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Creative Industries

Volume 711: debated on Thursday 4 June 2009


Moved By

To call attention to the contribution of the creative industries to the United Kingdom economy; and to move for Papers.

My Lords, I think that I shall wait a moment until the select few have gathered. I am grateful to have been given the chance to mount this debate. I hope that it will prove once and for all that the creative industries in this country are the flagship and the most powerful identifying characteristic of what we in the UK in the 21st century can do well both at home and abroad, and in the process enrich not only the economy but the minds and imagination of people here and around the world.

A recent analysis by NESTA suggests that between 2009 and 2013 the UK’s creative industries will grow on average at 4 per cent per annum—more than double the rate of the rest of the economy. By 2013 this sector is expected to employ about 1.3 million people—more than the financial sector; it is likely that there will be 180,000 creative businesses here compared with 148,000 today; and it is expected to contribute £85 billion to UK value-added, up from £57 billion today. Last April, the Business Secretary, the noble Lord, Lord Mandelson, acknowledged the contribution of the creative industries to Britain’s economy and said that it was central to ensuring the future success of the country.

I shall continue for a moment with statistics. For most of them, I am indebted to the National Campaign for the Arts, the UK’s only independent lobbying organisation representing all the arts, cross-party, cross-culture and, as its president, I can say always across the subject.

Moreover, it is worth hammering away for a few moments because there is still a stolid, ostrich, unimaginative conviction that the arts are somehow whimsical, marginal and verging on the dismissible. It is rumoured that even some of those in government still hold to that view. The industrial fact, to use the devil’s argument, is that the creative industries in this country have outstripped and will continue to outstrip even those ancient and venerable giants that powered and traumatised this country through the Industrial Revolution.

In 1997, our creative economy accounted for less than 4 per cent of UK gross value-added. In 2007, it stood at 7.3 per cent, having grown at 6 per cent per annum compared with 3 per cent for the rest of the economy. The UK has the largest creative sector in the EU and, relative to GDP, probably in the world. It employs a host of golden specialists who can and do travel the world with their crafts, works, books, music and arts, like roving European medieval scholars. Regarded as a sideshow by some, the overall impact of British theatre alone is £26 billion annually from a subsidy of £120 million.

The musicals of the noble Lord, Lord Lloyd-Webber, and Sir Cameron Mackintosh, for example, spin around the globe like Ariel in “The Tempest” and bring in profits simply unheard of in any other age. These two men started out as kids on the block doing the thing they loved but they were hugely aided by the cultural density in this country and, with that help, have become creators and supporters of highly specialised skills as well as writers, composers and producers of world renown in their own right.

Inside these statistics are individuals or very small groups who form an astonishingly modern cultural collective. Curiously enough, this is very like the way in which the first Industrial Revolution—the mechanised Industrial Revolution, probably the greatest revolution of all time—got under way. Talented, pig-headed, brilliant individuals—mostly in the north of England—followed their own obsessive path. I think that what we are seeing now is the first rocket stage of what will prove to be a creative cultural revolution that is perhaps just as radical and influential.

Take as a small example the 6,000 employees in Birmingham’s magnificently rejuvenated jewellery quarter—niche craftsmen who command a world clientele. They are joined at the hip with those northern inventors of the late 18th and 19th centuries. And we have a good enabling history here. Our progress in the creative arts is not a fluke: from the Committee for the Encouragement of Music and the Arts which came out of the Second World War; to Jennie Lee at the Arts Council in the 1960s; to Sir John Major and the noble Lord, Lord Gowrie, and the lottery funding—boom time throughout Britain; and on to the Labour Government who, since 1997, have put up funding by 73 per cent.

Private support has grown too, through tax breaks and philanthropy, and now the sum is more than £600 million a year. And of course there are shortcomings, and missed opportunities, and bureaucratic bungling, and the constraints of philistinism, and the British sound of moan which is sometimes justified. But fair’s fair. There has been an overall success, even triumph, in culture and the arts during the past 15 or 20 years, and until very recently it has been one of our best kept secrets.

Speakers in this debate will wish to cover different parts of the territory. I see my role as giving the overview, and I shall concentrate on only two or three specific aspects. I stress again that although larger economic forces are at work and must continue to work for the creative industries—of course we need art colleges and schools and academies for film, theatre and music; and we need structures such as the Arts Council and overseeing agencies such as the DCMS; and we need the BBC, with its invaluable and massive cultural presence; and other broadcasters, such as ITV, Channel 4 and now Sky Arts—in my opinion, this is at root the story of individuals. They must be allowed to breathe and flourish.

My fear, as I read government initiatives now climbing on what I hope I may be forgiven for calling the bandwagon, is that the weight, even the blight, of bureaucracy will stifle the enterprise of those individuals. Already in the past year or two, to take a small example, overcomplex rules about the playing of live music in pubs and clubs have not only threatened the seeding ground of our exceptionally successful popular music culture, but ruined many people's idea of a good night out.

An even more harmful example of unintended consequences of government regulation and interference was pointed out yesterday in the Times by Dame Joan Bakewell, the chairman of NCA. She wrote:

“The Home Office is making a mockery of Britain's reputation”.

She wrote that immigration controls are proving so unnecessarily difficult for artists from abroad, that they are turning away rather than waste time and money on our bureaucratic complexities. She wrote that Sokolov, the Russian pianist, lost patience and called off concerts at the Barbican and the Royal Festival Hall. The Iranian director of ENO’s “Cosi fan tutte” has not been admitted into the country. As Sir Richard Dearlove pointed out at the Hay Festival last week, over-extensions of the Terrorism Act threaten liberties elsewhere. For this country, a great international centre for the arts and a refuge for some of the greatest artists and musicians, to become a no-go area is surely the unacceptable fact of a lack of joined-up government thinking. Lord knows what they would have done at the time of the Industrial Revolution if they had gone north—probably strangle it at birth.

I fear the grasping claws of quangos. There is a fine book on oral history by George Ewart Evans entitled Ask the Fellows Who Cut the Hay. I suggest that the Home Office, the DCMS and all the other cultural bodies impale these words on their notice boards and websites. The arts in this country have always flourished either in solitary confinement or when two or three are gathered together in small clusters, in which individuals, a few like-minded individuals, have given us great riches. It is a delicate balance to cultivate without crushing, but to achieve that balance is one of the most important missions for the immediate future of the creative industries.

In my opinion, the way to kill the creative industries is to straitjacket them in regulations and subject them to that influential new army of consultants who, bewilderingly, claim merit from starting with a clean slate—that is, knowing nothing about the subject. Artists have their own slates and knowing about their subject is their life’s work, so ask the artists who do the work.

Of course, there is something to say about money. There always will be. Sir Christopher Frayling, who stood down as Arts Council chairman earlier this year and is still rector of the Royal College of Art, said recently:

“Most of the big performing arts companies get about a third of their funding from the Arts Council, a third from the box office and a third from merchandising or sponsorship. If government money wobbles during a recession … that means the second two-thirds of the funding will fall away too, which could be disastrous for many companies”.

Frayling’s successor at the Arts Council, Dame Liz Forgan, who has seen a small cut in comparative terms to the Arts Council budget, announced that an extra £445 million would be invested during the next two years specifically to help maintain artistic excellence during the economic turndown. That is the good news: there are good hands on the tiller.

Kevin Spacey, the artistic director of the Old Vic, is a remarkable and unusual example of success with a company that receives no public subsidy whatever. Despite that, he has put together not only an exceptional programme inside the Old Vic, but a thrilling programme of workshops, school projects and community productions involving literally thousands of children from low-income families who live just outside the Old Vic, in its immediate neighbourhood. He wrote recently that,

“the creative industries lead the UK economy and are the envy of the world. Having lived here for seven years, I genuinely believe that the UK’s pre-eminence in the arts and culture constitutes one of the nation's most powerful resources”.

Sometimes it is useful to see ourselves as others see us, such as Kevin Spacey and his fellow American, the late Sam Wanamaker, who recreated the Globe and gave us so much.

It would be flattering to ourselves to think that we had a natural and unique genius for the arts in this country, although perhaps there is something in that. More importantly, we have great traditions: first, in some of the finest artists and examples of the past centuries, but also in our colleges and in the workplace of theatres, orchestras and choirs. Perhaps even more important than that, it is a living tradition regrouped and refreshed through generations by new generations, and added to by them, and it goes on and on. The recent surge has been greatly helped by more training and interest in schools, as we see in our classical music, which is so strong at the moment, and tracks back through youth orchestras to school orchestras and now even to primary school orchestras. One million young people benefit from the Youth Music programme, and in the past few years more than 100 new arts buildings have been opened and more than 500 refurbished. It is not only classical music. The whole brass band tradition is undergoing a renaissance. We have the world’s leading brass band players among our children. And on popular music in this country, well, where shall we begin? There is a breadth and quality here unmatched anywhere outside the home of popular music, the USA, which has a five times bigger population.

I want to draw attention to an even more fundamental aspect of the creative arts. In the course of making a recent “South Bank Show” film on the violinist Tamsin Little, we went with her to Gallions Primary School in Newham, east London. She did several workshops with the children, and we filmed her performing with them. One of our team told me that the school is an inspiration. It opened eight years ago and took in children from multiracial, multilingual and very difficult backgrounds, including sink estates. Nearly all the children had failed in previous schools, and both they and their parents were disillusioned with the concept of education. To begin with, it was chaos, and the children were disruptive to the point of actually throwing the school furniture at each other. However, the staff had all been recruited because of their arts expertise, and they developed an ethos of arts education that would have an impact on the children's attainments, achievement and overall happiness. They obtained funding from JP Morgan and invested in musical instruments for the entire school. Every child studies music and plays an instrument. Within a week or two, certainly within a month or two, behaviour improved, concentration improved and results across the board in other subjects improved. It has had the most extraordinary effect, and the school is a delight to visit. When Howard Goodall did a film for the programme some years ago about choirs in schools, he came back with exactly the same story. However, there now seems to be a reluctance to develop and build on this, and that is worrying. Narrowly focused studies lead only to narrowly focused citizens.

All this has been hugely aided by the extension of free admission to some galleries and museums, a policy driven through by my noble friend Lord Smith of Finsbury, who sadly cannot be here today. Visitor numbers have risen by 87 per cent, but for me one further statistic stands out: since that happened, there has been a 21 per cent increase in visits from socio-economic groups C2, D and E, in short, people who would never have got there before, and some of them too will become part of the bedrock.

I must mention here the all-but-unimaginable rise in the numbers of festivals in all the arts, in music, of course, with the BBC Proms, nonpareil on the planet, and Glastonbury, too, in its own way, but let us talk about the literary festivals. From a few rather lonely outposts 20 or 30 years ago, we now have armies of audiences in their hundreds of thousands marching to the tent cities of Hay and Edinburgh, taking the town halls of Cheltenham and Glasgow, the Dome of Brighton and the theatre of Salisbury and captivating towns and villages across the land from Southwold to Keswick, from Bridport to Aldeburgh, from Ilkley to Chester to Bristol to Charleston. The land is alive with the voice of authors and the ever-growing involvement of readers.

We cannot overlook the London factor. This city now has a fair claim to be the greatest arts centre in the world. The regiment of institutions lined up along the South Bank makes it the jewel in its crown. This gives us a creative churn of invaluable enriching interconnections. The centre of our theatre is here, as is our film and television industry, many of our great and fine small galleries, the concert halls, opera and ballet, exhibition spaces and, of course, museums, some of which, such as the British Museum, have become works of art in themselves as well as housing great art. This cannot be overestimated, and I would stress again the influence of television, particularly in drama and film, which feeds into the film and theatre industries, irrigating and nourishing this metropolitan garden of delights.

Perhaps crucially, these industries extend the inner life, feed the energy for insights into a richer life and give people something like a faith in what is possible, what is rare and what can be reached through imagination. They lead us not into the soulless automaton state of the old Industrial Revolution, but into the unexplored treasures of the mind.

