The reality will depend on how farmers use the increased flexibility that will result from the abolition of the Agricultural Wages Board. Many workers are already paid above the agricultural minimum wage, so there is no reason why there should be a change. Moreover, the underlying labour market conditions suggest that workers will be in demand and farmers will need to offer competitive packages to attract and retain skilled and qualified staff. I am afraid that the evidence is against the noble Baroness, Lady Donaghy, who was claiming that the jobs would not be available and farm workers would be leaving the sector. I do not believe at all that that will be the case.

I am also grateful for the intervention from my noble friend Lord Plumb. It is encouraging to note his comments and all the efforts that he has been making in encouraging new workers into farming. I am also grateful for the intervention from my noble friend Lady Byford who, quite rightly, pointed out the importance of ensuring that there were some good working practices that will be retained within the agricultural sector.

The noble Lord, Lord Myners—who is now back in his place—spoke about the difference between the Low Pay Commission and the Agricultural Wages Board. This is exactly the point: there is no need for two different bodies both assessing low pay issues. That plays into our hands as to why we believe that it is right to abolish the Agricultural Wages Board.

7 pm

The noble Lord, Lord Hunt, raised the issue of the abolition being non-deregulatory. Many farm businesses have to operate both the agricultural minimum wage and the national minimum wage. Therefore, it will be a removal of a regulatory burden to have a single employment regime. Moreover, many of the consultation responses commented on the complications of the agricultural wages order and the difficulties for farmers in understanding the complexities of its provisions—points made with great eloquence by the noble Earl, Lord Cathcart.

The noble Lord, Lord Hunt, raised the issue of pressure from supermarkets. Since February 2010, all contracts between major food retailers and their direct grocery suppliers must comply with the Groceries Supply Code of Practice. The aim of the code of practice is to ensure that those who directly supply the large grocery retailers do not have unexpected costs or risks transferred to them.

16 Jan 2013 : Column GC292

Lord Myners: My Lords, the Minister made what I thought was a rather unnecessary remark about the fact that I was absent from the Committee for not more than five minutes—in a debate that has run for two and a half hours, and I was here for about an hour before that. I will not explain to noble Lords why I chose to leave the Room for five minutes, but for the Minister to make a point on that shows how desperate he is to keep the faith of his supporters.

On the subject of people leaving the Committee, the noble Lord, Lord Cameron of Dillington, who is no longer in his place, asserted his view that he did not think that the benefits would be passed on to supermarkets. I question that given that in their evidence to the consultation the supermarkets have been hugely supportive. One wonders why they are supportive of this proposal if they do not expect to benefit. If that is also the view of the Government, can the noble Viscount explain to us in very simple terms that if you have a transferred benefit here—taking £250 million out of the rural economy—where is that £250 million going? There has to be an equal and off-setting amount. Where does the Government believe the benefit will accrue?

Viscount Younger of Leckie: First, I apologise to the noble Lord. There was absolutely no derogatory comment intended.

I do not believe that the money will be taken out of the agricultural economy. The whole point of making this change and abolishing the Agricultural Wages Board is to create a more flexible environment and to enable farmers to recruit new workers.

Lord Myners: There is nothing in the Agricultural Wages Board that in any way prevents a farmer from paying more, as indeed the noble Earl explained to us. This is “flexibility” used as a euphemism. It is a flexibility that only moves in one direction. The Minister’s argument simply does not withstand any close and critical examination.

Viscount Younger of Leckie: I think I should repeat to the noble Lord that the Agricultural Wages Board has been in existence for 65 years. I realise that that is not necessarily a reason for changing but there are still some great anachronisms within the system. Secondly, part of the point is to release farmers from the administrative burden of the two-tier, dual system. So I stick by my view that this is long overdue and it is right that we should take this step.

The key priority for this Government is to encourage economic growth. The Government firmly believe that the abolition of the Agricultural Wages Board and the agricultural minimum wage regime is in the long-term interests of all those within the industry. It will enable the sector to meet the challenges of increasing domestic food production and help secure its long-term prosperity. The abolition of the related Agricultural Wages Committees and Agriculture Dwelling House Advisory Committees in England will also contribute to the Government’s public body reform programme and

16 Jan 2013 : Column GC293

will remove a number of redundant bodies, as mentioned earlier. I hope that the Committee will accept the amendment.

