23 July 2013 : Column 1161

23 July 2013 : Column 1161

House of Lords

Tuesday, 23 July 2013.

2.30 pm

Prayers—read by the Lord Bishop of Birmingham.

Birth of a son to Her Royal Highness the Duchess of Cambridge

Motion for an Humble Address

2.36 pm

Moved by Lord Hill of Oareford:

That an humble Address be presented to Her Majesty The Queen as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to congratulate Your Majesty, His Royal Highness the Duke of Edinburgh, their Royal Highnesses the Prince of Wales and the Duchess of Cornwall and their Royal Highnesses the Duke and Duchess of Cambridge on the birth of a son to Her Royal Highness the Duchess of Cambridge; to signify our great pleasure at this happy event; and to assure Your Majesty of our continued loyalty and devotion”.

The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford): My Lords, I beg to move that an humble Address be presented to Her Majesty the Queen to congratulate Her Majesty, and other members of the Royal Family, on the safe delivery of a son to their Royal Highnesses the Duke and Duchess of Cambridge.

This is a very happy day: first, for the Duke and Duchess of Cambridge personally, as it is for any young couple who experience that mixture of wonder and relief when their first child is born; but, secondly, for the whole country because it means that the succession to the Throne is further secured. No reigning British sovereign has been able to look quite so far ahead since the birth of His Royal Highness Prince Edward of York as a great grandson to Queen Victoria in 1894.

The bells are pealing from the Abbey; the guns have fired their salute. But it is the crowds which have once again gathered outside Buckingham Palace which are the real mark of the great affection in which the Royal Family is held. There, too, in the palace forecourt is the easel bearing the notice from the Queen’s gynaecologist, last used to announce the birth of Prince William of Wales in 1982. When moving a similar Address on that occasion, the late Lady Young said:

“The Monarchy, within our constitution, finds itself more securely based than ever before upon the affections of the people”.

My Lords, amen to that. It was true in 2011 at the Royal Wedding, it was true in 2012 for the Diamond Jubilee, and it is clearly true today.

The Duke of Cambridge has started his public life not only through royal duty and service in the tradition of his parents and grandparents but as a serving

23 July 2013 : Column 1162

officer in the Royal Air Force. I am sure that his father is very proud of him, as would have been his mother, at today’s happy news.

The Duchess of Cambridge has won many admirers for the way in which she has taken up her royal duties, supporting the Queen and in her own interests of art, children and sport. She and the Duke of Cambridge were superb ambassadors for the Royal Family, and for the United Kingdom, during the Olympics and the Diamond Jubilee.

We are right to celebrate this birth as a national event, but I am sure we all hope that the Duke and Duchess, and perhaps particularly the new Prince, can have some privacy. Royalty carries burdens as well as privileges, and those burdens will fall on the young Prince’s shoulders all too soon.

Our Queen, raised in the imperial court in the first part of the 20th century, today sees a child who is not likely to succeed to the Throne until well into the second half of the 21st. When that time comes, one thing is certain. The new Prince could not have a better example of duty and service than that set by his great grandmother and, indeed, his great grandfather. We wish the child well; we wish his parents well for his upbringing; and we offer Her Majesty the Queen our continued loyalty and our warmest congratulations.

2.40 pm

Baroness Royall of Blaisdon: My Lords, on behalf of Her Majesty's Opposition, I warmly endorse the sentiments expressed by the noble Lord the Leader of the House to Her Majesty the Queen, His Royal Highness the Duke of Edinburgh and their Royal Highnesses the Duke and Duchess of Cambridge. This is a moment of real joy for the Duke and Duchess, and we send them our warmest congratulations on the birth of their son—an extraordinary event for any new parent. It is also a moment of real happiness for people right across Britain, who will think with special affection of the Duchess, as a new mother, and her son.

Especially since their wedding in 2011, their Royal Highnesses the Duke and Duchess have given a great deal of happiness to the nation, and the occasion of the birth of their first-born child gives the nation the opportunity to make known its feelings in reply. It is clear that the nation is indeed doing so. I trust, however, that the nation will also allow them privacy to delight in their family life.

The fact that the Duke and Duchess’s first-born is a boy means that the Succession to the Crown Act 2013, which your Lordships’ House and the other place passed earlier this year, will now not need to be applied in the way it would have been had their first-born been a girl. But even so, the Act is the right thing for Parliament to have done in the modern age. It is an historic change and a welcome one, and I am sure that it will be well used in future.

Britain will rejoice in what we know will be an added delight to Her Majesty the Queen in the year celebrating the 60th anniversary of Her succeeding to the Throne in 1953. We on these Benches wish the Duke and Duchess, and the new Prince, long life and lasting happiness.

23 July 2013 : Column 1163

2.42 pm

Lord McNally: My Lords, the Leader of the House and the Leader of the Opposition have moved and seconded this Address with eloquence and elegance. It is only left for me from these Benches, with a sense of honour and privilege, to wish the Duke and Duchess of Cambridge and their son a long and happy life in the service of this country.

2.43 pm

Lord Laming: My Lords, it is a great honour and a real privilege, on behalf of my colleagues in the Cross-Bench group, to be associated with the sentiments already so well expressed. This is indeed a very happy occasion, and we gladly offer both our sincere congratulations and our very best wishes to Her Majesty the Queen and her family.

Your Lordships’ House has, time and again, demonstrated a particular interest in the well-being of children and families, so it has given us a very great pleasure to learn of the safe delivery of a son to the Duke and Duchess of Cambridge. Like so many loyal citizens in this country and, indeed, across the Commonwealth, we wish the baby a very long and fulfilled life.

We are indeed most grateful for this opportunity to express to Her Majesty and her family the joy the news has given us. We wish them well and offer our warmest greetings.

2.44 pm

The Lord Bishop of Birmingham: My Lords, the day’s proceedings in your Lordships’ House begin far too often with the announcement of a death. My friend the most reverend Primate the Archbishop of Canterbury and my other colleagues on this Bench regret not being present today because they are attending the funeral of the late Bishop of Coventry, Colin Bennetts. None the less, it is a wonderful joy and delight for us to join in the words of colleagues in this House as we pause to celebrate the birth of a new baby. Their Royal Highnesses the Duke and Duchess of Cambridge can be assured not simply of the congratulations, prayers and good wishes of those who occupy this Bench but, I am sure, the whole of the Church and faiths in England and the rest of the country.

My friend the most reverend Primate the Archbishop of Canterbury, your Lordships may like to know, did not, as was the custom in times past, actually attend the birth. Instead, he has offered his own prayers and congratulations to their Royal Highnesses, sharing,

“in their joy at this special time”,

and praying that God would,

“bless this family with love, health and happiness”.

I am delighted to associate myself with his comments and offer my own prayers for their Royal Highnesses and their new son.

Every Sunday, up and down this country, we pray for our Sovereign Lady Queen Elizabeth that she will be guided by wisdom and by truth. It may well be that similar prayers are said for this newborn child in years to come. He will, too, we hope and trust, be the Supreme Governor of the Church of England.