In my view, the creative economy should be developed and encouraged to the hilt. It is a proven performer, a pillar of the cultural tourist trade, an educative and inspiring force for young people, a conduit of skills and self-confidence in schools, a high-quality aggregation of niche specialisms in a country which must develop such talents if it is to flourish, a source of gaiety to the nation, intellectual and spiritual profit, and a focus and stimulation of imagination to people who want to reach out for a greater private life through work which lights up their private world. The creative industries are our new wealth and our new industrial enlightenment. I beg to move.

My Lords, I am very grateful to the noble Lord, Lord Bragg, for initiating this debate. He continues to make a great contribution to cultural life in this country and his opening words reflect the breadth of that experience.

As I am sure the noble Lord would agree, the pivotal challenge in any creative enterprise is to manage the creative talent. That talent is sometimes difficult, usually arrogant, often self-important, but it is the engine of everything that we do. The best managers in these industries are, unfortunately, also often difficult, arrogant and self-important, and I declare the interest of being one myself.

I have spent my entire working life managing creative people in the media, marketing, PR, arts, advertising, graphic design—all those kinds of activities—and I have bought and sold, downsized, upsized, and built and broken creative businesses in just about every part of the world. So this debate offers me the opportunity to try to answer three interrelated questions which have often puzzled me. First, what makes a good manager of creative enterprise and talent? Secondly, why does that talent rarely succeed when transferred into the public—that is to say, government-supported—arena? Thirdly, what can Government do to establish a greater pool of such managers and, therefore, help in that transition?

First, what makes a brilliant manager of creative people? I could recite a litany of character traits, but I want to emphasise just three or four as they will lead to answers to the other questions that I posed. First, these managers have an obsessive dedication, focus and concentration on the activities of the enterprise. Some managers make it all look so easy, but their focus is absolute and demands 110 per cent of every minute of every day. Secondly, they believe, without remainder, in their own judgment. They cannot be wrong. They believe themselves to have an instinctive understanding of what the customer wants and how the enterprise can be organised to respond to those needs. That umbilical chord between the customer and the manager is absolute. That is why accountants can very seldom manage creative people. Thirdly, this kind of manager, together with their creative partners, tears up the rule book as they go. They break conventions. They establish new rules and new codes of business activity.

If that originality is lost, the whole creative process begins to collapse and the enterprise becomes mediocre, with the inevitable loss of market differentiation. But there is one space, as the noble Lord, Lord Bragg, pointed out, in which the manager and the creative will often have guaranteed conflict—over money. So often, really creative people feel shackled by what they see as mundane financial constraints. Great managers of the creative process, however, believe exactly the opposite: they believe that financial controls make for greater creativity and financial laxity for creative mayhem. If the skilled manager can get the creative to agree the financial agenda, the enterprise can really sing. It is a golden place to find yourself. It rarely lasts for long, but for a fleeting moment, the commercial music can sound celestial.

So why have these managers such a poor record in public service? We can all think of some who have made it, but there are so many more who have failed or who just have not bothered. Let me offer some possible reasons. The first is management style. A great manager gives the impression of providing free rein to those who work for him, delegating authority and managing with a light touch, with little attention to soft issues such as time-keeping, dress code and so on. In a large corporation, such light-touch management is almost impossible to achieve.

The second is the rule book. I have about 1,600 creative people working for me at the moment, and every day we tear up the rule book at least once. In many of our businesses there appear to be no rule books at all, or at least the rules which apply to one part of the group do not seem to apply to another. Public corporations are held together by rule books.

Thirdly, in businesses our size, the customer—the user—is the centre of the organisation. There are no organisation charts; there is a dartboard, with the customer in the bull’s eye and everything is gathered around him. That is almost impossible to achieve as companies grow, developing or inheriting different masters or stakeholders to whom management must answer—particularly Government!

The fourth is meetings. We simply do not have them. We hate them. The best-run creative groups just work with the people they like, in an atmosphere they like, in a way that they like. Meetings spoil all that. Meetings are for suits and for accountants. Big public organisations thrive on meetings. You have to have them. You need to be accountable.

Finally, the ultimate bugbear: accountants, red tape and targets. It does not mean that they are wrong; it just means that they establish an environment that is, or at least feels, counter-creative.

Can we increase the number of these gifted managers so that more chance their arm in the public sector? I have five observations for your Lordships to consider. First, most new creative businesses are SMEs. The sources of risk equity and long-term capital for this sector are drying up. This is the 1930s Macmillan gap all over again. We must address this issue immediately, particularly since the recent banking collapse.

Secondly, these smaller businesses, as has already been pointed out, are throttled by regulation: employment law, health and safety, and any amount of other legislation and red tape which is not only inappropriate but stifles growth and enterprise.

Thirdly, tax issues in creative industries are all about income and founder equity. To have top people working for more than 60 per cent of the year for the Government and facing a rise of 80 per cent in capital tax on equity will not encourage entrepreneurship.

Fourthly, we need London to be the global centre of all the creative industries. How can we attract more and more people in this global, creative and digital world to make London the centre of their creative businesses?

Finally, we should start in the schools and the universities, particularly the schools. We should look at the work of organisations such as the Enterprise Education Trust, which has 50,000 children up and down the country involved in more than 1,000 business appreciation courses.

As we recognise the importance of the creative industries to our economy, our focus must also be on encouraging, motivating and rewarding those who successfully build and lead these creative enterprises. They are not just the source of national wealth, they are the future of our state-owned creative industries too.

My Lords, I appreciate this opportunity to take part in what will be a very wide-ranging debate. The noble Lord, Lord Bragg, has initiated it, and the noble Lord, Lord Chadlington, has opened a window that I never dreamt existed. To make the most of this opportunity for a free-running Welshman to contribute from a Welsh angle, I shall speak about a possible opportunity, and dilemma, for minority languages.

Let us look first at the world of publishing in Wales. Some Wales-wide publications in the Welsh language—long-standing newspapers and so on—have ceased publication because of reduced advertising, falling circulation, rising costs and myriad other things. Some continue as inserts in English-language dailies, but the ordinary national Welsh-language paper has failed, and efforts to establish a daily Welsh-language newspaper have been put on hold. What is happening in Wales is that community newspapers reflect local life. In 60 areas in Wales we have Papurau Bro, community newspapers run by volunteers which have circulations of 1,000, 2,000 or 3,000 and which make a definite and effective contribution to the life of their localities.

As for book publishing, I spoke this morning to a publisher and also to the Welsh Books Council. With a budget of only £1.3 million for investment in Welsh-language book publishing, it is questionable whether a single Welsh-language book could be published in many areas. We are so dependent on grants, through the Welsh Books Council, from the Welsh National Assembly. However, many people help to support the Welsh-language input, and we have the value of the printed word itself. We also have the various Welsh-language websites to which many thousands of people turn every day. But there is a flipside to that. Because they are reading on the web, as I do, many publications—the ordinary books and magazines—do not succeed.

The noble Lord, Lord Bragg, mentioned the free admission to museums and art galleries. I am delighted to say that it was the Government in Cardiff—led by a friend of mine, Jenny Randerson, who was the Minister at the time—who first introduced free admission in the United Kingdom. As has been said, it has succeeded in bringing in many people who never before would have visited that kind of building.

Wales is known as the land of rugby. I am not asking for a subsidy for Welsh rugby; I do not think that we need it at present. It is also known as the land of song, but I am not sure that that is always true. If you listened to me sing, you would not say it.

We have heard mention of the Hay festival, but we have not yet heard mention of the three major Eisteddfods, or Eisteddfodau, that we have in Wales. They are major cultural events for the Welsh community. The Urdd Eisteddfod was held in Cardiff last week, and some 45,000 Welsh youngsters were involved in activities leading up to it. The Urdd Eisteddfod encourages schools and young people, and by developing the dimensions of song, dance and the spoken and written word, we all benefit from it immensely. For older children—those in the sixth forms of our schools who have uncertain futures and limited employment prospects—this cultural dimension keeps their hopes alive.

In the 1930s there was horrendous unemployment in Wales—in Merthyr Tydfil, 60 per cent of the population were without a job—and yet the choirs and the bands continued. The valleys of unemployment were also the valleys of music, and that kept hope alive. So we must make certain that nothing hinders this dimension of our culture. Through the arts, music and so on, we can keep hope alive until better economic times dawn upon us.

The national Eisteddfod not only gives opportunities to people of all ages; it uncovers new talent. It is, as has been said, similar to festivals throughout the United Kingdom, but it also provides many opportunities for people who may be having difficult times. It restores their hope and confidence and contributes to the harmony of our communities.

I thoroughly enjoyed parts of “Britain’s Got Talent”. It was valuable because it introduced a massive viewer population—I am sure that is not the right way to describe it—to things like community groups such as the street dancers, Flawless and Diversity. If their influence can now spread to other communities and young people, that will be a tremendous benefit to us. The programme even gave my granddaughter an idea—I have seven grandchildren, at the last count. She saw this grandfather and granddaughter competing, and next I had a phone call: was I willing to enter “Britain’s Got Talent” with her next year? If the House is abolished I might have time on my hands, and we will be able to have an alternative career.

Then we come to the third Eisteddfod, Llangollen. I speak as a vice-president of that international music festival. Formed in 1946, its motto is, “Blessed is a world that sings; gentle are its songs”. Through music and dance you are able to bring people together. I often think that if you can laugh or sing together, that is a massive step forward. Pavarotti started his career at the festival; the Vienna Boys’ Choir became world-famous there. I hope—and the Government might be able to move on this quickly—that new immigration rules will not hinder applications from outside the European Union for people, choirs and dance groups to participate in festivals of this sort. Edinburgh and other places are also facing a possible dilemma here. I remember the battle we had over the Watoto children from Kampala—but they are singing in the Parliament next week, so at least we have overcome that hurdle.

The contribution is not only in money but in people. It provides dignity and confidence in difficult times; it builds communities and gives hope where there is little of it. That is why the sort of projects and festivals that I have outlined are immensely important for the well-being of our country.

My Lords, I, too, thank the noble Lord, Lord Bragg, for securing this debate and for his powerfully delivered overview of the creative sector, as well as for his long-term pioneering commitment to high-quality arts and cultural programming, of which “The South Bank Show” is just one example. I also thank Louise de Winter from the National Campaign for the Arts and Clare Cooper from Mission, Models, Money for briefings, discussions and ideas. The NCA is an independent organisation, as the noble Lord has stated. Mission, Models, Money is also independent, producing debates and action research projects that provoke fresh thoughts about sustaining the arts. Both are effective, fleet-footed, creative organisations that stimulate thoughts, and they have an influence far greater than their size would suggest was possible.

At this point I should declare several interests, mainly to do with being on the boards of various arts organisations including the Southbank Centre, the Nitro theatre company and the National Archives. I also chair a new group set up by the Commonwealth Foundation on culture and development.

The noble Lord, Lord Bragg, has helpfully covered all the statistics, so I will not go into them again. The creative industries, as defined by DCMS, cover a wide range of creative endeavour, including music, film, television, radio, architecture and designer fashion, which is a subject to which I will return.

Although for the purpose of policy or debate we might wish to make a distinction between the arts, museums, archives and libraries and the creative industries, or indeed between the subsidised and commercial sectors, in truth the boundaries are permeable and constantly shifting. Art, cultural and creative activities are interdependent, as are the publicly subsidised and commercial sectors. At times the categories are indistinguishable and may co-exist in the same organisation, as when a play produced by an Arts Council-funded theatre transfers to the West End and later to Broadway, and is made into a film that is then broadcast on television. So public investment in the arts has been and will continue to be essential to the success of Britain’s creative industries.

Even though the focus in this debate is on the economy, we should not forget the important contribution that creative expression can make to social, community and cultural development, a point that has been alluded to. Put simply, there is no point in being economically successful if people are unhappy and do not have ready access to an expressive, full, creative life. Such values are especially important in these difficult times, when financial and moral orthodoxies seem on the point of collapse.