The Deputy Chairman of Committees: The Question is that Amendment 28ZK be agreed to. As many are of that opinion will say “Content”.

Noble Lords: Content.

The Deputy Chairman of Committees:To the contrary, “Not Content”.

Noble Lords: Not Content.

The Deputy Chairman of Committees:My Lords, paragraph 8.103 of the Companion states:

“As divisions are not permitted in Grand Committee, decisions to alter the bill may only be made by unanimity. Thus when the Question is put, a single voice against an amendment causes the amendment to be negatived”.

I therefore declare this amendment negatived.

Amendment 28ZK negatived.

Schedule 18 : Adjudicators: bankruptcy applications by debtors and bankruptcy orders

Amendment 28ZKA

Moved by Lord Stevenson of Balmacara

28ZKA: Schedule 18, page 244, line 12, at end insert “except during any postponement period of ten working days as set out in section 263K(2)(b),”

Lord Stevenson of Balmacara: My Lords, I shall speak also to Amendments 28ZKB, 28ZKC, 28ZKD and 28ZKE which are in my name and that of my noble friend Lady Hayter. I should make it clear that we on this side support the new bankruptcy regime and welcome what is set out in the Bill to try to make progress in this important area, but we would like to suggest some improvements. In so doing, I declare an interest as chair of StepChange, the leading debt advice charity.

We are concerned that the proposed changes to the bankruptcy process, wherein a court-based process is being replaced with an adjudicator, may lead to individuals and sole traders being declared bankrupt when there is actually an alternative debt solution which would be more appropriate for their situation and would have less severe consequences for the debtor. Such miscarriages of justice could lead to the debtor unnecessarily losing assets, including their house, or unnecessarily closing their business, and prevent them getting bank finance for 12 months or longer.

Particularly at this time, we need to be very careful about how the debt relief processes work in practice. Under the new process, as I understand it, a debtor will make an application to an adjudicator. The adjudicator will then determine the application based on two criteria: the jurisdiction criteria based on the

16 Jan 2013 : Column GC294

debtor’s centre of main interest and whether the debtor is unable to pay their debts. Establishing the centre of main interest is important due to the recent development of bankruptcy tourism, where individuals from states with more onerous bankruptcy regimes, such as Germany or the Republic of Ireland, petition for bankruptcy in the UK in order to be discharged from their debts after 12 months. If the adjudicator is satisfied as to both criteria the order will be made. If the adjudicator is not satisfied that the criteria have been met, they cannot make the order.

The adjudicator will be able to request further information from the debtor, and if they receive information from third parties—for example, a spouse writing to the adjudicator to claim that the debtor was seeking to go bankrupt in order to avoid matrimonial claims—they would be able to decide whether or not to take this information into account. If the adjudicator is satisfied that the criteria have been met after receiving further information, the order will then be made. If the adjudicator rejects the application, the debtor is able to request a review of their file. If, after review, the application is once again rejected, the debtor can appeal to the court.

We need to consider the scale of the problems being faced by people experiencing unmanageable debt. We believe that some 6.2 million households are either in, or are close to having, significant debt problems. Bankruptcy is only one of three formal debt solutions, each of which involves the court, a licensed insolvency practitioner or the Civil Service equivalent. These include debt relief orders, individual voluntary arrangements and county court proceedings. However, many of StepChange’s clients prefer to reach a voluntary arrangement which we broker with their creditors and enter into a debt management plan under which they pay off their debts through us over a number of years. Last year, we returned some £300 million to creditors, and we are on target to counsel some 500,000 individuals this year.

At present, when a bankruptcy application is made to the court, either staff at the filing stage or the district judges or registrars at the hearing have an opportunity to point the debtor towards proper debt advice, and many discover that an alternative debt remedy is more appropriate for them. This may not only prevent miscarriages of justice, as I have already mentioned, but may also save the court, and particularly the official receiver, considerable unnecessary work.

However, we understand that under the new proposals, an adjudicator will not have the discretion to refer a debtor to seek advice and will have no choice but to process all eligible bankruptcy applications without considering whether an individual may be better off using an alternative debt solution.

The Government propose to deal with this concern in the new adjudication process by assuming that debtors will take independent debt advice before making their bankruptcy applications. However, in practice we know that many of our clients can stall over doing something about their debts for up to a year, until something such as illness or reduced earnings tips them over the edge, so to speak. We are therefore very concerned that the procedures to be introduced do not

16 Jan 2013 : Column GC295

place sufficient stress on the need for debtors to seek independent free advice, with the consequence that the new system will be much less effective at preventing inappropriate bankruptcy applications.

