Matthew Hancock – 2014 Speech on the Creative Industries

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, in London on 30th May 2014.

Introduction

Thank you very much.

Hello and welcome to the Makegood Festival.

I am delighted to be here today at this fantastic showcase of culture, creativity and entrepreneurship.

It’s a pleasure to see so many startups in the creative industries – and so many people who have benefited from their training with School for Startups, experience and sheer hard work.

For many of you here, this weekend represents the culmination of a year’s hard work, launching your creative business. And it is a celebration of the intensely powerful spirit of creativity and entrepreneurship that we find in Britain today.

I’m sure it’s been inspirational.

It’s pretty inspirational for me.

This weekend Makegood will play host to some of the finest new creative that London has to offer, with a line-up of speakers with a dedicated following from across creative industries.

Small businesses

Startups and small businesses like yours are the lifeblood of our economy.

In every single village, town and city in Britain, enterprising and hardworking people – like everyone in this room – are putting their energy, enthusiasm and creativity into brand new businesses.

In fact, more people than ever are rolling up their sleeves and going for it: almost 500,000 new businesses were started last year.

We are backing all of those new businesses – and all of you – every step of the way.

By extending small business rate relief until 2015 and introducing a new Employment Allowance to put up to £200 back into your business. By cutting unnecessary red tape, saving businesses over £1.2 billion already. By making it easier to access finance, like our new start-up loans. And easier to take on young people, by abolishing national insurance contributions for people under 21 from April 2015.

We want Britain to be the best place in the world to start and grow a business, bar none.

That’s my goal. Supporting you, and others like you, to grow.

Creating a stronger, more secure and more prosperous Britain.

Creative industries

All of you have a huge part to play in this.

Because the creative industries are one of the most vibrant parts of our economy – and one of our greatest strengths as a nation.

In 2012 alone, the creative industries contributed £71 billion to the economy – around 5% of UK total GVA. They’ve developed services exports worth £15.5 billion – 8% of UK services total in 2011.

In the 5 years between 2008 and 2012, they grew by 15%, almost 3 times more than the economy as a whole.

Over 100,000 creative enterprises provide 1.7 million jobs, 5% of UK employment in 2012. And if we count creative jobs across all sectors, the ‘creative economy’ provided 2.5 million jobs, 8% of UK total employment in 2012.

Because creative businesses and people help drive growth and exports in all kinds of industries – through good advertising, marketing, innovative design, software, new business models and so on.

And that’s without mentioning British films, performing arts, music, video games, crafts and fashion – from the world-leading names showcased in our GREAT campaign, which give this country such an incredible reputation from country to country and continent to continent.

These all fly the flag for Britain across the globe. And events like this are a brilliant chance to recognise their success – and spot the stars of the future.

Government is right behind you

The government is right behind you.

Over the last few years we’ve made sure that creative businesses have received special, targeted support.

Corporation tax relief has helped to secure £5.5 billion investment in a thousand British films – as well as supporting growth in TV production, animation, video games and regional theatre.

And we have provided £2.4 billion of public investment in the arts and culture in the four years since 2011 alone.

We are also making sure that creative businesses – and all businesses come to that – can rely on the sort of reliable, quick, high-quality communications infrastructure they need to survive. As I’m sure every one of you will be able to confirm, if you are well connected, and trade online, you can work from and sell to anywhere in the world – if not, it’s almost impossible to clear that first hurdle.

So we have provided £530 million to stimulate commercial investment and bring high speed broadband to rural communities; and provided £150 million to establish super-connected cities across the UK. We’re also investing up to £150 million to improve the quality and coverage of mobile phone voice and data services.

Of course, the best people to advise creative businesses on how to achieve success are those who have already done it. So we’re working with the industry on how we can encourage this vital sector to grow – including in the Creative Industries Council, chaired by Nicola Mendelsohn of Facebook – and I am looking forward to seeing the upcoming creative industries strategy written by employers for employers.

And the School for Creative Startups – who are behind this festival – are doing a fantastic job of training and backing creative entrepreneurs. I’m sure everyone here will want to thank them for all their support so far. The range and number of startups showcased here shows how successful they’ve been – and I’m sure they’re not stopping yet.

Small businesses

We want to make sure that we help, and don’t hinder. And we know that’s what you want too.

As the first government in modern history to reduce the overall amount of regulation, we’ve targeted 3,000 rules to be scrapped or amended – making it easier for businesses to survive and thrive.

And because businesses have told us that they want a tax regine which supports enterprise, a workforce with the right skills for the job, and better access to finance – that’s what we’re doing.

Thanks to our new Employment Allowance, 450,000 small businesses will pay no national insurance at all – allowing entrepreneurs to keep more of what they earn; meaning more cash for running and growing a business and creating new jobs.

And we’ve created one of the most competitive tax regimes in the world – including through the Seed Enterprise Investment Scheme and Annual Investment Allowance.

Access to finance

But I know that creative entrepreneurs often find it particularly difficult to get finance. They’re often strong on creativity, energy and enthusiasm – with loads of high-value intellectual property – but few tangible assets.

That is where our new British Business Bank is helping.

Around a third of venture capital from Enterprise Capital Funds has gone to creative and digital small businesses.

The Bank’s Enterprise Finance Guarantee has enabled loans to more than 500 creative businesses. The Business Finance Partnership, a public / private co-investment scheme for alternative and peer-to-peer lenders, is also playing an important role.

And 23% of all Start-up Loans have been offered to new businesses in the creative industries.

But money isn’t the only factor.

Skills

Alongside proper finance, you need a highly-skilled, well-educated workforce.

Research from a successful creative cluster in Brighton suggests that the most successful creative businesses are led by people with a combination of creative, digital and business skills.

And while we know that creative businesses thrive on diverse talents, we also know that doors have not always been open to people from all backgrounds, especially those without degrees.

This is now changing for the better.

Five years ago there were virtually no apprentices in the creative industries – there are now over 4,200.

We have driven up the quality of training every apprentice receives and now offer grants of up to £1,500 to firms that hire an apprentice.

New higher-level apprenticeships, equivalent to university study, have been developed by industry, for example in fashion, textiles, advertising and software development.

And the £15 million, publicly-funded Creative Employment Programme is supporting up to 6,500 new apprenticeships, pre-apprenticeships and paid internships in creative organisations.

But to make sure these changes make a real impact, we need to put employers in the driving seat – so that they are empowered to take responsibility for training and development, working with employees, freelancers, trade unions and training providers to make sure that their staff develop the skills they need to succeed.

Conclusion

These changes – and the other action I’ve outlined today – are just part of the work this government is doing to encourage creative start-ups, help small businesses grow and attract more talent into the creative industries from more diverse backgrounds.

Many of you here today are showing what can be done.

I wish you every success in the future.

Your success doesn’t just benefit you it helps the whole creative economy, the whole UK economy, to grow stronger and fairer, building a more prosperous country for all of us.