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On 7 July 2023, the House of Lords is due to debate a motion in the name of Baroness Stowell of Beeston (Conservative), the chair of the House of Lords Communications and Digital Committee, to take note of the committee’s report ‘At risk: Our creative future’.

The committee’s inquiry into the creative industries was launched in July 2022. It focused on the potential impact of new technologies and innovation on the sector over the next decade, and the changes in the “skills and talent pipeline” that may be required as a result.

1. Report conclusions and recommendations

The report noted that the creative industries are a major contributor to the UK economy, generating more value “than the life sciences, aerospace and automotive industries combined”. It welcomed some government initiatives in the sector in recent years, stating that “tax reliefs, investment programmes, skills initiatives and pandemic recovery funds have all been widely praised”.

However, the committee concluded that the government’s current policy towards the sector was “complacent” and it “risked jeopardising” its commercial potential. The committee said the sector “scarcely featured” in the 2022 autumn statement and was not identified as one of the government’s five priorities for growth. The report said the sector should “sit at the heart of the UK’s future growth plans”.

The report’s recommendations focused on the following areas:

  • Tax reliefs for research and development (R&D). The committee said the government should reform tax reliefs for the creative industries, as the current regime “does not reflect where innovation comes from” in the sector.
  • Intellectual property (IP) law. The committee noted that the Intellectual Property Office (IPO) launched a consultation in 2021 on the relationship between IP and artificial intelligence (AI). Part of the consultation sought views on reforming the regulations affecting text and data mining by AI software of copyrighted creative works. The government’s response to the consultation in June 2022 stated that it had decided to introduce an exception which would allow text and data mining by AI for any purpose. The committee expressed concerns that this could undermine the business models of many creative firms. It recommended that the IPO should pause the proposed changes until an impact assessment had been carried out. The committee also recommended that the government should commit to “maintaining the UK’s existing standards of intellectual property” in all future trade deals it negotiates with other countries.
  • Skills shortages. The committee claimed that technical skills shortages in the sector were “widespread”. It argued that the English education system equipped people poorly for the realities of work in creative occupations, in particular for the freelance market, which is common in the sector. The committee recommended that the government should promote the take up of T-level qualifications and apprenticeships, and improve opportunities for lifelong learning. The committee also criticised the government’s “rhetoric about ‘low value courses’” at university level. The committee claimed that many such courses were aimed at students entering the media and creative industries. The committee said some graduates from those courses “take time to generate higher salaries”, but this did not mean their studies were less worthwhile.
  • ‘Creative industries clusters programme’. The programme, funded through UK Research and Innovation (UKRI), had originally run from 2018 to 2023. It was intended to support R&D by establishing links between universities and businesses in the creative industries in order to drive innovation in the sector. At the time of the committee report’s publication, it had not been confirmed that funding would be extended for the scheme. The committee said it was “perplexed” by this decision and it recommended the programme should be continued.
  • ‘Creative industries sector vision’. In February 2022, the government said it would publish a sector vision which would set out how it would support the creative industries. Originally due to be published in summer 2022, it had not been published at the time of the committee’s report. The committee said the document would enable ministers to identify priorities and “make difficult choices”. It urged the government to publish the sector vision at the earliest opportunity.

2. Government response to the committee report

The government published a response to the committee’s report in April 2023. The government acknowledged that the creative sector was one of the fastest-growing sectors of the UK economy and that it made significant contributions to output and employment. The government said, “contrary to the conclusion” of the committee, it did prioritise the creative industries and the 2023 spring budget had identified it as a “priority growth sector”.

The following section summarises the government’s response to the committee’s recommendations in the five areas outlined above:

  • Tax reliefs for R&D. The government rejected the committee’s recommendation in this area. It said that the current definitions of R&D for tax relief purposes “were not sector-specific”, so creative businesses could benefit from them if they complied with the criteria. The government said that it consulted on the scope of R&D definitions in 2021 and it “does not see the need to consult again” as it would “create unnecessary uncertainty”.
  • IP law. The response stated that, “in light of additional evidence” of the impact on the creative sector, the government “will not be proceeding” with the proposals for an exception for text and data mining of copyrighted works. Instead, the government said it would work with users and rights holders to produce a “code of practice by the summer [2023]” on text and data mining by AI. On future trade deals, the government said it believed they should be “balanced” to ensure protections and remuneration for copyright holders, whilst “providing reasonable access and use of works” for others.
  • Skills shortages. The government said that the Unit for Future Skills, a research unit within the Department for Education, was working to improve skills data and identify skills gaps. On T-levels and apprenticeships, the government said it continued to support and promote them, but the content of courses was the responsibility of the Institute for Apprenticeships and Technical Education. On ‘low value courses’, the government said it wanted to ensure that students and the taxpayer “see returns on their investment” in higher education courses. It said that it had implemented regulatory reform with the Office for Students to introduce a “more rigorous and effective quality regime”.
  • ‘Creative industries clusters programme’. The government acknowledged that the programme had been a success. It said that UKRI would publish future plans for the programme’s funding in April 2023. A commitment to continue the programme was subsequently included in the government’s sector vision (see section 3).
  • ‘Creative industries sector vision’. The government said it would publish the sector vision “in the coming months”. It subsequently published the document in June 2023.

3. ‘Creative industries sector vision’, June 2023

The government published its ‘Creative industries sector vision’ on 14 June 2023. The government said it wanted to “leverage the UK’s global technological leadership to turbo-charge growth in the sector”. The sector vision set out how the government intended to work with industry “to unlock the growth potential of the sector by unleashing more investment and building the creative businesses and jobs of the future”.

The document set out the government’s “2030 goals and objectives” to deliver growth:

  • Goal one: grow creative clusters across the UK, adding £50bn more in gross value added [by 2030].
  • Goal two: build a highly-skilled, productive and inclusive workforce for the future, supporting one million more jobs across the UK.
  • Goal three: maximise the positive impact of the creative industries on individuals and communities, the environment and the UK’s global standing.

To achieve the goals, the government stated that it was committing an additional £77mn in funding, which included the following projects:

  • £50mn for the next wave of the creative industries clusters programme
  • an additional £10.9mn for the next round of the ‘Create growth programme’, supporting creative business in English regions outside London
  • £5mn each for the grassroots live music venue fund, which supports venues and promoters of live music, and the UK games fund, which supports the computer gaming industry

Further details of the proposed actions under each of the three goals can be found in the sector vision document, and in the House of Commons written statement by the secretary of state for culture, media and sport, Lucy Frazer, on 14 June 2023.

On the day the sector vision was published, the House of Lords Communications and Digital Committee said it welcomed the government’s adoption of several recommendations made by the committee. These included continued support for the creative industries clusters and the focus on skills development and lifelong learning in the sector.

The Labour Party has criticised the government’s record on support for the creative industries. Lucy Powell, shadow culture secretary, has said a future Labour government would introduce a “creative compact” to drive investment and innovation in the sector.

On 15 June 2023, during a debate in the House of Lords on freelancers in the creative industries, Lord Bassam of Brighton, Labour spokesperson for culture, referred to the creative compact when setting out the party’s priorities for the sector. He said:

They [the government] could boost our creative industries with a creative compact, and work in partnership with businesses to grow in creative clusters across the country; strengthening the Creative Industries Council would also help. They could build a more productive relationship with the EU to make Brexit work, enabling touring musicians and performers to move between the UK and the EU, by pushing for a visa waiver.

4. Read more

Cover image by Caleb Oquendo on Pexels.