We need to ensure there is proper access to finance so that more artists can get their careers off the ground. As I mentioned earlier, this is very much an industry of small and medium-sized enterprises, so we need to ensure that musical SMEs can find the finance to invest in artists.

I, too, pay tribute to Feargal. On finance, has the hon. Gentleman, like me, heard about the problems with the enterprise finance guarantee scheme? Will he press the Government to address those issues?

The hon. Lady is absolutely right: the industry seems to be excluded from the enterprise finance guarantee scheme, and I hope the Minister will comment on that. However, I am looking forward to hearing the Chancellor’s autumn statement; I hope there will be something in it for this important industry.

I should say at this stage that it is not all doom and gloom for the music industry. I was just on the phone to my son, who is in a teenage band that has been together for four years. I asked him how the band was going, and he told me it had secured a grant from the Keyfund scheme, which is run by North Yorkshire county council—a fine Conservative council. The band has managed to raise a few hundred pounds for a recording session, and it is about to secure some more money—in the thousands of pounds—to record a video, so there is money out there. However, the hon. Lady makes a good point.

Will my hon. Friend give us the name of his son’s band? It should be on the record so that we can look out for it in the years ahead.

At the risk of my son never speaking to me again because of the embarrassment that I have caused him as a teenage boy, the band is Summer City, and it is rather good. My son is Ben Adams, and there are three Bens in the band. If Andy Heath is listening, it has not yet been signed, but he can check it out. When it has made the recording it just got the money for, I will make sure that Mr Heath and the industry get a copy.

We must ensure that finance is in place and that all possible measures are taken in this climate to help the business. We must also ensure that intellectual property is properly protected; copyright law must be made relevant to the world we live in. By that, I mean it is time we caught up with our European counterparts and recognised that private copying from CD to iPod, for example, should be made lawful. As things stand, there is a grey area between what is allowed under copyright exceptions and the reasonable behaviour and expectations of most people.

On this matter, I urge my ministerial colleague to consider the effects that changes to format shifting may have on a larger scale. It is right that personal format shifting becomes an exception, but if the terms are drafted too widely, we could see an adverse effect on future innovation and potential revenue, which would be very damaging. Cloud services, for example, are an area where, if we get the balance right, music will play an even greater role in the UK’s future economic success. If we get it wrong, however, those who manufacture and create valuable intellectual properly could be undercut, which would be disastrous for the industry and those businesses.

Order. Two Members are standing. The debate finishes at 2 pm. Obviously, there must be time for the Minister to respond.

It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing the debate. How appropriate it is that we are having a debate on UK music and the economy on St Cecilia’s day, given that she is the patron saint of music. There is, dare I say it, a member of another distinguished band—MP4—here today, and we pay tribute to its members.

My hon. Friend strongly outlined how important music is to the economy, creating more than £5 billion. As he said, more than £1 billion is also generated by live events. In that respect, I should plug an excellent festival in my constituency, which is called Latitude. My right hon. Friend the Member for Bath (Mr Foster) spoke there earlier this year.

There is a side aspect to the economic issues involved here, which is about not only music or tourism, but some of the construction work involved in creating arenas. Latitude has just committed to a 15-year contract and is now investing in its site and in other aspects of the festival. That is important for local people. It also makes the area a great place to live.

There is also the investment undertaken by Arts Council England in UK music. Although it perhaps does not invest in popular music—the Professor Greens and the like—it does invest in things such as the Aldeburgh festival, at Snape Maltings, which has made that an attractive place to live in Suffolk Coastal.

I therefore want to make a call to councils. I understand the strong economic pressures they are under, but they should think about how they use some of their arts funding and how they invest in areas. Thirty or 40 years ago, Basingstoke and Deane borough council, for example, invested in ensuring that it had a concert hall so that it would attract companies to the area. That meant that it was a nice place to be and that people did not always need to travel elsewhere to get their cultural entertainment.

I, too, support the suggestion that we should deregulate entertainment in pubs and similar venues. My council has asked me to lobby against the changes, and I have said no, because I think the Government are making the right move. I would like to go even further and try to get rid of temporary event notices for unamplified music of any kind, because it is a shame when things go slightly wrong and the brass band can no longer play at the bandstand in a concert that was supposed to happen. I am delighted that the Live Music Bill, which my right hon. Friend the Member for Bath will take through the House, deals with that.

I pay tribute to the Government for their support for bodies such as Chetham’s school of music and the Yehudi Menuhin school, which stresses the excellence of such provision. There is also the wider point that children at every single school are being encouraged to play a musical instrument.

