Publishing Industry

Lord Giddens Excerpts

Wednesday 6th February 2013 Grand Committee

[Lord Giddens]

My Lords, I, too, congratulate my noble friend Lord Dubs on his excellent introduction. I declare an interest as founder and director of Polity press.

Publishing is an industry in absolute turmoil. I am not sure that even the contributions to the debate thus far have brought this up strongly enough. This is true not just in the UK but in the US and other countries, too. One can say that absolutely no one knows where these trends will lead. Many people have their best guesses, but nobody actually knows.

There are three intertwining factors in the transformation of the publishing industry. First, as has been said by other noble Lords, e-books have arrived with a bang after several years in which they made little or no headway. It is important to recognise how massively popular they are in some sectors. In the United States, for example, among more popular titles, more than 60% are now produced as e-books. Will the traditional book survive? Will the e-book survive? One should not think that the e-book is the cutting edge here. E-books themselves are being transformed by all sorts of multilayered devices; you can hold conversations with authors and so forth. The e-book is certainly not the end of the story.

Secondly, the publishing industry here and in many countries is becoming hollowed out, with ever fewer large conglomerates at the top and an array of small publishers at the bottom—all of them, in a way, following a precarious existence. The rise and rise of Amazon, as has been mentioned by the noble Lord, Lord Lucas, is one main factor in this. Publishing is not really about the production of books but about marketing and distribution. Because of its massive size, and its mainly automated warehouse and delivery system, Amazon absolutely cuts prices to the bone.

Thirdly, a trend which overlaps with these is the emergence of self-publishing on the internet, where an orthodox publisher might not be needed at all. There is lots of experimentation going on here. For example, one publisher invites prospective authors to pitch their book proposals on its website. If sufficient people pledge to buy it, the author can then go ahead and write it, reversing the traditional relationship. It is not clear that this will succeed. These are overlapping trends, but they are creating something fundamentally new after centuries of domination by traditional book publishers.

I have three brief questions for the Minister. Often, technological innovation is followed by a “back to the future” reaction; for example, when nylon was invented, people went back to wool and cotton. The same thing might happen to traditional books. For this reason, I hope that the Government will not take too big a scythe to public libraries.

Secondly, as other noble Lords have asked, what is the latest position on open-access publishing? Many publishers, as well as academics, are quite worried about that and the Government’s endorsement of the Finch report. What will it do to traditional journal publishers?

Thirdly, apart from the issue of taxation—following on from what the noble Lord, Lord Lucas, so eloquently said—are the Government happy with the dominant position that Amazon has taken in the book trade? In conclusion, I hope that no noble Lords will be caught reading a Kindle in a Starbucks.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, I, too, thank the noble Lord, Lord Dubs, for securing this debate. It is certainly true to say that I have learnt a great deal today from the expertise of all your Lordships. I have listened and it is indeed a privilege to reply. Perhaps I might say that there were quite a number of questions and I hope that noble Lords will be tolerant if I write a general reply wherever I have not dealt adequately, as I would believe, with their questions.

Without doubt, the UK’s creative industries make a vital contribution to national life but they also have a key role to fulfil in helping our economy to grow and helping the people of the UK to compete globally. Employment in the creative industries has grown at double the rate of the economy as a whole, and 1.5 million people are currently involved in creative employment. They are, in many respects, British culture and I was very much taken by what the noble Lord, Lord Howarth of Newport, said about culture. I am sure that the Prime Minister is very keen and that he champions British culture too.

The entire publishing sector is the largest of our creative industries. It contributes £11.6 billion a year to the UK economy and employs some 244,000 people across 9,700 companies, which cover books, e-books, academic journals, national and local newspapers, magazines and print music, to name a few. Our publishers are the largest exporters of all the creative industries. With 40% of the sector’s revenues coming from export—the noble Lords, Lord Dubs and Lord Howarth of Newport, referred to this—that is a bigger proportion than in any other country.

However, as noble Lords have mentioned, it is not limited to print alone. UK consumer e-book sales grew by some 366% in 2011, as the noble Lords, Lord Dubs and Lord Giddens, referred to, making the UK the largest e-book market in Europe. The UK is a market of early adopters. Consumers in this country are quick to take up new products, services and channels, particularly in entertainment. In publishing, this appetite on the part of consumers has been matched by the willingness of publishers to explore new opportunities, in spite of the challenges that new technologies undoubtedly present, as the noble Lords, Lord Wills and Lord Giddens, referred to. I reaffirm my personal support for bookshops and the many happy hours I continue to spend in them. I have to admit that I have never bought a book from Amazon.

The Government are committed to fostering an environment that will stimulate world-class content creation. We want the current level of success and investment not just to continue but to increase. I am very conscious of course that the noble Baroness, Lady Rendell, and my noble friend Lord Dobbs, whose work is so widely admired at home and abroad, are in their places. Indeed, I very much hope that there will be many more generations of their like in British culture.

