Data Protection and Digital Information Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee stage
Monday 22nd April 2024 Grand Committee

[Baroness Buscombe (Con)]

It is important that my noble friend answers that question. The point is that if we find—I am sorry, I still speak as if I am involved with it, which I am not, but I promise noble Lords that I have spent so much time in this area. If the DWP finds that there is a link that needs pursuing then that obviously has to be opened up to some degree to find what is going on. Remember, the most important thing about this is that the right people get the right benefits. That is what the Government are trying to achieve.

[Lord Clement-Jones (LD)]

My Lords, I note that the DWP has been passed a parcel by the Department for Science, Innovation and Technology—and I am not at all surprised. I am sure it will be extremely grateful to have the noble Baroness, Lady Buscombe, riding to its defence today as well. Also, attendance at this debate demonstrates the sheer importance of this clause.

We on these Benches have made no secret that this is a bad Bill—but this is the worst clause in it, and that is saying something. It has caused civil society organisations and disability and welfare charities to rise as one against it, including organisations as disparate as UK Finance, mentioned by the noble Lord, Lord Davies, and the ICO itself. They have gone into print to say that, for this measure to be deemed a necessary and proportionate interference in people’s private lives, to be in accordance with the law and to satisfy relevant data protection requirements, legislative measures must be drafted sufficiently tightly—et cetera. They have issued a number of warnings about this. For a regulator to go into print is extremely unusual.

Of course, we also have Big Brother Watch and the Child Poverty Action Group—I pay tribute to the noble Baroness, Lady Lister—the National Survivor User Network, Disability Rights UK, the Greater Manchester Coalition of Disabled People and the Equality and Human Rights Commission. We have all received a huge number of briefings on this. This demonstrates the strong feelings, and the speeches today have demonstrated the strong feelings on this subject as well.

There have been a number of memorable phrases that noble Lords have used during their speeches. The noble Baroness, Lady Kidron, referred to a “government fishing expedition”. The noble Baroness, Lady Chakrabarti, called it “breathtaking in its scope”. I particularly appreciated the speech of the noble Lord, Lord Kamall, who said, “What happened to innocence?” In answer to the noble Baroness, Lady Buscombe, this is not “nuanced”: this is “Do you require suspicion or do you not?” That seems to me to be the essence of this.

I was in two minds about what the noble Lord, Lord Sikka, said. I absolutely agree with him that we need to attack the fat cats as much as we attack those who are much less advantaged. He said, more or less, “What is sauce for the goose is sauce for the gander”. The trouble is that I do not like the sauce. That was the problem with that particular argument. The noble Baroness, Lady Lister, talked about stigma. I absolutely agree. The noble Lord, Lord Vaux, more or less apologised for using the word “draconian” at Second Reading, but I thought the word “overreach” was extremely appropriate.

We have heard some powerful speeches against Clause 128. It is absolutely clear that it was slipped into the Bill alongside 239 other amendments on Report in the Commons. I apologise to the Committee, but clearly I need to add a number of points as well, simply to put on record what these Benches feel about this particular clause. It would introduce new powers, as we have heard, to force banks to monitor all bank accounts to find welfare recipients and people linked to those payments. We have heard that that potentially includes landlords and anyone who triggers potential fraud indicators, such as frequent travel or savings over a certain amount. We have seen that the impact assessment indicates that the Government’s intention is to “initially”—that is a weasel word—use the power in relation to universal credit, pension credit and employment support allowance. We have also heard that it could be applied to a much wider range of benefits, including pensions. The Government’s stated intent is to use the power in relation to bank accounts in the first instance, but the drafting is not limited to those organisations.

Of course, everyone shares the intent to make sure that fraudulent uses of public money are dealt with, but the point made throughout this debate is that the Government already have power to review the bank statements of welfare fraud suspects. Under current rules, the DWP is able to request bank account holders’ bank transaction details on a case-by-case basis if there are reasonable grounds to suspect fraud. That is the whole point. There are already multiple powers for this purpose, but I will not go through them because they were mentioned by other noble Lords.

This power would obviously amend the Social Security Administration Act to allow the DWP to access the personal data of welfare recipients by requiring the third party served with a notice, such as a bank or building society, to conduct mass monitoring without suspicion of fraudulent activity, as noble Lords have pointed out. Once issued, an account information notice requires the receiver to give the Secretary of State the names of the holders of the accounts. In order to do this, the bank would have to process the data of all bank account holders and run automated surveillance scanning for benefit recipients, as we have heard.

New paragraph 2(1)(b) states that an account information notice requires,

“other specified information relating to the holders of those accounts”,

and new paragraph 2(1)(c) refers to other connected information, “as may be specified”. This vague definition would allow an incredibly broad scope of information to be requested. The point is that the Government already have the power to investigate where there is suspicion of fraud. Indeed, the recently trumpeted prosecution of a number of individuals in respect of fraud amounting to £53.9 million demonstrates that. The headlines are in the Government’s own press release:

“Fraudsters behind £53.9 million benefits scam brought to justice in country’s largest benefit fraud case”.


So what is the DWP doing? It is not saying, “We’ve got the powers. We’ve found this amount of fraud”. No, it is saying, “We need far more power”. Why? There is absolutely no justification for that. No explanation is provided for how these new surveillance powers will be able to differentiate between different kinds of intentional fraud and accidental error.

We have heard about the possibility and probability of automated decision-making being needed here. I do not know what the Minister will say about that, but, if there will not be automated decision-making—that is concerning enough—if the DWP chooses to make these decisions through human intervention the scale of the operation will require a team so large that this will be an incredibly expensive endeavour, defeating the money-saving mandate underpinning this proposed new power, although, as a number of noble Lords have pointed out, we do not know from any impact assessment what the Government expect to gain from this power.

It is wholly inappropriate for the Government to order private banks, building societies and other societies and financial services to conduct mass algorithmic suspicionless surveillance and reporting of their account holders on behalf of the state in pursuit of these policy aims. It would be dangerous for everyone if the Government reversed the presumption of innocence. This level of financial intrusion and monitoring affecting millions of people is highly likely to result in serious mistakes and sets an incredibly dangerous precedent.

This level of auditing and insight into people’s private lives is a frightening level of government overreach, in the words of the noble Lord, Lord Vaux, more so for some of the most marginalised in society. This will allow disproportionate and intrusive surveillance of people in the welfare system. In its impact statement, the DWP says it will ensure that data will be

“transferred, received and stored safely”.

That is in contrast to the department’s track record of data security, particularly considering that it was recently reprimanded by the ICO for data leaks so serious that they were reported to risk the lives of survivors of domestic abuse. With no limitations set around the type of data the DWP can access, the impact could be even more obscure.

