Phonographic Performance Ltd

Debate between Baroness Ritchie of Downpatrick and Pete Wishart

Wednesday 6th July 2011 Westminster Hall

[Ms Margaret Ritchie (South Down) (SDLP)]

I am grateful for the opportunity to have this important debate under your chairmanship, Mr Bayley. I want to talk about the licence regime operated by Phonographic Performance Ltd, which governs copyright for musical recordings, and by the associated Performing Rights Society; they issue music licences that cover the copyright for musical and lyrical compositions. Both licences are required by businesses if they want to play music in public places or hold a live performance.

I want to draw attention to the over-complex and expensive licensing regime in this market. The problem has been highlighted by the European Union and the Federation of Small Businesses, and by various businesses and constituents throughout my constituency in Northern Ireland. The regulations impact financially on many small enterprises across Britain and Northern Ireland, which are already over-burdened by Government regulation and red tape. Broadly speaking, as we seek to develop and grow the economy in Northern Ireland, such measures can place an undue strain on businesses that already have narrow profit margins.

The Government have acknowledged that the economy in the north of Ireland needs to be rebalanced, and the proposed steps to devolve corporation tax powers to the Northern Ireland Executive are encouraging. However, it has been noted that businesses are still subject to around 60 regulations, including licensing arrangements, which cost firms throughout the UK £13 billion. Those regulations may be particularly burdensome for our small and medium-sized businesses, which may not have staff dedicated to compliance issues. It is therefore important that we pay attention to the criticism that such firms have expressed about the licensing arrangements for performance music.

I would like to draw attention to more specific issues within the broader context of the debate. In March 2009, the PRS introduced an exemption rate for businesses with fewer than four employees to cover employees playing music in private that was not audible to the public. Under that arrangement, such companies were to pay £44 a year plus VAT, and that decision has since been upheld by the High Court. Such exemptions are welcome, but unfortunately they are some way short of a classification that would help small and medium-sized enterprises, given that SMEs are classed as organisations with fewer than 50 employees. I want to encourage the Government to examine such exemptions, and to make them more consistent with the definition of a small business.

[Pete Wishart (Perth and North Perthshire) (SNP)]

After 10 years as a Member of Parliament, I have not received one complaint on the subject from an SME in my constituency, and I, too, represent a rural area. Most small businesses are content to pay a small price to enable them to use wonderful music to enhance their businesses. When the hon. Lady is talking about exemptions, is she thinking about the musicians, most of whom survive on less than £16,000 a year? If small businesses with fewer than 50 people were exempt, the impact on musicians would be massive. Does she understand that musicians are struggling, and survive on the scraps that they get from the PRS?

[Ms Ritchie]

I thank the hon. Gentleman for his welcome intervention. I recognise that in another life he was a musician, and is a member of a popular Celtic folk band in Scotland, which has played in Northern Ireland on several occasions. I recognise the musicians’ plight, and that they and the music industry are an integral part of small businesses. I am reflecting on the position of small and medium-sized enterprises in Northern Ireland, where we have a predominantly public sector-led economy, and are trying to grow our economy and encourage small businesses. Any additional taxation or fees simply imperil their financial situation.