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Economy: Creative Industries

Volume 692: debated on Wednesday 6 June 2007

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:

“We have avoided boom and bust in the economy. We don’t intend to resume it in arts and culture”.

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.

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.

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”.

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.

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.

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.

The AHRC has established itself as the leading authority on research-based knowledge transfer and innovation in the creative economy. It has established itself as a trusted broker for the creative industries, working with them to identify significant barriers to innovation in the sector. It has challenged the narrow definition of research and development that precludes non-technological innovation, which is central to the creative industries. It has engendered an appetite for research-based innovation in companies that lack the capacity or, normally, the requirement to engage in research and development. It has done this through its knowledge catalyst scheme, which targets the micro-enterprises that typify the creative industries by placing in a company a graduate, with a university-based mentor, to address a particular issue and come up with ways forward. This has been a highly innovative approach, successful in attracting applications from organisations that were previously hard to reach.

For big firms, the AHRC has developed innovative models of knowledge transfer through its knowledge exchange programme, based on 50:50 funding. The purpose is to use previously untapped research knowledge in the arts and humanities to deliver new applications in convergent media. One such is with BBC Future Media and Technology. This programme, in its pilot phase, has already attracted 60 applications involving researchers and staff of the BBC.

It makes very good sense to foster the work done by the AHRC and for it to be recognised in the forthcoming funding round. I know that the Minister was in on the creation of the AHRC and I am sure that he is as keen as I am that it should be able to integrate fully with the creative industries.

My Lords, the creative industries are indeed precious, and we must nurture them. A balance-of-payments deficit on manufactures of £60 billion a year takes a lot of offsetting. Even after exporting Tracey Emin to Venice, we shall still not be paying our way.

Creative industries are a mixed bag in terms of economic performance. While the growth in gross value-added of software, computer games and electronic publishing over a sustained period has been 11 per cent a year, the growth in GVA of designer fashion has been zero. If a skull, even a diamond-encrusted skull with a £50 million price tag, is to be emblematic of our economy as well as of our culture, then whispers of immortality may be deceptive. At all events, we need to be very good indeed at the creative industries, not least because they are growing fast in this country and in others—faster, even, in some other countries than they are here.

What should the Government do? They should improve education for creativity. This is not easy; our educational tradition has been good at developing the rational and analytic faculties but much less effective in developing the imaginative and synthetic abilities. But if we can improve, through education for creativity, the self-confidence of young people, their motivation and their capacity to communicate along with their self-discipline and capacity for self-criticism, the benefits across the whole range of learning and the development of young people will be immense.

The Government should energetically implement all the very sensible recommendations of the Roberts report. In addition, they should continue to help link the universities and the creative industries, as the noble Lord, Lord Dearing, has just said, and continue to back the very important work of knowledge transfer that the AHRC is doing.

Otherwise, the Government should fund generously our museums, galleries, libraries, archives, theatres and orchestras—all our cultural organisations—so that they flourish. You get what you pay for. They should regulate sensibly; intellectual property rights should be flexible to adapt to the new situations that technological change creates and enforceable globally so that creativity is rewarded instead of sapped by the depredations of piracy and counterfeiting. They should tax sensibly: if the research and development tax credit excludes knowledge transfer in the creative industries from tax relief, then that should be changed. They should support creativity locally and regionally. There should be a duty on local authorities to support their own cultural institutions, with the resources to do so. They should enable access to finance for people who present themselves to the banks, as Oscar Wilde presented himself to the customs officer in the USA, saying:

“I have nothing to declare except my genius”.

There must be affordable premises. The Government should promote clusters and critical mass. The lessons from London and Liverpool are that the preconditions of creative success are liberal migration policies and liberal attitudes to lifestyle.

I hope that we shall see the Green Paper soon. After all, by the end of this month, the DCMS and the DTI may not even exist. I certainly hope we shall have a statement in July of a new, coherent vision. Above all, the Government must demonstrate that they value creativity. The irony is that if you support culture as a good in itself, it will repay you economically.

My Lords, after speed dating comes speed debating. I should like to speak in celebration. The UK is blessed with astonishing creative vitality, whether in the performing and visual arts, the media and writing, music of every kind or architecture, fashion and food. The range, diversity and quality are extraordinary.

