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House of Lords

Monday, 11 March 2013.

2.30 pm

Prayers—read by the Lord Bishop of Newcastle.

Inequality: Income and Wealth


2.36 pm

Asked By Lord Dubs

To ask Her Majesty’s Government what plans they have to tackle inequality in income and wealth in the United Kingdom.

The Commercial Secretary to the Treasury (Lord Deighton): My Lords, fairness underpins the Government’s plans to reduce the deficit. Universal credit will allow people to keep more of their income as they move into work, while the personal allowance increases announced by this Government will benefit 25 million individuals. As a result of this Government’s actions, the richest pay more tax on capital gains, more stamp duty on their homes and more tax on their pensions, and they are less able to avoid or evade tax.

Lord Dubs: Listening to that Answer, one would not be aware that the disparities in wealth and income in this country have reached record levels. Will the Minister confirm that 1% of the top earners earn 10% of income? The Government are being criticised on the grounds of their inequality policies by everybody from the bishops to the anti-poverty lobby—people who know what is going on. Further, does he not agree that when inequalities in a country get beyond a certain level, as they have here, our social cohesion is seriously damaged?

Lord Deighton: With respect to the 1% of the top taxpayers, the first point I would make is that actually they are responsible for paying 24% of income tax. The top 10% pay just under 50% of income tax—I think it is 44%—so their contribution to our revenues is the greatest in proportion. As for the development of inequality since this Government came into office, the commonly accepted measures of income inequality have in fact decreased.

Lord Forsyth of Drumlean: My Lords, will my noble friend confirm that the substantial increase in the capital gains tax levied, which was forced through the coalition by the Liberals, has led to a dramatic reduction in the revenue from capital gains tax?

Lord Deighton: I thank my noble friend for that question. I am not aware of the initial revenue yields. I asked the department earlier, and it said that it did not break it down that way. My noble friend clearly alludes to the importance in tax management of understanding the ultimate yield on a tax, rather than simply assuming that when tax rates are changed people will continue to behave the same.

Lord Peston: My Lords, is the Minister aware that, apart from me, the leading researchers in this subject all agree that there is far more inequality in our society than is required for the efficient working of the economy? Therefore, it follows that the inequality is totally unjustifiable.

Lord Deighton: There is clearly a relatively academic debate about the impact of equality and inequality on efficiency. All I can tell noble Lords is that this Government and their policies are focused on ensuring that, at the top end, those in receipt of large incomes and with significant wealth have been by far the major contributors to the consolidation of our deficit.

Lord Howarth of Newport: My Lords, given the view of employers that business competitiveness requires the replacement of British jobs by new technologies at home and by low-paid jobs abroad; given the Government’s view that the rate of income tax paid by the wealthy should be cut, public services for us all should be cut and the incomes of the poor should be

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cut; and given that, taking these together, the effect is a reduction of demand in our economy and widening inequality in our society, how do the Government foresee growth and the fruits of that growth being shared equitably among all our people?

Lord Deighton: There are a significant number of issues in that question. At the heart of this Government’s economic policy is that until we are able to balance our public finances, it is extraordinarily difficult for us to grow this economy in a sustainable way. All our policies are devoted to making sure that we can consolidate our fiscal position and that the contribution to making that happen is appropriately distributed, with by far the most significant contribution coming from those who can afford most. At the bottom end of society, we have a welfare system that works on the basis of incentivising people to get back into work. I absolutely agree that jobs transform lives. The 1 million-plus private sector jobs that have been created are a welcome development in the economy.

Lord Waddington: My Lords, may it not be more sensible for the Government to concentrate their efforts on trying to increase the overall wealth of the country, rather than rabbit on about how they might divide a perhaps declining cake?

Lord Deighton: My Lords, I absolutely agree—I am sure everybody does—with the sentiment that it is much easier to argue over the slices of an increasing cake than to divide one up that is static or shrinking.

Lord Barnett: My Lords, on the noble Lord’s major point about increasing personal allowances as a factor, does the greater relief go to somebody on £50,000 a year or somebody on £15,000?

Lord Deighton: What I can tell the noble Lord about the increase in personal allowances is that it is a highly progressive change in the tax system. It applies to about 24.5 million or 25 million taxpayers, who will enjoy a benefit of about £400 from it in 2013-14, and it takes just over 2 million people out of the tax system.

Lord Avebury: Has my noble friend studied the evidence published by the Equality Trust, which shows that across all the OECD countries, and similarly across all the states of the United States, there is a strong correlation between income inequality and indices of social malfunction such as crime, alcoholism, and teenage pregnancies? Considering that we are the second most unequal state in the whole comparison, does he not think that the Government’s policies should be strengthened to deal with those inequalities?

Lord Deighton: I thank my noble friend for pointing out that the causes of some of these social challenges are broader than those that will be tackled by our tax policy. It is much more important to get to the root causes and deal with issues such as education challenges, other public services, alcoholism and the breakdown of family life. That is extremely important.

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Lord Eatwell: The noble Lord has made much in his Answer of the proportion of taxation paid by the highest earners. Is not the reason for this that their gross incomes are excessively high compared to those of others in our society?

Lord Deighton: The noble Lord is correct that it is a simple question of arithmetic. At equal changes, they will make the greater contribution. However, if one looks at the distributional analysis—it is to the Government’s credit that at each fiscal event we lay out the distributional analysis, which is a great step forward—it shows that their increase is proportionally greater than the amounts they have.

Justice: Legal Advice


2.46 pm

Asked By Lord Bach

To ask Her Majesty’s Government what assessment they have made of the consequences for access to justice for those who will not be able to receive free legal advice on social welfare law matters from 1 April.

The Minister of State, Ministry of Justice (Lord McNally): My Lords, these matters were assessed as part of the impact assessments, which were published alongside the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

Lord Bach: My Lords, I thank the Minister for his reply as far as it goes but I do not think it is very full on detail. It is now only 21 days until civil legal aid effectively disappears, affecting access to justice for perhaps hundreds of thousands of people every year. What do Her Majesty’s Government think will happen to the disabled person, for example, who wants to appeal his or her Atos decision, or the person who needs housing advice but cannot get it because the local Shelter housing advice centre has been forced to close, as today’s newspapers report? What are the Government’s contingency plans when unadvised and unrepresented clients flood courts and tribunals? No one can say the Government have not been warned, all the way from the very top of the legal system to small charities that are at breaking point. What will the Government do when it all goes wrong?

Lord McNally: My Lords, we are working on some of these issues. We are working with the judiciary to improve guidelines for people representing themselves in court. We are developing a new online information service to help people find out if they are eligible for legal aid or signpost them to other services. We are giving £65 million of funding to help not-for-profit social welfare advice providers to adapt and transition over the next two years. We are also encouraging innovations in the legal services market, such as the provision of lower-cost advice services to help people in resolving their problems.

Lord Naseby: My Lords, how can anybody make a useful assessment in such a short time as there is from now to the changes? Should we not recognise that

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great trouble has been taken over these proposed changes? In a very tight financial situation, has not the time come to see what happens and then, if necessary, make changes one way or the other?

Lord McNally: I thank my noble friend for that question. It is true that the noble Lord, Lord Bach, has made something of a cottage industry of—

Noble Lords: Shame!

Lord McNally: He continually talks about what is going to happen. As my noble friend has just said, let us see what happens. As I indicated, we are making a number of changes. Of course I understand that there are difficulties for organisations such as Shelter and the CAB. We have tried to give assistance in those adjustments. It is extremely difficult to give precise responses to predictions of catastrophes that may or may not happen. I can say to my noble friend that we will keep these matters under review. As noble Lords on those Benches will remember, on their instructions we inserted into LASPO a clause that allows review of the impact of the changes that we have made.

Baroness Butler-Sloss: My Lords, I will not ask the Minister about legal aid, but is he aware of the increased importance of law centres and citizens advice bureaux advising unrepresented litigants, of which there will be an enormously increased number come April? What are the Government going to do to help them advise unrepresented litigants?

Lord McNally: Yes, my Lords, I am aware of that, but one of the points I have made continually through this is that the CAB and the law centres will have to adjust to a situation where the amount they have at their disposal is a lot less, just as my department and local authorities have had to do. That is a fact of life. As I have said on a number of occasions, we are a lot poorer than we thought we were four years ago. Citizens Advice has been extremely successful in lobbying and, as I have indicated, we have made more funds available. For example, my right honourable friend the Lord Chancellor has announced today that we will be giving further aid to the CAB at the Royal Courts of Justice to help with the particular work it is doing in this area.

Baroness Hollis of Heigham: My Lords, in three weeks’ time the bedroom tax will kick in—and I use the phrase “kick in” advisedly. Some 660,000 families, two-thirds of them including someone with a disability, will lose between £14 and £25 a week from their benefit. Given that, despite the noble Lord’s answers, CABs are losing—locally, certainly—some 40% of their funding because the Lord Chancellor’s money has dried up, where does he expect those 660,000 families to go for advice?

Lord McNally: They will go to the CABs in their local authorities.

Baroness Hollis of Heigham: With 40% cuts.

Lord McNally: The Opposition continue to preach gloom and doom about this. They will be entitled to bring to our notice how these impacts take place, but

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we have put a number of measures in place to try to deal with this new situation. We have put on a new online information service, we have given Citizens Advice and other advice centres transitional money and will continue to do so, and we are looking for innovations in legal services from other parts of the legal profession. We will see what happens.

Lord Marks of Henley-on-Thames: My Lords—

Lord Low of Dalston: My Lords—

Noble Lords: Next Question!

The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford): My Lords, we are now into the 17th minute, so I fear we must move on to the next Question.

Railways: Reopenings


2.53 pm

Asked By Lord Faulkner of Worcester

To ask Her Majesty’s Government what plans they have for future railway reopenings.

Lord Faulkner of Worcester: I beg leave to ask the Question standing in my name on the Order Paper and remind the House of my railway interests declared in the register.

Lord Popat: My Lords, the Government recently announced a £20 million new stations fund to support the development of new stations promoted by third parties in England and Wales. The Government have also allocated funding for the reopening of a key part of the strategic east-west rail route in Oxfordshire and Buckinghamshire. We believe that local authorities are best placed to consider whether a rail reopening is the best way to meet local transport needs.

Lord Faulkner of Worcester: My Lords, I welcome the Minister to the Dispatch Box for his first transport Question. He has given the House a positive Answer, which I hope indicates that the pro-rail consensus in this House is in good order. The Beeching report was published 50 years ago this month. Its implementation cut off a third of the network and deprived many parts of the country of access to the railway. Does the Minister agree that one of the most shocking parts of the Beeching legacy was the indecent haste with which so many closed lines were sold off and the land built over, which made their restoration expensive and often impossible? While the Minister’s support for reopenings is good news, will he take a particular look at schemes which run across local authority boundaries and which would bring major benefits, such as the Lewes to Uckfield route and the suburban lines around Bristol?

Lord Popat: I thank the noble Lord for his Question and I know he has considerable knowledge of this area. I had the pleasure this weekend of flicking through Holding the Line,his excellent book on Britain’s love of railways, and it touches on the Beeching report.

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With the benefit of hindsight I do not believe anybody feels that the Beeching report’s legacy is all positive. The noble Lord raises some of the most frequently expressed concerns. Regarding the Lewes to Uckfield line, I know that this is a long-standing campaign supported by many local residents. Network Rail has agreed to carry out a study into the capacity of the nearby Brighton line and the reopening of the Lewes to Uckfield line is one of the options being considered. The department is unaware of any work comparing the benefits of investment in rail schemes and road schemes in this corridor. In instances where proposed schemes go across local boundaries, we will, as always, encourage the authorities to work together.

To sum up the noble Lord’s response to the Beeching report, I had the privilege of looking at the report this weekend. It is fair to say that the author could not foresee how the country would change in the subsequent 50 years. Different times require different responses.

Lord Bradshaw: My Lords, will the Minister take into account the variations in cost between opening a line that has been closed, opening a station that has been closed and putting money into services such as Nottingham to Lincoln, where a small amount of money would greatly enhance the service and utility provided?

Lord Popat: My Lords, it is for the local authorities and PTEs working with the local enterprise partnership to determine whether a new railway line, train service or station is the best way to meet local transport needs and the wider strategic objectives of economic growth, housing growth and carbon reduction. With regard to the cost, if there is a good business case, I am sure the local authority will look into it.

Lord Davies of Oldham: My Lords, I, too, welcome the noble Lord to his new responsibilities and look forward to our future exchanges. I will begin with a very gentle question. Given that capital investment in Network Rail has been slashed by more than a £1 billion by the Government since they came to power, does not £20 million to local authorities look like a flea bite?

Lord Popat: My Lords, I thank the noble Lord for his compliment. The £20 million that has been allocated by the Government is for the 14 new bids that we have recently received. With regard to the investment of £1 billion, one must look at the McNulty report where the study recommends a review of a number of things. One of the recommendations, if implemented, will bring efficiencies and savings of between £2.5 billion and £3.5 billion.

