Intellectual Property (Hargreaves Report)

Debate between John Hayes and Pete Wishart

Thursday 7th July 2011 Westminster Hall

[Mr Hayes]

The hon. Lady made both those points earlier. With her usual assiduity, she has taken advantage of this opportunity to intervene on me to amplify them. I will deal with them in turn. First, that submission was indeed received and considered, and it played a part in informing the review’s recommendations, although it was not listed because, as I understand, it was received informally rather than through the formal process. Secondly, I am more than happy to commit my noble Friend Baroness Wilcox to meet her. My right hon. Friend the Minister for Universities and Science will want to be involved, too, and will be happy to join that meeting. The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) was also mentioned, and I shall deal with him later in my remarks. Given his Department’s involvement in the digital industries, an interface with him would be desirable, too. Having committed three of my colleagues’ diaries, I had better end on that point. However, we will have the meeting. I will insist that it happens.

Professor Hargreaves delivered his report, “Digital Opportunity”, to Ministers and the Government in May. Members know that the Government are considering that report and will not expect me to anticipate our response, but—it is right that the hon. Member for Wrexham raised the issue in his role as shadow Minister—I again make a clear commitment that the Government will publish our response within a month. There is another commitment made by a Minister who is not responsible for these matters; that is one of the virtues of being in this position.

[Pete Wishart]

When presented with the Hargreaves report, the Government said that the response would be published by the summer recess. What is the reason for the delay? It was a clear commitment to respond by the summer recess. Now the Minister is saying that it will take a month. Why the delay?

[Mr Hayes]

The Government need to consider such things carefully. The issues are complex. The hon. Gentleman made the point that they are challenging, and the Hargreaves review’s recommendations are wide-ranging. He knows the report well; I have it here. The volume of responses to the consultation was large, and they were wide-ranging in terms of both the ideas presented and the organisations that contributed. It requires serious and studious work. He might have wanted an early response, but better to have something satisfactory than something quick. I make the commitment that it will be published in a month, and I assure him that it will be a studious and carefully considered piece of work. I cannot go further than that. I am unable to give an account of the response’s contents before its publication, but I reassure the House that the Government recognise fully the seriousness of the matters raised in this debate and during the review and its publication, as well as the value of the industries that rely on intellectual property as their life blood.

Professor Hargreaves suggested that in some areas the UK’s intellectual property framework, especially with regard to copyright, is falling behind what is needed to meet new opportunities. That point has been made repeatedly today. The argument is that if we do not fix the framework, our economy will enjoy less innovation and lower growth. It is certainly true—I will comment this far on what we might say—that the UK needs open, contestable and effective markets in digital content and a setting in which copyright enforcement is effective. Copyright provides the legal framework to sustain and protect creative value. It needs to fit current conditions, and it should warrant, and get, the respect of consumers. In other words, while not anticipating our response, I think it is reasonable and fair to say, given that we have had such a serious debate, that we feel that changes will need to be made to bring the system in line with current conditions.

We need copyright content and technology working together, as has been said repeatedly. They should be in harmony, not in conflict. There should be a happy union between changing technology and copyright. We need an environment in which new businesses and technologies can compete fairly with existing ones. I accept the point made by the hon. Member for Solihull. Although I qualified her argument about the relationship between SMEs, partner networks and large players, it is certainly true that there is a risk unless we get the balance right. The law in that respect is important. I mentioned the late Sir Hugh Laddie earlier. The hon. Lady will remember that he made a point, following the Gowers report I think, that the legal system militates against smaller businesses and against individuals purely on the basis of cost. The hon. Lady has reinforced that, and I think that my hon. Friend the Member for Northampton South made the same point. Therefore, there are issues to be considered, and as I have said, we take them seriously.