23 July 2013 : Column 1164

It is not future responsibilities that prompt our celebrations today, but a desire that this child will have the strongest network of love and care. There has been huge interest in the royal birth around the country which, with sustained sunshine, British victories at Wimbledon and the Tour de France and an upsurge in that traditional English game of cricket, leaves the country basking in well-being. In all this warmth, we remember today that a new stage has begun for a young family. The infant has no idea what symbolic authority may one day be his; and so meanwhile, we pray that their Royal Highnesses will be guided and sustained as they take up the joys and challenges of parenthood. We humbly offer our congratulations, support and affection to the whole Royal Family.

Motion agreed nemine dissentiente, and the Lord Chamberlain was ordered to present the Address to Her Majesty.

Birth of a son to Her Royal Highness the Duchess of Cambridge

Motion to Convey a Message

2.46 pm

Moved by Lord Hill of Oareford:

That a message be conveyed to their Royal Highnesses the Duke and Duchess of Cambridge in the following terms:

“May it please Your Royal Highnesses to accept the loyal congratulations of the Lords Spiritual and Temporal in Parliament assembled on the birth of a son to Her Royal Highness the Duchess of Cambridge; and to assure Your Royal Highnesses of our great satisfaction and pleasure at this news”.

Motion agreed nemine dissentiente, and it was ordered that the Message be conveyed to Their Royal Highnesses by the Lord Chamberlain.

NHS: Children’s Congenital Heart Services


2.47 pm

Asked By Lord Sharkey

To ask Her Majesty’s Government what assessment they have made of the recommendation of the Independent Reconfiguration Panel in its report of 30 April on children’s congenital heart services that NHS England must ensure that any new review process properly involves all stakeholders.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, NHS England is taking forward the new national review of congenital heart services as quickly and effectively as possible, basing its actions on the recommendations of the Independent Reconfiguration Panel. I am advised by NHS England that it will ensure that all stakeholders have a chance to contribute to its review. Any decisions must carry the confidence of the public and be focused on the best outcomes for all patients.

23 July 2013 : Column 1165

Lord Sharkey: My Lords, the now discredited Safe and Sustainable review proposed closing the Royal Brompton Hospital children’s heart surgery unit, yet over the past three years this unit, along with Newcastle, has been the best performing in the country. Will the Minister reassure me that, before there is another proposal to close this or any other unit, he will publish a detailed model showing exactly what factors will be taken into account in any future proposal and how each factor will be weighted?

Earl Howe: My Lords, the first point to emphasise to my noble friend is that the new review is the responsibility of NHS England. It is not a piece of work that Ministers are in charge of. NHS England’s advice to me is that it is too soon to describe what the exact process will be. However, I can say that NHS England is developing a process that is, in its words, “rigorous, transparent and inclusive”, particularly in the use of evidence and data. As I have said, there will be opportunities for all stakeholders to participate in the review—including, importantly, the current providers of children’s congenital heart services.

Lord Walton of Detchant: My Lords, can the Minister give any estimate of how long this saga is likely to smoulder on? By all national and international comparisons, the unit at the Freeman Hospital in Newcastle upon Tyne has proved to be absolutely outstanding, and awaiting the outcome of this lengthy process is delaying a number of important and significant developments. Can the Minister give us any assurance about how long this will take?

Earl Howe: My Lords, my right honourable friend the Secretary of State wrote to NHS England as soon as the IRP’s report was published to say that it will need to work with all interested parties to ensure that progress on its new review of congenital heart services is made as quickly as possible. NHS England’s aim is that by June 2014 it will have developed, tested and revised a proposition for the review and undertaken work to identify a preferred approach to implementation.

Lord Woolmer of Leeds: My Lords, does the Minister recognise that the south Asian communities of Yorkshire, who felt deeply neglected by the previous review, will be watching with great care to see whether this review takes account of travel times and ensures that those communities most at risk of these issues are not only properly consulted but fully weighed in the balance?

Earl Howe: Yes, my Lords. The point that the noble Lord makes is extremely important. I think that there were a number of people who, for whatever reason when the Safe and Sustainable review was going on, felt left out of the picture. NHS England is clear that that should not happen again and that lessons have to be learnt so that this is a genuinely inclusive process.

Baroness Masham of Ilton: My Lords, does the Minister agree that adult and children’s services for congenital heart disease should be located on the same site to ensure continuity of care? When young people reach the age of 16, they seem to be thrown out of children’s service provision.

23 July 2013 : Column 1166

Earl Howe: My Lords, I am informed by NHS England that it will be including adult heart surgery in its review of the care for people with congenital heart disease, but of course I cannot pre-empt in quite what way the conclusions will flow from that.

Baroness Howarth of Breckland: My Lords, during the previous difficulties and confusion when there was much lobbying and debate, the people who found it most difficult to follow the information and the evidence were parents. Presumably, they are the most important stakeholders, particularly in the case of children’s congenital heart disease. Can the Minister convey to NHS England the importance of finding clear and sometimes simple ways of helping parents at a time when they are stressed, anxious, worried about the geography and not able to understand the outcomes? They do not always have the best information with which to make decisions.

Earl Howe: My Lords, the noble Baroness makes an extremely important point. I know that NHS England is cognisant of the need to ensure not only that parents are included in this consultation but that there is a system going forward which will inform parents appropriately.

Lord Hunt of Kings Heath: My Lords, I refer the House to my health interests as set out in the register of interests. In the mantra of the market in the health service, which the noble Earl and his party are so wedded to, can he tell me when the Competition Commission can be expected to intervene in this issue, given that under the market mantra the decision to reduce the number of children’s heart centres reduces choice?

Earl Howe: My Lords, before I answer that, perhaps I may be so bold as to offer the noble Lord my congratulations on his silver wedding anniversary. I recognise why he has asked that question. It is too early to prejudge the final outcome of NHS England’s review, and I should stress that there is no preconceived result in its head. What I can say is that NHS England will need to engage with all key stakeholders throughout this review, including around any competition considerations.

Lord Mawhinney: My Lords, if I understood my noble friend correctly, he said that it would take until 2014 to test the process and then the review has to take place. Given the years that have been consumed in the past and that will be consumed in the future, what does my noble friend think all this is doing to the quality of service that is being provided and to the morale of those who are providing it?

Earl Howe: NHS England fully recognises that morale is extremely important and that it is fragile in certain locations. That is why the timescale is actually quite ambitious. Contrary to what my noble friend has said, its aim is to have a preferred approach to implementation ready by next June, which, given the scale of the task, is a major piece of work. It will of

23 July 2013 : Column 1167

course build on the modelling and analysis that has already been done, so it is not going to be a wasted effort. In the mean time, I can reassure the House that children’s heart surgery is being delivered safely in all locations.



2.55 pm

Asked by Lord Risby

To ask Her Majesty’s Government what assessment they have made of the current social and economic situation in Lebanon.

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, the Syria crisis and, in particular, the influx of more than 600,000 refugees has had a serious impact on Lebanon’s social and economic situation. As part of the UK’s strong support for Lebanon’s stability, the International Development Secretary announced during her visit to Lebanon on 9 July that we are contributing a further £50 million to help Syrian refugees and Lebanese host communities. This brings our total support for Lebanon’s humanitarian response to £69 million, in addition to our contribution through the EU and international organisations.

