June 2009 – Nigel Walley
I have always found the idea that you shouldn’t kick a man when he is down, to be rather odd. If you are going to kick someone, ‘when he is down’ seems like a great time to do it. For a start, he is near your feet. So, in that vein, lets have a go at Gordon Brown.
I got a call a few months ago from a consultant working for the DCMS. They wanted me to take part in something called their ‘Creative Britain’ programme. Now, this ‘aims to move the creative industries from the margins to the mainstream of the UK economy’. This annoyed me immediately, I didn’t realize up to that point that the government viewed me as being at the margins of the economy. They made me feel better when I read on their site that the programme views ‘talent, innovation, business growth and intellectual property as key drivers of success in the creative industries’. However, for anyone running an agency this really is stating the bleeding obvious and all very big government.
But it made me wonder what tools or devices does a government have to help an industry like ours. In simple terms, there are only two areas where they can play: regulation and fiscal policy ( tax and spend to you and I ). This is where it all got a bit odd. They went on to say that they are committing ‘£70 million to support the strategy…and successfully deliver a range of commitments’.
Now, initially you think £70M sounds significant. But when you consider the UK has 250 advertising agencies that make more than that a year, around 50 digital agencies that make more, and that’s before we get into radio, TV, music, movies, design, architecture, publishing and the other 20 odd industries that are covered by the programme. In terms of sharing it around it doesn’t seem so much.
However, when you discover how it is being spent you quick become grateful that its such a pokey amount of money. It is to be spent on breakthrough initiatives such as helping councils invest in’ mixed media centres,’ launching ‘a World Creative Business conference’, creating 5000 apprenticeships in creative companies by 2012 and, intriguingly, a £3M research programme ‘to improve the capacity of growth oriented, small and medium creative enterprises to innovate’.
Now the thing to remember that this is our money they are spending on this nonsense, and that fiscal policy has two parts. Before a government can spend, it has to tax and this is the rub for creative industries. During the lifetime of this government it has enacted three elements of fiscal policy which work directly against the interests of the creative industries, and whose impact dwarfs the (so far unmeasurable) outcomes or the Creative Britain programme. It has raised the corporation tax threshold for small businesses , it has reduced the capital gains allowances for business owners who sell their agencies or production houses and most recently, they have raised the personal tax rate for top band employees. This is classic ‘take with one hand, and pretend to give with another’ and undoes any good that their token initiatives may deliver.
The cumulative impact of these changes is to dramatically disincentivise the kind of entrepreneur who turns their initial creative impulses into job creating, small and medium size businesses. The only place that Cool Britannia will exist , if this goes on any longer, will be in the Macclesfield Council ‘Mixed Media Centre’ where I will be selling the popcorn.