Mission, Models, Money has turned its thoughts to the kind of questions with which many of us who work in the sector are concerned. For example, what new knowledge, skills and competencies do creative organisations and individuals need to develop to be able to thrive in the next decade or so? How do we support the sector to operate effectively in a new environment where potential investors are ever more risk-averse—a real problem for a sector that is, by its nature, risk-taking? What tools can we develop to help us to optimise digital communications technologies, which redraw or erase boundaries—boundaries between communities, cultures and nations, between audience and producer, and between cultural forms? What are the new economic structures that promote more sustainable lifestyles? That is an important point for me. If there is really going to be a shift—“a great turning”, as some people have described it—from a society based on continued industrial growth to a less consumer-driven, more sustainable way of living, what is the role of the arts in shaping national consciousness and informing the development of values that will be of importance to the economic structures of the future?

This social consciousness is not anything new for the arts and creative sector—on the contrary. But there is a greater sense of urgency given what is happening at the moment and the challenges that we are all facing. I want to say something in this regard about the creative, designer end of the fashion industry, not an area historically associated with social responsibility. First, I again declare an interest as I am in the process of looking into setting up an APPG on ethical fashion. This is a very broad term, indicating clothing and accessories produced using renewable fabrics, chemical-free dyes, organic materials or taking into consideration the people involved in the production of the garments and the humane treatment of animals.

I have been speaking to several people recently who care passionately about the subject. Increasingly, awareness is being raised within the industry about its responsibilities in terms of its environmental impact, exploitative employment and trading practices, and animal welfare. Awareness-raising among the public is crucial, as is encouraging a different approach to fashion, rejecting a high turnover of goods that are produced cheaply by exploited labour and which have a negative environmental impact.

Because this debate is about the creative industries, I am referring to designer clothing—an issue in itself, as of course it tends to be out of the price range of most people. But it is important because designers increasingly work across a range of markets, with the likes of high-end designers such as Matthew Williamson and Stella McCartney creating clothing for the high street. What they do and how they work is reported on extensively in glossy magazines and consumed by a great many people, particularly young women.

The noble Lord, Lord Hunt of Kings Heath, launched Defra’s sustainable clothing action plan at the start of February’s London Fashion Week; colleagues in the industry tell me that his catwalk performance was very much appreciated and highly rated. It is an admirable document with much to recommend it. In particular, it lives up to its title, because it is about action, not just words.

Cross-departmental co-operation really adds value to this type of project. Although the plan has been generated by Defra, the DCMS, DfID, the Department for Innovation, Universities and Skills and other departments have, or should have, active roles in ensuring that this initiative is given the best chance of being successful in the long term.

I make this point about fashion partly because many see it as frivolous, trivial and a conscience-free zone. But the number and quality of organisations that have signed up to the actions demonstrate the importance and economic significance of the market. Larger companies that have signed up, such as Tesco, Sainsbury and Marks & Spencer, are well known and have the resources and clout to make an impact, but they are not the prime focus of my remarks. It is the small-scale, innovative designers such as From Somewhere, Adili and People Tree that need support, especially those that have been pioneers of ethical fashion for a decade or more.

This economic climate is particularly unfavourable for the SMEs and micro-enterprises that populate the creative industries in general and the fashion industry in particular. I would very much like to hear from the Minister about initiatives under way at government level. In London, we are fortunate to have had the GLA produce several booklets of guidelines on becoming green in different areas, such as Green Screen Guide, Green Music Guide and Green Theatre Guide. Is anything besides the SCAP happening at a national level that can facilitate the further development of the creative sector and maintain its reputation for innovation, is economically resilient with a 21st-century skills set and is socially responsible and environmentally sustainable?

My Lords, I thank my noble friend Lord Bragg for his initiative in securing this important debate and for his entertaining and forceful review of our creative life. I grew up in Scotland before television, and a pretty bleak time it was. Our most exciting cultural activities were watching films and listening to music from America. We saw very little that reflected our own lives, and a career in what we now call the “creative industries” was open to very few. Well, how things have changed.

When I left school in the mid-1950s, about four pupils in 100 went on to university. Today, almost half of pupils go on to higher education, more than half of whom are women—another remarkable measure of our progress in the past half-century. And, of course, many of those students now choose media-related courses, or study for careers in other creative activities.

As chancellor of Glasgow Caledonian University, I see hundreds of gifted media students graduating each year. In recent times, their options for further training have multiplied in all sorts of fascinating niches. For instance, as a former television executive, I am delighted to see our university being used by broadcasters and independent producers, led by Shed Productions, to train scriptwriters of long-form dramas, from serials to soap operas, with the opportunity of working live on location.

In previous educational roles, on the council of Sussex University, as a governor of the National Film and Television School and as a visiting professor of film and media studies at Stirling University, I endured all the inane jibes about “Mickey Mouse” degrees in media studies. My most effective response was to say that when I was chief executive of Scottish Television, there was nothing “Mickey Mouse” about the profits that we made producing the “Disney Club” each week for ITV.

However, it took a long time to persuade politicians and opinion-formers that our creative work was also a serious business, in which Britain often led the world. I think that that argument has been won, and it is accepted that we are now well into the revolution that is shaping a very different, service-based, online economy.

I recall back in the 1990s a pioneering effort by Glasgow, an industrial city in decline, to rebrand itself, quite brilliantly, as the first European City of Culture, although that, for me as a Glaswegian, is a title permanently held by Edinburgh, which hosts each August the most exuberant collection of festivals anywhere on the planet. Once dismissed as arty and frivolous, that festival is now seen as an economic and aesthetic treasure—and I speak as a former chair of the Edinburgh Film Festival who endured what Bernard Levin once denounced as Edinburgh’s “annual ceremony of the grudging of the money”.

Just last month, our ambitious and successful arts festival in Brighton, where I now live, attracted many visitors from abroad and kicked off a summer holiday season. As my noble friend Lord Bragg said, we must surely marvel at all the activity that is going on: music festivals, book festivals, art exhibitions, poetry readings, opera events, free and more attractive museums and, as the noble Lord, Lord Roberts, said, dance groups such as Diversity from Dagenham—Britain has indeed got talent.

We have all this, and Liz Forgan now chairing the Arts Council, where we shall all benefit from the bubbling energy of the kind which she showed in her time running BBC Radio and, before that, at Channel 4, where she helped create a whole new industry sector of independent producers of television. Six hundred indie companies now turn over about £2 billion a year and employ more than 20,000 people. It is another huge success in our media sector, helping us to maintain our reputation for producing the world’s best broadcasting.

As noble Lords will hear in a later debate today, your Lordships’ Select Committee on Communications has been conducting inquiries into the state of our television and film industries. Here it is not, alas, all good news. One great achievement of broadcasting policy in the UK was the creation of a network of commercial broadcasters, mostly based in the regions and coming together in the national ITV network to compete with the BBC in the quality of their public service broadcasting. For 50 years, this very robust business was funded by television advertising, but the ITV network now faces acute problems. Despite maintaining pretty decent audience ratings, ITV sees its advertising migrating to online services. Newspapers are also in financial trouble, as ad revenue is sucked out of the UK economy by global operators such as Google. The ITV regional companies have now mostly been absorbed into a consolidated ITV plc, based increasingly in London.

To compensate for the loss of ITV production from centres across the English regions, I am sure that the Minister will want to give every encouragement to the BBC in its plans to devolve operations outside London. Perhaps Ofcom, while considering how best to support ITV, would have a word with it about its obligations to support training in television by renewing its vital contribution to Skillset, the sector skills council for the creative media. Skillset does a great job and support for it should be mandatory from all companies that benefit from our systems of public service broadcasting. Our talent base is what underpins the success of our television industry at home and in international markets, and is also what attracts international film makers to shoot in Britain and work with British crews. I congratulate the DCMS and, in particular, our own the noble Lord, Lord Smith, on setting up the UK Film Council, which has been a force for progress across what has always been a rather unco-ordinated but talent-driven business. That talent has to be trained, as my generation was not, to maintain the remarkable position that the UK has achieved as a global leader in the creative industries.

I trust that the Minister and politicians of all parties will follow a basic rule of business; invest in success and back your winners. If we are in for a lengthy recession and the possible shrinking of the financial sector, it is all the more important that the Government continue to invest in new skills and talent, which will build new creative businesses, starting in our schools and universities. The White Paper on Digital Britain, to be published later this month, will highlight the challenges and opportunities of the online revolution.

Let us be under no illusions: a wave of disruptive technology is sweeping across our creative industries. We are already counting the casualties in regional newspapers and television. Piracy has to be suppressed; global predators and free-riders have to be confronted. Levies may have to be imposed to pay for the support of this vital industry sector, which is a creative cluster of talent, uniquely British—and irreplaceable if allowed to atrophy. Above all, we need strategies in government that help our creative industries to understand and deploy these new technologies ahead of other nations. I hope that the Minister and official bodies such as Ofcom will conclude that, in times such as these, they may have to be as radical as reality itself.

My Lords, since adding my name to the speakers list only a few days ago, I have received briefing documents on a wide variety of subjects, which highlight the importance of our debate this morning. I have heard from ITV, Channel 4 and Sky Arts. I have received information on the Digital Britain report, highlighting the need to protect and create jobs in the creative industries. PPL has contacted me on the problems of copyright infringement and stressed that that lies at the core of the business models of all the creative industries. I have notes on online piracy and illegal file sharing.

Although I am grateful for this information, it is important that I remind your Lordships of the significant contribution of jazz to the economy. I declare an interest as a very mediocre trumpet player and co-chairman of the All-Party Parliamentary Jazz Appreciation Group. We had to change the name from the All-Party Jazz Group to the All-Party Parliamentary Jazz Appreciation Group because of all the requests that came to Westminster to book the non-existent parliamentary jazz band.

Today musicians throughout the country play jazz. Many UK jazz musicians have developed international reputations for live performance and have recordings that are seen and bought by a worldwide audience. There is an active jazz scene in all major UK cities. Mature musicians with established reputations and young musicians, many with great flair and originality, seek a serious audience who can understand and enjoy their music. They perform in a variety of settings: concert halls, arts centres, hotels, ballrooms, village halls, restaurants and coffee and public houses. Every year there are jazz festivals all over the country, many attracting some of the finest jazz musicians in the world. More than 3 million people patronise these events with five times that amount expressing a definable interest in jazz.

On 20 May, the parliamentary group—sponsored by PPL—hosted the widely acclaimed parliamentary jazz awards, where we recognised the contribution made by musicians, their recordings, broadcasters, educators, journalists and jazz venues.

The annual turnover of the jazz sector of the British music industry is in excess of £88 million. The report by Jazz Services Ltd as part of its Arts Council England lottery development project found that sales of CDs through shops and websites and at gigs reached almost £40 million, while ticket sales for jazz concerts and festivals were worth £22.5 million.

The Value of Jazz in Britain report estimated that there were over 45,000 jazz performances per year in the UK and said that a significant area of growth was the number of annual festivals. A survey of jazz promoters showed that half of pub gigs were given free of charge or cost £5 or less to enter. The typical admission charge for a jazz club event was between £5 and £7.50, while tickets for concerts at arts centres or concert halls typically cost between £7.50 and £10. The income of promoters and musicians from admission charges is supplemented by public funding from arts councils and local authorities, with smaller amounts from arts charities and commercial sponsors. The report estimates that jazz received over £4 million per year in public funding and a much smaller amount in commercial sponsorship.

Audience research on music and other art forms showed that over 3 million adults had attended at least one jazz performance in the previous year, with a core audience for jazz estimated at 500,000 compared to 400,000 for classical music concerts and 100,000 for folk music events.

Sadly, as the noble Lord, Lord Bragg, mentioned, the performance of jazz has been restricted by the licensing legislation. The Act included the playing of recorded music in the description of regulated entertainment, but it was changed in the transition to the new regime for existing bars, pubs, restaurants, hotels and any premises that were already licensed to sell alcohol. Those places were allowed to keep jukeboxes or other systems for the playing of incidental recorded sound and broadcast events, no matter how powerful the amplification. However, the automatic permission to have one or two musicians in such venues—amplified or not—has ceased. That was the live performer element of the so called two-in-a-bar rule, which, since 1961, had been available in those premises as an exception from the general requirement to hold a public entertainment licence for live music. This restrictive legislation has had serious implications for jazz. It has removed hundreds of venues where young musicians can perform and learn to play to an audience.