Lord Risby: Does my noble friend agree that fate has been very cruel to Lebanon, which in living memory has suffered a terrible civil war, occupation by Syria which became destructive, an invasion, all the tensions now arising from the activities of Hezbollah across the border in Syria and, as my noble friend mentioned, the huge and tragic influx of Syrian refugees to the country? Given all this, can my noble friend give some detail about the broad spectrum of support being given to Lebanon at this extremely difficult time in its history?

Baroness Warsi: My noble friend makes an important point. The country has 7,000 years of history as a hinge between various continents and civilisations. Sadly and tragically, since its independence it has also suffered ongoing political challenges. I assure my noble friend, and indeed the House, that the UK stands firm in its support for the Lebanese state. We have a strong relationship and I can refer to a number of recent visits and support. For example, we strongly supported the UN Security Council statement on 10 July reaffirming international support for Lebanon. The Chief of the Defence Staff visited Lebanon earlier this month and discussed our plans to increase our assistance to the Lebanese armed forces. We have since announced an additional £10 million to bolster the armed forces’ ability to protect and manage the border. We also support trade and investment. UK-Lebanon exports are up 31% on last year’s figures.

23 July 2013 : Column 1168

Lord Anderson of Swansea: My Lords, the European Union has just decided to designate the military wing of Hezbollah a terrorist organisation. Will the Minister say how meaningful the distinction is between the military wing and the political wing of Hezbollah? What effect will it have on any representations we would wish to make to Hezbollah?

Baroness Warsi: My Lords, we do not see why the EU designation should impact on Lebanese political stability or on EU relationships with the Lebanese Government. We do not think that it will affect the EU and the UK relationship, but we feel that it sends out a clear message that the EU is united against terrorism and that there are consequences for terrorist attacks carried out on European soil. It is important, as I am sure noble Lords are aware, that the designation is of the military wing of Hezbollah. We recognise that Hezbollah’s political representatives will remain a legitimate part of Lebanon’s political scene.

Baroness Falkner of Margravine: My Lords, would my noble friend tell the House what discussions Her Majesty’s Government have had with the political wing of Hezbollah regarding its participation in the Syrian civil war?

Baroness Warsi: Discussions with all Lebanese political parties, including Hezbollah—it is a large part of politics in Lebanon—are ongoing. We have raised our concerns because there was an indication that Lebanon was to remain neutral in this particular conflict. Clearly, from Hezbollah’s own admission that has not been the case. We are deeply concerned and have raised our concerns with Hezbollah.

Baroness Uddin: My Lords, is the Minister aware of some of the allegations of violence against women, perhaps even of rape? If so, could she tell the House what work is being done to support women and families in vulnerable situations in those refugee camps?

Baroness Warsi: The noble Baroness may be aware of the Foreign Secretary’s specific initiative on preventing sexual violence in conflict. Part of that is to have experts advising at an early stage, when we look at how refugee camps are set up. For example, specific work is being done on where the toilets and wash facilities are for women—and to ensure that they are done in a way that means women are protected—and on where the food facilities are. That is part of the thinking going into the development of these refugee camps.

Lord Howell of Guildford: My Lords, the EU move to blacklist the military wing of Hezbollah is the right one, although it is a very sensitive area and EU interventions in the Middle East jigsaw have not always been a dazzling success. The Minister’s remarks about continuing and strengthening our own bilateral links with Lebanon are very welcome, but will she add to that our support for the development of its very

23 July 2013 : Column 1169

considerable offshore oil and gas resources? If developed, they could bring prosperity to the whole region and maybe contribute to peace.

Baroness Warsi: My noble friend always understands issues in much more detail than I ever could. I am not familiar with the particular oil and gas reserves to which my noble friend refers, but I of course support his comments. We have put huge efforts into making sure that we strengthen the trade relationship between our two countries.

The Lord Bishop of Birmingham: My Lords, Lebanese communities have shown incredible generosity in coping with refugees but the flow is reaching breaking point. Will the Minister accept that, in addition to providing support for refugees, more work should be done to alleviate tension between communities and to strengthen the resilience of host families?

Baroness Warsi: I completely agree with the right reverend Prelate that there has been a huge show of generosity and a real welcome from the Lebanese people. Noble Lords may be aware that the population of Lebanon is about 4 million. The number of registered refugees is 600,000 but it is estimated that the real number could be a lot higher—somewhere around 1 million. That is the equivalent of the whole of the Romanian population arriving on British shores over a very short period. A huge amount of pressure has been put on local resources, which has of course caused tensions. It is for that reason that we are supporting not just the refugee communities but the host communities as well.

Baroness Symons of Vernham Dean: My Lords, the noble Baroness may be aware that at the recent G8 women’s conference, considerable anxiety was expressed about the economic and social impact of disruption across the region on women. Can the noble Baroness say what specific help is given at the moment to Lebanese women in that respect?

Baroness Warsi: Unfortunately I cannot, but I will write to the noble Baroness in detail on that issue.

Economy: Infrastructure


3.03 pm

Asked By Lord Dobbs

To ask Her Majesty’s Government what plans they have for improving infrastructure to enable businesses and employment to grow.

The Commercial Secretary to the Treasury (Lord Deighton): My Lords, the Government laid out their infrastructure plans at the spending review in their document Investing in Britain’s Future, committing to fund publicly specific projects worth over £100 billion and facilitating private investment by both extending

23 July 2013 : Column 1170

the UK guarantees scheme and providing policy certainty, for example to energy businesses and investors through the early publication of renewable strike prices.

Lord Dobbs: I thank my noble friend. On this exceptionally happy day, could we perhaps spend a moment looking on the bright side? It might be too early to spot green shoots but there are certainly a number of blue shoots around. Growth is accelerating, exports are rising and unemployment is falling. Confidence among consumers and business is growing. However, many challenges still lie ahead. Does my noble friend agree that small businesses are consistently at the sharp end of economic revival? How do he and his colleague intend to ensure that the huge and very welcome infrastructure programme that he has announced gives a fair share to Britain’s small businesses?

Lord Deighton: I thank my noble friend for those observations about the signs of good news that are beginning to be seen in the economy. Based on my discussions with small businesses, they are most concerned about access to finance, improved broadband and better roads. The Government are addressing all of those through the Funding for Lending scheme to get cheaper financing and through the business bank to get about £1 billion of capital committed in non-bank funding. We are rolling out broadband as fast as possible both privately and through government intervention and we have committed a record amount not only to building new roads but to improving and repairing existing roads so that small businesses can get around. As for the participation of small businesses themselves in these large infrastructure projects, those businesses operate down the supply chain, and giving them a long-term warning that these projects are coming is extremely helpful. By way of example, I think that about 58% of the businesses which benefit from Crossrail spend would be classified as small and medium-sized.

Lord Barnett: The noble Lord will know that I strongly welcome the news of the amounts being spent. However, as he has now taken direct responsibility in this area, can he answer the vital question of how much will be spent in the next two years?

