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I welcome those parts of the Bill which incorporate the Digital Britain promise to speed up delivery of a fully operational DAB digital radio platform. I spend a lot of time in cars and have had hearing difficulties since the arrival of my first child, so it is a real pleasure to enjoy the quality and clarity of digital sound, especially when listening to music-whether it is Radio 3 or Classic FM, both of which are excellent stations. The plank for Ofcom to be able either to terminate analogue licences without consent, subject to a minimum two years' notice, or where appropriate to extend analogue licences up to and beyond switchover, on condition that digital services are also provided, will no doubt help to build in the much-needed flexibility to enable radio switchover. I very much hope and have confidence in the plans that have been outlined that it will happen by 2015. It is important that it does.
I turn to Part 3, which deals with creative industries-a key part, with exports worth £16 billion or 8 per cent of GDP, as the Creative Coalition Campaign tells us. Sadly, the industry is increasingly undermined by illegal file-sharing, or theft, to put it bluntly.
There are also some 1.8 million UK jobs involving a wide range of skills which are endangered while this illegal trade, which is far more dangerous now it is digitally enabled, continues. While most people would be reluctant to limit anyone's access to the internet-my imagination somewhat boggles at how this is to be achieved-and despite the briefings by Which? and other organisations, which I have certainly read and I think are concerning, my initial reaction is that the Bill's clauses are both moderate and proportionate. It is good that the Bill will require ISPs and rights holders to work together on how the process to be followed is carried out. Obviously there will be a need for a closer look at the clauses in Committee, but on balance, this seems an acceptable, step-by-step approach to a difficult and-I hope, as we are told-relatively temporary problem, as the market produces a better business model that will make this form of activity less desirable.
Finally, noble Lords will understand that with my background at the Broadcasting Standards Commission, my main concern with amendments to the Video Recordings Act 1984 is child protection. I of course welcome those parts of the Bill implementing Dr Tanya Byron's recommendations in Safer Children in a Digital World, but I am concerned that this Bill represents a missed opportunity to update all the exemptions in Section 2 of the current Act. These exemptions relate not only to video games which the Bill does amend, but also to other video work such as music and sports videos. Such works can claim exemption from the VRA and be sold perfectly legally to children, even if
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I have seen some of these works myself. Their content is by any standards, inappropriate for children. For example: "Motley Crue - Greatest Video Hits"-and these, I may say, are not on my usual viewing list-features topless lap-dancing. "Slipknot (10th Anniversary DVD)", features the sight of the band's name carved into girls' arms and torsos. These are works which parents could legitimately expect to be regulated. Yet under the current legislation they can be sold legally without any age restriction. The enforcement agencies have no ability to prosecute distributors for supplying such works unclassified.
Will the Minister confirm that it is not the Government's intention to allow the new video games authority to classify film-type content, including full length feature films, in video games? This is important not to undermine a regulatory system for films and other non-game content that is tried and tested and has public support.
I note that the Bill anticipates that certain classes of video games may be transferred to the BBFC from the video games authority, and I understand both from it and the Explanatory Notes, that this could include games which are supplied on the same disc as a film, where the film is the primary content, and hard-core sex games, which require specific expertise because of the extreme pornographic content.
I would suggest-and perhaps we can look at this in Committee-that it might better reflect the Government's intent if they were to state in the Bill that these allocations shall take place where the primary content on a disc is film-type material rather than a video game, or where the video game would require an R18 certificate for supply to a licensed sex shop. I hope that the Government are able to address these concerns and, indeed, the others that will clearly be arising in Committee and on Report, but I thoroughly support the main purpose of the Bill. I hope that it is going to be improved-I am sure that it will-by the debates that go on in your Lordships' House, and that the result will be to more effectively future-proof the whole legislation, and to better achieve support for the creative industries and, above all, for public service broadcasting.
5.36 pm
Baroness Morris of Yardley: My Lords, before making a brief contribution to this debate I declare an interest as a director of the Performing Right Society. I very much welcome the Bill, and it has been heartening to hear some really powerful speeches in favour both of its thrust and of some of the details in it. In particular, I am struck by the idea that in this digital age, this is the first time that we are looking at communication other than just as the BBC, ITV and Channel 4. Yet really, Parliament and the legislators are seeing it as the public have experienced it for a long time now.