The 12 notes on a keyboard can give rise to extraordinary emotions. Six strings on a guitar, four strings on a cello and just three valves on a trumpet can really touch the heartstrings of what makes people special. I think it was Tolstoy—that master of words—who said:

“Music is the shorthand of emotion.”

That is absolutely right. We need to ensure that UK music is celebrated and supported so that it will contribute to our economic growth.

Time is short, so I will keep my remarks brief. The music industry and the entertainment business are not called that for no reason; they are called that because they are worth £5 billion to the economy, with £1.3 billion coming specifically from exports, and they employ 130,000 people. However, I want to look specifically at the impact on the north-west.

Coming from Liverpool, I like to see the city as the epicentre of creativity and the hub of the music industry. Whether we are talking about Gerry and the Pacemakers, The Real Thing, Orchestral Manoeuvres in the Dark, Echo and The Bunnymen, The Lightning Seeds, The La’s, The Zutons or The Coral, Liverpool is a creative hub.

I want to look at the direct and indirect consequences of music and the music industry. Yes, music has financial implications, but it is also an emotional outlet for a younger generation and a way to let their creativity out. It can provide jobs that people might not otherwise have. People can express and stretch themselves, and they can explain their life and their whole meaning.

Obviously, I could not talk about Liverpool as a creative hub without mentioning The Beatles and what they are still worth to the city. The Beatles Story museum attracts 600,000 people every year. It is claimed that people going there over recent years have brought £20 million to Liverpool and Merseyside per year—that is just because of The Beatles.

UK Music research found that the north-west attracts 965,000 music tourism visitors per year and accounts for 12% of all such visits to the UK. It is the second biggest such destination outside London. In addition, it is estimated that music tourists in the north-west spend at least £132 million a year, which benefits the north-west economy by £56 million a year in gross value added. That also sustains the equivalent of 1,400 full-time jobs. The music industry is vital for us and something we particularly excel in. It links to the film industry, adverts, the gaming industry, TV and radio. We also have the brand-new MediaCity in Salford.

My point to the Minister is that we need to protect the industry and the creatives. We need to protect music as a financial and creative industry. We must support it to help it grow, and we must sustain it as much as possible. We must also link in the new MediaCity in Salford as much as we can, so that we get as much benefit from it as we can.

It is a delight to appear under your chairmanship once again, Mrs Brooke. I congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing this important debate. The fact that so many hon. Members have attended, intervened and made speeches shows that there is large-scale recognition throughout the House of the success of the music industry, and support for it.

I wish Ben Adams the best of luck in his music career. I shall look out for Summer City, which has a ring to it. I can just hear the late Saturday night programme announcer saying, “We’ve got Ben Adams from Summer City coming on next,” and people will stay through the advert break to hear what he says.

I congratulate my hon. Friends the Members for Suffolk Coastal (Dr Coffey) and for Wirral West (Esther McVey) on their important contributions. Obviously, I go regularly to the Aldeburgh festival, which is probably one of the world’s leading classical music festivals. When my hon. Friend the Member for Wirral West recalled The Beatles, that made me recall a recent visit to Abbey Road studios, which I think still has the largest recording studio in the world. Hon. Members may have seen the George Harrison documentary recently, with the extraordinary pictures of The Beatles recording in Abbey Road. The studios still have the piano on which “Eleanor Rigby” was composed—a piano built in 1902. If hon. Members can find any excuse to visit Abbey Road studios, I would urge them to do it.

We talked about the huge success of the British music industry—and it is a staggering success, with almost £4 billion of sales. Britain is the only country apart from the United States and Sweden that is a net exporter of music, and although the major record labels may no longer be owned by UK companies, it is heartening that Beggars Banquet, the largest independent label, has had such astonishing success working with that amazing artist Adele. That leads me on to the point that was made about Andy Heath taking the helm at UK Music, following Feargal Sharkey’s resignation. I pay tribute to Mr Sharkey’s astonishing record in leading the UK music industry, and herding cats in putting things together. He was ably assisted by his second in command Jo Dipple, who I know will continue to play an important role.

I, too, pay tribute to Feargal Sharkey. The Minister rightly talks about our success in exporting albums, but I understand that if we were to take away from the equation Adele, Amy Winehouse and Coldplay, and a few other big names, we would be doing a lot worse. Does he share my concern that things are increasingly difficult for struggling artists, some of whom, in the independent sector, have made the greatest contribution because of their influence? They struggle in today’s climate, and we are in a world where only “The X Factor”-type bands and the huge sellers such as Adele and Coldplay can survive.