As a country, we appear to have been doing something right for quite a long time. It is a mix of things. Our schools appear to be successfully nurturing individual creativity. Our arts educational institutions are simply world-class. Our regulation of, and investment in, public service broadcasting has fostered widespread innovation. Our national performing companies attain dizzy heights. We appear, too, to have the balance right, for success in the public sphere is matched by a corresponding vitality in the commercially funded sectors. There are plainly now powerful synergies at work in the UK between the public and the private spheres, with much crossover traffic going both ways.

Creativity is spread wide across the land as well, but it is worth while, in this context, considering London, for it is the powerhouse of the UK economy. As a city, it achieves world standards of productivity, matching the United States. It makes a huge contribution through taxation to the rest of the UK. It is noteworthy that the creative industries, including fashion, publishing, advertising, architecture, design and many other arts-related activities, are now second only to business services as the largest contributor to London's vibrant economy.

The final factor is that the UK is increasingly a magnet for the most talented, able and capable business people from all over Europe and beyond. Surveys tell us that those who come to work here are attracted not only by the sheer economic vitality of the UK, where the capital markets work especially well, but specifically by the liveliness, cultural diversity and sheer zest and creativity of life in the capital and beyond. Our national creativity increasingly underpins our economic development. The DCMS has powerful arguments to place before the Treasury.

My Lords, asking an academic to speak for two minutes is like some form of exquisite torture, since we normally talk for 50 minutes—and there is some of my two minutes gone already.

I have three main points, which I shall make briefly. To reaffirm what other noble Lords have said about the crucial importance of the creative industries in the modern economy, one has to see that against the backdrop of the amazing changes that have affected the economy more generally. A generation ago, more than 40 per cent of the population worked in manufacturing and agriculture; now only 14 per cent of the population do so. There has been a tremendous change, and the creative industries are in a kind of vanguard in that new economy.

Secondly, however, we should not make a ghetto for the so-called creative industries, a notion that anyone can see is suspect, as you need creativity in every industry. Alongside the reports mentioned, we should add the Cox Review of Creativity in Business, which was much more sobering than the picture that the noble Lord, Lord Birt, painted of arts industries. It showed that more than 50 per cent of firms had not introduced any new services or goods within the previous three years, indicating that there is a long way to go in that regard.

Thirdly, on a note of caution, economists are saying that we are in a new phase of offshoring. The old phase of offshoring manufacture has probably gone about as far as it can, but IT offshoring is completely different; it could be vastly more radical. The Princeton economist Alan Blinder argues that no less than 40 per cent of jobs in the United States economy could in principle be outsourced, including many creative economy jobs in design, computers, film and television. As I go around the world speaking in universities, I am impressed by the degree to which other countries have many universities teaching completely in English. One can see that the whole level of competition is being ratcheted up. If the Minister would like to say something about the perils and opportunities of offshoring in the IT industries, I should be very happy.

My Lords, it is a pleasure to speak about the contribution of the creative industries to the UK, because those industries, as other noble Lords have said, are the dazzling jewel in the UK treasure chest. I am sure that noble Lords will say that that jewel should be displayed regularly and with considerable ostentation. Higher education institutions have an essential role in keeping that jewel sparkling. I declare my interest as chief executive of Universities UK.

Higher education institutions provide the skilled workforce that enables the creative industries to succeed. Our smaller, specialist institutions, such as the Royal College of Art, the Royal Academy of Music and the Guildhall School of Music and Drama, are never undersubscribed and never short of successful, even world-famous graduates. Our larger, more mainstream universities equally play a role, as was shown in Universities UK's recent publication Higher Level Learning.

I shall give just two examples—and there are many that I could choose. Abertay Dundee, with support from the industry, became the first university in the world to develop degrees in computer games technology. The London College of Fashion, part of the University of the Arts, London, has its own fashion business resource studio. Competition is intense; having a degree is not always enough. That is why universities offer placements, work experience and tailored vocational teaching. But to maintain this success—and I echo here everything that the noble Lord, Lord Patel, said—investment is needed.