We have heard about the legal advice obtained by Big Brother Watch. It is clear that, on the basis that,

“the purpose of the new proposed powers is to carry out monitoring of bank accounts”

and that an account information notice can be issued

“where there are no ‘reasonable grounds’ for believing a particular individual has engaged in benefit fraud or has made any mistake in claiming benefits”,

this clause is defective. It also says that

“financial institutions would need to subject most if not all of their accountholders to algorithmic surveillance”;

that this measure

“will be used not just in relation to detection of fraud but also error”;

and that this measure

“would not be anchored in or constrained by anything like the same legal and regulatory framework”

as the Investigatory Powers Act. It concludes:

“The exercise of the financial surveillance/monitoring powers contained in the DPDIB, as currently envisaged, is likely to breach the Article 8 rights of the holders of bank accounts subject to such monitoring”


in order to comply. It is clear that we should scrap this clause in its entirety.

Online Safety Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee stage
Tuesday 9th May 2023 Lords Chamber

[Baroness Buscombe (Con)]

I am sorry to interrupt the noble Lord, but I would like to ask him whether, when the Joint Committee was having its deliberations, it ever considered, in addition to people’s feelings and hurt, their livelihoods.

[Lord Clement-Jones (LD)]

Of course. I think we looked at it in the round and thought that stripping away anonymity could in many circumstances be detrimental to those, for instance, working in hostile regimes or regimes where human rights were under risk. We considered a whole range of things, and the whole question about whether you should allow anonymity is subject to those kinds of human rights considerations.

I take the noble Baroness’s point about business, but you have to weigh up these issues, and we came around the other side.

[Baroness Buscombe (Con)]

Does the noble Lord not think that many people watching and listening to this will be thinking, “So people in far-off regimes are far more important than I am—I who live, work and strive in this country”? That is an issue that I think was lacking through the whole process and the several years that this Bill has been discussed. Beyond being hurt, people are losing their livelihoods.

[Lord Clement-Jones (LD)]

I entirely understand what the noble Baroness is saying, and I know that she feels particularly strongly about these issues given her experiences. The whole Bill is about trying to weigh up different aspects—we are on day 5 now, and this has been very much the tenor of what we are trying to talk about in terms of balance.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.

As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.

I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.

I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, Amendment 228 introduces a new clause with a regulation-making power that will enable the police and the National Crime Agency to apply to the courts for an order compelling communication providers to take whatever action the order specifies to prevent communication devices being used in connection with drug-dealing offences. Such action may include blocking mobile phone handsets and SIM cards and preventing particular phone numbers from porting between networks, as well as preventing access to wi-fi networks. This is an enabling provision that provides for the Secretary of State to set out in regulations details of how applications are to be made and dealt with in the courts. The amendment broadly mirrors Section 80 of the Serious Crime Act 2015, which provides for a similar power to prevent the use of mobile phones in prison.

The amendment responds to an operational requirement of the police, who require support in tackling the issue of county lines—the police term used to describe gangs in large urban areas who supply drugs, especially class A drugs, to suburban areas and market and coastal towns. To support their market expansion, gangs recruit and exploit children and vulnerable adults through deception, intimidation, violence, debt bondage and/or grooming. They are used to carry drugs and money.

County lines gangs’ criminality relies on the unrelenting recruitment, coercion and systematic exploitation of the most vulnerable including looked-after children, young people reported as missing and children from broken homes. Vulnerable adults are also exploited and can lose control of their home to gangs who use it as a base to distribute drugs, in a practice known as cuckooing.

The phone line is central to this model and to the gangs’ ability to deal drugs out of area in this way. When establishing a new county lines market, gangs will promote a number locally as the number to call to buy drugs. That “deal line” is therefore at the very core of this criminal model. Dealing drugs is a serious criminal offence and the police are committed to securing prosecutions wherever possible. However, as the deal line is held well away from local street-level drug-dealing activity and it will be an anonymous pay-as-you-go line, both those factors make it hard for the police to achieve prosecutions against an individual for the activity on that line.

Each deal line has the potential to interact with hundreds of customers and facilitate thousands of deals 24 hours a day. Disrupting these lines will have a significant impact in disrupting the gang-related drug supply and associated exploitation. There is currently no legal power in place to compel communication providers to disconnect phones used in county lines drug-dealing activity. We must ensure that the police have the powers they need to tackle this issue.

This legislation is part of a wider ongoing multiagency response, including safeguarding partners, to tackle county lines gangs, but this new order is a critical tool that will render this operating model ineffective and unattractive through the disruption of it. Amendments 236 and 241 are consequential. I beg to move.

[Lord Clement-Jones]

My Lords, we are broadly supportive of the amendment. We want to put on record that we have our doubts about the efficacy of the provisions, but obviously if they work then we will be thoroughly delighted. We are slightly doubtful about whether these measures will ultimately be effective, though, and I am sorry that my noble friend Lord Paddick is not here to add his experience to the debate.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 3rd sitting (Hansard): House of Lords
Monday 6th February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I thank the noble Lord, Lord Clement-Jones, for raising this issue. Our creative industries ultimately depend on the efforts of authors, musicians and other creators, and I agree with the principle that they should be fairly remunerated when their works are used. We want to create an environment where the UK’s creative industries can continue to thrive and retain their world-leading edge. The creative content tax reliefs are one of the Government’s flagship policies, and the film tax relief alone supported over £1 billion of expenditure in the UK in 2015-16. The Government are also investing in skills to create a pipeline of future talent. Since 2013, we have made available up to £20 million match funding to the skills investment fund to help employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.

The amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on their use and the revenue they generate, and states that this obligation could be met by complying with a code of practice determined at sector level. It would also provide creators with recourse to court if these requirements are not adhered to. The principle of transparency is an important element of well-functioning markets. I am aware that some creators and their representatives find it difficult to access information on the use of their works owing, for example, to difficulties in negotiating suitable contractual terms. I am, however, happy to confirm to your Lordships’ House that the Government are already engaged in discussions to address this issue. The European Commission has made proposals in this area as part of its current draft directive on copyright, and the UK will actively engage in these debates while we remain a member of the European Union. As such, I hope the noble Lord, Lord Clement-Jones, will understand the Government’s wish to allow this process to develop before considering the case for domestic intervention.

I welcome the noble Lord’s recognition in his amendment of the important role that collectively agreed industry standards can play in this space. Creators and publishers alike have highlighted the role that such standards can play in improving transparency and fairness. Examples in the UK include the Publishers Association’s Code of Practice on Author Contracts, and the fair digital deals declaration operated by the Worldwide Independent Network. I believe that it is worth giving careful consideration to the part that these industry-led initiatives can play, and I hope the debate at EU level will be a chance to explore that. With this explanation, and the assurance that these issues are under active consideration, I hope the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for an extraordinarily well-crafted response—it seemed to throw bouquets in various directions, but I am not quite sure where the petals will fall at the end of the day. It was splendidly positive at the outset, and I felt a speech on industrial policy for the creative industries might be coming on. I thank the noble Earl, Lord Clancarty, for his very supportive contribution.

