Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Earl of Clancarty Excerpts

Committee stage
Thursday 14th December 2023 Grand Committee

Moved by

[The Earl of Clancarty]

12: After Clause 5, insert the following new Clause—
“Artist’s resale rightWithin 12 months of the passing of this Act, the Secretary of State must lay before Parliament an impact assessment of the possible benefits of seeking to extend the Intellectual Property Chapter of the CPTPP to include provisions on the artist’s resale right.”

[The Earl of Clancarty (CB)]

My Lords, this group of amendments concerns the arts and creative industries; although, in the case of intellectual property, not exclusively so. It therefore picks up directly from where the first day in Committee ended a week ago. I did not participate in that debate but recognise the faces of some who did around this table. It is noticeable that those in the House most closely associated with the arts—I emphasise the word “most”—do not tend to talk about copyright or intellectual property issues because it is such a technical area. I pay tribute to those—including present colleagues, the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, and one or two others—who, over a long time, have been keeping a watching brief on this important area. I also pay tribute to outside organisations such as the Alliance for Intellectual Property, whose briefing I am grateful for, and its member organisations.

Artists are acutely aware that a bad or compromised deal for the creative industries will directly affect the rights and livelihoods of UK artists not just in their work abroad but at home too—as was very much borne out in a debate on intellectual property in Grand Committee on 20 November in relation to new regulations. This is a corrective, in a sense, to the view of some of the public, who believe that these kinds of agreements are about conquering new markets and nothing else.

In this group I support Amendment 24, on the Intellectual Property Chapter, in the name of the noble Lord, Lord McNicol, and Amendment 28, on performance rights, in the name of the noble Lord, Lord Foster of Bath. Outside this group, I also mention Amendment 30, in the name of the noble Lord, Lord Purvis of Tweed, because there needs to be a debate on the effect of the CPTPP after the passing of the Act which also includes its implications for the creative industries. However, the concern about the extension of performers’ rights beyond this agreement needs to be sorted urgently.

My own Amendment 12 relates to the artist’s resale right, which is one important aspect of the wider landscape of concerns about rights for creators, in particular, the reciprocal rights—or potential lack of such rights—that this treaty has thrown up. Reciprocity is a key concept in much of this debate. I am grateful to the noble Lord, Lord Foster, and my noble friend Lord Freyberg for their support. Unfortunately, owing to illness my noble friend cannot be here today, but he has kindly passed on to me some notes for the speech he would have made.

The artist’s resale right is a vital element of our visual arts culture and is hugely important to our artists. It is a fundamental IP right that provides a royalty to artists on the secondary sale of their work. It has been introduced in some form in more than 90 countries worldwide, Mexico being the latest, in 2023. The noble Lord, Lord Clement-Jones, expressed it very well in Grand Committee on 20 November, when he said that he felt confident that these rights

“are now bolted fully into our intellectual and moral property rights”.—[Official Report, 20/11/23; col. GC 52.]

In the 17 years of its existence in the UK, the artist’s resale right has provided artists and estates with £120 million—moneys paid out by the not-for-profit organisation the Design and Artists Copyright Society, whose briefing for this debate I am also very grateful for. Artists invest ARR royalties into their practice which, in turn, supports the arts ecosystem. It is therefore not just individual artists who benefit but the culture as a whole, particularly since estates will also use the moneys to archive and restore work. It is important to note that, contrary to erstwhile concerns, there is no evidence that ARR has negatively impacted the UK art market or diverted sales to non-ARR markets. The UK art market is currently ranked second in the world, and ARR royalties represent only 0.1% of the market’s value.

I gave a very full speech on the artist’s resale right in the debate on 20 November on the new regulations. I refer the Minister to that. I will not say much more on ARR specifically, particularly as the Government should not need to be persuaded of the value of this right. I was very happy, in the circumstances, to back the Government in that debate on introducing the regulation that turned EU law on ARR into UK law. Of course, we now have reciprocal agreements on this right with two CPTPP member states, Australia and New Zealand, through separate trade agreements. I understand too from the letter that the noble Viscount, Lord Camrose, sent to us after the aforementioned debate that the UK is in discussion with Japan on this—a country, I believe, which does not yet operate this right. Could the Minister expand on that? Indeed, DACS has said:

“ARR should be introduced into more countries so that national artists benefit from this right, and UK artists get their due royalties for international sales”.


