Queen’s Speech
Lord Clement-Jones Excerpts(12 years, 11 months ago)
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Lord Clement-Jones
My Lords, I, too, start by congratulating our maiden speakers on three superb speeches. Today’s debate, focusing in part on health, education and welfare, is a chance to welcome warmly a number of key elements in the Queen’s Speech and the forthcoming legislative programme: the Care Bill, the Pensions Bill, the Marriage (Same Sex Couples) Bill and the carryover of the Children and Families Bill, which, as we have been reminded, contains the biggest overhaul of the SEN system in 30 years. On the other hand, in the health context, I very much hope that legislation for plain standardised packaging for tobacco products is not being kicked into the long grass despite clear evidence that it would have the desired impact.
I heard the negative commentary of the noble Lord, Lord Hunt, on the Queen’s Speech, but I do not think that Peter Oborne of the Telegraph is a notable supporter of the coalition and we should take notice when he described the Queen’s Speech as “sharp, dynamic and purposeful” and,
“a serious programme for government”.
Today, I want to speak about the issues affecting the creative and cultural industries and the tourism industry, which will need to be tackled by the DCMS, the Treasury and the Business Department if they are to fulfil their potential in growing our economy. The recent CEBR report for the Arts Council, mentioned in the lyrical maiden speech of the noble Lord, Lord Berkeley, on the economic impact of the arts and culture, strongly emphasised the link between the two sectors, with 42% of all tourism expenditure involving cultural engagement. In the case of both sectors, it is crucial to build on the Olympic legacy. Is it not a real tribute that Channel 4 won the BAFTA television award for sport and live events for its coverage of last year’s Paralympic Games?
As another aside on the Olympic legacy, rather less positive, there is now, after a long delay, a supplier recognition scheme in place, whereby, in general, suppliers are allowed to promote their work for the Olympics. Yet there are still areas, nine months after the event, not covered by the scheme. Many companies selling products such as lighting and audio-visual equipment are not able to publicise their involvement with London 2012. The value of the Olympic legacy for these businesses is being completely lost, and this is disgraceful.
Many of us have been impressed by the post-Olympics GREAT promotional campaign overseas, which has highlighted our creative and cultural sector for visitors. We are beginning to see real strategic co-operation between UKTI, VisitBritain, the Arts Council and the British Council, which is extremely welcome, but we need to do more to co-operate in squeezing out every bit of resource. The Australian tourism marketing budget in China, for example, is £13 million, while ours is a mere £1 million. It is extraordinary to consider that the impact of these two sectors—tourism and hospitality and the creative industries—sponsored by the DCMS, taken together and calculated by Oxford Economics and Nesta, amounts to some 20% of our GDP, delivers more than 5 million jobs and offers the strongest prospects of growth in employment over the coming years.
In this context, I want to mention the recent speech by my right honourable friend the Culture Secretary at the British Museum. I did not take it as a demonstration of some kind of Gradgrind utilitarian approach to the arts and culture. She was not insisting that all arts activity needs to be monetised. I took it as an understandably plaintive cry for support in her battle with the Treasury in its demand for more cuts in the service of deficit reduction. With perfect timing, we have had the CEBR report commissioned by the Arts Council on the contribution of the arts and culture, which makes it clear that, quite apart from their intrinsic value, they are very good value for money. Public funding of the arts can, in particular, help to diminish the economic risk of developing new productions, which can then go onto global success. Take the productions of the National Theatre’s “War Horse” and “Matilda” from the RSC, for example.
The Korean fashion entrepreneur Sung-Joo Kim, in an inspirational speech to an all-party group here in the Lords a couple of weeks ago, talked vividly of Britain’s future as a creative brain centre, in terms of our creative skills, allied to our archive, museum and gallery resources—now, of course, including the BBC’s Digital Public Space. There is no doubt that our future lies with our imagination, creativity and invention. We are pre-eminent in so many creative areas; the UK has the largest cultural economy in Europe, and the creative and cultural industries represent one of our economy’s greatest success stories. It was great to hear yesterday, for example, that the new “Star Wars” film will be made in the UK.