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I shall restrict my remarks to Clauses 4 to 17 on "Online infringement of copyright", and at this stage I will not really go beyond that. I very much welcome them; the principle is right, and from what I have read so far I think that the detail is right as well. If there is to be an argument against it, I suppose that it will be that this is legislation which should have happened some time ago, but if that accusation is going to be bandied around the Government will certainly not be the only guilty party. Indeed, everybody seems to have been slow to react to changes in this field. That is why, so many years into the digital economy, we are now faced with a really quite serious problem of online piracy.
I suspect that as we go through this Bill we shall be talking a lot about some of the difficulties that the digital economy has thrown up. I suppose that is why we are legislating, and I therefore wanted to take the opportunity to say at Second Reading that those things are the small downside of two incredible success stories. First, there is the success story of the digital economy itself, which has quite simply transformed access to information, to creative content and to social networking in a way that we could not have imagined 10 or 15 years ago. Secondly, we are discussing these issues because of the quality of the creative content. Quite simply, no one would bother to download for free lousy content in an infrastructure that was difficult to use. It is because we have a strong digital economy and high-quality creative content that we have the problem.
The digital economy is a success story, when you look at it, because of its pace of innovation and its speed in adapting to the wishes of its users, which have made it one of the fastest-growing industries, perhaps, of all time. In 2006, the Performing Right Society licensed 400 providers of online music; in 2009, it is licensing 1,200-an increase of 200 per cent in about four years. I cannot think of another industry so important which has managed to grow at that speed. There is no doubt that, in terms of education and opportunity, the world is far stronger because of it.
Often, in these debates, we have spoken as if the digital world sweeps away everything else. We talk about a revolution and, indeed, in many ways it has been one. Yet we constantly make this mistake, when talking of the need for a revolution and welcoming rapid change when it has happened, of forgetting to say what does not change. We forget to say what must remain in place. The principle that a creator should be able to choose whether they get paid for their work or give it away free should be a cornerstone of the digital economy, in the same way that it has been a cornerstone of the creative economy. We have all failed to remind everybody, particularly the youngsters who have grown up in a digital age, that that does not change. It is not part of the revolution that we otherwise welcome.
It has indeed been a long-standing practice of musicians to give away their work for free. No one is opposed to that. The important principle is that it is their choice. If not, it is not only theft from the individual, as a number of noble Lords have already said, but foolishly
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There were two things that we failed to do. One was to argue the need for copyright. We sometimes talk as though it is only this generation that does not understand copyright and treats it with such disregard. To tell you the truth, when I was 17 or 18, I am not sure that I thought much about copyright when, in those days, I taped something from a record that was playing. It is not that this is the first generation not to value copyright; it is the first generation that can do it at such high quality. Therefore, it has such an impact on the rest of the economy. Our generation probably did it; we got away with it and the economy got away with it, but it is a different ball game now.
Clearly, as a number of noble Lords have already said, there should have been models that safeguarded copyright far earlier than there have been. If we are going to move forward on this, and get the best of the revolution but at the same time preserve the best of what needs to be preserved, four things need to be in place. First, consumers need easy ways to pay for download content. Secondly, new business models need to make sure that rights holders are paid for the work that they create. Thirdly, a legal framework needs to protect consumers and creators, but also provide an environment in which the digital economy can flourish. Fourthly, something that has not been mentioned as much so far this afternoon is the need for an education programme about the value of copyright. None of those things would restrict the creativity or innovation that is important to make sure that the digital economy continues to flourish.
I would argue that in three of those four areas, prior to the Bill, progress-although late-has been made. It is now easy to download music legally and pay for it. There is no excuse now for not doing so. iTunes, probably the first online provider of music to be licensed, in 2004, now has 8 million people who download music and pay for it. Perhaps an even greater success story is that of Spotify, which went from a zero start to having 2.7 million users in the six months up to July of this year. Most of them are over 35 years of age and are downloading music for the very first time. People are beginning to use the facility that is there.
There is also a business model. In 2002 the Performing Right Society collected £1 million to pay its members for online music services. By 2008 it was collecting £23 million just through online music, and distributing £20 million to its members. There is also an education programme. The Federation Against Copyright Theft has worked long and hard to get a programme, but I know from experience that having a programme does not mean that people learn. It certainly does not mean that people act on it.