Lord Spicer: My Lords, does my noble friend accept that before privatisation all the talk was of the closure of railway lines and that after privatisation it is all about reopening them? Nowhere is this more true than on the line to Worcester that the noble Lord, Lord Faulkner, champions.

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Lord Popat: My Lords, the council has submitted a bid for funding a parkway station on the Worcester to Oxford line. While the bids are being considered, it would be inappropriate for me to comment on the merits of this scheme. Since privatisation the number of passengers travelling on our railways has gone up by 60%.

Lord Snape: My Lords, in this spirit of co-operation, I ask the Minister on his first appearance at the Dispatch Box to consider paying tribute to Mr Tony Speller, the former Conservative Member of Parliament for North Devon, who died recently, whose amendment to the Transport Act did so much to help to reverse some of the disastrous decisions that were taken following the Beeching proposals 50 years ago.

Lord Popat: My Lords, I agree with the noble Lord; we must pay tribute to him. I also pay tribute to my noble friend Lord Fowler, who, when he first became the Secretary of State in 1979, was the one who put a stop to the closure of railway stations.

Armed Forces: Reserve Forces


3 pm

Asked By Lord Rosser

To ask Her Majesty’s Government what progress is being made towards achieving the projected increase in the size of the United Kingdom’s reserve forces.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, the first year of the Future Reserves 2020 programme has been about stabilisation and understanding. The number of inquiries about reserve service has increased, and early indications are that strength is stabilising. We recently conducted a public consultation to ensure that the right relationships were established between reservists and their families, their employers and the Armed Forces. We intend to publish a White Paper in the spring that will set the conditions to deliver the reserve force strength we require.

Lord Rosser: My Lords, the future strength and capability of our Armed Forces is dependent on increasing our Reserve Forces to 30,000 by 2018, yet the Territorial Army has declined by 1,000 over each of the last three years. In the year up to this March, it looks as though the number of recruits will be well below target. A Federation of Small Businesses survey showed that even among members who are open to employing reservists, two out of every five believe that the Government’s future requirement that reservists serve and are away from their civilian jobs for one year out of every five would negatively impact their business. What action do the Government intend to take to accelerate recruitment to our reserves; what incentives will be given to employers to hire reservists; and what protection will be given to reservists to prevent them being discriminated against in respect of both hiring and promotion?

Lord Astor of Hever: My Lords, we acknowledge that this is the start of a challenging programme to reshape our Armed Forces. We inherited Reserve Forces

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that were in decline and not being used in the most cost-effective way. What we are setting out to do is sensible and achievable, and the planned strengths are well within historic levels. However, we are not complacent, and we are already running a major recruiting campaign for the TA. This has already resulted in over 6,650 inquiries since it started on 17 January. The Government are fully committed to delivering Reserve Forces that are integral to and integrated with the Regular Forces, and we are investing an additional £1.8 billion over the next 10 years.

Lord Trefgarne: My Lords, is my noble friend aware, in his reference to the historic situation with Reserve Forces, that I stood at that Dispatch Box and announced the increase in the Territorial Army, not to 31,000 but to 83,000, and that I announced the formation of 607 City of York Squadron, Royal Auxiliary Air Force, to be deployed in support of 2nd Infantry Division, then commanded by Major-General Peter Inge, now of course the noble and gallant Lord, Lord Inge? Is he also aware that I stood at that Dispatch Box and announced the purchase of 11 River class minesweepers, exclusively for the Royal Naval Reserve, assisted on that occasion by the then Commander Alan West, now of course Admiral Lord West, the noble Lord, Lord West?

Lord Astor of Hever: My Lords, I remember well when my noble friend was a very distinguished Minister standing at this Dispatch Box, and I believe I lobbed the odd question at him. My noble friend mentioned the figure of 83,000. That is why we are very optimistic that we can get up to a figure of 30,000 by 2018.

Lord Dannatt: My Lords, when the noble Lord, Lord Trefgarne, was announcing the things he has just referred to, I was a mere Lieutenant Colonel working as a military assistant to the Minister of State for the Armed Forces. Therefore, we are all aware of the aspirations for our Reserve Forces and the way it has worked out. We are all committed to making this policy work in the interests of the security of the realm, the safety of our citizens, and the well-being of the Armed Forces. However, as this Government think about the next defence review, are they also thinking of an alternative if we are not able to recruit Reserve Forces of the size that we currently need? Might we think about increasing the size of our regular Army in particular?

Lord Astor of Hever: My Lords, we are thinking optimistically. I quote General Monro, who is head of the Territorial Army, and who is very focused on its success. He said:

“There is a mission, and we have to achieve the mission. I am confident that we will get there.”

We intend to maintain appropriate force level to meet our planning assumptions. If necessary, mitigation strategies are in place to ensure that we can take early action to maintain an appropriate force level.

Lord Anderson of Swansea: My Lords, is it not the truth that the Government are currently below their projected targets? Is not the Government’s failure to estimate the number of SMEs, because employers and employees within SMEs are more reluctant to join and

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co-operate with the Government’s targets, part of the problem? Will the projected and likely decrease in recruitment centres have an adverse effect on recruitment?

Lord Astor of Hever: My Lords, we have always recognised that reversing the long-term decline in the Reserve Forces and increasing their strength would be challenging, which is why an additional £1.8 billion is being invested in them and why we have recently conducted a public consultation to ensure that the right relationships are established in future between the reserves and their families, their employers and the Armed Forces. As I said earlier, the number of inquiries has increased and early indications are that the strength of the reserves is stabilising.

The noble Lord mentioned SMEs. We aim to tailor our approach, adjusting our working practice to reflect the different opportunities and impacts of reserve service for different employers—public and private, large, medium and small—as well as by sector.

Lord Palmer of Childs Hill: My Lords, can the Minister tell us how, in the rush to increase our Reserve Forces, we will ensure that the relevant skills are available from the new reserves so recruited?

Lord Astor of Hever: My Lords, all three Armed Forces are recruiting reservists against defined military trade requirements. Some reservists seek to use their civilian skills in their military role, and we encourage them to do this, but many do not, and training will be provided in the required military trades. In future, we seek to achieve greater accreditation of training and increased mutual recognition of civilian and military qualifications between the Armed Forces and civilian employers.

Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2013

Financial Services Act 2012 (Misleading Statements and Impressions) Order 2013

Financial Services Act 2012 (Consequential Amendments) Order 2013

Uncertificated Securities (Amendment) Regulations 2013

Social Security (Contributions) (Re-rating) Order 2013

Social Security (Contributions) (Limits and Thresholds) (Amendment) Regulations 2013

Motions to Approve

3.06 pm

Moved By Lord Newby

That the draft orders and regulations laid before the House on 28 January be approved.

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Relevant documents: 18th and 19th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 4 March.

Motions agreed.

Renewables Obligation (Amendment) Order 2013

Motion to Approve

3.07 pm

Tabled By Baroness Verma

That the draft order laid before the House on 4 February be approved.

Relevant document: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 6 March.

Lord Gardiner of Kimble: My Lords, I beg to move the Motion standing in the name of my noble friend on the Order Paper.

Motion agreed.

Legal Deposit Libraries (Non-Print Works) Regulations 2013

Motion to Approve

3.07 pm

Moved By Lord Gardiner of Kimble

That the draft regulations laid before the House on 28 January be approved.

Relevant document: 18th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 6 March.

Motion agreed.

Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill 9th, 10th, 11th, 12th and 14th Reports from the Delegated Powers Committee

Report (4th Day)

3.08 pm

Relevant documents: 9th, 10th, 11th, 12th, 14th and 16th Reports from the Delegated Powers Committee.

Clause 66 : Exploitation of design derived from artistic work

Amendment 84ZBA

Moved by Baroness Whitaker

84ZBA: Clause 66, page 62, line 31, at end insert—

“( ) in Schedule 1, paragraph 6;”

Baroness Whitaker: My Lords, I support the amendments of my noble friend Lord Stevenson of Balmacara in this group, but I will speak to the ones in my name. I tabled these amendments in Committee and will not repeat what I said at that time. The reason for their reappearance is that in his reply on 28 January

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the Minister said that I had raised an interesting point which deserved further consideration. He went on to say,

“we shall have the opportunity to consider these very specific issues more carefully”.—[

Official Report

, 28/1/13; col. GC 443.]

At a subsequent meeting that the noble Lord helpfully held with us and his officials, I was assured that my points were taken and that they were working on a solution. Now is the time, I hope, to hear it.

I briefly remind noble Lords that Amendment 84ZBA applies the new copyright protection to works of art made prior to June 1957 and brings the UK back into compliance with European legislation. Amendment 84ZEB is pretty much consequential to Clause 66 to make sure that regulations apply to copyrights which were never protected under previous legislation but will be now, again bringing the UK into compatibility with the decisions of the European court. Amendment 84ZEA allows a short transition period, with a possible extension for third persons who manufacture or hold stocks of copies of design works within the European Economic Area.

I also remind noble Lords of the present situation for our many talented designers who contribute sizeably to economic growth. Because sufficient protection has been lacking, the UK has become a safe haven for the sale of replicas of designs which breach copyright. Only two other countries in Europe behave in this way—Estonia and Romania. Criminal prosecutions are pending against UK-based suppliers in other countries. We should not allow this damage to the reputation of our design market, potentially one of our great strengths. No British jobs are at stake if we implement these amendments and fair competition, as well as our international reputation, will be improved. Our brilliant design businesses will have more security to develop, so I very much look forward to the Minister’s reassurance.

Lord Clement-Jones: My Lords, I would like to speak to Amendment 84ZC in this group. I come from a slightly different perspective from that of the noble Baroness, Lady Whitaker, because there is particular concern among publishers that the giving of full copyright protection to three-dimensional artistic works will impact on those who create two-dimensional images of such works, including publishers, museums, educational establishments and filmmakers, and that designers taking inspiration from existing works will be penalised.

There is particular concern that this clause will have an adverse effect on the publishers of books that include images and description of artistic works. This consideration was wholly absent from the impact assessment. Where such books currently include copyright material, they may possibly come to be in breach of copyright as the images and descriptions being used will have had their copyright term lengthened. Furthermore, implementation of the clause will have a serious negative effect on the future ability of publishers to produce such books.

In Committee, the Minister responded to a debate on an initial amendment, and said:

“The amendments seem to be intended to create special cases for particular uses of works. It is not clear that there is a compelling reason for some artistic works to be treated differently in that way”.

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However, the Minister further said that exceptions being proposed as part of the modernising copyright programme could cover the situation. He said:

“These will include, for example, an amended quotation exception, which will permit the use of photographs of artistic works in situations that the courts determine to be fair, and new exceptions for education. Those could cover some uses envisaged under the amendment”.—[Official Report, 28/1/13; col. GC 437.]

This amendment is designed to elicit a more detailed statement from the Minister about the expected exceptions, such as quotation, education and fair dealing. It is important for him to clarify issues about the retrospectivity of the clause where legitimate copies have been made of a work after the expiry of the design protection and before the new extended term of copyright protection has arisen under this clause. Can existing photographs, for example, be used in newly published works? What is the position of reprints?

The Government also need to give details of the impact of this clause on publishing and other sectors and to give assurances about the formulation of the transitional provisions accordingly. In that respect I support, and have added my name to, the amendment tabled by the noble Lord, Lord Stevenson, about when this clause might come into effect.

Government Amendment 84A is also in this group, which I very much welcome. We debated the former Clause 66, which is now Clause 67. I may get my retaliation in first in terms of welcoming the clause. It is a good omen for going forward in further discussion on Part 6, and a good omen for discussion on the exceptions when we come to them later this year. I am delighted with the Government’s very clear statement about the use of Clause 67, and I know that it will be widely welcomed.

3.15 pm

Baroness Brinton: My Lords, I want to add my support to the comments that have been made so far this afternoon, but perhaps from a different sectoral perspective. There are certainly a number of concerns about how this clause will affect designers and manufacturers. In particular, universities and colleges want to draw attention to the fact that it will substantially affect teaching, research and design. The ability to display photographs of designs is essential to the teaching of design. The change in copyright terms for these articles would mean that in future, any academics seeking to do this in a way which is not covered by the existing exemptions—including any digital reproductions such as displaying Powerpoint slides during a lecture—would have to seek a licence to do so. This will also apply to publishers reproducing photographs of industrially produced articles, or museums which may wish to display such articles.

We share concerns that this will frustrate the development of the creative sector in the UK, and the teaching of subjects associated with it. As has already been mentioned, the impact assessment focused very much on the commercial uses of designs, such as manufacturers of replica furniture and household goods. I believe that it should consult with non-commercial users of designs which are currently covered by Section 52 of the Copyright, Designs and Patents Act 1988, such

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as academics, museums and publishers to ensure that its appeal does not have an unduly negative effect. To this effect, I support Amendments 84ZC and 84ZE.