My noble friend Lord Freyberg has pointed out to me, with figures he researched, the particular significance of the Asian art market. This in part relates to Amendment 24’s reference to future agreements. Japan is a CPTPP member, while China and South Korea are among formal and potential applicants. Together, their art markets were worth around £10.5 billion in 2022 and are likely to continue to grow. My main question to the Minister is: what is the Government’s overall strategy for reaching agreements on this, both through this treaty with other member states, and with those outside it? Has this been broached in relation to this treaty, or will there be negotiations on the treaty so that provision for this will find a place in the chapter on intellectual property? That would be a preferable solution but if that is unrealistic, I would like to hear that from the Minister. I look forward to his reply. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, I entirely support the amendment in the name of the noble Earl, Lord Clancarty, and that of the noble Lord, Lord McNicol. Noble Lords will be aware that I made it clear at Second Reading that I had real concerns that our accession to the CPTPP was done on the basis of failing to get many of the improvements sought by the creative industries. I pointed out that I suspected that that had happened because we were being a rule-taker rather than a rule-maker.

That argument was well demonstrated by the Minister, who, in a subsequent letter, made it very clear that the CPTPP was “a pre-existing agreement”, and therefore we have little choice in this matter. However, I have been heartened by a further paragraph in which he says that

“we intend to be a constructive member of CPTPP and will champion our values and priorities, including through the committees and councils set up by the agreement. Our ambition is to play a full role to strengthen the high standards of CPTPP”.

He goes on to say in a subsequent paragraph that our accession

“will not limit our ability to seek more ambitious agreements, including with CPTPP partners”.

All I would say to him is that I hope very much that we will look to find ways of improving some of the current IP protection arrangements within the CPTPP.

However, I wish to concentrate specifically on performers’ rights—an issue we debated at some length in our last session. I confess at the outset, first, that I will have to speak for rather longer than I would normally hope, and secondly, that I remain somewhat confused about what precisely the Government are proposing. I am not alone in that. I have talked to a number of organisations that are concerned about intellectual property rights and the Bill’s implications for those. They too are confused. If I have got things wrong, I hope the Minister will be able to correct me and give a clear enunciation of exactly what the Government are proposing in the Bill.

Much of this is based on the concerns of the music industry, although I acknowledge that the issue goes somewhat beyond it. It is worth just reminding ourselves that the UK music industry’s contribution to our economy is enormous: £6.7 billion last year, with exports from the industry generating £4 billion. It is an important industry and it is founded on the fact that in the UK we have an incredibly robust IP rights regime, which includes performers’ rights.

The issue is extremely complicated, as the Minister acknowledged during our deliberations in the last session. However, in terms of artists’ rights we are talking, predominantly but not exclusively, about broadcast performances. If a recording of a UK artist, composer, publisher or record label is aired on a UK radio channel, we know that royalties have to be paid via the collection agency PPL and then distributed via an agreed split between the various parties involved in that recording. If it is aired on a streaming channel, exactly the same applies, although the split may be different. However, if that recording is aired in another country, whether royalties get back to the UK depends on the deals that we have done with those countries. That might be through a free trade agreement or other international treaties, such as the Rome convention or the WIPO Performances and Phonograms Treaty—the WPPT.

Rights are often reciprocal but in some cases they can be limited. For example, Canada wanted to protect its small radio stations and capped the amount of money that they have to pay, so the amount that comes back to the UK is effectively capped. It might be supposed that the CPTPP Bill would deal exclusively with the arrangements for handling these issues between the UK and other CPTPP countries, establishing a reciprocal arrangement, just as we have done with other FTA deals. In a letter to the noble Lord, Lord Lansley, the Minister says:

“We intend to lay secondary legislation under these powers in Parliament in February 2024. This will make technical changes that are necessary, along with the Bill, to comply with CPTPP and other treaty obligations. The secondary legislation will include changes to the rights that are extended to CPTPP Parties and the performers who have a qualifying connection to those Parties. In circumstances such as these—where the UK has little or no flexibility in how it must implement its international obligations—it would be inappropriate to consult”.


I have no concern about that whatever. However, the Bill goes much further and, as the BPI says, makes significant and broad changes overall to copyright law.

In the CPTPP Bill, the Government are proposing to make changes to copyright law that would introduce obligations for performers and rights holders to receive payment for public performances in the UK of their music via equitable remuneration. This would appear to apply to either all countries or some countries. I hope that in his response the Minister will make it absolutely clear which performers and which countries are intended to be covered. At the moment, as I say, there is considerable confusion about this.