As a result of extensive lobbying, the Government announced on 18 July 2008 an examination of the effects of the Licensing Act and the impact on live music. In evidence, the committee heard from UK Music and the licensed trade that the Act was harming small gigs. Despite that, the Government seem now to have abandoned their promise to hold in the spring of this year a public consultation on further exemptions for low-risk performances.

In March 2009, the noble Lord, Lord Clement-Jones, asked why the consultation had not taken place. The noble Lord, Lord Davies, replied:

“There is no formal review of the live music provisions of the Licensing Act 2003. However, the Department for Culture, Media and Sport continues to discuss the effect of the Licensing Act 2003 on live music with representatives of musicians and local government. These discussions include consideration of how low impact live music events might be further encouraged”.—[Official Report, 24/3/09; col. WA 122.]

A report by the House of Commons Culture, Media and Sport Committee, published on 14 May, agreed that something more needed to be done to try to make it easier for smaller and secondary venues to host live music performance. It states, on page 30:

“We recommend that the Government should exempt venues with a capacity of 200 persons or fewer from the need to obtain a licence for the performance of live music. We further recommend the reintroduction of the ‘two-in-a-bar’ exemption enabling venues of any size to put on a performance of non-amplified music by one or two musicians without the need for a licence. We believe that these two exemptions would encourage the performance of live music without impacting negatively on any of the four licensing objectives under the Act”.

I know that the Minister will have a look at this. I am concerned that draft DCMS guidance that accompanies the new minor variations amendment includes a very weak statement in support of live music applications. It says that,

“the addition of live or recorded music to a licence may impact on the public nuisance objective, but this will depend on many factors. Licensing authorities will need to consider factors such as proximity to residential areas and any noise reduction conditions volunteered by the applicant. It is very much the Government’s intention that applications to vary a licence for live music should benefit from the minor variations process unless there is likely to be an adverse impact on the licensing objectives”.

Could it be that, despite government promises of a public consultation this spring on further exemptions for live music, faced by Local Government Association opposition, Ministers have little enthusiasm for such exemptions in pubs and bars?

I have a final thought. Can the Minister comment on the plan by Sing London to place 30 pianos in different areas of London? Some of the sites will be in licensed areas, but some will not. Will he be advising the local authorities how this contravention of the licensing law will be managed?

My Lords, I, too, am extremely grateful to my noble friend Lord Bragg for initiating this debate, which comes just a week or two ahead of my noble friend Lord Carter’s Digital Britain report. This Labour Government, I am proud to say, and my noble friend Lord Smith of Finsbury should take enormous credit for having put the creative industries on the public policy map since 1997.

Twelve years on, and with a severe contraction in our financial services sector as well as elsewhere in the economy, it feels as though the creative industries’ time has finally arrived. We have the strongest creative talent base in the world, certainly on a per capita basis and possibly even on an absolute basis. We need to invest in that talent and to harness it to both our industrial and our cultural ends. Should we do so, the rewards will be immense. I should like to identify myself with the remarks made by my noble friend Lord Macdonald of Tradeston in what I thought was a marvellous speech about the talent base. The talent base is everything. Without the talents and skills, this entire debate becomes, I am afraid, something of a waste of time; with them, it becomes packed with potential.

The really big thing that has happened since 1997 in relation to this sector is the serious arrival of digital technology. My noble friend Lord Carter, who sadly is not in his seat today, knows this better than anyone in your Lordships’ House, and I am sure that we all look forward to the imminent publication of his report.

The digital environment, and the huge changes that it brings with it in terms of access to audiences and the use of our creative output, is a massive opportunity. It means, for example, that organisations such as the Tate, the Royal Opera House, the National Theatre and the British Film Institute, all of which were once thought of simply as cultural organisations, are suddenly in the digital content business—and on a global level. The Royal Opera House and its production arm, Opus Arte, are now delivering their productions to cinemas across the UK, Europe, the United States and well beyond. Last year, over 450 million people in China saw one of its productions.

Some of this work is being done in 3D. As anyone who has seen a demonstration of 3D cinema knows, it pretty well knocks your socks off. Tate Media has taken one of the best-known brands in the country and created and commissioned content that expands on and contextualises its activities in all sorts of innovative ways via its Tate Player. Later this month, the National Theatre will screen “Phaedra” with Helen Mirren live to a chain of cinemas across the UK. This is a huge opportunity for the UK, culturally and commercially. In fact, the two happily go hand in hand. Building on our cultural assets, we can create global commercial value, while also delighting audiences at home who, both as taxpayers and as lottery players, helped to subsidise that content in the first place.

However, the creation of new content, vital though it may be, is only part of the contribution that our creative industries can make in a digital age. I happen to think that we are simultaneously entering a fascinating phase in the development of this country’s literal treasure trove of archival content. Much of it was funded by the public purse in the name of our creative industries, although they were not called that at the time, and much of it was for years hidden from public view. In other words, they are creative assets that have not been allowed to sweat their value to the benefit of the creative economy and, indeed, to the broader public. This content is staggeringly rich and diverse, ranging from hundreds of episodes of “The South Bank Show”, courtesy of my noble friend Lord Bragg, to award-winning amateur films about life in rural England, few of which have ever seen the light of projection.

I offer just one example. Inspired, I am sure, by the runaway success of its Mitchell and Kenyon titles, the British Film Institute moved up a gear last year with the restoration and release of the public information masterpieces, which it put out on DVD, entirely made up of archival material. The British Transport Films collection, the stunning collection of public information films collected together under the generic title “Land of Promise” and the GPO film packages are all absolutely invaluable to anyone with the remotest interest in this nation’s recent past.

The next phase is to really build on the BFI’s existing online activities, such as, and make sure that schools and colleges of every kind across the UK make use of these films in citizenship classes and, indeed, in modern history classes. These are films that can and should be used for a whole series of different purposes. It is hard to argue the case for producing a brilliant series on British Rail if it is going to reach and engage only a few hundred rail anoraks; I sincerely apologise in advance to those one or two anoraks who invariably emerge from the depths of your Lordships’ House as world experts on pretty well every subject on earth. On the other hand, if, through films such as these, citizens across the UK, young and old, develop a better understanding of the overwhelming importance of our transport infrastructure, that can surely only be a good thing. There is real added value in ensuring that, for example, a national debate on the future of rail is both informed and stimulated as a result of the availability of such material.

Within the context of many issues surrounding future sustainability, such films suddenly become an even more valuable teaching and learning resource. Until we encourage people, particularly young people, past the so-called expert custodians and allow them to understand the implications of the many irreversible decisions being made daily on their behalf, we are merely delaying the opportunity of creating a more engaged, better informed and more responsible citizenry.

Let me put that another way. By combining the availability of an extremely rich array of material from the UK’s archive and the possibilities offered by digital technologies, we have the opportunity of looking at things and, as it were, reassembling them. We can try to reimagine our world as it might be, or even as it might become. All this is part of what is really an enormous opportunity for the strategy for UK screen heritage, for which the Government have recently given the UK Film Council a capital allocation to begin to bring forward.

I am also enormously encouraged by the work that Roly Keating is now leading as director of archive content at the BBC. The decision by the BBC’s management to make one of its most senior executives head of this whole area signals something very important. It is the kind of management change that suggests a serious interest in releasing this potential.

Tony Ageh, the BBC’s controller of archive development, recently came up with an extraordinary and prescient analogy in which he compares archives to energy. He makes the point that coal has for ever lain underground and was for millennia just sitting there to be dug up from time to time because it burns slowly and you can warm yourself by it. Basically, it was an entirely passive asset. However, eventually someone realised that this coal stuff was really quite useful. Under the right conditions you can generate sufficient heat to make tools and weapons and do all sorts of other useful things. A few thousand years go by and along comes James Watt, with another enormous leap forward to the realisation that you can turn heat into steam and thus generate energy, so passive coal became active energy. Surely that is exactly what we should now be trying to do in moving our archives from their passive, collection-based status to a thorough-going, energy-generating, productive resource—effectively a brand-new form of invaluable intellectual energy for our creative economy. As during the first Industrial Revolution, culture and commerce can go hand in hand as an engine of growth.

In the end, though, our ability to deliver all this rests on our commitment to invest in our creative and technological talent. It seems absolutely self-evident to me that without that commitment, which has to be a judicious mix of public and private investment, we cannot be among the winners in this new economy.

I am absolutely persuaded that, as we enter the era of the digital economy, our creative industries have the potential to be world leaders in many respects. I do not have time today to touch on the contribution that our games sector, designers and musicians make to that economy both at home and abroad. But we have the creative talent. We have the creative and cultural assets. All we really now need in order to deliver our potential is the vision, ambition and energy that demonstrate our commitment to these creative industries as being the real standard-bearers for our national prosperity in the 21st century. I very much hope that today’s debate will reinforce the fact that all sides of your Lordships’ House recognise the opportunity and the fact that it is there for the taking.

My Lords, I declare a non-pecuniary interest as chairman of the Wales Millennium Centre and president of the Royal Welsh College of Music and Drama. I join in thanking the noble Lord, Lord Bragg, for securing this debate.

We have heard persuasive arguments. The sector is vital, not just for the wealth that it creates, but for its contribution to the social and intellectual well-being of our country. It was my intention to expand upon such matters on a national canvas, until I had the fortune—good or otherwise—to pick up yesterday this excellent document which was thoughtfully placed in our Library. I refer to the 2007 report published by UK Trade and Investment entitled Creative Industries UK.

As I scanned its helpful pages, I realised how London-centric the messages were. The word “Cardiff” is mentioned once, “Wales” twice, “Scotland” once and “Edinburgh” thrice. In the section on useful contacts, there is no Arts Council of Wales or Wales creative industries’ Hub, although Scottish Screen does get an entry. I could go on, and the Minister may wince as I return to themes that I have already used in your Lordships’ House in connection with the funding of the Olympics and its negative financial impact on arts funding and the unsatisfactory Cultural Olympiad programme which is unfolding; unsatisfactory because, despite government statements to the contrary, it is again largely centred on London organisations. Where is the legacy promised to the United Kingdom?

The former Prime Minister stated in 2007 that, years before he came to government, he said that he would,

“make the arts and culture part of our ‘core script’ … no longer to be on the periphery … an essential part of the narrative about the character of a new, different, changed Britain”.

I, like many others, am still waiting for this to happen.

After a false start, Liverpool achieved much in artistic, social and economic terms by successfully completing its year as European City of Culture—so much so that the Government then suggested at the beginning of this year that they would support an initiative to have a British city of culture annually. Since the initial publicity there has been silence. I remind the Government that those UK cities which reached the shortlist for 2008 each spent at least £1 million. The question I have raised with the DCMS is that, rather than start a whole new contest in these economic times, why not just nominate the cities that were shortlisted, put them in alphabetical order and, if they accept it, just get on with it? Perhaps the Minister would care to comment.

As Wales has been left off the UK Trade and Investment cultural map, I fear that I must compensate for this omission. For some time, the creative industries in Wales have been identified as a key driver of our business growth. The sector employs 21,000 people—just over 4 per cent of the UK creative industry's workforce—contributing more than £900 million GVA to the UK economy. By 2014, the industry is expected to grow by another 5,000 jobs. By 2011, the BBC will have moved more of its drama production to Cardiff, adding to the growing stable of network drama produced in the city, including the award-winning “Doctor Who”, “Torchwood” and “Gavin and Stacey”.

One of Dylan Thomas’s more memorable lines is:

“Praise the Lord, for we are a musical nation”.

