Question for Short Debate (Lords) on Arts and Creative Industries: Freelancers and Self-employed Workers - Jun 15

Asked by

The Earl of Clancarty

To ask His Majesty’s Government what support they intend to give to freelancers and other self-employed workers in the arts and creative industries; and what assessment they have made of the case for a Commissioner for freelancers.

The Earl of Clancarty (CB)

My Lords, this is an interestingly timed debate, not least because of yesterday’s announcement of the Creative Industries Sector Vision, about which I will say something later on. As theatre critic Lyn Gardner said earlier this month in the Stage:

“It is time to make more noise, more usefully, to support freelance creatives”.

We have received some excellent, detailed briefings listing the many and varying concerns of freelancers. As the Authors’ Licensing and Collecting Society says,

“For a long time, freelancers have faced systemic challenges relating to their work. There are multiple areas where focused government engagement would improve the situation of UK freelancers”.

I will try to go through some of those concerns and I look forward to the contributions from all those who have signed up to this debate. However, I say now that we also need a much longer debate on the whole area of atypical work, which over the last few decades has become less atypical.

Although freelancers make up 15% of the workforce, they represent about 32% of the creative industries, rising to 70% for the visual arts and 70% for theatre, while 80% of musicians are freelancers. I declare an interest as a self-employed artist, while my wife is a journalist who has worked both as staff on newspapers and as a freelancer.

The Arts Council says that:

“Without talented artists, technicians, designers, curators, producers, writers and other practitioners, our buildings, fields, streets, shelves, walls would be sorely lacking in creativity and culture.”

Freelancers, particularly in the arts, have been described as the backbone of the landscape. This is a particularly apt metaphor, with its sense of the strength and necessity of the sector but also its vulnerability. The pandemic very much highlighted that, with many workers forced out of the sector—a terrible waste of skills—because of patchy support that the Government provided at the time. Equity says that 40% of members received no support from the Government’s self-employment income support scheme and 47% of artists missed out, while many musicians did not qualify for support. In the event, I hope that that mistake would not be made a second time.

A major argument in favour of the appointment of a freelance commissioner is the lack of good data about a workforce of a diverse nature. As ALCS says,

“a dedicated commissioner would help to relay expert information and feed into government policies that will impact this valuable proportion of the workforce”.

One of the clichés of the freelance world for the wider public has been the tacit acceptance of the trade-off between freedom and security. Yet, if the trend in all work is towards more flexible working arrangements, something that many workers are demanding, is that trade-off acceptable any more in the modern world? Freelancers have very few of the employment rights and protections that standard employees have. The Incorporated Society of Musicians and BECTU ask that shared parental leave and statutory sick pay are extended to the self-employed. BECTU asks that Section 44 of the Employment Rights Act 1996 be extended to strengthen protection for health and safety. Job sharing, term-time working, career breaks and sabbaticals are other areas that BECTU believes should be looked at. Without effective protection, there is the concern that bullying and harassment will remain unaddressed because of the imbalance of power between freelancer and client. ISM’s second Dignity at Work report found that 88% of self-employed musicians did not report the discrimination they suffered, even when this was sexual harassment, often for fear of losing work.

Another area of concern focuses on tax and benefits. I believe my noble friend Lord Colville will elucidate concerns around IR35. One area that the Government could address immediately is the universal credit minimum income floor, which shuts out many actors and others because of irregularity of payment. I tackled the DWP on this a year ago in a debate on the Social Security (Additional Payments) Bill. I now address it to DCMS, which perhaps might be able to convince the DWP of the importance of these concerns. Since then, new research by Equity and the University of Warwick demonstrates that, of nearly 700 members, 41% of those subject to the MIF had gone without food or utilities and 5% had had to leave their homes. Furthermore, many self-employed people have been excluded from the cost of living payments by the MIF.

As actor Julie Hesmondhalgh said in an interview with the Guardian last month when talking about having once put on plays by novices, including Rufus Norris, in a basement:

“That would not have been possible if we were living under the benefits system that exists today, that absolutely refuses to accept artists as having a ‘proper job’”.

Heidi Ashton of the University of Warwick says:

“In the past, people from working-class backgrounds relied on social security in the early stages of their careers … due to the precarious nature of freelance work. Without this safety net people without other financial means are either leaving the sector entirely or face losing their homes”.

There may never have been a golden age for freelancers, but the experience under UC contrasts significantly with the former, more flexible social security system. I personally remember how useful the original enterprise allowance scheme was. Equity is rightly calling for the abolition of the MIF, but we also need a fundamental, wide-ranging review of the way in which the current benefits system affects the self-employed.

