Copyright and Performances (Application to Other Countries) (Amendment) (No. 2) Order 2024

Lord Clement-Jones Excerpts

Wednesday 12th February 2025 Lords Chamber

Moved by

[Lord Clement-Jones]

That this House regrets that the Copyright and Performances (Application to Other Countries) (Amendment) (No. 2) Order 2024, laid before the House on 13 November 2024 (SI 2024/1124), did not involve consultation on Option 0A, which will result in inequitable treatment of performers on sound recordings based on their nationality.

[Lord Clement-Jones (LD)]

My Lords, I will start by saying that I am delighted that the Minister is treating this as one of her first engagements back in the House; how flattering to have her here at this time of day for a regret Motion. I also want to put on record my thanks to the Minister, Feryal Clark, who has taken the trouble to engage. Time will tell whether that engagement bears fruit, as we will see.

We on these Benches agree with Equity—the actors’ union—and the Musicians’ Union that this statutory instrument should be withdrawn due to several significant concerns regarding its fairness, its consultation process and its potential impact on performers, particularly those from the United States. The key arguments against the statutory instrument revolve around the implementation of option 0A, which maintains the status quo for producers of sound recordings while extending public performance rights to foreign performers only if their producer is a UK national or based in a country that is a signatory to the Rome convention, thereby excluding performers from countries that are not signatories, such as the United States. This option was not explicitly consulted on, and it creates an inequitable system of remuneration for performers.

The consultation presented four options, numbered 0 to 3, but option 0A emerged after the consultation. The Government have acknowledged that option 0A is a new option. However, the Government’s claim that they carefully considered all views is wrong, as a key policy option was developed and implemented without input from key stakeholders. Impacted organisations were not given an opportunity to formally submit their views on option 0A. As such, this lack of consultation raises concerns about the transparency and fairness of the decision-making process, and in fact undermines it.

As I have mentioned, option 0A creates a system where some foreign performers receive public performance rights based on national treatment, while others, specifically US performers, are denied those rights, based on the principle of material reciprocity. This means that US performers will not receive equitable remuneration for their work in the UK, even though their recordings are being used. US producers will continue to enjoy protection and equitable remuneration in the UK, while US performers on the same recordings are denied these rights. This disparity is difficult to justify and is clearly discriminatory.

It will also extend public performance rights to some additional foreign performers who will qualify through their producer, regardless of whether their nation offers material reciprocity to UK performers. The situation is further complicated by the fact that performers from countries such as Australia and New Zealand, which also do not offer material reciprocity to UK performers, will still receive public performance rights in the UK. This inconsistency makes the policy arbitrary and unjust. The Government’s approach effectively singles out US performers for less favourable treatment.

The Government further justifies their position by arguing that expanding performers’ rights would negatively impact the UK music sector. The Government’s decision to not expand performers’ eligibility is partly based on the argument that UK affiliates of overseas record labels retain a significant proportion of the revenues attributable to foreign rights holders. Specifically, the British Phonographic Industry, BPI, claimed that UK labels retain 30% of the revenues collected in the UK on behalf of foreign affiliates, and that any reduction in revenues for US record labels would mean less money for the UK music sector.

Little evidence for this claim has been made and the Musicians’ Union disputes it, arguing that this paints an “exaggerated, bleak picture”, that the UK and US operations remain financially separate in practice, and that it cannot find any workings in the BPI’s redacted submission to the consultation. This suggests that the Government’s financial justification is based on flawed information, not solid evidence. Smaller independent record companies have, by contrast, expressed that the current situation is unfair and supported option 1, which would expand performers’ eligibility for remuneration.

The Government also claim that denying US performers public performance rights is intended to encourage the US to adopt material reciprocity. However, the revised economic impact assessment acknowledges that this is unlikely to influence US policy. In the view of Equity, a more effective strategy would be to offer US performers rights for a limited term, such as 10 years, and then use that as leverage to negotiate material reciprocity with the US Government. This approach would provide US performers with fair compensation while creating an incentive for the US to reciprocate. The current strategy effectively withholds remuneration from performers as a negotiating tactic, while a more effective strategy will still guarantee that performers get paid for their work.

The Government’s policy is intended to ensure that UK law meets its international obligations under the Rome convention and the WIPO Performances and Phonograms Treaty. However, the implementation of option 0A undermines the spirit of these treaties by creating a system of unequal treatment for performers based on their nationality. Equity believes that all foreign performers in countries that qualify for public protection rights should benefit from the same level of protection. It considers the current approach to be unethical, and we agree. As a matter of principle, performers should be remunerated for their work. This option leaves some performers benefiting from national treatment, ignoring lack of material reciprocity, while US performers are denied remuneration on the basis of material reciprocity.