Baroness Buscombe: My Lords, I support my noble friend the Minister in his Amendment 84A to Clause 67. It is a sensible amendment that recognises that the IPO’s original Henry VIII wording was not fit for purpose. If I may say so, it skilfully overcomes legal and parliamentary complexities to meet this stated aim of the Government since this clause was first introduced in another place. As I understand it, the clause now maintains criminal penalties for copyright infringement without inadvertently giving this or future Governments power to introduce copyright exceptions.

Lord Jenkin of Roding: My Lords, I have some sympathy with the amendment moved by the noble Baroness, Lady Whitaker. The protection of designs is a hugely important part of the whole question of intellectual property. I am not convinced that the Bill as drafted adequately protects this, and I shall be very interested to hear what my noble friend on the Front Bench says. I understand the points that have been made by my noble friend Lord Clement-Jones and others about the desire of the people who might want to use this for other purposes, but I feel very strongly that it is necessary to protect the property rights of those who were responsible for the original design. As I understand the amendment of the noble Baroness, Lady Whitaker, that is the intention that she has put forward.

When I spoke on this Bill before, both in Committee and at the previous Report sitting, I was initially given the impression that this issue was not sufficiently high on the Government’s agenda. However, by the time we had finished the Committee stage, and in the light of the amendments which my noble friend has tabled and to which reference has already been made, I have been reassured. However, I still feel that those who are responsible for creating the designs—they may be designs of all sorts of artefacts and artistic works—should have their rights properly protected. Having heard the noble Baroness, Lady Whitaker, and having read some of the briefing on this from bodies that represent designers of all sorts, I am not wholly satisfied that the individual’s rights are properly protected. I shall be interested to hear what my noble friend has to say when he replies to this debate.

I should add that I am very much in favour of and welcome government Amendment 84A in this group. That seems to be a considerable improvement and reinforces my view that my noble friend is doing his best to try to hold the balance fairly. However, on this question of design, on which the noble Baroness, Lady Whitaker, laid emphasis, and on which I have seen some of the representations that have been made, I still require reassurance. I hope that my noble friend may be able to provide it.

Lord Howarth of Newport: My Lords, I should like to enter a dissenting note in relation to what was said by the noble Lord, Lord Jenkin, and my noble friend Lady Whitaker on this specific question of designs—for

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example, of furniture. It is not clear to me why it would be an improvement to extend the period of protected copyright in a registered design from the 25 years that has prevailed for a long time past to the proposed “life plus 70 years” period. The effect would be to perpetuate monopolies held by designers and their assignees, and by those who purchase intellectual property from them.

It is of course essential that there be a proper period of protection for intellectual property and that designers and other originators of intellectual property are able to enjoy a proper return and reward for their investment. However, it is not clear to me why the prices of the items that they designed—tables and chairs, for example—should be kept artificially high beyond 25 years, for perhaps 100 years and more.

Let me quote to my noble friend William Morris, a pioneer of English socialism and of English domestic design, whose general injunction was:

“Have nothing in your house that you do not know to be useful, or believe to be beautiful”.

He also said:

“I do not want art for a few any more than education for a few, or freedom for a few”.

We must reward and incentivise our designers, but we must keep a balance that will enable people to have beautiful things in their homes. It is not clear to me why the price of a Charles Eames chair or an Eileen Gray table should be kept very high for long periods beyond 25 years, thereby preventing ordinary people having beautiful things in their homes.

I wonder also whether the proposed extension would prove to be policeable. I do not know what the noble Lord and my noble friend anticipate the intellectual property regime will be that will successfully police the manufacturing of furniture by, for example, 3D printing. The pace of change in the digital economy and its extent is so vast that we may need to think in more radical terms about how we find ways to protect the legitimate interests of individual and private rights holders while extending the benefits of digital design that are capable of being replicated at virtually no cost as rapidly and extensively as possible. I wonder whether it is sensible to try to continue to shore up this decaying edifice of traditional copyright, or whether Governments and possibly charities should not be finding ways to give the rewards to the designers but, at the same time, allow the maximum number of people to have the benefit of those designs as early as possible.

Baroness O'Neill of Bengarve: My Lords, the noble Lord, Lord Howarth, has put his finger on the real difficulty for designers. It is not that the period of copyright protection is too short; rather, it is too ineffective. What is needed for our designers is some method of ensuring that their designs are not ripped off extremely rapidly so that they have no effective period of protection. I have heard it said that new fashion designs that appear on the catwalks of London or Paris are copied within a very few weeks, and the copies are then retailed in our shops. If we wish to protect our designers, as we surely should because they are so talented, it seems to me that that is the direction in which we should look. Rather than extending

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the period of copyright protection, it should be made an offence to sell something that was designed within a shorter but reasonable period of time, and such goods should be seizable if they appear in the retail markets here.

Lord Stevenson of Balmacara: My Lords, as has already been said, all of us around the House can welcome Amendment 84A. This has been a troubled point that has caused difficulty in another place as well as in Committee and here, so we welcome what has now been drafted. We think it does the trick, given what it was intended to do, so we are happy to put our weight behind it. However, it will be obvious from the short debate that we have already had on this rather complicated set of amendments on a rather complicated part of the Bill that not everybody is happy with the direction of travel here. It is important to reflect for a second on why that is.

The debates are really all about whether the Government are right to delete Section 52 of the Copyright, Designs and Patents Act and whether, by so doing and so ending the current regime of registered designs, which, as has been said already, has lasted for a good number of years, the Government have really and fully considered all the issues that flow from that decision. Implications would arise for products that are or are about to be put out of rights protection under the present registered design period of 25 years, and that will in future be copyright for a period of 70 years after the death of the designer. That is a substantial change.

As the noble Baroness just said—and I have a lot of sympathy for this—there is growing concern that the whole approach, which is reflected by this proposed change, goes against where good sense would suggest the issues are going to go in the future. Some countries have very little legal protection for copyright, and what there is is very weak, and others are moving in different directions from us. What is the point of trying to tie down longer periods during which protection could be offered if you cannot also put forward the necessary arrangements under which that protection is to be guaranteed?

There is of course a case, and a very good one, to be made for letting industrial designers have the same protection for their efforts as are available to composers, writers and the like. However, there are still some very real questions on this issue, which have led me to put down the amendment, which would delay the implementation of Clause 66 and give us time to consider two very different and rather important issues. The first is whether this is the right decision, and if so how and on what basis it will be introduced. We have not been given the detail here, we have not seen the draft regulations, and we are not aware of the timescale that the Government have in mind.

Secondly and more importantly, a lot of what is being argued, or will I think be argued by the Minister when he comes to respond, relates to the exceptions and changes that have been forecast by the Hargreaves review to the way in which copyright and copyright exceptions are organised. This point was made by the noble Lord, Lord Clement-Jones, in relation to 2D design representations of 3D designs. So much of

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what is going to change could, with the right sort of regulatory framework brought in under the Hargreaves exceptions, allow some guarantees and support for those involved. However, we simply do not know enough about it, so surely it would be better to see those regulations, take them through the due processes in this House, agree them in their original form or as modified if that is thought appropriate, and then consider whether Section 52 should be changed and the new regime brought in.

I will give a bit more detail on this. I asked the Minister in Committee, although I did not get much of a reply and he has not included any further detail in the letters I have received so far, why this proposal was not preceded by a consultation with stakeholders and why the impact assessment that has been published has very little detail about the impacts that will be implemented by its changes.. The impact assessment, although it is not complete, admits that the reform of Section 52 will harm consumer welfare, as classic designs—those that are more than 25 years old—will be remonopolised. Replicas that are currently available at some 15% to 20% of the price of an original will no longer be available, but no opportunity has been taken to consult consumers. Moreover, there are those who argue that the impact assessment significantly underestimates the other costs that will arise, partly because of its focus on furniture and three-dimensional design, and because it fails to acknowledge that section’s immunising effects on certain secondary uses.

3.30 pm

The Government believe that the change would encourage innovation and investment in design, but this is supported by the very flimsiest of arguments in the impact assessment, and no new evidence is offered to explain why the balance of interests between designer and owner, and competitors and consumers, should be drawn differently today from how it was in 1988 or indeed in 1994-95, when the Government successfully negotiated to retain Section 52 of the Copyright, Designs and Patents Act. As I have said, I am also concerned that we have no real idea yet what, when Section 52 is repealed, the transitional arrangements will be on existing stocks and on articles and designs such as wallpaper that are out of copyright but which will now gain a further period of protection.

Turning to the detail of the amendments, Amendment 84ZC would offer some comfort to museums, teachers, publishers, photographers and film makers. At present, they can rely on Section 52 to justify the inclusion of their images of mass-produced designs in catalogues, books, PowerPoint slides and films. In the case of a number of art publishers, this freedom represents the difference economically between a viable publication and one that could not occur. For museums, it allows the inclusion of images of such designs on websites and indirectly facilitates education in design.

Amendment 84ZD seeks to protect “follow-on designs”—that is, designs that build on designs and use them to create new and innovative materials. This is threatened by the proposed repeal of Section 52 because of the strict test of copyright infringement that will, in effect, be applied henceforth to the use of any design from the 20th century. The test of infringement

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of copyright is the reproduction of any original part of the copyright work; it does not matter how much the use has added. That means that copyright can impede the use of design contributions that draw upon but add to and transform a design.

In contrast, in European design law the test of infringement of design rights is whether the user’s design produces a “different overall impression” on an “informed user”. This test means that there will be no infringement where a second-generation designer draws on existing design features but produces something that is transformed into a new design. If copyright protection is to be extended in time, as the Government propose, we think this is a preferable test. Establishing impediments to follow-on designers is a reckless move, particularly in the middle of a recession.

I argued in Committee that we need to be very careful here. It is well known that designers build with and on the design ideas of their predecessors. I believe that the extension of copyright term to “life plus 70” will make this much more difficult because of the sheer length of the term and because copyright protection is in many ways stronger than design protection. In my view, this issue has not been given sufficient weight, as we need to give careful consideration to the needs of future generations of designers.

This is a complicated area and I have dealt with it in some detail, but it is very important that we hear absolutely clearly from the Government how and in what terms they intend to proceed with this process. Nothing that I have heard today suggests that there is a good case to be made for that, and I hope that the Minister will be able to reassure us.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie): My Lords, I start by thanking noble Lords for their helpful contributions to this debate. I very much recognise their detailed knowledge of these issues.

I should like to begin with government Amendment 84A. During Grand Committee, in response to very helpful interventions by my noble friend Lord Clement-Jones and the noble Lord, Lord Stevenson, I made a commitment to look again at the wording of what was Clause 66 and is now Clause 67. The purpose of the government amendment is to limit the clause so that when the Section 2(2) power is used to amend copyright exceptions, the limitation on criminal penalties does not apply. The new clause no longer operates a separate power. It is now a way of removing the undesirable consequences which flow when Section 2(2) is used. With this amendment I believe we have responded to the concerns that were expressed in Grand Committee by my noble friend Lord Clement-Jones and the noble Lord, Lord Stevenson.

I should like to deal with Amendments 84ZBA 84ZC, 84ZD, 84ZE, 84ZEA and 84ZEB together, but shall deal first with Amendments 84ZEA and 84ZE. The Government understand the real concerns about the repeal of Section 52 of the Copyright Act. We want affected groups to have adequate time to adapt but we also take seriously the fact that rights owners are pressing us for early implementation. That is why

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the Government have committed, as I said in Grand Committee, to consult all interested parties on the timing of the change. To decide those timings now would prejudge the consultation, and any transitional period will allow appropriate time to implement changes to copyright exceptions.

I will just answer a question that was raised by the noble Lord, Lord Stevenson, on the economic effects on consumers and those who use 2D images. I can reassure him that the Government will consult on traditional provisions and publish another impact assessment.

On Amendment 84ZC, the Government have met with publishers and the Publishers Association, representatives of replica furniture manufacturers and academics. We have heard from others, such as the British Screen Advisory Council and the Victoria and Albert Museum. We will continue this productive engagement and helpful exchange of information through the consultation.

Copyright exceptions will go some way towards moderating the impacts of the change. The forthcoming changes to copyright exceptions, announced in December, are particularly important for this. For example, fair dealing exceptions relating to teaching and the use of quotation are likely to be relevant to the use of two-dimensional images of artistic works in the teaching of design or related subjects. My noble friend Lord Clement-Jones raised the issue of the amended quotation section. He wanted, I understand, a more detailed statement from me concerning retrospectivity and the impact on the publishing sector. I hope that what I have said has gone some way towards answering his particular query.

It may be helpful to focus more in an answer on film makers, photographers, picture libraries, designers and publishers. The Government understand that film makers, picture libraries and photographers who use images of certain artistic works, and designers who use motifs from existing designs, could be affected if there is copyright in the underlying work. For example, a wallpaper that has been inspired by a design from the 1950s by Lucienne Day has been cited to the Government as a follow-on design which could be affected by the changes. Further consideration will be given when the Government consult on how and when to implement the repeal. Moreover, in December 2012, the Government announced changes that will be made to copyright exceptions. It is possible that these will address many of the concerns that have been raised about the use of images of artistic works.