Similar concerns affect all freelancers who may also experience downturns in pay or work opportunities, which may be temporary, such as the dearth of current opportunities for unscripted TV work. If skills are not to go to waste, we need to look more closely at how we can support freelancers under these conditions, rather than simply leaving it only to the marketplace.

Another hugely significant area is payment. Late payment is the bane of freelancers, affecting many working in different areas, from artists and musicians to journalists and others. Payment rates themselves are a huge concern. A recent survey by Industria finds that visual artists who worked on a freelance basis on projects in publicly funded galleries earned on average £2.60 an hour for their work, compared to a minimum wage of £10.42. Although shocking, this is not surprising when one considers the significant cuts to government investment in the arts that have taken place over a long period, inevitably reducing pay levels for freelancers in particular but of course meaning devastating under-financing of the hugely important subsidised arts sector. The past 15 years have seen the Arts Council’s grant in aid shrink in real terms by 47%. Between 2009 and 2019, local authorities have seen cuts to funding of 37%, meaning that the Arts Council has taken on responsibilities that it did not previously have.

I have yet to look at the new sector vision in detail, but we need a vision for the arts as well as the already commercialised end of the creative industries—they are not quite the same thing. It is good if extra money is being found to help save our grass-roots venues, but my first impression is that a large part of the arts—for instance, the visual arts—is left out of the plan. Part of the importance of the arts is that they inform the wider creative industries. Increasingly, there is a growing sense that arts production should be valued for its innate worth over its commercial potential—however welcome that is to the Treasury. That is something that the Minister might ponder while he listens to the London Symphony Orchestra performing Messiaen tonight.

Much of my plea so far has been for greater support of freelancers, but I also want to strike a cautionary note: support is not the same as uncritical promotion. ISM has drawn attention to the worryingly increasing casualisation of some sections of the creative workforce; for example, visiting music teachers, who are moved to zero-hour contracts. The threat to BBC musicians is another case in point. I firmly believe that the BBC Singers should remain as properly salaried employees of the BBC. There are a number of reasons for that, including, as my noble friend Lord Berkeley of Knighton has pointed out, the question of who retains artistic control—the independence of which, I argue, is most secure, as it has proved to be, in a publicly-funded organisation free of commercial or other external interests.

There is no clear channel for dialogue between freelancers and government. The Creative Industries Council contains no representation by unions or societies which advocate for individual artists or creatives. A freelance commissioner would help to bridge that gap.

There is much I have not covered in detail: Brexit’s curtailing of opportunities for musicians and others; the skills shortage; the huge importance of arts education for the next generation of practitioners; the effect of the ongoing closure of art spaces, including music venues, which one hopes this extra money will alleviate; the disappointing closure of the University of Brighton Centre for Contemporary Arts, which feels too much part of the narrative of the degrading of the arts in higher education; and the structure of the workforce itself in terms of class background and gender. I look forward to some of that detail being filled by other speakers.

2.17pm
Lord Hannan of Kingsclere (Con)

My Lords, it is an immense pleasure to follow the noble Earl, Lord Clancarty, and to have the privilege of being the first to congratulate him on introducing this Question with such skill, knowledge, empathy and thoroughness.

In the short time I have, I will focus on one of the things he said: the way in which what we still think of as atypical jobs are ceasing to be atypical. I look at my children, who range in ages from five to 21, and I do not think that any of them will ever have a job as we understood that word in the 20th century. They are likely to go through life constantly reskilling and freelancing, and adapting to a rapidly accelerating technological revolution. We should not be frightened of that. I know that there is a great sense that AI will put everyone out of work, but that same argument has been made about almost every technological advance since the Industrial Revolution—and yet the number of jobs keeps growing. What it will do is fragment the labour market further; we will become more and more specialised as we are freed up from the current jobs we do to find much more niche employments.

The Government have been very slow to adapt to the consequences of that. We still have a set of labour rules, social security rules and pension rules that are designed for mass workforces, going back to Chamberlain’s Holidays with Pay Act 1938. However, that is not the world that our children are growing up in; it literally belongs to another century. Instead of looking at freelancers as some subset, we need to start thinking about whether this will be the future of the entire workforce and about how we need to change our fiscal and employment rules—starting with the abolition of IR35, which is the bane of every freelancer. I declare my interest as a freelance journalist.

I hope that one thing that will come out of this is that we do not end up with only state employees being outside this benign revolution. It is not a revolution we should fear; it is one that will create more wealth and liberate more talent, and Ministers should not stand in its way.

2.20pm
Lord Cashman (Lab)

My Lords, we are indebted to the noble Earl, Lord Clancarty, for securing this extremely important and timely debate. I declare my interests as set out in the register, particularly as an author and a rights holder.