The Olympics showcased the social and economic value of intellectual property to the UK. We need to realise that our creativity, ideas and intellectual capital will increasingly drive our future prosperity. The recent Nesta Manifesto for the Creative Economy had some good recommendations, especially on the need for better measurement of the creative economy and the need to recognise and understand the economic connections between the arts and creative industries. However, at the end of the day the same old message is being delivered, as it was in the Hargreaves report, that copyright is an impediment to innovation and growth. Indeed, the Nesta report claims that term extension to copyright has weakened the ability of UK business to innovate; it equates copyright with regulation. This kind of attitude is spilling over into dealings with the EU. During a recent trip to Brussels, members of the All-Party Parliamentary Intellectual Property Group were greatly concerned by the apparent stance of the UK Government in appearing to support those in the Commission, notably DG Connect, which wishes to weaken copyright protection by the introduction of yet further exceptions beyond those contained in the current directive on copyright in the information society, such as over user-generated content. This is extraordinary, given the importance to our economy of the creative industries. It was a delight, therefore, to see the recent piece from the noble Lord, Lord Smith of Finsbury, on Music Tank, forcefully arguing the contrary.
I know that my noble friend Lord Younger intends to be a strong advocate for the value of intellectual property, but we need clear and concrete signals that the role of intellectual property as the foundation of our creative industries is appreciated by government. A vital step would be the implementation of the Digital Economy Act. If the Government are serious about the health of our creative sector, it seems extraordinary that we are still waiting for the issue of sharing of costs relating to notifications and appeals against the initial obligations code to be resolved by the Treasury three years after the passing of the Act. Nor has the DEA been activated in respect of public lending rights to on-site loans of audio books, e-books and so on.
Another strong signal needed from government is one in support of the creation of the copyright hub, which is a major initiative designed to streamline copyright licensing across the industry. I welcome the Government’s decision to give modest funding support to the development of the copyright hub, which will ensure that it comes into operation earlier than anticipated. I am delighted that, after a terrific campaign by the PRS and the music industry with support from government, the Global Repertoire Database has recently announced that it is locating its global headquarters in London. That is a triumph.
Also on the subject of intellectual property, I want to welcome the Intellectual Property Bill, which is focused on design rights and the introduction of the Unified Patent Court, which we will debate in more detail next week. We certainly need to consider extending the ambit of that to unregistered design and consider other aspects of it, such as providing for public lending right to cover remote e-lending, as recommended by the Sieghart report. I also welcome the consumer rights Bill.
Yesterday, my noble friend Lady Bonham-Carter made powerful points in her speech on two issues that impact heavily on the creative industries: education and skills and finance. I warmly support what she said, particularly over the necessity of implementing Darren Henley’s cultural education recommendations and in taking forward the Creative Industries Council’s recommendations on financing creative industries. I am pleasantly surprised to find that Creative England is now recognised to be playing a very important role.
I have very little time left to me, but I want to mention the enormous advantages that the UK has in its attractions for visiting tourists—yet it is often seen as the Cinderella sector. I hope that the Culture Secretary will, as recommended by industry representatives, agree to form across industry a hospitality and tourism council along the lines of the Creative Industries Council, to include government and industry leaders, jointly chaired by the Culture and Business Secretaries. Those two sectors are of huge significance to our future prosperity. I hope that the Government will take the necessary action so that the opportunities presented can be seized by all concerned.
Enterprise and Regulatory Reform Bill
Lord Clement-Jones Excerpts(13 years, 3 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, in its 10th report of this parliamentary Session, the Delegated Powers and Regulatory Reform Committee considered that the exercise of a number of the powers in these provisions should be subject to the affirmative procedure, at least the first time that they are exercised. The amendments in this group take heed of this recommendation. I am pleased to say that, in fact, they go further by requiring that not just the first use of the powers but all uses be subject to the affirmative procedure. I trust that this additional, significant safeguard in the Bill gives due comfort and assurance to those who have expressed concerns about the exercise of these powers. I beg to move.
