Lord C-J says Ministers must ensure the multi-billion pound fashion industry industry is not put at risk
This is a piece I recently did for the House Magazine: ‘From fashion to furniture, Britain’s design sector relies on EU protections, writes Lord Clement-Jones’.
It was notable from her speech at the Mansion House earlier this month that the Prime Minister has woken up to the threat to our broadcasters of exit from the EU through loss of country of origin rules – the rules which have enabled the UK to operate as an international broadcasting hub.
The fact is, however, that this is but one of the many severe threats to our creative industries posed by Brexit.
The Prime Minister also needs to recognise the threat posed by Brexit to the design sector, which includes the fashion industry and furniture lighting and furnishings and many other design areas, from the potential loss of European unregistered design rights for United Kingdom-generated designs.
European design laws protect the individual character of a design, in particular as they relate to shape, texture, contours, lines, colour, ornamentation or materials. UK unregistered design right protects only the shape and configuration of a design.
Recently the Law Society made the news when it revealed that London Fashion Week is under serious threat from Brexit. They said it could lose its status as an event where new clothing creations are unveiled because laws that protect European fashion houses from unauthorised copying may no longer apply in London when Britain leaves the EU next year.
Fashion houses that first reveal an unregistered design on the London catwalk would be at risk from copies going on sale in the EU.
"As the majority in the industry are micro and SME design innovators with less than four employees they are particularly vulnerable to infringement of their designs."
— Lord Clement-Jones
In 2016 the value of UK fashion and textile exports stood at £9.1bn. The fashion industry, through the British Fashion Council, has highlighted the serious consequences for British fashion designers if they lose unregistered EU design rights protection in the other 27 member states. Potentially losing the protection currently available under EU law will leave these UK designers in a disadvantageous position versus their EU competitors.
These are typical but high profile examples of how designers across the board may be forced to launch new designs in EU countries after Brexit.
The potential impact to our economy is massive. UK design and design skills in the UK are currently worth a startling £209bn. This is put at risk if legal protection for design IP is weakened.
The reason for this is that copying is endemic not only in the fashion sector but in the lighting, furniture, furnishings, gift and product and many more design sectors, all of which will also be affected by loss of the EU unregistered design right. As the majority in the industry are micro and SME design innovators with less than four employees they are particularly vulnerable to infringement of their designs.
In the Lords this Thursday I will be seeking a firm assurance from the government that it will provide a solution to the potential loss of EU design rights in one of the fastest growing sectors in the economy. I will be calling on ministers to end this major threat to our design sector and introduce legislation which will offer the same EU unregistered IP rights’ protection as they now enjoy in 28 member states.
Unlike some other Brexit conundrums, in this case the solution lies in government’s hands and we and the design industry have every right to expect urgent action.
Stay in the Single Market and Keep the Country of Origin Principle says Lord C-J
I asked the Government this week what assessment they have made of the ability of United Kingdom audiovisual services to take advantage of the European Union country of origin rules after Brexit. This is the exchange with Lord Ashton of Hyde the Minister at the Department for Digital, Culture, Media and Sport.
My Lords, the broadcasting industry has continuously emphasised the significance of maintaining the country of origin principle. We are committed to working with the sector to ensure that those points are explored and considered as the UK develops its stance on exit negotiations as part of the overall effort to secure the best deal for the UK as a whole. The effect of leaving the EU will depend on the exit negotiations.
I replied
My Lords, there are hundreds of channels based here which are broadcast to the EU and get the benefit of a single regulator in the form of Ofcom. The Creative Industries Federation states, in its report today on global trade and Brexit:
“To ensure the UK remains a leading hub for international broadcasters, the continued mutual recognition of broadcasting licences between the UK and EU Member States is imperative”.
Does the Minister agree with that statement, and will the Government treat this as a priority in trade negotiations? Is this not another example of where the straightforward solution would be to stay in the single market?