I want to focus on two elements: remuneration and benefits. Recent research has shown a worrying drop of 60% in real-term income from writing over the past 15 years for writers and 85% of actors earn under £10,000 per annum, with 72% taking on second jobs outside entertainment to support themselves. Visual artists, shockingly, report earning an average of £2.60 an hour when they deliver work or projects for public institutions. This is unsustainable and it is reflected across the industry. The lack of secure income is the most common reason for one-third of the workforce considering leaving the sector.

Yet, in 45 other countries creative workers are better supported by receiving payments to compensate them when their work is downloaded or stored for free through schemes called private copy levies. I am reliably informed that an amendment redressing this will be brought forward to the Digital Markets, Competition and Consumers Bill, and I hope that the Minister will respond positively to this proposal.

This brings me to my second element, and I will wrap up quickly. Significant reduction in support for the arts from local and central government over the last 13 years has reduced opportunities among freelancers and the self-employed within the industries. These cuts are causing undue losses of secure jobs at long-established institutions such as the Oldham Coliseum, which has closed, and the English National Opera, which is moving from its London base.

I could say much more, but I conclude with this: these issues need a comprehensive approach across government departments so that we remain world-leading. But this must not be at the expense of remuneration or a decent standard of living for those working in the creative industries. The working models are there; I hope the Government have the common sense to adopt them.

2.22pm
Lord Addington (LD)

My Lords, when you find yourself in a debate with only two minutes to speak, the only thing you can do is dive straight in. The one thing I would say here is, when it comes to training and supporting people in these structures, on-the-job training is not going to work if you have a varied employment structure that moves around the country. Whenever we have devised something of late, we have said: “Let’s go for an apprenticeship or let’s go for work-based training”. It is incredibly difficult for this group to access training in a growing field that has great growth potential.

How do you have an apprenticeship when most of the people doing the job are not going to be working in the same place or under the same contract in six months’ time? It is incredibly difficult to do. The T-level, for which I hope we will get a better structure, has requirements for on-the-job training. When the Minister replies, will he say how we are going to start addressing this? A model that has been terribly fashionable in government circles, across many parties, is becoming increasingly unuseful for training the next generation. We have started to do things such as saying that level 4 training is going to get more support, but if you go into the sectors which are growing it is not going to work. When the Minister replies—or even if he has to write—can he give me some idea of what you do to get support for people doing an apprenticeship, an apprenticeship-type course or a level 3 course if they have varied contracts and the people who are doing it cannot provide that support? It is a question that should have been answered already.

2.24pm
Lord Berkeley of Knighton (CB)

My Lords, I must declare my interest as a freelance composer and broadcaster. Freelancers are, as we have heard from my noble friend Lord Clancarty, the backbone of the UK’s art forms in the cultural industries, which raise £109 billion. Without them, film and television production would quite simply collapse so, as I think the Government recognise, we must nurture them. I welcome the new paper that the Government have come up with. Yet Covid, Brexit’s effect on EU touring, particularly in cabotage, and the drawing in of the economy have meant a terrible lack of security for this sector. Despite the Chancellor’s generous help during the pandemic, many freelancers fell through the net, especially the disabled. Could the Minister and his colleagues look at this in case, God forbid, there is a repetition of the pandemic so that we are in a better place should that happen?

In doing so, the Minister will doubtless talk to his esteemed colleague, the noble Baroness, Lady Barran. On Monday, she said in reply to me that there is a problem in getting recruits for training musicians and for teaching. This impacts on schools because it is where the next generation will come from—the next players in our orchestra and the next teachers in our schools. We need to make sure that we nurture them. After all, if we cannot, we will be encouraging migration, because we will have to import teachers and musicians for our orchestras from abroad. That surely runs counter to the Government’s policy.

2.26pm
Lord Strathcarron (Con)

My Lords, I declare my interests as a publisher, producer and freelancer, as per the register. Boiling my contribution down to two minutes, I would like to make the following points, bearing in mind that the world of publishing may be more gentlemanly and gentlewomanly than other sectors.

Researching for this debate, I found that over the last three years my firms have used 29 different creative freelancers from around the world over 144 projects. As a creative freelancer, I have been contracted five times on five different projects, again worldwide. The conclusion is that the market is growing and global; it is a totally free and self-regulating market, where the creative freelancers set their Ts and Cs depending on their desire for the work, what the market will bear and how they choose to build their client relationships. Their clients choose either to accept these terms or not, and I see no reason at all for third parties to intervene in these private arrangements.

The disadvantage of being a creative freelancer is having to deal with that which is the very opposite of creativity: administration, form-filling and dealing with bureaucracies, whether private or public. The Question asks how the Government can help creative freelancers. The answer is: by demanding from them as little as possible. The best single way to help the UK’s freelance self-employed is to reform, or ideally abandon, IR 35 and stop nailing us through unfair NICs and other welfare policies and irregularities.

