Enterprise and Regulatory Reform Bill

Lord Lucas Excerpts

Wednesday 16th January 2013 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, it may not surprise my noble friend Lord Deben that I do indeed have some speaking notes, but I also hope that I can attempt at least to answer the questions that have been raised this afternoon by noble Lords. I know that these issues have been raised before, and I have considered carefully the amendments, arguments and indeed endorsements of the noble Baroness, Lady Hayter, for regulating the letting sector, particularly the ones that were mentioned this afternoon. She raises a very important issue.

I fully recognise the noble Baroness’s commitment in championing the interests of consumers in this area and take her concerns very seriously. It is helpful that she has brought it up in the context of this Bill. I note and respect the intervention of my noble friend Lord Deben in this respect as well. I know that the Housing Minister is aware of these concerns but I will raise them with him for further consideration. It is clear from the speech from the noble Baroness, Lady Hayter, that he—Mark Prisk, my honourable friend in another place—is aware of the issues that she has mentioned.

The noble Baroness, Lady Hayter, raised the issue in terms of a need for a mandatory redress to protect consumers, particularly those who are the most vulnerable. The Government are indeed keen to promote a greater use of redress but, understandably, want to avoid increased costs which might fall on landlords and tenants which a new mandatory regime would bring. While the Government acknowledge that poor practice exists in some parts of the letting sector, Ministers believe that new regulation would be disproportionate and would drive some businesses from the market. This would increase costs for consumers and reduce the choice and availability of accommodation on offer to tenants.

I can reassure noble Lords that letting and management agents are already subject to consumer protection legislation. For example, the Consumer Protection from Unfair Trading Regulations 2008 protect against giving false or misleading information, not acting with the standard of care and skill that is in accordance with honest market practice or claiming falsely to be a member of a professional body or approved redress scheme. The Unfair Terms in Consumer Contracts Regulations 1999 provide protection against unfair contract clauses, particularly where they are hidden in the small print.

Consumers who are treated unfairly or are charged unreasonable fees by an agent can seek help from their local trading standards officers, who have civil and criminal enforcement powers. The Office of Fair Trading has been investigating practices in the lettings sector and will be producing a report shortly including recommendations on how enforcement bodies can work to raise standards. We look forward to considering its report and recommendations. I hope that this particular point will go some way to reassuring the noble Baroness on the points that she has raised.

In addition to the protection offered by the consumer protection legislation, it is estimated that around half of all agents belong to voluntary schemes which set standards and offer redress if things go wrong. We invited industry bodies to work with us to improve the quality and coverage of self-regulation and in 2010 we endorsed the industry-led SAFEagent scheme. SAFEagent is designed to help consumers understand the benefits of using agents with Client Money Protection, by developing an easy to recognise logo. We are aware of the need for consumer awareness and also the importance of ensuring that vulnerable people are well informed, and indeed are advised as to what to do and where to go for help.

We have also published top tips for both landlords and tenants setting out the benefits of using an agent that belongs to SAFE agent or one of the professional bodies offering the right protections. We will continue to work with Citizens Advice and other bodies to ensure appropriate information is available. Citizens Advice provides help and advice on lettings over the telephone, online and face to face. In the light of these existing schemes and the consumer protection legislation in place, we have no current plans to introduce further statutory regulation. We are, however, keen to do everything possible to ensure that consumers are well informed and empowered to exercise their rights.

I was grateful for the intervention from my noble friend Lady Gardner who spoke most eloquently on the issue of the regulation of managing agents. I am aware that several issues have been brought to the Housing Minister’s attention in relation to letting agencies and residential leasehold and I am certain that managing agents are part of this. I am sure he is aware of your ongoing interest in this matter, but I will also inform him of the comments you made today. These are important issues to raise—as has been pointed out by the noble Baroness, Lady Gardner, there is a shortage of 300,000 houses in the UK. The letting of some of these properties must be effected fairly and consistently.

I hope that the noble Baroness, Lady Hayter, is reassured and will therefore be prepared to withdraw these amendments.

[Lord Lucas]

My Lords, I recognise a Treasury reply when I see it. I should be most grateful if the noble Lord would justify the first sentence of his reply by writing to me with the evidence on which that statement was based—that having this amendment passed would result in higher costs for consumers and a diminution in respectable firms in the market. That is just Treasury boilerplate. I very much doubt that they have done the work to justify that but I eagerly await the Minister’s letter to show me that I am wrong. In the absence of that, I very much hope that on Report we will deliver to my noble friend his first defeat as a Minister in the House of Lords. As he knows, this will not be a defeat for his department but merely for the Treasury and therefore one in which we shall all rejoice.

[Baroness Gardner of Parkes]

My Lords, we would all like to see that reply and I hope that it will be made readily available to everyone.

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Moved by

[Lord Lucas]

28A: Before Clause 65, insert the following new Clause—
“Ownership of licences to copyright
(1) Any natural person who acquires, for value and for his personal use only, the right to use a copyright may, for value or otherwise, transfer that right to any other person.
(2) Any terms in any contract that purport to forbid, place restrictions on or require payment for a transfer under subsection (1) shall be null and void.
(3) Any person who in any way controls the use of a copyright must do all things necessary, without undue delay and without recompense, to effect a transfer under subsection (1) above.”

