Keynote speech to the BPI AGM
2pm, 3 July 2012
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Thank you for inviting me to be here with you today.
And I want to particularly thank Geoff Taylor, and pay tribute to your chair Tony Wadsworth. You couldn't have better ambassadors for the music industry.
It’s a real privilege to be here to address you as Shadow Secretary of State for Culture, Media and Sport.
I’m sure you've had loads of politicians coming here over the years saying ‘trust me - I love music’. And I’m sure they do, and I do too.
But that's not the point.
What I want to say is that music has to be important to me because it’s so important to my constituents. The people I represent in the inner city south London constituency of Camberwell and Peckham.
And for the people there, particularly for the young people, it’s part of their identity – music is part of who they are.
They're consumers of music, they're producers of music, and many of them want a future in your industry.
So it’s not just about my policy brief, or that I love music. I have to take music seriously because they do. It’s a democratic imperative.
The UK music industry is a global success - a great British success story.
Great at composing music, performing music and recording music - British artists are loved all around the world.
And just as we recognise the cultural importance of UK music we have to recognise the economic importance too.
- The British music industry generates £3.8bn a year.
- We are the world's second biggest exporter of music in the world with a 12% share of global sales of recorded music – one in eight of all albums sold worldwide.
- And for four of the last five years, the top-selling album globally has come from a British artist.
The British music industry is world class, and we see huge British success stories all over the world. Even in America, which is a notoriously difficult market to break, in 2010, British acts accounted for one in ten of all albums sold. Look at the success of Adele, or Mumford and Sons, One Direction, or Coldplay.
And as well as British performers punching well above their weight in terms of sales across the world, when it comes to jobs, music is a big employer.
As well as being incredibly proud of our music industry, the job of government – policy makers – is to take the music industry absolutely more seriously in economic terms - and figure out, as policy makers, how best to support you.
When we were in government we tried to do as much as we could, working with you, to support the music industry.
Now in Opposition we want to continue that commitment, push the government to do more and also formulate our policy for what we would do in government.
I know that one of the overriding concerns is the lack of a coherent strategy running across government, and, worse still, different government departments pulling in different directions.
So, the Culture Secretary says music in schools is important. But without even consulting him, the Education Secretary cuts music in school by £16million a year.
The Culture Secretary says philanthropy is essential for the future of the arts, but the Chancellor in his Budget slaps on a philanthropy tax and the Culture Secretary was the last to know.
As well as the lack of coherence across government, there’s a lack of focus within DCMS. So, we haven't seen the much promised Green Paper.
And we all know the reason why – the Secretary of State has been completely preoccupied saving his own neck.
But I don’t want the government to solve their problems with Jeremy Hunt by abolishing his Department altogether, as the rumours have it.
The creative industries need a stronger voice in government – and a strong secretary of state at the Cabinet table – not no voice at all.
Because of the importance of working on a cross-departmental basis in government, that’s the way we’re working in Opposition.
My determination is that we in the Labour Party should have an integrated approach - developing an ‘active industrial strategy’ for the music industry.
So that music is not just in a silo at the DCMS.
It’s not something just for DCMS but
• for the Treasury
• for BIS
• for Education.
Music will be integrated across our teams, so that music's not just at the heart of our cultural agenda but also at the heart of our economic agenda.
And to make that happen, I’ve brought together Ed Balls, Chuka Umunna and Stephen Twigg and we’re working together - and with you - to make sure that the importance of music is as central to their departments as it is to the DCMS. To make sure we develop the best policies to support jobs and growth in music and in the wider economy.
When it comes to music, we're all in it together.
Strategy for jobs and growth
And I want to thank all of you who’ve worked with us. As we pull this all together to set it out in the autumn, covering five key areas:
- access to finance in a fair and competitive market
- exports and inward investment
- a regional strategy for growth
- young people and skills, and
- intellectual property.
Our overarching concern is that we should have a policy framework that supports investment
- in people, and
- in the industry.
And that there are
- the right incentives for that investment, and
- the right protection for that investment.
And at a time when Ed Miliband and Ed Balls are arguing for a diversification of the economy, with less reliance on financial services and with a focus that is broader than just London.
I want to touch briefly on each of the five areas.
Firstly, access to finance.
The irony is, it seems outlandish to be arguing that the banks should be doing their basic job of lending to business when they seem to have gone so far away from that and so deeply into speculation and gambling. But the truth is they are important for the lifeblood of business.
