Higher and Further Education

Pete Wishart Excerpts

Tuesday 11th September 2012 Commons Chamber

[Shabana Mahmood]

I thank my hon. Friend for her intervention. She is absolutely right. As I have said, choices that are being made on the basis of affordability represent a tragedy not just for the individual making them, but for us as a country, because we are missing out on their potential at a time when we should be investing in our education and skills base. In a highly skilled economy we need our people to have high-level skills. This Government are creating circumstances in which that will not be possible in the future.

This Government’s policies will affect level 3 apprenticeships for those aged 24 and over. The added costs could act as a deterrent for potential apprentices and the added bureaucracy could put off businesses from offering places.

A high percentage of learners are also enrolled in courses directly related to, or benefiting, public services. For example, just over 90,000 learners were enrolled in courses in health, public services and care, and over 45,000 in those for education and training. Sixty three per cent. of those affected are women. A drop-off from those numbers would hit local services, and local economic growth prospects could hit the productivity of the public sector and the life chances of tens of thousands of adult learners. The policy will also affect those taking courses in science, technology, engineering and maths when we need more people, not fewer, to take STEM subjects in order to compete in the world with new technology and new industries.

As with higher education, the Government’s policies on further education take us in the wrong direction on participation and social mobility. We are mindful of the impact that the trebling of fees is having on students and would-be students, so this time last year we suggested an alternative to the Government. We have called on them to cut the tuition fee cap to a third, to a maximum of £6,000. We have proposed a fully funded way of doing that, paid for by not going ahead with the corporation tax cut for the banks and through some additional payments by the wealthiest graduates.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The hon. Lady is being very generous in giving way. We know now the difference between a Labour tuition fee and a Conservative tuition fee—it is £3,000. She says that the proposal will be funded by reversing the corporation tax for banks. Does that include Scottish financial institutions? Why should they pay for a cut in tuition fees for English students?

[Shabana Mahmood]

The corporation tax cut is for banks across the UK.

Intellectual Property (Hargreaves Report)

Pete Wishart Excerpts

Thursday 7th July 2011 Westminster Hall

[Pete Wishart (Perth and North Perthshire) (SNP)]

I refer to my entry in the Register of Members’ Financial Interests. I welcome you to the Chair, Mr Chope, and hope that you find our little chit-chat about intellectual property intellectually stimulating. The Minister for Further Education, Skills and Lifelong Learning is not a regular at our get-togethers about the creative industries and intellectual property, but we welcome him to the debate. I saw him in action yesterday. He was particularly robust in his response then, and I am sure that we will get a comprehensive response to the many issues that will come across his desk in the next few hours.

This debate gives me a sense of déjà vu and Groundhog day. I remember standing here, probably on this same spot, some five years ago responding to a Government-commissioned report and review into intellectual property, which was described as groundbreaking and eagerly anticipated, and as the panacea for all the difficulties and problems that we have with the intellectual property laws. That was the Treasury-commissioned Gowers review, and around the Chamber I can see other veterans who carry the scars of that review. Five years down the line, fewer than half of Gowers’ recommendations have been implemented.

Gowers, and now Hargreaves, follow a long, honourable and noble tradition of Government reviews and reports on intellectual property. Since Gowers, and before Hargreaves, there was the “Digital Britain” report and the Digital Economy Act 2010. In fact, 25 pieces of work on intellectual property or copyright laws have been commissioned from either Brussels or Whitehall, including Green Papers, White Papers, formal consultations, informal consultations and the inevitable round-table discussions. The Government have proven very efficient and effective in initiating such reports, reviews and commissions, but a little less so in implementing the many recommendations that have come across their desk. We wait to see whether Ian Hargreaves will be more successful with his recommendations, but I have a sense and a suspicion that once again, in a few years’ time, we will all be sitting around this table looking at another Government-sponsored review on intellectual property, which once again will have been eagerly anticipated and presented as some sort of panacea for the problems with our intellectual property laws.

My little bit of advice to the Government is that they expend a bit more energy on doing something with the creative industries and less on indulging in this continual and consistent review-itis. We need action from them to support our creative industries, to ensure that they continue to develop and grow. Perhaps the Government could consider some of the financial matters. Finance and funding are a critical factor, and small and medium-sized enterprises in particular are looking just now to the Government for assistance with that, so that they can develop. The Government should also help creative industries to deal with their online market, as that will help with the new digitalisation that is a massive challenge to so many of the industries, and the Government should do something about the corrosive online piracy that eats away at our creative industries, depriving them of profit, investment and growth. The Government can do more than continually and consistently have reviews, so let us get together and do something.

Of course, it is good to see that the Government take an interest in their intellectual property and copyright laws. So they should. Intellectual property and copyright are fundamental to the well-being of the UK economy, accounting for about 8% of our total gross domestic product. Some £65 billion was invested in intellectual property in the UK in 2010, and the creative industries alone account for 2.7 million jobs here. My particular interest is in music, and music—particularly exports—has been a massive success over the past few years. In the United States, in 2010 alone, 9.8% of all album sales were from UK artists. It looks like 2011 will be an equally bumper year, with one artist, Adele, practically owning the US charts just now, such is her phenomenal success. That has helped to maintain the UK’s position as the No. 2 exporter of music worldwide.

It is not just music; we excel in all creative exports, and do well in all sectors. Being creative is just something we do well, and over the years the UK has produced the most innovative and diverse range of creative talent imaginable. We have been successful because we have ensured that artists, creators and those who invest in our talent have been properly rewarded for the work they produce. What we must carry on doing, by way of our intellectual property laws, is ensure that that continues, and resist the ever-constant desire and temptation to tinker with legislation. As we consider the Hargreaves report and wait for the Government’s response, it is worth while reminding ourselves that our intellectual property and copyright laws have not done not too badly in the face of some serious challenges over the past decade, most notably from the online market and the technology that develops almost daily.

