Oral Answers to Questions
Debate between Nigel Mills and Andrew Griffith(7 months, 1 week ago)
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Andrew Griffith
The Government are absolutely committed to expanding STEM opportunities. A key way of doing that is building mathematical capabilities and helping girls and minorities to stick with maths, which is why the Prime Minister has announced our ambition to see all young people receive maths education until they are 18.
Nigel Mills (Amber Valley) (Con)
Andrew Griffith
The Medical Research Council is benefiting from the highest ever level of research spending, but I would be happy to meet my hon. Friend to talk about what more we can do in this important area.
Draft Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023
Draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023
Debate between Nigel Mills and Andrew Griffith(1 year ago)
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Andrew Griffith
Good morning, Mrs Cummins; it is a pleasure to serve once again under your chairmanship.
Intellectual property underpins our economy: it is the means by which businesses and individuals can commercialise their ideas, turning them into products and artistic impressions. IP drives innovation and investment, which, as set out in the Government’s innovation strategy, is vital to tackling the world’s largest challenges. Industries with an above average use of intellectual property contribute almost a quarter of UK output, 16% of UK employment and over half of goods exports. IP is crucial to support the Government’s long-term vision to cement the UK as a science and technology superpower and a global leader in innovation. Maintaining the current system is crucial to supporting innovation across the economy.
The draft regulations before the Committee use powers contained in the Retained EU Law (Revocation and Reform) Act 2023, or REUL, to amend or restate certain provisions in IP legislation. They make modest and targeted changes to the benefit of our IP framework in line with the aims of that Act. I will take each set of draft regulations in turn.
Subject to the Committee’s approval, the Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023 will amend provisions in four pieces of IP legislation, and I will explain more about these. The Design Right (Semiconductor Topographies) Regulations 1989 provide protection for designs that are semiconductor topographies, implementing international obligations under the World Trade Organisation TRIPS—trade-related aspects of intellectual property rights—agreement. Semiconductor topography design right is an IP right intended to protect the design of specific semiconductor products—for example, printed circuit boards—which can be relatively easy to copy.
In the UK, the law treats the protection of topographies of semiconductor products as a form of unregistered design right and extends protection to persons from certain qualifying countries. WTO members that are not EU member states are included as qualifying countries by being listed in the schedule to the regulations. The proposed amendment does not alter the design right but is simply intended to remove the need for further legislation to update the schedule when new countries join the WTO, to save parliamentary time.
The Artist’s Resale Right Regulations 2006 provide the basis for an artist’s resale right in the UK. ARR is a form of IP protection related to copyright. It gives creators of visual art, such as paintings or sculptures, an unwaivable statutory right to receive a royalty when their works are resold in the secondary market. The proposed amendments directly replace references to euros in ARR royalty calculations with pounds sterling and are intended to reduce regulatory burdens and costs for UK businesses. A transitional provision has been included so that this change will apply from 1 April 2024, which will allow industry time to prepare and adapt to the changes, in line with advice from the collective management organisations that administer ARR payment schedules.
The Copyright Tribunal Rules 2010 set out the rules of procedure for the copyright tribunal, which adjudicates on various commercial copyright licensing disputes, particularly concerning the terms of licensing schemes for copyright material. The amendments proposed by this instrument will mean a respondent or intervener in a copyright tribunal case will be required to provide an address for service in the UK rather than one located in the European economic area.
Lastly, the Collective Management of Copyright (EU Directive) Regulations 2016 set minimum standards for the governance, transparency and behaviour of collective management organisations established in the UK. CMOs operate as companies and are therefore subject to domestic company law. The amendments proposed by this instrument will reduce the regulatory burden on those CMOs, which qualifies small companies by exempting them from the requirement to audit the accounting information provided in annual transparency reports. The regulations also redefine other exemptions so that they apply to CMOs that qualify as a micro entity under the Companies Act 2006. That will include the removal of references to euros.
I now turn briefly to the draft Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023. It is important to maintain a balanced, consistent and stable IP framework. An essential mechanism that provides this balance in our IP system is called the exhaustion of IP rights. Put simply, IP rights enable their owners to control the first sale of their creation, but our exhaustion of IP rights regime ensures that, once a good is lawfully placed on the market, the rights holder can no longer use their IP rights to control the subsequent distribution or resale of that good.
For example, after someone purchases a book, the copyright owner cannot stop them from selling that book to another person in the same territory. A functioning exhaustion regime is therefore crucial for commerce in our modern economy. The mechanism also underpins the rules on parallel imports, which are the importation of genuine IP-protected physical goods that have already been put on the market in other countries—medicines, for example.
After we left the European Union exhaustion of IP rights regime, the Government created a bespoke, unique, regional exhaustion regime. Under that regime, once a good is lawfully placed on the market in the UK or the European economic area, the relevant IP rights in that good are considered exhausted. The regime was created to provide certainty for businesses and consumers while the Government consulted on what the UK’s future exhaustion regime should be.