2.28pm
Baroness McIntosh of Hudnall (Lab)

My Lords, this is indeed an important issue and I am grateful to colleagues at Freelancers Make Theatre Work for their excellent research and briefing, which I recommend to the Minister.

Freelancing in the live performing arts is a deeply precarious existence, as we have heard. Pay is typically low and conditions often poor. The pandemic had a terrible effect on the freelance workforce: many could not access any financial support and consequently left the industry or went, if they could, to the slightly safer and better paid haven of film and television. We now have a skills shortage which is already having a serious impact on organisations of every scale, but particularly on small producing companies such as OperaUpClose, newly included in Arts Council England’s national portfolio and of which my daughter—with long experience as a freelance opera singer—is artistic director and chief executive.

Companies such as OperaUpClose are where much of our most innovative and exciting work is happening and they are entirely dependent on freelancers to deliver that work. OperaUpClose, with a wide-ranging and ambitious programme, has just three permanent employees, who between them carry all creative, managerial and administrative responsibilities, including for fundraising and for all the onerous reporting requirements—far too onerous, in my view—that go with being an Arts Council England client. They operate with small budgets and compete for the services of performers, directors, designers, stage managers, writers and others in a market where those people need either to take the best-paid work or to take far too much work just to survive. This is an existential threat to the whole performing arts sector.

My question for the Minister, which I make no apology for stealing directly from my friends at Freelancers Make Theatre Work, is: what have His Majesty’s Government done, and what more will they now do, to address the serious challenges facing freelancers in the performing arts? Without them, there is no performing arts industry.

2.30pm
Baroness Bull (CB)

My Lords, the creative industries rely more heavily on freelancers than any other sector and that leads to greater precarity compared to the wider UK workforce. I want to highlight how this impacts on two groups: disabled artists and freelancers with parental responsibilities.

The number of working mothers freelancing in the sector increased by 79% between 2008 and 2016, but 2020 saw a 51% fall in female freelancers against a 5% decline for men. Even without Covid, the freelance infrastructure penalises working mothers and parents. Freelance women who experience pregnancy discrimination have fewer protections and less support. They rarely enjoy maternity cover and return to work more quickly after childbirth. Self-employed parents cannot access shared parental leave and pay, as the current system provides maternity allowance only for self-employed mothers, a system described by one woman as

“the worst administrative burden I’ve ever encountered”.

It is not surprising, then, that the sector average gender pay gap for creative freelancers is 37.4%.

I turn to the issue of disabilities. Freelance incomes inevitably fluctuate, but if a disabled artist’s income briefly exceeds the threshold for a given benefit, they risk losing that benefit and destabilising a carefully negotiated support package that is vital to housing, living costs and daily assistance. There is a discriminatory policy gap, in that the unpredictable income that is integral to freelancing is at odds with the stability required to maintain disability benefits. Will the Government consider a grace period for disabled freelancers when income briefly exceeds thresholds, so that benefits are not immediately cut? At the very least, better guidance is needed on how freelance income affects benefits so that intermittent income does not disrupt the entirety of a delicately balanced support package.

Freelancing is often described as offering flexibility and choice, but in many creative careers it is the only option. This reinforces demographic barriers and inequalities, limiting the diversity of the creative workforce and therefore the perspectives that we see on stage and screen. The Government need to do more to address the distinctive needs of this sector. Without it, we are all the poorer.

2.32pm
The Earl of Dundee (Con)

My Lords, I, too, thank the noble Earl, Lord Clancarty, for introducing this timely debate. Briefly, I will connect two points: first, how a government commissioner can enhance the industry’s performance by reducing current unfairness to its workforce; and, secondly, how in turn that would enable UK creative industries to establish good practice, both nationally and internationally.

On benefits, does the Minister agree with the noble Earl that freelancers ought to be entitled to universal credit and the minimum income floor, access to work and the new enterprise allowance? Does he concur that they should become eligible for statutory sick pay, paid parental leave, adoption pay and paternity and maternity pay?

On skills, does he support the idea, as advocated by many, that future national plans must take into account the circumstances of freelance work? Equally, does he approve of the idea that future immigration policy has to reflect the economic needs of the creative industries, particularly subsectors such as design, screen and the arts?

The best way is for a commissioner to supervise these adaptations, otherwise that process would become too unfocused and procrastinated. As the noble Lord, Lord Cashman, has inquired, is the Minister in favour of a commissioner operating between the Department for Business, Energy and Industrial Strategy and the Department for Work and Pensions? If he did that, a much clearer understanding of what has to be done to help freelance workers would develop across those departments.

The United Kingdom remains a key member of the 46-state human rights affiliation of the Council of Europe. I declare an interest as a recent chairman of its culture and education committee. By redressing anomalies and unfairness adversely affecting the creative industry’s workforce, the United Kingdom would also achieve an improved standard of good practice, thereby benefiting its own economy and the international community at the same time.