The Minister talked about transparency being an important element of a well-functioning market and went on to talk about codes of practice, the Government’s active engagement in discussions of elements of the EU draft directive, and so on, but she never actually agreed that the principle of transparency should be incorporated into UK law. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. However, the Minister did not say, “Yes, and moreover, given the call for evidence, we have heard the evidence on transparency and we fully support that element of the directive”. It was rather a case of saying, “Let’s keep talking and actively engaging”, and so on and so forth. I suspend disbelief slightly given that the Minister supported the principle but I am not sure she went so far as to support its incorporation into law. That is a rather different matter. We may well return to this issue on Report. In the meantime, I thank the Minister and beg leave to withdraw the amendment.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 2nd sitting (Hansard - continued): House of Lords
Thursday 2nd February 2017 Lords Chamber

[Baroness Buscombe (Con)]

My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.

An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.

That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.

In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.

Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.

IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.

With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.

[Lord Clement-Jones]

Before the noble Lord, Lord Stevenson, expresses his view of the Minister’s response, may I ask her a few questions? She gave a bit of a “curate’s egg” response, giving with one hand and taking away with the other. At the end of the day it might be considered that a criminal offence is appropriate—but as to the call for evidence, does the Minister have a timetable that she can reveal to the House for this to take place? Will it include the role of intermediaries?

I think that the Minister can understand some of our impatience in this area: legislative opportunities to deal with this kind of infringement are few and far between, and this is a major problem. The percentage of people using this software and these boxes is rising inexorably, and that is having a very bad impact on the business models of many in these industries. We urge urgency on the Government.

[Baroness Buscombe]

I respect what the noble Lord has just asked, but I did say—maybe I was not clear—that we would run a public call for views over the coming few weeks.

[Lord Clement-Jones]

Weeks not months?

[Baroness Buscombe]

Absolutely—weeks. We will ask investigators, prosecutors and industry representatives whether they think the existing legislation provides all the tools needed. IPO officials have also been meeting intermediaries, and I am sure that they would welcome more such meetings to see that we get this right.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this important debate on the issue of retransmission fees. A number of noble Lords have tabled amendments urging the Government to get on with the repeal of Section 73 as quickly as possible.

The Government, through the Intellectual Property Office, consulted on the technical aspects of the repeal, including on the question of a transition period. The Government will, hopefully very shortly—and I say that with some strength—be publishing their response to this consultation, and I believe that the noble Lords will find this response enlightening and helpful. I therefore suggest that we return to this issue on Report, where I can fully set out the details of how the repeal will be conducted.

The noble Lord, Lord Stevenson, also tabled an amendment that would require any new fees which may flow to the public service broadcasters to be reinvested in original British content. I believe it is premature to legislate on this issue. We need to see how this new market develops after the repeal of Section 73. The British broadcasting landscape, with its steady flow of high-quality output, is envied around the world. The public service broadcasters are already pulling their weight here and face content requirements set by Ofcom. I do not believe that it would be necessary or desirable to legislate in this area that works so manifestly well for British audiences.

Clause 29 will repeal Section 73 of the Copyright, Designs and Patents Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services—and any work in the broadcast—retransmitted by cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, cable TV platforms are currently not required to provide copyright fees in relation to the core public service broadcaster channels. Last year, the Government consulted on the repeal of Section 73 and the balance of payments between public service broadcasters and TV platforms. The conclusion reached was that Section 73, as noble Lords have said tonight, is no longer relevant.

Today, a wide variety of platforms ensure that virtually everyone in the UK is able to receive public service broadcasts. Following digital switchover, completed in 2012, digital television services are now available for over 99% of consumers through a combination of digital terrestrial television, satellite and cable platforms. The cable market has now moved from a large number of local providers in the 1980s to one big provider and a few—very small—local platforms, and from 130,000 subscribers to over 4.5 million to date. The Government are satisfied that the objective of ensuring that public service broadcast services—as well as other TV services—are available throughout the UK has been met, and therefore Section 73 is no longer required to achieve that objective.

Moreover, the repeal of Section 73 will close a loophole used by providers of internet­based live streaming services of broadcast television programmes. These providers are relying on Section 73 to exploit PSB content by retransmitting channels and selling advertising around the service, without any benefit flowing to the PSBs.

I hope that, on that basis, noble Lords will feel able to withdraw their amendments.

[Lord Clement-Jones]

My Lords, I thank the noble Viscount, Lord Colville, and the noble Lord, Lord Black, for their comments and support for these amendments.

The noble Viscount, Lord Colville, talked about underlying rights and, of course, there should not be any anxiety about whether these have been obtained sufficiently for retransmission. Channel 4 tells us that it has a multiyear contractual arrangement in place with Virgin Media for which all the rights are cleared, so there is no impediment. The noble Viscount also made the point that the money involved in retransmission fees is a large amount for public service broadcasters but relatively small for cable operators. That is another factor.

The noble Lord, Lord Black, stressed the point about time being of the essence. I am delighted that the Minister responded to that, because we are in a context where the creation of world-class content to be competitive on the world stage could never be more important. He described further delay of two years as being a lifetime in this industry. That is absolutely true.

In the circumstances, and compared with many ministerial responses, I thought the Minister’s response extremely positive. I do not think I have ever had such a tantalising response about revealing all on Report. That is quite something.

I may be getting this wrong and the Minister can correct me, but I assume there will be some sort of revelation on Report about the timetable. I am perfectly happy to table a probing amendment to get the full benefit of her response on timing, but if she is going to table an amendment that would move things towards the kind of timing we are looking for in this amendment, as a result of the technical consultation finally being determined by the IPO, I will not quarrel with that. I am very happy to suspend judgment, but a nod is as good as a wink in Committee. If the Minister would like to say anything further about what precisely she meant by what she might do on Report, I would be open to suggestion.

[Baroness Buscombe]

My Lords, I will not be tempted at this stage, but I repeat that, when we get to Report, I think noble Lords will find my response enlightening and helpful.

[Lord Clement-Jones]

My Lords, that is even more positive than the first time around. In those circumstances, we will suspend judgment. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords for this important debate and for this proposed new clause. It seeks to extend the public lending right to include remote lending of e-books and e-audiobooks by public libraries. This would allow authors of these to receive payments from the public lending right fund, as they do for public lending of printed and audiobooks. It would also amend the definitions of e-books and e-audiobooks so that these works could be lent by public libraries only if they have been licensed by publishers on agreed terms for library lending.