So, what does the Hargreaves report bring to the table? What innovations does it have to offer? In considering the report, it is almost impossible to set aside how it was conceived and initiated. This time around, it was the Prime Minister himself, after, I think, a very good lunch with his friends at Google, who posed the question: do our intellectual property and copyright laws get in the way of the emergence and development of a Google in the UK? He then got Ian Hargreaves and his team dispatched to find the answer. The review was perhaps unfairly christened the “Google review”, and those of us who care passionately about our creative industries observed all this with varying degrees of horror.

The question behind the review was: what can be done to help search engines and social networking sites such as Google develop in the UK? Not one shred of evidence, however, has ever been produced to support the initial prime ministerial contention. We must remember that the UK has some fantastic search engines and social networking sites, not least Friends Reunited, which could even be credited with starting the whole social networking revolution. Compared with where Google comes from—silicon valley in mid-California—the UK is an altogether different cultural and economic environment. The set of conditions that exist in silicon valley are unique—they do not even exist on the east coast of the United States, let alone in the UK, or anywhere else in Europe or the rest of the world. Nevertheless, Ian Hargreaves was discharged to bring mid-California to a business park off the M25 in Shoreditch.

A number of us were concerned about all the talk of Google, because Google has not been a great friend of intellectual property over the years, and I think it would be fair to say that it has been a bit cavalier in its approach to IP rights. Mr Chope, if you were to put one of your favourite artists into the Google search engine you would be directed to a number of sites that totally disregard and ignore the intellectual property rights of the artist. Having Google as an inspiration for such a review did not so much set alarm bells ringing as put whole fire departments on stand-by.

To be fair, however, Ian Hargreaves did his job diligently. All talk of good will was quickly abolished, and we had a report that considered economic growth and its inhibitors. The professor approached his task professionally and was not too consumed by the almost baffling inception of the review that he was tasked to pursue. At first, it was all about, “Will he or won’t he recommend a system of fair use, as championed in the US?”. We were able to find out what the good professor was thinking, because he produced a blog that we could follow while he did the review. Looking at all the air miles that were being clocked up in the States, a number of us feared that he was considering adopting fair use as a central recommendation in his report, but he decided that fair use was not for us because, as the report said, it was

“unlikely to be legally feasible”.

What we do not know, Mr Chope, is whether if it was legally feasible you would be looking at fair use coming soon to a creative industry near you. Fair use would have been an absolute disaster for our creative industries, and I think a collective sigh of relief was exhaled when that proposal was dropped.

So what does the Hargreaves report recommend? There are 10 recommendations, and Professor Hargreaves makes the bold assertion that if all 10 were adopted in full, UK GDP would increase from 0.3% to 0.6%. We in politics say that that is a courageous statement, but it was the claim that Hargreaves made. I will not list all the recommendations. Some of them are uncontroversial and are generally supported, some are hangovers from previous reports, and some come directly from the Gowers review. Some are new, some are interesting and some have excited all sorts of concerns and anxieties.

The major underlying recommendation—the one that tops the chart at No. 1—is that all future regulation should be based on evidence. The importance of economic evidence is inarguable—I do not think that anybody could disagree that economic evidence is required for any future regulation on IP laws and copyright—but it is one thing to say that evidence is required and another to act on it, rather than dismissing it if one does not happen to like it. For example, the report does not fully acknowledge the economic case for the current copyright framework, and has little to say about the huge amounts of investment in, and profitability already being derived from, innovative digital products and services. Given the success of creative UK plc, that omission is baffling. The report casually dismisses crucial research and evidence, because it comes from industry, as though it were mere lobbying, even though the Government charge industry time and again with providing evidence and doing research to help shape future policy.

Other recommendations that have received attention include proposals to set up a digital copyright exchange, permit the licensing of orphan works and create further exceptions to copyright. If anything in the report counts as a big idea, it is the creation of a digital copyright exchange. The report describes it as the digital opportunity: the means of unlocking the UK creative industry’s economic potential and solving the problems of rights clearances that Hargreaves maintains give copyright law such a bad press.

The report says of the DCE:

“The prize is to build on the UK’s current competitive advantage in creative content to become a leader in licensing services for global content markets; in short to make the UK the best place in the world to do business in digital content.”

Who could argue with that? But what exactly is the DCE and what is envisaged for it? Is it to be a virtual content megastore in UK cyberspace for rights owners, traders and users, or is it more of a brand name to describe a collection of rights registries and rights databases across the internet? More fundamentally, what will it look like, who will pay for it and how, and who will run it?

In many respects, a DCE already exists, based on a variety of technical standards developed by the music, film and publishing industries and other sectors of the creative industries, which have rapidly developed comprehensive databases with ownership data and online functionality. In such a critical matter, Government must be careful not to duplicate or replicate work already being done within the sector and to work hand in glove with the industry if they are minded to accept the recommendation on a digital copyright exchange.

The DCE must be voluntary and recognise that different industries license content in different ways and for different purposes. Hargreaves hints that non-participation in the exchange might lead to penalties for rights holders, such as being exempted from some of the measures in the Digital Economy Act 2010. That is definitely not welcome. It could create a two-tier approach to rights holding, run counter to international copyright treaties, and discriminate against smaller rights holders.