Lord Deighton: The actual expenditure on infrastructure is difficult to predict because, of course, the predominant portion of infrastructure is financed by the private sector. That is why we focused on developing our energy policy, so that we can trigger investments with offshore wind, with nuclear and with various gas developments. We have laid out our expenditure plans and the proportion of investment that is capital investment is laid out in the spending round for this year and for future years. We have shifted, I believe, £9.3 billion from current spending to capital spending during the time of this Government. We have put an extra £18 billion into capital investment in Budget 2013. As a result of those changes, public investment as a share of GDP will be higher on average between 2010-11 and 2020-21 than it was under the previous Government. We are trying to shift it into the more productive areas. Transport

23 July 2013 : Column 1171

investment in 2013-14 will be higher than at any point under the previous Government despite the fact that we were in something of a boom time there, and it will rise every year until 2020.

Lord Forsyth of Drumlean: My Lords, can my noble friend tell the House how much less would be spent on infrastructure and capital projects if the plans of Alistair Darling and the previous Labour Government had been implemented?

Lord Deighton: Again we are dealing with a hypothetical question because in 2010 our plans for capital investment were broadly similar. Since then, because of our ability to focus on government efficiencies and the delivery of other programmes more cheaply, we have been able to transfer, first, the £10 billion to which I referred into capital spending within our fiscal envelope and, then, a further £18 billion through 2020-21. These capital expenditure investments are very focused on the most productive areas—economic infrastructure—but they are also all fully costed and within a fiscal envelope that is affordable.

Lord Harrison: My Lords, given the palpable failure of the regional growth fund, can the Minister report on the Government’s proper ambition to try to switch access to finance for small businesses from the current 80% secured from their banks in the United Kingdom to the 80% secured from the capital markets which applies in the United States of America?

Lord Deighton: I share the noble Lord’s observation that the current performance of the banks in supporting small and medium-sized businesses needs support. That is why we introduced Funding for Lending and amended it to make it more effective in cheapening banks’ funding for those areas. It is also why we have the business bank in place. I agree that some of the schemes need time to bed in, and they need to be activated faster and more effectively, because this is a critical part of our plan to get the economy growing again.

The Earl of Listowel: My Lords, can the Minister say what part high-quality, affordable childcare will play in freeing up the workforce for small and medium-sized enterprises, particularly for women entering the workplace?

Lord Deighton: I thank the noble Earl for drawing attention to the importance of flexibility in the workforce, the way that it relates to our policies in the area of welfare and its reform and the support that we are giving to get valuable members of the workforce back into being productive members of this economy.

Baroness Sharples: Can my noble friend say whether ministries are paying all their small business suppliers on time?

Lord Deighton: This goes back to the noble Lord’s earlier point about being creative about finding every possible way to get finance into smaller businesses. The noble Baroness is right: getting everybody to pay on time, including the ministries, is a critical part of

23 July 2013 : Column 1172

that, and we have a programme in place to ensure that we perform in the same way as we are encouraging the rest of business to.

Police: Neighbourhood Policing


3.11 pm

Asked by Baroness Smith of Basildon

To ask Her Majesty’s Government what assessment they have made of the finding by Her Majesty’s Inspectorate of Constabulary that neighbourhood policing is at risk of being eroded by budget cuts.

Baroness Stowell of Beeston: My Lords, the Government welcome HMIC’s report, which finds that police forces are rising to the challenge of reduced budgets. Crime is down by more than 10%, victim satisfaction is up and the proportion of police officers on the front line has increased. This Government have introduced a range of new measures to tackle community crimes and have empowered forces to respond to the needs and priorities of local communities. Decisions on how neighbourhood policing teams are resourced and deployed are now for each chief constable and their PCC.

Baroness Smith of Basildon: My Lords, that slightly complacent Answer does not really address the Question I asked. The HMIC said that neighbourhood policing is the cornerstone of British policing, not something that it is simply nice to have. As police forces struggle with a further £2.4 billion of cuts, the remaining police are spending more time on paperwork and investigations and less in the community. The Police Federation fears that this leads to crimes not being prevented or reported. Do the Government value neighbourhood policing? If they do, how will they deal with this problem?

Baroness Stowell of Beeston: My Lords, as I said, neighbourhood policing is indeed very important but it is right that police chiefs, in consultation with their elected PCCs, decide on the priorities for their area. Crime is down and satisfaction is up. Another thing that this Government have done to ensure that the public are able to hold their police forces to account is to give them greater information about the performance of their local police forces so that they can properly assess that performance and hold those police chiefs to account.

Baroness Hamwee: My Lords, does the Minister welcome, as I do, another item in the report—namely, that forces are making greater efforts, as they have been doing over the years, but with variable success, to reduce the amount of patrolling in pairs? Patrols by single officers are more successful, not least because the public are not deterred from approaching an officer, rather than thinking that if there are two officers, they are interrupting a private conversation.

23 July 2013 : Column 1173

Baroness Stowell of Beeston: My noble friend highlights an important example of how police chiefs are now in a position to prioritise and make decisions in the way that they see best in order to meet the Home Secretary’s strategic goal of cutting crime. The survey shows that the public support some PCSOs patrolling on their own because it leads them to think that they are more approachable than when they are in pairs.

Lord Campbell-Savours: The Minister said that satisfaction is up. Who is saying that?

Baroness Stowell of Beeston: The HMIC report includes a survey of the public, and victim satisfaction is up from 82% in 2010 to 85% in March of this year.

Lord Avebury: My Lords, what increase in the volume of neighbourhood crime does my noble friend think would be attributable to the failure of the Government to implement minimum unit pricing of alcohol?

Baroness Stowell of Beeston: One measure that this Government have introduced is the late-night levy, which comes into force when pubs and clubs decide to stay open beyond midnight. We have taken real steps to address this kind of activity by ensuring that people take responsibility for the decisions they make in their local area that might lead to an increase in consumption and local crime.

Baroness Scotland of Asthal: My Lords, the Minister said that the performance to date has been satisfactory. Indeed, the police and others should be complimented. But will the noble Baroness address the Question she was asked in relation to the future cuts that are anticipated and the fears that have been expressed in the report that the police will not be able to maintain that level of performance in the future?

Baroness Stowell of Beeston: The report identifies neighbourhood policing as an area which needs to be monitored in order to ensure that its importance is maintained. It is important to police forces; there is no suggestion that it is not. The police college is already looking at new and innovative ways to modernise local policing. It is there to ensure that best practice is spread around from force to force. We want to see them using new technology in order to maintain standards in a modern world.

Lord Naseby: Are the Government not to be congratulated on their success so far? For the past 10 to 15 years, all we have heard about is more and more crime requiring more and more policemen. Furthermore, now that we have elected police commissioners working alongside chief constables, is this not an opportunity to make further progress in this challenging area?

Baroness Stowell of Beeston: My noble friend is right. It is worth quoting Her Majesty’s Chief Inspector of Constabulary, who said:

23 July 2013 : Column 1174

“In these times of austerity and considerable financial challenges, it is to the credit of the police service that so many forces have shown themselves able to protect the front line and make the necessary savings.”

As I said, crime is down.

Lord West of Spithead: My Lords, does the noble Baroness not agree that crime has actually been falling fairly consistently for about the past 14 years? It is a slight conundrum, because one feels that if we had no policemen there would be no crime. Is it not true that there has been this fall?

Baroness Stowell of Beeston: The noble Lord is right. Crime has been falling for several years, but I believe that it was his party which suggested that crime would increase, because of the cuts that were necessary. We have clearly proven the Opposition wrong on that count.