The Government support recognising authors for e-lending by libraries. We committed in our manifesto to work with libraries to ensure the public can access e-lending, and to appropriate compensation for authors that enhances the public lending right scheme. As the Minister in another place confirmed, we intend to legislate to extend the public lending right to include remote e-lending. In response to the noble Lord, Lord Maxton, I say that our intention is to include all e-books regardless of technology.

This proposal is supported across the sector, including by libraries, authors, publishers and booksellers. I am therefore pleased our commitment is also supported by noble Lords in this House. Public libraries increasingly provide e-lending to support reading and literacy in response to the needs of their communities. Most library loans remain of printed books, with over 200 million such loans in Great Britain in 2015-16—so not everyone has given up the printed word, as has the noble Lord, Lord Maxton. However, e-lending is growing, with 4 million e-book and 1 million e-audiobook loans in Great Britain in the same period.

In considering how to legislate to extend the public lending right to include e-lending, we are engaging with representatives of authors, libraries, publishers and booksellers to understand their views. A number of these have raised points that need careful thought before the Government table their own clause.

One point made by representatives of authors and publishers is that an amendment to the legislation should include protections for the commercial market. The proposed new clause seeks to do this by specifying that e-books and audiobooks could be lent out from public libraries only if they had been licensed by publishers on agreed terms for library lending. However, others had raised concerns about whether such a provision might impact on public libraries’ ability to acquire and lend e-books.

This is an important issue. Officials have therefore met sector representatives to allow us to consider carefully the views and decide on the appropriate way to proceed with our commitment. I understand that the discussions in recent days have been promising and that the respective parties have been considering whether they can agree a settled view on the issues. We want to continue to work together to support a strong book sector that helps promote opportunities for reading and learning by the public, so we intend to table our own proposals for the necessary legislative changes as soon as possible. We will carefully consider these views in deciding how to proceed. I hope therefore that noble Lords will not press this proposed new clause.

Amendment 79B requests that e-books be exempt from VAT. Issues affecting taxation are a matter for the Chancellor of the Exchequer. It would therefore be inappropriate to include this amendment in this Bill. There are other difficulties, however, in accepting such an amendment. VAT is an EU-wide tax and is applied by member states within agreed structures. While we remain in the EU we are bound by our international obligations. This amendment would cut across those obligations in respect of VAT. EU VAT law, agreed unanimously by member states, currently specifically requires the standard rate to be applied to all electronically supplied services. This includes e-books, which are services, not goods. Because of this, if we accepted the amendment we would be in breach of our obligations. To make the change proposed in this amendment a change of EU law will be necessary, supported by all 28 member states. While a proposal is currently on the table there have been a variety of different reactions from member states and no unanimous agreement. I hope that the noble Lord will therefore not move his amendment.

[Lord Clement-Jones]

My Lords, I thank those who have taken part in the debate. The noble Earl, Lord Clancarty, has throughout been a doughty campaigner for the arts and for authors. I also thank the noble Lord, Lord Arbuthnot, for his contribution, and the noble Lord, Lord Stevenson, in particular for an amendment that we would all support if only it were practical. Who knows? There may be some silver lining to Brexit at the end of the day. I do not think that that is quite substantial enough for many of us but it is certainly a little glimmer. I thank the noble Duke, the Duke of Somerset, as well. Of course we always bow to the superior technological knowledge in these matters of the noble Lord, Lord Maxton. I agree with the Minister: I am still an aficionado of the printed book, and am one of the digital book. There is a place for both in one’s library.

I welcome what the Minister said. In a way she performed a political ju-jitsu on us by thanking us for supporting her government line on this, which I thought was magnificent. I accept that it is in the Conservative manifesto. The Minister in the Commons pledged to come up with a solution to this. All that we have done really is to give the Government a bit of a push today. This wording is not the agreed wording. Agreement was reached, at the final hour—not in time to include in Committee today—between the various parties involved, particularly CILIP. As the noble Earl, Lord Clancarty, said, I am delighted that there has been agreement reached between the parties and the wording about which I have been told will perhaps be the wording to which the Minister will return, having performed her ju-jitsu at Report. Perhaps I have her in an armlock now to come back at Report with a suitable amendment. In the meantime, I beg leave to withdraw the amendment.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I will need to check this to be absolutely sure, but it will not form part of the legislation. I am talking about the report that is being considered with care at the moment. There will be a public consultation after that report, so we cannot commit to this without fully exploring our thoughts and proposals in response to the report of 16 December. I hope that that is helpful—but it will be subject to regulations as opposed to primary legislation.

[Lord Clement-Jones (LD)]

My Lords, I do not want to prolong this but if it is to be subject to regulation, there must be primary legislation permitting that regulation to be made. Perhaps the Minister could write to us on that subject.

[Baroness Buscombe]

Yes, that is a good idea. We will absolutely make sure that we write to noble Lords on this point.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all those who have spoken in this debate. I begin with Amendment 14 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Foster of Bath. The amendment seeks to place a mandatory obligation upon mobile phone service providers to agree with the customer a financial cap on their monthly bills at the time of entering into a contract.

Providers offer consumers a range of innovative ways to manage their usage, such as apps that allow consumers to turn financial caps on and off, warning text messages when customers are approaching their existing allowance limits, and dedicated telephone numbers that advise the customer about their usage. The noble Lord, Lord Foster, has already referred to some of these opportunities.

We expect providers to continue to take steps to minimise bill shock and to ensure that their customers are sufficiently equipped to manage their usage. Having said that, if the Government consider that more needs to be done, the forthcoming consumer Green Paper will be an opportunity for us to consider the issue of bill capping in more detail. It is also important to note—and perhaps it has been said before in another place—that Ofcom has guidance on its website to help consumers avoid so-called bill shock. Tips include making sure you have the right deal to suit your usage, switching provider or increasing your usage allowance, monitoring your usage, and how to protect your phone from unauthorised use.

Amendment 15, in the names of the noble Lords, Lord Stevenson and Lord Mendelsohn, seeks to amend the Communications Act 2003 and Ofcom’s power to set conditions to ensure that the interests of the consumer are protected when purchasing a contract relating to a mobile phone, and when switching mobile provider. Changing provider should, of course, be quick and easy for everyone. This is why Clause 2 makes explicit that Ofcom has powers to facilitate easier switching across all the communications sectors, including mobile services. Ofcom has an existing statutory duty to protect consumers of communications services, including consumers of mobile services, under Section 51 of the Communications Act 2003. The combination of this power and duty thus already creates the effect this amendment seeks.