The report recommends a Government-led approach involving the appointment of some public figure as a digital champion, almost a digital tsar. There are hints that the Government’s delay in responding to the Hargreaves report is due to difficulty finding that digital champion. We wait to see who it will be. I think that all of us would like to see the job description.

[Mr Don Foster (Bath) (LD)]

Before the hon. Gentleman leaves the issue of the digital copyright exchange, will he comment on the use of the word “exchange”? An exchange implies a place where one goes to do business. How does he feel about that?

--- Later in debate ---

[Pete Wishart]

I am grateful to the right hon. Gentleman for bringing that up. There are many models for exchanges. An exchange for the creative industry will be difficult to conceive and create. There will be issues categorising work. The report recommends a digital champion. We must know who it will be and how he will be found.

Another issue is orphan works. The idea is that if an owner cannot be identified, a standard statutory licence would be obtained and the payment would go into a fund to pay the owner if they are ever identified, or towards general social use. Hargreaves suggests that if a work cannot be found on the DCE, it should be declared orphaned and become available for licence. I hope that before the Government consider and conclude on that recommendation, they will re-examine the legal situation and take time to consider the British Copyright Council’s proposals on the issue.

Other recommendations, such as those dealing with format shifting and parody, are also hangovers from the Gowers review. On format shifting, Hargreaves wants to proceed without compensation to creators. That is likely to run contrary to the copyright directive and would put the UK out of line with the vast majority of European states. I hope that when the Government consider that recommendation, they will put the interests of British musicians, creators and artists before anything else. The proposed exception for parody is more mystifying. There are countless examples online, for example on YouTube, of parody being enjoyed as part of UK entertainment. If the Government are minded to accept such an exception, they must give us evidence that parody is a problem. Examples have been highlighted, but we need evidence.

The report’s acknowledgement of the importance of an effective rights regime is welcome and puts the report in the context of the Digital Economy Act 2010. The Act is the other weighty piece of work sitting in the Government’s in tray, and it is time that they got down to work and started to implement all the measures agreed in it. We appreciate that there have been difficulties with the DEA, including the judicial review and ongoing work by Ofcom, and we know that tensions remain in the coalition, but it is time to implement what has been agreed.

The Government have it in their hands to help our creative industries significantly and substantially. The DEA was established to reconnect the public with legitimate means of purchasing online materials, and it is time to get on with it. One big theme in the Hargreaves report is economic growth and removing the barriers to development. Illegally taking creative works for nothing is the biggest barrier to growth confronting our creative industries, and that more than anything threatens jobs and investment. The DEA contains real, available and tangible measures to deal with the biggest inhibitor of growth in our creative sector.

[Mr Foster]

I apologise for interrupting the hon. Gentleman a second time during his excellent speech. He says that the Government should get on with the DEA. Is he aware—I know he is—of the problems discovered involving site blocking? Not least because of outstanding court cases, the Government are unable to implement the Act in its current form.

[Pete Wishart]

I have seen the early-day motion to which I think the right hon. Gentleman is referring; it was kicking around just now. I have certainly received correspondence on the issue. That seems to be one of the great misconceptions about the DEA. People are always referring to disconnection, but nowhere in the DEA is there any mention of disconnection. If any technical measure were to be enforced, as he knows, numerous measures would have to be agreed by Government and Ofcom before anything like that could be considered. What would happen is that people would receive a polite letter asking them to stop taking music for nothing and directing them towards legal sites. I am glad that he mentioned the subject.

[Jim Dowd (Lewisham West and Penge) (Lab)]

Before the hon. Gentleman moves away from the point about illegal downloading, has he seen today’s BBC report showing that the problem not only persists but continues to grow year on year? Does he agree that regardless of all the sophisticated arguments that can be advanced, it is nothing short of theft?

[Pete Wishart]

I did see the BBC piece. It was done for “Newsbeat”, and it showed the effect of illegal downloading on the film industry. It is not just film studios but people who work in the film industry—carpenters, caterers and all the other ancillary staff—who are taking a direct hit to their ability to earn a living working in the creative industry. The piece was a great example of the impact on the creative industries of the scourge of illegal downloading, and it shows why the Government must get their finger out and start dealing with the problem, using the measures agreed in the DEA.

When will the Government’s response be published? We were promised a response before the recess, which is now only 10 short days away. I presume that we will not get a response to the Hargreaves report before the recess, so when will it be published? What is it likely to include? Will the Government ensure that a thorough cost-benefit analysis is undertaken by whomever they appoint to study the issue? Will they ensure that existing activity is properly assessed? How will the Government ensure that IP laws remain protected in the light of changes to consumer law and the proposed organisational change to consumer protection?

If we want a successful and vibrant creative sector, IP has to be respected and valued, and not seen as something that people have the right to access for free just because technology enables them to do so. We cannot continue to give away our great recorded works for nothing, threaten our film industry, compromise our publishing houses, and leave our artists and creators without reward and protection, just so that some people can illegally take their work for nothing. Our creative industry is one of the most dynamic parts of the economy and the provider of hundreds of thousands of jobs. We have not done too badly so far with our IP and copyright laws, and nothing must be done to compromise our success and creativity. The Government have it in their power to ensure that the UK can become the world hub for creative industries. It is now time to stop the reviews and get on with the work.

--- Later in debate ---

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to be here this afternoon under your chairmanship, Mr Chope, and to have listened to such an interesting and intellectually challenging debate. I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing the debate. We all know about his musical talents from Runrig to the heady heights of MP4. He slips in a bit of politics from time to time. His insights have illuminated our discussion of the Hargreaves report. There were not too many surprises in his contribution. We have met on a number of occasions, and we have discussed these issues in different forums with many of the people who are here today. In particular, I remember an interesting tea that we had with Ian Hargreaves. Before I go into that, let me first say that I found Ian Hargreaves to be very accessible. To produce a report within such a short period of time was a demanding job. He has done that, and we are here debating the content of that report, which is positive.