Lord Alderdice: My Lords, there has been some suggestion that one of the reasons for these figures is that increased crime on the internet has not necessarily been detected. Are there any indications from my noble friend that internet crime is being monitored and included in these figures?

Baroness Stowell of Beeston: There is a range of crimes that are coming down, but one of the crimes that is increasing is fraud; my noble friend is right about that. That must be a priority and we must ensure that it is addressed.

National Minimum Wage (Amendment) Regulations 2013

Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013

Motions to Approve

3.18 pm

Moved by Lord Popat

That the draft regulations and draft order laid before the House on 6 and 10 June be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 6th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 15 July.

Motions agreed.

23 July 2013 : Column 1175

Companies and Partnerships (Accounts and Audit) Regulations 2013

Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013

Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013

Motions to Approve

3.18 pm

Moved by Viscount Younger of Leckie

That the draft regulations and draft order laid before the House on 10 and 24 June be approved.

Relevant documents: 4th and 6th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 July.

Motions agreed.

Intellectual Property Bill [HL]

Intellectual Property Bill [HL]


3.19 pm

Clause 8 : Accession to the Hague Agreement

Amendment 1

Moved by Viscount Younger of Leckie

1: Clause 8, page 6, line 12, leave out paragraph (b) and insert—

“(b) before subsection (5) insert—

“(4B) The Secretary of State may not make an order under section 15ZA unless a draft of the statutory instrument containing the order has been laid before, and approved by a resolution of, each House of Parliament.””

Viscount Younger of Leckie: My Lords, before I begin today, I should like to take this opportunity to thank noble Lords for their continued interest in this Bill and for their insightful contributions to the debate. The Government have listened to the points raised by noble Lords and have given careful consideration to all aspects of the Bill. Since Grand Committee, I have met representatives from the International Chamber of Commerce, and have been working with my officials to continue to engage with stakeholders to understand their concerns and alleviate them where possible. My officials have also issued a plain English guide to the

23 July 2013 : Column 1176

Bill, particularly aimed at small and medium-sized businesses. It can be found on the IPO website. I hope that the amendments brought forward by the Government today will reassure both noble Lords and industry representatives that their concerns are taken very seriously. The Government believe that these amendments present a balanced and considered approach.

I am also pleased to report that since we debated the issue of e-lending in Grand Committee the Government have announced funding for the public lending right scheme, which will allow this valuable work to be taken forward. I am sure noble Lords will agree that that is a very positive development.

Turning to the amendments before us, during our first day in Grand Committee we had a brief discussion about the recommendations of the Delegated Powers and Regulatory Reform Committee. The committee and its members gave careful consideration to the order-making powers set out in the Bill. As my noble friend Lord Clement-Jones suggested in the debate:

“Simply reading the committee’s report is pretty persuasive by itself”.—[Official Report, 11/6/13; col. GC 344.]

The Government also found the report persuasive. We have given detailed thought to the committee’s recommendations and I am pleased to bring before the House today amendments that will implement the changes suggested.

Amendment 1 concerns Clause 8, which permits the UK to accede to the Hague agreement concerning the international registration of designs. The amendment specifies that any order giving effect to these provisions must be considered and approved by a resolution of both Houses. Amendments 2 and 3 relate to Clause 11, concerning the introduction of an opinions service for designs. These amendments ensure that the first time that regulations are introduced to implement the opinions service they, too, must be subject to the scrutiny and approval of both Houses. Noble Lords will note that the Delegated Powers and Regulatory Reform Committee recommended that thereafter the negative resolution procedure should apply. The Government believe that this is wholly the right approach. Once the service has been set up, following full discussion in Parliament, any changes that need to be made to suit the needs of business users can be implemented more quickly.

I also take this opportunity to briefly set out why the Government have tabled a further minor and technical amendment to Clause 21. As noble Lords are aware, Clause 21 is intended to simplify the way in which the UK currently meets its international obligations to extend copyright protection to works from other countries and their citizens, delivering clearer information for users. The need arises from the fact that the UK is a signatory to a number of international copyright conventions and treaties. This obliges the UK to extend copyright protection to works and performances created by citizens of other member countries or to works that originate in other member countries. These obligations are reciprocal: UK copyright holders benefit from the same protection in those countries.

One of these international agreements is the Berne convention, which has been amended a number of times since its original incarnation in 1886 and most recently in 1971. A small number of countries have

23 July 2013 : Column 1177

not yet caught up with the 1971 update. This minor and technical amendment makes it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. The purpose is to ensure that countries that are not signatories to the most recent Act do not receive lesser copyright protection in the UK than those that are. I beg to move.

Lord Young of Norwood Green: My Lords, these government amendments implement the DPRR 3rd report recommendations and we welcome them on that basis. On the Clause 8 orders giving effect to the Hague agreement, the DPRR Committee found that the Bill created a Henry VIII power, and commented that it,

“would therefore expect to see some justification for the negative procedure that is to apply”.

However, the committee did not consider that the case for the negative procedure had been made for orders under new Section 15ZA and recommended that the affirmative procedure should apply instead. We are glad to see the Government accepting that recommendation.

Clause 11(1) inserts new Section 28A into the Registered Designs Act 1949 to provide for the registrar—that is, the Comptroller-General of Patents, Designs and Trade Marks—to give an opinion about matters specified in the regulations with respect to designs of a kind described in subsection (1)(a) and (b). The new section is purely enabling in that the whole provision about the new opinions service is to be set out in negative regulations. Subsections (2), (4), (5) and (7) set out provisions that the regulations must contain—for instance, about protecting the registrar from liability in respect of an opinion and about appeals. BIS explains, in paragraph 13 of the memorandum, that the intention is that the new opinions service will be similar to the existing patents opinions service. That service is provided for in Section 74A of the Patents Act 1977, but it is important to note that almost all the provision appears in the Act, with only one power to make regulations to provide for an exception.

The committee was not convinced by the Government’s argument for a need for flexibility and was critical that they did not explain why more provision cannot go into the Bill—for instance, about the scope of the opinions service. The committee remained unpersuaded that the negative procedure was appropriate for the introduction of this new service entirely by regulations, and recommended that the affirmative procedure should apply on the first exercise of the powers under new Section 28A, which is why we welcome the Government’s decision in this regard. We also welcome the fact that the Government now make it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. As the Minister assured us, this ensures that countries that have not signed up to the most recent Act of the Berne Convention do not receive any less copyright protection in the UK than those that have, and therefore we welcome the government amendment.

Lord Clement-Jones: My Lords, I join the noble Lord, Lord Young, in thanking the Minister for responding so effectively to the concerns raised on

23 July 2013 : Column 1178

Report. I hope that these swallows which are already evident on Report will mean a summer for the rest of the Report stage.

Viscount Younger of Leckie: My Lords, I am grateful for the short contributions to the debate on these government amendments by the noble Lord, Lord Young of Norwood Green, and my noble friend Lord Clement-Jones. I take this opportunity to thank again the Delegated Powers and Regulatory Reform Committee for its consideration of the Bill.

Amendment 1 agreed.