Government commitment to research and development, particularly in science, has been widely welcomed. I hope that the Minister will reassure me that this does not mean that the arts and humanities will be forgotten, since they are vital to the creative sector. Could he also comment on how the Government intend to support collaboration between higher education and small and medium enterprises, which are so prevalent in the creative sector? With proper support for applied research and incentives for university collaboration, our creative industries will continue to dazzle, both nationally and internationally.

My Lords, this is the text message version of a longer speech. The first message is that I agree with pretty much everything that has been said so far, by every speaker—remarkably, within the time limit set.

The second message is that the creative industries include the performing arts—it says so on the DCMS website, so it must be true. The performing arts have led to very significant urban regeneration, and I give as an example the South Bank. Noble Lords can walk along the South Bank, see what has happened there and the economic activity that has followed. It is important that we recognise how significant the impact of large-scale cultural projects can be on producing regeneration.

Thirdly, theatre, which is part of the performing arts, is big business. It is worth approximately £2.6 billion per annum in the UK, £1.5 billion of that in London alone. It attracts visitors and is a tremendous export success. An example of that is “The History Boys” from the National Theatre. Will my noble friend confirm that the Government understand the powerful contribution that theatre makes, both culturally and economically, and does he agree that we must be careful not to undermine that contribution? Can he also say what progress is being made to ensure that theatres are not adversely affected by the sell-off of analogue frequencies ahead of digital switchover in 2012? That is a bit of an anorak point, but I am sure that the Minister will have a very good answer.

Finally, I shall say a very quick word about the Roundhouse in north London, of which I am proud to be a trustee. The Roundhouse has just completed a refurbishment, which cost about £30 million, of which 60 per cent has come from private donation and 40 per cent from public sources, both national and local. At the heart of the Roundhouse project is an inspirational new facility for young people, the Roundhouse Studios, which is equipped with performance spaces, recording studios, practice rooms, camera and editing facilities, musical instruments and much more. Some 4,000 young people have been through its programme since the building reopened. Most of them are from hard-to-reach communities, and many are linked to pupil referral units and youth services. They come to the Roundhouse to work with professional artists, technicians, marketing people and administration staff, to explore their own creativity but also to learn skills and develop attitudes that will help them into employment. This is another kind of cultural regeneration, regenerating minds and hearts, encouraging aspiration and supporting ambition, and we need much more of it.

My Lords, like all of us here, the Government are aware that the creative industries are important to our economic future. I congratulate them on that. But what needs to be done?

I shall make two quick points. First, technology is rewriting the rules of the game. One result is that the arrangements for collecting royalties are now obsolete. The so-called summit on copyright in Brussels last week was inconclusive. So what is happening? The stakeholders—I hesitate to call them the players—are either pursuing their own individual solutions or heading for the courts. The Government are really going to have to get to grips with copyright because the uncertain economics will hold back the industry.

Secondly, perhaps the main reason why the creative industries do so well here is that we are seeing art and culture in all their forms—high and low, sound and vision—breaking out of their traditional locations, forms and media and infiltrating every part of our lives. I hope that the Government will treat the creative industries as part of our total economy, not a subsection, because creativity, which touches a chord with people everywhere, needs to be in the mainstream of our economy, not somewhere out in the fringes.

My Lords, what a distilled debate—we could probably sell bottles of it. I want very briefly to raise issues raised by the Select Committee, and referred to by the noble Lord, Lord Smith, in its excellent New Media and the Creative Industries report. The committee expressed strong concern about the lack of progress by the Government on copyright development, which in itself makes the argument for establishing a strategic advisory board on IP policy, as the Gowers review recommended. What plans do the Government have to include that in their Green Paper? I hope that they will take it forward.

The committee urges the Government to press the European Commission to bring forward proposals to extend the term of copyright for sound recordings to 70 years. We on these Benches have always thought that that extension should be combined with archive protection and compulsory licensing. However, the industry itself is now moving voluntarily down that track. We strongly support the committee’s recommendation. What are the Government doing in this respect? I asked an oral Question on this subject in December last. What consultations are taking place on the Government’s recommendations to the European Union? The European Union is clearly in pole position on this, but the Government’s attitude—since the UK has such an important position on music and recorded music copyright—will be vital.