How frustrating it must be for small businesses in the music industry, to be told they are a risk and can’t be lent money, when they see the extraordinary casino-style risk-taking and criminality in the banking industry.
The paradox is while London is a global financial centre and Britain’s artists are global success stories - much of the music industry still struggles to get finance.
The banks have got to start lending to viable music businesses, including small businesses.
81% of firms in your industry employ fewer than 5 people. And they need to be able to get finance – to start up, to go from small to medium and for medium sized firms to grow into world class businesses.
Project Merlin figures show banks are still failing to meet their lending targets.
It’s not good enough.
The Government has got to sort this out and get the banks lending.
And we must do what we can to incentivise investment. We do that for manufacturing, - through tax reliefs - we do it for film, we're going to do it for video games.
Like manufacturing and like film we need to ensure that we reward investment by and in the music industry, and I was very interested to see the BPI’s idea of a corporation tax break for higher investment levels in A&R – the music industry’s R&D – to help develop new talent. And I'd like to see your view on how it would work, and deliver, in practice.
Secondly, exports and our international strategy.
Because we are a big exporter of music with potential for even greater growth, the government should ensure that it is doing everything it can to support music as a serious earner of overseas currency for the exchequer.
So, when David Cameron, Osborne and Cable lead British business on trade delegations overseas to bang the drum for UK plc, I want to see music and film at the forefront - not just defence and pharmaceutical companies.
And the British Government should be using its assets abroad to be showcasing British music.
There are British embassies in cities all over the world, beautiful buildings which are buzzing hubs of activity.
I’d like to see every British embassy in every capital city of the world showcasing British music. Ambassador’s receptions should not only serve Ferrero Rocher but serve up the best of British music.
And as well as an international strategy,
We need a regional strategy.
The creativity and entrepreneurship which is the engine of growth in the music industry is not just in London - it’s in Scotland, Wales and every region of England.
Look at Liverpool, Manchester and Glasgow - as well as London, they've had had a massive impact on music.
Music has been a key part of economic regeneration in the regions and will continue to be - like the amazing arena which is being developed in Leeds.
The abolition of the Regional Development Agencies - which helped draw investment - including European funds - into our regions - has only made things worse. And to add to that, local councils have had their budgets decimated. Despite that, Labour local councils are determined to do all they can to support music and the arts.
There has to be a proper government-backed regional strategy for growth in the music industry.
Key to a regional strategy is a truly national broadband infrastructure. A digital economy needs digital infrastructure.
Educational and skills
And to make sure that the industry has the talent it needs - composing, performing, recording - including on the technical side - there needs to be a proper strategy for education and skills for the music industry.
Unlike politics – the music industry has no problem appealing to young people. But we have to ensure that there is real equality of access and that the music industry therefore has the widest pool of talent to draw on.
There's a real worry that with the cuts in music for young people - not just in school, where music budgets have been cut by £16m a year, but in local youth projects like the Rock School in Harlow - music will increasingly become not a right for all but a privilege for the few.
The industry needs graduates with the right qualifications and skills like they get at all the courses at the University of Hertfordshire. But as the Government has trebled tuition fees, the number of people applying higher education in the creative arts at university fallen by 16%.
And the generation who get their music online and the many who want to work in the industry must understand the need to pay for the music they enjoy.
And that brings me to intellectual property.
Which is about protecting investment.
To sustain the music industry in the digital age we need innovation and new business models.
And we need effective copyright protection that works for the digital age. So if you create something – it is yours – to license for others to use, to sell or give away.
And this is the basis for all the industry including:
- Managers and marketers
- As well as the sound engineers and session musicians.
The collection of royalties makes money available for investing in new talent.
The BPI’s figures estimate the record industry reinvests over 20% of its revenue in developing new talent.
You can't run a business effectively if the products you want to sell don’t generate revenue because they are downloaded for free. Copyright infringement makes it much harder to run a business - especially if you are a small to medium sized business - as so many are in the music industry.
And we need to recognise that protection of intellectual property is not just a private matter - between the rights holder and the rights user. It’s about the public interest. And that’s why we need to see enforcement better coordinated and strengthened. The way it stands today, the framework is just not good enough and that includes the Intellectual Property Office.