Clause 11 : Opinions service

Amendments 2 and 3

Moved by Viscount Younger of Leckie

2: Clause 11, page 10, line 26, leave out from “after” to “insert” in line 27 and insert ““under this Act””

3: Clause 11, page 10, line 27, at end insert “, and

(c) after subsection (4) insert—

“(4A) Subsection (4) does not apply to the first regulations to be made under section 28A, but the Secretary of State may not make those regulations unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.””

Amendments 2 and 3 agreed.

Clause 13 : Offence of unauthorised copying etc. of design in course of business

Amendment 4

Moved by Lord Stevenson of Balmacara

4: Clause 13, page 11, line 30, after “person” insert “deliberately”

Lord Stevenson of Balmacara: My Lords, I shall also speak to Amendments 5 and 6, which are in my name and in the name of my noble friend Lord Young of Norwood Green.

Clause 13 introduces two offences: unauthorised copying of a registered design, and dealing with unauthorised copies. Although these provisions have been welcomed by a small number of sectoral groups, the vast majority of businesses and representative bodies strongly oppose the introduction of criminal sanctions for design infringements. Many noble Lords will have received a copy of a letter from Sir James Dyson. He writes:

“In the law relating to copyright, acts of unintentional infringement are excluded from criminal sanctions. In the proposed clause of the Intellectual Property Bill relating to registered design infringement, the same is not true. If this Bill is passed unamended, innocent designers will be threatened with criminal proceedings. It is wholly wrong that a designer should go to prison for unintentional infringement. The current wording of the Bill does not exclude that possibility”.

He goes on:

“I have spent decades fighting to protect my ideas; taking on competitors who have flagrantly copied my patents and designs. I abhor intellectual property infringement. It is something I feel

23 July 2013 : Column 1179

passionately about. But the Intellectual Property Bill's inclusion of proposals to criminalise infringement of registered designs is a serious mistake”.

There is a real concern that the legislation, as currently drafted, will open a Pandora’s box of unintended consequences, potentially discouraging the very kind of legitimate, competitive risk-taking that policymakers have been keen to encourage as a driver of growth. The arguments that the Government have deployed until now are deeply flawed. They say that the treatment of design rights needs to be brought into line with existing copyright and trade mark legislation; that there is an anomaly between the application of criminal sanctions for copyright and trade mark infringement and the lack of equivalent provisions to stop the copying of registered designs. However, there are good reasons to treat design right infringements differently from piracy and counterfeiting. This is because the scope and validity of registered designs depends, as with patents, on prior art. As a result, the scope and validity of a design registration are never black and white but instead are open to a degree of interpretation. Indeed, relevant prior art may not even come to light until years later.

3.30 pm

It has been suggested that criminal sanctions would provide an additional layer of protection to small designers, which would spur greater innovation and investment in new design. While this line of reasoning is superficially attractive, it ignores the potential unintended consequences of the draft legislation, specifically the risk of significantly chilling innovation and competitive design in the wider UK economy. Senior executives advised us that even a very small risk of criminal action is likely to discourage the launch of some innovative products in the UK or significantly delay decisions on product launches, particularly where a company has to escalate concerns to board level. In the best-case scenario, this would entail additional costs for the business; however, it is possible to envisage circumstances in which executives might choose not to launch products on the UK market. It is clear that this would have a significant knock-on effect on employment, growth and consumer choice.

It has been said that criminal sanctions for design rights are necessary to protect small designers and to allow them to obtain redress for infringements. The first point is that most small designers do not register their designs and instead rely on the unregistered design right. There is a huge imbalance here, and it is odd—we will return to this issue—that the focus in this clause is only on the registered design route. Secondly, it is important to recognise that criminal sections are not the only tool that can be employed to address some of the very real issues faced by small designers in obtaining redress for design infringements. For example, the Patents County Court allows for design cases to be heard under cheaper and more streamlined procedures than in the High Court. As an alternative to criminal sanctions, the Government’s strategy could have focused on promoting access to the PCC so that it could continue to allow independent and small designers to protect and enforce their ownership of their products’ design.

23 July 2013 : Column 1180

There are also good reasons to avoid introducing highly technical cases into the criminal court system. Most criminal judges lack the relevant expertise and evidence that is required properly to evaluate infringement claims. It is instructive in this case that the Government chose to exclude registered designs from the small claims track of the PCC last year because, as they said, disputes are likely to involve more complex issues.

There is another danger: the risk of exposing small and independent designers themselves to criminal prosecutions. Small companies will be less able to afford expensive prior-art searches and legal support, leading to a greater risk of wrongful conviction. Cases of this kind would be likely to have a seriously chilling effect on the UK’s design industry. UK enforcement agents would be compromised by the drain on resources that would inevitably arise from extending criminal sanctions to the UK design frameworks.

It is said that the IP Bill will provide a competitive boost to the UK design industry, but the introduction of criminal sanctions would have far-reaching unintended consequences for the British business environment. The uncertainty that would be created by criminal measures will discourage large multinational companies from investing in and commissioning design in the UK, given the legal risks. This deterrent to inward investment in UK design may not only result in an innovation drought but threaten the future employability of UK designers. It is telling that no other leading common-law jurisdictions, such as the USA, Australia, New Zealand or India, have introduced criminal measures for design infringements.

Notwithstanding these reservations, we accept that criminal sanctions could play a part in the fight against counterfeiting. We have therefore tried in Amendment 4 to raise the bar for criminal proceedings by making it clear that they would be commenced only if it was clear beyond reasonable doubt that the action taken had been calculated and motivated by a wish to exploit the original registered design. We feel strongly about this issue, and believe that not only have the Government failed to make their case on this point but introducing new criminal penalties should be the very last resort, and one on which Parliament should expressly give an opinion—if necessary, by voting.

It may have been assumed that, since the offence is committed if a person copies a registered design, that act must have been intentional and therefore deliberate. However, there have been cases in the past where copying was unintentional—for example, where a design brief that was intended to ensure the creation of an independent design so as to avoid infringement was erroneously too prescriptive. We suggest, therefore, that the offence should be limited to cases where a person deliberately copies a registered design. I accept that the phrasing—using the word “deliberately”—may not be the best way of inserting that sensibility, but I hope that the Minister will give serious consideration to the concerns that we have expressed here and perhaps bring forward a more suitable phrasing at Third Reading.

If this approach does not find favour, we have, in Amendment 5, provided an alternative approach, limiting criminal proceedings to cases where the civil jurisdiction

23 July 2013 : Column 1181

has been exhausted. Our belief is that the civil jurisdiction is to be preferred, so this gives a backstop position to the criminal sanction.

Amendment 6 focuses on the differences between deliberate copying and deliberate infringing. It proposes a defence where there is a reasonable belief that one is not doing anything legally wrong. We note that the IPO, in its report on the consultation, said in paragraph 84 that the criminal offence would contain defences against unintentional infringement of registered design rights. The new section introduced by Clause 13, however, does not contain that defence.

It has often been stated that imitation is the life-blood of competition, so focusing criminal liability on deliberate copying is problematic—ironically, because it focuses on something that is actually socially valuable. We propose, at the minimum, a defence for anyone who reasonably, or in good faith, believed that their actions were non-infringing.

Section 92(5) of the Trademarks Act 1994 offers an analogy. It states that:

“It is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark”.