And Lord Ashton of Hyde responded
My Lords, I am very pleased to confirm to the noble Lord that we will treat this as a priority. Of course he is right that the broadcasting industries are one of the UK’s success stories. In fact, 55% of the TV channels based in the UK mainly targeted the European market in 2016, and 53% of the video-on-demand services primarily targeted the EU. It is definitely one of the top priorities of my department, and we communicate regularly with the Department for Exiting the European Union to ensure that it is one of its.
"Does the Minister agree with that statement, and will the Government treat this as a priority in trade negotiations?"
— Lord Clement-Jones
Brexit: Why Freedom of Movement Restrictions Will Impact on the Creative Industries
Here is a piece I wrote for the House Magazine recently.
Freedom of Movement and the Creative industries
Our creative industries are of ever growing importance to the UK economy quite apart from their cultural value. Worth £87bn to the UK economy, they are growing three times as fast as other sectors of the economy and account for nearly 2 million jobs. They have massively benefited from our membership of the EU.
As witnesses from the creative services sector recently underlined to the House of Lords EU Select Committee looking at the impact of Brexit on Non Financial Services, maintaining continued access to the EU’s labour market to address skills shortages and to support continued growth is vital.
The Creative industries Federation in their Brexit Report last autumn said: “Talent and skills are fundamental to the UK’s creative sucess. It is vital we continue to cultivate our own talent as well as to attract the best and brightest from around the world.”
The UK is a creative hub, the free movement of people to work and travel across Europe, without the need for visas, has both facilitated, and fuelled, the exchange of culture, creativity and expertise and generated commercial and artistic opportunities.
Without the right deal, the creative industries will face big challenges if restrictions are placed on the movement of talent and skills.
For example London is Europe’s hub for start-ups and first jobs in fashion. To further their careers fashion graduates need experience at a wide range of international fashion houses. A lot of people who work in fashion are not British and many students when they graduate get jobs abroad. The music industry, too, relies heavily on the movement of national and international talent.
Although overall 6.1% of Creative Industries workforce are EU (non-British) nationals, particular sectors are heavily represented. It is estimated that 25% of the VFX (visual effects in film) workforce is from the EU, up to 30% in gaming is made up of EU (non-British) nationals and 10% of the design, publishing and advertising workforce are EU (non-British) nationals.
Of course we should aspire to more home-grown talent –and Sir Peter Balzaghette’s review of industrial strategy for the creative industries should address this urgently to ensure that our education and training policies fully recognize the specific needs of the creative industries-but as it is there are currently 17 creative roles which are on the government’s Shortage Occupation List (allowing recruitment from outside the EEA) from orchestral musicians to graphic designers. This shortage list will increase following Brexit if freedom of movement is ended and adequate visa arrangements are not put in place.
On Brexit the ability to develop audiences by low cost touring within the EU, a significant earner for young talent, could end. One visa application for a non EU cultural organisation costs between £600 to £1,000. In line with the Arts Council sector survey of the arts and culture, the continued ability for people to move freely between the UK and EU for creative activities such as television and film production, concerts and fashion events is vital.
Our immigration system must continue to enable easy access to critical skills and talent from both EU and non-EU countries. Above all we must ensure as the Liberal Democrats insisted during the passing of the European Union (Notification of Withdrawal) Act, non-British EU citizens currently employed in the UK must have the right to stay.
Liberal Democrats have always been champions of creators and of their industries. The Government must listen to these strong concerns when Brexit negotiations begin.
Libs Dem Demand Top Table for Creative Industries
The Lib Dem DCMS Team recently led a debate on the impact of Brexit on the Creative Industries
Here is how I introduced it :
Last July, when I took part in the two-day debate on the outcome of the European Union referendum, I talked about the implications of Brexit for the creative industries. Uncertainty about the future on the part of both government and those industries was understandable then, but the sad truth is that six months later, despite myriad representations from different parts of the industry, from the Creative Industries Council, the Creative Industries Federation, Arts Council England and many others, and even an extensive speech by the Prime Minister on Tuesday, we are still almost as much in the dark about the implications of Brexit for those industries—and whether the Government have taken on board the concerns of those industries—as we were then. Indeed, it was notable that the Prime Minister mentioned a number of sectors in her speech but not the creative industries.
