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I have had cause to get very cross with the performing rights licence people, they went through a period of months where they were on the telephone almost every day, threatening to send...inspectors to see if we were playing music in our café without a licence. We told them time and time again that although we were a café we did not play musicit took getting really nasty with them before they finally left us alone.
In all fairness, the PRS was concerned when I described some of the cases in which people felt that the letters and phone calls that they had received were too aggressive and said that it had already acted to soften the language in some of its letters. That is good news. The PRS has also undertaken an independent review of its calls and
call centres, to ensure that calls are being handled courteously and accurately. In addition, the Federation of Small Businesses has been invited to visit the call centre to see the process for itself.
I have also heard anecdotal evidence of inspectors knocking on doors asking for money. The PRS has confirmed to me that that is not a practice that it engages in. For anyone listening to this debate or reading it, I would like to highlight my concern that there could be a scam going on. If anyone has somebody turn up on their doorstep claiming to be a PRS inspector, but not having made an appointment, that person is probably not a PRS inspector and they should either inform the police or contact the PRS directly for clarification.
There are wider concerns about how the PRS inspects and what its role is. It is not a Government agency, so what are its powers to gain entry to properties? I am advised that the PRS is able to enter already licensed premises, but would usually do so only with an appointment.
As I have said, the fee structure is complicated and most people have no idea how it works. There is a range of more than 40 licence tariffs and fees, which are calculated based on the size of the business and other factors, including how many people listen to the radio. However, when I selected a category on the website, it was almost impossible to work out what the cost would be. Again, the PRS assures me that it is already looking into the problem, particularly in some sectors where the existing charging system has been questioned, to see whether improvements can be made.
However, we need clarity in other areas, too. What happens, for example, if an employee in a company decides to bring in their radio to listen to? Is the employer liable? Do they need a licence? What happens if an employee plugs an MP3 player or an iPod into some speakers and everybody hears the music? Who has responsibility in those circumstances?
Guest house owners are also confused by the system. If music is being played in a room for the personal enjoyment of a guest, is it being played in public? Guest house owners in Plymouth have real worries about the licensing system. One is Steve Scaife, who has received threatening letters and says that the PRS had the bailiffs sent round, although there has been no court case. He says:
This year I caved in and paid it, but nobody knows if guest houses should be paying it or not.
The current consultation on music licensing offers an excellent opportunity to strike a healthy balance between the needs of the music copyright holders and the music users in the voluntary and community sector, but the feedback that I am getting suggests that the present options do not meet everyones needs. I hope that my right hon. Friend the Minister will bear in mind the comments made in submissions to this consultation when drawing up the Governments position. He will also understand that, with the expanding use of music in a digital and online age, the PRS has a difficult task trying to ensure that those responsible for the writing and publishing of music are fairly rewarded for their efforts. Keeping track of music usage on the internet and in other media cannot be easy.
I know that my right hon. Friend will take note of the concerns that I have raised todayand of the willingness of the PRS, as expressed to me, to address the criticisms of its operationand that he will do what he can to facilitate the process of improvement. Importantly, will he please ensure that Government do nothing to complicate the process further, thereby avoiding placing additional burdens and costs on small business and voluntary organisations?
The Minister of State, Department for Innovation, Universities and Skills (Mr. David Lammy): I congratulate my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) on securing the debate and on the forensic, reasoned and able way in which she discussed the issues. I found that incredibly helpful. This is, indeed, an opportune moment for us to reflect on the activities of the copyright licensing bodies, and in particular of the Performing Right Society, given that a number of complaints have been received by the Intellectual Property Office and by my Department.
First, I hope that the whole House will join me in recognising the success of the members of the Performing Right Society. The society represents the songwriters, composers and publishers who make such a large contribution to the economic and cultural wealth of the UK. Of course, we are not just talking about the Beatles back catalogue; we are talking about the creative work that young British peoplemany of them from the least advantaged parts of our societyare doing today. Two million people are employed in creative jobs, and the sectors contribute £60 billion a year to the UK economy. That is 7.3 per cent. of our gross domestic product. Over the past decade, our creative sector has grown at twice the rate of the economy as a whole, and it is well placed for continued growth as demand for content grows around the world.
Intellectual property remains the lifeblood of the UKs creative industries, and those industries are even more valuable to the UK economy in tough times than in easier ones. In the music industry, the value arises from copyright. Copyright is important because it provides the legal framework to sustain and protect creative value.
Let me now say a little more about the Performing Right Societythe PRS. It is a not-for-profit membership organisation representing 60,000 songwriters, composers and music publishers. PRS members have a right to request remuneration whenever their work is broadcast on radio or TV or in public. That right is protected under international, European Union and national legislation. My hon. Friend was right to say that the PRS is responsible for collecting the payments due to its members for the use of their music. In that sense, it is entitled to collect licence fees when music is broadcast in public, but of course, the value of music is not just about the revenue that it can bring. The value also lies in the music being heard and being accessible to the public.