Lord Clement-Jones
My Lords, I shall say just a few words on the Minister’s very welcome amendments in response to the 10th report of the Delegated Powers and Regulatory Reform Committee. It is very interesting. The committee demonstrated the value of a collective memory, as it took us all back to the Digital Economy Act and the comments that it made at the time; it has been entirely consistent. It is good to see that the Government have responded. However, I wonder, especially in light of the fact that the Minister has confirmed that the affirmative process will be used for Clause 68, whether he will also confirm that the affirmative process will be used when the Hargreaves exceptions are introduced under the European Communities Act. The Minister has clearly stated that the Government will not be using Clause 66 when those exceptions are introduced; it will be purely for penalties. We very much welcome the assurance that the Minister gave on Monday. However, will he take the opportunity to confirm that the scrutiny process will be by the affirmative procedure of both Houses when those draft statutory instruments come under the ECA procedure?
Lord Stevenson of Balmacara
My Lords, we on this side will also be interested to hear the answer to that question, although I think I gathered from remarks made previously in Committee that that is the case. We will look forward to hearing about that. Other than that, we are very grateful to the Minister for bringing forward these amendments, which, as he says, go a step further than the DPRR Committee recommended, but are none the less welcome for that.
Lord Clement-Jones
My Lords, I think we gave the issues a pretty good airing on Monday, so I will not tax the patience of the Committee for too long today. The Minister is well aware that there are many who think that we should align ourselves to the EU directive and that the extended collective licensing arrangements go well beyond where we should be at present, given that the digital hub could solve some of our problems.
The first thing I want to do is return the compliment to the Minister for the care and attention that he has given in his capacity as the Minister for Intellectual Property, and for listening to the arguments that have been made. I thank him particularly for his clarification and assurances and, latterly, for his letter which, although directed at the noble Lord, Lord Stevenson, seemed to encompass most of the questions that I had asked, so I was pretty satisfied with that way of dealing with things. In particular, I welcomed the assurances he gave about the ECL on Monday: the Government are clear that an opt-out must be as simple and as low-cost as possible for rights holders; and further safeguards to be drafted in the regulations will require the licensing body to set out the details of opt-out systems, why they are appropriate to meet the needs of rights holders and how it plans to publicise the scheme so that rights holders can opt out in advance. Moreover, the Secretary of State will be able to impose conditions on an authorisation relating to the opt-out if necessary. I found all that very reassuring.
Above all, I hope that the Minister recognises that many bodies and institutions—many of them represented by FOCAL and BAPLA—are still very unhappy about both ECL and orphan works. I hope he will continue to listen and engage with all those organisations. I also mention Stop43 in that context. There is certainly a very strong feeling that the impact assessment—particularly for orphan works, which have a range of 9 million to 91 million—is hardly credible as a business plan. I have made the point directly to officials that genealogy or genealogical services are not a great basis on which to work out a business plan. The Minister has answered many questions but there will be others coming down the track, such as whether the Copyright Tribunal is really suitable and exactly what a “diligent search” consists of, especially when there are several works by the same author. My wording might not have been as good as it should have been, but we were trying to get at the fact that care needs to be taken in respect of individual works and where there are multiple rights holders. What copyright items will be included in the definition of orphan works?
The EU directive does not include photographs, and for that very reason, photographers and the whole of that sector have become very exercised about the new provisions. Therefore, particular care needs to be taken in respect of that sector, as we heard from the noble Lord, Lord Greenway. I recognise that if the museums and universities and so on want to see ECL, then they have to justify how it is used and its impact on rights holders.
As regards ECL, the impact assessment states that the UK’s existing rights clearance system is complex, involving multiple users and rights holders seeking and granting permissions. Hargreaves recommended that it be simplified. Government intervention is required to introduce ECL as a tool for simplification. Is that not precisely what the copyright hub is designed to do? There is the concern very strongly held by foreign rights holders—I mentioned the letter from the US photographers to the Secretary of State—that they will have very inadequate means of monitoring what is happening in the UK.