Our current exhaustion regime relies on retained EU law, which will no longer exist from 31 December 2023; without replacing that, our exhaustion regime would not operate effectively from the end of this year. That could create uncertainty about the operability of rules for IP-protected goods, which may impact on supply chains and create a chilling effect on commerce and investment in the UK. Our position is that Parliament must act now to ensure that the UK does have a functioning exhaustion regime from the end of this year onwards. These regulations achieve that purpose. Subject to the Committee’s approval, the regulations restate certain retained EU law to ensure the continued operation of that regime, but without making substantial changes to the policy area. That also achieves the aim of the rule by making our exhaustion laws more befitting for the UK statute book and only restate retained EU law that is necessary for the continued operation of the regime.
In terms of the impact of these regulations, consumers and businesses should not see any significant changes to trading practice, because in substance they ensure a continuation of the current regime that has been in place since 2021.
Nigel Mills (Amber Valley) (Con)
Can the Minister tell us how this applies to electronic sales? If I buy a book on a Kindle, it is always very hard for me to pass on to somebody else. Is that a right I do or should have under these regulations?
Secondly, is this regional principle now the Government’s policy? Does the Minister think a Europe-wide territory for exhaustion is the right answer, or are we going to look at this in our trade deals and try to expand that region to, say, the whole of the comprehensive and progressive agreement for trans-Pacific travel partnership as well?
Andrew Griffith
I will address the first, technical point in my winding up. I was about to come to the fact that the Government have consulted but have not listened to industry’s views about what a go-forward exhaustion regime post our departure from the European Union looks like. The regulations that the Committee is asked to approve today effectively maintain a continuation, to provide that certainty. The Government will respond to that consultation, in due course, to directly address the question asked by my hon. Friend the Member for Amber Valley. As part of that, there will be consideration of the relative merits of extending that territory to include new territories such as the CPTPP.
I hope that hon. Members on both sides will reflect on the fact that this is a complex area; it is very much determined by an interlocking web of international rules and treaties, and I think that it is right that the House should proceed cautiously, given the importance of IP protection to the UK’s economy. My hon. Friend makes an important point, and I hope that we can move forward on that, in collaboration with industry and on a cross-party basis, to provide the opportunities that are there for the UK.
In conclusion, this set of regulations seeks to use powers contained in the Retained EU Law (Revocation and Reform) Act 2023 to introduce only targeted changes, at this stage. Those changes will ensure that rights holders, businesses and consumers can continue to have certainty and confidence in the UK’s IP framework.
Oral Answers to Questions
Debate between Nigel Mills and Andrew Griffith(1 year, 2 months ago)
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Nigel Mills (Amber Valley) (Con)
The Economic Secretary to the Treasury (Andrew Griffith)
At Mansion House, the Government presented a series of pension reforms that will increase returns for savers and enable the financial sector to unlock capital for some of the UK’s most promising industries. The Department continues work to build on the initial package of measures and will set out further details in the autumn.
Nigel Mills
I thank the Minister for his answer and welcome those measures. Have the Government considered what more can be done to unlock surpluses in defined-benefit schemes to allow employers to use that money more effectively, rather than having it end up going into insurance companies on buy-outs? There is a huge tax penalty on unlocking surpluses. Is there a way of relieving that to encourage the money to be invested more efficiently?
Financial Services Reforms
Debate between Nigel Mills and Andrew Griffith(1 year, 4 months ago)
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Andrew Griffith
I hope that my hon. Friend can reassure the constituents he so diligently represents that on average, as supported by the Government Actuary’s Department, if they started their working life now under the new assumptions about the compact, they could be up to £1,000 a year better off in retirement. That is a meaningful difference. At the end of the day, this is about making people’s money work better for them and harder for them and delivering them better outcomes. He is also right to observe that our ambitious programme of regulatory reforms, although it will never be divergence for divergence’s sake, could not have been achieved if it were not for the ability of this place to set the corpus of regulations under which financial services operate.
Nigel Mills (Amber Valley) (Con)
I welcome the Mansion House compact and the focus on auto-enrolment pensions delivering a better pension for their scheme members, but if the Minister looks at the websites of the firms that have signed up to his compact, he will see that they are all still marketing themselves as being cheap and simple for employers, rather than the best quality and best return for savers. What more can we do to give individual members a choice of which scheme they are auto-enrolled in? Will he look at a clearing house scheme, under which it would be individual employees who choose where their pension savings go, not their employer a few years ago based on what was easy and cheap?
Andrew Griffith
My hon. Friend is absolutely right to talk about the need for that culture to change, moving away from an excess focus on cost to the detriment of performance—that is what these reforms will achieve over time. He is also right to talk about giving agency to individual long-term savers over time. Making sure that we have that usable journey for pensioners that delivers across the whole of their life is something that my colleague, the pensions Minister, is passionate about.
Draft Insider Dealing (Securities and Regulated Markets) Order 2023
Debate between Nigel Mills and Andrew Griffith(1 year, 6 months ago)
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Andrew Griffith
These are important matters. The funding of the police is out of scope, but I am sure I share the Committee’s desire to see any criminals in this space prosecuted and to see as many investigations as possible. The FCA has operational independence in dealing with those matters, and it is our job to provide it with the tools, which is what we are doing. I am grateful for the support of the hon. Lady and her party.