What do we want our copyright system to deliver? We want it to maximise the availability of creative works to the public. We want to ensure that creative endeavour is rewarded, and that users can enjoy what has been created, on fair and reasonable terms. Here in the UK, we have one of the worlds more liberal systems governing our licensing arrangements.
Let us look, for example, at the process of setting the tariff, which is the cost of the licence to the end user. Our system expects the PRS to negotiate tariffs and other terms and conditions with relevant representative bodies. Usually, that would be a trade association or similar body. Our system expects those players to agree a market rate for a licence, which is settled through negotiation. If negotiations break down, the user can refer the scheme to the copyright tribunal. In other jurisdictions, they do things differently. In some, the licence terms and conditions are set by the administration; in others, the licence terms are set by an independent tribunal; and some licensing bodies are under constant administrative supervision.
The questions we must ask ourselves are, first, whether our system is working and, secondly, whether it is seen as fair and reasonable. My hon. Friend is right to suggest that we also need to ask about the very nature of the word public, particularly in the context where small businesses are facing harder economic times and the PRS has acknowledged that it is moving deeper into the types of businesses that it responds to. We are talking about very small cafés, very small neighbourhood hairdressers or the local chip shop, for example. My hon. Friend also raised issues about the hospital radio station and the local community centre. If the system is to work properly, it must gain the confidence of the public.
Mr. Cawsey: I welcome the Ministers balanced approach. I entirely agree that things need to be balanced, but economic downturns and recessions also hit performers, songwriters and composers, so while it is important to ensure that unfair burdens are not placed on businesses or the voluntary sector, it is also important to ensure that the people who actually work in the creative industries in the first place receive a fair remuneration for the work that they do. I am sure that the Minister will agree.
Mr. Lammy: Speaking as a former cathedral chorister who still gets the odd royalty, I agree absolutely. There is real talent at the Dispatch Box, but the key question is balance and securing a system that commands the respect of the public. Clearly, some issues have gone awry over the recent period, so I have reflected on these issues and found scope for improvement in two areas.
First, we need to ensure that people understand the law, the PRS and what it is doing. Many small businesses are unaware that they need a licence and our inquiries suggest that not all large trade associations are fully aware of how the system works, as my hon. Friend the Member for Plymouth, Devonport showed. They do not always know that they can play a role in negotiating the terms and conditions of a licensing scheme, and some large associations are unaware that they can take a case to the copyright tribunal if they are unhappy with the terms and conditions.
We need to make sure that information is reaching the right people and organisations. We need them to know about the role of the PRS; we need to make sure that trade associations representing small businesses know about the system; and we need to ensure the rights of the PRS. Customers need to know what the
PRS can and cannot do and they need to know their own rights as users and that avenues for redress are available for them in the copyright tribunal.
Secondly, we need to make sure that users have access to effective mechanisms for complaint and for judicial redress. As far as judicial redress is concerned, users, and particularly trade associations, need to know about the copyright tribunal, and they need to know that it has a function for them as a specialised court where they can seek adjudication on tariff schemes. The Select Committee suggested in March this year that the tribunal process had gained a reputation in some areas for being expensive and time consuming. I am pleased to announce that the Intellectual Property Office is implementing a series of reforms to change the position. However, we also need to ensure that we engage in the jurisdiction of that tribunal. Apart from the judicial process, I am anxious that individual users should have access to an effective complaints procedure.
Alison Seabeck: I welcome the direction in which the Minister seems to be moving. One of the key issues raised was the number of people who were paying up because they were not sure how much it would cost them to appeal or go to a tribunal.
Mr. Lammy: I am grateful for what my hon. Friend has said. I have met representatives of the PRS, and agreed with them that there will be a code of practice to deal with complaints from individual users. The PRS will consult publicly on the code by the end of the year. That is a start, but I believe that more needs to be done. I am well aware that there must be an independent body to review complaints in a system of this kind. It cannot be right, in 2008, for there to be only an internal adjudication process within a single body, and I hope that I have been able to demonstrate to my hon. Friend that, in that respect, action is in hand.
As the new intellectual property Minister, I am encountering many new and interesting challenges, one of which is the need to ensure that intellectual property rights are properly understood and valued by those who live by and from the system. I have heard much in the debate, from my hon. Friend and others, that gives food for thought. I want it to be understood that I do not take these issues lightly, and will reflect seriously on the points that have been made. I consider it importantindeed, essentialto the protection of intellectual property for licensing schemes to command the respect of the entire community, and for no process to undermine the effort that our musicians make because it is seen to be harsh or unfair.
I have asked the PRS to reflect on the breadth, as it were, of those whom it approaches in seeking licences. Clearly it is not great if someone understands the process for the first time only because a significant amount is being sought from them. There are issues of public education, but beyond that there are issues of proper judicial process. I shall explore those issues further over the weeks and months ahead.
That the draft Misuse of Drugs Act 1971 (Amendment) Order 2008, which was laid before this House on 13th October, be approved.
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