Similarly, Section 107 of the CDPA premises criminal liability on knowing or having reason to believe that articles are infringing articles or that acts are infringing acts. Section 107(2A), for example, states in relation to communication of a work to the public that there is criminal liability only,

“if he knows or has reason to believe that, by doing so, he is infringing copyright in that work”.

We continue to oppose the introduction of criminal sanctions for registered design infringement as a matter of principle. However, should the proposal be approved, we think that the Bill should also contain a defence for any person who reasonably believed that they were not infringing. I beg to move.

Lord Clement-Jones: My Lords, briefly, I express some bafflement, especially in the light of discussion in Committee, at what the noble Lord, Lord Stevenson, has said. On the one hand, half his speech was devoted to saying that the criminalisation of registered design rights under the Bill was wrong and therefore should not proceed. On the other, the second half seemed to say that, on the basis that it would proceed, it should be amended to add words such as “deliberately”, as in Amendment 4. Looking at Clause 13, however, it is quite clear that mens rea, as the term is used in criminal law, is contained within the clause as it stands.

I can understand the position of Sir James Dyson. He believes in principle that it is not right to criminalise registered design infringement. I happen to disagree with him. A number of particularly small designers represented by bodies such as Anti Copying in Design—ACID—feel strongly that this is a very important protection. It may not be favoured by the IP Federation, which represents the larger companies and their designers, but this is something that is very much to be desired by the smaller designers. The argument used that there is a chilling effect on innovation is completely rebuttable. I am sure that my noble friend will go through that in his own way.

23 July 2013 : Column 1182

Taking the second limb of the objections of the noble Lord, Lord Stevenson, it is clear that Clause 13 does exactly what he wants his amendment to do. There is no doubt that the act has to be deliberate on reading new Section 35ZA(1)(b)(i). I cannot see that there is any ambiguity there.

Viscount Younger of Leckie: My Lords, in Grand Committee we had some detailed debates about the introduction of criminal sanctions for the deliberate copying of a registered design. This is a finely balanced issue, and concerns were raised by a number of noble Lords. On the one hand, some felt that criminal sanctions should not be introduced as the offence may inadvertently capture innocent infringement. On the other hand, some noble Lords agreed that the offence was necessary, and indeed some felt that its scope should be extended further.

We shall no doubt return to the latter point in the course of today’s debate. However, as we consider this particular group of amendments, I would like to speak first to government Amendment 7 in order to allay some of the concerns that noble Lords have expressed regarding the application of the offence. This amendment to Clause 13 sets out more precisely the scope of the term “use” within the context of business activities. The amendment will further focus the offence with the aim of ensuring that innocent infringement will not be captured.

Before I comment further on this amendment, I remind noble Lords of the purpose of this clause. As your Lordships know, Clause 13 introduces a criminal sanction for the copying of a registered design. This will create a more coherent approach to the protection and enforcement of designs, trade marks and copyright in the UK, and should help to reduce the scale of blatant copying of registered designs by acting as a deterrent. Under the clause, it will be an offence to deliberately copy a registered design without the consent of its owner. It will also be an offence to knowingly market, import, export, stock or use the design in the course of business activities.

Concerns were raised in Grand Committee as to whether the term “use” may inadvertently capture accidental and incidental use under the offence. As the noble Lord, Lord Stevenson, pointed out in relation to the offence, it,

“includes as a criminal act the use of a product in the course of a business and the stocking of the product for use. Does the Minister accept that the word ‘uses’ is an unacceptably vague notion for criminal prosecution?”.—[

Official Report

, 13/7/13; col. GC 399.]

Because the offence has been drafted to require an element of active knowledge in order to be found guilty, it should be the case that accidental use will not be caught. However, the Government accept there may be cases where incidental use could conceivably come within the scope of the offence. For example, a business may lease a vending machine, which is a copy of a registered design, for use by its employees. This is completely ancillary to its main business but some have suggested that because the business is “using” the machine, a responsible person within that business who knew the machine was copied but still tendered its lease would be liable for the offence. The Government

23 July 2013 : Column 1183

believe that, in practice, such cases should not attract the criminal offence. This is because the use of the registered design in this case would be ancillary to the main purpose of the business.

I reassure noble Lords that the Government have listened carefully to their concerns, and believe that this amendment is the right way to clarify the detail of the offence. By qualifying the word “use”, it will ensure that the mere incidental use of a copy of a registered design in the course of business will not be subject to criminal proceedings.

Amendment 4 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, would add a qualification to proposed new Section 35ZA(1)(a) in Clause 13. The noble Lords have set out their position on this amendment. This would mean a person would attract the criminal offence contained in Clause 13 only if an act of copying was undertaken deliberately. The Government are of the opinion that “copying” refers to a deliberate “taking” of the design in question. In crafting the offence of registered design copying, the Government worked hard to ensure that it caught only cases of intentional and deliberate copying. For example, the existing test for whether, in civil law, design is infringed is to ask whether the product creates a “different overall impression” on an “informed user”. This was rejected for the proposed criminal offence because it left too considerable a margin for subjective judgment within a criminal case. The offence was purposefully drawn to be narrower than civil infringement, and while it of course remains a subset of such infringement, it will not be used in cases where there has been no blatant copying of a design. This ensures that designers can continue to be legitimately inspired by, and innovate around, existing designs without fear of their actions being caught by criminal sanctions.

3.45 pm

The Government do not think it is necessary to specify that the act of copying is done deliberately, because the act of copying by its very definition requires an active choice to have been made; that is to say, a deliberate choice. Or, to put it another way, if a person comes up with a design from independent and objective means then, by definition, they cannot have copied it. Furthermore, the offence requires the person to know, or have reason to believe, that the design they have copied is a registered design. This is a high standard to achieve and will capture only acts which have been carried out with positive—that is to say, deliberate—intent. In view of this, the Government believe that it is unnecessary to further qualify that an act of copying must be carried out deliberately. To briefly summarise my point, this amendment would insert an element of tautology into the clause. As such, I suggest to noble Lords that it is unnecessary.

Amendment 5 would introduce an additional requirement to the criminal sanction for registered design copying. Broadly, a defendant would have to be found guilty of civil infringement before they could be charged with the criminal offence of design copying. I will reiterate why the Government are seeking to introduce

23 July 2013 : Column 1184

criminal sanctions in the first place. Many businesses in the design sector do not believe that the civil courts are a viable option when it comes to protecting their rights as they find the cost of court action prohibitive. They also argue that those who take their designs use whatever means they can to delay proceedings when they are initiated, increasing the costs for the smaller party in the hope that they will be forced to give up or even go out of business.

In particular, stakeholders tell us that deliberate copiers of designs also use the fear of losing in court as a weapon against design owners. It is also their belief, as set out during the consultation process that preceded the introduction of the Bill, that a criminal sanction would act as a deterrent against those who copied their designs. The amendment would, therefore, in reality limit access to the criminal offence from precisely those small businesses that were most vocal in pressing for the offence, since they would be required to undertake the civil procedure first. The amendment would also set designs apart from other types of intellectual property to which a criminal sanction provision applies. For example, the offences that apply to trade mark and copyright infringement do not provide in the relevant legislation that the civil route must be exhausted prior to the commencement of criminal proceedings. There are good reasons for this, which relate to the differences between criminal and civil law.