[Lord Lucas]

My Lords, in moving the amendment, I wish to speak also to Amendment 28B.

Since I tabled these amendments, we have had a Christmas present from the ministry. On 20 December, the Secretary of State was kind enough to announce a package of intentions to reform copyright which entirely supersedes my Amendment 28B. Therefore, I will not trouble the Committee by addressing that because clearly we will see this in a proper and thought through form when we come to the Bill that will follow the announcements made by the Secretary of State. However, we have a small cameo performance on copyright now before we go to bed. I would be grateful if the Minister could confirm that the 28th of this month will be the next day in Committee, since clearly this stage of the Bill is now going to go into 10 sittings. If there is any suggestion that there will be a day in between, will we all receive an e-mail notification rather than having to spot that something has changed on the Order Paper?

It seems to me that copyright is aptly described by Macaulay. A lot of people speak as if copyright is a god-given possession of creative people. It is not; it is a deal done between those who consume copyright material—I both produce and consume copyright material—and those who produce it. In order that it should be produced, those who consume are prepared to let the copyright owners have a limited monopoly on it, but that monopoly is not without terms. It is given in order that it should be available for consumption. The way in which people want to consume copyright material is therefore an important part of negotiating and renegotiating the bargain between users and producers of copyright material.

My firm view, which, to judge from his 20 December announcements, is shared by the Secretary of State, is that we should look at copyright as a means of increasing national wealth, not just of producing a nice little rose garden to enable creative people to live comfortably and have everything exactly the way that they want it. It is a bargain between two sides. It is an agreement to use something that is essentially an evil—a monopoly—in order to enable something good to happen. My view, like that of the Secretary of State, which is covered in Amendment 28B, is that we must from time to time look at the way in which copyright functions in this country and ask whether it is serving the interests of users as well as those of the people who create it. In the case of fair use, quite clearly the rules had begun to fall well short of the way in which people wanted to use copyright material. We all own a reasonable variety of devices. If we buy a copy of Beethoven’s ninth symphony by the London Symphony Orchestra, we ought to be able to listen to it on various devices; we do not want to have to buy separate copies for separate devices. Therefore, we must make it possible for users to do that because that is the way that users want to consume material and that is part of the modern bargain.

Amendment 28A covers something that the Secretary of State has not touched on but which others will be aware of. In the days of books—and long may they continue—when you bought a book, you owned it. You could pass it on to other people, you could sell it second-hand, you could leave it in your will—it was a possession. Now if you buy a book for use on your Kindle it remains the property of Amazon, which can remove it at any time—and does. Amazon strips people of their whole libraries or removes individual books if something has gone wrong with the licensing. You do not own a book; you just have the right to consume it for a while. That is a fundamentally undesirable position when it comes to the relationship between the creator and the user.

Something that is for personal consumption ought to be a personal possession; it ought to be something that we can pass on to other people. We should not allow the position to persist where the balance has been shifted. We have allowed the change in technology to change the balance between the old regime that existed in the case of books, of ownership as a result of payment to one of leasing as a result of payment. We should encourage people to have libraries and pass on intellectual works they have created to other people. That is the right balance between users and creatives. I want to restore the balance in the case of modern technology to where it was in the case of the old technology. Although I know I will not achieve anything this time with this amendment, I hope we will see something, if not from this Secretary of State then a future one. It is certainly a matter I will raise when we next debate this Bill. I beg to move.

[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.

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Amendment 28B aims to ensure that someone who has bought a legal copy of a copyright work is able to reproduce it for their personal format-shifting and back-up. We understand that there is a need to modernise the law regarding private copying. This is why, as the noble Lord, Lord Lucas, mentioned, the Government have announced that they will permit private copying in certain circumstances, similar to those set out in this amendment. This will align the law with what consumers expect and how businesses anticipate their products will be used. It will be welcomed by the public and cause little harm to copyright owners, and will be introduced in secondary legislation later this year. In light of this, I hope that the noble Lord will withdraw his amendment.

[Lord Lucas]

My Lords, I am grateful to my noble friend for his reply, and less grateful to my noble friends for their interventions.

To my noble friend Lord Clement-Jones, I will say—as I will likely say on future occasions in this Bill—phooey. One of the effects of cloud computing and the fact that something is not fundamentally located on an individual device makes the whole business of regaining ownership much easier. No longer does one have to deal with something that is passed from device to device and copied into a torrent stream that suddenly goes illegal and cannot be kept track of. In the case of iTunes, it is one enormous great cloud computing lump, and transferring ownership is an extremely easy thing to do if one bothers to write a few lines of code. Technology is moving on and is making the transfer of ownership much easier than it was under the old ways of doing things. I expect that, given proper consideration and thought, this will be quite easy to implement in a few years’ time. For now, I beg leave to withdraw the amendment.

Amendment 28A withdrawn.