Take the Environment Agency. It issues licenses for discharging waste of potential pollutants. But if that license is breached they don't just stand back and say to the landowner whose land is damaged, ‘you go to court’ - the Environment Agency itself takes it to court.
It clearly is in the public interest to have intellectual property and copyright protected. Trading standards officers enforce it in the public interest. But, what about leadership - and co-ordination - at national level?
Should we completely recast the role of the IPO and turn it into a champion for protecting and enforcing precious copyright? It should not be agnostic about copyright breach - it should lead action against it.
There need be no apology for protecting copyright. It is in the public interest and as the means of distribution transform and the challenges to copyright protection change.
In the US, they have an Intellectual Property Enforcement Coordinator – an IP czar – appointed by President Obama. Someone to make sure all the federal agencies work together to protect copyright, and to protect ‘the ingenuity and creativity of Americans’.
Perhaps we need an institutional shake-up to reflect that.
We all know that piracy is a big issue and a big problem for music and other creative industries online.
We all know that while technology creates brilliant new opportunities it also creates new problems.
And we all know that this debate has been going on for far too long enough and needs to be brought to a conclusion.
The Government has got to get a move on and stop dragging its feet to strike the right balance between the content industries, including music, and the technology companies to create a climate where innovation can flourish while copyright is protected.
I've had discussions with both, I know the arguments from both sides.
Google and other technology companies need to do more with the content creators to better signpost legitimate search and block illegal sites. Search engines like Google are highly trusted, and there’s no way of telling, as an average consumer, what is an illegal site. They could also do more to stifle the income of pirate websites by stopping advertising on illegal sites.
And I want to see the Government getting on with implementing Labour’s Digital Economy Act. And while I’m pleased that Ofcom published their code for consultation last week – it will still be 2014 before any warning letters are sent out.
The Government has failed to show leadership.
Despite them being pressed on this, including by us, they still haven’t
- implemented the Digital Economy Act under a clear timetable
- lead and set a deadline for agreement in the industry for site blocking, search engine responsibility and digital advertising
- made it clear that if there’s no agreement, this will be legislated for in the Communications Bill.
I understand there’s a lot of controversy around about how the notification letters should be worded, and the ISPs and consumer groups have concerns about people being cut off. But there is a common sense way through, which means people don’t have their services cut off immediately and makes sure piracy does not go on unchecked. Letters should inform, and warn.
And all of this should have been set out in the Green Paper which we were promised at the beginning of this year and now won’t appear.
Number Ten can’t stand up to Google and Jeremy Hunt is incapable of standing up to Number Ten.
When we were in government, we did everything we could to support music and the arts, from supporting creativity in schools to arts funding to tax credits to legislating for the Digital Economy Act.
And where this Government does the right thing, we will support them, to support you. When the plug is being pulled on DCMS by the education department or the Treasury, we will back DCMS up.
When they’re doing the right thing.
But when they’re not, we’ll hold them to account. We will scrutinize and we will criticize. And sadly, there is much to criticize.
This Government has slashed funding for the Arts Council and for local government, which support music across the country. This Government has cut funding for school music, which supported the musicians of the future. You shouldn’t only have access to music because your parents have got the money to finance it, or because you go to a school with lavish private facilities. Music should be for everyone – for the many, not the few.
This Government has dragged its feet unforgivably on implementing the Digital Economy Act. It’s standing up for the wrong people – for powerful interests and not hardworking musicians, giving in to lobbying and not giving support to our music industry.
This Government has abandoned the Green Paper. It might even abandon the DCMS, at a time when the creative industries need a stronger voice, not to be silenced.
This Government is out of touch. It doesn’t understand music or the arts. Understanding music is not about having a box at the opera but about having the right policies to support music, from school music to stadium tour. It’s about standing up for music across the country and across all levels of government.
But to this Government, music is an afterthought.
Especially at the moment. The Government is too focused on protecting a lame duck Secretary of State. It is not focused on jobs and growth for the future, or on intellectual property, or on the Communications Bill. You deserve better.
And I want to conclude by assuring you of my personal commitment to this portfolio and my belief in the importance of music and the creative industries to individuals and to this country.
Labour has always seen itself as the party of Bread and Roses - and that's what music is.
It’s a belief is shared by Ed Miliband, which is why he asked me, as his deputy, to do the job.
Even if it looks like Jeremy Hunt is not in it for the long term, I am.
And I, and my team, look forward to working with you.