That tea that I have referred to was pretty influential. It became clear to Ian Hargreaves then, if he had not known before, that there was a strong view among parliamentarians that the direction set out by the Prime Minister last November when the review was announced was not one with which many agreed. With the exception of my hon. Friend the Member for Falkirk (Eric Joyce)—I am glad that he contributed today—many parliamentarians here agree with the general view that fair use is certainly not what we need. We should ensure that our artists are suitably supported for their artistic and creative contributions. That is the view that comes across in most debates in Parliament, which is interesting because most of the e-mails that I receive on this subject say exactly the opposite. That is something that we should be very conscious of and that we should discuss in more detail with our parliamentary colleagues. Some of the people who need to be educated on this issue are fellow parliamentarians. When we were candidates before the last general election, we all had the happy task of responding to hundreds of e-mails on the Digital Economy Act 2010. There are heavy lobbies in this area, and I have received a number of them in connection with this debate.

The contributions today have been very helpful. I have already referred to the hon. Member for Perth and North Perthshire. We learned a lot from the excellent contributions of the right hon. Member for Bath (Mr Foster), who has such tremendous experience in the area, and of my hon. Friend the Member for Lewisham West and Penge (Jim Dowd). The hon. Member for Folkestone and Hythe (Damian Collins) made some interesting observations about search engines.

I want to raise one further matter, the vertical integration of search engine companies. Search engines do not always disclose their interests in the results of a search. They increasingly tend to acquire other companies that provide services and that are then linked to the search engine, so they are directly benefiting from their business. We need increased disclosure, so that the consumer is well aware of what is going on.

I enjoyed the contribution from the hon. Member for Suffolk Coastal (Dr Coffey) who quoted Abba. I was deeply disappointed that she did not give us the music to go with it. Perhaps she will do so on another occasion.

The hon. Member for Solihull (Lorely Burt) told us about small business, and she emphasised its importance in this field. I am disappointed that the group to which she referred feels it was not taken into account in the review, but of course it was the Government she supports who selected the people for the review, so perhaps she should take it up with them. She obviously took it up with the Minister, and I am sure that he will respond in due course.

It is always a delight to hear from the hon. Member for Northampton South (Mr Binley), who told us about visiting CD shops in Beijing; I am sure he did not buy one. We also heard from the hon. Member for Hove (Mike Weatherley) who has great experience in this field. He has shown the benefits of someone who comes not from a political background but from a business background. He has the experience to talk knowledgeably about this issue, and it is very refreshing to hear someone who is clearly at odds with his Prime Minister being able to speak out so frankly and openly on an issue such as this. Long may he do so; I myself have done so in the past. My hon. Friend the Member for Falkirk has a slightly different perspective, but it is important that it forms part of our debate.

I begin by discussing an important issue that we have not raised. When the Hargreaves report was commissioned last November, it was launched by the Prime Minister. The Secretary of State for Business, Innovation and Skills was charged with dealing with the issue, and the Minister with responsibility for culture, communications and creative industries in his Department is the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage (Mr Vaizey). The Minister for Further Education, Skills and Lifelong Learning clearly loves a debate. As a junior Minister, however, he does not have the same communication with the industry in connection with the internet, the media, culture and communications as the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage, who is now also a Minister in the Department for Culture, Media and Sport. That is a major problem. It is important that the industry has a close relationship with the Ministers who are actually dealing with this issue on a day-to-day basis. That is not happening at the moment, because in Parliament there is a great deal of confusion about who is responsible for this particular area. We know that telecommunications was shifted away from BIS as a result of the discussions that the Secretary of State for Business, Innovation and Skills had with some of his constituents. This is a serious issue as far as the industry is concerned.

[Pete Wishart]

The hon. Gentleman is making an important and powerful point. I think Siôn Simon will go down in history as possibly the last creative industries Minister. Having someone as a central point of contact that the industry could go to was very useful. We have not even got the Minister with responsibility for the matter here, because she is in the House of Lords. There needs to be a get-together on all this to have one Minister whom industry and we as MPs can go to, and I hope that the hon. Gentleman will continue to press the Government to create that one individual post.

[Ian Lucas]

I am grateful to the hon. Gentleman for making that point and for his support. We all want this area to move forward, because we want jobs and growth in this sector. We all know and appreciate that this is a hugely important sector for the UK. We have heard the 8% of GDP statistic and the fact that we are No. 2 in the world in exports in this field, and we want the sector to progress. Under this Government at the moment, I am afraid that we are not making the progress that we should. On 18 May, the Secretary of State said that there would be a response within weeks to the Hargreaves review, and I want to hear from the Minister when the response will actually come. We have still not made progress on the Digital Economy Act 2010. We are not clear about the Government’s position on enforcing rights. We still have a spectrum consultation going on, and we are awaiting announcements on broadband funding allocations. In the context of a very serious economic position, with growth flatlining generally over the past few months, we need to have one of the most important and positive sectors in the UK in a position of certainty and stability.

When a new Government are elected, a sector always gives them some time, because it is clearly in their own interests to have a good relationship with Government. I am afraid that the sector is running out of patience, and it needs to have support from Government to take matters forward as quickly as possible. It is important that the Minister understands that the industry wants action in this area, and it wants it as quickly as possible.