2.35pm
Viscount Colville of Culross (CB)

I declare an interest as a freelance television producer who also employs freelancers. Recently, I had to staff up a big, six-part television series on Ukraine. I wanted a diversity of staff on the production team—after all, diversity is the essence of creativity—but it was difficult. Throughout the creative industry, schedules have been tightened and budgets cut. The knock-on effect is that young freelancers in this sector are increasingly exploited and many are leaving. This is particularly so for young people from poor and ethnically diverse backgrounds.

The Freelancer Club has done a survey and found that an increasing number of freelancers are being asked to work for free. As a result, 45% cannot afford to cover their living costs. It estimates that it takes 18 months’ work before the average freelancer can afford to cover their living costs from their earnings. I call on the Minister to take steps to improve this woeful situation. It is fine for a freelancer to shadow somebody doing a job, or to do a short internship for free, but once they start creating value for the company they must be paid.

In 2016, New York introduced a law, the Freelance Isn’t Free Act, with the aim of changing the culture in the workplace by demanding that freelance workers are given contracts, timely payment and protection from retaliation. I suggest to the Minister that the New York Act is worth looking at. I also ask him to look at the problems of the introduction of IR35, which other noble Lords have mentioned. It forces self-employed people to become workers. They end up as so-called workers on the books of umbrella companies that demand that they pay PAYE, employee national insurance and, indirectly, employer national insurance.

The Minister will tell me that none of these areas is within scope of the DCMS and that he will pass on my comments to his colleagues in BEIS and the Treasury, but the creative industries are within his scope and they need to be protected by bringing different arms of government together to encourage and support the freelance and self-employed workforce. Maybe a freelance commissioner could do that but, whatever happens, I ask him to solve these problems by generating cross-departmental co-operation to ensure that this vital and talented part of our country’s workforce is encouraged and supported.

2.37pm
Lord Watson of Invergowrie (Lab)

My Lords, a two-minute speaking limit allows for not so much a speech as a comment, although the upside, I suppose, is that it is a result of so many noble Lords being passionate about the arts and creative industries. I congratulate the noble Earl, Lord Clancarty, on securing the debate but, as he said, we need a fuller one very soon.

Freelancers make a major contribution to the creative sector and the performing arts and deserve meaningful support from the Government, particularly in skills policy. A freelancer visa to allow them to work abroad would be welcome and that must surely be one of the first initiatives of a commissioner, a position that is urgently required.

I want to focus on the crisis facing grass-roots music venues, on whose behalf the Music Venue Trust campaigns vigorously. So far this year, one music venue has closed every week across the UK. That is not because people are losing interest in music; there were 22 million audience visits to a gig in 2022. Over 30,000 people work in the sector and grass-roots music venues are the research and development department of the UK’s £5 billion a year music industry. Eight new arenas are proposed to open in the UK in the next five years, but there is no record of such venues making a financial investment in the pipeline. We have to ask why that is.

Football in England demonstrates what can be done to help develop the next generation: 15% of the Premier League’s central revenue goes to supporting clubs lower down the professional ladder, as well as the women’s game and wider grass-roots and community football. There is no good reason why the top end of the live music industry cannot do the same and reinvest in the talent and venues that are supporting it and supplying the next generation of performers.

Venues are suffering extreme hardship from unaffordable energy bills and other costs. Live music generates huge returns for the Treasury, yet currently 16% of the value of every ticket sold at a grass-roots venue event is lost to VAT, removing almost £5 million from the sector in potential investment in new and emerging talent. I say to the Minister that in this post-EU environment there is no impediment to the Government zero-rating VAT on ticketing for grass-roots music venues and they should do so as a matter of urgency.

2.39pm
Lord Freyberg (CB)

My Lords, one of the fascinating facts about the creative industries is the very large proportion of freelancers and self-employed workers in them. In the year to September 2022 there were 3.1 million filled job roles in the creative and cultural industries and, of those, 989,000 were self-employed. This is more than double the self-employment rate in the wider economy, but freelancers and the self-employed face a number of challenges that are holding back this vital sector. Echoing the noble Lord, Lord Hannan, today’s younger workforce wants a different contract with the state. Their expectations of work are very different from those of previous generations. They want portfolio careers, greater flexibility about hours and the places they work, and a better work/life balance. But existing employment rights and our tax, benefits and pension systems make that difficult.