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The problem we have is that the idea that creative content should be freely available is received wisdom for such a large proportion of our population. A whole generation has grown up believing that it is all right to download someone else's creative work at no cost. Progress is being made but there are challenges. Trying to persuade people to pay for something that was once free is far more difficult than doing it the other way round. Moreover, it is an incredibly complex market to license. It is not the easiest thing to negotiate, monitor and manage the 1,200 online providers that the Performing Right Society licenses. You often hear it said outside-it has not been repeated much here today-that the sector can afford it and that the people who are losing the income can afford to get it elsewhere. Last year, 82 per cent of Performing Right Society members earned less than £1,000 from the music they created. Some 1.5 per cent of them earn above £50,000 a year while fewer than 500 members earn more than £100,000 a year. Those 500 members who can afford to give their work away free online can turn to other income sources such as gigs to earn their income. That is why the Bill-it is, if you like, the digital economy's fourth plinth-is so important. We have had nothing like this so far, and it is therefore very welcome in adding to the infrastructure. Indeed, it goes some way to completing that infrastructure.
We have the strong statement that file-sharing is not acceptable and that we do not live in a society where that is the done thing. The Bill will ensure that legal, online services have time to develop, unhampered by having to compete with illegal free music. It is very difficult to get legal services going when you are competing with people who give them away for free. The Bill is directed at the most serious serial file-sharing offenders, and, according to the legislation, is a last resort. It incorporates in the system education about the process. I believe that it will begin to move us towards a fully functioning online market for the creative industries. We should not ignore people's complaints about the Bill but no one wants to go beyond the remit or make problems worse rather than better. In Committee and on Report we will have the opportunity to consider that. I very much welcome the principles and detail of the Bill.
5.47 pm
Baroness Buscombe: My Lords, I declare an interest as chairman of the Press Complaints Commission, but I want to be absolutely clear that it is not my role at the Press Complaints Commission, or my intention in this debate, to champion the interests of the newspaper industry. I speak in favour of the Bill as a longstanding passionate advocate of the UK's creative industries, which I believe are the best in the world. This has been an area of long-term interest for me and I am heartened that there are many more speakers today than in 2005, when only the Front-Bench spokesmen contributed to a debate I initiated to highlight the importance of valuing intellectual property and the creative industries.
I feel, too, that we have come a long way from the Communications Act 2003 in recognising what is actually happening due to media convergence. Noble Lords will recall that the Act recognised the reality of the
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My contribution today reflects my enduring interest in the UK's vibrant creative economy. The creative sector is set to be an engine of growth out of the recession, especially as other sectors of the economy continue to struggle. It is important that the Government reaffirm and recognise the value of creative works, both to individuals and to the UK economy. I also have concerns regarding freedom of speech and possible regulatory creep beyond public service broadcasting into other editorial content, a concern that could directly impact the future of self-regulation for the press and online news. I will come to that a little later.
When the Digital Britain report was published, there was much talk about the focus being too much upon the pipes and not enough upon the poetry, that the Government had addressed the relatively easy bits, the hardware, but what about the valuable software, the creative content, both in terms of its future viability and protection from piracy? Digital copyright theft, including illegal peer-to-peer file-sharing, is, as we have heard this afternoon, severely damaging the UK's creative industries, such as music, audio-visual, publishing, retail and sports broadcasting.
Clearly, online copyright infringement seriously threatens the sector and it should be for an artist, singer, composer, author, photographer, filmmaker or publisher to decide whether they should give their work away for free. Measures are needed to tackle both illegal peer-to-peer file-sharing and non-peer-to-peer forms of infringement. The Bill has to be proportionate, effective and fair to media owners, ISPs, rights holders and consumers-a tough challenge. I hope the Bill will not only reduce the levels of online copyright infringement, but also ensure the development and growth of legal online services. Quality of content and high professional standards are vital across the media and to all the creative industries.
The Bill focuses on a number of important areas which I hope will be carefully scrutinised through its passage. For example-this may sound like one small area and it is one that is often overlooked, I focused back in 2005 on orphan works. I said then:
"Without adequate protection the photographic image-tomorrow's cultural heritage-and those who create it will cease to have true value, and without adequate protection a profession dies".-[Official Report, 22/6/05; col. 1690.]
