Speech

Danny Alexander at the Technology Innovators Forum

Creativity and innovation are at the centre of the new economy that we need to build in Britain, explains the Chief Secretary to the Treasury.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Danny Alexander

Thank you Jonathan [Lord Marland].

I’m very pleased to be in such esteemed company this afternoon.

My speeches often dwell on some of the difficulties we faced after the recent global crisis…

But instead – today – I want to focus on how we’re working hard to build a new, stronger, more balanced economy…

And how – drawing on our rich heritage of creativity and innovation – sectors like those represented here today are at the centre of the new economy that we need to build in Britain.

This sector is so important to the future of our economy, because it is disruptive…

Creating new platforms and concepts and ideas which then create new markets…

So I want to see a creative and technological sector here in the UK which is open and different, and challenging to the established order.

Because if we can channel the inventiveness and resourcefulness that I know exists on these shores…

Then we can be at the forefront of the most exciting cultural developments of the future – be that in existing or new fields.

And we can also house a healthy, vibrant creative sector which is at the cutting edge of new technology…

And generates jobs and investment and growth, both here and around the world.

Now – as politicians – we don’t perhaps have the greatest reputation for creativity ourselves…

But what I hope we can do, is try to develop the right policies to help creative people – and creative sectors – like yours to flourish.

Through implementing the right tax systems…

Through investing in the right infrastructure…

And through developing the right skill sets among our workforce.

That’s what the government has spent the last three and a half years doing.

And I’d like to spend my brief time with you this morning, talking through each of those in turn.

Tax

In 2010 the government set out to create a corporate tax system that would improve our business environment…

And help to attract companies – like many of you here today – to set up on these shores.

So over the last three years we’ve reduced our main rate of corporation tax from 28 per cent to 23 per cent, which is already very competitive.

And by April 2015, that level will have fallen again to just 20 per cent, which is set to be the lowest business tax of any major economy in the world.

That sends a message to all industries…

That if you want to move here to the UK…

If you want to invest here in the UK…

And – crucially – if you want to employ people here in the UK then the government wants to help you and welcome you.

We’ve also worked hard to ensure that our taxes don’t hinder the creative industries.

Film tax relief, has proven to be a real success in promoting the sustainable production of British films…

Offering relief on up to 80 per cent of costs – it is – as I’m sure many in this room will be aware – a very simple scheme to use…

And since its introduction six years ago, it’s supported £5.5 billion of investment into nearly a thousand British films, receiving roughly £800 million in relief.

As a result, we’ve seen some of the last decade’s biggest grossing films shot or produced in the UK, like The King’s Speech and Inception and Skyfall.

And – as a proud Scotsman – I was delighted to see that two of the top three films at the UK box office last weekend…

Filth and Sunshine on Leith…

Were both very different, but very Scottish films…

And were both shot up in Edinburgh.

So, having seen the boost that our relief gave the film industry…

And knowing how quickly our other creative industries are keeping up with movies in terms of innovation, and cultural significance, and production budgets…

We’ve decided to replicate that relief with other creative industries.

So last year, we announced the introduction of corporation tax reliefs for the video games, animation and high-end television industries.

The animation and television reliefs came into effect six months ago…

And we’re working with the European Commission to get state-aid clearance to introduce the video games relief, as soon as possible.

But it isn’t just in those very specific industries that we want to encourage creativity.

We’re increasing the support provided through our R&D credit system.

And we’ve also introduced a comprehensive and competitive regime to support the development and exploitation of intellectual property in the UK…

As well as setting up a specific crime unit to make sure IP is protected.

The other advantage that the UK offers – and I don’t think this should be understated – is the strength of our capital markets…

So – alongside New York and LA – this is one of the best places for industry to raise finances.

Infrastructure

As well as getting the right tax and financial systems in place, I’m also keen that our country has the right infrastructure in place to support your sector over the longer term.

And that’s why – despite this being a period when we’ve had to make significant cuts to public spending – we’re clearing the way for investment in our transport and energy and digital networks.

Improving our railways might not sound like the most important investment when it comes to industries like yours…

But the cluster of digital companies popping up in East London, will be much closer to Heathrow Airport – and hence the world – when we complete our Crossrail project…

The new North-South rail-link – High Speed 2 – will help companies in London connect with our burgeoning scientific and digital industries in the North West…

And our work on station refurbishment will continue to open up new – brilliantly connected – locations for industry.

That’s why Google are setting up in the Kings Cross development…

And Kings Cross – of course – sits just two stops north of the Tech City project at Old Street.

But I know that for many of you, while high speed rail is helpful…

High speed broadband is a necessity.

In the last year alone, the average download speed of a UK fixed broadband connection has increased by 64%…

And 10 000 new premises are getting access to superfast broadband every month under our rural rollout programme.

By 2018, 99% of the UK – in urban and rural areas – will have superfast access…

Including 22 super-connected cities…

Making this a country where the high tech sector has the infrastructure it needs to succeed.

Skill Sets

But to take full advantage of that superfast access…

We need to make sure we have a workforce with the right skills.

And that is the third – and final – area of investment I’d like to talk about.

Yes, we’re proud of our cultural and creative heritage here…

Nowhere was that better encapsulated than at the Olympic Opening Ceremony last year…

The BBC. The Beatles. Bond. Bowie. Mr Bean even…

But we know we can’t be complacent.

And we know that we need to produce a generation with the right skills to be at the forefront of cultural developments of the future.

At the Budget this year, we announced that we would match industry…

To the tune of £16 million…

In providing entry and professional level training for the film, TV, animation, video games and VFX sectors…

Meaning that over 5 000 individuals will be developing the key skills to build successful businesses here.

We’re also overseeing a number of funding competitions for digital businesses…

Including up to £15m – which will be made available through the Technology Strategy Board – to support digital content production in the UK…

And we’re confident that investment will lead to the development of new applications, tools and software that will sustain creative and commercial success on a global stage.

We’re continuing to invest in our cultural education programme, and…

Perhaps most importantly…

We’re also preparing the next generation for careers in the high tech sector, by introducing a new curriculum for computer science in schools next year.

Conclusion

I think it’s vital that when the next generation of children grow up, they have the right skills to engage with, and succeed in, and advance the technologies of the future.

And the great thing about those technologies - for me, someone who believes in knocking down international barriers rather than building them up - iss that those technologies are bringing the world much closer together.

So I think the work you’re doing – at this conference – over the next two days is incredibly important.

And I hope that work results in some strong ideas and some strong contacts…

Which can lead to some successful, inventive, disruptive collaborations…

Perhaps some more triumphant Scottish cinema…

And – ultimately –long and stable growth for your industry and our economy.

I also hope you go away with the reassurance that the government will do everything we can to support you in that.

Published 15 October 2013