Therefore, the purpose of those of us on these Benches today is to highlight in no uncertain terms the importance of these industries to our economy and our future, and the essential matters than must be safeguarded on Brexit. Lest we be accused of being miserable remoaners who cannot accept the outcome of the referendum, we also want to set out the opportunities in terms of industrial policy that the Government must grasp in order to make sure that those industries prosper in the future.
Before I go any further, I want to try to give a picture of the importance of these industries, which span such a broad range of creative endeavour. In the UK, we are a vital hub for the TV, design, games, visual effects, publishing, film, advertising, music and fashion industries. They make a contribution of over £87 billion to the UK economy, employ almost 2 million people and are growing at twice the rate of the rest of the economy. As a result, we are second in the world only to the US for cultural influence or soft power. After all, what other country has instantly recognisable characters such as Harry Potter, James Bond and Sherlock Holmes in quite the way we do? Their exports are worth £20 billion, and the fact is that Europe as a whole is the largest export market for the UK creative industries, accounting for 56% of their trade in the sector. That is not all digital or audio-visual. Europe, with 31% of the total, is the largest market for physical book exports. I could go on. However, I recommend the report from the industry members of the Creative Industries Council, and also the one from the Creative Industries Federation, which give a much better overview than I can in the time available.
The other aspect that is of key importance, but on which I will only touch today, is the relationship of this sector to the tech sector. That relationship and interdependence is becoming more and more important for Britain’s future. Increasingly, tech platforms need creative content, and both sectors rely on creative skills. They are both strongly impacted by government policies on superfast broadband rollout and spectrum allocation, and, of course, by the outcome of Brexit on our telecoms sector, whose consumers have benefited so strongly from an EU-wide regulatory regime. My noble friend Lord Foster will be expanding on this. Both too are going to be strongly affected if there is a change to the way that data can flow freely between the UK and other EU countries. This comes to a head in the games industry, but concerns all creative and tech industries that distribute content or software digitally. Ensuring continuing adequacy of data protection under EU law will therefore be crucial.
It is not always easy to generalise about the creative industries, since they have many individual characteristics. However, some very strong common themes emerge from the work that the creative industries have done so far in responding to the prospect of Brexit. The first and most crucial of these is the need for access to talent. Yes, we need to accelerate the development of our skills here in the UK, and the industries have not been slow in showing how that must be done over the middle and long term by adopting what we might call a full STEAM agenda. However, the fact is that in fast-changing markets, specialist skills are in short supply. The ability for small businesses to hire skilled freelancers is vital. Freedom of movement of people with those skills is crucial; including, for instance, music artists going on tour in Europe or to festivals. This is important also when considering film, games and advertising production, or fashion and publishing here in the UK, particularly when it comes to digital skills. The Prime Minister has promised that the brightest and best can come here, but current changes to the tier 2 visa regime are going in precisely the wrong direction—so much for being truly global. So, too, it is not enough just to recognise the need to guarantee the right of those EU citizens already here to remain in the UK. That is already within the gift of the Government and should be granted immediately.
Another common theme has been about the future of intellectual property enforcement and co-operation. Although the broad principles of IP law are covered by international treaties, the shape of copyright exceptions are largely determined at European level, and so too are the enforcement levers on matters such as breach of copyright and counterfeiting. For instance, European co-operation has been of huge importance to initiatives on infringing online sites, such as Follow the Money. Will this continue? Will we continue to treat historic decisions on IP matters by the ECJ as binding? Will European trademarks no longer have protection in the UK? Will our artists continue to have the benefit of artists’ resale rights? Then there is the community design right, which is so important for the fashion industry, giving much more extensive rights to designers than the UK design right. Will we preserve that?