In simplistic terms, as I see it, the plan is to extend an agreement whereby we would effectively be paying royalties to other countries and performers where there is a performance in the UK of their recording, either of the individual performer or that country, even when we have no reciprocal arrangements with them and then, at a later stage, to decide whether or not to limit those rights as, for instance, Canada has done. This could have a significant impact on the UK, with a potentially significant loss of income. For instance, we have no reciprocal rights with the United States of America, yet, until some limits are potentially imposed at a later date, we will end up paying royalties to the US and to US performers while they will pay no royalties to us for UK performances in the United States.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for pointing out that I am already talking about the impact, while also saying that we should not have an impact statement after one year; however, I do not think that that is fair. We are trying to have a broad gauge—is this a significant, multi-million-pound issue that needs to be confronted with urgency, or a relatively manageable amount of capital change? The instance we are looking at is not significant in relation to the music industry overall—it was a few tens of millions. I do not have the figure in front of me, but the noble Lord will understand.

That is the reason why we are having a consultation. Our estimate implies that it would not result in significant distortions of the music market in this country. Remember, this is for broadcast media. It does not include streaming, which is how most people access their music at the moment. It will result in additional artists being included, but many artists already are.

We should be aware that we often talk in these debates about the issues facing us—it is always about us. I would like us to look at the opportunities our artists will now have in terms of being protected. British music is the greatest in the world, and among the most popular. The Beatles are at No. 1 again; that must mean something. All the great bands are reforming to take advantage of these new benefits of CPTPP and the enormous revenues they will be paid, so something must be working. We should not lose sight of that. I think that my noble friend Lord Cameron of Chipping Norton told me that Blur are getting back together again. He will know more about it than me.

This is a very important issue. We must not lose sight of the fact that on the whole, these measures tend to result in additional protections which did not exist for our artists in many of these countries. That is very important. We can get lost in the detail. I am not saying that the detail is not important, but we should keep things in perspective. I cannot answer the question from the noble Lord, Lord Foster, about when the consultation will be completed. It is unlikely that we will have the consultation back by Report, which is hoped to be the second or third week of January. I am aware of the time constraints and recognise noble Lords’ comments, but we will continue to work together to find a good solution. I am extremely comfortable having further conversations with the noble Lord and other interested Peers on how we can delve more deeply into this subject. I am very sensitive to the fact that we are trying to come to the right conclusion.

Turning to some of the other key points, the noble Earl, Lord Clancarty, made a very fair comment on artists’ resale rights. We have tried to propagate this position. It is a new concept globally and so far, 90 countries have taken up the opportunity to employ artists’ resale rights. Unfortunately, very few CPTPP countries deploy ARR in their legislation. The noble Lord was right to mention Mexico, and Peru is similarly beginning the process. However, it is at an early stage and has not functioned in a way that is advantageous to our artists, so while the systems have been set up, they have not started to yield the payments we were hoping for. Therefore, we are not in a position to introduce ARR into the CPTTP, because many of the countries simply do not have that legislation to hand. It would therefore not be appropriate for what is a collective multilateral treaty that we are joining.

The noble Lord rightly asks about our strategy. I am happy to come back to him on our plans for continuing engagement, but he should be reassured that we specifically negotiated this in the Australia and New Zealand free trade deals and that we are in negotiations with Japan to see how we can implement that.

The noble Lord, Lord McNicol, asked about Japan and geographical indications. I cannot make a significant comment in reply, other than to point to our commitment to continue negotiations on this. It was a very important part of the initial negotiations and the Secretary of State at the time was determined to ensure that these principles were magnified. I, my officials and the trade team will be happy to reassure the noble Lord, I hope, that we are moving forward.

I hope I have covered the questions raised. My noble friend Lord Trenchard kindly supported me with his point about impact assessments and timeliness, for which I am grateful. He also raised specific questions which I will answer in writing.

[The Earl of Clancarty (CB)]

My Lords, I thank the Minister for his reply on my amendment, which I found reasonably reassuring. As far as I can see, the Government are moving in the right direction on this. Time will tell by how much and with what enthusiasm they can persuade other countries to reach reciprocal agreement with us on this important right. I detected a suggestion for a possible meeting about this with interested parties; that would be really helpful.

On the other hand, I think many of us are much less convinced on the other concerns, particularly those about performance rights raised by the noble Lord, Lord Foster. He asked whether we could have the consultation before Report. It is really important that the consultation precedes any secondary legislation. The Minister has said that that legislation is technical, but the experts, including the Alliance for Intellectual Property and people in the music industry, say that we cannot be so sure what the effect will be of widening rights to foreign rights holders. We are asking the Government to tread carefully, and not recklessly in a way that will damage the UK’s creative industries. The principle of reciprocity is paramount, as the noble Lord, Lord Foster, pointed out. It should be a guiding light. Crucially, stakeholders need to see precisely what is intended to be in the secondary legislation before it is made. As we know, once secondary legislation comes before the House, it is too late to change anything. With that, I beg leave to withdraw my amendment.

Amendment 12 withdrawn.