Take photographers, who are concerned that, in a digital age, information about copyright and the creator supplied with the digital image is stripped away, often automatically, so that in a matter of moments the world is awash with so-called orphan images. Almost five years on, in a world where digital is now
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I hope that this will be an enabling rather than a restrictive Bill. New laws should seek to encourage consumers into legal services and deter them from using illegal sites. In this regard, I have been struck by the degree of concern across the creative sector regarding the proposal in the Bill to allow for, in the words of Liberty,
- "future Governments to sidestep traditional criminal and civil law standards and procedures in favour of administrative systems controlled by the Executive".
As other noble Lords have said, future Governments will have the power to change even the fundamentals of copyright without parliamentary debate through the use of statutory instruments. Of course we must also accept that with the speed of change in the creative environment, both in terms of technology and the marketplace, there must be flexibility, and the process of primary legislation is slow and often inflexible. There is a difficult balance to strike here, and I believe that it is important that we wrestle further with this issue in Committee.
As chairman of the Press Complaints Commission, the body responsible for independent regulation of the press, I must express some concern at the extension of the scope of Ofcom's reviewing and reporting obligations beyond television. Considering public service media content on other platforms and applying stringent statutory impartiality rules has worrying implications for freedom of speech and expression. The exact shape, scope and range of the new regional news providers-the Minister referred to the new news consortia-the IFNCs, has yet to be finally determined by the Government and clarification is required.
Otherwise, the risk is that impartiality rules will be expanded into areas of the media for which they were not intended and in which they will constrict freedom of expression. It is right that the Government acknowledge that we need funding and investment for a vibrant digital economy, and that they recognise the huge new opportunities for the creative industries that digital technology provides. New ideas, content and products must be fairly rewarded and protected, so it is also vital that the Government find a way to achieve a difficult balance between the rights of the individual and copyright protection.
In terms of investment, however, are the Government satisfied that Ofcom will be able with confidence to promote the right and sufficiently flexible infrastructure, given the speed with which technology is changing? The need to create new business models fairly to reward creative works is crucial, and I am concerned that the Bill still has not addressed that and seeks to rely on old economy solutions to new economy problems. My worry is that the Bill is in danger of missing the opportunity seriously to consider funding for creative content. After all, its proper focus on illegal file-sharing masks the underlying problem of how content providers can survive when the public now expect free content online.
In essence, perhaps the Bill has the wrong title. It should surely be called the creative economy Bill, to keep reminding us all that, no matter how much law is
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5.56 pm
Lord Roberts of Llandudno: My Lords, I venture to enter this debate with a short contribution looking at the Bill through Welsh eyes. What does digital mean? Of course it means television and radio, but it also means broadband. I am sure that we will discuss this when the Finance Bill comes to us in March, but unfortunately we are now looking at a Bill based largely on the interim report of the noble Lord, Lord Carter, Digital Britain, which pledges to give us universal broadband access at 2 megabytes per second by 2012. However, the report did not outline how that is to be achieved. I read that Tim Johnson, the chief analyst at the broadband think tank Point Topic, warned that the commitment presents a massive challenge.
The promise of universal access to broadband is vital, but the scale of the task of making that a reality should not be underestimated. Figures show that Wales is still lagging behind much of the country when it comes to broadband access and speeds. We need to look at how to prioritise areas that cannot currently access broadband. I appreciate that it is important that broadband expansion is carried out in a manner that is commercially viable, but we must not lose sight of the fact that accountants must not have the last word. Some areas cannot receive broadband at all.
Many individuals and businesses, especially in rural Wales, still do not have access. That is damaging both to individuals who are missing out on the benefits that broadband provides and to rural businesses, not just the agricultural sector, but people who need high-speed internet to remain competitive. This morning, I spoke to the National Farmers Union secretary for Montgomeryshire, Mr Aled Griffiths. He emphasised the needs not only of agriculture but of businesses in rural areas, which are increasingly trading internationally, and the needs of rural tourism.
In Wales, tourism is now our main industry, and 10 per cent of our workforce are employed in tourism. Welsh tourist organisations-I spoke to them this morning-are unanimous that broadband access is vital. We remember that in attracting tourists we compete not only with the rest of UK but with the rest of the world.
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