I want to thank all the organisations which sent me submissions in connection with the Hargreaves review. I have met many of them, and I have discussed in detail what is a very complex area for anyone who comes to it for the first time, as I did about nine months ago. There are many different groups within the sector who lobby well. When I was reading the papers in connection with this debate, I was struck by the common ground, despite the fact that the different groups are often presented as having a great deal of disagreement. The first common issue is that everyone wants growth. We are good at this sector, and we need to do better. We know that we can compete with anyone in music, drama and computer games, and we know that with the right background and the right framework, we can do better. We need to get more people involved in the creative industries, because we still draw from too limited a pool, but I think that we can make real progress. We all agree that investment and talent need to be rewarded, or there will be fewer people working in the sector, and the growth that we want will not happen.

In its submission to me, Google stated that it

“will continue to help content creators to generate new revenues and take control over their online products.”

I deliberately selected Google as supporting the rights holders in that way. When I read that, I was reminded of an interesting discussion that I had recently with the poet Wendy Cope at a meeting. She is well worth reading, although she is often read online without payment. Not surprisingly, she is frustrated by this, because, like everyone else, she has to pay for her Sunday dinner, too. We need to ensure that all original artists are paid. We all agree that artists need to be paid, and we all agree that their work needs to be disseminated more widely.

Obviously, no artist or creator wants fewer people to see their work. No artist will object to format shifting, provided they are paid for it in some way. I was pleased to hear the hon. Member for Hove make his position on format shifting clear. That is an area that needs to be sorted out. Frankly, I am not clear why it has not been done before. I was struck that it was not an issue for virtually every group that I have met. The fact that we have this format shifting that nobody seems to support is a barrier to growth. The example used by the Secretary of State for Business, Innovation and Skills when publishing the Hargreaves review was the case of Brennan, the format shifting company that first came to my attention in the New Statesman in the very convincing advert that it ran over a number of months, basically indicating that it is a company that is at a competitive disadvantage because of the position of format shifting at the present time. We all agree that the current position is not acceptable, and that we need progress, but no one can agree on a way forward, and in that respect copyright is a bit like House of Lords reform.

So, what can we do? There seems to be a consensus that the matter is best dealt with and led by the industry, but there is disagreement about what precisely should happen next, as has been reflected in the debate today. We have had, for example, a discussion about the digital copyright exchange, and part of the reason for the uncertainty, or disagreement, about that is that no one is exactly sure what is being proposed. If we are simply talking about a one-stop shop where someone goes initially and is then directed to existing registers somewhere else that can cope with the matters, that seems to be largely acceptable, but there is great resistance to any sort of compulsory system and to penalising artists if they do not take part in the digital copyright exchange.

The timetable for the Hargreaves review was so tight that the review was never really going to come up with a detailed and convincing response, but we need the matter to be taken forward and an agreement to be reached—within the industry, I think. There are lots of experts in this field, and it is better that they sort out a way forward themselves. I was very encouraged by the setting up of the Creative Industries Council, which is a good model. We have the Automotive Council UK in the very competitive automotive industry, and the different industry parties sit around the table and devise with the Government a strategy to take forward the UK automotive industry. The Creative Industries Council should perform a similar role in areas such as the Hargreaves report, and one of its first tasks should be to find a way forward through discussion within the industry and compromise. Sometimes, to make progress it is also necessary for the Government to knock a few heads together, but in all the discussions that I have had there has been a desire to establish stability and progress in the sector, and the industry in the UK would benefit as a result of that.

It cannot be beyond the wit of the creative industries to put this together; we know about their capabilities and the fact that they have devised structures and new models of working. The Government must, however, play their part too, and I am afraid that at the moment they are letting the side down. We have delay, confusion and a lack of clarity in the relationship between the Government and the industry, and the Government need to step up to the plate, act as quickly as possible—I hope that we will hear some dates for their responses to the review—improve their relationship with the sector and take matters forward from there.

--- Later in debate ---

[Mr Hayes]

The hon. Lady made both those points earlier. With her usual assiduity, she has taken advantage of this opportunity to intervene on me to amplify them. I will deal with them in turn. First, that submission was indeed received and considered, and it played a part in informing the review’s recommendations, although it was not listed because, as I understand, it was received informally rather than through the formal process. Secondly, I am more than happy to commit my noble Friend Baroness Wilcox to meet her. My right hon. Friend the Minister for Universities and Science will want to be involved, too, and will be happy to join that meeting. The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) was also mentioned, and I shall deal with him later in my remarks. Given his Department’s involvement in the digital industries, an interface with him would be desirable, too. Having committed three of my colleagues’ diaries, I had better end on that point. However, we will have the meeting. I will insist that it happens.

Professor Hargreaves delivered his report, “Digital Opportunity”, to Ministers and the Government in May. Members know that the Government are considering that report and will not expect me to anticipate our response, but—it is right that the hon. Member for Wrexham raised the issue in his role as shadow Minister—I again make a clear commitment that the Government will publish our response within a month. There is another commitment made by a Minister who is not responsible for these matters; that is one of the virtues of being in this position.

[Pete Wishart]

When presented with the Hargreaves report, the Government said that the response would be published by the summer recess. What is the reason for the delay? It was a clear commitment to respond by the summer recess. Now the Minister is saying that it will take a month. Why the delay?

[Mr Hayes]

The Government need to consider such things carefully. The issues are complex. The hon. Gentleman made the point that they are challenging, and the Hargreaves review’s recommendations are wide-ranging. He knows the report well; I have it here. The volume of responses to the consultation was large, and they were wide-ranging in terms of both the ideas presented and the organisations that contributed. It requires serious and studious work. He might have wanted an early response, but better to have something satisfactory than something quick. I make the commitment that it will be published in a month, and I assure him that it will be a studious and carefully considered piece of work. I cannot go further than that. I am unable to give an account of the response’s contents before its publication, but I reassure the House that the Government recognise fully the seriousness of the matters raised in this debate and during the review and its publication, as well as the value of the industries that rely on intellectual property as their life blood.