The self-employed often miss out on careers advice and lifelong learning opportunities in the creative industries, where the pace and scope of technological change are more apt to require new skills over time than in many other areas of the economy. Last year’s announcement of DfE’s flexi-jobs apprenticeship pilot was a good start, but creative industries have struggled to make the most of the apprenticeship levy, so we must learn lessons from it and put in place appropriate measures. Education and training programmes tailored to freelancers and the self-employed in these rapidly growing sectors could play a vital role by equipping them with not only specialist skills but an understanding of business and financial management. Supporting initiatives to enable networking and provide mentorship, guidance and resources can also foster vibrant creative communities.

Frustratingly, as highlighted in the 2017 Creative Industries Federation report, the self-employed in the creative industries feel invisible to policymakers. I would be grateful if the Minister could set out how the Government plan to improve the situation specifically for this group.

In conclusion, if the Government could make moves not just to shore up the rights and benefits of freelancers and self-employed workers but to enable access to lifelong learning opportunities and enhance the support that is available, they would be getting it right for a current generation of creatives who contribute so much to the UK’s appeal around the world, as well as those who aspire to join them in future.

2.41pm
Lord Foster of Bath (LD)

My Lords, as we have heard, the creative industries have a particularly large number of freelancers and self-employed workers. Some patchy help was given during the pandemic, but 38,000 freelancers still left the sector in 2020. Those remaining have to cope with cost of living increases, fluctuating funding streams—often offering money to organisations and not individuals—and numerous challenges created by Brexit, often on low pay. For example, freelance visual artists earn £12,500 per annum on average, yet they get very little help.

Many of us argue that the apprenticeship levy scheme was inappropriate for the sector’s freelancers. Eventually, the Government piloted a flexi-scheme, but its evaluation concluded that it was not flexible enough and that employer costs were unsustainable. The sector vision, just published, states that the Government plan to improve creative apprenticeships. Can the Minister say more about this welcome commitment?

Just as the apprenticeship scheme is inappropriate for freelancers and the self-employed, so is the benefits system, which simply was not designed for their tax and employment status. Can the Minister outline what plans there are to address this and to ensure that the protections that full-time employees have, such as parental leave, sick pay and protections against discrimination and harassment, also apply to freelancers and the self-employed? Given the decision to drop plans to reform IR35, what will be done to develop a tax system that can unlock the agility of a freelance workforce?

AI will bring opportunities to the creative industries, but unless it is properly regulated it could put creative occupations at risk. Much work is being done. The IPO is considering a code of practice on how AI technology firms operate with copyright-dependent sectors such as music. But is the Minister aware that in the consultations and round tables developing such plans, very few organisations that represent freelancers and the self-employed are involved? Will he look at this imbalance in representation?

Other countries do more. The Irish have piloted a basic income scheme for artists. There is a French scheme offering income support and social protection to individuals who are between periods of employment. Our Government should also do more. I hope that the idea of a commissioner, who could look at the issues that I and many other noble Lords have raised, will be seriously considered.

2.44pm
Lord Bassam of Brighton (Lab)

My Lords, we are agreed that the creative sector, more than most, is reliant on self-employment and freelancing because of its inherent flexibility. Commissioning is now at the heart of media employment and underlines the need for supportive policies. These should start with a rethink over the apprenticeship levy; reforming this is key to ensuring we have a continued pipeline of talent across the creative sector. Repeated personal tax rises and the Tory mortgage penalty mean that freelancers who lack predictable hours and income are finding it harder than ever to plan their finances and futures.

Rather than fostering our creative industries, the Government first attacked the reputation of Channel 4 then abandoned their policy of privatisation, which put at risk commissions and jobs that were organised through that process. Delays to the media Bill also do not help much of the freelance sector. The Government could recognise and support the UK’s role as a global creative centre and a major exporter of cultural output. They 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. They could work with the creative industries and tech sector to grow the economy and build a strategy that people can be proud of.

Finally, a parochial plea to the Minister to examine the future of the Brighton centre for contemporary arts and, with his DfE colleagues, intervene to preserve its integrity and prevent its closure. Losing the BCCA would be a hammer blow to Brighton’s role as a centre of cultural excellence and a cultural capital in the south. We have already lost the first exhibition of Turner Prize-winner and Brighton resident Helen Cammock’s work, through the cancellation of her exhibition. Cuts equal cancellation: my city needs the Minister’s help.

2.46pm
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)

My Lords, I am grateful to the noble Earl for calling this important debate; like other noble Lords, I wish it could have been longer, but I think we have made some useful noise.

Let me start by stating clearly that freelancers make an essential contribution to the arts and creative industries, enriching both the economic potential of our sectors and the lives of the people they reach. Without them, our cultural and creative sectors simply would not survive.