The noble Lord, Lord Clement-Jones, is concerned about whether there is more to be said on this matter. The clause extends Ofcom’s power to set conditions for switching, so it will be for Ofcom to decide what should be required and whether switching is an appropriate requirement to impose on providers.

[Lord Clement-Jones]

My Lords, I am sorry to interrupt the Minister but I find that a somewhat extraordinary statement. The Government are responsible for policy—indeed, they have published a paper on switching principles. The question is: what has Ofcom been asked to implement? Surely the type of switching that will be implemented is not purely up to Ofcom. The Government—the business department, as was—published a paper setting out very clearly the principles on which switching was to be based. We cannot have a situation where a Minister simply says that it is all down to Ofcom and that is the kind of scheme that it will suggest. I find that extraordinary.

[Baroness Buscombe]

My Lords, I am sorry if the noble Lord finds it extraordinary. However, I think that he has made a reasonable request and I will make sure that we write to him in detail, giving a full reply.

Amendments 16 and 18 seek to make additions to Clause 3 to ensure that compensation is paid within a reasonable timescale and that, for mobile phone services, compensation is payable where the provider fails to meet a specified standard or obligation. Also, one of those standards must be satisfactory mobile coverage.

The drafting of the clause already allows for Ofcom to consider timescales for compensation, as well as what service standards are within scope. In the spring of this year Ofcom plans to publish a full consultation setting out how automatic compensation could work. Thus, we do not see the need for these amendments.

Amendment 22 seeks to establish a code of practice on business broadband speeds. In January 2016, Ofcom published a voluntary code of practice on business broadband speeds, and it came into force in September 2016. The code gives businesses clearer, more accurate and transparent information on broadband speeds before they sign up to a contract. Signatories to the code also commit to manage any problems that businesses have with broadband speed effectivity and to allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level. Ofcom will continue to work with the industry to ensure full transparency. With such a code already in existence, we see no need for there to be a power for the Secretary of State to prepare one.

Amendment 233 would amend the Consumer Rights Act 2015. I am grateful for the response of the noble Lord, Lord Clement-Jones, to this amendment, as I have to hand the transcript of the debate on that legislation—it makes quite enjoyable reading—when he referenced the consequences of an amendment which is the same as the one before us tonight. He said that,

“the consequences of this amendment could be quite unforeseen and extremely contrary to the interests of the strong and vibrant software industry that we have in this country”.—[Official Report, 19/11/14; col. 507.]

We entirely agree with the noble Lord that things have not changed that much, and they certainly have not changed in that regard. The rights set out in the Consumer Rights Act were designed to achieve a workable balance to reflect consumers’ reasonable expectations while not imposing unnecessary and potentially damaging requirements on our vibrant, growing and technically innovative digital content suppliers. We believe that this amendment would undermine those rights.

When formulating the Consumer Rights Act, we concluded that providing for a short-term right to reject was not necessary in the context of digital content. Unlike physical goods, digital content can on the whole be fixed rapidly and with little effort on the part of the consumer. Consumers accept that it is the nature of digital content that it may be released with minor errors and incompatibilities which come to light in use and which will be fixed to ensure that the product is satisfactory. A short-term right to reject digital content and impose strict limits on the number of repairs and replacements would not be practical in this context. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be the result of an action by the trader at all. That is why a repair is a more equitable solution in the first instance than a full refund.

Many digital content producers are micro-businesses and start-ups, and we need to maintain an environment in which they can flourish and provide innovative products, while ensuring appropriate protections. Enabling rejection as an immediate remedy could cause the industry to be more conservative in its product offerings, reducing our competitiveness and chilling innovation, to the detriment of both business and consumers.

As we know, the Act has been in force since October 2015 and the Government have received no evidence or representations to the effect that it is not working as intended. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.

Enterprise and Regulatory Reform Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Monday 11th March 2013 Lords Chamber

[Lord Clement-Jones]

My Lords, I will also speak to Amendment 84AEA. We had a very good debate in Grand Committee about orphan works, and the Minister gave some very useful assurances about how the orphan works regime would operate. However, there are one or two loose ends, and I want briefly to raise them.

Amendment 84AE is essentially a retabled amendment designed to establish definitively the nature of diligent search. I was slightly disconcerted by the way the Minister replied to this amendment last time. Surely diligent search must cover each work involved, and I hope the Minister can demonstrate how such search should be undertaken. There is no amendment to this effect, but I should say in passing that many of those who have debated this subject believe that it is very important that orphan works cannot be sublicensed. The argument is clear that to permit sublicensing would risk the distortion of the market through, for example, enterprises that sought orphan works licences and then resold them to all comers, circumventing the safeguards promised in the regulations. I do not know whether that is a loophole or simply a fear that will not be realised.

Amendment 84AEA relates to an objectionable feature of Clause 69, which is found in the new Section 116A(6) of the Copyright, Designs and Patents Act 1988. This states:

“The regulations may apply to a work although it is not known whether copyright subsists in it, and references to a missing owner … are to be read as including references to a supposed owner and a supposed right or interest”.

The objection to this is that if copyright does not subsist, the work or performance is in fact in the public domain and there is no rights owner who could reappear.

It seems rather unsatisfactory to introduce what I believe is called the domaine public payant in this surreptitious way. If there is going to be an orphan works licensing scheme it should surely be confined to orphans. If it cannot be determined whether a work is still in copyright, surely an orphan licence should not be available. It should be plain in the Bill that this should not extend to works that may be in the public domain. It would be helpful to have a ministerial assurance on this point. I beg to move.

[Baroness Buscombe]

My Lords, I support my noble friend in relation to diligent search. I think the amendment speaks for itself, and I echo the words of my noble friend Lord Clement-Jones.

--- Later in debate ---

[Lord Clement-Jones]

In moving Amendment 84AEB, I wish to speak also to Amendments 84AEC to 84AEG and Amendment 84AF.

I will speak first to Amendment 84AF as it falls outside the scope of the other amendments. Clause 69 as drafted does not factor into the opt-out of ECL the situation where the rights holder is not the creator. A firmer commitment from the Government in the Bill is necessary to give more reassurance to rights holders on the ECL provisions in Clause 69 before the legislation completes its passage. This amendment was tabled as Amendment 28X in Grand Committee. An opt-out is available to copyright owners in the Bill as it stands. The amendment would extend this opt-out to exclusive licensees and authorised representatives.