Encouraging debtors to take appropriate debt advice prior to submitting an application will not necessarily ensure that they have all the information that they need in order to make an informed decision on whether bankruptcy is the best solution. Debtors contemplating bankruptcy are understandably under enormous financial and emotional stress and may be unaware of the sources of potential advice: my charity is the leading purveyor of free independent advice, but there are others, including Citizens Advice, and there are also fee-charging operations including, of course, insolvency practitioners.

Furthermore, while debtors may be aware of the gravity of bankruptcy and its implications, they may be unaware that they may qualify for an alternative debt remedy that would cost less, or be free, ensure that they maintain their homes and possessions, and have far less grave implications for their future relationship to credit.

I understand that in Scotland, where we operate as a separate charity, consideration is currently being given to making debt advice mandatory within the insolvency processes there, and I applaud that. I urge the Government to consider whether this would be a sensible step here. It would be possible to legislate to require a debtor to confirm that they have received independent expert advice before making their application. If that is too radical a step at this stage—and I accept that it may be—I urge the Government to think about emulating the Scottish Government to the extent of at least reviewing the whole debt arrangements system before too long. We have a major problem looming, as too many people are bumping along while prices rise, and with the spectre of a return to “normal” interest rates possibly the trigger for a whole range of new problems.

Amendments 28KA and 28KD give the adjudicator the opportunity to stay proceedings and work with debtors while they seek independent debt advice and enable debtors to withdraw their application during the 10-working day postponement period, for example if they are advised during that period that bankruptcy is not the most appropriate debt solution.

When he responds, will the Minister clarify whether the Government will consider ensuring that the online forms to be used in this new system will require debtors to confirm that they have sought appropriate debt advice from the independent and free debt advice charities? Will he also confirm whether there will be an exhortation for the debtor to work with the debt advice organisations such as StepChange, Citizens Advice and IPs to ensure that the advice suggested or required on the online forms captures the best possible options and language for the debtor? Will the Minister also confirm whether discussions are being held with the Scottish Government, particularly the Accountant in Bankruptcy up there whose scheme is very similar to that proposed?

16 Jan 2013 : Column GC296

Amendment 28ZKE reflects our concern that discretion for the adjudicator to seek guidance from the court has not been included in the Bill. If the adjudicator were given the discretion to ask the court for directions if they are not satisfied as to whether the criteria for making an order have been fulfilled, this could avoid the review and appeal process, as the court could provide an answer or guidance on complex issues, including cases where a petition may have been presented for an ulterior motive, such as to avoid matrimonial claims.

At present it is up to the debtor to appeal to the court if, for example, the adjudicator rejects their application, and in these circumstances the debtor may face the prospect of two fees—not a palatable prospect if the debtor is out of funds. If the adjudicator had the ability to seek guidance from the courts, we think that many cases may be resolved without the need for the debtor to apply to the court directly and incur additional fees.

Without the ability to seek guidance from the court, the process will also be unnecessarily prolonged and may expose the debtor to additional perils. In the interim period between the initial application for the order and the last resort of an appeal to court, there will be no moratorium from creditor action and debtors could still be pursued by their creditors, with all of the associated stress and anxiety that this can cause. In our view, the drawn-out process could be avoided if the adjudicator could seek guidance from the court in the first instance.

We understand that the Government have discussed the issue with insolvency practitioners and they take the view that it is more important to have a simple system shorn of subjectivity and to a large extent kept out of the courts. Those are admirable aspirations, but when he comes to respond, will the Minister honestly defend a situation where simplicity seems to be trumping individual rights, where difficult judgment calls are eschewed in place of a box-ticking process and where people’s rights to be heard in court are being threatened? I would be willing to meet the Minister and his team if that would be helpful because I hope that we can find accommodation on these matters. I beg to move.

7.15 pm

Viscount Younger of Leckie: My Lords, the amendments seek to extend the role of the adjudicator introduced by Clause 63 of the Bill. Noble Lords will be aware that the reforms to the debtor-initiated bankruptcy process remove the order-making function from the court, and replace it with a new administrative process. This provides an opportunity to introduce a modern, electronic and more efficient application process, and was indeed first consulted on by the previous Government. A similar process has been successfully operated in Scotland since 2008, as the noble Lord, Lord Stevenson, has already mentioned. The adjudicator will be required to consider each application and decide on an objective basis whether or not the criteria for making a bankruptcy order are met. If they are, the adjudicator must make a bankruptcy order.