There are many other questions and I do not want to prolong the session today. There is the whole question of what “substantial support” means for a collecting society in what the Minister said on Monday. What sums of money will be paid to copyright owners under ECL? What will be the duration of licences? Will ECL societies have the right to license just UK content or content from overseas? How will copyright owners know which of their works have been licensed, and so on? Considerable clarification is needed, not least that for the Association of Authors’ Agents. When we were talking about that, the Minister distinguished between certain warranties and other warranties. That was perfectly fair, but nevertheless clarity will be all when dealing with these matters.
The task of the Intellectual Property Minister, especially in these circumstances—holding the ring between different interests—is not easy, but I commend the newsletter from Victoria Espinel, who is the Intellectual Property Enforcement Coordinator in the States. As a statement of the balancing of intellectual property rights with innovation and growth, I cannot fault what she has said about the new United States-Russian Federation intellectual property rights action programme. How about that for a salient? She states:
“Strong IPR protection and enforcement are vital to promoting innovation and creativity by securing the rights of innovators and the creative community, attracting high-technology investment, and fostering the jobs necessary for long-term sustainable growth”.
That seems to me to balance very well the interests of all parties and I commend that to the Minister.
Baroness Buscombe
My Lords, I rise briefly to add a few words in support of everything that my noble friend has said thus far. I also want to refer to a letter addressed by the Minister to the noble Lord, Lord Stevenson, and thank the Minister because it addresses some of the questions which I raised in the Committee’s previous session.
The Minister and the Government agree that when licensing bodies operate ECL, they should do so transparently and should provide for fair treatment for non-member rights holders whose works are licensed through ECL. Any licensing body that wishes to operate a scheme will be required to have a code of practice that complies with the Government’s minimum standards for collecting societies. This will include specific protections for non-member rights holders. We welcome that statement and the statement about the applicability of UK ECL schemes for the use of works outside the UK. The Minister has said that the Government’s proposals would apply only to use within the UK. It is not possible to extend these provisions to other jurisdictions.
I thank the Minister for that but would just say that, where the Minister refers in response to a point raised by my noble friend Lord Clement-Jones about the operation of ECL in Nordic countries, while the Minister said that, since the 1960s, ECL has operated in the Nordic countries without challenge and is explicitly recognised in EU law, there is a difference. This is something to which we will have to give more thought between now and Report. In Nordic countries, the system operates against a background of legislation that guarantees remuneration for creators and the identification and integrity of works. I feel that we are making real progress on this Bill, and I support the Minister’s helpful responses to our concerns thus far.
Finally, I add my continuing concern in relation to photographers. A number of noble Lords spoke on this issue on Monday. It remains a serious concern, and it might be helpful if we could have more thought prior to Report about how the future viability of being a photographer in this digital age could be addressed in the Bill.
Lord Clement-Jones
“Greater protection for authors when assigning or licensing copyright
In paragraph 1(c) of Schedule 1 to the Unfair Contract Terms Act 1977, omit “copyright”.”
Lord Clement-Jones
Amendment 33 is inspired by the Creators’ Rights Alliance which feels that the contractual scales are very much weighted against it. I do not often make common cause with Consumer Focus but I am delighted that it supports the amendment. Its brief on the amendment puts the position rather well. It states that the Copyright, Designs and Patents Act 1988 makes creators the first owners of copyright, and that creators’ ability to assign or license their copyright to others is central to the overriding aim of copyright: that is, ensuring that creators benefit financially from their works. However, in the UK, creators frequently assign all their copyright for a one-off payment to intermediaries, such as publishers or record companies. Individual creators are frequently at a disadvantage when negotiating contracts with intermediaries, and some creators complain that they are unfairly pressured into assigning all their rights for a one-off payment.
The 2012 research of Consumer Focus found that 77% of British consumers expect that a fair share of the money they pay for music, films and e-books goes to the artists who created the work. The ability of the copyright system to ensure that creators receive a fair remuneration is central to public support for the principle of copyright. I agree with Consumer Focus that removing the copyright exclusion from the Unfair Contract Terms Act 1977 should be central to the Government’s efforts to build a fairer copyright system that supports economic growth and innovation. How about that, my Lords? Many creators work as freelancers or microbusinesses. They are the bedrock of the creative industries and deserve the protection provided by the Unfair Contract Terms Act. I beg to move.