The Government have stated that the current statutory instrument corresponds closely to option 0, which was the status quo option. However, the Intellectual Property Office itself stated in its revised impact assessment that

“Parliament has passed the CPTPP Act. The CPTPP Act contains measures that will, when it comes into force (expected in December 2024), expand eligibility for performers’ rights generally, in a way that approximates the effects of Option 1. Doing nothing therefore now means allowing the law to change in a way similar to that set out in Option 1, rather than maintaining the effect of existing law”.

Therefore, the Government’s claim that they are maintaining the status quo is actually incorrect, because the status quo is already changing due to the CPTPP Act, which has now come into effect. The Government are claiming to maintain the status quo, but that status quo is already changing due to that legislation.

Equity, SAG-AFTRA, the Musicians’ Union and PPL have all raised concerns regarding the Government’s proposed course of action. This statutory instrument should be withdrawn due to a flawed consultation, the unfair treatment of US performers, the disputed financial claims, its ineffective approach to achieving material reciprocity, the ethical concerns and the contradictions with existing legislation. The Government should reconsider their approach, consult on both option 0A and option 1 and implement a system that provides equitable remuneration for all performers. I beg to move.

[The Earl of Clancarty (CB)]

My Lords, I support the noble Lord, Lord Clement-Jones, on this regret Motion. I will be brief, not least because the noble Lord has covered the ground so well. I too thank the Minister, Feryal Clark at DSIT, for our meeting with her on Monday on this issue. I also thank Equity for its briefing on this and for alerting us to this concern. I very much welcome the Minister back to her place.

Ultimately, this is about fairness and consistency—or, perhaps more to the point, unfairness and inconsistency —and about mutual benefits, which this Government should strive toward in every area of our dealings with others, not least in the case of the arts and creative industries. I have become a great believer in the word “mutual”. I prefer it now over “reciprocal”, which the public grasp less, I think—they find it too abstract. But we all understand, or have a better chance of understanding, what “mutual benefits” means. For example—forgive me if I digress slightly—a new poll finds that over 80% of the public are in favour of mutual free movement in Europe, because that becomes something that is immediately understandable, while of course some of us have been banging the drum for reciprocity for years and not getting very far. The language we use to describe these things is hugely important.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for her response. I do not doubt her motives at all; it is just the outcome that we are not happy with. I thank those who have spoken in favour of this regret Motion. The noble Earl, Lord Clancarty, talked about US session musicians, who are an important aspect of this. Clearly, they are being discriminated against if they are working with musicians from countries that are reciprocating and paying our musicians. This seems to be unfairly singling out those session musicians in those circumstances.

My noble friend Lady Featherstone talked about fair play and the risk of US retaliation. The Government may have the right motives, but I do not think they have quite come to terms with what a US Administration might do in this regard.

The noble Lord, Lord Markham, rightly said that any system needs to have the confidence of those who are supposed to benefit from it. I thought that his injunction to tread carefully in these circumstances was very important.

I do not propose to put this Motion to a vote; the SI has already gone through on the negative procedure. However, we are not wholly reassured. I very much hope that the Government will initiative a dialogue with Equity. When I raised with Minister Clark whether they had actually met Equity to discuss this SI, it was interesting that they had not. There are other issues that Equity would, I am sure, very much want to talk about, such as synthesisation of performances, in relation to AI—that is probably another area. It seemed rather extraordinary that a Labour Government had not properly engaged with Equity in the last six months. I very much hope that the Minister will be able to take that back to the department and reinforce the desire to meet with Equity and the Musicians’ Union.

The Government have been unduly influenced by the figures from the BPI. I do not recognise the figures that the Minister maintained about the income which would be forgone if another option had been taken. As I said when I introduced the Motion, those figures are very much disputed by the MU. We have not seen any real workings that prove that that would be the loss of income, but we can argue the toss on that.

I very much hope that the Government will at least take back from this regret Motion that in producing an option at the last minute, however creative it may be—I would not deny that creativity is a useful thing to have in the department—you can be slightly overly creative if you are not consulting on a particular option. I thought it was a neat piece of speechwriting but not necessarily to be desired. It is the kind of thing that would go to judicial review if a commercial organisation was involved in this SI. If this was BT, or another major telecom company, disputing an SI in which an option had not been consulted on, they would take this kind of thing to court. As it happens, this is about artists and unions, so they are not going to do that; they are going to go through the political process. I welcome that, but it nevertheless shows the fragility of the decision that has been taken in this case. I beg leave to withdraw the Motion.

Motion withdrawn.