Then there is the question of piracy. The Government are simply not doing enough, the committee concludes. Exemplary damages need to be considered. The committee says that the deterrent effect of the current enforcement regime is zero. Action needs to be taken on unauthorised copying of films by camcorders in the cinema. There is also the question of the so-called file sharing of music.

Finally, there is the question of fostering the investment climate in new media business development. In many ways we have gone backwards in this respect. I hope that the Green Paper will address all those issues. I hope that it does not consist only of a new task force—the previous one seems to have disappeared without trace. Even the Creative Economy Programme set up in 2005 is likewise not very visible. I look forward to hearing what the Minister has to say.

My Lords, rather than “What assessment?”, I suggest that it might in many ways be better if there was no assessment. Governments, when they look at things, have a nasty habit of interfering. The industries that most contribute to the economy, such as the advertising industry referred to by my noble friend Lady Buscombe, did not achieve their prosperity with the help of government. Indeed, one of the reasons for the recent decline, even if modest, in some of the creative industries can be directly attributed to government. The terrifying deluge of ill thought-out legislation and regulation is the exact opposite of the freedom from interference that makes the creative mind tick.

As my honourable friend the shadow Chancellor of the Exchequer has commented, it is not possible for Governments to create creativity. The greatest assistance that government can give to creativity is not to interfere but to leave it to take its own unpredictable path. When Handel, Mozart and Haydn came to London, it was because of freedom from government, not because of interference or subsidy. If my noble friend Lord Saatchi were here, he would no doubt tell us that his brother—however ill advised some might think it—has been a far more conspicuous and successful patron of Brit art than have government. Historically, theatres and music have prospered on their own. Their successors in the entertainment industry still do. Video games, iPods, televisions and so on developed without taxpayers’ help. Government interference hinders their evolution.

Perhaps, if the Government have to interfere, they could reverse the imposition by the European Union of the droit de suite and other actions of the European Union that have done so much to harm the fine art industry in the United Kingdom as well as addressing the problem of copyright piracy referred to today.

My Lords, I start by thanking the noble Baroness, Lady Bonham-Carter, for securing this debate. Like everyone else, I think that it is a great shame that we have had to do it so quickly. There are some very important matters to be discussed but we will not have time to do so.

Last week I spent a great deal of time at the literary festival at Hay-on-Wye. Although it is called a literary festival, it is much more than that. It is a week when many major players in the creative economy converge on Hay, turning this small town into a hub of creativity—a live testament to the importance of the creative economy. People from film, music, literature and theatre come together and talk; and if you listen, no one would doubt the existence and growing importance of this part of our economy—growing, as we have heard, at twice the rate of the economy as a whole, with exports for this sector of around £13.6 billion. My noble friend Lord Haskel argues that it must be seen as central to our economy and not as a sideshow. He is absolutely right, as is the noble Baroness, Lady Bonham-Carter, who made the same point.

Let me give a few examples of what I heard at Hay. Tim Bevan, of Working Title, told me that “Mr Bean”, yet to open in the US, has already grossed $181 million around the world. Andy Harries, of Left Bank Pictures, which made “The Queen”, directed by Stephen Frears, told me that it cost $15 million to make, was shot and edited entirely in the UK and has taken to date—and it is just at the beginning of its run—$120,000,000 worldwide. But the British film industry, as we have heard, is flourishing not only in London. John Newbigin told me that last year two international hit films were made in the West Midlands—I did not know that. “Confetti” sold to the US market for four times production cost and the acclaimed “The Road to Guantanamo” has been sold in 23 countries around the world. Neither of these films would have been made without the support of Screen West Midlands, a regional support agency for the West Midlands film industry.

A record 12.3 million people attended the London theatre, and we heard from my noble friend Lady McIntosh the value of theatre both inside and outside London. I had hoped that the noble Lord, Lord Lloyd-Webber, would be in his place this evening, but he is abroad preparing the sequel to the fabulously successful “The Phantom of the Opera”. The total value of UK film exports in 2006 was just under £600 million. As we know, the UK is second only to the US in the global art market.