As I speak, the Welsh capital is preparing for the BBC Cardiff Singer of the World 2009 and the Wales Millennium Centre is literally buzzing with rehearsals for competing singers from 25 countries for the hugely prestigious title, won in the past by many now globally famous stars. The event will attract audiences from all over the world. Nowhere is performance better showcased than at the Wales Millennium Centre with its 1,900-seat lyric theatre, studio theatre, state-of-the-art recital hall, dance house and one of the UK's largest free performance programmes. The centre is home to eight creative organisations: Welsh National Opera; BBC National Orchestra of Wales; Academy; Hijinx Theatre and Touch Trust, two artistic companies working with people with learning disabilities and severe learning disabilities; Ty Cerdd, the amateur music federation; Diversions, the national dance company; and Urdd Gobaith Cymru.

Last week the centre hosted the Urdd National Eisteddfod—the noble Lord, Lord Roberts, may have referred to that—one of Europe's largest youth cultural festivals, attended by 100,000 over six days. The centre is a creative factory, a true furnace of creativity, with almost 1,000 people employed under one roof. Noble Lords may agree that this is a significant workforce even by large-scale manufacturing standards. Since opening in 2004, the centre has been visited by nearly six million people, making it the number one tourist attraction in Wales and one of the top 10 cultural attractions outside London. This figure is far in excess of the original predictions of key stakeholders, including the Welsh Assembly Government.

We have seen unprecedented growth in recent years in the arts, securing the UK's position as a world centre, if not the world centre. The sector has also held up well—as it has done in the past—against recession. Last month, for example, we sold £l million worth of advance tickets for our Christmas presentation, Cameron Mackintosh's “Les Miserables”, touring for the first time in 15 years.

As we have frequently heard, the Government seek to grow our way out of recession. I firmly believe that the seeds of investment need to be spread on this most fertile ground—the creative industries. The impact on the lives of people of all ages and backgrounds is now well known.

Returning for a moment to UK Trade and Investment—an organisation for which I have a lot of respect and with which I have had a great deal to do in the past—earlier this year a YouGov survey conducted among a panel of business leaders cited the provision of arts and culture as being a critical determinant in investment location decisions, even more important—this may be hard to believe—than a favourable tax regime. There is no doubt that the Wales Millennium Centre has become a symbol for what is innovative and attractive about Cardiff and Wales, and for the devolved Administration it is a symbol of national identity.

Lastly, Wales is a centre of excellence in creativity, with our higher education institutions punching well above their weight in producing some of the UK's leading talent in music, drama and film. I hope that I have contributed to noble Lords’ understanding.

My Lords, I, too, thank my noble friend Lord Bragg for introducing this debate at a very timely moment. His remarks cheered me up. In a dark time it is wonderful to hear such enthusiasm. I agree most profoundly with what he said about the contribution of the arts and culture to—as he put it—feeding the inner life. If only we could talk about this with less embarrassment, not in this House, of course, but elsewhere.

I should declare a variety of interests—the term “creative industries” draws together a variety of enterprise which includes the live performing arts, where I spent most of my professional life and where I retain connections through membership of several boards, including that of the Roundhouse in north London, the National Opera Studio and the Royal Academy of Dramatic Art. Today, however, I want to talk about two aspects of the creative economy with which I have no personal association, except to the extent that my son started in one of them and now works in the other. The first is television drama—that was briefly mentioned by my noble friend Lord Bragg—and the second is the fashion industry, about which I thought I might be alone in making observations. However, I reckoned without the excellent contribution of the noble Baroness, Lady Young.

I am privileged to be a member of your Lordships’ Select Committee on Communications. I am sorry not to be able to take part in the debate later today on the committee's report on public service broadcasting because many of the issues raised in the report have a direct bearing on matters under discussion in this debate. In particular, it draws attention to the current gaps in public service provision and asks some searching questions about how those gaps are to be filled, both in terms of funding and content. My own principal anxiety centres on the future of high-quality drama for television. For the purposes of this debate, I use the term “high-quality” to refer to the kind of work exemplified by, for example, Granada's work in the 1980s such as “Jewel in the Crown” and “Brideshead Revisited”, and more recently by productions such as Channel 4’s recent “Red Riding” or “The Devil's Whore”, and some of the best of the BBC's output such as “Life on Mars” and “Cranford”.

I recently embarked on a programme of acquisitions for my own DVD library in order to get together as many of the television drama series that I remembered enjoying over the past 25 years, have another look at them and see whether they stood up to scrutiny. So in the past few months I have watched “Brideshead Revisited”, many adaptations of various Dickens novels and of novels by Trollope, Thomas Hardy and George Eliot, two series based on John Le Carre's Smiley novels, “The Edge of Darkness”, a brilliant original drama commissioned by the BBC—now something of a cult piece—in which the late and in my view very much lamented Bob Peck gave one of his finest performances, and a lot else besides. Your Lordships may think that I have too much time on my hands. But the fact is that I am not embarrassed to share this aspect of my leisure activity with the House because this little research project focused my mind not on recalling a supposed golden age when there was always something good on telly—although a lot of this work is very good—but on wondering whether in 25 years’ time my children will have a similarly impressive volume and range of television drama to remember in their dotage. For the danger in which we stand now is that the cost of making this sort of home-grown work is so high, particularly when compared with the relatively low cost of buying in product from the USA, that television companies are able to do less and less of it and almost invariably need co-production money to do it at all.

We have heard about the crisis facing the independent television companies. ITV has already told us that drama is one of the areas it will cut back. Channel 4's drama output, once one of its great glories, is also likely to decline as the company struggles to find a sustainable way forward. The BBC, although still in the forefront of producing UK drama, is under increasing pressure to share its resources with others, and we must wonder what impact this will have on how it fulfils its commitment to drama in the future. Why does this matter—in particular, why does it matter to the economy? Why should we not leave things to the market and content ourselves largely with a diet of imported drama, mostly from Hollywood? In thinking about this I am indebted to Professor Peter Grant of the Law Faculty at Toronto University. In the illuminating evidence he recently gave to the Communications Committee, he noted the need for Governments and regulators to maintain and enhance their involvement with locally produced drama to avoid a decline in what Ofcom and others accept is the most popular genre of programming on television.

Professor Grant says:

“People appreciate having their own stories told and their own experience reflected on the small screen”.

He goes on to point out that there is a clear economic justification for government support, noting the importance of creative clusters to economic strategy. He says:

“Creative clusters are essentially groupings of the creative personnel in cities and regions who are able to produce quality cultural products of all types … Drama is the one category that uses all of the creative energies and all of your creative forces together. It is the highest cost within programming but it is also the most ambitious and if you have a structure in the country that supports local drama it is a major contribution to the development of these creative clusters. There have been studies ... in many countries ... about the importance now of creative clusters to the economic well-being of a nation”.

The UK is rich in the talented people who form these clusters, and their skills are sought after worldwide, as a number of speakers have said. Furthermore, what they create is popular and highly valued by audiences both at home and abroad. Will my noble friend say when he replies in what way the Government intend to encourage broadcasters and programme makers to maintain their commitment to UK television drama? Will they, for example, consider the introduction of levies, as was mentioned by the noble Lord, Lord Macdonald, and as has been done in other European countries, to provide an additional source of funds for this vital work?

Finally, I shall have a brief word about fashion. I love fashion; it is perhaps another indication of my fundamentally frivolous nature, but it is not just because I like nice clothes. I am intrigued by the way the fashion industry represents the bringing together of often radical design ideas with strong commercial imperatives. It is an industry that is highly consumer-focused and depends on innovation—some might say on novelty—making it highly dynamic and highly globalised, for example in relation to the sourcing of textiles, as has already been pointed out by the noble Baroness, Lady Young. As she also said, it has not always been at the forefront of ethical thinking about trade, but now, in a world faced with huge social, economic and environmental challenges, some practitioners are beginning to develop systems to address the negative impacts of current practices and push the huge creative energy within the industry towards imagining—I use the word advisedly—a future based on collaborative models of sustainability and ethical practice. For example, the Centre for Sustainable Fashion, set up in 2008, at the London College of Fashion is already working with big fashion retail businesses to take some of these ideas forward, looking to develop skills and technologies as well as design talent, to create, as it says,

“better lives through a sustainable fashion economy”.

I will be interested to hear how my noble friend responds to the remarks of the noble Baroness, Lady Young, about government support for the sustainable fashion initiatives already under way.

In these dark times, and despite all the difficulties, the creative industries in this country provide us with something to feel good about. There is so much to be proud of, and so much to lose if we fail to understand the significance of what these industries contribute. I hope that the Government will continue to do everything possible to support and encourage them.

My Lords, I am extremely grateful to the noble Lord, Lord Bragg, for introducing the debate, and particularly for—on a slightly different tack from the noble Baroness, Lady McIntosh—emphasising the creative industries’ economic significance to Britain. That is particularly important in the context of what I might call the post-financial-crash world, although I am tempted as an aside to comment that I suspect that the trouble there was a trifle too much creativity. The point about the creative industries’ talent and creativity is that it does not come from nowhere; it needs to be nurtured, appreciated and rewarded. In my few remarks, I would like to say a little about, first, failure, which we have not talked about yet; secondly, the past; thirdly, leadership; and fourthly, education.

The older I get, the more I am staggered by the number of bad paintings in the world. An awful lot of them were thought to be good at the point at which they were created. If you go into a bookshop, it is unbelievable how many bad books are on the shelves; if you go into the basement of a second-hand bookshop, it is even worse. You have to realise that, for the people who created them all, they were important intellectual projects. However, to have a successful creative economy—rather like having an effective programme of scientific research, a point made recently in an article that I read by the noble Lord, Lord Rees of Ludlow—it is necessary to understand failure. Society must know how to handle it and deal with its financial implications. I remember talking long ago to Sir Sydney Samuelson about film, and I said, “Can you predict which film will be a success?”. He said, “No, but I can tell from a group of 10 which film will become successful; nine of them will flop”. The problem is rather like something that I was saying to the noble Baroness, Lady McIntosh, yesterday about the Treasury’s approach to the previous regime about film finance; it appeared to be too successful—in other words, it involved too much money—and somehow it had not produced, in its view, enough good films. However, to have a successful creative economy, there has to be failure and an understanding that that is inevitable.

For there to be a continuing pool of talent, it must be continuously replenished from the younger generation. The characteristic of the younger generation, in every generation, is that it rejects history. The world did not start in 1997, 1979 or 1879; it is always a case of one generation reacting against and moving on from the previous one. The pendulum swings backwards and forwards. One of the essential preconditions of a thriving creative sector of the economy is a thriving education sector, which has to understand history and the context in which we are living. Yet do we as a society properly fund and support what I might call the framework for that sort of education to take place? The Victoria and Albert, to name but one such institution, was established as much as anything else as a resource for students. That is true of many of the great provincial museums round this country. We do not fund them properly. We are a country that seems to have gone to war in Iraq without really thinking twice about its cost. If you take the longer view, which is more important to our country in the future? Do we have our cost-benefit analysis properly worked out?

Another important contextual aspect, on which nobody has yet touched, is the influence of old buildings and landscape on every member of society. That is probably the way in which we are touched by what has gone before in a bigger and wider sense than almost any other, yet how does society operate? The state seems to put hurdles and barriers in front of people who want to improve and maintain things. I always suspect that neglect and lack of maintenance has done far more to destroy our cultural architectural heritage than the Luftwaffe ever did. Again we come back to the question of whether those who take the decisions fully balance the benefits and costs represented by a world where the creative economy is becoming important.

As I said, much of what is created is not very good. The market sorts some of it out, but not all of it. I often wonder whether those involved in cultural leadership necessarily give enough support and credit to those who understand, and who can point out to the rest of us who follow, what is good. Some of us may have been to see the pictures that the British Council bought that are on show in the Whitechapel art gallery. It is an extraordinary testament to the ability of the original purchasing team to see what it acquired then. The noble Lord, Lord Bragg, will know that Carlisle—my home city, and very close to where he comes from—had the most enlightened policy of art acquisition between the wars and after the Second World War; Carlisle city gallery has a remarkable collection. That policy was made by those in political authority acting on the judgment and expertise of those who knew what they were doing, and not simply being swayed by a kind of—if I can be rather crude about it—debased populism.