The review recommends that the Government ensure that the IP system is based on evidence. The right hon. Member for Bath (Mr Foster) was right to insist that the Government’s response should also be evidentially based, and I assure him that it will be. Economic considerations should play a stronger role in assessing the nature and perhaps even the limits to rights, which is another point that he made. It is critical that we take an empirical view, inasmuch as one can in this dynamic and complex area. We will prioritise that kind of evidential approach.

On international priorities, the report recommends that the UK pursue international interests in emerging economies and prioritise the EU patent. We will, of course, look at that too, given some of the comments that have been made during the debate.

To improve the environment in copyright licensing, the Hargreaves review recommends the establishment of a digital copyright exchange. That has been mentioned several times, including by my hon. Friend the Member for Hove (Mike Weatherley). Although he will know that that argument has been made by many people over a considerable period, the nature of the exchange, which we are considering alongside other recommendations, must be founded on consent. The idea that we have a state-driven, compulsory system that dictates and determines from the top is probably not compatible with the arguments that have been made by almost every contributor to the debate. It must be based on a collaborative and co-operative model.

The appointment of a champion for the digital copyright exchange has also been raised. I think it was my hon. Friend who said that the champion must not be a dictator, which is of course true. The champion would have to work closely with the industries concerned. The consultative nature of how the Government have gone about getting to where we are would need to characterise the subsequent arrangements that we put in place.

The review also recommends that the Government legislate to enable licensing of orphan works. I want to say more about that in response to the comments of the right hon. Member for Bath. It is important to design a scheme that prevents reappearing rights holders from losing control of their work. Any scheme proposed will have to involve a diligent search for rights information. That must surely be essential if such a scheme is to be fair to all parties. Perhaps I can put it in these terms: if the creator of a bestseller were to come forward, the work would no longer be an orphan work.

The right hon. Gentleman should welcome and not be fearful of the emergence of a missing great creative work. Occasionally, such things happen. Not long ago, an important work by Mozart was discovered, which is surely a cause for celebration. Mozart was perhaps the greatest of the baroque composers, but let us not go down that road or we will have a longer and perhaps less relevant debate. The character of genius is very interesting, but let us not talk about it here.

--- Later in debate ---

[Mr Hayes]

That is exactly what I was alluding to. My hon. Friend implied that in his earlier remarks; but for the reasons he has just given, the matter is complicated. The system would need to be thought through carefully to get the balance right. As I said, if he wants to give that more thought, I would be happy to receive representations on the matter. I will then pass them on to my noble Friend Baroness Wilcox and my hon. Friend the Member for Wantage.

[Pete Wishart]

I simply remind the Minister that I have five minutes to sum up at the end.

[Mr Hayes]

That is very generous of the hon. Gentleman.

Phonographic Performance Ltd

Debate between John Hayes and Pete Wishart

Wednesday 6th July 2011 Westminster Hall

[Mr Hayes]

I shall deal with that specific question before I finish speaking. No doubt inspiration will wing its way to me to inform my response—the hon. Lady knows what I mean by that. She has made it clear that there are areas in which we can make improvements, notwithstanding the constraints to which I have referred. Ah! Inspiration may already have reached me, but I want—not tantalisingly, but temptingly—to delay what I say about that for a few moments.

[Pete Wishart]

I am very much looking forward to the Minister’s reply to tomorrow’s debate on the Hargreaves recommendations. He knows that nothing in the Hargreaves report suggests or recommends exempting small and medium-sized businesses with fewer than 50 people, so can he now rule that out and ensure that musicians continue to get fair play from the wonderful recorded works that they provide, which enhance so many businesses up and down the country?

[Mr Hayes]

We will not exempt small firms. That is the answer to the question. The hon. Gentleman has raised the issue, and there is a case for exempting small firms, but the frank answer to his question and the question asked by the hon. Lady is that the UK would almost certainly be in breach of its international and European obligations if it did so. I can be very clear about that.

Let me deal with the hon. Lady’s intervention. Within the next month, she will learn more—because I will insist on it—about the Government’s response and thoughts on how we can take forward the review’s recommendations, where we feel that it is appropriate to do so.