There are many EU proposals currently on foot which will impact on our creative industries if we do not have a seat at the table to argue their corner. In that context, will the Government be publishing their response to the recent consultation on EU copyright reforms? In the same context of the creation of the EU strategy for a digital single market, will we be able, on the way out of the EU, to protect the territoriality of copyright, which is so important to the financing of our film and television productions, or take advantage of the new transparency rights for creators?
What is the Government’s response to the Arts Council’s suggestion of a review to see how our intellectual property can be enhanced and maintained outside the EU? Will we achieve the right result on the draft directive on online sales for our games industry? In its recent report, the BIS Select Committee said:
“The decision to leave the European Union risks undermining the United Kingdom’s dominance in this policy area. We could have led on the Digital Single Market, but instead we will be having to follow”.
Forty-two per cent of UK digital exports go to the EU. As the Select Committee asked itself, have the Government really started to get to grips with this? Is there any real appreciation in government about the implications of Brexit for the UK’s access to the digital single market?
There are the implications of the loss of funding from Creative Europe, the European Regional Development Fund and Horizon 2020, on which my noble friend Lady Bonham-Carter will expand. All the creative industries have real issues about the prospect of lack of access to EU markets but I want in particular to highlight the issues relating to the audio-visual industry—in other words, the film and television sector—which I know the noble Lord, Lord Puttnam will be focusing on later.
The Audiovisual Media Services directive sets out the vital country of origin principle which ensures that our television channels gain access to the EU market without further regulation. As all industry commentators have said, without it there would be significant harm to the industry, especially as the principle could be extended to satellite in future. However, its continuance would have to be negotiated—it cannot simply be preserved by a great European reform Bill—otherwise I can see television channels substantially relocating in order to stay within the AVMS directive. Likewise it is vital that the AVMS directive continues to classify programmes made in countries covered by the European Convention on Transfrontier Television, not purely the European Union, as European works. How alert are the Government to that?
Convinced leavers claim that the world is full of opportunity for trade deals to be done outside the EU but as CETA, the Canadian European Trade Agreement, exemplifies, cultural exceptions are a besetting aspect of trade agreements. What assurance can the Government give about how high up the agenda our creative industries will be in any trade negotiations? These industries need the maximum possible strategic certainty in order to minimise disruption to decision-making, investment and people’s jobs.
We need a commitment to action by the Government on Brexit which supports our creative industries. We need an industrial strategy for the creative industries which incorporates all the above elements. It should also include a raft of domestic action to extend the investment support through tax relief schemes—there is a good case to extend them to music—to build on the strengths of the different regions of the UK and their creative clusters, and on synergies between the creative industries and other sectors of the economy, particularly in the development of skills.
Everything I have outlined is not some special pleading but a hard-headed calculation of what is necessary for the continuing success of the UK creative industries after Brexit. They need to be able to compete in a global environment. We have competition from players operating with larger domestic markets and many up-and-coming agile competitors. Leaving the EU makes us vulnerable without robust action and negotiation, especially if the Prime Minister and Mr Davis envisage that we may leave without any deal at all or with minimal transitional arrangements. The Government need to demonstrate that they grasp these issues and are pursuing a strategy to deliver a trade agenda and an industrial strategy for the creative industries that meets the case.
Lord C-J: Blueprint for Creative Industries needed post Brexit vote
I am seriously concerned like many others for the future of the creative industries after the Brexit vote in the referendum. Here is what I said in the Lords debate:
Last weekend I took part in the March for Europe from Park Lane to Parliament Square. It consisted largely of young people and families, all utterly concerned about and opposed to our leaving the European Union. All of them up to that point had seen their identity as bound up with Europe and now see an uncertain and more isolated future. I could not help reflecting while on the march on how my generation had let theirs down by voting in the way that it did and on how many in politics had failed to deliver a more positive message about the benefits and impact of being in the EU over the years, or to create a fairer society of the kind so well outlined by my noble friend Lady Manzoor yesterday and by the most reverend Primate. But whatever our regrets, we cannot afford to sit back and be buffeted by the consequences of Brexit. We need a steely determination to make the best of it and demonstrate to the no doubt overwhelmed Brexit unit how we can mitigate the risks and take the opportunities that arise.