I have touched on what is crucial for the future: that we have an education system to develop the talent that will enable us as a nation to derive the economic benefits that the creative industries are capable of providing for us. That education system must be rigorous and properly founded. I suspect that the chances of it turning out, certainly at degree-show level, material that the Members of this House might appreciate and enjoy at first blush are pretty remote. Indeed, I suspect that something would be wrong were it to do so. However, the danger that faces the country is that, if the system of education is organised on a kind of tick-in-the-box measurement output basis, we will stifle the creativity that will be so important economically for the future. Again, how is the cost-benefit analysis working in this area?

For me, the key to understanding creativity lies in one’s analysis of what “Culture” is all about. Too much now in this country, the “C” in “DCMS” has become synonymous simply with what people do in their spare time; that is not as it should be at all. In this country—it is a characteristic that seems to go back many years—I fear that we do not really care much about this. We, particularly the English, pride ourselves on having common sense and our feet on the ground. As a result, we do not give proper credit to the economic significance of these areas of human endeavour. It was summed up to me succinctly some years ago when I went as our country’s representative to the informal Culture Council in Bologna. There was I, and my Italian counterpart was Walter Veltroni, then Deputy Prime Minister. While I do not think that Italy is a very good political comparator, I suspect, perhaps at least in this little regard, that it may have got it a bit more right than we did.

The problem is that those in the public sector who view these things cannot evaluate what the cultural and creative sector contributes to our country—not in aesthetic, artistic or spiritual terms, which are important anyway, but in hard economic terms. In the post-industrial world into which we are moving, that will become increasingly important. It is important that this issue is revisited in a hard-nosed way to make sure that the bean counters and the accountants, in putting together our “national plan”, have this issue clear in their heads. The underlying problem is that culture, like politics, is something that we in this country want on the cheap. And look where that has got us—we seem to know the price of everything and the value of nothing.

My Lords, I recently came across the following quote:

“The stuff that creates new insights, delights and experiences, that stirs our senses and enriches our lives, is also the stuff that is propelling a larger slice of our economic output. How we create the architecture that will incubate rather than stunt creative industry growth is a major policy question”.

Those are the wise words of Will Hutton, the chief executive of the Work Foundation. This debate is an important contribution to creating that architecture and I congratulate my noble friend Lord Bragg on bringing it about.

Defining the sector is not always straightforward, but it should include everything from advertising to architecture, music and film to design and publishing, fashion and computer games to TV and DVD; and we should not overlook the fact either that it also includes the sciences, because what on earth are scientists if they are not creative? But that, of course, is a subject more appropriate for the debate that will follow this one.

Taken as a whole, the creative industries make a huge contribution to our economy as well as to our social and cultural life. They employ around 2 million people. They produce a higher proportion of GDP in the UK than they do in any other country, and they contribute considerably more to our balance of trade than does construction, insurance or pensions, and twice the amount of the pharmaceutical sector.

Our creative industries are therefore not some lightweight or marginal sector contributing on the periphery of our economy. They are serious business. Our music industry alone—a recognised world leader—supports 125,000 jobs and contributes nearly £5 billion to the UK economy, of which one-third derives from exports. The UK film and video industries employ more than 50,000 people, with British television’s overseas earnings bringing in around half a billion pounds. Pinewood Studios has recently announced plans to double its size as it challenges Hollywood for the next generation of blockbuster films. Importantly, those plans include working with the National Film and Television School to set up an onsite academy to train set designers and costume makers, and Pinewood is projecting its plans as an opportunity to form a creative cluster, adding to a media park that houses companies such as Technicolor.

We have the largest market in Europe for computer and video games, as people in Britain now buy more computer games than record singles. In 2008, the UK video and computer games industry generated £2.5 billion and more than 20,000 people were employed in games development, publishing and retail. Most multinational games companies choose to locate their European HQ in the UK, and we have by far the largest concentration of games development studios in Europe, with clusters around Cambridge, Coventry, Dundee, Leeds and Liverpool, to name but a few. Our design industry is now worth over £5 billion a year, employing 70,000 people, and our designer fashion industry—as the noble Baroness, Lady Young, said—has grown tenfold in the past decade. Collectively, that is big business indeed.

In the Government’s first two terms they championed the creative industries, driven largely, as many noble Lords have said, by my noble friend Lord Smith of Finsbury in a previous life. The challenge now is to promote creativity and innovation in every part of our economy, because creativity is as important in the retail industry and in education, health and business as it is in the creative industries. The cultural sector in its widest sense should become the dynamo of the creative impulse that can serve all of those areas. My noble friend Lord Bragg quoted the key employment statistics for the creative industries, but he was referring to direct jobs. A great many creative jobs are within the many businesses supporting these industries.

The Government understand and have recognised the value of the creative industries. They have lain out in clear and decisive terms what needs to be done to nurture the sector and ensure that the economy gains maximum value from their products. It was an excellent example of joined-up thinking and cross-cutting government that produced the creative economy strategy entitled Creative Britain: New Talents for the New Economy. DCMS, in partnership with BERR and the Department for Innovation, Universities and Skills, set out a wide range of commitments outlining how the Government will take action to support the creative industries. Most measures are self-explanatory, such as giving all children a creative education, supporting research and innovation, or helping creative businesses to grow and access finance, and all contain a raft of measures that will help develop and sustain the sector.

Perhaps the most important measure is the one known as supporting creative clusters, because the spin-off effects of such developments can be of real benefit to more than the creative industries themselves. These companies can prove to be the drivers of wider growth, sometimes leading the regeneration of cities experiencing post-industrial economic slump.

My home city of Dundee provides a prime example of that. Left reeling from a sharp reduction in heavy engineering and an end to shipbuilding, the city suffered from relatively low innovation and export levels. The response over the past 15 years has seen a ground-breaking collaboration between Dundee City Council, Scottish Enterprise Tayside, the city’s universities and its businesses to rebalance the local economy as a city region. Driven by Dundee University’s College of Life Sciences and the University of Abertay’s School of Computing and Creative Technologies—both recognised as world leaders—a creative media district was developed. The area already housed the renowned Rep Theatre and the Duncan of Jordanstone College of Art and Design, which is now part of Dundee University, and its cultural credentials were further enhanced with the arrival of the Scottish Dance Theatre and a visual arts centre, Dundee Contemporary Arts. Dundee’s Digital Media Park, now known as Seabraes Yards, was established, and the multiplier effect on employment, inner-city regeneration and the city’s reputation far and wide has been remarkable. More than 2,000 people are employed in the thriving creative media sector in Dundee, and this will drive further growth.

Other major UK cities have gone down a similar route: Glasgow’s flagship creative industries project, the Digital Media Quarter, is taking shape at Pacific Quay, a £500 million public and private sector redevelopment project that is anticipated to deliver 3,600 jobs by 2013. It is one of the flagship undertakings in the regeneration of the River Clyde waterfront, with neighbours including BBC Scotland, Scottish Television, Film City Glasgow and the city’s Science Centre.

The Cultural Industries Quarter in Sheffield is an example in another post-industrial city, and there are further instances in Birmingham, Liverpool and Newcastle as the regional development agencies increasingly identify the creative industries as one of the foundations for building a strong and dynamic regional economy. The London Development Agency has established Creative London to champion and support the capital’s creative industries. In Scotland, public agencies are supporting the country’s creative talent, formally joining forces to support the creative industries, a key sector for Scotland's economy which makes an important contribution to prosperity and growth. In 2007, these industries generated a turnover of more than £5 billion and supported more than 60,000 jobs. It is vital to build on that. In February this year, the Scottish Government published a framework document outlining the roles and responsibilities of key support organisations, including Creative Scotland, the enterprise agencies and local authorities.

The UK’s universities play a vital role in developing and sustaining the creative economy. The universities grouping Million+ has helpfully provided noble Lords with a briefing for today’s debate outlining the recommendations of its Creative Futures report. One of its group, the University of Abertay Dundee, is a partner in Scotland’s centre for research and teaching in the creative industries, the Institute for Capitalising on Creativity. Last year, the ICC was awarded a £1.5 million grant from the UK’s Economic and Social Research Council to conduct research in the creative industries in Scotland. The institute combines the expertise of four Scottish universities and is dedicated to a novel postgraduate programme of research, knowledge transfer, continuing professional development and networking/hub activities, including seminars, think tanks and conferences. The grant was one of only four to be awarded in the UK under the ESRC’s Capacity Building Clusters in Business Research and Engagement scheme, and was the sole grant to focus on the creative industries. Its award is a testament to the strength of those industries in Scotland.

This debate is indeed timely. As much attention as possible should be drawn to the cultural sector and the creative industries, and I trust that my noble friend the Minister will confirm that the Government will ensure that those industries continue to receive the necessary support to enable them to maintain their essential contribution to our economy.

My Lords, I thank my noble friend Lord Bragg and congratulate him on the masterly way in which he introduced the debate. However, I gently chide him for overlooking the astonishing contribution of the members of the Lunar Society in Birmingham—among them James Watt, Matthew Boulton, and Michael Faraday, to name but a few—who saw the problems facing people at the end of the 1700s and into the 1800s. They met on the night of the full moon because there was no street lighting, and they set about solving those problems. Although it is a small matter, it is the West Midlands and not quite the north.

That apart—and it might be something for the next debate rather than this one—there is expanding success in our creative industries. That success, as has already been said, is built on a very wide and deep base of talent—in schools, colleges and universities, amateur dramatic groups, choirs, orchestras and musical groups—and among all those people inspired to put the book which we all have inside us on to paper or on the screen. Musicians, film makers, script writers, authors, TV producers and designers are world renowned alongside a wide range of other talents, and the artists and programme makers do not all have to live within the M25 belt.

In Birmingham and the West Midlands, we have the Royal Shakespeare Company, the City of Birmingham Symphony Orchestra, the Birmingham Royal Ballet and the Birmingham Museum and Art Gallery among many other companies, both professional and amateur, which enrich our cultural lives and take their talents into schools and community groups to encourage others to enjoy what is on offer and perhaps to participate themselves. Advantage West Midlands, the development agency, has a £1.3 million fund to support festivals and events to underpin the region’s leisure tourism. These include the Shakespeare birthday celebrations, an international dance festival and a film premiere with Screen West Midlands. As has already been said, Britain truly has got talent.

Making a massive contribution to Britain’s creative energy, as well as to the enjoyment of its viewers and listeners, is of course the BBC. There is no other public broadcaster in the world, publicly funded, which is able to offer such a wide variety of programmes in sound and vision and digitally, and, in the process, to discover and nurture the talent and skills which this range of output needs and depends on, all paid for out of the licence fee. Only the BBC can sustain investment in a huge swathe of musical events, ranging from the joyousness of the Proms at one end to the big band concerts at the other. I very much agree with what Sir Michael Lyons, the chairman of the BBC Trust, said last week:

“The licence fee is key here … And when people come up with ideas about ‘top-slicing’ the licence fee for other causes or commercial players, they would do well to remember that licence fee-payers give us their money in good faith, believing it will be spent on BBC services and content. To suddenly tell them midway through the settlement that their money is being siphoned off, as some have suggested it should be, would be more than an act of bad faith, it would be tantamount to breaking a contract”.

The BBC also makes increasing use of the independent production sector, which stimulates and encourages talent outside London as well, to bid for programme commissions. Channel 4 does the same, investing around £400 million a year in core independent production companies and also supporting digital content production. Similarly, ITV, the largest of the commercial broadcasters, invests around £800 million a year in original content, encouraging and using the talents of writers, actors, musicians, designers, directors and editors. It also gets overseas revenue of around £300 million, up last year by 25 per cent compared with the previous year.

All these activities in the audiovisual sector face serious theft issues—the theft of intellectual property. Copyright theft alone costs the sector an estimated £0.5 billion a year, meaning a loss to the economy of £1.2 billion a year and cheating the Exchequer out of £85 million a year in VAT. Organised criminals pocket this cash instead of it going where it should through physical and digital distribution. A report last week by the Strategic Advisory Board for Intellectual Property revealed that,

“50 megabytes-per-second broadband access can deliver 200 MP3 music files in five minutes, a DVD of Star Wars in three minutes and the complete digitalised works of Charles Dickens in less than 10 minutes”.