The other evening, my noble friend Lord Rogers won the prestigious Pritzker Prize, the Nobel Prize for architecture, reminding us that UK firms account for eight of the top 10 architectural firms in western Europe. Our music industry is the third largest in the world, worth £6 billion. As an example, in March, Amy Winehouse’s album “Back to Black” entered the Billboard chart in the US at No. 7, with 57,000 sales in the first week. By the end of May, it had sold more than 400,000. Closer to home, British music artists are the dominant force in Europe. Nineteen of the 36 IFPI platinum awards made to artists selling more than 1 million copies of an album across Europe went to British acts.

UK book publishing is the largest in Europe, exporting more than 40 per cent of what it produces. Nobody will be surprised to learn that the sales of JK Rowling’s six Harry Potter books exceed 325 million copies. As we have heard, the UK is a world leader in computer games. Grand Theft Auto has sold more than 50 million copies worldwide, with a revenue of nearly £2 billion.

I could talk about many things but I do not have the time. I am particularly pleased that the noble Baroness, Lady Buscombe, talked about advertising, which is a very important creative industry, and that the noble Lord, Lord Patel, touched on design. I have not mentioned Brit art and Damien Hirst’s diamond skull. These are all extraordinary examples of the vitality and economic worth of this industry.

Many speakers asked about the Government’s role in this vital part of the economy. I have heard before the view expressed by the noble Lord, Lord Howard of Rising, and it is a perfectly reasonable position to take—that the Government have no role and should just let creative people get on with it. My view and that of the Government is that a benign framework should be provided within which the creative industries can flourish. The Government should also provide the statistics to monitor the growth of the creative economy. To go off message for a moment, my own view is that the creative economy is worth a good deal more than 7 per cent of our gross national product.

The Government must continue to fund the arts properly because the arts are the catalyst for much of what has happened and will happen in the creative economy. Like the noble Baroness, I was greatly heartened by the speech made by the next Prime Minister at Brighton, in which he recognised the contribution that government arts funding makes to the creative economy.

Education, which is so important at every level, was stressed by noble Lords. Some people in the popular music world whom I knew a few years ago had all been educated at art school. I refer to Pete Townsend, Brian Eno and Ray Davies of the Kinks. Perhaps that was the case with that whole generation. Are art schools still as creative now as they were then? Is there that same extraordinary creative activity that there was in the 1970s and the 1980s? As I say, education is hugely important.

The Government should prepare reports that focus on aspects of this economy that need careful thought. That was mentioned. I refer to the Cox review of creativity, the Roberts report on creativity in schools and the Gowers review of intellectual property. I add my voice firmly to those who praised the Culture, Media and Sport Select Committee report into the creative industries. It is an excellent report and I hope that everybody will heed it. The creative economy Green Paper, which is expected to be published shortly, will set out the Government’s vision for supporting our creative sector. This will be a significant step in the Government’s support for the creative industries and will build on the excellent work of the creative industries task force in 1998 and the 2001 mapping document.

My noble friends Lord Smith and Lady Morris, the noble Lord, Lord Clement-Jones, and others touched on an issue that in itself deserves a full debate; namely, the protection of intellectual property in the digital age. Grave problems need to be addressed but we are all at one in saying that, without protection from piracy in whatever form or guise, all aspects of the creative economy will be damaged, including its future growth and worth. It is extremely worrying that people are arguing rationally for copyright work to be available at the point of creation. We must resist that. People will create only if their work is protected. We must do everything that we can to discuss this, push back that boundary and make sure that anybody who steals creative work is dealt with appropriately.

Unfortunately, I do not have time to answer the specific questions asked by my noble friends Lord Giddens and Lady McIntosh, but I undertake to do so shortly. In the mean time, I thank all noble Lords for being so incredibly positive about this economy. We must all keep talking about it and do everything that we can to protect the people who create it for us. We should keep discussing it and keep stressing its vital importance not only to our way of life but to our children and our economy.

My Lords, I congratulate all who contributed to the debate and, somewhat embarrassedly, beg to move that the House do adjourn during pleasure until 8.30 pm.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.26 to 8.30 pm.]