Why Cameron must not abolish the culture department

The abolition of the DCMS would be a disaster for the creative industries.

As we approach the Olympics, rumours that the government is planning to abolish the Department of Culture, Media and Sport (DCMS) – the creative industries' place at the cabinet table (as well as heritage, the arts, libraries, sport, the media and tourism to name just a few) – are becoming more widespread, and more grounded.

Anyone who works in the arts and the creative industries understands their worth – not only in terms of the value they provide to us as consumers, but the value they add to our economy; 1.5 million jobs and more than 10% of the UK’s exports – this is not a sector which should be underestimated or sidelined. A recent report by the Institute of Economic Affairs claimed that closing DCMS would save £1.6bn, a figure which will appeal to this government as they plan policy based on short-term savings, rather than long-term strategy. This figure is based almost wholly on funding which is distributed to other organisations such as the Arts Council. To make these savings in their entirety would mean abolishing schemes such as free museum entry.

The other, more likely, option which it is rumoured the government is actively considering, would be the redistribution of the elements of DCMS to other, beefed-up, Whitehall departments: the creative industries to Business, Innovation and Skills, Sport to Health or Education and Heritage perhaps to Communities and Local Government. To do this would be very, very short sighted.

The arts and creative industries provide both massive cultural and economic benefit. A decade of free entry to our museums and galleries has seen visitor numbers more than double from seven million to 18 million a year; a child at school in Britain today rightly has free access to learn about our important heritage and history.

Through the flagship creative partnership scheme, which Labour introduced, a young person had the opportunity to develop their creative skills and learn about work in the creative industries; a scheme which has been cut by this government. We are now able to enjoy festivals which embrace our unique identity, and our ability to lead in the world of culture – the Manchester International Festival, Animation Exeter, Sheffield Doc/Fest; all of these are the result of the championing of the DCMS during the Labour years.

Labour also understands that the arts and creative industries more than earn their worth. Free entry to museums has meant that not only have visitor numbers increased, they also earn Britain over £1bn a year in revenue from overseas tourists.

Creative industries rely on three elements which, although not perfect, were successfully fine-tuned in the last decade; a strong intellectual property framework (although this could be made stronger), a wide variety of skills with leading universities such as Central St Martin’s and the University of Brighton, and incentives to encourage exports, and inward investment. Fashion, for example, recruits heavily from UK graduates and contributes nearly £21bn to the UK economy. Since 1999, this vibrant sector has grown by an average annual rate of 3.3% and shows no sign of slowing down, despite the double-dip recession made in Downing Street.

But our position as a world leader becomes threatened without a department which champions the arts and creative industries and represents them at the government’s top table. We have already seen the disregard in which David Cameron and George Osborne hold these important sectors with the budget announcement on the heritage tax, and the misguided philanthropy cap. Thanks to a strong campaign from arts and heritage organisations, the latter has now been one of many U-turns, and the former has seen a partial U-turn but still leaves 93% of listed buildings in danger. The proof remains – we cannot allow the creative industries, the arts, heritage, libraries, tourism, sport and the media to be without a champion at the heart of government. 

Labour’s shadow secretary of state for culture, media and sport, Harriet Harman, raised concerns at the potential abolition of the Department in April this year, at which point Number 10 stated that “it did not recognise” the reports, and yet these rumours persist. If David Cameron is serious about the arts and creative Industries, he should give a categorical assurance that he will not abolish this important department - unlikely to be forthcoming in the short term.

Last week, Labour held a reception with over 150 figures from the creative industries to demonstrate the immense talent and potential which these industries hold. The reception was attended by not only the shadow DCMS team, but also members of the shadow treasury, business, innovation and skills and education teams. Hundreds of people are feeding into our report A Vision for Jobs and Growth in the Creative Industries which focuses on what the government should be doing to provide much needed support – not one person has advocated the abolition of DCMS.

We know that the success of these vibrant industries relies not just on the continued existence of the department, but also on a department which champions it across government, and fights its corner. The abolition of DCMS would be a disaster for one of Britain’s true success stories, and we must not allow that to happen.

Will Culture Secretary Jeremy Hunt's department survive the reshuffle? Photograph: Getty Images.

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/