16 Jan 2013 : Column GC297

The first four of these amendments seek to impose a requirement on the adjudicator to consider whether bankruptcy is the right option for the applicant, and whether an alternative debt solution may be more appropriate. The proposal is that the adjudicator should have a discretion to hold off making a bankruptcy order for a period if he or she feels the debtor may benefit from taking further advice.

The amendments may be motivated by a power that the court presently has to refer a debtor who has presented a bankruptcy petition to an insolvency practitioner in a case where an individual voluntary arrangement may be a viable alternative to bankruptcy. I understand, however, that the courts very rarely make use of this power.

I reassure noble Lords that before making their bankruptcy application, applicants will be strongly encouraged to take independent debt advice to ensure that bankruptcy is really the right option for them. My officials will work with the Money Advice Service and providers within the debt advice sector to ensure that applicants have the information they need to make an informed decision. Furthermore, within the electronic application process itself, we propose to include a series of warnings to ensure that applicants are made fully aware of the serious implications of bankruptcy before they make their application. We will also ensure that the process flags up any alternative debt remedies that may better suit their circumstances.

The Government consider that these safeguards are sufficient to ensure that debtors are empowered to make an informed decision as to whether or not bankruptcy is the right option for them before they take the serious step of making a bankruptcy application. The Government believe that these amendments would unnecessarily complicate the process by requiring the adjudicator to exercise discretion on a case-by-case basis. That would increase administration costs with an impact on the application fee. It would also delay access to debt relief for the debtor, who would have elected for bankruptcy in full knowledge of their other options.

Amendment 28ZKE seeks to give the adjudicator power to apply to the court for directions in relation to any matter arising in connection with the bankruptcy application. The policy intention is to ensure that the system delivers better outcomes by focusing the court’s role and resources on matters of dispute that rightly require judicial intervention and expertise. The onus will be on the debtor to show that he or she meets the relevant criteria. However, the application process will be designed to help the debtor and to ensure that the adjudicator has all the information needed to reach a decision. The adjudicator will also be able to request such additional information from the debtor as he or she considers necessary for determining whether a bankruptcy order should be made.

The Government recognise that complex issues may arise in a small minority of cases, especially around the jurisdictional criteria and where the debtor’s centre of main interests is located in England and Wales. However, persons appointed as adjudicators will have the skills they need to do the job without the need for recourse to the court. It is acknowledged that the

16 Jan 2013 : Column GC298

court still has a role to play. Where the adjudicator refuses to make a bankruptcy order because the criteria are not met, the debtor will have the right to appeal to the court. That provides a route to court in those cases where it is needed. The court will also continue to determine creditor-initiated bankruptcy petitions, which are more likely to be complex and contentious.

For these reasons, the Government consider that this amendment would confer an unnecessary discretionary power on the adjudicator. In the light of these reassurances about the application process and the recourse to court for debtors, I hope that the noble Lord will agree to withdraw the amendment.

Lord Stevenson of Balmacara: I thank the Minister for that response. I sense within what he has said that he shares some of my aims in tabling these amendments, and I welcome that. However, I am still a bit perplexed. If you are prepared to go down the route of ensuring that those responsible in these processes flag up the options that are available to people—as I tried to explain in my opening remarks, there are many people for whom bankruptcy is the wrong solution; in the rather overused phrase, it is the nuclear option—and you are going to ensure that appropriate warnings are put on to the application forms, we are very close indeed on this point. It therefore boils down to a question of whether there is a bit more discretion in the system than perhaps the Minister is prepared to admit. I find that puzzling.

I tried to explain in my opening remarks that there is an awful gap for a debtor who is attempting to resolve a crisis because the only two options are to trust an adjudicator, and if the decision goes against the debtor, to find, finance and pay fees for an appeal to the court. As the noble Viscount has said, there are areas where the court will be better placed to make these decisions. The other point he made was the need to make sure that, in the first instance, there is sufficient discretion in the appointment of adjudicators who have the sensibility to make sure that people are involved. The noble Viscount has hinted that further discussions may take place between his officials and the appropriate authorities. I would urge that they involve the main bodies that are actually involved in direct dealing with those who have debt problems and not with the Money Advice Service. Obviously it will have an interest in this, but I think we need to speak to the experts in this matter. Perhaps we could have a side exchange on how those discussions go and whether the right people are being consulted. I would then be less concerned about them.

