Government complacency risks undermining the UK’s creative industries in the
face of increased international competition and rapid technological change, the House of Lords Communications Committee has warned.
In a report published on Tuesday (17 January), the committee says that creative
industries such as the meetings and events sector should sit at the heart of
the UK’s economic growth plans. And the committee sounds the alarm over missed
opportunities and a failure among senior Government figures to recognise the
sector’s commercial potential.
Baroness Stowell, chair of the Committee, said: “The UK’s creative industries are an economic powerhouse and have been a huge success story. But the fundamentals that underpin our success are changing, and rivals are catching up. The Government’s failure to grasp both the opportunities and risks is baffling."
The UK’s creative industries were worth more than £115bn to
the UK economy before the pandemic, and make up as many as one in eight
businesses across the country. Their contribution to the economy in 2019 was
more than the aerospace, life sciences and automotive industries combined. The
sector also delivers higher levels of innovation than many other areas of the
economy. Countries across the world are competing for a slice of the lucrative
opportunities in the sector: global exports of creative services alone exceeded
$1 trillion in 2020 – more than double what it was in 2010.
Failing
The Committee draws attention to the implications of
technology-related disruption, and warns that the UK risks losing its leading
position in this fast-growing industry. The committee concludes the Government
has a major opportunity to put the creative sector at the heart of its future
growth agenda but is failing to do so.
The report calls on the Government to unlock the sector’s
potential by fixing policies “characterised by incoherence and barriers to
success”. The report acknowledges the Government’s ongoing work but says urgent
action is needed to ensure the UK does not fall behind fast-moving
international competitors.
Issues of concern include:
- allowing other countries to overtake the UK on
providing more competitive tax incentives
- blind spots in education and skills policy
- proposals to relax intellectual property law
which threaten creative sector business models
- the ending of the Creative Industries Clusters
Programme
- a failure to take seriously the creative
industries illustrated by the perception across government that DCMS remains
the “ministry of fun” rather than a key driver of economic growth.
Baroness Stowell added: “International competitors are championing their creative
industries and seizing the opportunities of new technology. But in the UK we’re
seeing muddled policies, barriers to success, and indifference to the sector’s
potential. We acknowledge the Government has introduced important programmes in
recent years, but we are concerned past success has bred complacency.
“Our report sets out some immediate challenges that the
Government can address now. These include improving R&D tax policy to stop
excluding innovation in the creative sector; abandoning plans to relax
intellectual property rules which would undercut our creative businesses;
making the Department for Education wake up to the reality that the future lies
in blending creative and digital skills rather than perpetuating silos; and
urging senior figures across Government to take the creative sector’s economic
potential more seriously.”
Recommendations
The Committee set out a range of recommendations including:
• Improve tax policy to boost
innovation: The Government’s definition of R&D for tax relief is narrow and
restrictive. It should be changed to include more of the creative sector. The
Government should also benchmark other creative sector tax reliefs against
international competitors to address the UK’s declining competitiveness.
• The
Intellectual Property Office’s proposals to change the text and data mining
regime are misguided and should be paused immediately. The proposals were intended
to support the development of AI, and could enable international businesses to
scrape content created by others and use this for commercial gain without
payment to the original creator. This would threaten business models and income
streams in the UK creative industries.
• Protect
the UK's intellectual property framework, which is respected across the world.
These protections underpin the success of the UK's creative industry exports.
The Government must not water them down when striking new trade deals.
• There should be a cross-Government
focus on skills shortages in the creative industries. The Department for
Education should encourage students to learn a blend of creative and digital
skills; improve careers guidance; reverse the decline in children studying
design and technology; change lazy rhetoric about ‘low value’ arts courses; and
make apprenticeships work better for SMEs in the creative industries.
• UK Research and Innovation should
identify options to continue the most successful parts of the Creative Clusters
Programme after March 2023. Discontinuing support would be a needless waste of
a programme that is exceeding co-investment expectations by 600 per cent.
