My Lords, I join others in welcoming the Minister to her first outing. I have rarely seen a smoother and more effective transition from Back-Bencher to Front-Bencher. She seemed to take to it as though she had been doing it all her life—indeed, so much so that the government Chief Whip, who crept in at the start of the Minister’s
remarks, presumably just to make sure that she had made the right decision, left almost immediately, smirking widely. The Minister seems to have passed whatever test that was, and I congratulate her.
I also play tribute to the noble Baroness’s predecessor, the noble Viscount, Lord Younger, who, as has already been said, has been very good on this issue: patient, courteous—yes, all that—but also a fantastically good letter writer. I hope that the Minister might pick up from him his ability to find one or two issues that came up during these debates and discussions which required him to write us letters which served as a good way of catching up on what had been talked about and picking up on the points that occasionally get missed. That is not mandatory, but it was something that we all welcomed and enjoyed.
As others have done, I also thank officials for their work on this SI. It is the first time that I have ever had a briefing from no less than the chief executive of the IPO—which made me tremble slightly as I opened it up and realised what it was. It was good to have. Maybe it is not a change of view, but one of the concerns that we have had over the plethora of activity that has come out of the Hargreaves review has been a slightly defensive attitude on the IPO’s part, which I felt was manifested in meetings and correspondence. If this is the new IPO under the new Minister, she has effected change in a remarkably short time. It very welcome and long may it continue.
The Minister will already have realised that she is entering an area of deep expertise from a very small number of people in your Lordships’ House. There are usually one or two more of us than there are today—we are feeling a bit bereft of other noble Lords and Baronesses. However, we geeks like nothing better than to get our teeth into a bit of IP and feel that a day in Parliament is wasted if we have not had some meaty issue to chew over. I am delighted that we are back on track and look forward to more of these debates.
This instrument has a long pedigree, as has already been mentioned. We have been talking about the passage of the ERR Act of famous memory, during which some of the debates around the Government’s approach were rehearsed over a long period of time. Out of that has come some good, however, because I am sure that the thoughts that informed those debates have been reflected in some of the outturns that we have seen today. As the noble Lord, Lord Clement-Jones, was right to point out, this area is not free of others who might wish to make regulations. We have a European directive on this and a number of similar areas that is still to come through within a couple of years. There is also the ongoing work of the non-statutory but important Copyright Hub, which will in time prove very capable of dealing with so many of the issues that we have been looking at.
In looking at collecting societies, we should have at the front of our minds the fact that this is a process of dealing with a regulated monopoly. As such, it is important that Parliament should exercise as much scrutiny as possible in these areas. We are broadly disposed not to accept monopolies, even though they often occur and exist in many parts of the economy. However, in this area we are permitting them to exist
and, indeed, encouraging them to take their work further. It is therefore important that we spend time on thinking through the implications, certainly those raised by the noble Lord, Lord Clement-Jones, and my noble friend Lord Howarth.
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This measure takes the idea of monopoly further in the sense that it seeks to move into areas where rights holders are not currently obtaining the benefits that may be provided by a collecting society, and to some extent are making it more likely than not that they will join into the monopoly to benefit from what is going on. Dealing with real property rights, we clearly have to be careful about how that is done. It is therefore not a surprise that the regulations themselves are extremely complex and quite long. That is a good thing. What is a bit less good, and perhaps something that we might ask the noble Baroness to respond to, is why the detail that is already in the regulations needs to be accompanied by what is called a legal opinion, which will be circulated when these out. What is the difference—is there more detail that we have not had? I can guess that other noble Lords have raised points that might be part of it. Like the noble Lord, Lord Clement-Jones, I am slightly worried about there being sources of authority in relation to how this will be implemented in practice that are not being scrutinised at the moment but which are being left to come out and will, in fact, be the vehicle through which collecting societies themselves and rights holders are expected to operate. We should be grateful for the Minister’s comments on that.
However, it is extremely good to have confirmation from the chief executive and also to read in the final regulations that the regulations have been amended through the debates we have had in this House and also through discussions with the industry. That is all for the better. I sense from talking to those who have submitted comments to me that we are at a point where this has broad acceptance, even if it is not an ecstatic welcome, right across the industry. That is good.
I have four points that I want to raise. One is very trivial in that I want to record that I am pleased that the Government have now accepted that their statutory instruments should come out on the two vesting dates. This one is due to come out on 1 October. That system was departed from with two earlier SIs on this copyright area, and I think that that is to be regretted. The reasons for the entry of these new regulations are good and robust, and it requires very specific reasons not to do it. That is not the case in this area.
Secondly, the regulations touch on fees that may be charged. It is always important to have a sense of what is being talked about. There are fees in two directions, as far as I can see: the fee that will be charged by those authorising collecting societies, which are limited to the recovery of expenses; and the fees that may be charged by the collecting societies to their members in relation to the work they are doing in servicing the rights holders in respect of the remuneration that they might recover. Unfortunately, there is very little detail on that. Like the noble Lord, Lord Clement-Jones, I looked back at the initial impact assessment and could find very little about it. It is not an impact assessment in terms of money, although it does deal with some of
the legal issues. I would be grateful if the noble Baroness could give us some sense of where she thinks those fees will lie. We need to have a sense of that, even though it will depend on the actual costs. Work must have been done on that. If she does not have the figures today, it would be a good topic for a letter.
Thirdly, there is the question of the mandate, as I call it. The noble Lord, Lord Clement-Jones, raised this point. Why are the regulations so coy about when it is feasible for a collecting society to start operating an extended system? We are talking about “substantial majorities”, “significant support” and “informed consent”. We are quite used to democracy in our country. Is there something being hinted at here that is not meant to be discussed in polite society? Is this some sort of code for a 75% majority? Why is it not just a simple majority of members voting in an open election perhaps run by the Electoral Reform Society, or something like that? That is the normal way to do these things. Even trade unions do that sort of thing. I cannot believe that it is so difficult for the Government to come up with a nice simple phrase that says that a majority of members voting in this will be sufficient for it to take effect. I should be grateful if the noble Baroness would respond on that.
Fourthly, like my noble friend Lord Howarth, I am also very confused about the duration point. The first time that it comes up there is a very fearsome statement that the duration will never be more than five years. Two pages further on, however, there seems to be the possibility of open-ended and permanent durations. I can see the issues that must have been in the drafters’ minds: “This is new; we are dealing with monopolies; it is difficult; therefore we will set a firm time limit”. However, all the responses we are getting are about the need to ensure that this is long term, not just for the institution itself but because contracts with private companies will need much longer terms to recoup the investment they might put in for perhaps the larger data transfers.
There is obviously a tension here. I can understand the issues, but I question having five years initially and the inability to apply for an extension until three years have passed. Incidentally, this is accompanied by what seemed quite a draconian—a sloppy word, I admit—or substantially bureaucratic requirement that review is to be on a three-year basis. For the review, there is a page of detailed requirements that ECL schemes must comply with, which suggests that the scheme is being quite heavily policed. I just wonder, like the noble Lord, Lord Clement-Jones, whether we have got the balance right. Clearly the regulations will stand as they are, but when there is an opportunity to review them, perhaps this point can be taken into account.
Having said all that, I am broadly in favour of what is happening. I do not share the concerns that the noble Lord, Lord Clement-Jones, has about the regulations. I think that they are good both for society and for the economy, although we have very little to go on except a sense among the industry that this will be, for certain big institutions, a very important change and should result in more royalty payments and therefore greater earnings for people who have rights that they currently do not exercise. I ask the noble Baroness to respond to that series of questions.