Turning to Amendment 84ZD, I note concerns about the ability to use artistic works as features in new designs. This sort of follow-on design plays a useful role in the thriving UK design culture. However, it is not clear that it would be lawful to provide a copyright exception permitting follow-on designs. There are concerns about what happens to copies of an artistic work made after the expiry of the 25-year design protection but while Section 52 remains in force. I can confirm that any copy made, distributed or imported into the UK or communicated to the public while Section 52 is in effect will be unaffected by the change in the law. However, if, for example, a book

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containing photographs of artistic works is reprinted after Section 52 is repealed, permission will need to be sought from the relevant rights owners unless a copyright exception applies.

On Amendment 84ZEB, I have heard concerns about imposing an obligation on the owner of a revived work to grant a licence, even if they would prefer not to. The points raised will be given careful consideration in the consultation.

I will deal now with Amendment 84ZBA. Some are concerned about the revival of copyright in works of artistic craftsmanship created before 1957. A work protected by copyright in any other EU member state on 1 July 1995 would also be protected in the United Kingdom. In the circumstances, I hope that my noble friends will agree that an amendment is not needed, as provision already exists under the current law.

I will answer a couple of points raised by the noble Lord, Lord Howarth. He emphasised the need for balance, and was concerned about the overly long term of copyright. The term after the abolition of Section 52 will be the same as for most other copyright holders. It will thus put furniture designers of classic works in a position to be incentivised, as is the case for any other creator. He also raised some concerns about the benefits of design classics not reaching the greater public. Some people see the availability of cheap replicas as good for consumers who cannot afford the originals. However, designers argue that replicas damage the integrity of the design industry and make British companies less willing to support long-term investment in design than their European competitors. Supporting British designers and offering greater choice to consumers are not mutually exclusive and the Government hope that the repeal of Section 52 should lead to UK designers developing new designs in markets which become less dominated by copies of artistic work. That would benefit consumers by offering them greater choice and variety. In the light of what I have said, I hope that the noble Baroness will withdraw her amendment.

Lord Clement-Jones: The Minister said he hoped that what he had to say would be reassuring about retrospectivity. However, I did not pick up exactly what he had to say about retrospectivity; he talked a lot about fair dealing and the educational exemptions. Specifically on retrospectivity, can the Minister give a little more clarification? I understand that if copies of those three-dimensional works are made after the new extended term of copyright has come into effect, clearance will need to be obtained for those existing works.

Viscount Younger of Leckie: I thank my noble friend for that question. The best thing would be for me to get back to him in due course, as I have done on many occasions, with a focused letter on the specific question of retrospectivity.

Baroness Whitaker: My Lords, I am grateful for the authoritative support of the noble Lord, Lord Jenkin of Roding. In response to my noble friend Lord Howarth of Newport, I remind your Lordships’ House of the double damage done by undervaluing individual creativity in design: the disincentive and loss to a significant

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sector of our economy on the one hand, and the simple, yet common, injustice of yet again failing to recognise that the,

“lifeblood of a master spirit”,

is not just the written word but other unique manifestations of the human spirit.

I agree with the noble Baroness, Lady O’Neill of Bengarve, about the importance of effective implementation and enforcement. I also welcome the Minister’s arrangements for consultation. That will be helpful on the dilemmas that we have been exploring in my amendments, but I shall want to check the exact application of the law as he quotes it before Third Reading. In the mean time, I beg leave to withdraw my amendment.

Amendment 84ZBA withdrawn.

Amendments 84ZC to 84ZEB not moved.

Amendment 84A

Moved by Viscount Younger of Leckie

84A: Clause 67, leave out Clause 67 and insert the following new Clause—

“Penalties under provision amending exceptions: copyright and rights in performances

Paragraph 1(1)(d) of Schedule 2 to the European Communities Act 1972 (limitation on criminal penalties) does not apply for the purposes of provision under section 2(2) of that Act amending—

(a) Chapter 3 of Part 1 of the Copyright, Designs and Patents Act 1988 (acts permitted in relation to copyright works), or

(b) Schedule 2 to that Act (rights in performances: permitted acts).”

Amendment 84A agreed.

Clause 68 : Power to reduce duration of copyright in transitional cases

Amendment 84AA

Moved by Lord Clement-Jones

84AA: Clause 68, page 64, line 2, after “amend” insert “paragraph 12(3) of”

Lord Clement-Jones: My Lords, I shall also speak to Amendments 84AB, 84AC and 84AD.

Amendment 84AA straightforwardly addresses a specific aspect—that is, the duration of copyright in existing anonymous or pseudonymous works. The amendment is designed to clarify the scope of the application of Clause 68. Rather more importantly, the effect of Amendments 84AB and 84AC would be to prevent the Secretary of State being able to curtail the period of protection in respect of unpublished pre-1988 Act films and pre-1956 Act photographs, and in respect of other unpublished pre-1988 Act works whose authors are known and who died in the period from 1900 to 1989. This means that the copyright material covered by the amendment will, unless published in the mean time, fall into the public domain at the end of 2039, which is the position under the law as it stands.

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I thank the Minister for his correspondence on Clause 68; that correspondence has now extended to quite a number of letters, which I have found extremely helpful. However, no one would object to this clause if it simply solved a problem about copyright protection attaching to centuries-old, unpublished manuscripts and private charters. As regards works created more recently, such as unpublished minutes of meetings and correspondence from the 20th century, being within the scope of Clause 68, the Minister is clearly of the view, as he said, that these provisions are part of the solution to the orphan works problem. In the discussions about the copyright clauses in Grand Committee, I pointed out that one of the difficulties was that the Government’s policy had such an insubstantial evidence base. The Minister has now in correspondence referred to the Seeking New Landscapes study by Barbara Stratton. However, without going into great detail, there is doubt as to whether generalisations can be drawn from that study. It would be helpful to know what proportion of the material held by archives and assessed as orphan is pre-20th century, and what proportion of the 20th century material post-dates 1960. That, at least, would give some indication of whether Clause 68 will in fact make a significant contribution to reducing orphanage.

3.45 pm

Indeed, the Government have made clear that they are acting to reduce the number of orphan works through this clause. It is thought, and the Minister believes, that a large proportion of orphan works in cultural connections are unpublished. Given the clear crossover with orphan works—which is the subject of separate legislation in this Bill—the Government should surely make clear how they intend for unpublished works, which may also be orphaned, to be treated. In particular, the Government should issue guidance on how a search process to determine the date of creation will operate, and on when potential users need to approach the orphan works licensing body; and should make clear that unpublished orphan works will also still be subject to the copyright term directive.

Generally, as I understand it, exercising the Clause 68 power, as drafted, would enable the Secretary of State to remove copyright protection from the unpublished works of authors who died before 1 January 1943. Assuming that the clause came into effect before the end of this year, it would have an immediate effect on only the unpublished material of authors who died before 1943. It would have no effect on post-1968 material, because for those cases the European directive provides a term of 70 years from the end of the calendar year in which the author died, rather than the fixed term to 2039 provided for in the 1988 Act.

It follows that if one disregards anonymous and pseudonymous works from the analysis, a potential user will need to be able to discover the date of death of the author of any work—such as an unpublished letter—to ascertain whether the work in question has been ejected into the public domain. If it is not yet in the public domain, they will need to ascertain whether it will be affected at some future date by an order made by the Secretary of State. I doubt whether this will make life much easier for any of the archivists who are the intended beneficiaries of this clause.

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The Minister lays a good deal of emphasis on the claim that unpublished works are not being commercially exploited. Surely some are; for example, audio-visual archives contain large numbers of unpublished films which are commercially exploited on a large scale, including digitally.

Celluloid film reels were rarely sold or hired, with the consequence that a great deal of commercially valuable but unpublished audio-visual material is widely exploited. Substantial investment has also been undertaken to produce and make this content available digitally, in reliance on the current legal provision that it will be protected by copyright until at least the end of 2039, thus enabling the costs of digitisation and digital exploitation to be recouped.

Some major organisations are involved: AP, British Pathé, Getty Images, the Imperial War Museum, ITN and Reuters—I am sure that the Minister has had meetings and correspondence with them. However, there are many others with significant but smaller holdings. Unpublished films represent the capital assets of thriving business which, under the proposal as it currently stands, the Government seem bent on affecting. In his letter to me, the Minister indicated that he has asked officials to look at this issue. I welcome that, but perhaps he could give more detail today. There are also perfectly respectable grounds why the owners of literary material might not wish to publish. One has to consider only why one might not wish to publish Nancy Mitford’s letters, or Eliot’s letters: the executors might well have perfectly good reason for deciding not to publish.

On those grounds, it is essential that the Government should take time to think again about Clause 68 and, as I suggested, widen the evidence base to demonstrate the existence of a substantial body of orphan works which are capable of being affected by the proposed powers. Certainly, in the first instance, they should exclude subsection 5(b), concerning films, from the ambit of Clause 68.

Moving briefly to Amendment 84AD, the relationship between Clauses 68 and 69 is unclear, as I mentioned earlier, and will lead to legal uncertainty as to what provisions apply to an orphan, anonymous or pseudonymous work which has not been published. Anonymous or pseudonymous works are likely to be orphan. Consequently, the administration should be subject to the normal rules for orphan works, requiring a diligent search for the rights holder. The amendment is required to clarify the scope of Clause 68 in relation to orphaned works. If the work is an orphaned work under Section 116A of the Copyright, Designs and Patents Act, the mechanism for orphaned works as set out in Clause 69 should apply. I beg to move.

Baroness Buscombe: My Lords, I have added my name to this group of amendments, which, as my noble friend has already explained, are to deal with the situation where the Bill as drafted would permit a number of unintended consequences, including permitting the publication of confidential family papers and destroying the value amassed in archives of works.

Clause 68 contains a particular quirk of historic definitions in copyright law that means that films and

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photographs are defined as published only when they are first hired, sold or made available for hire. As most films are broadcast and photographs appear in newspapers or magazines, they are not as such published and therefore would fall under the scope of the clause. Although on the one hand, the Government want to use the clause to allow organisations such as the British Library to publish medieval manuscripts, it will also enable millions of commercially valuable films and photographs to be put into the public domain. We believe that that loophole can easily be fixed by including in the Bill that unpublished photographs and films should fall outside the scope of that power. The amendments solve that problem in a clean and simple way and will give surety to concerned rights holders but not impact on the valuable contribution that the clause can make to organisations such as public libraries. I urge my noble friend to accept them.

Baroness Brinton: My Lords, I shall speak against Amendment 84AA and the other amendments in the group. I refer back to the point made by my noble friend Lord Clement-Jones about the scope and size of the problem of unpublished works and grey literature. A study by the British Library found that 43% of potentially in-copyright works published between 1870 and 2010 were orphan works. The figure for unpublished works, including letters, diaries, photographs and memos is far higher, and grey literature produced by charities, societies and associations but not for any direct commercial purpose, also contain high concentrations of orphan works. One example of that is a study of sound recordings of political debates in the 1960s, which identified 350 performers, of whom only 100 could be traced, meaning that more than 70% of the content was orphaned; 350 hours were spent trying to clear the rights to use the material; and the success rate—permissions received—was only 4%. That shows us the size of the problem, which is why I am grateful to the Government for the clarifications in the Bill and why we need to oppose the amendments.

Bringing copyright for unpublished work into line with the existing copyright duration would release much valuable historical data into the public domain and would not affect unpublished works created shortly before the 1988 transitional arrangements. As we have discussed in previous stages of this Bill, works of these kinds are, of their nature, orphan works. The copyright holders are incredibly difficult to identify. The British Library notes that it still has material from the 7th century in copyright. As a result, a large amount of material currently in copyright due to the transitional arrangements would be difficult or impossible ever to obtain a licence for.

Viscount Younger of Leckie: My Lords, I turn first to Amendments 84AA, 84AB and 84AC and thank my noble friends for raising the important issues in them. At the outset, I will answer questions raised by my noble friend Lord Clement-Jones, supported by my noble friend Lady Brinton, about the voices concerned about the evidence for the clause and for the orphan works, and especially asking how much is pre-20th century. That is probably a slight paraphrase of the questions raised by my noble friend Lady Brinton.

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We do not know the exact amount, but the National Archives estimates that around 12 million—or 42%—of the 30 million archival items held in English and Welsh public archives predate 1891, which is over 120 years ago. Therefore we are now likely to be 70 or more years past the date of creation. The vast majority of these are thought to be unpublished and would therefore remain in copyright under the current law until 2039. The law relating to the transitional provisions of the Copyright, Designs and Patents Act 1988 is complex. The various points that have been raised through these amendments and in debate underline that complexity. These are important points, and it is right that we should take time to debate them properly.

The Government’s overriding policy objective has always been to enable use of historically important unpublished material which has over-long copyright protection. Prior to 1998, copyright on such material was perpetual, and from 1998 it ran until 2039 at the earliest. Because of the way the 1956 and the 1988 copyright legislation interact, it appears that it may be possible for a film to remain unpublished, even if it has been commercially exploited by showing it to the public in a cinema or on television. This is because it can be shown to the public by various legal routes which do not technically constitute publication; for example, public performance, exhibition or communication to the public.