Our tech, digital and creative industries currently punch way above their weight globally. We now need to develop a blueprint to show how they can continue to thrive despite not being in the EU and despite the uncertainties of the exit process, so they will be able more than ever before to benefit from the UK’s creative skills and culture. This depends on the UK in general and London in particular remaining a global hub for creative businesses. The essence of this is our continuing ability to retain, recruit and develop the best and most diverse talent from around the world.
Our film and video games studios, publishers, advertising agencies, music recording facilities and design and post-production houses depend on this flow of talent, failing which other locations within the EU—eastern and central Europe, for example—will appear more attractive. It would be deeply damaging if we or the EU erected barriers equivalent to those in the US, which mean that many UK musicians who plan to perform there find that visa-processing problems mean cancelled tours and postponed engagements. The truth is that the lack of free movement of talent will mean a less creative and diverse culture in the UK and will spell danger for the UK as a creative hub.
Individual parts of the creative sector have many unknowables. Will advertising services, that powerhouse of our creative economy, be subject to EU barriers when sourced from the UK if we are not in the internal market? Activities carried on by the audio-visual group are particularly vulnerable. The audio-visual media services directive has, since 1989, had a major impact by limiting applicable regulation to the country of origin. Almost a quarter of its exports are to the EU. It risks being caught between being unable to relocate production as it would fail to qualify as a British product—but, if so, not being treated as EU content. Once the UK is outside the EU, unless we specifically achieve a negotiated deal, the UK will no longer be able to come within the quotas applied by other European countries for their television broadcast services, which in some cases are as high as 70%.
In funding this type of product, every market matters, and if the EU falls out of the equation it could well mean that investment is no longer forthcoming to the same extent. Amanda Nevill, CEO of the BFI, has also warned of the impact on independent film-makers of the loss of EU funding from the Creative Europe programme. This adds up to the need to put in place at the very least greater government support for investment in these audio-visual products.
Then we have the digital economy, which is a vital part of our future. The digital single market being developed by the EU up to now was seen to be a cornerstone for the future of our tech and creative industries. We will now lose our influence on how regulations and intellectual property reforms are shaped, especially as regards the exceptions to copyright protection which are being developed.
We may also need to adopt safe-harbour provisions of the kind currently required between ourselves and the US in respect of data. Then there are the resources that will be needed now by government here and overseas through our diplomatic and consular services and UKTI in counteracting the impact of Brexit and, as Sir Martin Sorrell has said, targeting fast-growth markets. We need to redouble our efforts to promote Britain as a place to invest in, partner and do business with, especially in the creative industries. Just boosting the budget of the GREAT campaign will not be enough.
When we are outside the EU state aid rules, there may well be some opportunities through improved tax incentives to counteract some of these risks and to maintain the attractiveness of the UK as a destination for the creative industries. But I can see many other industries clamouring for special treatment, too.
I will continue to fight for the closest possible relationship with the EU. But what we need for this sector, as for others, is a cool appreciation of the actions we need to take and the deals we need to do to safeguard them. I am pleased that the Creative Industries Council is taking on this task, constituted as it is largely by a wide range of private sector players in the creative and digital industries, including television, computer games, fashion, music, arts, publishing and film, but co-chaired by Ministers from both BIS and the DCMS.
The Ministers and departments sponsoring our tech, digital and creative industries must immediately, as a priority, start working with the Brexit unit and with Justine Simons, the new deputy mayor for culture and the creative industries in London. It is vital, as she said last week, that we,
“maintain the flow of ideas and creative talent and shore up our cultural economy”.
I sincerely hope that this Government, whoever heads it, take heed of those wise words and recognise the importance of these industries to our future.