We may have to come back to this issue because to me it feels too tight, but perhaps further experience will be sufficient. On that basis, I shall withdraw the amendment.

Amendment 28ZKA withdrawn.

Amendments 28ZKB to 28ZKE not moved.

Schedule 18 agreed.

16 Jan 2013 : Column GC299

Schedule 19 : Adjudicators: minor and consequential amendments

Amendment 28ZL

Moved by Viscount Younger of Leckie

28ZL: Schedule 19, page 248, line 14, at end insert—

“ In section 293 (summoning of meeting to appoint first trustee), in subsections (2) and (3) for “court” substitute “prescribed person”.

In section 295 (failure of meeting to appoint trustee), in subsection (3) for “court” substitute “prescribed person”.”

Viscount Younger of Leckie: My Lords, these amendments make minor and technical changes to the Insolvency Act 1986 and relate to the reforms to the debtor bankruptcy petition process introduced by Clause 63. The reforms will remove the existing requirement for the indebted individual to present a bankruptcy petition to court and replace it with a new administrative process. Presently, certain statutory notices are required to be filed at court during the course of a bankruptcy. Most of these requirements are presently set out in the Insolvency Rules. However, a small number of requirements are contained in the Insolvency Act and are the subject of these amendments.

The proposed amendments would ensure that Ministers, in consultation with stakeholders, are able to modernise and make more efficient all of the filing and document inspection processes governing both debtor and creditor-initiated bankruptcies without the need to amend the Act in the foreseeable future. It is anticipated that, where the bankruptcy is commenced by way of the debtor making an application to the adjudicator, documents generated will not necessarily be routinely filed at court. While the Government have no intention at present to change the current policy of filing notices at court in relation to creditor-initiated bankruptcies, it is possible that in the future the Government may be minded to extend some or all of the filing efficiencies introduced in relation to debtor-initiated bankruptcies to creditor-initiated bankruptcies.

The strong policy preference is that such detailed procedural requirements, including those relating to filing, should be in the rules and not in the Act. This is in line with a wider government agenda to consider the overall structure of insolvency legislation with a view to ensuring consistency in what is contained within the primary and secondary legislation. One of our aims is to remove detailed prescriptive requirements from the primary legislation wherever possible. The amendments also make other minor and technical changes that are consequential to the reform of the debtor petition process. I beg to move.

Lord Stevenson of Balmacara: My Lords, I have listened carefully to the Minister. I find that these proposals are in keeping with the general approach that has been taken and I have no particular objection to them. I mentioned in my contribution on the earlier amendments that I was much taken by the experience in Scotland; I was trying to suggest that there are lessons to be learnt from there. I make this point, which I think would be worth reflecting on. The new

16 Jan 2013 : Column GC300

bankruptcy Bill that is about to go through the Scottish Parliament, which I am sure officials are well briefed about, seems to take as its starting point a slightly different perspective to those with debt problems from the one that we are taking in England and Wales. I slightly regret that. I am not overstating it when I say that there is an ambition north of the border—is there not always an ambition north of the border?—to create what is called there, possibly in correspondence rather than in the main line, a financial health service. Perhaps the Minister could reflect on whether there is some element of that in what is being proposed in the totality of the amendments that we have been considering today.

The point that I am driving at is that, if we focus only on the processes when people are already facing imminent bankruptcy or worse, we are not picking up the sensibility that I think is infusing the thinking by the Accountant in Bankruptcy and in the Scottish Parliament on these matters, which is that far greater attention should be placed on the role for public involvement in the borrowing and lending processes that affect individuals. Too many people find it very easy to borrow and extremely hard to save. That balance is completely wrong. We should have a much more balanced approach to how these things operate and how we regulate in a space within which people extend credit in order to provide the sort of services that they wish to use during their lives but at the same time acquire debts that have to be serviced and eventually repaid.

