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4 Mar 2003 : Column 693—continued
Mr. Smith: The hon. Gentleman is absolutely right. There is a particular problem with the younger age groups, among whom this activity is regarded as an entirely natural phenomenon, even though, as I mentioned, many of them are aware that it is illegal. It is regarded in a way that is similar to the way that some people regard speeding on a motorway: they know that they should not do it, but they do it none the less. It is absolutely essential to change the culture and to get across the message that this is not a pain-free exercise and that doing it to too great an extent will kill the goose that produces the eggs in the first place. I hope that Ofcom and others can play a role in helping to change the culture in the way that the hon. Gentleman has described.
In proposing this new clause, I am seeking to put down a marker or two and I hope that the Government will accept that this serious issue requires a serious approach. We want as much broadband as possible, as rapidly as possible, in this country, but also want our creative industries, particularly the music and moving image industries, to thrive as they have done in the past and can do in the future. This country is very good at those industries, and long may that remain the case. To put those two things together, we need to achieve the best possible technological answers to ensure that those things can happen legitimately and that the digital reception of moving image material can be properly and legitimately done, rather than illegally done through piracy and counterfeiting.
I want the digital environment and the advent of broadband to be an opportunity for the content and creative industries, not a threat. To turn it into an opportunity, we need to make sure that structures and standards are in place to ensure that that can happen. Ofcom can play a role in making sure that that occurs. The new clause seeks to enable Ofcom to play precisely such a role.
Mr. John Whittingdale (Maldon and East Chelmsford): I start by welcoming the overall thrust of new clause 1, which was moved by the right hon. Member for Islington, South and Finsbury (Mr. Smith). We sought to raise this issue several times in Committee. I moved an amendment to clause 3, on the general duties of Ofcom, the intention of which was not vastly dissimilar to that of the new clause. At that time, I expressed some reservations about Ofcom deciding the direction of technological development. I was glad, therefore, to hear the right hon. Gentleman say that his aim is not to allow Ofcom to impose a standard on the industry or decide between competing technologies. That would not be an appropriate role for Ofcom.
The right hon. Gentleman is right to say that the scale of the problem will have to be made clear to Ofcom. Piracy and illegal copying are not new developments—they have been going on for a long time. Nearly 20 years ago, I was a special adviser in the Minister's Department. At that time, we wondered whether a levy should be imposed on blank tapes in recognition of the fact that the vast majority of them were being purchased to record music off the radio or off vinyl albums; almost all those purchases probably breached copyright. The industry accepted that the practice could not be stopped and a second-best solution was offered—a levy on tapes that would be redistributed to the music industry as compensation for lost sales.
One of the limitations of copying on to blank tapes was that the quality of reproduction was not especially good. In addition, people had to buy an album before copying it. Since that time, there have been a succession of technological developments: the replacement of vinyl albums with compact discs of almost perfect quality; recordable CDs; DVDs; recordable DVDs; movies and music being made available on a massive scale through the internet; and MP3 players, which allow one to take music off the internet quickly and to keep it in a convenient format so that it can be reproduced at almost the original quality. All those developments are a huge threat to the music industry. In due course, they will be a threat to the movie industry, too.
In the past we have wrestled with the problem of illegal copying—piracy—by factories that produce counterfeit CDs in China or other countries. The CDs are then brought to this country and sold in car boot sales and elsewhere. That remains a huge problem.
Mr. Chris Bryant (Rhondda): The hon. Gentleman may know that the copyright directive, in its post-negotiated form, allows for different countries in the European Union to resolve this issue in different ways—in particular, in respect of video and cassette tapes. The directive allows countries to enforce a levy on blank tapes, but it also says that the levy may be a levy of nothing, because the British Government have insisted that we should maintain the system that allows individuals to copy for their own private use so as to time-shift. When the directive is eventually incorporated into United Kingdom law, would the hon. Gentleman wish us to abandon that tradition or to maintain it?
Mr. Whittingdale: We have moved a long way from the issue of copying on to blank tapes, which is no longer the main problem. I have always regarded the levy as very much a second-best solution. In respect of the current problem, I do not think that a levy is necessarily the solution, and I want to pick up on some of the points made by the right hon. Member for Islington, South and Finsbury on what could provide a solution.
In the previous Session, the House passed a Bill on copyright theft to strengthen the penalties available to tackle illegal copying. All parties supported its passage, but the problem now is finding the resources to enforce it. Local authorities do not necessarily pay enough attention to enforcing the legislation. The industry has raised that matter with the Minister's Department and the Department for Culture, Media and Sport, which may have to get together to come up with a more co-ordinated approach.
The problem has changed from being one of mass reproduction of discs, in factories outside this country, which are imported and sold in car boot sales. The problem is now much more serious, because it goes on in children's bedrooms. Technology now allows young people, in particular, to burn CDs. They do not even have to purchase CDs in the first place; they can download music from the internet using peer-to-peer file sharing programs. That is a quick and simple procedure and it achieves a very high quality.
The root of the problem, to which the right hon. Gentleman referred, is the attitude of young people to the practice. He quoted a survey that shows that a majority of young people are now downloading and copying music and movies, and that the fact that they are in breach of the law does not stop them from doing it. Part of the problem has been the perception that taking music is somehow a right and that the only people who lose out are the big, fat record companies, which can well afford it. To some extent, that perception has grown because of the view that CDs have been priced higher in this country than elsewhere and the view that the record industry has been exploiting consumers. I have never believed that to be true. All the investigations that the Office of Fair Trading and others have conducted have shown that it is not true. However, even if that case was once arguable, it is no longer arguable. The record industry is on its back and one of the main reasons for that is the practice of copying. The really frightening thing is that the situation will get worse.
The right hon. Gentleman referred to an American survey. I understand that the survey concluded that it may now be impossible to save the music industry and that we may have to concentrate instead on trying to protect the film industry, which will be the next to suffer. In some countries, the number of blank CDs sold now exceeds the number of pre-recorded CDs sold. Even in this country, recent figures show that 308 million blank recordable CDs were sold in Britain. The industry estimates that about 128 million of those CDs were used to copy music rather than computer programs—although copying computer programs is not necessarily any better. The figures show the scale of the problem.
John Robertson: Will the hon. Gentleman suggest some answers to the question that I asked my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) about companies that not only make the music and CDs but make recordable CDs and the recording equipment? What should we do with those companies?
Mr. Whittingdale: Sony is probably the best example of a company in that position, and a question does arise about the responsibilities of manufacturers. When DVDs were first launched, regional encryption was used to protect copyright. The intention was that we in this country would purchase region 2 DVDs, and that if we purchased a DVD in the United States it could not be played on equipment purchased in this country. However, Dixons on Victoria street stocks multi-region DVDs—they are everywhere. Manufacturers have
produced multi-region DVDs that are designed, I presume, to overcome the protection that the copyright owner has installed.
Mr. Bryant: Someone who perfectly legitimately buys a copy of "The Two Towers" in the United States should have a perfect right to watch it in this country. The attempts to foil the interests of consumers are crazy.
1.30 pm
Mr. Whittingdale: I am sympathetic to the hon. Gentleman's point. I was about to say that the technological solution will always fail. Attempts to counter the problem by trying to build in technological safeguards merely provide a challenge to the hackers and those who seek to get round the safeguards. They will always win. That has happened in a number of cases recently. For example, a court in Norway dealt with the case of someone who was 15 when he developed a computer program to overcome the technology in DVDs that prevents copying. He was taken to court by the copyright owner, but the court upheld his right to do what he wanted with the DVD. That included copying it.
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