In Grand Committee, the Minister committed the orphan works and extended collective licensing working group to look into this issue as part of its deliberations. While this commitment is welcome, there needs to be certainty that any regulations for extended collective licensing will include such provision. Since ECL has the effect of exercising property rights, potentially against the will of the rights owner, the ability to opt out under subsection (3) of what will be the new Section 116B must be as straightforward and easy to implement as possible. To effectively administer the repertoire they have invested in, music publishers will need to make catalogue-wide arrangements applicable to hundreds, thousands, or potentially, millions of separate works. The grant of rights and arrangements between creators and music publishers are very often not exclusive assignments of copyright; grants can also be made by way of licences, both exclusive and non-exclusive.

It will be unworkable to have an opt-out which is exercisable only by the copyright owner or exclusive licensee. This would require a publisher to go contract by contract, checking the nature of each grant of rights and, where necessary, asking composers to sign opt-out documentation to be sent to the body seeking to operate the scheme. If the opt-out could be operated by the composer’s authorised representative, this would give a publisher or other representative the right to seek the permission from its composers to exercise an opt-out on their behalf, which could then comprise one repertoire-wide opt-out from a rights owner in a manageable way.

Practical experience abroad is that, in the absence of this possibility, ECL provisions can be manipulated by bodies operating schemes to make it impossible for right owners to opt out in any manageable way. I am informed by representatives from music publishing that one example of this is the operation of the extended collective licensing provisions enshrined in Hungarian copyright law in relation to the performing right. In Hungary, one reason for the failure of being able to rely on the opt-out came from the requirement of Artisjus that the rights owner—not any representative—provide due diligence evidencing ownership of each title in question. In relation to a repertoire of many thousands of works, this represents a huge barrier to successfully exercising the opt-out in terms of tracing the title back to its source. It is often via a complicated chain, redacting and copying documents to comply with confidentiality restrictions and then shipping these across to Hungary.

This example of abuse of proprietary rights provides ample evidence that, in the context of ECL, the burden of challenging any opt-out must sit with the entity operating the scheme and not with the individual rights owner. I believe that it is not the intention of this legislation to create such problems but it is important to guard against potential abuse. Can the Minister give assurances on this?

At the end of the day, I cannot see any downside to giving composers a choice in being able to elect to have their trusted authorised representative act on their behalf in this context. I am also not aware of a prevailing view that would be opposed to creating such a modest requirement. Indeed, in Grand Committee, the Minister stated that the Bill does not rule out such a provision.

With the experiences of ECL in other territories in mind, I hope that Report stage is an opportunity for the Minister to clarify responsibility for overseeing due diligence in an opt-out process. I hope that the Government will use this stage of the Bill to clarify that regulations will be clear that the burden of proof for the due diligence in an opt-out will be on the body applying for ECL.

On Amendment 84AEB, copyright licensing bodies are indispensible in many circumstances. For example, no composer could keep track of all the playings of his or her song on television, radio, the internet and in concerts, pubs, hairdressers, department stores and so on; PRS for music does this collectively. However, this kind of licensing is voluntary, meaning that the rights owner gave his or her permission to PRS to license his or her works for use in broadcasts and public performances. Extended collective licensing means that the licensing body can also license works whose authors have not given permission.

Therefore, ECL—and we have debated this in Grand Committee—is potentially dangerous to rights owners. A rights owner may not know about extended collective licensing and find that his or her work has been licensed without their permission. Perhaps they would not have wanted it in that particular publication, or perhaps they had given another publication an exclusive deal. Perhaps they would have charged a different fee; if they had given permission direct, their fee would not have suffered deduction of the licensing body’s commission. Foreign composers in particular may not be aware of the licence at all and may grant conflicting rights or may not collect their fee.

The Government’s explanations always described ECL as “voluntary extended collective licensing”, but the fact is that ECL allows the licensing body to license its rights without their prior authorisation. It is government policy that the author can opt out, but this acknowledges that the licensing body has permission to license his or her rights in the first place. This permission is ultimately given by the Government by authorising the organisation to license rights that it does not in fact hold, not by the author who must withdraw by opting out.

To their credit, the Government have acknowledged the dangers inherent in ECL, and in Grand Committee on 31 January, the Minister explained the Government’s policy regarding safeguards for rights owners. However Clause 69, which enables ECLs to be created by statutory instrument, only very minimally reflects the safeguards as the Minister has now enunciated them. The Government have claimed that the Nordic ECLs provide a strong precedent. However, the safeguards are set out in the Nordic primary legislation. By “Nordic”, I mean Sweden, Norway, Denmark, Finland and Iceland. Setting out the safeguards in primary legislation is clearly an aspect of the Nordic precedent that the UK Government should follow.

My amendments are essentially translations of the Nordic statutory provisions, adapted to the Copyright, Designs and Patents Act. The safeguards usefully include a requirement on licensing bodies to qualify, the need to explain the type of licence being granted, the need for the authorised body to be representative, the adoption of a code of conduct, the ability to refer to the Copyright Tribunal where a claim is being made that the body is not representative or that licences go beyond scope of existing copyright licences, a limitation on the term of authorisation to five years, and clear provisions about the ability to give notice of exclusion of a work.

The Minister has said that there must be flexibility, but he has been fairly detailed in his description of what the secondary legislation will consist of. Flexibility is not therefore necessarily an argument for excluding safeguards for rights holders from the Bill, and there can be no reasonable argument against including those safeguards. I beg to move.

[Baroness Buscombe]

My Lords, I should like to speak to Amendment 84AF, to which I have added my name. I spoke at some length in Committee on the extended collective licensing measures in Clause 69, and I made it clear then that I do not like the principle of ECL. I cannot see how it materially benefits the UK and it will bring uncertainty by not being truly voluntary.

I believe—and I have said so previously—that such a scheme should be opt-in, rather than opt-out, whereby rights holders who want to license their content through others can do so. However, I welcome the Minister’s assurances thus far that safeguards to such a scheme are vital, but—I echo the words of my noble friend Lord Clement-Jones—the safeguards should be included in the Bill, not left to secondary legislation. If the Government are backing ECL because it works in the Nordic countries, why not follow the Nordic lead and put the necessary safeguards in the primary legislation? Whoever may benefit from such a scheme can then benefit, and whoever feels threatened by it will have some comfort in knowing that the Government have protected the rights of rights holders.

As I said on an amendment on Report last week, China has just announced that it will implement ECL in its copyright law and has said that the details will be in regulations yet to be published. Where have we heard that before? The UK Government will not be in a position to demand appropriate safeguards for licensing of UK copyrights by ECL in China if we do not have them in our own legislation, as the Nordic countries do, nor will UK rights holders or their representative bodies be in a strong position to safeguard UK rights abused by ECLs in foreign countries if the UK’s own statute lacks the necessary safeguards. My noble friend Lord Clement-Jones and I have tabled a series of amendments to this clause which does just that, putting into statute the very safeguards that the Minister himself has articulated.