To become published, a film would need copies of it to be issued to the public, such as on DVD or through online sales. It may be necessary to recognise this in the treatment of films in the regulations. Before they exercise this power, the Government recognise that it will be important for the impact assessment accompanying the regulations to assess whether there are costs to specific rights holders or industry sectors. The regulations would allow the Government to treat different works in different ways.

However, my noble friend has raised a good point about the impact on commercial film and photographic archives. My noble friend Lord Clement-Jones today raised concerns about business expectations in relation to unpublished works. I will therefore commit to looking in advance of Third Reading at how this should be addressed. I hope that in the light of this assurance, my noble friend will not press this particular amendment.

Finally, Amendment 84AD relates partly to the provisions to reduce over-long copyright in some unpublished works—which we spoke about earlier—and partly to the orphan works licensing scheme. I can confirm that where there is any doubt about whether an unpublished, anonymous or pseudonymous orphan work is still within copyright, an orphan works licence could be applied for. This would be under the scheme proposed in Clause 69. Therefore I believe that there is no need for this amendment.

If the user of an orphan work chose to proceed without gaining an orphan works licence, they would be open to possible legal action if a rights holder reappeared and the work turned out to be still within copyright. That might be described as a risk-based approach to the problem of copyright infringement. However, the courts would be likely to take a dim view of such infringement when there was a lawful means

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of using such a work through the orphan works licensing scheme. In the light of the assurances that I have provided, I hope that my noble friends will not press their amendments.

4 pm

Lord Clement-Jones: My Lords, I thank the Minister for his reply. In the light of it, I suppose that I should be grateful that I do not have to trade discussion with my noble friend Lady Brinton about the study instituted by the British Museum. There are many of us who do not believe that Barbara Stratton’s report, Seeking New Landscapes, comes to conclusions that can be generalised about in the way that some people have done by extrapolating from it in a way that is not necessarily helpful, although I do not think that the British Museum has done that.

That said, the way that the Minister has tied together Clauses 68 and 69, in his undertaking that the orphan works provisions would come together with unpublished works which were in copyright, is extremely helpful. I am not quite sure how that is achieved by the actual wording of the clause. One may wish to be rather clearer about when the duty of diligent search applies, certainly in regulation, because it may not be obvious from the outset that these works are orphaned and in copyright. Some further probing may be necessary on that.

I very much welcome the Minister’s undertaking on news film and so on, and his recognition that films have not necessarily been published even when they have been exhibited. That is one of the absolutely fundamental issues that the organisations which I mentioned earlier have been labouring under. However, their point has come across and I am grateful to the Minister for recognising it. I look forward to seeing what he will come forward with on Third Reading. In the mean time, I beg leave to withdraw the amendment.

Amendment 84AA withdrawn.

Amendments 84AB to 84AD not moved.

DfID: Tied Aid


4.02 pm

Baroness Northover: My Lords, I will now repeat the Answer to an Urgent Question asked in the other place earlier today. The Answer, given by my right honourable friend the Secretary of State, is as follows:

“I am delighted to update the House on my speech today. There is no change on Her Majesty’s Government’s policy on tied aid. I was clear in my speech on 7 February, and again this morning when I said:

‘I am not talking about tied aid. I do not believe that is the way to achieve good, sustainable development … It’s the wrong way to go about things’.

That answers his first point. DfID contracts are awarded in line with EU procurement regulations. The vast majority are subject to competitive tender. The evaluation process for large contracts includes an assessment of technical and commercial criteria, which are published at the outset of the tender. That answers his second question.

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In relation to today’s speech on pursuing poverty reduction and an end to aid dependency through jobs, it is clear that economic growth is critical. Wherever long-term per capita growth has been higher than 3%, we have also seen significant falls in poverty. Sustainable public services in the developing world, as here in the UK, need a funding stream of tax receipts and that means a thriving private sector.

DfID will be putting an increased emphasis on economic development, including: reducing overall barriers to trade and investment; unlocking the ability of entrepreneurs and business people in developing countries to drive economic growth through their own businesses; and fostering greater investment by business in developing countries. I want to see more businesses, including those in the UK, joining the development push with DfID. We all have the opportunity to help build up responsible trade with developing countries.

Finally, I welcome the positive response from organisations like CARE International and the Overseas Development Institute, with the former saying that,

‘It’s no longer an option for development agencies to view business as operating in a parallel universe’”.

That concludes my right honourable friend’s Statement.

4.05 pm

Lord Collins of Highbury: My Lords, we also welcome UK companies seeking access to growing markets across the developing world. However, from the media reports at the weekend, the Government’s policy was not clear. We are vehemently against tied aid, trickle-down economics, and growth that has no focus on either inequality or sustainability. I have two specific questions for the Minister. Can she tell the House what steps her department will take to ensure private sector-led projects by DfID will be required to meet decent work and labour standards? Secondly, under what circumstances does she believe it right that a British company should be awarded a contract in a developing country without having to compete in a fair and transparent tendering process?

Baroness Northover: My Lords, I thank the noble Lord for his acceptance that economic growth through the expansion of businesses and so on is very important for developing countries, as it was in the United Kingdom. As we have seen in China and India, it obviously has a transformative effect. I reassure noble Lords that DfID remains poverty focused. That underpins everything that we do. Therefore, we are trying to ensure the development of the private sector, it is so that those long-term aims of relieving poverty are addressed. On how British companies would be awarded contracts, as I said in the Statement from my right honourable friend, contracts awarded to British companies by DfID go through the EU procurement regulations. However, the focus of DfID is always on the relief of poverty.

4.06 pm

Lord Laming: My Lords, I, too, am grateful for the Statement repeated by the noble Baroness. Could the noble Baroness reassure the House that actions are always in place to ensure that when these decisions are

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made the beneficiaries receive the benefit—I am expressing this badly but noble Lords know what I mean—that the money goes to the right place for the right purposes, that it is properly monitored and that we are reassured that it is not being diverted into other means?

Baroness Northover: I thank the noble Lord for that question. I assure both noble Lords that DfID supports responsible business standards, which are very relevant here, through various schemes such as the Ethical Trading Initiative, the UN global compact, OECD guidelines for multinational enterprises and so on. One striking thing about the United Kingdom’s potential help for developing countries is what we can offer by way of our law and justice system. I was struck in meeting the Minister responsible for mines from Afghanistan the other day to learn how initially they found that in dealing with Chinese companies the benefit was probably not for Afghanistan so much as for the Chinese companies, but that now they are rooting it very much in British law guided by British companies. That is an instance where it is of mutual benefit. Of course, it is of benefit in business to the British companies working in this area, but you can see immediately the effect in terms of the poorest in Afghanistan. That is where the greatest benefit is. Therefore, these things can be looked at as of not exclusive but mutual benefit.

Lord Elystan-Morgan: My Lords, I am left with the very clear impression from the Minister’s Statement that there will be no difference as far as the future is concerned in the total amount of aid that is disbursed at every level and in every way. If that be so, I heartily congratulate the Government. It is all very easy when the going is benign and happy to be charitable, but it is in situations of difficulty such as this that the true test of a community’s charity is put to the proof.

Baroness Northover: I appreciate what the noble Lord has to say, and I hope that he continues to say such things loud and clear, because in a time of austerity there is a clamour of voices asking whether this is the right thing to do. As we meet the 0.7% commitment, which we have built to and kept to, we have a moral obligation to address the difference in the levels of need around the world. There is also the interest in terms of greater stability. If you are addressing the most abject poverty around the world, that helps to stabilise things for everybody, whether in that region or in our own.

Lord Tugendhat: Does the Minister agree that Africa is now one of the fastest growing regions in the world and that we should all be very pleased about that? Aid is now a relatively small proportion of the disbursements that go from the developed world to what used to be called the developing world. Remittances and direct investment have grown enormously, and the role of aid is far less significant than it used to be. It is not a question of this Government cutting back on what they have been giving; the extraordinary thing about this Government is that, at a time when they are cutting back on almost everything else, they have been increasing the overseas aid budget by 30%. I find that barely explicable.

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Baroness Northover: If the noble Lord listens to Bill Gates, for example, he will hear how small contributions looked at globally can leverage an enormous effect. The noble Lord is right that remittances are coming in and there is more inward direct investment and so on, and that is very welcome. We have to make sure that, as the noble Lord, Lord Laming, indicated, the poorest are included in that benefit and that there is the health and education provision to make sure that there is a skilled workforce to benefit from this, because it is in nobody’s interest to have countries with the instability and inequalities that that lack of provision would ensure. It is extremely important that we retain our commitment in this area, but at the same time we must make sure that these other areas, such as direct investment, grow as well and that they are to the benefit of the poorest in these countries.

Lord Kerr of Kinlochard: I thank the Minister for repeating the Statement. I was very pleased to hear her strictures on tied aid and her support for competition. Will she confirm that the same applies to consultancies? The only thing that worried me in her Afghan homily was the interjection that investors in mining in Afghanistan were advised by British companies. When such advice from consultancy firms comes from the aid programme is it subject to the same degree of open competition? In developing countries, one sometimes hears that rather a large share of the British aid programme does not go into projects on the ground but into consultants in London.

Baroness Northover: The Afghan Government chose to gain their legal advice in the way that I indicated. Consultancies are subject to open competition, so the noble Lord can be reassured in that regard.

Lord Fowler: I agree with what my noble friend set out as her department’s general policy. I have a specific question about the statement by the former Secretary of State that new money, extra money, would be going to the global fund for HIV and other diseases. Will that pledge be kept?

Baroness Northover: I am going to have to write to my noble friend to clarify that. I know that the Global Fund had some problems, with which he will be extremely familiar. I also know that DfID was working extremely closely with the Global Fund, because it had been so effective in the past, to bring it back to that position. I have not had the most recent update. I will make sure that he gets it.

Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill

Report (4th Day) (Continued)

4.15 pm

Clause 69 : Licensing of copyright and performers’ rights

Amendment 84AE

Moved by Lord Clement-Jones

84AE: Clause 69, page 64, line 39, after “search” insert “of each individual work”

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Lord Clement-Jones: My Lords, I will also speak to Amendment 84AEA. We had a very good debate in Grand Committee about orphan works, and the Minister gave some very useful assurances about how the orphan works regime would operate. However, there are one or two loose ends, and I want briefly to raise them.

Amendment 84AE is essentially a retabled amendment designed to establish definitively the nature of diligent search. I was slightly disconcerted by the way the Minister replied to this amendment last time. Surely diligent search must cover each work involved, and I hope the Minister can demonstrate how such search should be undertaken. There is no amendment to this effect, but I should say in passing that many of those who have debated this subject believe that it is very important that orphan works cannot be sublicensed. The argument is clear that to permit sublicensing would risk the distortion of the market through, for example, enterprises that sought orphan works licences and then resold them to all comers, circumventing the safeguards promised in the regulations. I do not know whether that is a loophole or simply a fear that will not be realised.

Amendment 84AEA relates to an objectionable feature of Clause 69, which is found in the new Section 116A(6) of the Copyright, Designs and Patents Act 1988. This states:

“The regulations may apply to a work although it is not known whether copyright subsists in it, and references to a missing owner … are to be read as including references to a supposed owner and a supposed right or interest”.

The objection to this is that if copyright does not subsist, the work or performance is in fact in the public domain and there is no rights owner who could reappear.

It seems rather unsatisfactory to introduce what I believe is called the domaine public payant in this surreptitious way. If there is going to be an orphan works licensing scheme it should surely be confined to orphans. If it cannot be determined whether a work is still in copyright, surely an orphan licence should not be available. It should be plain in the Bill that this should not extend to works that may be in the public domain. It would be helpful to have a ministerial assurance on this point. I beg to move.

Baroness Buscombe: My Lords, I support my noble friend in relation to diligent search. I think the amendment speaks for itself, and I echo the words of my noble friend Lord Clement-Jones.

Lord Howarth of Newport: My Lords, I speak to Amendment 84AE only. The noble Lord, Lord Clement-Jones, referred to it as a loose end. It is an issue of fundamental importance. The effect of the amendment would be to require a diligent search to be made for each individual orphan work. It is true that the European Union orphan works directive requires the same. We have not yet incorporated the directive in our own law, nor should we. It is unfit for purpose in this and in other respects. We had some discussion about aspects of it last Wednesday and previously in Committee. The requirement that there should be a diligent search

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for each individual orphaned work is totally and utterly unrealistic. If it were to be legislated it would scupper the Government’s orphan works project.

The success of the project depends upon the regulations being proportionate and manageable. They should, of course, have a proper regard for the legitimate interests of all rights holders, and certainly for the interests of the publishing and entertainment industries. Equally, however, they should have regard for the wider public interest in enabling as full access as possible—for educational, research and cultural reasons and reasons of public enjoyment by the mass of our people—to the enormous collections of orphan works in our great public cultural institutions.