There is a bigger and better conversation to be had around whether the 19th-century and 20th-century notions of debt are as appropriate as they should be in the 21st century to the way in which people operate. At one level—I do not want to extend this debate, but I think that this is an important point to put on the record—there are many instances where we see behaviour in the marketplace that is counterintuitive and absurd. I am thinking particularly of payday lenders. The problems relate to the flow of credit to those who need it and the pressures under which they operate. The fact that people are prepared to take out these ridiculous loans at absurd interest rates and on impossible repayment terms is not a reflection of iniquity on the part of the lenders; it is a reflection of something that is going on in society. We are not tapping into that in the proposals that we are hearing today. Yes, it is sensible to take away the courts’ role as a primary source for all these bankruptcy applications but only, I would argue, if we are also aware of and alert to the other ways in which people can be assessed for indebtedness and helped to find an appropriate way forward. On that basis, I find this general approach right but possibly lacking context. I wonder whether, in his closing remarks, the Minister could make a few comments on that area.

7.30 pm

Viscount Younger of Leckie: I listened carefully to the noble Lord, Lord Stevenson, and I am very grateful to him for his full response. I very much take note of the issues that he raised concerning the need to provide better help to those who unfortunately get into debt.

16 Jan 2013 : Column GC301

I think that the best thing to do is to follow up his suggestion to take this further in discussion outside this Committee.

Amendment 28ZL agreed.

Amendments 28ZM to 28ZT

Moved by Viscount Younger of Leckie

28ZM: Schedule 19, page 248, line 18, at end insert—

“ In section 298 (removal of trustee and vacation of office), in subsections (7) and (8) for “court” substitute “prescribed person”.

(1) Section 299 (release of trustee) is amended as follows.

(2) In subsection (1)(a) for “to the court” substitute “under this paragraph to the prescribed person”.

(3) In subsection (3)(a) for “court” substitute “prescribed person”.”

28ZN: Schedule 19, page 251, line 38, leave out “In section 415 (fees orders), after” and insert—

“(1) Section 415 (fees orders) is amended as follows.

(2) In subsection (1)—

(a) after paragraph (a) omit “and”, and

(b) at the end of paragraph (b) insert “and

(c) the performance by an adjudicator of functions under Part 9 of this Act,”.

(3) After”

28ZP: Schedule 19, page 252, line 28, after “adjudicators” insert “in the discharge of functions for the purposes of Part 9 of this Act”

28ZQ: Schedule 19, page 252, line 40, at end insert—

““24ZA Provision requiring adjudicators—

(a) to keep files and other records relating to bankruptcy applications and bankruptcies resulting from bankruptcy applications,

(b) to make files and records available for inspection by persons of a prescribed description, and

(c) to provide files and records, or copies of them, to persons of a prescribed description.

24ZB Provision requiring an adjudicator to make returns to the Secretary of State of the adjudicator’s business under Part 9 of this Act.”

28ZR: Schedule 19, page 253, line 2, after “applications” insert “and bankruptcies resulting from bankruptcy applications”

28ZS: Schedule 19, page 253, line 3, leave out “those”

28ZT: Schedule 19, page 253, line 4, at end insert—

“24B Provision requiring a person to whom notice is given under section 293(2), 295(3), 298(7) or (8) or section 299(1)(a) or (3)(a)—

(a) to keep files and other records of notices given under the section in question, and

(b) to make files and records available for inspection by persons of a prescribed description.””

Amendments 28ZM to 28ZT agreed.

Schedule 19, as amended, agreed.

Amendment 28ZU not moved.

Clause 64 agreed.

Schedule 20 agreed.

16 Jan 2013 : Column GC302

Amendment 28A

Moved by Lord Lucas

28A: Before Clause 65, insert the following new Clause—

“Ownership of licences to copyright

(1) Any natural person who acquires, for value and for his personal use only, the right to use a copyright may, for value or otherwise, transfer that right to any other person.

(2) Any terms in any contract that purport to forbid, place restrictions on or require payment for a transfer under subsection (1) shall be null and void.

(3) Any person who in any way controls the use of a copyright must do all things necessary, without undue delay and without recompense, to effect a transfer under subsection (1) above.”

Lord Lucas: My Lords, in moving the amendment, I wish to speak also to Amendment 28B.

Since I tabled these amendments, we have had a Christmas present from the ministry. On 20 December, the Secretary of State was kind enough to announce a package of intentions to reform copyright which entirely supersedes my Amendment 28B. Therefore, I will not trouble the Committee by addressing that because clearly we will see this in a proper and thought through form when we come to the Bill that will follow the announcements made by the Secretary of State. However, we have a small cameo performance on copyright now before we go to bed. I would be grateful if the Minister could confirm that the 28th of this month will be the next day in Committee, since clearly this stage of the Bill is now going to go into 10 sittings. If there is any suggestion that there will be a day in between, will we all receive an e-mail notification rather than having to spot that something has changed on the Order Paper?