As many noble Lords have noted, the creative industries grew one and a half times as quickly as the rest of the economy between 2010 and 2019, generating more than £100 billion in GVA in 2021. Roughly a third of the workforce in the creative industries are freelancers, double the average of the economy overall. We know that being freelance is a conscious choice for some people; being self-employed gives workers more flexibility and control. The Good Work Review published by the Creative Industries Policy and Evidence Centre in February shows that 72% of workers in the creative industries claimed autonomy over their hours, compared with 52% across the overall economy. But we know, as the noble Baronesses, Lady Bull and Lady McIntosh, and others said, that for many others it is not a choice but the only way to work in the sectors that they love and that have inspired them throughout their lives.

We recognise that working freelance comes with challenges: the absence of HR support, long payment terms and the expectation of unpaid overtime, as well as freelancers experiencing more acute insecurity in employment and income, to name but a few. The Good Work Review also showed that 45% of workers in the creative industries feel they have job security, compared with 52% in the wider economy. Such precarity also creates unequal access to opportunities in the sector, as noted by the noble Baroness, Lady Bull, and others, often based on a person’s capacity to work for free, which will stop our creative and arts industries being representative of our population—something that both the sector and the Government are passionate about achieving. It can also limit people’s ability to volunteer or give their time pro bono, compared with those who work for organisations that offer support for volunteering.

It is clear that many issues remain, and that working in the cultural sectors requires a great amount of personal dedication, but support has been more forthcoming than has been reported at times. Today I want to touch briefly on both the work the Government have done in the past and the areas where we can work together in future to ensure that our excellent freelance creative professionals can continue to thrive in our arts and creative industries.

On past support, it would be remiss of me not to touch on the Government’s unprecedented package of support during the Covid-19 pandemic, including bespoke support schemes for those who were self-employed. The primary route was the self-employment income support scheme. People who were self-employed in the arts, entertainment and recreation sectors claimed a total of £812 million-worth of support through this scheme. A full impact evaluation is due later this year, and it is important that we look at it carefully. I look forward to seeing in greater detail how the scheme helped to support our creative freelancers, but also what lessons we should learn should we, God forbid, face a similar situation in the future, as the noble Lord, Lord Berkeley of Knighton, and others, urged me to do.

In addition to this support, throughout 2020 and 2021 Arts Council England provided £7.5 million to eight benevolent funds supporting freelancers in the creative sectors. I arrived at DCMS as a Minister towards the tail-end of the pandemic, and was glad to be able to help find a further £1.5 million to support freelancers affected by the Omicron variant when that hit during the crucial Christmas period in 2021. I am glad that that was matched by £1.35 million, which came from the theatre sector, with great generosity.

Throughout the pandemic, the cultural sector benefited from an increase in the higher rate of cultural tax reliefs. We recognise that the after-effects of the pandemic are still with us, and of course acknowledge the pressures of the rising cost of living, which is why, at the last Budget, the Government extended these reliefs for another two years. These changes—estimated to be worth £350 million over the five-year forecast period—will help to offset ongoing pressures and boost investment in our creative and cultural sectors. They will support many new productions to be devised and to tour, and, I hope, create and secure a significant number of work opportunities for the freelancers working in the sectors.

Noble Lords have kindly noted our Creative Industries Sector Vision, which was published yesterday, looking through to 2030. That considers freelancers throughout in its focus on growth, workforce and impact. I have no doubt that large numbers of freelancers involved across the creative and cultural sectors will benefit from the new funding announcements that accompany this. I am pleased to be able to say to the noble Lord, Lord Watson of Invergowrie, that it includes a new £5 million of funding through to 2025 to expand Arts Council England’s support for live music venues. The sector vision contains a specific chapter on workforce and our ambitions for improving job quality, which I will touch on a bit more. It will be complemented by the cultural education plan, a joint piece of work by my department and the Department for Education, informed by a panel chaired by the noble Baroness, Lady Bull, which will ensure that we are giving opportunities to young people to equip them with the knowledge and pathways that they need to flourish and keep these sectors thriving in the future.

Both the Government and Arts Council England have taken proactive steps to provide support to freelancers. “Increasing our support for individuals” is one of the five themes of Arts Council England’s current delivery plan, and it sets clear, high expectations for all cultural organisations that work with creative and cultural professionals. It has online toolkits, which support practitioners and employers by setting out good-practice approaches on recruitment, working with, and offering fair pay for, creative and cultural practitioners, and directing people to other supportive resources. The Arts Council has also provided resources and training for freelancers on the important themes of business skills, safeguarding and networking.

I am pleased that, in 2022-23 alone, the Arts Council supported more than 1,200 creative and cultural practitioners through National Lottery Project Grants, totalling almost £30 million, and more than 1,500 individuals through the Developing your Creative Practice programme, who received a total of £14.5 million in grants. The Arts Council anticipates these funding streams to have created more than 19,000 work opportunities for freelancers, and expects there to be a further 60,000 opportunities for freelancers through its awards to organisations.