The UK Film Council told the authors of the report that there were,

“just under 100m illegal DVD downloads in 2007 and the global film industry is thought to lose more than £4bn a year”,

through this theft. Respect for Film, which campaigns on behalf of the moving image, commissioned Oxford Economics to look at how legislative changes might help. It concluded that tightening laws to tackle physical and digital copyright theft would increase UK economic output from this sector by £614 million. That should interest any Chancellor of the Exchequer in these straitened times.

What changes could be made? One example is to make camcording illegal in cinemas. This is the source of 90 per cent of seized first-release films and DVDs. It is already a criminal offence in France, Italy and Spain, and, in my view, there is no reason why it should not be made a criminal offence here. Next, there needs to be better regulation by local authorities’ trading standards departments of car boot sales and other markets. It is said that the Digital Britain White Paper, which we are expecting later this month, will commit the Government to the aim of reducing the file-sharing of illegal content by 70 to 80 per cent within two to three years as one step towards reducing online copyright theft. If that is the case, I much welcome it. I well understand that it is a complex issue but ways can and must be found to protect intellectual property rights for the future of our creative industries.

This debate is right to celebrate the value of our creative industries socially, culturally and economically, and the depth and range of the talent that underpin them. I do so with enthusiasm.

My Lords, I appreciate being allowed to make this brief contribution in support of the education and research which underpin what other noble Lords have shown to be the huge success of the creative industries.

I argue—I declare an interest as chief executive of Universities UK—that this success has been built on the foundations of forward-looking education and research in higher education institutions, yet I am concerned that, in the laudable effort to promote study and research in traditional science subjects, we risk losing sight of the importance of the arts, humanities and social sciences, all of which play a role in underpinning our efforts in the creative fields. Research and education in fields such as design, interactive media and digital content, as well as more conventional creative subjects such as art, drama and music, are the lifeblood of our creative industries.

Therefore, I ask the Minister to comment on just one issue. Is it correct that the current definitions of R&D inadvertently position research for the creative industries and other arts and humanities outside the current R&D and innovation agenda? As I understand it, the guidelines for R&D tax credits state:

“Work in the arts, humanities and social sciences, including economics, is not science for the purpose of these Guidelines”,

thus excluding knowledge transfer activity relating to the creative industries, as well as R&D within the creative industries themselves, from tax relief of this kind. Therefore, a sector of industry which is often characterised by SMEs and which thrives on cutting-edge research does not receive the incentive to invest in that research.

So I urge Ministers, in considering how to achieve the best value for public funds, not to forget the lesson of the creative industries. We need education and research in the arts, humanities and social sciences. They are an integral part of the intellectual ecosystem of the UK—a part that, yes, provides powerful economic benefits but so much more as well.

My Lords, I join in thanking the noble Lord, Lord Bragg, for securing this debate. The number and variety of speeches today are an indication of how central the contribution of the creative industries is to the UK economy and also, I argue, to the well-being of the UK. As Sting pointed out at the Hay festival, while the country does not produce much any more,

“we do make art and music”.

He is so right. As I have said before, in an era which has seen manufacturing jobs halved since 1997, the creative sector is the new economy. As I think the noble Lord, Lord Watson, mentioned, it has been estimated that music alone contributes £5 billion to the UK economy.

Many noble Lords have mentioned festivals today—we have heard about Wales and Edinburgh—and I feel that I have to speak up for the south. I went from Hay to the Wylye Valley art trail, a nine-day celebration of the visual arts in and around the Wylye Valley where I live. It was an opportunity to visit artists’ studios, see the range of artwork being carried out in the area and to meet and talk to artists and craftspeople. Up the road, the Salisbury festival has for the past two weeks been host to music, dance, theatre, workshops and even, I believe, the noble Lord, Lord Bragg.

It not just about art, music and theatre; the range and diversity of the creative industries, as the noble Baroness, Lady Young, pointed out, stretches from fashion to film, advertising, architecture, television and video games. The cultural and creative industries make up 7.3 per cent of the national economy, contributing £60 billion a year and collectively employing 2 million people. We believe that that should be a key route to getting us out of the recession. But we must keep ahead of the game. The UK is lagging behind in the deployment of super-fast broadband. The Government’s commitment in the interim Digital Britain report to a rollout of two megabytes per second, when the average is already 3.6 megabytes per second, is not nearly ambitious enough and will not provide the catalyst for recovery that is required.

One of the greatest threats to the growth of this sector, as mentioned by the noble Lords, Lord Corbett and Lord Macdonald, is the knotty problem of the protection of intellectual property rights in our digital age and the ease with which copyright can be and is, flouted via online piracy and peer-to-peer file sharing. The report, to which the noble Lord, Lord Corbett, referred, Strategic Advisory Board for Intellectual Property stated that around 7 million people in the UK are involved in illegal downloads, costing the economy tens of billions of pounds. Of course, this behaviour spans from those involved in intentional online piracy to many who are uncertain about what is illegal. The fact that so much on the internet is free confuses people.

A new settlement is needed between artists, consumers, rights-holders and intermediaries, with copyright at its core. Good copyright protection is vital for the encouragement of creativity and the health of the creative sector. The Government’s interim Digital Britain report acknowledges the importance of creative capital. However, its suggestion of a digital rights agency without statutory powers seems to offer little hope of ending the problem. A collective approach from internet service providers, rights-holders and government is needed to make it more likely for court cases such as that brought against the founders of Pirate Bay to succeed. Moves by the ISPs to send warning letters to repeat offenders are welcome and evidence suggests that they would have a good chance of making a difference. However, we do not think that the “three strikes and you are out” policy being considered in France is a desirable solution. ISPs cannot be both judge and jury.

It is to be welcomed that part of the remit of the proposed rights agency is, according to the noble Lord, Lord Young, in a recent debate on online piracy,

“to focus on encouraging respect for the creative industries and increasing public awareness of the easiest way to access legal content”.—[Official Report, 2/4/09; col. 1224.]

I think that we would all agree about the need for education alongside regulation. We must not forget that we are talking about the creative world—a fast-moving, dynamic world that the explosion of digital content has nurtured. Alongside the need to find a solution to online piracy, we need to exercise proportion—cultivate without crushing, as the noble Lord, Lord Bragg, said. But the new world brings with it problems for the old.

Broadcasting has historically made a hugely important contribution to the British creative economy. I declare an interest as an associate of an independent production company. The inspired creation of the BBC—followed by ITV, BBC2 and then Channel 4—has played a crucial role in sustaining and fuelling British creativity. More recently, changes in TV terms of trade have seen remarkable growth in the independent production sector. As well as nurturing British talent and British content, radio and television channels have provided virtually free access to all across the creative spectrum. But as the noble Lord, Lord Macdonald and the noble Baroness, Lady McIntosh, said, British broadcasting has reached a critical point. A transition is under way. Competition from digital channels and the internet has led to a decline in advertising revenue for the commercial public service broadcasters, which is exacerbated by our being in recession. The funding model, which has seen an annual investment of £3 billion in UK-originated content is under severe threat.

However, the statistic that is most relevant is this: the five terrestrial channels—those that are universally available and free—are responsible for about 90 per cent of the investment in UK-originated content; whereas the new players—the digital channels and the internet—contribute less than 10 per cent. That is despite the fact that together they receive two-thirds of the income coming into UK TV.

The British creative industries need our public service broadcasters and we must protect the BBC licence fee from topslicing and suggestions of arbitrary freezing, as made recently by the Conservative Party. According to an independent report commissioned by the BBC Trust last year, the BBC’s activities put £5 billion per annum into the creative industries. We must not return to the days when the BBC was a monopoly. We welcome the Government’s commitment in the interim report of the noble Lord, Lord Carter, Digital Britain, to maintaining a plurality of public service broadcasters. Can the Minister confirm that the Government support the idea of a partnership between Channel 4 and the BBC’s commercial arm Worldwide?

As a publisher-broadcaster, Channel 4 makes an enormous contribution to the creative economy. It stimulates competition in the UK’s creative economy and it is vital that it survives. A snapshot of the creative industries can be seen in the new manufacturing industries and the phenomenon of Harry Potter. The films are made at a place called Leavesden aerodrome, where Rolls-Royce used to manufacture helicopter engines. Now instead of that kind of industry, it employs vast numbers of people from across the creative spectrum from the most advanced new media to practitioners of crafts in the shape of carpenters, painters, actors, and so on. But for this, there needs to be a skills base, and that starts with education.

Creativity needs to be nurtured from the, beginning, as the noble Lords, Lord Puttnam and Lord Inglewood, mentioned. Yet creative skills are stifled in our schools by a system that is dominated by exams and league tables. With the rejection of the Tomlinson report, the national curriculum continues to undervalue vocational qualifications. Creativity needs status, which has been recognised across the Atlantic by President Obama, who has committed to reinvest in arts education. He said:

“In addition to giving our children the science and math skills they need to compete in the new global context, we should also encourage the ability to think creatively that comes from a meaningful arts education.”

Will the Government follow his lead?

In their Creative Britain paper, the Government committed to establishing 5,000 apprenticeships annually in the creative industries by 2013. There is no money ring-fenced. Instead, the commitment turns out to be raising the awareness of employers of the benefits of apprenticeships. In other words, the commitment is to a concept, and so far I believe that only 50 places have been provided. The Chancellor said in his Budget speech that job creation and employment for people of all skill levels would be vital to long-term recovery. The Government should be investing in these apprenticeships.

The creative industries are a key to economic recovery. Two years ago, the cultural sector got together and published a manifesto called Values and Visions. I end with its words that,

“Britain’s economic prosperity will not depend on industrial prowess, natural resources or cheap labour but on developing, attracting, retaining and mobilising creativity. In this 21st century, goods, services and industries driven by knowledge and creativity will define Britain’s competitive edge”.

My Lords, I join in the thanks to the noble Lord, Lord Bragg, for introducing this interesting debate, which has covered such a wide range of subjects, all under the heading of creative industries.

A number of noble Lords have pointed out the huge contribution that the creative industries have made to the economy of this country and, as the noble Baroness, Lady Young of Hornsey, pointed out, the enormous variety of fields that come under the description. Creative industries cover architecture, advertising, the performing arts, television, theatre—you name it. It is immense.

In some areas, that contribution is made in spite of the obstacles put in the way of that industry. For example, there are artists’ resale rights, or droits de suite, as they are more commonly known. At present, droit de suite applies to living artists. That imposition by the European Union is difficult and expensive to administer. A recent study shows that fewer than 1,000 of the 85,000 living artists have received anything, while the top 10 per cent shared 80 per cent of the total money paid out in the first 18 months of the scheme.

The United Kingdom has a derogation, so that droit de suite applies only to living artists. That is due to expire in 2012, when the droit de suite will be extended to all European Union artists who have been alive in the past 70 years. I urge the Minister to impress on Her Majesty's Government the importance of extending the exemption for the United Kingdom. The United Kingdom is, both through its dealers in art and its salesrooms, a leading player in the art market. Credit crunch permitting, I declare an interest as a purchaser in the salesrooms. The art market is global, but with none of the leading competing markets, such as Asia, Switzerland and New York, having the droit de suite, business will inevitably gravitate away from the United Kingdom to countries outside the European Union, to the detriment of all.

Some might say that salesrooms and dealers in art are not a creative industry, but they provide a marketplace for a broad range of products, not just the headline-grabbing items that feature in the media. Those intermediaries therefore play an important role in the overall prosperity of the creative sector. Impositions such as droit de suite can only drive business away from these shores. The argument has been made that only the big-ticket items will disappear. That argument is not valid, as diminishing the marketplace as a whole will have a consequent knock-on effect that will end up by reducing the ability to deal in the more mundane and everyday articles of artistic or rarity value.

A significant impediment to prosperity within much of the creative industry is, as the noble Lord, Lord Corbett, and the noble Baroness, Lady Bonham-Carter, mentioned, illegal file-sharing and intellectual piracy. The internet has made that possible on such a huge scale that it has been estimated that a quarter of the population has been guilty of that abuse at some stage or other. There is no easy answer to that problem. If there was a simple and straightforward solution, it would have evolved in the huge amount of discussion on the subject and the reams and reams of paper that have been produced.