It seems to me that copyright is aptly described by Macaulay. A lot of people speak as if copyright is a god-given possession of creative people. It is not; it is a deal done between those who consume copyright material—I both produce and consume copyright material—and those who produce it. In order that it should be produced, those who consume are prepared to let the copyright owners have a limited monopoly on it, but that monopoly is not without terms. It is given in order that it should be available for consumption. The way in which people want to consume copyright material is therefore an important part of negotiating and renegotiating the bargain between users and producers of copyright material.

My firm view, which, to judge from his 20 December announcements, is shared by the Secretary of State, is that we should look at copyright as a means of increasing national wealth, not just of producing a nice little rose garden to enable creative people to live comfortably and have everything exactly the way that they want it. It is a bargain between two sides. It is an agreement to use something that is essentially an evil—a monopoly—in order to enable something good to happen. My view, like that of the Secretary of State, which is covered in Amendment 28B, is that we must from time to time look at the way in which copyright functions in this country and ask whether it is serving the interests of users as well as those of the people who create it. In the case of fair use, quite clearly the rules had begun to fall well short of the way in which people wanted to

16 Jan 2013 : Column GC303

use copyright material. We all own a reasonable variety of devices. If we buy a copy of Beethoven’s ninth symphony by the London Symphony Orchestra, we ought to be able to listen to it on various devices; we do not want to have to buy separate copies for separate devices. Therefore, we must make it possible for users to do that because that is the way that users want to consume material and that is part of the modern bargain.

Amendment 28A covers something that the Secretary of State has not touched on but which others will be aware of. In the days of books—and long may they continue—when you bought a book, you owned it. You could pass it on to other people, you could sell it second-hand, you could leave it in your will—it was a possession. Now if you buy a book for use on your Kindle it remains the property of Amazon, which can remove it at any time—and does. Amazon strips people of their whole libraries or removes individual books if something has gone wrong with the licensing. You do not own a book; you just have the right to consume it for a while. That is a fundamentally undesirable position when it comes to the relationship between the creator and the user.

Something that is for personal consumption ought to be a personal possession; it ought to be something that we can pass on to other people. We should not allow the position to persist where the balance has been shifted. We have allowed the change in technology to change the balance between the old regime that existed in the case of books, of ownership as a result of payment to one of leasing as a result of payment. We should encourage people to have libraries and pass on intellectual works they have created to other people. That is the right balance between users and creatives. I want to restore the balance in the case of modern technology to where it was in the case of the old technology. Although I know I will not achieve anything this time with this amendment, I hope we will see something, if not from this Secretary of State then a future one. It is certainly a matter I will raise when we next debate this Bill. I beg to move.

Lord Clement-Jones: My Lords, it would be a shame not to savour the final quarter-hour of Committee today—although I have probably learnt more about agriculture than I ever wished to. I see that the noble Lord, Lord Whitty, is still here; he is clearly incredibly versatile in all these matters. Seeing him and the noble Lord, Lord Lucas, I am afraid that I am reminded of the passage of the Digital Economy Bill, which may or may not be a good thing. As we know from that, the noble Lord, Lord Lucas, is never knowingly underprovocative, particularly on the question of intellectual property rights, and I am not going to enter the lists with him on the issue of the format-shifting exception that was the subject of the Christmas present he mentioned.

Amendment 28A is an incredibly sweeping amendment that would have a massive impact on the cloud computing industry in the UK, which is forecast to grow from something like £2 billion to £6 billion. It would have an incredibly damaging effect, which makes it highly undesirable for various commercial reasons. Quite frankly,

16 Jan 2013 : Column GC304

it also happens to be in contravention of the existing EU directive on computer software, which gives the exclusive rights to copyright owners in those circumstances. Of course, there are issues about the ownership of digital content, but this is not the way to deal with them. There are issues about who owns what you have on your iPad or tablet from other manufacturers, but this is an incredibly sweeping way to do it. In the way the amendment is phrased, I doubt whether it will cure the issue by itself.