One of the several actions that the Arts Council pledged to take in its current delivery plan was to convene individual practitioners, cultural organisations, funders, unions and others to explore the steps we can take to improve support for freelancers. That will require more than just support from the Arts Council and the Government; it will require the leadership of industry too, but I am glad to say that this is happening.

Last spring, Arts Council England commissioned a collective of freelancers to develop and deliver the Freelance: Futures symposium through a consortium made up of representatives from Freelancers Make Theatre Work, Inc Arts, Migrants in Culture, Musician and Artist Exchange, people make it work, Something to Aim For and What Next? to discuss how we can improve support for people working in the creative industries and the arts.

Last June, I joined the What Next? and Freelance: Futures round table, where we discussed some of the specific issues facing creative freelancers and how the sector can move towards a more equitable future for the whole workforce. I am grateful to everyone who has taken part in that work, not least those who gave up their time without remuneration—a point we sincerely appreciate. We owe them our continued listening and to show the action that we are taking in response to the points they raised.

While we continue to listen to the voices of those currently in the workforce, we also have to remember the freelancers of the future, educating them and raising awareness of careers. I am glad to say that this will now be addressed at an earlier age, thanks to our Creative Careers programme. Last year, the Government relaunched the programme in secondary schools, delivered by ScreenSkills, with just under £1 million of public funding. This enables 11 to 18 year-olds across England to have better access to resources and information about the wide variety of rewarding careers available. We all agreed that these resources must include more information on freelancers and portfolio careers. As a result, ScreenSkills commissioned Alison Grade, the author of The Freelance Bible,to create bespoke content for young people considering becoming a creative freelancer. That material, both filmed and written content, will be available for free as part of the programme.

Inspiring people to take on creative careers is one thing, but just as important is the question of how to retain the current creative workforce and provide it with high-quality work. The Good Work review, which was co-funded by DCMS, is the first deep dive of its kind into job quality and working practices in the creative industries. The research indicates that there are many challenges, often related to employment status, in formal recruitment practices and the lack of formal training or ongoing professional development. Government and industry have committed to work together to address the review’s recommendations, which highlight specific areas where we can improve job quality for freelancers.

Again, the role of industry is critical here. The social enterprise Creative Access, which provides career-long support to creative professionals from underrepresented communities, recently reported that 50% of freelancers do not feel supported by the employers they work with. We need the sector to step up so that freelancers can have enjoyable and fair conditions and provide the high-quality work which we all benefit from. We continue to champion industry efforts to lead the way in this area, including Creative UK’s work, in partnership with many others, to develop the Redesigning Freelancing initiative. This aims to support the development of fair and equitable engagement with freelancers, the first phase of which is being supported by the English combined authorities.

A number of noble Lords raised IR35, also known as off-payroll working. That is of course a matter for HMRC. The rules were put in place more than 20 years ago to ensure fairness within the tax system. They aim to ensure that two people working in similar ways pay similar taxes and remove the incentive to work through an intermediary simply for tax reasons. However, we hear the differential impact that it has on people working in different parts of the economy. I am pleased to say that HMRC has worked collaboratively with film and TV companies, as well as unions including Equity and BECTU, to produce guidance in 2019 specifically for those sectors. The guidance was reviewed and updated at the beginning of June this year to incorporate new roles. My department continues to feed in representations from the sectors we are proud to champion.

I have heard the concerns raised regarding the Department for Work and Pensions’ minimum income floor policy for self-employed people and how that interacts with the creative freelance workforce. Support is available for self-employed people through universal credit, including for those working in the creative sectors. That is a matter for the Department for Work and Pensions but, as the noble Lord, Lord Cashman, knows—he and I had a meeting with Equity about it, and I then had a meeting with my counterparts in DWP—I am not shy in raising these matters on behalf of the sectors. I will continue to do so, following the points noble Lords have raised today.

The noble Earl invited us to discuss the case for a commission for freelancers. It is one that has been raised before, not just in connection with these sectors but across the whole economy. That is a matter which we could debate at greater length, and I think it would benefit from having responses from other departments. I have some sympathy with ways to champion the work of freelancers. However, I would not want the deliberation on that issue to hold up or hinder the progress on the work which we expect will have a tremendously positive impact on the support, such as through the sector vision.

Finally, the noble Lord, Lord Bassam, rightly raised issues in his home city. I am delighted to be visiting Brighton with him on Friday of next week, so we can take that opportunity to discuss them further in his home city.

With no time remaining, I reiterate what I said at the outset. Freelancers are the lifeblood of our arts and creative industries. The Government are deeply committed to supporting them, as evidenced by our support throughout the pandemic and beyond, and our focus on the future through the creative industries sector vision. I am grateful to the noble Earl and all those who have given us further material with which to work as we do so.