Britain's creative industries will face significant damage unless the government strengthens AI copyright law, according to a House of Lords committee. The warning comes asthe Financial Times reported that ministers were set to delay making the contentious changes to UK copyright rules after a backlash from the creative industries.
Creative industries were underpinned by a "gold standard" copyright regime and contributed £124 billion to the UK economy in 2023, while employing 2.4 million people. By contrast,the AI sector employed just 86,000 and contributed £12bn to the economy in 2024.
The House of Lords Communications and Digital Committee report, published today, calls on the government to reject a text and data mining (TDM) exception with an opt-out mechanism.The UK parliament's preferred position on the bill has been that copyright holders need to formally opt-out if they don't want their materials used to train AI models. Yetpublishers, filmmakers, musicians and others have said that this would be impractical and an existential threat to the UK's creative industries.
Committee chair Baroness Keeley expressed the stakes plainly."AI may contribute to our future economic growth, but the UK creative industries create jobs and economic value now. In 2023 the creative industries delivered £124 billion of economic value to the UK and this is set to grow to £141 billion by 2030. Watering down the protections in our existing copyright regime to lure the biggest US tech companies is a race to the bottom that does not serve UK interests. We should not sacrifice our creative industries for AI jam tomorrow."
The government is now at an inflection point.During an evidence session before the House of Lords committee, secretaries of state Liz Kendall and Lisa Nandy said the government had been wrong to express its preference for reform, with Nandy describing it as a "mistake" and Kendall saying the government is "having a genuine reset moment".
The committee found that widespread unlicensed use of protected works, coupled with limited transparency from AI developers about how their models have been trained, leaves rightsholders unsure about whether their content has been used, and unable to enforce their rights when it has. The problem is not, the committee emphasised, that existing UK copyright law is outdated.
Instead, the Lords committee recommends that the government pursue what it calls a "licensing-first" approach.This would be backed by effective transparency requirements and technical standards for data provenance and labelling, so that rightsholders and developers can participate confidently in this arrangement. The committee also called for new protections against unauthorised digital replicas and "in the style of" uses of creators' work.
The government's recalibration reflects genuine pressure from the creative sector.According to the government's progress report, the opt-out option was favoured by just 3% of more than 11,500 respondents to its AI copyright consultation. Instead, 88% of respondents said they would prefer the government to pursue a different option under which UK copyright law would require AI developers to obtain a licence in all cases to use copyrighted content for the purpose of training their AI models.
The government is obliged to publish a final report on AI and copyright by 18 March 2026, as required by the Data (Use and Access) Act passed last year. Yet what emerges remains uncertain. The competing interests are real. AI developers argue that access to training data is essential for sector growth. Creators argue that their work should not be used without consent or compensation. Both perspectives contain genuine weight.
The House of Lords report suggests that responsible AI development need not come at the expense of creator protection. But translating that principle into law requires hard choices about transparency standards, technical feasibility, and market structures. The government's revised approach signals it recognises the stakes. Whether its final proposals satisfy creators, technologists, and the public interest remains to be seen.