There have been a number of interludes since the original FEMR in 2015, including the unprecedented period during the pandemic and some of the other financial measures that we have had to pursue as part of Brexit. I hope we have consensus about how we move forward now. In all the important work that we are doing across the financial services sector, I have a zeal to proceed at the fastest possible pace. We do not have the ability to travel back in time, but we can put the draft order on the statute book now.
Nigel Mills (Amber Valley) (Con)
One of many changes since the FEMR is the rise of cryptoassets and cryptocurrencies. Do cryptoassets fall under the definition of transferable securities or money-market instruments included in the draft order, so that cryptocurrency insider trading will be caught by these rules?
Andrew Griffith
It is not in these rules per se. There were two things that I talked about; one is the fact that we are moving away from a prescriptive list and towards definitions of what constitutes a financial instrument. That allows a degree of future-proofing for precisely the purpose that my hon. Friend talks about.
My hon. Friend will also be aware that we are consulting right now on the broader regulation of cryptoassets. I humbly suggest that it is not in scope for this Committee, but I am happy to engage with him and other colleagues on it. The purpose of the consultation is precisely to involve the broadest possible range of hon. Members and stakeholders so that we get this important regulation right. It is a whole new part of the economy, and our desire is to get it right.
Question put and agreed to.
Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2022
Debate between Nigel Mills and Andrew Griffith(2 years, 1 month ago)
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The Financial Secretary to the Treasury (Andrew Griffith)
I beg to move,
That the Committee has considered the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2022 (SI. 2022, No. 782).
It is a pleasure to serve under your chairmanship, Mrs Cummins. Due to the sad passing of Her late Majesty, the debate on this statutory instrument has been delayed, but I am pleased to introduce it today.
The SI is largely administrative, and makes only minor updates to provisions under the money laundering regulations. The Government recognise the threat that economic crime poses to the UK and to our international partners, and we are committed to combating money laundering and terrorist financing. Illicit finance causes significant social and economic costs through its link to serious and organised crime. It is a threat to our national security, and it risks damaging our international reputation as a fair and open rules-based economy. It also undermines the integrity and stability of our financial sector, and it can reduce opportunities for legitimate businesses in the UK.
That is why we have taken significant action to combat economic crime, including in legislation with the economic crime (anti-money laundering) levy and the Economic Crime (Transparency and Enforcement) Act 2022. However, we are going further. In this Session, we have introduced a second economic crime Bill, which will reform Companies House, and we will develop the second iteration of the landmark economic crime plan. We are also working closely with the private sector and international partners to improve the investigation of economic crime, strengthen international standards on beneficial ownership transparency, and crack down on illicit financing flows.
The money laundering regulations support our overall efforts. As the UK’s core legislative framework for tackling money laundering and terrorist financing, they set out various measures that businesses must take to protect the UK from illicit financial flows. Under these regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries that are identified as having strategic deficiencies in their anti-money laundering and counter-terrorism financing regimes, which could pose a significant threat to the UK’s financial system.
The statutory instrument amends the money laundering regulations to update the UK’s list of high-risk third countries. It adds Gibraltar to the list, and removes Malta, which mirrors lists published by the Financial Action Task Force—the global standard setter for anti-money laundering and counter-terrorism financing. For the purposes of the high-risk third countries list, countries include territories and jurisdictions, so Gibraltar, as a UK overseas territory, is treated as a country in that high-risk third countries list. This is the fourth time we have updated the UK list to respond to the evolving risks from third countries, and the update ensures that the UK remains at the forefront of global standards on anti-money laundering and counter-terrorism financing.
Nigel Mills (Amber Valley) (Con)
Can the Minister explain why Russia does not appear on the list? Is it because there are separate measures in place such that we do not need to include it? Would it not be prudent to add Russia for the sake of completeness?
Andrew Griffith
I thank my hon. Friend for making that point. As he will know, there are separate provisions in respect of Russia, particularly sanctions against individuals and institutions linked to the Russian state or to its leader, Vladimir Putin. This measure refers to standards in banking systems, and the view of the Financial Action Task Force, whose guidance we follow —we are part of the taskforce and are well represented on it—is that the Russian system itself includes protections. The issue of why we are sanctioning Russia is a separate one. I hope that that answers my hon. Friend’s question.
The UK was a founding member of the Financial Action Task Force. We are very much aligned with international partners such as the G7 to drive improvements in anti-money laundering and counter-terrorist financing systems globally.
This high-risk third country list is one of the Government’s many mechanisms to clamp down on illicit financial flows from overseas threats. We will continue to use other mechanisms to respond, such as the sanctions regime that I mentioned in response to my hon. Friend the Member for Amber Valley.
The statutory instrument will enable the money laundering regulations to continue to work as effectively as possible to protect the UK financial system. The Government consider it crucial to protect UK businesses and the financial system from money launderers and terrorist financiers. I therefore hope that colleagues on both sides of the Committee will join me in supporting the measure.