Professor Hargreaves suggested that in some areas the UK’s intellectual property framework, especially with regard to copyright, is falling behind what is needed to meet new opportunities. That point has been made repeatedly today. The argument is that if we do not fix the framework, our economy will enjoy less innovation and lower growth. It is certainly true—I will comment this far on what we might say—that the UK needs open, contestable and effective markets in digital content and a setting in which copyright enforcement is effective. Copyright provides the legal framework to sustain and protect creative value. It needs to fit current conditions, and it should warrant, and get, the respect of consumers. In other words, while not anticipating our response, I think it is reasonable and fair to say, given that we have had such a serious debate, that we feel that changes will need to be made to bring the system in line with current conditions.

We need copyright content and technology working together, as has been said repeatedly. They should be in harmony, not in conflict. There should be a happy union between changing technology and copyright. We need an environment in which new businesses and technologies can compete fairly with existing ones. I accept the point made by the hon. Member for Solihull. Although I qualified her argument about the relationship between SMEs, partner networks and large players, it is certainly true that there is a risk unless we get the balance right. The law in that respect is important. I mentioned the late Sir Hugh Laddie earlier. The hon. Lady will remember that he made a point, following the Gowers report I think, that the legal system militates against smaller businesses and against individuals purely on the basis of cost. The hon. Lady has reinforced that, and I think that my hon. Friend the Member for Northampton South made the same point. Therefore, there are issues to be considered, and as I have said, we take them seriously.

The review recommends that the Government ensure that the IP system is based on evidence. The right hon. Member for Bath (Mr Foster) was right to insist that the Government’s response should also be evidentially based, and I assure him that it will be. Economic considerations should play a stronger role in assessing the nature and perhaps even the limits to rights, which is another point that he made. It is critical that we take an empirical view, inasmuch as one can in this dynamic and complex area. We will prioritise that kind of evidential approach.

On international priorities, the report recommends that the UK pursue international interests in emerging economies and prioritise the EU patent. We will, of course, look at that too, given some of the comments that have been made during the debate.

To improve the environment in copyright licensing, the Hargreaves review recommends the establishment of a digital copyright exchange. That has been mentioned several times, including by my hon. Friend the Member for Hove (Mike Weatherley). Although he will know that that argument has been made by many people over a considerable period, the nature of the exchange, which we are considering alongside other recommendations, must be founded on consent. The idea that we have a state-driven, compulsory system that dictates and determines from the top is probably not compatible with the arguments that have been made by almost every contributor to the debate. It must be based on a collaborative and co-operative model.

The appointment of a champion for the digital copyright exchange has also been raised. I think it was my hon. Friend who said that the champion must not be a dictator, which is of course true. The champion would have to work closely with the industries concerned. The consultative nature of how the Government have gone about getting to where we are would need to characterise the subsequent arrangements that we put in place.

The review also recommends that the Government legislate to enable licensing of orphan works. I want to say more about that in response to the comments of the right hon. Member for Bath. It is important to design a scheme that prevents reappearing rights holders from losing control of their work. Any scheme proposed will have to involve a diligent search for rights information. That must surely be essential if such a scheme is to be fair to all parties. Perhaps I can put it in these terms: if the creator of a bestseller were to come forward, the work would no longer be an orphan work.

The right hon. Gentleman should welcome and not be fearful of the emergence of a missing great creative work. Occasionally, such things happen. Not long ago, an important work by Mozart was discovered, which is surely a cause for celebration. Mozart was perhaps the greatest of the baroque composers, but let us not go down that road or we will have a longer and perhaps less relevant debate. The character of genius is very interesting, but let us not talk about it here.

--- Later in debate ---

[Mr Hayes]

That is exactly what I was alluding to. My hon. Friend implied that in his earlier remarks; but for the reasons he has just given, the matter is complicated. The system would need to be thought through carefully to get the balance right. As I said, if he wants to give that more thought, I would be happy to receive representations on the matter. I will then pass them on to my noble Friend Baroness Wilcox and my hon. Friend the Member for Wantage.

[Pete Wishart]

I simply remind the Minister that I have five minutes to sum up at the end.

[Mr Hayes]

That is very generous of the hon. Gentleman.

--- Later in debate ---

[Pete Wishart]

I am grateful to the Minister for those remarks. I agree with them entirely. This has been a well-informed and useful debate. I hope that some of things that he has heard during the past three hours will inform the response to the Hargreaves report. I have seen the officials sitting at the back taking copious notes, so I hope that some of the helpful things raised by hon. Members from all parties will be listened to and reflected in the Government’s response when we see it, which I believe will be in the next month.

I hope that you have been intellectually stimulated by the debate on intellectual property, Mr Chope, because some fine contributions have been made. We heard from my colleagues from the all-party group on intellectual property. The elder statesman—or the young prince—of creative industries the right hon. Member for Bath (Mr Foster) raised many pertinent points, particularly about orphan works. I hope that his comments will be listened to. The hon. Member for Lewisham West and Penge (Jim Dowd) is right to say that the report has been generally supportive but that we must be careful about how we consider some of the issues.

It was fantastic to hear from the hon. Member for Folkestone and Hythe (Damian Collins). I think it is the first time I have heard him speak in one of these debates. I hope that he comes back again to give us the benefit of his vast experience in advertising. His comments were very useful. He was right to say that we must ensure that we tackle illegal activity and recalibrate the public to ensure that they go to legal sites and that artists and creators are rewarded for their work.

