Fifth Standing Committee
on Delegated Legislation
Wednesday 12 February 2003
[Mr. Derek Conway in the Chair]
Public Lending Right
(Increase of Limit) Order 2003
The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells): I beg to move,
That the Committee has considered the draft Public Lending Right (Increase of Limit) Order 2003.
Many hon. Members will know that after the lively debate which led to the Public Lending Right Act in 1979 the public lending right, which I hope I can refer to as the PLR, has received wide support from all sides of the House. The Act followed a 30-year campaign by authors for some form of reward for the loan of their books from public libraries and conferred on them a new right to receive payment for these loans.
Since it was established, the public lending right has provided the means by which the Government, on behalf of the library-using public, have been able to recognise the contribution that authors make to our lives. When this year's payments are taken into account, the PLR will have distributed no less than £77 million to authors over the first 20 years of its operation. The Government are proud to support this scheme.
It is with that same sense of pride that I can state that we are putting more money into the PLR now than ever before. In 2000, we supported the case made by authors for more funding for the scheme and provided a 35 per cent. increase, taking the fund from £5.2 million to £7 million. This additional funding will begin to take effect this year. It will have the effect of doubling the number of authors receiving the maximum payment of £6,000, and of bringing 1,500 writers into payment for the first time. In addition, we are increasing the rate per loan by 1.54p, from 2.67p to 4.21p. This is the highest it has ever been. I should add that the 2002 spending review provided for further increases in PLR funding, which will reach £7.4 million in 2005–06.
The PLR Act established a scheme under which authors throughout the United Kingdom are paid out of a central fund. The fund also covers the administration costs of the scheme. It is supported through money voted by Parliament.
Under the PLR Act, an increase in the fund requires an order in a statutory instrument to be laid before the House of Commons and approved by resolution of the House before the start of the financial year in which the increase is to take place. Unfortunately, due to an administrative oversight, this did not occur last year, and we are therefore laying the statutory instrument now to enable payment for both this year and next. This will result in a short delay in payment, to 1 April.
Mr. Michael Fallon (Sevenoaks): The Minister referred to the extension of the order bringing some
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1,500 new writers on to the list, which I am sure hon. Members on both sides of the Committee will welcome. Perhaps he could give us an example or two of the new writers to be added to the list and say whether they have his personal cultural approval.
Dr. Howells: It would be nice if I could, but I can't so I shan't.
The order authorises an increase in the upper limit of the fund from £5.5 million to £14.452 million and reduces that limit to £8 million for subsequent years. This will allow us exceptionally to make two payments in the financial year 2003–04—one on 1 April 2003 and the second in the normal time frame of February 2004. This will allow the registrar to increase the rate per loan to authors and to work with us to take forward and develop the scheme.
The rate per loan is based on an arithmetical calculation. Administrative costs are subtracted from the overall budget, leaving the remainder for distribution to authors. In recent years the registrar has sought to reduce costs, freeing more of the fund to be distributed to authors. A representative sample of public libraries from 30 local authorities is surveyed, giving an estimate of the total number of loans of registered books across the country. The funds available for authors are divided by the total number of loans to give the rate per loan. The rate per loan for this year's payments will be 4.21p, the highest to date. Although 4.21p may not seem like much, it will result in more than 19,000 authors receiving a payment—1,500 more than last year, as I have said—and it will double, to 251, the number of authors who will receive the maximum payment of £6,000.
We know from the feedback that the registrar receives from authors how important the PLR is for their livelihood and continued creativity. More than 50 per cent. tell us that the PLR makes a significant contribution to their income. Even among the 251 who will receive the maximum payment of £6,000, many are not best-sellers but have loyal followings in libraries across the country. For others on smaller payments, to know from the PLR how often their books are borrowed in libraries acts as a real morale booster. I am also aware that authors appreciate the efficient and friendly way in which the registrar and his staff operate the scheme.
A quinquennial review was recently completed on the PLR. Some of the key messages emerging from this were that the PLR was highly valued and should be retained in substantially its present form; that the PLR was efficient and responsive to authors' needs; that the maximum and minimum thresholds should be reviewed to make them more equitable; and that producers of audio books should receive adequate payment for the use of their work. This, however, is a complex area. It was recommended that a working group involving key stakeholders be established to consider this matter and to recommend whether inclusion within the PLR regime or through a licensing agreement is more appropriate. Work on all the recommendations will see an improvement in the PLR and have a direct effect on authors.