Again, I urge my noble friend the Minister to accept these amendments, and avoid a situation in which companies can seize the intellectual property of others and license it on their own terms.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, there is currently in many cases an imbalance in economic power between the creator and those with whom they are dealing on copyright. I moved an amendment similar to this in Grand Committee, and at that time the Minister said that the Unfair Contract Terms Act is intended to regulate only business to consumer relations. Of course that is correct. The Minister has, however, agreed to see what can be done by way of review within the Department for Business, Innovation and Skills of this type of issue.

The amendment is designed to elicit from the Minister an assurance that this work will be undertaken. I have sent the Minister a paper suggesting how such a review might take place. It would be an independent review of copyright contracts for creators and would explore how copyright contracts could be made fairer to ensure that creators receive a fair share of the money that consumers pay for copyright content and that the purpose of copyright in stimulating and sustaining creativity is met.

The kinds of contracts that such a review might consider are those with publishers, broadcasters, record labels and film studios; creator’s contracts with, and mandates to, collecting societies; and contracts with internet platforms such as Flickr. Some possible solutions for the review to explore—I am not going to go through them all—might include whether the doctrine of undue influence that applies when a person in a dominant position uses that position to obtain an unfair advantage for himself or herself could be codified in statute law; or whether, for instance, a right to equitable remuneration for creators is a necessary underpinning to fair contracts for creators; and whether model licences and codes of conduct could extend the benefit of collective negotiations through professional bodies to a wider range of creators, particularly new entrants to the entertainment industries and consumers-turned-creators. I very much hope that the Minister can indicate how a review might take place and who would be responsible for it. I beg to move.

[Baroness Buscombe]

My Lords, I support this amendment, to which I have added my name. I support everything my noble friend Lord Clement-Jones has already said. This amendment would go some way to mitigate risks to the individual creators, without whom there is no creative economy. We have here more risks of unintended consequences of the government proposal for extended collective licensing. Already before the passage of the Bill, there is renewed pressure on individual creators to sign away to publishers all their rights, including rights to income from extended collective licensing. While creators are vulnerable to the take-it-or-leave-it approach in contracts offered by powerful organisations, the likelihood is that creators will thus be deprived of the compensation for the use intended by the drafters. I should add that we have had so much correspondence in this regard that we are looking to my noble friend the Minister for strong reassurance.

Enterprise and Regulatory Reform Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Thursday 31st January 2013 Grand Committee

[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.

--- Later in debate ---

[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.

Enterprise and Regulatory Reform Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Monday 28th January 2013 Grand Committee

[Lord Clement-Jones]

My Lords, I will speak first to Amendment 28C and then to my own Amendment 28D. I support the amendment proposing a director-general of intellectual property rights, put forward so eloquently by my noble friend Lord Jenkin. I was extremely interested to hear about his Scottish connections, his great-grandfather and his relationship with Kelvin. There was a programme recently on the BBC about innovation that described how Matthew Boulton, James Watt's partner, succeeded in making sure that Watt derived benefit from his inventions and the modifications that he made to the Newcomen engine. It must be one of the few cases where innovators and inventors received a proper reward for their inventions. That was heartening. Perhaps it was as a result of Matthew Boulton's commercial enterprise that the Scots have been so inventive over the past couple of centuries.

As my noble friend mentioned, the UK is a world leader in intellectual property. He put some significant figures forward in terms of employment and the value of the creative sector. Therefore, how the Government develop IP policy is vital for our economy. We hear much about becoming a knowledge-driven economy. IP is vital for that and for those whom it supports, such as in manufacturing.

There is concern, however, extremely well reflected by my noble friend, that the IPO is not in fact a champion of intellectual property. I was a member of the All-Party Parliamentary IP Group inquiry into the IPO. From the evidence that I saw, officials did not see their role as being to champion intellectual property. Indeed, officials found it difficult to describe intellectual property as a property right even though nearly all creators believe that fundamentally. In fact, there were three important conclusions. My noble friend mentioned them but they bear repeating: IP is a vital foundation of economic growth, there is no champion of IP policy within government and that the IPO's policy-making function has lost the confidence of a large number of its key stakeholders. That is pretty unusual. The third point bears repeating as it is a very important conclusion.

It is significant that in their paper last year on the role of the IPO, the Government came to certain conclusions, which I think bear quotation:

“In coming to this conclusion, he”—

Hargreaves—

“argued that intellectual property policy had been insufficiently directed towards the objective of economic growth and that there had been instances in which IP policy had been developed in ways that were inconsistent with the economic evidence”.

Noble Lords can see the thrust. They continued:

“To improve the focus of IP policy on growth, the Review proposed that the Intellectual Property Office, as the Government body responsible for advising Ministers on the development of IP policy, should have an overarching legal mandate to promote innovation and growth, and state that IPO decisions will be based in evidence and take due account of the impact of the IP system on innovation and growth”.

I should say in parenthesis that your Lordships will note that there is no statement about the importance of intellectual property in the middle of that statement about innovation and growth. They go on:

“The Government wishes to retain the current structure of the IPO as an Executive Agency, combining practical experience of the IP system, gained through rights granting and advisory services, with policy responsibility. There are advantages in maintaining an organisation which has a blend of technical expertise and policy development skills, and the development of policy should not be done at arm’s length from Ministers”.

That was the major conclusion—that the IPO would pretty much stay as it is, with a stronger emphasis on innovation and growth.

Some of this is disappointing, especially in the light of the kind of proposal that we have here, but it is also fairly breathtaking. I shall not dwell on those comments unduly but the fact is that, as was recently demonstrated by Professor Hargreaves before the Culture, Media and Sport Select Committee, the evidence base for his own reports has been flimsy at best when justifying certain copyright exceptions. The impact assessments for most of the relevant clauses in this Bill are also wholly inadequate as a result. The mantra that somehow copyright is a barrier to innovation and growth runs through the Hargreaves report and the work of the IPO, I am afraid.

Let us contrast that with the recent report on access to finance for the creative industries by Ian Livingstone, which is very positive about the need to recognise and build on the value of creative content. He fully recognises the benefit derived from promoting the creation and retention of intellectual property, alongside finance, skills creation and other factors.

Therefore, I hope—especially in the light of this amendment—that the Government will rethink their approach to intellectual property policy. As the feasibility studies by Richard Hooper and the work thereafter show, ambition within the UK’s collective licensing bodies and the creative industries to form hubs with other copyright owners—for example, for licensing music for services of every kind—right across the globe, making the UK a global licensing centre, really does exist to a powerful degree. The UK’s collective licensing bodies are investing in the technical expertise, processing power and administrative efficiency to handle billions of uses of music and other intellectual property, and to charge, collect and distribute income with precision.