Unfortunately the hon. Member for Suffolk Coastal (Dr Coffey), who is no longer in the Chamber, gave us the lyrics without the music—it would have been good to have had the music. We also received some useful advice about cat litter, which I took a note of. I will see what I can do with it when I get home. She is right to say that there must be recompense to artists. She also mentioned search engines, which are critical to the matter—Google was the inspiration for all this. It was good to hear from the hon. Member for Solihull (Lorely Burt), too. She is right to remind us that patents are important. That subject did not get the coverage that it required or deserved from Hargreaves, but now the Minister has listened to her comments I am sure that patents will be covered in the response.

The hon. Member for Northampton South (Mr Binley) made a pertinent speech. I will be checking out that place in China to make sure that I get my royalty from those CDs. He was right to raise that as a real issue.

It was good to hear from the hon. Member for Hove (Mike Weatherley). We perhaps disagree a little bit about format shifting. It is right that the matter should be resolved. This has been going on since the time of the cassette tape. If there is going to be an exception for format shifting, I hope that the Government look at compensation for artists and creators. The UK would be in bad company if it were not going to give any compensation to artists, given that most of Europe is doing so.

It was also good to see the hon. Member for Falkirk (Eric Joyce). We do not agree on all the issues, but it is good that he is here. On some of the language in the early-day motion he has signed, nobody talks about disconnection in the Digital Economy Act 2010. It is about reconnecting the public with the legitimate means to secure that music. I sometimes wish that we could achieve greater consensus on the language that is used.

It has been a good debate. I thank the Minister for his robust response. We look forward to seeing the Government’s response to the Hargreaves report in the next month, as we have heard today.

Phonographic Performance Ltd

Pete Wishart Excerpts

Wednesday 6th July 2011 Westminster Hall

[Ms Margaret Ritchie (South Down) (SDLP)]

I am grateful for the opportunity to have this important debate under your chairmanship, Mr Bayley. I want to talk about the licence regime operated by Phonographic Performance Ltd, which governs copyright for musical recordings, and by the associated Performing Rights Society; they issue music licences that cover the copyright for musical and lyrical compositions. Both licences are required by businesses if they want to play music in public places or hold a live performance.

I want to draw attention to the over-complex and expensive licensing regime in this market. The problem has been highlighted by the European Union and the Federation of Small Businesses, and by various businesses and constituents throughout my constituency in Northern Ireland. The regulations impact financially on many small enterprises across Britain and Northern Ireland, which are already over-burdened by Government regulation and red tape. Broadly speaking, as we seek to develop and grow the economy in Northern Ireland, such measures can place an undue strain on businesses that already have narrow profit margins.

The Government have acknowledged that the economy in the north of Ireland needs to be rebalanced, and the proposed steps to devolve corporation tax powers to the Northern Ireland Executive are encouraging. However, it has been noted that businesses are still subject to around 60 regulations, including licensing arrangements, which cost firms throughout the UK £13 billion. Those regulations may be particularly burdensome for our small and medium-sized businesses, which may not have staff dedicated to compliance issues. It is therefore important that we pay attention to the criticism that such firms have expressed about the licensing arrangements for performance music.

I would like to draw attention to more specific issues within the broader context of the debate. In March 2009, the PRS introduced an exemption rate for businesses with fewer than four employees to cover employees playing music in private that was not audible to the public. Under that arrangement, such companies were to pay £44 a year plus VAT, and that decision has since been upheld by the High Court. Such exemptions are welcome, but unfortunately they are some way short of a classification that would help small and medium-sized enterprises, given that SMEs are classed as organisations with fewer than 50 employees. I want to encourage the Government to examine such exemptions, and to make them more consistent with the definition of a small business.

[Pete Wishart (Perth and North Perthshire) (SNP)]

After 10 years as a Member of Parliament, I have not received one complaint on the subject from an SME in my constituency, and I, too, represent a rural area. Most small businesses are content to pay a small price to enable them to use wonderful music to enhance their businesses. When the hon. Lady is talking about exemptions, is she thinking about the musicians, most of whom survive on less than £16,000 a year? If small businesses with fewer than 50 people were exempt, the impact on musicians would be massive. Does she understand that musicians are struggling, and survive on the scraps that they get from the PRS?

[Ms Ritchie]

I thank the hon. Gentleman for his welcome intervention. I recognise that in another life he was a musician, and is a member of a popular Celtic folk band in Scotland, which has played in Northern Ireland on several occasions. I recognise the musicians’ plight, and that they and the music industry are an integral part of small businesses. I am reflecting on the position of small and medium-sized enterprises in Northern Ireland, where we have a predominantly public sector-led economy, and are trying to grow our economy and encourage small businesses. Any additional taxation or fees simply imperil their financial situation.

--- Later in debate ---

[Mr Hayes]

I shall deal with that specific question before I finish speaking. No doubt inspiration will wing its way to me to inform my response—the hon. Lady knows what I mean by that. She has made it clear that there are areas in which we can make improvements, notwithstanding the constraints to which I have referred. Ah! Inspiration may already have reached me, but I want—not tantalisingly, but temptingly—to delay what I say about that for a few moments.

[Pete Wishart]

I am very much looking forward to the Minister’s reply to tomorrow’s debate on the Hargreaves recommendations. He knows that nothing in the Hargreaves report suggests or recommends exempting small and medium-sized businesses with fewer than 50 people, so can he now rule that out and ensure that musicians continue to get fair play from the wonderful recorded works that they provide, which enhance so many businesses up and down the country?

