: My Lords, the noble Lord, Lord Holmes of Richmond, is not in his place at the moment. He enjoined us to pay respect to the wonderful skills of the Minister who is about to respond to his fourth topic of the day. Having moved seamlessly from sport to parking and to marine inquiries, he now has to deal with intellectual property and, in particular, the blocking of ISPs—not an easy topic, as I know that he knows, but one that has to be dealt with as we consider Clause 41.
The clause would remove a power from the Digital Economy Act 2010 to make regulations containing site-blocking provisions. The Act gives courts the power to grant injunctions requiring internet service providers to block access to specified sites to prevent the infringement of copyright. The power was included to enable copyright owners to tackle sites based outside the UK that offer their copyrighted material illegally. Copyright owners are not able to take action against those sites in the UK and find it difficult to pursue them in their home territory. It was therefore considered reasonable to provide the ability to block access via internet service providers.
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After the Digital Economy Act came into effect, the Government asked Ofcom to review the efficacy of such site-blocking injunctions, if they were to be made. I will refer to its report later. Copyright owners had begun successfully to utilise the pre-existing provisions in Section 97A of the Copyright, Designs and Patents Act 1988 in the interim, and had applied them to site-blocking injunctions. Since Section 97A of the CDP Act provides remedies for copyright owners, we accept that there is at least a case for the clause to be included in the Bill. However, as I have pre-warned the Minister, this is a complex issue, not least because how we legislate for copyright infringements is central to our creative industries. As this repeal has wider implications, we need to be careful about how we approach this issue.
Copyright is a key part of the creative industries and the digital economy that drives them. They provide an estimated 1.5 million jobs, 10% of the economy and more than £36 billion of gross value added. However, it is wrong to think that intellectual property is the preserve simply of specific creative industries, such as design, film, music and broadcasting. Our USP in this area is the difficult to find juxtaposition between creativity and innovation, and the impact on production and manufacturing. The fact that we have a strong creative industries sector, combined with a strong science and research base and world-beating manufacturing sectors, including automotive, construction, aerospace and pharmaceuticals, means that our economic model—indeed, our whole future prosperity—is very much dependent on IP.
The first problem with the Government’s approach is that, despite several significant changes to our copyright regime in primary and secondary legislation in this Parliament, they have no overarching vision of this sector. Everything in this area is compromised by the split in responsibilities between DCMS and BIS, whether it is the failure of the IPO to speak up for creative industries in a general sense; the mess made by the Government in implementing the Hargreaves recommendations; or the worrying approach to copyright apparently being adopted by government in Europe.
Under the previous Government, the Communications Act 2003 set out a 10-year vision that brought together existing communications regulators for telecoms, television and radio to address the then new concept of convergence. There was another review in 2009, which looked forward a further 10 to 15 years. The previous Government wanted to ensure that legislation kept pace with technology as far as possible. That is a key point of the clause: the opportunities and challenges of technology lie at the heart of the malaise that is attacking the value of online copyright. When in government, we wanted legislation to keep pace with and not to prevent change or innovation, but to provide the certainty and legislative framework in which competition could flourish, new businesses could be established and innovation could be harnessed to put us in first place in the global digital race.
I have some questions for the Minister. If the Government want to delete Sections 17 and 18 of the Digital Economy Act, are they confident that they are putting in place the necessary legislative framework to enable our digital economy to grow, so reliant as it is on online copyright? Where can we find a vision of our future digital economy and the role of online copyright in it? We have been promised a Green Paper and then a White Paper since 2010; indeed, there were rumours and sightings of drafts at one point. At one stage, publication of a White Paper was promised every month for almost an entire year. The interim discussion paper, Connectivity, Content and Consumers, simply cobbled together a few existing initiatives and said that the Government would work with industry to develop a strategy by the end of 2014, which is about now. Will the Minister tell us where we are with the long-term strategy for connectivity, content and consumers? It is important to understand what it is.
The rationale for this deregulatory measure is that a clause in a Bill drafted well before the digital age is being used to protect against modern problems. Would it not have been sensible to have approached this from the other direction: to have used the DEA provisions, which were specifically drafted to achieve the aims outlined in the Bill, as a long-overdue trigger to implement the other measures in the Digital Economy Act that could have benefited our creative industries?
