Enterprise and Regulatory Reform Bill

Baroness Buscombe Excerpts

Wednesday 14th November 2012 Lords Chamber

[Baroness Buscombe]

My Lords, the Bill has much to commend it and I welcome it to your Lordships’ House. I found the speech of the noble Lord, Lord Stevenson, from the Dispatch Box opposite a little surprising given the previous Government’s lamentable track record in this area. I well recall, as it was so close to Christmas, standing in the same place almost alone on 21 December 2000. I spoke on behalf of Her Majesty’s Opposition at Second Reading of the then Regulatory Reform Bill. We were promised so much. I remember that we talked a lot about better regulation but, following the introduction of that legislation, we had to endure more and more ineffectual regulation, often leading to unhelpful, unintended consequences and the stifling of enterprise. This Bill will help to address that. Yes, it covers a number of different measures. The noble Lord, Lord Stevenson, said that it was piecemeal; I say that it is focused. There is a lot to do to deal with the last Government’s mismanagement and approach to enterprise, which stifled business and made it incredibly hard for enterprises, particularly small and medium-sized ones.

Today, I focus my contribution on the creative industries. This is an incredibly valuable area and sector which we must do all in our power to support. Ten years ago, I introduced a debate in your Lordships’ House on the importance of intellectual property. I am sad to say that no one felt moved to speak in it. Now we have a very different situation. We have a much better appreciation of what we have in this country and therefore what is at risk in a digital world. The Minister made it clear that we want to make our copyright laws fit for the modern age but I urge him to ensure that our laws support creators.

Clauses 65 to 69 and Schedule 21 introduce measures relating to copyright which fail to meet the Government’s intention, stated in verbal assurances in another place. The Intellectual Property Office consulted on the implementation of the Hargreaves review of intellectual property, with many of the 471 responses disputing the financial evidence of the review and consultation. Impact assessments for proposals that would shift the balance towards free use of original content were well wide of the mark, often claiming inflated growth forecasts or incorrectly stating that there would be no negative impact on rights holders. For instance, one impact assessment drafted by the Intellectual Property Office stated that an exception for free usage of copyright content for use in parody would lead to no monetary impact on the content creators. I am sure that television companies that license clips of footage every week to the likes of “Have I Got News For You”, “Russell Howard’s Good News” or “10 O’Clock Live” would dispute that.

Despite this disquiet, there has not been an adequate response from the Intellectual Property Office to this consultation, just a publication of responses. There was understandable and widespread shock among the companies that invest in original content and therefore rely on copyright protection when some of Hargreaves’s most contentious proposals about exceptions to copyright and extended collective licensing appeared in this Bill. In short, we fear that these provisions will threaten the success of British creative businesses large and small, reduce their ability to make a living from their work and thereby put into question the UK’s proud position as the world’s leading home for the creative industries. But the provisions are free-standing and losing them from the Bill would not impact on the other parts.

I want to focus a bit more today on extended collective licensing. At present, the UK operates collective licensing systems in markets that fail to have independent licensing or where the dynamics lend themselves to one body representing a number of others, such as music where the Performing Rights Society—PRS—does a fantastic job representing the rights of artists. However, many sectors have taken great strides to make content accessible to those who want to license it. This has been done through digitising content so that it can be viewed, purchased and downloaded online, while others will set commercial terms for another company to license its content. This commercial model for optional collective licensing already exists but we fear it would be pulled apart by this measure as companies spring up in what I might dare call a “copyright Wild West” to appropriate and license other companies’ content.

The proposals here for extended collective licensing will mean all rights can be taken from rights holders. Bodies will spring up to license copyright material on behalf of content creators without their consent. These bodies will set financial and commercial terms for that content. The system is being called voluntary, but I fear that that is disingenuous. This is the nub: it is an opt-out system and there is little or no detail as yet to explain important factors such as which companies will be set up to conduct extended collective licensing for a particular sector, how a rights holder can find out which companies have been created to license copyright material from their sector so that the rights holder can opt out and whether the rights holder can opt out all content in perpetuity or whether they have to opt out each piece. For companies such as ITN, Reuters, Associated Press and Getty, this would be vital as they make thousands of pieces of content every day. There are also big questions over how such a scheme would be policed and regulated, with just £10,000 per annum being earmarked to administer it. Of course there is also the question of whether extended collective licensing bodies could license content for the internet, meaning that in fact extended collective licensing would spill well beyond these shores.

The Government suggest that such a scheme is successful abroad but only one very limited example exists as far as I know—in the Nordic countries. This is no model on which to change our very different copyright market. Any new system should be opt in only—if the Government have confidence in this, why not make it opt in?—or limited to a specific remit such as extended collective licensing for non-commercial use of orphan works.

The industry concerns and economic ramifications being raised are that content will be licensed by ill-regulated bodies that can undercut prices, be ignorant of any exclusive licensing agreements or license sensitive material for usage that the creator would not otherwise grant. The Intellectual Property Office has stated that extended collective licensing will bring no economic benefit to the UK, but industry tells us that it will do great damage to burgeoning creative industry sectors and that the aim of making licensing simpler is being achieved by industry innovation to make content available online. I fear that we tinker with this at our peril.

In conclusion, as I said at the outset, there is much to commend in the Bill. I suggest that we use this opportunity to do what we always do well in your Lordships’ House: work to make it an even better Bill that, when enacted, will genuinely support UK enterprise in our global economy.