I believe that that is of far greater significance across the board in the technology sector and the creative industries than the copyright law reforms proposed, whether in this Bill or in the proposed exceptions put out before Christmas. The Government should match this ambition and champion IP as much as possible. The IPO clearly needs to be more overtly a champion for IP. The United States has obviously benefited from having an IP tsar, otherwise known as the Intellectual Property Enforcement Coordinator, who is responsible for a national strategy and works directly to the White House. Creating a director-general of intellectual property rights to sit within the Intellectual Property Office and serve as a champion of IP rights within and across government would increase the influence of the IPO across government and also strengthen the hand of the Minister responsible for IPO, if I may say so to my noble friend.

My noble friend quoted the Alliance for Intellectual Property and I should like to take another quotation. It says:

“We believe such a post is needed to ensure that this success is properly recognised, celebrated and built upon to ensure its contribution to growth, employment, culture and society is properly maximised; for IP to be championed in a way it is in other nations”.

Statutory underpinning of the IPO will give British IP-based industries the confidence that they need both at home and abroad.

Turning to Amendment 28D, as I mentioned, one of the most significant developments—in my view, far more significant than changes to copyright law—is the work following from Richard Hooper’s feasibility studies into a digital copyright exchange, otherwise known as the digital hub. Now the work following that feasibility study has been entrusted to a broadly representative voluntary group, the Copyright Licensing Steering Group. That has proved to get buy-in right across the creative sector. It is important to have an annual report on the follow-up to Professor Hooper’s recommendations and the progress made by the group in streamlining copyright licensing. He refers to that in paragraph 167 of his final report. We need to keep momentum going: how? He sets out several possibilities, but the one that I am attracted by is his fourth recommendation:

“Industry and the Government could also look at whether there is any productive and cost-effective overlap between reporting on and monitoring all the work described in this final report and Ofcom’s reporting requirements under the Digital Economy Act. This approach has the advantage of an independent voice but the disadvantage of perhaps moving away from the industry-led and industry-funded philosophy underpinning all this work. Given Ofcom’s new role in relation to copyright enforcement this may be an important idea for industry to consider given their concerns about copyright enforcement not being forceful enough”.

That is one suggestion; there are others; but they all surround the need to keep the momentum going and have a proper report to Parliament about progress on licensing. There is support for that approach from the Government’s paper on the role of the IPO that I mentioned previously. It states:

“The Government therefore considers that the most effective way of strengthening the IPO’s focus on innovation and growth would be to require it to report annually on the extent to which its activities had promoted those two ends. This increased transparency would act as a powerful incentive to develop policy based on the best available evidence, and to be clear about the respective weightings given to economic and social impacts on individual policy issues. Where the data are not as robust as we might like, a requirement to report will act as a spur to improve the quality of evidence”.

Surely, what is sauce for the goose is sauce for the gander in that respect.

I close by citing some very wise words from the closing paragraphs of the second Hooper feasibility study. I think that they apply across the board to both amendments.

“In conclusion, the political dimension of our work, introduced in our first report, remains constant: if the creative industries ensure that they have done all they can to make licensing and copyright work easier for rights users and therefore consumers, then the ball is firmly at the feet of politicians to ensure appropriate measures are in place to reduce the incidence of copyright infringement on the web … There must be a sensible balance between the rights and requirements of licensors and of licensees, of producers and of consumers, a balance that is beneficial to both parties leading to further and sustained growth and innovation in the UK creative and internet industries … But intellectual property across copyright, trademarks, design rights and patents is at the heart of the success of a modern knowledge-based economy it must be sensibly protected against theft and improper use”.

Amen to that.

[Baroness Buscombe]

My Lords, I have added my name to Amendment 28C, following my noble friends Lord Jenkin of Roding and Lord Clement-Jones. It was interesting to hear from my noble friend Lord Jenkin about his genes. It made me think about my genes, and my grandfather, who invested a great deal of time, energy, love and passion in developing motor racing cars back in the 1950s and 1960s. I remember as a young child the privilege of being able to stand within what we called the works to watch those incredible machines being built. That was wonderful. The specifications used to build those machines, and their protection, were paramount to their success as flagship examples of British industry, for jobs, investment and advancement of technology within the motor industry and the motor racing industry. Of course, the principles that were clear then, in the 1950s and 1960s, are no different today. The protection of copyright is crucial for certainty. Everybody involved in the creative industries needs certainty. Often, as we know, people in the creative industries are taking enormous risks—very often on their own—whether they are a lone photographer or a filmmaker or a record company representing multiple interests.

Enterprise and Regulatory Reform Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Wednesday 16th January 2013 Grand Committee

[Lord Clement-Jones]

My Lords, it would be a shame not to savour the final quarter-hour of Committee today—although I have probably learnt more about agriculture than I ever wished to. I see that the noble Lord, Lord Whitty, is still here; he is clearly incredibly versatile in all these matters. Seeing him and the noble Lord, Lord Lucas, I am afraid that I am reminded of the passage of the Digital Economy Bill, which may or may not be a good thing. As we know from that, the noble Lord, Lord Lucas, is never knowingly underprovocative, particularly on the question of intellectual property rights, and I am not going to enter the lists with him on the issue of the format-shifting exception that was the subject of the Christmas present he mentioned.

Amendment 28A is an incredibly sweeping amendment that would have a massive impact on the cloud computing industry in the UK, which is forecast to grow from something like £2 billion to £6 billion. It would have an incredibly damaging effect, which makes it highly undesirable for various commercial reasons. Quite frankly, it also happens to be in contravention of the existing EU directive on computer software, which gives the exclusive rights to copyright owners in those circumstances. Of course, there are issues about the ownership of digital content, but this is not the way to deal with them. There are issues about who owns what you have on your iPad or tablet from other manufacturers, but this is an incredibly sweeping way to do it. In the way the amendment is phrased, I doubt whether it will cure the issue by itself.

[Baroness Buscombe]

My Lords, I rise to resist the amendment of my noble friend Lord Lucas and to support what my noble friend Lord Clement-Jones said. My noble friend Lord Lucas’s argument in relation to Amendment 28A; that if someone has a book they should be allowed to own it, enjoy it and pass it on to others sounds, emotionally, like a good thing. Indeed, I have done that on many occasions among my family and friends. But passing one book among one or two friends is a million miles from what is now possible because of the speed of technology. Because of the digital world we inhabit, the whole of the creative being of that book can be out in the ether and transmitted globally within moments. The creative right is all but destroyed rather than shared in a small and special way. While I entirely understand the emotion behind the idea that we should continue to feel that we can share something we really enjoy, it is neither wise nor sensible to do that in this world because it will deter creators from creating more wonderful books. That is the tragedy of this. It is a perverse consequence of technology.