Lord Stevenson of Balmacara
My Lords, extended collective licensing requires fair contracts. People who work in the creative industries are already seeing intensified efforts by many publishers and other intermediaries to coerce individuals who are sole traders into signing away all rights to their work. Those who succumb to this blandishment would be deprived of the income that the ECL provisions in the Bill are supposed to offer. Therefore, the failure of the Bill to include measures to level the playing field for negotiation of contracts undermines the purposes of copyright in promoting fresh creativity. These are not just matters of concern to professional creators, vital though it is to the creative economy that the possibility of making a living as a professional creator is defended. Every citizen has an interest in enforceable creators’ rights and fair contracts now that so many people are publishing and broadcasting their own works through social media.
There is a well known example of the problems that this can cause. In late 2012, the Instagram online photo-hosting service attempted to impose a contract of terms of service that would allow the company to sell users’ photographs to advertisers. This was defeated only after alert users boycotted the service. Legislation will be required to ensure that the price of creativity is not an eternal vigilance which distracts from the work of creation.
The issue of unfair contracts typically arises in two circumstances: “take it or leave it” contracts presented by large businesses to sole-trader professional creators, who are informed that no negotiation will be contemplated; and “click-wrap” contracts offered to those, professional or amateur, who use online hosting services to store or share their creations in words, music or images.
Amendment 33 would bring contracts dealing with copyright works within the terms of the Unfair Contract Terms Act 1977. This would remove an inexplicable exemption and allow at least some challenge to the contracts being foisted on many creative members. I support the amendment.
Lord Clement-Jones
I thank my noble friend the Minister for that response. I think that is as good as it gets at this stage and I would very much like to meet him. The time has certainly come to look very carefully at this exclusion from the Unfair Contract Terms Act. There is a head of steam building up and it would be very useful to have that discussion. In the mean time, while looking forward to that discussion, I beg leave to withdraw the amendment.
Baroness Buscombe
My Lords, I thank the Minister for bringing forward the series of amendments in this group and for his explanation. Although the government changes to Schedule 21 are to be welcomed, I suggest that the Government could edge even closer towards improving the Bill yet further. Briefly, I should like to respond to the government amendments and then introduce those in my name; namely, Amendments 34 through to 51, excepting Amendment 49, which is in the next group.
Amendment 33A responds to the concerns of the 10th report from the Delegated Powers and Regulatory Reform Committee. Its concern, as we have already heard, was that the Bill will allow the requirements of the default code, enforced by penalties, to be imposed or revised without parliamentary scrutiny, given that failure to comply may lead to sanctions. Equally important as parliamentary scrutiny, in my view, is the fact that it is indispensable that the code criteria should be subject to consultation by interested, informed parties. That would be the effect of my Amendments 43 and 51.
I very much welcome the Minister adding his name to Amendment 46, which I tabled. That will help to ensure that the regulations must now set out the process for determining non-compliance, determining the type or size of the sanction and for providing a right of appeal. I also welcome Amendments 46A and 46B. As financial penalties will ultimately be borne by the collecting society’s members, fines should be imposed as a last resort. A right of appeal is essential. Also Amendments 50A, 51A and 51B are welcome additions to the Bill.
I turn to the series of amendments that I have tabled. Although the government amendments put forward are very welcome and a big step in the right direction, my amendments address separate issues which, with respect, still need to be considered. The purpose of these amendments is to provide even greater clarity in the Bill for Schedule 21, which would help to ensure that the Bill meets the stated aim of fostering successful self-regulation. The effect of the changes would be to reduce the considerable uncertainties surrounding future regulations because the powers currently provided for by this legislation are simply too vague, even with the Government’s latest amendments.
