"Contrast this with the lot of the creator, who makes the stuff that Justified Bloke downloads for free. 80 per cent of musicians in the UK earn less than £10,000 a year, while 95 per cent of songwriters and composers earn less than £15,000 in royalty income."
This is where the problem lies.
I don't download much music for free. I have bought the vast majority of what I want, and there is very little out there now that I would want to buy.
However, while I may download a new track from a big artist (mainly because it's what other people want to hear at parties or similar but I would not want to listen to myself), I would never pirate a track from a smaller, unsigned artist/band. These are the people who drag that figure down: The ones who go out playing gigs at pubs every weekend and scrape a crust, probably having to do another job as well to keep their heads above the water. They sell their CDs at gigs, and I will buy them.
If you excluded these from the income figure (and there are a huge number of them), the figure would be much higher than you are suggesting, much higher than the income of those who are downloading the music.
As always, there is a South Park episode which describes this perfectly: Series 7 Episode 9 - Christian Rock Hard.