[Mr Hayes]

We will not exempt small firms. That is the answer to the question. The hon. Gentleman has raised the issue, and there is a case for exempting small firms, but the frank answer to his question and the question asked by the hon. Lady is that the UK would almost certainly be in breach of its international and European obligations if it did so. I can be very clear about that.

Let me deal with the hon. Lady’s intervention. Within the next month, she will learn more—because I will insist on it—about the Government’s response and thoughts on how we can take forward the review’s recommendations, where we feel that it is appropriate to do so.

I want to say more about what further progress can be made. First, we need to ensure that people understand the law and understand what not only PPL but all collecting societies from whom they need a licence are doing. We know from the ministerial postbag and from our constituency postbags and surgeries that many small businesses are unaware that they need a licence for the activities that we are discussing. The hon. Lady has made the point clearly. Many businesses question why they need a licence from PPL and PRS for Music to have the radio on in business premises when the broadcaster has already paid for a licence. Many ask why they need a licence at all. Where they do require licences from both PRS for Music and PPL, some businesses query, reasonably enough, why they are not told clearly that they need two licences and why joint licensing is not used to cut costs and the time that they have to spend on that.

PPL tells us that it is doing more to raise awareness among licensees and potential licensees. As a result of this debate, our further consideration and representations made to us from outside this place and within it, we will continue to press PPL to fulfil that commitment. Indeed, as a result of the debate, I will ask Baroness Wilcox, who is the Minister with responsibility for this area, to meet representatives of PPL to talk about how they can make the commitment real and what further steps they will be taking to address some of the questions that I have raised. Trade associations, too, must continue to build on the work that they do to raise awareness among their members. We will certainly involve them in that discussion.

Secondly, where charges are justified, they should be applied in a clear, unambiguous and efficient manner. Those wanting to start new businesses must not be deterred by uncertainties about charges that have no bearing on their core business. Thirdly, inquiries suggest that not all trade associations are aware that they can have a role in negotiating the terms and conditions of the licence for their sector. Some trade associations and licensees are even unaware that they can take a case to the Copyright Tribunal, if they are unhappy with the terms and conditions. They simply do not know their entitlements. The tribunal secretariat is working to raise awareness in those areas. It hosts regular user group meetings, which are aimed at making the tribunal more accessible by familiarising users, especially SMEs, with its procedures and giving them an opportunity to meet the chairman and lay members. The secretariat also hosts regular meetings of collecting societies to discuss, among other things, concerns raised by licensees.

I will also ask Baroness Wilcox to advance our work with trade associations. Of course, we do not exert executive power in that respect, but we will take the work further to ensure that all the steps are accelerated. It seems to me that a seminar might be appropriate. I am thinking of a seminar in which the interested parties are brought together to talk through what further steps might be taken to deal with some of the specific issues relating to small businesses raised by the hon. Lady. Perhaps my ministerial colleague will write to her and other interested hon. Members, addressing the possibility of just such an initiative.

I have heard much in this debate that provides food for thought. We do not take these matters lightly. In relation to charities, PPL has agreed to joint licensing with PRS for Music, which should reduce administrative burdens. The hon. Lady will know about that. We might be able to discuss, at the type of event that I have described, further steps along those lines, because there are community organisations—some of them are very small—that struggle to deal with some of these matters, not least in terms of information and understanding. On that basis, I welcome the agreement that has been reached and encourage exploration of other areas for joint licensing, notwithstanding the point that I made about exemption and the perfectly proper point that the hon. Gentleman has raised.

We will reflect carefully on these matters before responding formally to the recommendations of the review. We will continue to work to ensure that the framework is explicable and accessible and that it operates fairly. There is a balance to be struck between the interests of different parties, as I think has been made clear in this brief debate. Those parties have a legitimate expectation that the system will work fairly. The regulation should certainly not be burdensome, and we need to ensure that we have some understanding of the costs of the regulation. When we promote steps that are designed to ensure that a system is operating fairly, we should always do so on the basis of understanding the cost burden that it creates. We also feel—I am sorry; I am using the royal “we”. I also feel that measurement of the function of these agencies is important, so having proper lines of accountability to ensure that what is being done is working as it should be is important.

This has been a useful albeit short debate. As I have said, it is remarkably timely. I hope that I have made reasonable commitments to the hon. Lady as a result of it. She will hear more very soon about our further reflections.

Education Maintenance Allowance

Pete Wishart Excerpts

Wednesday 19th January 2011 Commons Chamber

[Andy Burnham]

The hon. Gentleman is talking about 78,000 young lives—those of the people the Government say would not stay in education were there to be no EMA.

Let me come to the heart of the Government’s misunderstanding of this issue. They talk only about participation, but for the others—the Secretary of State does not seem to understand this—EMA provides the chance to fulfil themselves in education because it means that they can devote themselves to their studies.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The right hon. Gentleman is building a very powerful case for the defence and protection of EMA. Will he take this opportunity to congratulate the Scottish National party Government in Scotland on retaining EMA and ensuring that we are fulfilling our pledge to the most vulnerable and poorest students in Scotland?

[Andy Burnham]

My knowledge of Scottish politics is okay, but I think I am right in telling the hon. Gentleman that it was the Labour Administration who brought in the education maintenance allowance in Scotland, so I warn him off that subject.

I have detailed the lives of some of the young people I have met in recent weeks who are receiving EMA because it is important that the House focus its mind on those young people before we get much further into the debate. I want to clear up one myth at the beginning. EMA is overwhelmingly used to provide the basics to support education—travel, books, equipment and food.