My Lords, I thank my noble friend Lord Clement-Jones for his amendment. This amendment and the following one fall within the remit of the Secretary of State for Culture, Media and Sport. However, as I work ever more closely with my colleagues in DCMS where there is some crossover in policy, I am more than happy to discuss these amendments today.
The Government recognise the opportunities presented by the lending of e-books by public libraries and recently commissioned an independent review of e-lending in libraries in England, led by William Sieghart, which my noble friend Lord Clement-Jones referred to. Noble Lords will be aware of the public lending right—PLR—scheme which enables authors and other rights holders to receive payments in exchange for their works being loaned out free of charge by public libraries.
More than 23,000 authors, illustrators, photographers, translators and editors who have contributed to books lent out by public libraries in the UK receive PLR payments each year, up to a maximum of £6,600 per rights holder. This is, in effect, compensation for the mandatory nature of the PLR scheme. Rights holders are automatically included in the scheme, although some authors waive their right to receive PLR payments.
At present, e-books, audiobooks and e-audiobooks—which I shall collectively call e-books for convenience—are outside the scope of the PLR scheme. This is regardless of whether those books are downloaded on library premises or downloaded remotely, such as at home. It is very important to note that public libraries are able to lend e-books, both on library premises and remotely, without the PLR scheme being extended. Library authorities offering e-lending reach appropriate agreements to license the lending of e-books by contracting the services of third party aggregators who liaise with publishers on rights holders’ behalf.
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Before I address my noble friend’s amendment, it is worth noting that loans of e-books currently represent a tiny fraction of book loans in this country. The last set of statistics on public library usage showed that there were 850,000 e-book loans in the UK in 2011-12 compared with almost 288 million loans of print books in the same period. Nevertheless, e-lending is a growing trend and we should expect library users’ expectations and demands to change. In the future, for some people, perhaps popping to the library will become synonymous with going upstairs to log on to their computer.
The Digital Economy Act 2010 contained provisions enabling the PLR scheme to be extended to on-site e-lending; that is, loans of e-books carried out on library premises. By contrast, under remote e-lending, a library user may, for example, log on to a library website from his or her home and download an e-book in that way. I apologise for labouring the distinction but it is an important one for the Committee to bear in mind.
Last autumn, the Minister for Culture in the other place, Ed Vaizey, asked William Sieghart to carry out an independent review of e-lending in public libraries in England. The report recommended that the PLR scheme should be extended to on-site loans of audiobooks and e-books by commencing the provisions in the Digital Economy Act 2010, and that PLR should be extended to remote e-loans. The government response, published in March this year, welcomes the review’s findings, but explains that it has not yet been possible to bring the provisions of the Digital Economy Act into force. However, it also says that the Government
have now committed to considering the commencement of the provisions to extend PLR to on-site loans of audiobooks and e-books.
However, this amendment deals specifically with remote e-loans, which are not covered by the provisions in the Digital Economy Act. This was to ensure compatibility with a European directive: namely, the copyright directive. Under that directive, authors are provided with the exclusive right to authorise or prohibit any communication to the public of their works. This includes making a work available to the public by electronic transmission in such a way that members of the public may access it from a place and time of their own choosing—in other words, via remote e-loans. This right is provided for in the Copyright, Designs and Patents Act 1988.
On-site loans of e-books are subject only to the separate right of reproduction. There is a specific exemption in the copyright directive for loans by libraries. By contrast, in respect of the exclusive right of communication, the specific exemption is limited to communications to members of the public,
“by dedicated terminals on the premises”.
This is the basis upon which the Government legislated in the Digital Economy Act to extend PLR to on-site loans. Therefore, I trust that, considering the wider constraints within which UK legislation must operate, and that we must have proper regard to this matter of EU law before proceeding, my noble friend will appreciate that this area needs particularly careful consideration.
Furthermore, the implications for PLR funding need to be considered against evidence of the number of remote loans of e-books. The government response stated that,
“any increase to PLR funding would need to be considered against evidence of increased loans within the increased remote scope”.
An important step, therefore, is ensuring that there is a robust evidence base upon which to consider any future extension. This is a really important point as existing research about e-lending is predominantly American. While that provides useful indicators, the UK market is significantly different in many ways. Therefore, to offer any meaningful evidence on e-lending in the UK, the review concluded that a central project is needed to bring together all partners collaboratively.
As a result of the findings of the review, I am pleased to say that the evidence base will be improved through a research project led by the Society of Chief Librarians in collaboration with publishers and library authorities. The Government expect that the whole library sector can benefit from these results. The Government see improving the evidence base as an important step forward as e-lending is evolving extremely quickly. However, the Government believe that it would be premature to prejudge the outcome of that independent research project by legislating now.
A number of noble Lords raised questions in this short debate and my noble friend Lord Clement-Jones stated that authors’ rights were being infringed without this amendment. Non-print book rights holders are currently conferred lending rights by the Copyright,
Designs and Patents Act 1988, allowing these rights holders to authorise or prohibit the lending of their work. The law requires library authorities to reach appropriate agreements with non-print rights holders or with other parties on behalf of those rights holders in order to license the lending of their non-print works.
Library authorities offering e-lending do this by contracting the services of third party aggregators who liaise with publishers on their behalf, which is a point that I made earlier. My noble friend Lord Clement-Jones spoke about the need to increase funding for the PLR. The funding available for PLR for 2015-16, which is the earliest at which the scheme can be extended, will be confirmed in the spending round on 26 June. Given that loans of print books and audio books are seeing a downward trend as loans of e-books are increasing, it is not necessarily the case that an increase in PLR funding would be necessary to maintain the rate per loan paid to authors.
My noble friend Lord Clement-Jones made a recommendation that the PLR should be extended and funding provided urgently, and he asked why this has not happened to date. In the response to the review, the Government have committed to considering the commencement of the DEA provisions. I can assure your Lordships that careful consideration has been given to this and I will inform the Culture Minister of my noble friend’s keen interest. The funding available for the PLR for 2015-16 will be confirmed on 26 June, as I mentioned.
The noble Lord, Lord Young, asked where the Government are on the Digital Economy Act—whether it would be implemented and when. The provisions in the Digital Economy Act aim to address the online copyright infringement resulting from unlawful peer-to-peer file sharing. The Government and Ofcom are currently implementing this system. The Government are still on track to send the first notification letters during the course of 2014. It may be that a fuller answer is required to the noble Lord in respect of his specific questions on the timing and I will endeavour to do that.