We have a thriving and vibrant music scene, and no individual singer or band is guaranteed success, but it is reassuring to me—I happen to be a fan of “The X Factor”, but people understandably say it should not be the future of UK music—that Adele and other stars have risen. Adele, I think, is the biggest selling artist in the world at the moment; that is an astonishing achievement. Obviously, the Government cannot dictate who is going to survive and thrive, but that is testament to the fact that we have a vibrant music ecology in this country.

I know that the hon. Member for Bristol East (Kerry McCarthy) has concerns about visa issues. It is important that bands in this country should have the opportunity to tour the world, and I am happy to continue working with her on the question of jurisdictions where it might be difficult for bands to get the appropriate visas—perhaps for understandable reasons.

That might be a stretch. Without making the debate too much of a love-fest I, too, pay tribute to the work that Feargal Sharkey did, including the ultimate sacrifice of actually playing with MP4 once or twice along the way.

Does the Minister agree that it is important for the industry to maintain that single-voice focus, which Feargal Sharkey helped to establish with the setting up of UK Music; that that put an end to the old days, when it was difficult to get a single established view from the music industry; and that it is important that that should continue into the future?

Yes, absolutely. I agree that when UK Music came together two or three years ago, that was a real achievement. There were a number of disparate voices. I emphasise, for the benefit of all hon. Members, that Feargal Sharkey is still very much alive; the range of tributes being made might make people think he is not. He is entitled to move on, and I have no doubt that he will continue to play an extremely important role.

Among other issues covered in the debate was the importance of live music and of deregulating the licensing system. I echo the call made by the right hon. Member for Bath (Mr Foster) that no man should stand in the way of the Bill that Lord Clement-Jones has introduced. Let no man put asunder the marriage between the right hon. Gentleman and the Bill this Friday. Let us hope that it passes through the House with ease. Nevertheless, there is the backstop of the Government’s consultation on live music licensing.

Copyright is an incredibly important issue to the music industry. The Hargreaves report was mentioned; a consultation will shortly be initiated by the Intellectual Property Office. As to format shifting, from a common-sense point of view it makes sense to establish regulations that would allow people to do what they do already—move from CD to iPod and so on—while at the same time ensuring that any measures that are appropriate to protect the music industry are in place. That will be part of the consultation.

There are other things whose importance I want to highlight: the digital copyright exchange, which we are not forcing on the music industry—we hope that there will be a bottom-up approach, with Government help; the recent extension of copyright for performers, taken through the European Commission; and the continued action that the Government take to combat the theft of intellectual property—otherwise known as piracy—not only through the Digital Economy Act 2010, passed by the previous Government, but through brokering conversations and deals with rights holders and internet service providers, including advertisements on pirate sites, credit card details, payment facilities being provided on pirate sites and search engine optimisation issues, and through the important progress made recently in the courts, with the blocking of the Newzbin site, which began 10 days ago.

Access to finance is of course a perennial problem for the creative industries. The Creative Industries Council, which we established last year, has one specific work stream on access to finance, chaired by Ian Livingstone from the games industry. It is important that people engage with him on issues of access to finance. I have spoken to banks about the enterprise finance guarantee scheme. I had a meeting, for example, with the Royal Bank of Scotland, to discuss it. Importantly, a recent Demos report, authored by the researcher Helen Burrows, shows that the creative industries are not as risky as people think, and that they are a good investment.

Others could take a leaf out of the video games industry’s book. After the debate I shall be going to the National Endowment for Science, Technology and the Arts to talk to small-scale angel investors, who are being introduced to games companies. If UK Music could stretch itself even further to organising one or two investment conferences with banks and the music industry, and independent labels in particular, that could bring progress.

My hon. Friend the Member for Suffolk Coastal, who rightly highlighted the Aldeburgh festival, made the point that the record industry of course encompasses classical music. Although we missed a trick by not launching it today, on St Cecilia’s day, we shall shortly launch our national music plan. I gather that it is pencilled in for Friday; it is a constantly moveable feast, as we seek to improve it more and more. However, the key point about the national music plan is the music education hubs that will sit at the heart of it. I hope that those will bring together local authorities and organisations such as the Aldeburgh festival to provide a wider offer to children in schools. The money has been secured for local authorities, but we want to put a system in place to secure the participation of the much wider ecology of the music industry locally, whether that is local orchestras, the brass band or the Aldeburgh festival.

We have had a good-natured and well-tempered debate in which hon. Members from both sides of the House have united to emphasise our support for the music industry. We have highlighted the key issues that affect it: education in schools, copyright, access to finance and live music. The Government are focused on all those issues, and I am grateful for the participation and input of hon. Members from both sides of the House.

Question put and agreed to.

Sitting adjourned.