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Mr. Malcolm Moss (North-East Cambridgeshire): May I say, Mr. Conway, what a pleasure it is to serve under your chairmanship?
We on the Conservative Benches fully support the PLR and the work it does, and we are encouraged by the fact that its running costs over the last few years have been kept under very tight control. We commend those who have managed it in such an efficient way.
The Minister gives a good story today in respect of one side of the coin, but glosses over the bureaucratic difficulties, as they were described, in bringing the order forward on time. We of course welcome the increase per loan from 2.67p to 4.21p, but we wonder why the authors have been told that the payment that was due this month has been delayed. Does that mean there is no money whatsoever in the central fund, that it is completely denuded of resources? If that is the case, why was this not anticipated long ago?
I understand that authors were told the good news some time ago that the Department for Culture, Media and Sport had decided on this huge increase of 150 per cent. Letters were dispatched informing the authors that they would receive this extra, up to an annual maximum of £6,000. Then somebody, somewhere in the Minister's Department, discovered that the 1979 Act required an Order in Council to effect this increase. So, apparently, more letters went out to the authors informing them that after all they would not get this huge increase that they deserved on the usual February pay date, but, it was hoped that if the Minister could rush the order through Committee in good time-—if it was not opposed and if it got through—they might receive their money on, appropriately enough, April Fools' day. We hope, of course, that that will be the case.
We do not intend to oppose this well-earned and deserved increase in payments for book loans, but we notice that the Minister skated over the bureaucratic difficulties with some alacrity. There is a need for a little more explanation other than that somebody simply forgot or overlooked the matter. It is a serious issue, and I imagine that the authors having to wait another few months for their money are hopping mad.
Mr. Fallon: My hon. Friend is drawing the Committee's attention to a rather important point. Would those authors be entitled to compensation for the interest on the money that they have forgone?
Mr. Moss: That is not a question I can answer, but it is an excellent one for the Minister. I hope that when he responds he will say whether authors will receive the few months' interest on this late payment.
The Minister alluded to a recent report on the PLR. I note from that report that there is now reciprocity with some European countries on this PLR-type operation. Perhaps in his response he might indicate how successful that has been and whether the small number of countries currently in the scheme will be extended. One would have thought that it would cover at least the rest of the European Union.
There is some irony in all this. We are agreeing an increase in the rate per loan for the authors, quite
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rightly, but Government policy is resulting in the closure of many libraries so the opportunities to loan books are diminishing. Therefore, perversely, although the rate per loan has gone up, the possibility of more books by more authors being taken borrowed from libraries is diminishing as local authorities close smaller libraries because of the pressures from the grant settlement.
We have the same problem again this year. My own county council, Cambridgeshire, now has seven or eight small local libraries on the agenda for closure. This cannot be joined-up government: trying to support authors and trying to encourage people to take books out of libraries while not providing sufficient resources for many of the libraries to stay open.
The Minister tried to explain why £14.252 million is going to the central fund in respect of the financial year beginning on the day that this order comes into force. He explains that it is to cover the next two years and then £8 million in financial years thereafter. Is it really clear from that that there is £14 million spread over two years? Perhaps the hon. Gentleman will confirm that. Why is it £8 million, when the explanatory memorandum says:
''The Secretary of State has announced the following allocations to the PLR'',
and then gives a table showing £7.2 million for next year, £7.38 million for 2004 and £7.4 million for 2005? There is no mention of £8 million in the figures that have been agreed for future years, so there seems to be some discrepancy between what the order says, what the Minister said in opening the debate and what the explanatory memorandum is telling the Committee is already agreed by the Secretary of State. Those are a few questions for the Minister to answer in his winding-up speech.
As I said at the beginning, we fully support the increase to the authors under the PLR. We are only sorry that, due to what The Observer described in a headline in January as ''A royalty cock-up''—I use its words carefully—the hon. Gentleman's Department was not more on the ball to make sure that the money landed through the authors' letterboxes at the appropriate time.