Carrying out a diligent search to establish the intellectual property rights in orphan works is a time-consuming and laborious business. It is significantly easier when we are speaking of commercially published books. Reference was made in an earlier debate to the British Library’s study, the results of which were published under the title Seeking New Landscapes, which demonstrated that it took on average about four hours and cost some £80 to establish where the intellectual property rights lay in the case of a single book. The noble Lord, Lord Clement-Jones, says that you cannot generalise from that study, but it does demonstrate that this is a laborious, arduous and expensive process.

In the case of a single postcard, perhaps sent in 1916 by someone who simply signed herself “Betty”, copyright resides in the design of the postcard, in the design of the postage stamp on the postcard, and in the words Betty inscribed on the postcard. If you were to be required to investigate to establish where the intellectual property in each aspect of that particular picture postcard now lies, you would spend a lot of time.

There are vast quantities of such items in our public archives and collections. The impact assessment at pages 7 to 11 gives some indication of the scale of orphan works in our public institutional collections. It mentions, for instance, that the BBC has some 5 million photographs and the British Library has 112.5 million newspapers. Inevitably, in an age of mass digitisation we have to think of how we can satisfactorily legitimise digitising en masse this kind of material in public collections.

Extended collective licences already provide for the mass licensing of the use of large numbers of works where it has been recognised that individual negotiations would be impossible because of the volume of the material: for example, in the fields of educational photocopying or musical broadcasting. Extended collected licences are provided for in the other directive—the European copyright directive—so there is some tension between the two directives.

Where market failure means that it would otherwise not happen, public access will be lost unless we have streamlined procedures for rights clearance, so a generic approach is essential. The licensing authority will need to verify that the approach to the search by the cultural institution and its methodology have been appropriate: that it has been reasonable in regard to the nature of the works-whether for example they were originally

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commercially published or unpublished. It should have regard to the proposed use of these orphan works; to whether access to them would be provided free of charge for educational or cultural research purposes and for the benefit of the general public, or whether they would be charged for; to what the risks might be to rights holders in this particular category of works; and to the feasibility of tracing the present rights holders.

We need to establish under the regulations that the generic approach has been diligent. If we were to insist that there should be a diligent search, item by item, for every orphan work, it would be impossible, and access would continue to be denied to great swathes of our public collections in the Bodleian Library, Cambridge University Library, the British Library, the BBC, the British Film Institute, and many other institutions. If modern copyright law is to be respected, people must feel that it is proportional and rational and sensibly balances the private and public interest.

Baroness Brinton: My Lords, I, too, oppose these two amendments and support the points that the noble Lord, Lord Howarth of Newport, has made, to which I briefly add two further points.

The rights holders of apparently orphan works very rarely come forward at a later date. This makes court action unlikely in most cases, particularly where use of the works was manifestly for the purposes of teaching or research. However, using works in these ways would require institutions such as universities and libraries to operate outside the law in order to make legitimate use of this material. This is not a satisfactory long-term solution.

It is important that what constitutes a diligent search is sensitive to the intended use and the kind of material. Searching for the author of a commercially published book, where the intention is to republish for commercial gain, should require a higher level of diligence than for the digitisation for preservation purposes of an archive of non-commercial material. It is very important that the Bill is flexible enough to allow regulations to account for these differences. Unfortunately, these two amendments would take it in the opposite direction.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie): My Lords, I begin by thanking my noble friends for their amendments. They raise important issues.

Turning first to Amendment 84AE, in Grand Committee there was a full and productive debate, as has been mentioned, on the issues around diligent search. I have also subsequently written to the noble Lords who spoke in that debate. I can confirm that, before a work qualifies as an orphan, a diligent search for the all the rights holders in the work must be undertaken. If as a result of an initial UK search there are indications that the rights holders may be overseas, there will be a requirement to expand the diligent search to include relevant overseas territories. However, a balance must be struck between protecting rights holders and making the system cost-effective for users. That is why the orphan works working group is undertaking detailed work to ensure that diligent search

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requirements reflect current best practice across all sectors. These requirements will be set out in regulations that will be subject to both consultation and the affirmative procedure.

I will answer some questions raised by my noble friend Lord Clement-Jones and the noble Lord, Lord Howarth, about the provision of more detail on the requirements for diligent search, although I am not sure how far I can reassure the noble Lord, Lord Howarth. Diligent search should find rights holders when works are not really orphaned, and it is important to find the right balance between protecting rights holders and making the system cost-effective. Extensive thought has already been given to what should be done in a diligent search for different sectors, including by the European digital libraries initiative. Existing industry databases and registries and bibliographic publications are just a couple of examples of sources of information that could be searched. It is likely that searches would differ across the various sectors, and therefore sector-specific guidance may need to be developed. To that extent, this may help to answer some of the concerns of the noble Lord, Lord Howarth.

Diligent search is being considered with stakeholders through the orphan works and ECL working group. Diligent search guidance will cover the scenario where the work may have originated outside the UK. The noble Lord, Lord Howarth, may know that the Canadian orphan work scheme licenses works, provided that they have a strong connection with Canada. They may be of foreign origin, but with an orphan work this will not necessarily be known.

In relation to Amendment 84AE, my noble friend Lord Clement-Jones was concerned that there might be a loophole regarding sublicensing. The answer to this is that the Bill does not permit sublicensing, if that is a help to my noble friend.

I may well have touched on this earlier, but for clarity, the noble Lord, Lord Howarth, again raised the issue of diligent search and made a fair point about the need to cover every orphan. I believe that he used the analogy of the postcard. I do not think that we can avoid the need to look for a legal owner, but we do not want a search regime that is too obtrusive and costly. This is a matter of achieving balance, and that is why these matters are best dealt with in regulations, where the needs in different sectors can be properly addressed.

Amendment 84AEA would remove the option of licensing a work under the orphan works scheme where it was not known whether copyright subsists. Establishing whether a work is still in copyright will of course be a key part of the diligent search process. Indeed, it is in the applicant’s interest to establish this fact, because if the work is out of copyright they will be free to use it and will not need to apply for an orphan works licence. However, it may not always be possible to establish definitively whether a work is still in copyright. This will particularly be the case with unpublished works, where often key information such as the date of creation or the date of the creator’s death is not known. Having to establish definitively whether a work is still in copyright could, therefore, exclude very many works.

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This practice of allowing a licence where there is uncertainty about whether copyright subsists is followed in Canada, which I mentioned earlier, where a scheme has been running for nearly 25 years. In doing so, it provides legal certainty for the user of the work. If we do not include such works within the scope of the orphan works scheme, we could exacerbate the very problem that the proposals are designed to address. I hope that in the light of the assurances that I have provided, my noble friend will not press his amendment.

4.30 pm

Lord Clement-Jones: My Lords, I thank the Minister for that reply. I am reassured by his statement in at least three respects. He made the distinction between the requirement to have an individual search and the requirement to be proportionate in the way the diligent search is carried out. That is the distinction that I would make. I found the statements of the noble Lord, Lord Howarth, rather bloodcurdling in many respects. The proportionality lies not in whether each individual work is looked at but in the nature of the search. I hope that the regulations focus very much on that.

I of course agree that if one is to have an orphan works scheme, it has to be economically viable and has to work for all those taking part in it, but at the same time it must protect genuine rights holders and make sure that searches uncover works that are not orphan but may appear on the face of it to be so. Therefore, I look slightly askance at measures that say “streamline procedures” when individual rights holders, if they exist, are to be ignored. I think that we have common ground on proportionality, but the question is where that lies. It will be useful to refer to the Minister’s words generally when the regulations are drawn up. We may have a chance to debate them in this House in future. I very much welcomed what he had to say on the sublicensing point; that was a very helpful statement. Those who are concerned about Amendment 84AEA will also be reassured. I beg leave to withdraw the amendment.

Amendment 84AE withdrawn.

Amendment 84AEA not moved.

Amendment 84AEB

Moved by Lord Clement-Jones

84AEB: Clause 69, page 65, line 13, after “a” insert “qualifying”

Lord Clement-Jones: In moving Amendment 84AEB, I wish to speak also to Amendments 84AEC to 84AEG and Amendment 84AF.

I will speak first to Amendment 84AF as it falls outside the scope of the other amendments. Clause 69 as drafted does not factor into the opt-out of ECL the situation where the rights holder is not the creator. A firmer commitment from the Government in the Bill is necessary to give more reassurance to rights holders on the ECL provisions in Clause 69 before the legislation completes its passage. This amendment was tabled as Amendment 28X in Grand Committee. An opt-out is available to copyright owners in the Bill as it stands. The amendment would extend this opt-out to exclusive licensees and authorised representatives.

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In Grand Committee, the Minister committed the orphan works and extended collective licensing working group to look into this issue as part of its deliberations. While this commitment is welcome, there needs to be certainty that any regulations for extended collective licensing will include such provision. Since ECL has the effect of exercising property rights, potentially against the will of the rights owner, the ability to opt out under subsection (3) of what will be the new Section 116B must be as straightforward and easy to implement as possible. To effectively administer the repertoire they have invested in, music publishers will need to make catalogue-wide arrangements applicable to hundreds, thousands, or potentially, millions of separate works. The grant of rights and arrangements between creators and music publishers are very often not exclusive assignments of copyright; grants can also be made by way of licences, both exclusive and non-exclusive.

It will be unworkable to have an opt-out which is exercisable only by the copyright owner or exclusive licensee. This would require a publisher to go contract by contract, checking the nature of each grant of rights and, where necessary, asking composers to sign opt-out documentation to be sent to the body seeking to operate the scheme. If the opt-out could be operated by the composer’s authorised representative, this would give a publisher or other representative the right to seek the permission from its composers to exercise an opt-out on their behalf, which could then comprise one repertoire-wide opt-out from a rights owner in a manageable way.

Practical experience abroad is that, in the absence of this possibility, ECL provisions can be manipulated by bodies operating schemes to make it impossible for right owners to opt out in any manageable way. I am informed by representatives from music publishing that one example of this is the operation of the extended collective licensing provisions enshrined in Hungarian copyright law in relation to the performing right. In Hungary, one reason for the failure of being able to rely on the opt-out came from the requirement of Artisjus that the rights owner—not any representative—provide due diligence evidencing ownership of each title in question. In relation to a repertoire of many thousands of works, this represents a huge barrier to successfully exercising the opt-out in terms of tracing the title back to its source. It is often via a complicated chain, redacting and copying documents to comply with confidentiality restrictions and then shipping these across to Hungary.

This example of abuse of proprietary rights provides ample evidence that, in the context of ECL, the burden of challenging any opt-out must sit with the entity operating the scheme and not with the individual rights owner. I believe that it is not the intention of this legislation to create such problems but it is important to guard against potential abuse. Can the Minister give assurances on this?

At the end of the day, I cannot see any downside to giving composers a choice in being able to elect to have their trusted authorised representative act on their behalf in this context. I am also not aware of a prevailing view that would be opposed to creating

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such a modest requirement. Indeed, in Grand Committee, the Minister stated that the Bill does not rule out such a provision.

With the experiences of ECL in other territories in mind, I hope that Report stage is an opportunity for the Minister to clarify responsibility for overseeing due diligence in an opt-out process. I hope that the Government will use this stage of the Bill to clarify that regulations will be clear that the burden of proof for the due diligence in an opt-out will be on the body applying for ECL.

On Amendment 84AEB, copyright licensing bodies are indispensible in many circumstances. For example, no composer could keep track of all the playings of his or her song on television, radio, the internet and in concerts, pubs, hairdressers, department stores and so on; PRS for music does this collectively. However, this kind of licensing is voluntary, meaning that the rights owner gave his or her permission to PRS to license his or her works for use in broadcasts and public performances. Extended collective licensing means that the licensing body can also license works whose authors have not given permission.

Therefore, ECL—and we have debated this in Grand Committee—is potentially dangerous to rights owners. A rights owner may not know about extended collective licensing and find that his or her work has been licensed without their permission. Perhaps they would not have wanted it in that particular publication, or perhaps they had given another publication an exclusive deal. Perhaps they would have charged a different fee; if they had given permission direct, their fee would not have suffered deduction of the licensing body’s commission. Foreign composers in particular may not be aware of the licence at all and may grant conflicting rights or may not collect their fee.

The Government’s explanations always described ECL as “voluntary extended collective licensing”, but the fact is that ECL allows the licensing body to license its rights without their prior authorisation. It is government policy that the author can opt out, but this acknowledges that the licensing body has permission to license his or her rights in the first place. This permission is ultimately given by the Government by authorising the organisation to license rights that it does not in fact hold, not by the author who must withdraw by opting out.

To their credit, the Government have acknowledged the dangers inherent in ECL, and in Grand Committee on 31 January, the Minister explained the Government’s policy regarding safeguards for rights owners. However Clause 69, which enables ECLs to be created by statutory instrument, only very minimally reflects the safeguards as the Minister has now enunciated them. The Government have claimed that the Nordic ECLs provide a strong precedent. However, the safeguards are set out in the Nordic primary legislation. By “Nordic”, I mean Sweden, Norway, Denmark, Finland and Iceland. Setting out the safeguards in primary legislation is clearly an aspect of the Nordic precedent that the UK Government should follow.