I want to say more about what further progress can be made. First, we need to ensure that people understand the law and understand what not only PPL but all collecting societies from whom they need a licence are doing. We know from the ministerial postbag and from our constituency postbags and surgeries that many small businesses are unaware that they need a licence for the activities that we are discussing. The hon. Lady has made the point clearly. Many businesses question why they need a licence from PPL and PRS for Music to have the radio on in business premises when the broadcaster has already paid for a licence. Many ask why they need a licence at all. Where they do require licences from both PRS for Music and PPL, some businesses query, reasonably enough, why they are not told clearly that they need two licences and why joint licensing is not used to cut costs and the time that they have to spend on that.

PPL tells us that it is doing more to raise awareness among licensees and potential licensees. As a result of this debate, our further consideration and representations made to us from outside this place and within it, we will continue to press PPL to fulfil that commitment. Indeed, as a result of the debate, I will ask Baroness Wilcox, who is the Minister with responsibility for this area, to meet representatives of PPL to talk about how they can make the commitment real and what further steps they will be taking to address some of the questions that I have raised. Trade associations, too, must continue to build on the work that they do to raise awareness among their members. We will certainly involve them in that discussion.

Secondly, where charges are justified, they should be applied in a clear, unambiguous and efficient manner. Those wanting to start new businesses must not be deterred by uncertainties about charges that have no bearing on their core business. Thirdly, inquiries suggest that not all trade associations are aware that they can have a role in negotiating the terms and conditions of the licence for their sector. Some trade associations and licensees are even unaware that they can take a case to the Copyright Tribunal, if they are unhappy with the terms and conditions. They simply do not know their entitlements. The tribunal secretariat is working to raise awareness in those areas. It hosts regular user group meetings, which are aimed at making the tribunal more accessible by familiarising users, especially SMEs, with its procedures and giving them an opportunity to meet the chairman and lay members. The secretariat also hosts regular meetings of collecting societies to discuss, among other things, concerns raised by licensees.

I will also ask Baroness Wilcox to advance our work with trade associations. Of course, we do not exert executive power in that respect, but we will take the work further to ensure that all the steps are accelerated. It seems to me that a seminar might be appropriate. I am thinking of a seminar in which the interested parties are brought together to talk through what further steps might be taken to deal with some of the specific issues relating to small businesses raised by the hon. Lady. Perhaps my ministerial colleague will write to her and other interested hon. Members, addressing the possibility of just such an initiative.

I have heard much in this debate that provides food for thought. We do not take these matters lightly. In relation to charities, PPL has agreed to joint licensing with PRS for Music, which should reduce administrative burdens. The hon. Lady will know about that. We might be able to discuss, at the type of event that I have described, further steps along those lines, because there are community organisations—some of them are very small—that struggle to deal with some of these matters, not least in terms of information and understanding. On that basis, I welcome the agreement that has been reached and encourage exploration of other areas for joint licensing, notwithstanding the point that I made about exemption and the perfectly proper point that the hon. Gentleman has raised.

We will reflect carefully on these matters before responding formally to the recommendations of the review. We will continue to work to ensure that the framework is explicable and accessible and that it operates fairly. There is a balance to be struck between the interests of different parties, as I think has been made clear in this brief debate. Those parties have a legitimate expectation that the system will work fairly. The regulation should certainly not be burdensome, and we need to ensure that we have some understanding of the costs of the regulation. When we promote steps that are designed to ensure that a system is operating fairly, we should always do so on the basis of understanding the cost burden that it creates. We also feel—I am sorry; I am using the royal “we”. I also feel that measurement of the function of these agencies is important, so having proper lines of accountability to ensure that what is being done is working as it should be is important.

This has been a useful albeit short debate. As I have said, it is remarkably timely. I hope that I have made reasonable commitments to the hon. Lady as a result of it. She will hear more very soon about our further reflections.