Collecting societies have invested considerable time and money in adopting and operating voluntary codes of conduct. PRS for Music introduced a voluntary code of practice for licensees as far back as 2009 and then one for its members in 2010. Many other collecting societies have followed suit. The British Copyright Council’s Principles for Collective Management Organisations’ Code of Conduct, known as the BCC principles, are important to reference here, as many of these codes of conduct for members and users comply with these guiding principles, which have at their heart a commitment to transparency, accountability and good governance. I suggest that those are all good Conservative principles.
These collecting society voluntary codes also have regard to the Government’s recently published minimum standards for collecting societies and, therefore, include an independent complaints review ombudsman. Independent adjudication of a complaint is obviously an important feature of any sensible self-regulatory system. Those BCC principles also include provision for an independent code review process. This first such review is intended to start in November 2013. In short, the principles of good self-regulation are established and are generally being operated successfully by collecting societies.
Amendments are necessary to the Bill to make the path from voluntary to statutory regulation much clearer than is currently outlined in the legislation. It is only reasonable, I suggest, to give businesses the certainty that they deserve. After all, it is a big step to move from self-regulation to underpinning with state regulation.
First, it should be clarified that the majority of the powers in Schedule 21 are exercisable only in a scenario where it has been adjudged through a fair, robust and transparent process that there has been an unremedied failure of self-regulation. The imposition of a statutory code, and/or any statutory appointment of an ombudsman or code reviewer, will lead to significant additional costs and potential exposure to penalties, and should therefore be imposed only when it is clear that self-regulation has failed. Collecting societies need to have visibility of what triggers the imposition of statutory regulation so that they are not left in the dark about whether they are close to or far from crossing the line.
Equally, given that collecting societies are already offering, or on the point of offering, ombudsman dispute-resolution services and providing for a code reviewer, the regulations should also make it plain under what circumstances the Secretary of State would appoint a statutory ombudsman or code reviewer. Amendments 34 and 50 serve to clarify the processes and specific circumstances that would enable the Secretary of State to impose such regulation.
Improvements to the Bill can also be made so that the penalties for non-compliance much clearer and more proportionate. This is why I am proposing Amendments 44, 45 and 48. The Bill provides for sanctions in case there is failure to abide by a code. These sanctions include financial penalties that may be imposed on directors and other personnel. The highest fine stated in the legislation is £50,000. Under the Companies Act 2006, penalties on individuals arise in relation to very specific failures. Codes of conduct are typically of a general nature. I therefore believe it is unacceptable to impose personal liability and financial penalties for undefined offences that are less specific than UK company law.
Let us remember that all collecting society revenues are distributed to members after management costs are deducted, and fines are therefore a direct penalty on the membership itself. Any fines would be paid for by the members of the collecting society. There is a strong argument that fines on societies should be imposed only as a last resort. Instead, it would be more sensible to provide appropriate help or assistance to a society that has been deemed to have failed, as opposed to simply punishment.
I have also tabled Amendments 35 to 42, which are effectively technical. Paragraph 3 refers to a licensing code ombudsman. Codes of practice typically govern a collecting society’s relationship with its members and its licensees. I propose that the phrase “licensing code” should be deleted because it is not appropriate.
Let me conclude by saying that we should not forget that compliance with regulation is costly; and, ultimately, the resources which are devoted to regulation must in effect be paid for by the creator members themselves. It is entirely reasonable that the penalties for non-compliance are clearly set out and proportionate. This Government support the principle of good self-regulation; they should therefore take this opportunity to do just that and reduce the uncertainties provided for by the current drafting.
Lord Clement-Jones
My Lords, I rise briefly to support my noble friend Lady Buscombe. In fact, while she mentioned good Conservative principles, I can pray in aid of self-regulation good Liberal principles. The essence of the issue is that these should be backstop powers, and as she said, we should be fostering successful self-regulation. It is important that there is as much transparency and clarity about these rules as there is in UK company law. Some of the sanctions could be just as high as those in UK company law and, of course, they will ultimately be borne by the collecting societies’ members, and a right of appeal is essential in those circumstances. I thought that my noble friend argued eloquently for why we should be aiming for that kind of regime.