As my noble friend Lord De Mauley said in a previous debate, in such a fast-changing environment, where everything from users’ habits to the technology and the source of the desired content changes at such bewildering speed, it is impossible to expect the Government or a regulator to keep up. Instead, we must look to the industry itself to both tempt users away from illegal options and identify the worst abusers.

When one looks at what has happened in the past 25 years in the world of the internet, it is almost certain that there will be further developments in forthcoming years that no one here today has thought of or can probably even imagine. Given the huge changes that are occurring and will continue to occur on an almost daily basis, it is pointless to pretend that legislation can be devised to deal with the problem of creative talent being hijacked with no payment. Given that proposition, one with which I find it difficult to argue, it is for the industry itself, which has benefited so much in the past from technological developments—the wireless, telephone, television, gramophone records and so on, all of which have created huge streams of income—to find a solution, or perhaps even revert to life as it was before the days of electronic communication.

That evolution can already be detected in the world of popular music. Only recently, live tours were used to promote the sale of recordings. Now it is the recordings that are used to promote the live tours, which generate enormous sums of money, or there are the shows to which the noble Lord, Lord Bragg, referred. There may be a role for government here, but the role will be to facilitate the creative industries to act rather than for any direct action by the Government, as some have called for.

The noble Lord, Lord Bragg, and my noble friend Lord Chadlington both referred to the problem of bureaucratic interference and red tape of one sort or another. Some of that cannot be avoided. If government subsidy is accepted, it must be recognised that there will be a greater level of government interference. Examples such as that of Kevin Spacey and theatres such as the Globe, given by the noble Lord, Lord Bragg, which receive not much, if any, subsidy, demonstrate how effective theatre can be without interference and subsidy. From that, should one question whether subsidy can do as much harm as it does good and whether it should therefore be treated with great caution, lest creative talent is stifled? If theatres such as those can survive, surely television will be able to continue to produce quality drama without too much help.

Before sitting down, I would like to say that, having listened to him play, my noble friend Lord Colwyn grossly underestimates his talent as a trumpet player. It is a pleasure to listen to him.

My Lords, I share with the House my gratitude to my noble friend Lord Bragg for his introduction to this very important debate, and for stimulating such a range of constructive contributions, varied in geographical range and in the issues addressed, making this an extremely difficult debate to which to respond adequately. I will do my very best to answer the particular points raised. At the same time, I emphasise that in his introduction, my noble friend surveyed the contribution of the creative industries to our society and economy in a manner that I could scarcely match. The Government have revised the figure of the creative industries contributing 7.3 per cent of the economy; we now identify it as 6.4 per cent, which is a slightly lower contribution but, nevertheless, one that reflects the expansion during the past decade. There is no doubt that the creative industries are important in the employment that they provide, their contribution to the economy and, as my noble friend identified, our exports.

All that is not to measure the arts and the creative industries purely in terms of their economic contribution, but it would be remiss not to mention—I was grateful to my noble friend for emphasising this fact—that in these straitened times, we need to put our analysis of sectors such as the creative industries into an economic perspective. It is a dynamic sector. Over the past decade, it has grown faster than the rest of the economy. Employment in creative jobs has grown by more than 400,000 since 1997, which means that creative employment has grown at twice the rate of employment in the economy as a whole.

All of us on the government side—although I think it is recognised a great deal more widely than that—would say that one of the most popular, constructive and important decisions taken by the Government on coming into office in 1997 was the abolition of charges for galleries and museums. That has been justified by the enormous, overwhelming demand shown in the attendance figures at art galleries and museums since then. As my noble friend indicated, several of our great museums are now part of the national consciousness. That gives us hope that some of the suggestions made in this debate about the necessity for educational change are partially being met by this extension of opportunity and understanding.

My noble friend Lord Bragg mentioned education, and other noble Lords commented on it, including my noble friend Lord Puttnam. I was encouraged by the fact that an education Minister was sitting beside me for the early part of this debate and taking on board the important point about the extent to which the creative industries depend upon the successful education of our children. I say to those who are anxious about education that their anxieties might well be allayed by visits to schools. We all recognise that schools have to meet targets with regard to performance in a range of ways, but there is not a junior school in the country that does not show commitment to creative work for young children. Nor is there any real anxiety that the creative industries may not get the necessary support from young people emerging from our schools and universities. That argument cannot be sustained if we look at the kind of A-levels that many students take—in other parts of the House to some disparagement—because arts subjects are pursued to a great extent at A-level, and at university level, we have seen enormous expansion in opportunities in creative industries. I make the obvious point that one of the strongest growths in educational opportunity in higher education is in media studies. That is sometimes regarded in educational circles as some kind of a soft option, but let me emphasise that universities providing media studies often find that students on those courses are more successful in gaining their first jobs than those on more traditional courses. I look upon that as a positive factor. I am glad that my noble friend mentioned this in his introductory remarks.

My noble friend Lord Bragg will have drawn considerable solace from the immediate support that the noble Lord, Lord Chadlington, gave to the issues in this debate. There is no doubt that management in the creative industries is an important dimension of success. I was grateful for his contribution because it emphasised skills and talent, which the Government have been concerned to address. We need to look at the way in which the creative industries make demands upon the educational system and upon training. The Government are well aware of that, and are very concerned that action should be taken. My noble friend Lord Puttnam, who always speaks on these matters with great authority, was reinforced by my noble friend Lord Macdonald, who spoke about the television industry. The skills agenda is of the greatest importance. We are concerned to develop 5,000 apprenticeships before 2013 in the crucial area of the creative industries. That reflects the fact that the Government recognise that investment in skills is crucial.

In this context, I mention again that the Government are concerned about innovation. The success of the creative industries is clearly based on technological and non-technological innovation, and we are seeking to support and encourage innovation in various ways, including through NESTA and the Technology Strategy Board. It will be recognised that £10 million has been invested in the Technology Strategy Board in research and development relevant to the creative industries. This is where the Government can play their crucial role of giving support.

Several noble Lords made the point that the creative industries and creative people must not be strangled by overregulation. The noble Lord, Lord Colwyn, criticised the Licensing Act. He has spoken on this issue before. The Government are concerned about this matter. The noble Lord will know that certain aspects of licensing are vested in local authorities and that they have important interests to balance. However, I assure him that his point is well taken and the Government are looking at ways in which they can relax certain aspects of the regulations in order to sustain, as far as we can, live music in as many locations as possible. He will recognise that the Government have been reviewing the Licensing Act in that respect.

We have also been concerned to develop our Creative Britain initiative. It aims to move the creative industries from the margins to the mainstream of economic and policy thinking and to bring together a range of government departments that have relevant responsibilities, not only the DCMS, which is bound to be a lead department in this area, but the Department for Business, Enterprise and Regulatory Reform for regulation and support and, as my noble friend Lady Warwick reminded us, the Department for Innovation, Universities and Skills, on higher education. I am having a little difficulty in replying to the noble Baroness’s rather precise point about taxation and support. However, I assure her that the Government are fully aware of her important point about where incentives can be adduced, and I will write to her in some detail after the debate when I will have the chance to address some of the issues that I have not been able to address successfully.

Intellectual property was raised by a number of noble Lords. The noble Baroness, Lady Bonham-Carter, emphasised it in her contribution, and my noble friend Lord Corbett was concerned about it. The noble Lord, Lord Howard, was generous in his remarks on this matter when he identified that this is not an easy issue for the Government to address. The Intellectual Property Office has taken action on intellectual property enforcement and education and is concerned with this crucial issue. However, there is no doubt that we recognise that online piracy on the internet is difficult for national regulation and government in action. In order for the UK to remain one of the best countries in the world in which to produce and invest in content, we need to ensure that the necessary protection and incentives are in place for our creative workers. Therefore, we need to safeguard their achievements. However, the issue is complex, so our approach is multifaceted. We will legislate to require internet service providers to inform their subscribers when rights holders identify them as engaging in unlawful file sharing, and we will oblige ISPs to maintain a list of individuals identified by rights holders as being the most frequent copyright infringers. Subject to a court order being obtained, this will allow targeted legal action by rights holders against the most active infringers. All this activity will be subject to a code of practice supervised by Ofcom.

None of us underestimates the challenge represented by developing technology. Legislation always takes considerable time to enact and then to enforce, and the pace of change can overwhelm us if we are not careful as we develop that legislation. We are all therefore well aware that this is one of the most difficult areas in which to legislate effectively. I want to reassure the House that we do not have the slightest doubt about its importance to the creative industries and the need to preserve intellectual property and copyright positions.

Several contributions ranged probably more widely than my expertise and even that available to me from the civil servants was somewhat stretched. As they have both been in the news this week, I know rather more about Nicole Farhi’s husband and his work than about her products. However, I recognise the importance of the creative work of fashion, which was introduced by my noble friend Lady McIntosh and the noble Baroness, Lady Young. In particular, we applaud the point emphasised by the noble Baroness, Lady Young; namely, that sustainability is important. Creative fashion is an art form which strikes many with the most enormous enthusiasm, a point which my noble friend Lady McIntosh conveyed. The economics of the industry and the sustainability of the fabrics it uses are also important. I want to emphasise the importance of those points.

I am also conscious that the debate had a geographical dimension. My noble friend Lord Bragg worried me a little. I understand entirely his point about some of the ravages of the Industrial Revolution, which were not always attended by a skilful, creative force in terms of art. I recall however that in some of our major industrial cities, major industrialists were most concerned to construct some surpassing examples of Victorian art form, including architecture, to include some outstanding Victorian art and what had preceded it. We should pay tribute to the Industrial Revolution for some of the outstanding art galleries and museums in our northern cities and the Midlands.

I could not possibly allow the contributions made by those concerned with other parts of the country, particularly Wales, to pass without reference. The noble Lord, Lord Rowe-Beddoe, suggested that when the cities of Britain make a bid to become the city of culture, with which Liverpool was blessed in terms of its outstanding position in 2008, they be put in alphabetical order. I note that Cardiff begins with a “C” and that, therefore, a little special pleading was going on. All sides know the importance of Welsh culture, particularly with regard to music and poetry. I am grateful for those contributions.

I inevitably am short of time for covering such a wide-ranging debate. However, I again emphasise that we have been debating areas in which we all have an intrinsic interest because of the joy and advantage we all derive from the work of the creative industries. Of those, television is bound to be very important because of its appeal to the nation. Therefore, I emphasise to the noble Baroness, Lady Bonham-Carter, to my noble friend Lord Corbett, and to my noble friend Lord Macdonald, who spoke with his usual authority in this area, that we are addressing crucial support for aspects of the industry which are under pressure. We all know the difficulties of independent television and the pressures on the provision of regional news and programmes. There is no doubt that the BBC has an important part to play in responding to those challenges. In just over a week’s time, my noble friend Lord Carter will report on digital Britain and the future of the media in the broader sense, of which television is very important. We will be able to discuss this more intensively at that time. I hope noble Lords will therefore forgive me for not being able to speak too intensively about that aspect now.

Finally, my noble friend Lady McIntosh said that one of the things she enjoyed most about the opening speech made by our noble friend Lord Bragg was that he filled the House with cheer in these somewhat gloomy times, which he did. We all recognise the difficulties that the economy faces and the difficulty of resources for aspects of the creative industries. But we should also recognise the extraordinary advantage that we have. My noble friend described London as the city of delights. Whether or not we accept that at face value, we know what he means; namely, that London is the world capital for art. It leads an immensely creative country and this debate has shown all its richness and its importance. We should support it in every way we can.

My Lords, I thank all those distinguished speakers from whom I have learnt so much. The debate was very impressive and very informed. Alas, I do not have the time to point out your Lordships’ individual contributions, which is a great shame, given their quality. There is clearly real knowledge of and commitment to the creative industries in your Lordships’ House. As so often, this House stands for what is best in Parliament and in the country. I beg leave to withdraw the Motion for Papers.

Motion withdrawn.