My amendments are essentially translations of the Nordic statutory provisions, adapted to the Copyright, Designs and Patents Act. The safeguards usefully include a requirement on licensing bodies to qualify,

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the need to explain the type of licence being granted, the need for the authorised body to be representative, the adoption of a code of conduct, the ability to refer to the Copyright Tribunal where a claim is being made that the body is not representative or that licences go beyond scope of existing copyright licences, a limitation on the term of authorisation to five years, and clear provisions about the ability to give notice of exclusion of a work.

The Minister has said that there must be flexibility, but he has been fairly detailed in his description of what the secondary legislation will consist of. Flexibility is not therefore necessarily an argument for excluding safeguards for rights holders from the Bill, and there can be no reasonable argument against including those safeguards. I beg to move.

Baroness Buscombe: My Lords, I should like to speak to Amendment 84AF, to which I have added my name. I spoke at some length in Committee on the extended collective licensing measures in Clause 69, and I made it clear then that I do not like the principle of ECL. I cannot see how it materially benefits the UK and it will bring uncertainty by not being truly voluntary.

I believe—and I have said so previously—that such a scheme should be opt-in, rather than opt-out, whereby rights holders who want to license their content through others can do so. However, I welcome the Minister’s assurances thus far that safeguards to such a scheme are vital, but—I echo the words of my noble friend Lord Clement-Jones—the safeguards should be included in the Bill, not left to secondary legislation. If the Government are backing ECL because it works in the Nordic countries, why not follow the Nordic lead and put the necessary safeguards in the primary legislation? Whoever may benefit from such a scheme can then benefit, and whoever feels threatened by it will have some comfort in knowing that the Government have protected the rights of rights holders.

As I said on an amendment on Report last week, China has just announced that it will implement ECL in its copyright law and has said that the details will be in regulations yet to be published. Where have we heard that before? The UK Government will not be in a position to demand appropriate safeguards for licensing of UK copyrights by ECL in China if we do not have them in our own legislation, as the Nordic countries do, nor will UK rights holders or their representative bodies be in a strong position to safeguard UK rights abused by ECLs in foreign countries if the UK’s own statute lacks the necessary safeguards. My noble friend Lord Clement-Jones and I have tabled a series of amendments to this clause which does just that, putting into statute the very safeguards that the Minister himself has articulated.

Again, I urge my noble friend the Minister to accept these amendments, and avoid a situation in which companies can seize the intellectual property of others and license it on their own terms.

4.45 pm

Viscount Younger of Leckie: My Lords, this group of amendments is designed to incorporate in legislation a series of safeguards regarding extended collective

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licensing. The Government have publicly committed to many of these safeguards in some form or other. I thank my noble friend for his continued positive engagement with ensuring ECL is a fair system. The Government share those aims, and I seek to reassure my noble friend that we have met them.

As there are a large number of amendments in this group, I will respond to them by reference to a set of themes. Amendments 84AFA, 84AFB, 84AGA, 84AGB, 84AGC and 84AGD are essentially consequential in nature, and so I will not deal with them directly. Amendments 84AEB, 84AEC, 84AED, 84AEE and 84AEF seek to provide clear safeguards against an unwanted extension of the scope of collective licensing, and to define the characteristics of a body which can be authorised to operate ECL schemes.

The need for safeguards is absolutely beyond dispute. A working group which includes creators of photographic, audiovisual, literary and musical works is helping us to develop these safeguards into draft regulations. I gave commitments during Grand Committee on some of the issues the working group would be asked to consider, such as those raised by Amendment 84AED. The Government will consult on these draft regulations before asking Parliament to approve them. The Government feel that regulations can more easily be adapted to keep safeguards effective in the light of market changes. Such adaptability ensures that the scheme continues to protect creators’ interests. Regulations can also more easily be adapted to emerging best practice; this better prevents abuses. The Government’s approach will still allow for a comparable level of safeguards to those found in primary legislation in other jurisdictions.

My noble friend Lord Clement-Jones raised the issue of the Nordic protections which are in primary legislation, a topic also alluded to by my noble friend Lady Buscombe. The UK proposals include similar safeguards, such as the right to opt out and a test of representation, and a different legislative route that has been used to provide future-proofing. However, not all Nordic ECL provision is for specific uses. For example, the Danish Act includes provision for a “general” ECL. Some vital safeguards are on the face of the Bill: the right to opt out and the requirement that ECL can be authorised only for specific types of works and rights. Applications to operate ECL would be authorised only on the basis of significant, demonstrable support for collective management in relation to the specific licence. This would need to include evidence that the applicant—a significantly representative licensing body—has the consent of its members to apply for the authorisation.

My noble friend Lord Clement-Jones raised the issue of ECL. If I have him correctly, he described ECL as potentially dangerous and questioned the description of it as voluntary. Noble Lords have queried our description of our proposals as voluntary, but they are voluntary because the Government will have no power to impose ECL on a sector. This is not compulsory collective licensing; it will be for a relevant licensing body which will require the explicit consent of its members to choose whether to apply. For non-member rights holders, I accept that ECL, where it

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applies, shifts collective management from opt-in to opt-out. This is why the Government are committed to a series of safeguards to ensure ECL is authorised only when there is a demonstrable case for it, and to make sure that rights holders have the opportunity to exercise their opt-out.

In relation to the advertisement of ECL schemes prior to authorisation, the Government have proposed that an application should be publicised to allow comments from interested parties before a decision is taken. The Government do not propose that new regulations should be laid in relation to each proposed authorisation. With regard to Amendment 84AEF, I confirm that authorisations will apply specifically and solely to the licensing scheme which was the basis of the application.

In relation to Amendments 84AEE and 84AEG, the Secretary of State will decide whether to grant or reject an application and to set the conditions of any authorisation. We therefore consider it appropriate to provide in the regulations that the Secretary of State should also have the power to revoke an authorisation, should that prove necessary. The Government believe that this may be a more efficient process than a referral to the Copyright Tribunal. Following discussions with the working group, I can confirm that the Government intend to make ECL authorisations subject to renewal.

I turn now to the question of the opt-out, and I hope that my subsequent comments on the subject of exclusive licensees will be helpful to my noble friend Lord Clement-Jones. Amendment 84AF focuses on the right to opt out of ECL schemes. In Grand Committee, I made a commitment that the working group on extended collective licensing would be asked to consider whether the right to opt out should be extended to exclusive licensees and their representatives. The Government take the opt-out protection seriously. If it becomes clear that an extension of the provisions to cover exclusive licensees and representatives is necessary, the Government will act on that basis. However, I do not want to pre-empt the work of the working group, given my Grand Committee commitment.

I know that my noble friend Lord Clement-Jones also has concerns regarding due diligence in relation to opt-out. I can confirm that the Government’s intention is that the burden of proof should favour the party seeking to opt out. That seems to us the right and fair thing to do.

My noble friend Lord Clement-Jones raised his concern that the opt-out would be too burdensome for rights holders. However, the responses to the consultation make it clear that rights holders expect to be able to opt out entire collections of work or individual works quickly and with minimal or no cost. It will be the responsibility of the collecting society to operate opt-out schemes which meet the needs of effective rights holders. They will need to demonstrate how they intend to do this when they apply to operate an ECL scheme.

On Amendment 84AEH, the Government believe that licensing bodies rather than users, who may be individuals or small businesses, should accept and process opt-outs. Licensing bodies will be required to

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publicise any ECL scheme before it comes into effect, giving rights holders every opportunity to opt out in advance.

Subsection (b) of the amendment presents some practical difficulties. “Reasons to believe”, for example, could prove to be a very subjective judgment. It would seem more practical for licensing bodies to address issues of exploitation that the “author would oppose” on a scheme-by-scheme basis through, for example, licence conditions.

On fair treatment and remuneration for non-members, I reiterate my support for the principle. However, I do not feel that it would be appropriate to give non-members of licensing bodies recourse to the Copyright Tribunal that members do not have. I also feel that it is unlikely to be cost-effective.

Codes of practice will require fair treatment for non-members, and ECL will not be authorised unless a suitable code is shown to be in place. If a dispute fell within the scope of a code, a non-member would be able to use the licensing body’s complaints procedure, with appeals going to an independent ombudsman. The Secretary of State would have the power to revoke an ECL authorisation if a code was not complied with. This is in addition to the proposed wider backstop powers and code review system, which includes the ability to impose other sanctions.

Amendment 84AGE would mandate that the regulations provide for a creator’s moral rights to have been assumed to have been asserted. I am happy to confirm that the orphan works regulations will indeed provide for this.

In relation to ECL, the principle is that the licence conditions applicable to the use of member’s works would also apply to the works of non-members. Amendment 84AGE would, however, also remove references to other safeguards. These include the various rights and obligations once a work ceases to be orphan, and the right to withdraw from an ECL scheme once it is up and running. The fact that these matters are specifically referenced in the Bill is an indication of their importance.

My noble friend Lord Clement-Jones and others have made some valuable points, but I can reassure the House that the Government understand the importance of getting the detail right. Fixing the detail in regulations will allow for expert input from the working group, further consultation and parliamentary scrutiny via the affirmative procedure, and will help the Government to keep safeguards up to date and effective. While I appreciate the intention of these amendments, I am concerned that they would hinder us in getting the detail right now and in the future. I therefore ask my noble friend to withdraw his amendment.

Lord Clement-Jones: My Lords, the Minister has been so forthcoming that I almost do not know where to start in thanking him for the assurances that he has given about the nature and content of the regulations in terms of the safeguards that will be similar to those in most of the Nordic legislation—that is, the way in which licensing bodies will need to demonstrate significant support, the way in which the Secretary of State will set out the requirements, and the powers of the Secretary

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of State in relation to codes of conduct. These schemes will be subject to renewal, which is extremely important. The way in which the Minister expressed these assurances was extremely important, first, in terms of meeting the expectations of rights holders, which is crucial in meeting some of the concerns. Secondly, even more important is what the Minister said about the onus of proof in terms of the ability of rights holders to withdraw from collective licensing schemes. Above all, that will provide more assurance than almost anything else.

I shudder to think how long some of the regulations following on from Part 6 of this Bill will be, since we are putting huge emphasis on secondary legislation following on from the clauses that we are agreeing. However, the Minister has given a very useful route map of what those regulations relating to extended collective licensing are, and to that extent it is extremely welcome. I beg leave to withdraw the amendment.

Amendment 84AEB withdrawn.

Amendments 84AEC to 84AFB not moved.

Amendment 84AG

Moved by Lord Howarth of Newport

84AG: Clause 69, page 65, line 41, after “paid” insert “if deemed required”

Lord Howarth of Newport: My Lords, this amendment arises from conversations that I have held with the British Library, with Universities UK and with the Wellcome Trust. They all endorse this amendment, as do the Chartered Institute of Library and Information Professionals—CILIP—the National Museum Directors’ Conference and the British Broadcasting Corporation. The issues at stake are important for our universities, our libraries, our archives, our museums, our galleries and our broadcasters, as well as for our culture and economy.

The purpose of the amendment is to create some flexibility in respect of a requirement that fees should be paid up front for the use of certain in-copyright works, known as orphan works. Orphan works are works whose rights holders, following a diligent search, remain unidentified or untraceable. The amendment would ensure that there is no absolute requirement in the statute that fees for the use of orphan works should be paid up front.

Let us remind ourselves of the benefits of being able to license the use of orphan works, provided that it is done with appropriate safeguards. I strongly support the Government’s policy of making orphan works accessible.

5 pm

The great cultural institutions of our country hold tens of millions of orphan works in their collections. The Joint Information Systems Committee of the Universities Funding Councils estimated that there might be some 25 million orphan works in its sector. The National Museums Directors’ Conference estimates 50 million in its sector. The British Library considers

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that perhaps 40% of its in-copyright collections consists of orphan works. As the law now is, there is no way that this great wealth of resources can be licensed for use. Orphan works remain quarantined. In the words of the National Museums Directors’ Conference, they are underused, understudied and undercelebrated. So Clause 69 and Schedule 21 are essential.

What sort of material are we speaking of? In the first instance, we are talking about books. The British Library’s exercise, the results of which were published in Seeking new Landscapes, found when it took a representative set of titles published between 1870 and 2010 that 43% were potentially in-copyright orphan works. There is unpublished material in vast quantities. Take, for example, material relating to World War I, the centenary of which we are about to start to commemorate. There are personal photographs, letters and diaries. There is more recent material; the Wellcome Trust has a collection of posters about HIV and AIDS. Of the 3,674 posters, 2,601—71%—were found to be orphans. These orphan works represent resources on an extraordinary scale and of extraordinary potential cultural, educational and economic value. They have the potential to stimulate new research, extend knowledge and excite new creativity and innovation. If they were made available to the public there would be enhanced public interest and enjoyment of the contents of our national collections.