The issue of VAT was raised by my noble friend Lord Black, the noble Lords, Lord Dubs and Lord Stevenson, and the noble Baroness, Lady Rendell. As has been pointed out, Luxembourg and France at present operate a reduced rate of VAT on e-books. Under existing law, e-books are electronically supplied services and therefore should be taxed at the standard rate. The European Commission has launched infraction proceedings at the European Court of Justice against Luxembourg and France on this matter, the outcome of which is awaited.

My noble friend Lord Black of Brentwood raised a point about the recent EC report on pan-European press regulation. The Government have noted the contents of the report on media freedom and pluralism and await with interest any resulting debate and the response from the European Union. However, the Government have no intention of allowing European institutions to regulate the British press. The Government believe that this is a matter for individual member states and will resist any European legislation in this area.

Many noble Lords referred to copyright, including my noble friend Lord Lucas, the noble Baroness, Lady Rendell, and the noble Lords, Lord Dubs and Lord Howarth. It is vital that the publishing industry is supported in addressing copyright issues. I am mindful of the difficulties the music industry has suffered in its own digital transition, which my noble friend Lord Lucas specifically referred to. The Government are acting in a number of areas to ensure that the UK copyright framework meets the demands of the digital environment while continuing to maintain the success of sectors such as publishing. An appropriate regime is vital for copyright in the UK. The Government are very well aware of the range and strength of views and interests, which is why the Hargreaves review of intellectual property and the development of government policy since then have included broad and deep consultation.

Last December, the Government outlined a number of ways to support efforts by creative industries to protect copyright, in particular: action to educate consumers about the importance of respecting copyright and paying creators; launching a superfast patent processing service; a campaign for smaller businesses; and looking at enforcement. The Government are exploring with the City of London Police and the content industries what more can be done to bring to book the criminals who make a living from counterfeiting and piracy, particularly online. Protections for the interests of property rights owners and creators must be built into the revised framework. The noble Lord, Lord Dubs, mentioned that in particular.

The Government have sought to increase the number of options available to rights holders looking to protect their intellectual property online—the noble Lord, Lord Wills, referred to that—in particular, by ensuring proportionate responses are available at every level, from court action to a voluntary response. The Government have supported collaboration between industry and law enforcement and a regular round table for those involved is now held at the Department for Culture, Media and Sport under the chairmanship of my honourable friend the Minister for Culture, Communications and Creative Industries. The noble Lord, Lord Stevenson, in particular raised that. The round table has seen several successes, including an agreement with internet advertisers to cut off payments and advertising to illegal sites.

On exceptions, noble Lords raised in that connection the potential impact of changes to copyright law on business, for example the impact on exceptions to copyright rules on music publishing for educational use. The noble Lord, Lord Dubs, and my noble friends Lord Black of Brentwood and Lord Dobbs mentioned that. I will write to my noble friend Lord Black about the particular matter he raised. The Government want teachers to be able to use creative materials in the classroom without copyright being an obstacle but—I emphasise “but”—this should not be done at the expense of our educational publishing sector, on which our schools depend. We will give teachers more flexibility to use copyright works in new and creative ways but they will not be given a free pass. It is important that we strike the right balance. Copyright is the means to reward creativity; it generates investment, stimulates wider dissemination and delivers balance.

The noble Lord, Lord Dubs, mentioned the national curriculum. The Secretary of State for Education is due to announce the statutory consultation on the new national curriculum shortly. Publishers will therefore be able to consider the proposals for all national curriculum subjects. Again, the matter of young people was raised by the noble Lord, Lord Howarth of Newport. I entirely agree that reading and libraries are a great source of inspiration for young people—and adults. Next week, I am due to answer a Question in the Chamber on libraries. Libraries come under the budgets of local authorities and I am sure that we will have a full discussion in the seven minutes permissible on that next week. Again, I am personally a staunch supporter of open access to libraries. There are many exciting opportunities. New libraries are being opened and communities are coming together to ensure that reading and the opportunities that it provides to young children are well understood and recognised.

The Government also recognise that there are significant potential threats and opportunities with regard to how, for instance, text and data mining may be affected and how these technologies are used. I think we would all agree that the priority must be to develop the best environment for scientific and medical research. That has to include a successful research publishing sector. I am very mindful of what my noble friend Lord Smith of Clifton and the noble Lord, Lord Giddens, said. I will write to all noble Lords on the Finch review because I would like to consider the matter and then write in full detail. It is fair to say that the Government will proceed carefully in this sector.

The Government are supporting the industry through the expanding intellectual property attaché network abroad, which is already in China, Brazil and India. There is a new one now in south-east Asia. Progress on the EU patent front is a major step forward.

I appreciate that the sector faces many challenges. Noble Lords today have raised them in full and I am mindful of them.

[Lord Giddens]

Would the noble Lord care to say one or two words about Amazon and its industry dominance?

[Lord Gardiner of Kimble]

I should like to finish my few words. My commentary on Amazon is already on the record. However, many opportunities can be seen by the way in which the sector is embracing the digital revolution. The Government recognise the sector’s importance for cultural and economic reasons, and are working closely with the publishing industry to create an intellectual property environment which sustains success and rewards creativity.