The House of Lords Communications Committee has released a report, At risk: our creative future, warning that “Government complacency risks undermining the UK’s creative industries in the face of increased international competition and rapid technological change.”

In the report published today, the Committee warns against “missed opportunities and a failure among senior Government figures to recognise the sector’s commercial potential”

The report points out that the UK’s creative industries’ contribution to the economy in 2019 was more than the aerospace, life sciences and automotive industries combined and “delivers higher levels of innovation than many other areas of the economy.”

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 report 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” and 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; and 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.”

The commitee’s key recommendations are

• 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.

Baroness Stowell of Beeston, Chair of the Committee, commented: “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.

“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.”

In response to the House of Lords Communications Committee’s warning, Caroline Norbury OBE, Chief Executive, Creative UK, said: “I very much welcome the House of Lords Communications Committee’s call for the Creative Industries to “sit at the heart of the UK’s economic growth plans”. The creative sector has long outperformed the wider economy and other industries in driving economic growth and job creation, and yet as the Committee’s report finds, there has been a failure to recognise and capitalise on this potential. Missed opportunities not only undermine the power of the UK’s Creative Industries, they risk diluting our position as a world-leading creative powerhouse, especially in the face of unprecedented technical advancements that are embraced by our global competitors.

“Continuing to think of UK creativity as a ‘nice-to-have’, subsidised by the taxpayer, will blunt the sector’s capacity to transform our society for the better. Financial support for the Creative Industries is not a costly public burden, on the contrary, it is a vital investment to unleash economic growth, accelerate innovation, underpin the UK’s global soft power, and provide social and wellbeing benefits to communities across the country. The UK is bursting with creative brilliance, but too often a lack of opportunities or barriers to success prevent these talents from flourishing.

“The recommendations set out by the House of Lords Communications Committee would provide a much-needed step towards cultivating an environment where creative skills are celebrated, the value of original IP is recognised, and R&D receives the investment required to realise new, unexpected and transformational possibilities.”