However, none of those benefits is possible now. Orphan works remain in limbo. Under the current law, if institutions digitise this material and exhibit it, they are acting illegally. It happens to an extent for the good reasons that I have suggested. It is absurd and wrong that a law that is unfit for purpose should criminalise academics, curators and professional people who are scrupulous about copyright. They are active users and generators of copyright themselves, and their whole ethos is to use these public collections for the public good. I emphasise that everyone agrees that it is essential to protect the legitimate interests of rights holders. Where we see that certain rights holders may have genuine grounds for being anxious about their interests, we must acknowledge and accommodate their concerns in the regulations.

Take digital photographers, for example; it is too easy at the moment to create a fraudulent orphan work by stripping from a digital photograph the metadata that provide the attribution of intellectual property. This happens—not in the great public cultural institutions to which I have been referring, but it does happen. Until a solution is found for this particular problem, probably a technological solution, it would be appropriate to exclude digital photography that originated as digital photography from the scope of licensing of orphan works. The British Library and CILIP would be content if that were done. Meanwhile, vast quantities of analogue material from the 20th century are in archives which, if they could be brought into public exposure and use, would constitute no genuine threat to modern photographers. They would not undercut the market. The Government should, of course, not be stampeded by private commercial interests, expressing vague and unsubstantiated fears about scams and unfair competition.

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Without this amendment, we will lose the benefits of Clause 69 and Schedule 21—the benefits of releasing these orphans into the world. A requirement that royalties and licence fees should be paid upfront for the use of orphan works would be unnecessary and damaging. There will be, absolutely rightly, a requirement that a diligent search should be made before application is made to the licensing authority. If, as a result of the diligent search to find the rights holder they have still not been found, there is a strong probability—indeed, a virtual certainty—that the work is orphan. The institutions testify and can demonstrate that it is very rare that a rights holder appears. If a rights holder does appear, where we are speaking of digital library projects which would provide free access to students, scholars, and the general public, it is very unlikely that the holder would require payment: they recognise the educational and public benefit of sharing their property.

Of the 3,674 posters in the Wellcome Collection, responses were received from 108 rights holders. Of those, all but 12 agreed to allow publication online with a non-commercial licence. It is the practice of the National Portrait Gallery to list orphan works on its website when it places images of them online. Over 10 years, fewer than 10 rights holders have appeared, and all have been content that the images remain online. CILIP confirms that this is normal.

To pay people who cannot be identified while not paying those who can be does not make sense, yet that would be the effect of the policy. A requirement to pay upfront is therefore unnecessary. Only modest sums would be needed to requite the rights holders, and those sums can be found from the cash flow of the institutions, and certainly from their reserves. The argument that upfront payment is a necessary insurance is wrong. It would be using a sledgehammer to crack a nut; it would be an unnecessary, bureaucratic, costly diversion of funds from our cultural institutions; and it would be very damaging. Fees required to be placed in an escrow account with the licensing authority would be sterilised. There would be no benefit for the phantom rights holders, but the money would be lost to the institutions as it would be confiscated for years, probably for ever.

We have to envisage substantial sums because of the quantity of orphan works in the public collections. Even a minimal charge per item would be cumulatively prohibitive. The BBC has 950,000 TV and radio programmes in its archive, 5 million photographs and 2 million sundry items in its collections. The British Library has 112 million newspapers and 18.5 million sundry items. Even a minimal fee on each of those would tot up to an impossible level of charging.

What would the licensing authority do with the money? The impact assessment tells us:

“Should the rightful owner not re-appear within say, six years of a permission being issued, the deposited fee would be treated as a Bona Vacantia case (where assets have no owner) … and would thus default to the Crown … The Crown could then use these funds in a variety of ways”.

Let me emphasise that the cultural institutions are entirely happy to contribute to necessary administrative costs of a licensing authority. Let me also say again that they are more than happy to pay royalties due to

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rights holders who want to be paid. However, it would be outrageous to require that licence fees be paid not for the benefit of rights holders—who will not appear, or, if they do, will not want to paid—but to default to the Crown. This would be a tax on publicly funded institutions. Indeed, it would be a double tax: it would be taxing grant-in-aid that had already been provided by the taxpayer. Where charitable funds are in question, it would be a levy on those.

It would be an impossible, as well as an inappropriate, burden. Public funds have already been substantially cut to our public cultural institutions, which are struggling to cope with their depleted finances. An upfront licence fee would be an impost on the top of other substantial costs that are appropriate and necessary: for example, diligent search, which we have already spoken about, is very expensive. A diligent search carried out by the Wellcome Trust on the AIDS posters required 132 days of staff time—this is just one instance. The costs of diligent search, digitisation, curation online, maintaining online services and of the contribution for the administration of the licensing authority would all already be there. We must not add unnecessarily to them.

This is the main part of the answer to the Government’s argument about unfair competition and the need for minimal market distortion. They say that it should not be cheaper to use an orphan than a non-orphan work. It would not be, as I have explained. The cultural institutions already face major financial hurdles and costs. If extra, unnecessary, costs are added through the requirement to pay upfront royalties, the institutions will conclude that the game is not worth the candle, the orphan works will stay in limbo and the Government’s highly desirable policy will be aborted.

As the noble Lord, Lord Clement-Jones, said earlier, an orphan work scheme must be economically viable. Do not take my word for it that the scheme would cease to be economically viable. The Wellcome Trust, a great charity to which all of us owe an immense amount, states that to,

“tie up precious public and charitable funds in an escrow account that would, in reality, rarely be used … could act as a significant barrier to institutions taking up the scheme”.

Universities UK states similarly:

“An up-front payment system, with a large number of payments being made to escrow accounts which are never collected, would have a significant negative impact on the ability of universities and others to make legitimate use of orphan works”.

The British Library adds that if, after all this, the licence is to be issued for only five years, leaving uncertainty as to what would happen after that and, presumably, a requirement to keep repeating that laborious process, in all the circumstances, it would not engage with the process. So the Government would be defeating their own purpose.

There is also a moral point. A high proportion of orphan works never originated as commercial. I speak of religious texts or ethnographic material documenting endangered or minority cultures, personal photographs, and the papers of local societies. We should not introduce an assumption that all should be commercialised, that a market price should be attached to everything that is personal, communal or sacred. I wonder whether the

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rights holders of non-commercial material would really want a government agency or the Government themselves to be paid for the use of that material. Why should the norms that may be appropriate in the commercial entertainment or publishing sectors be applied everywhere else? We must seek a workable and balanced system for copyright which balances public benefit against legitimate private rights and serves each equitably while facilitating the dissemination of information and knowledge to the broadest public.

The world’s first copyright legislation was passed in this country in 1710 and was known as an Act for the Encouragement of Learning. In 1836, Antonio Panizzi, the great librarian, the creator of the Round Reading Room in the British Museum, wrote:

“I want a poor student to have the same means of indulging his learned curiosity, of following his rational pursuits, of consulting the same authorities, of fathoming the most intricate enquiry as the richest man in the kingdom, as far as books go, and I contend that the Government is bound to give him the most liberal and unlimited assistance in this respect”.

We should legislate in that spirit.

Does the Minister accept that the concerns of the museums, libraries, archives, universities and broadcasters are valid in this matter? Of course we should have sensible flexibility and phasing in how the policy is introduced and developed, but there needs to be a presumption that there will not be a requirement to pay upfront for orphan works. At the very least, we need flexibility in the statute. I beg to move.

5.15 pm

Baroness Blackstone: My Lords, I support my noble friend Lord Howarth of Newport. In doing so, I declare an interest as chairman of the board of the British Library. I will not repeat all my noble friend’s arguments, which were made at some length and extremely cogently. Nobody could have made the case better. However, on behalf of the great cultural institutions, of which the British Library is one, I want to say how important this amendment is. As my noble friend said, it is absolutely right that more than 40% of the in-copyright collections at the British Library are orphan works. I can confirm that.

My noble friend made a plea for flexibility and this is an example of legislation where flexibility should be built in. Clause 69 is an important clause in this Bill and I congratulate the Government on bringing it forward. However we need to make sure that it leads to the maximum use of orphan works for research, scholarship and other public uses. I fear that without this amendment, maximum use will not take place and many of the benefits of Clause 69 will we lost, as my noble friend has said. I cannot believe that the Government would want that to happen.

It will be extremely damaging if there is a requirement to pay upfront for orphan works in the way that the Bill requires. It is also quite unnecessary. I can see no downside to making this small change; otherwise it will end up—as my noble friend has said—as a tax on the very public institutions that both the Government and all parts of this House want to support. I ask the Minister to respond positively to this amendment. It is extremely important and will make a great deal of difference to this Bill.

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The Earl of Erroll: My Lords, I support the noble Lord, Lord Howarth, in this amendment. It is extremely sensible, very simple and allows for flexibility, which is what we want. The concept of licensing for orphan works and for extended collective licensing is important if we are to disseminate things that we want to do and see. More and more programmes, books and so forth now dwell on our recent past. In this case, “recent”, when it comes to copyright, means the lifetime of the author plus 70 years.

The situation gets confusing. First, if one of your Lordships were to send someone a postcard, the copyright—wherever that postcard ends up and whoever buys and sells it and owns it later—would subsist for their lifetime plus 70 years. The next confusion is the assumption that copyright resides with the person who wrote the document. Let us suppose that someone tries to produce a study of an incident that happened between the wars. Indeed, a similar issue arose the other day when someone asked whether they could use a letter from my great-grandfather and whether I would grant copyright. There is a certain technical problem. I presume that they had looked at all the wills between my great-grandfather, my grandfather, my mother and myself to find out that I was the residual legatee; or that each was the residual legatee of each will; or that the copyright in this particular case had not been assigned to someone else. How on earth would you prove that? It would be totally impossible. For things that were never designed to be commercial, the concept of trying to trace the person who owns the copyright is ridiculous and is just a non-starter.

A clampdown will mean that a whole raft of things will not be able to be published by people in public office, because one cannot say to a public servant, “Just break the law because nobody is going to sue you”. You are telling them to act illegally. You can possibly do that as a private person and say, “They are not going to dare to sue me”, but you cannot expect people in libraries, universities, other such public bodies and charities to break the law. It is the wrong way to treat the law. As a result, we need something more sensible. That is why this entire clause is there, to try to solve the problem. But think of the millions of pounds involved if we charge even one penny per potential orphan work. We heard the figures a moment ago from the noble Lord, Lord Howarth. I do not believe that there should be a presumption of an upfront payment unless it is a small administrative charge. There should be no payment that tries to reflect the number of orphan works that might be involved, particularly if it involves lots of little individual things going from A to Z.

I am also worried about what happens to the money. If it goes into general taxation, I am not sure that is a very good use of it. I tend to think that the great institutions probably know how to spend the money better than central government, but maybe I should not say that. I certainly feel that most taxpayers think that they know how to spend their money better, so for this to be a covert tax is not a good idea. I also find the concept of government departments taxing and fining each other absolutely ridiculous, as it just circulates money around.

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I would disagree with the noble Lord only about the copyright on digital photographs. If, because there is a technical challenge with some people stripping out metadata, exclusions are made for one class of item, exceptions and exemptions will be created because there are many ways around it. What happens if you take what is an analogue photograph and digitise it? At that point, it is going out there digitally. Is it now digitised so that the copyright rule does not therefore apply to it, or whatever? We should keep it simple and include everything within the orphan works scheme. Apart from that, very soon there will not to be many photographs that are not digital, so by excluding them the law will take some time to catch up. In any event, this amendment is sensible and it would be madness to refuse it. Please will the Minister look on it kindly?

Lord Howie of Troon: My Lords, I want to make a very brief observation with regard to orphan works. The existing definition of an orphan work is not terribly satisfactory. The matter came before the previous Government in their last weeks—I see my noble friend Lord Young nodding over there—when I was successful in persuading them to accept a new definition of what an orphan work actually was, so that people would be in no confusion as to what they were dealing with. Unfortunately, this was the declining days of that Government and that part of the legislation disappeared in the wash-up. I wonder whether the Minister might look back to the Hansard of that period for the redefinition of orphan works and, perhaps at a later stage of this Bill, bring it back in.

Lord Stevenson of Balmacara: My Lords, this has been a very powerful debate. In contradistinction to what have been discussing in the immediate run of amendments, this seems to be a situation where the Government are trying to be a little too definitive in primary legislation. My point would be, to support the comments made on this side, to suggest that the Minister might wish to review that.

We have heard that we are talking about hundreds of millions of works, which are—in the words that my noble friend used—underused, understudied and undercelebrated. There is no contention that the repositories in which these works lie are happy to pay for the cost of the administration of the scheme that is to be used to provide access to them. The concern is that by providing a very inflexible approach to this, these institutions will effectively have been taxed to provide funds which will go to the Crown under the bona vacantia rules. This seems extraordinarily unfair and I urge the Government to think again about this issue. I am aware that it has already been the subject of some discussion and debate but, given that we have at least another 10 days until the final stages of this Bill, perhaps there is still time for the meeting or discussion that I might encourage the Minister to have. We would certainly be very willing to meet his timetable in order to progress this.