Baroness Buscombe: My Lords, I rise to resist the amendment of my noble friend Lord Lucas and to support what my noble friend Lord Clement-Jones said. My noble friend Lord Lucas’s argument in relation to Amendment 28A; that if someone has a book they should be allowed to own it, enjoy it and pass it on to others sounds, emotionally, like a good thing. Indeed, I have done that on many occasions among my family and friends. But passing one book among one or two friends is a million miles from what is now possible because of the speed of technology. Because of the digital world we inhabit, the whole of the creative being of that book can be out in the ether and transmitted globally within moments. The creative right is all but destroyed rather than shared in a small and special way. While I entirely understand the emotion behind the idea that we should continue to feel that we can share something we really enjoy, it is neither wise nor sensible to do that in this world because it will deter creators from creating more wonderful books. That is the tragedy of this. It is a perverse consequence of technology.

Lord Stevenson of Balmacara: My Lords, I do not wish to detain the Committee, but I wish to thank the noble Lord for his introductory comments and reflect on two points. First, a number of the issues he raises will come up in other amendments and I hope that he will share his wisdom on those occasions as well. Secondly, I must disappoint him in one respect. He suggested that part of what he wanted to say was covered by the Christmas present provided by the additional copyright exceptions and other things that were coming forward and that there might be an opportunity to discuss those in a separate Bill. That will not happen because the Government are, at the moment, choosing to implement those proposals by secondary legislation, bundled in, as the note says, “as few SIs as possible”.

Unless we get a late Christmas present from the Minister, we will have to oppose that because there are very large issues within what has been proposed. Not all of them are unwelcome and we would probably want to get behind most of them. But the way in which it has been done leaves a gap in the expectation outside that there should be a lot of discussion about these things. As has just been said, they affect the very heart of what we are trying to say around our creative economy, how people create and how things are consumed. If we do not get that right, there will be a wave of concern outside. I therefore lay down a small elephant trap for the Minister to fall into then leap out of with one bound later on when we reach that point in the Bill.

16 Jan 2013 : Column GC305

Viscount Younger of Leckie: My Lords, it is fair to say that, as a Scotsman, I do not do Christmas presents after Christmas. Nevertheless, I am grateful to my noble friend Lord Lucas for initiating these amendments. Before I continue, I cannot yet confirm the dates for the extended Committee work, but we will make sure that noble Lords hear in good time.

The amendments aim to allow consumers to do more with copyright materials that they have already bought. Amendment 28A seeks to ensure that personal licenses to use copyright can be resold or passed on to another person. This would apply, for example, to those licences that accompany e-books or computer software. This is an important area and one of which the Government are keenly aware. However, the law in this area is still developing. The extent to which resale of licences is already allowed under European law is not yet clear. The cases that have been considered have dealt with specific limited circumstances. I note the comment from my noble friend Lord Clement-Jones who described the proposal as incredibly sweeping. Perhaps it is not surprising that I would say that there should be careful consideration before action is taken.

7.45 pm

Amendment 28B aims to ensure that someone who has bought a legal copy of a copyright work is able to reproduce it for their personal format-shifting and back-up. We understand that there is a need to modernise the law regarding private copying. This is why, as the noble Lord, Lord Lucas, mentioned, the Government have announced that they will permit private copying in certain circumstances, similar to those set out in this

16 Jan 2013 : Column GC306

amendment. This will align the law with what consumers expect and how businesses anticipate their products will be used. It will be welcomed by the public and cause little harm to copyright owners, and will be introduced in secondary legislation later this year. In light of this, I hope that the noble Lord will withdraw his amendment.

Lord Lucas: My Lords, I am grateful to my noble friend for his reply, and less grateful to my noble friends for their interventions.

To my noble friend Lord Clement-Jones, I will say—as I will likely say on future occasions in this Bill—phooey. One of the effects of cloud computing and the fact that something is not fundamentally located on an individual device makes the whole business of regaining ownership much easier. No longer does one have to deal with something that is passed from device to device and copied into a torrent stream that suddenly goes illegal and cannot be kept track of. In the case of iTunes, it is one enormous great cloud computing lump, and transferring ownership is an extremely easy thing to do if one bothers to write a few lines of code. Technology is moving on and is making the transfer of ownership much easier than it was under the old ways of doing things. I expect that, given proper consideration and thought, this will be quite easy to implement in a few years’ time. For now, I beg leave to withdraw the amendment.

Amendment 28A withdrawn.

Amendment 28B not moved.

Committee adjourned at 7.47 pm.