As I argued earlier, the proper protection of IP is critical for many sectors of our economy. It is about incentivising creativity and innovation by allowing an appropriate reward for the risk that inventors, creators, musicians or performers take in generating that IP. Protection of IP is not about protecting obsolete business models, but about protecting new and emerging business models when they suffer copyright theft or other effective criminal activity.
Studies by the film and television industries indicate that more than 10% of UK adults consume infringing content online, and that piracy costs of these industries are more than £535 million per year in the UK alone. We have more evidence from Ofcom, which estimates that in the last three months, 280 million music tracks, 52 million TV programmes, 29 million films, 18 million e-books and 7 million games were illegally downloaded. The industry estimates that over the whole Parliament, the Government’s delay in effectively enforcing online IP will cost it more than £1 billion.
The Government propose to repeal these provisions in the Digital Economy Act, but do not give any real indication of what they will do to protect IP in the future. Clause 41 repeals the power to make provisions for blocking injunctions in Sections 17 and 18 of the Digital Economy Act. However, these sections contain wide powers that are not found in the Copyright, Designs and Patents Act 1988. How could they be? It was drawn up well before the digital age. The sections contain powers to make regulations that could grant courts the power to order internet service providers to block websites that enable illegal downloads or host significant material that is not copyright, or copyright-infringing. Section 18 also specifies that any such regulations would be subject to the super-affirmative procedure, which means that the regulations must be expressly approved by both Houses of Parliament before they can be made. Will the Minister explain why he feels that the clauses in the Copyright, Designs and Patents Act 1988 are sufficient for the digital age and why Parliament is being excluded from this process of blocking websites?
The Minister will probably refer to a report by Ofcom in 2011 when it was asked to review the practicability of the DEA provisions. In that report, Ofcom noted that none of the blocking techniques,
“is 100% effective; each carries different costs and has a different impact on network performance and the risk of over-blocking … all techniques can be circumvented to some degree by users and site owners who are willing to make the additional effort … the location of infringing sites can be changed relatively easily in response to site blocking measures, therefore site blocking can only make a contribution if the process is predictable, low cost and fast to implement … to be successful, any process also needs to acknowledge and seek to address concerns from citizens and legitimate users, for example that site blocking could ultimately have an adverse impact on privacy and freedom of expression”.
These are good points that need to be taken on board. I invite the Minister to respond to them. I hope that he will also recall that Ofcom acknowledged that,
“site blocking could contribute to an overall reduction in online copyright infringement”,
even though it said that Sections 17 and 18 of the 2010 Act were not the full solution. However, I note that in August 2011 the Business Secretary said:
“There are test cases being fought in the courts, so we’re looking at other ways of achieving the same objective, the blocking objective to protect intellectual property in those cases, but in a way that’s legally sound”.
So can the Minister explain why there has been a change of plan here? In 2011 the Government were apparently searching for even better ways to achieve the objective of Sections 17 and 18 of the DEA Act, but in this Bill they say that injunctive relief using
existing 25 year-old legislation is the only solution they need. Is this really so? Is it not clear that what this clause exposes is that the Government have failed to come up with a legally sound, effective way of protecting intellectual property, something the industry says that it needs?
The House of Lords Communications Committee was invited by the Joint Committee that scrutinised the draft Bill to comment on Clause 41. In its response, it noted what it described as the Government’s undertaking in 2011 to do,
“more work on what measures can be pursued to tackle online copyright infringement”.
Will the Minister explain precisely what further work the Government have done on this issue? Are they intending to do any more? Is this it? This decision hardly meets the need for the overarching approach to securing the future of our digital economy that we were promised.
Repealing Sections 17 and 18 of the Digital Economy Act is the wrong approach. It might have detrimental consequences in terms of both perception and reality for the digital economy. Perhaps the Government are no longer engaging with the matter. Given the disarray in the Government's approach to the digital economy more generally, we find it difficult to support Clause 41. The contrast between the previous Government, seeking out the future, looking forward and acting in advance of the technology to secure and protect jobs in the valuable digital economy and this Government, waving the banner of deregulation to hide their inability to act, could not be greater.