First, the amendment would fetter the prosecuting authorities’ ability to act when there was the potential for public harm, such as in clear cases of counterfeiting. It is worth remembering that the objective of criminal law is to punish and protect society as a whole rather than to provide redress for the individual. Secondly, the amendment requires there to be a verdict through the civil procedure, which usually takes from 12 to 24 months, and for the appeal route to be exhausted. Prosecuting authorities would have to wait until this process was complete before charging an individual, who could be engaging in practices that harm designers and society as a whole. In both cases this would undermine the impact of the criminal offence and would not seem to be in the public interest. Nor would it seem to be in the interests of justice to require the additional hurdle of proving civil infringement before criminal proceedings could begin.

Amendment 6 would effectively extend the defences relating to infringement which apply in relation to criminal sanctions. The amendment would mean that someone who had sufficient reason to believe that their activity was not infringing would not be guilty of a criminal offence. I understand that noble Lords are concerned with the potential chilling effect that the criminal sanction may have, as the noble Lord, Lord Stevenson, mentioned, and they will recall that we had a very good debate on these matters in Grand Committee. Indeed, the noble Lord, Lord Stevenson, has said, with reference to a group opposed to the introduction of criminal sanctions, that,

“it argues that criminalisation would create a ‘chilling effect’ on innovation, where deliberate activities are genuinely believed to be non-infringing, but would have no defence”.—[

Official Report

, 22/5/13; col. 855.]

23 July 2013 : Column 1185

As I have mentioned previously, the Government were mindful of this issue in constructing the offence. They therefore built in several requirements which must be fulfilled before a criminal act can be considered to have taken place. These requirements include that copying—in other words, a considered act—must take place, and therefore “accidental” or independent activity will not be caught. This also shows why Amendment 4, to which I have already spoken, is not necessary.

The requirements also include having knowledge or reason to believe that the design in question was registered. Therefore, for example, retailers who do business in good faith with a third party which has itself wilfully copied somebody else’s design, will not fall foul of the sanction provided that they do not know, or have reason to believe, that the design is registered. The criminal sanction also incorporates specific defences. Again, these are intended to eliminate any likelihood of a chilling effect, and to prevent those who have acted in a decent manner being unfairly caught by the offence.

There are two specific defences. One relates to infringement, which is closely related to the amendment we are discussing now, and the other to a reasonable belief that the registration was invalid. Nevertheless, it is clear to the Government that the particular issue of a potentially chilling effect on legitimate business operations remains of great concern to stakeholders.

As I mentioned, I recently met the International Chamber of Commerce and other business representatives to discuss the effect of Clause 13. Even more recently, my officials had further constructive contact with stakeholder organisations and businesses on precisely these matters. In the light of the representations made, the issue is something to which the Government want to give careful consideration. Although I cannot make a commitment now, I would welcome the time to consider this further.

I will take the opportunity also to speak to Amendment 8 in my name. I thank my noble friend Lord Clement-Jones for originally proposing an amendment relating to the liability of corporate bodies and partnerships. The Registered Designs Act 1949 does not make reference to partnerships, and I am grateful to my noble friend for bringing this omission to my attention. In Grand Committee, he said:

“It is very interesting that there is no reference to partnerships in the existing legislation. Partnerships are interesting bodies. Some of them have unlimited liability whereas others are limited liability partnerships. Therefore, some interesting drafting needs to be done in that regard because LLPs are quite akin to corporate bodies”.—[Official Report, 13/6/13; cols. GC 395-96.]

As I said in Committee, the Government wanted to consider this point further, and have consequently done so. Although the liability of corporate bodies is already covered in Section 35A of the Registered Designs Act 1949, the Act does not specifically set out how an offence would be treated if it has been committed by a partnership. It is important that this gap in the law is resolved appropriately.

The government amendment will introduce into the Registered Designs Act 1949 a provision that specifies how offences committed by partnerships will be addressed. Where the partnership is guilty of an offence, every partner will be liable if they were aware of the offence

23 July 2013 : Column 1186

being committed and did not intervene to prevent it. In addition, on conviction, any fine imposed on a partnership will be paid out of the partnership’s assets. This will broadly reflect the provision of the Trade Marks Act 1994, and will be consistent with the Partnerships (Prosecution) (Scotland) Act 2013 to ensure that Scottish law is adequately provided for. The amendment will provide legal clarity on the liability of partnerships and partners, and will address the gap that exists in the law.

I hope that noble Lords will forgive me for making a long speech. The noble Lord, Lord Stevenson, raised a number of questions that I will address now. He stated his belief that the majority of bodies opposed criminal sanctions. The majority of respondents to the consultation, including small businesses and individual designers, were in favour of the introduction of criminal sanctions. The noble Lord also asked for criminal sanctions to be replaced by improved access to the PCC. The Government recognise that improving access to the PCC is certainly also important. For example, the UK Government’s series of reforms in the patent county court have simplified and streamlined procedures. The introduction of a small-claims track means that low-value claims relating to unregistered designs can be dealt with quickly, informally and cheaply. It ensures that SMEs in particular are not deterred from innovation by the potential costs of litigation to safeguard their rights.

The noble Lord, Lord Stevenson, raised the question of whether small design businesses would be intimidated. The Government do not believe that criminal sanctions will lead to small designers being intimidated by larger businesses. The CPS has powers to intervene in cases where a private prosecution is vexatious: for example, where there is no case to answer, or where the public interest factors against the prosecution outweigh those in favour. As the noble Lord will know, each case is treated differently.

Finally, the noble Lord, Lord Stevenson, claimed that other common law intellectual property countries do not have criminal sanctions—for example, the USA. Some countries that operate within the EU legal framework, as the UK does, have criminal sanctions. These include Germany, Denmark and Finland. In the light of my comments and the government amendments tabled, I ask the noble Lord to withdraw the amendment.

Lord Stevenson of Balmacara: I begin by thanking the Minister for his very full reply and his customary courtesy in dealing with all the points, for which I am most grateful. He sets a high standard in this House. However, let us be clear: we are talking about approximately 4,000 designs which are registered each year at the Intellectual Property Office and some 350,000 designers who suggest that about 18,000 unregistered designs are lodged with the asset database, so this is a very small proportion of the designs with which we are involved. We are probably arguing around a very narrow point but it is an important one. I want to come back to it, but before I do so I thank the Minister for his comments about Amendments 7 and 8, both of which we welcome, and which have gone a long way to answering points raised in Committee, for which we are grateful to him.

23 July 2013 : Column 1187

The issue that we are left with is the pleasing word “bafflement” which invaded the otherwise normally sane and sober noble Lord, Lord Clement-Jones. I am delighted to have struck a blow for those who believe in bafflement. However, I must say that I am not at all baffled by this. The situation is very clear: we are against criminalisation of this aspect of the design world. We accept that there may be a case for having as a very last stop a criminalisation process which would enable those who are constantly engaging in this sort of behaviour, or are doing so on such a scale, to be given appropriate penalties. The issue is whether or not the clause that we are debating has sufficient safeguards. My argument in Committee and today was that the Minister, on behalf of the Government, did not adequately defend why it was necessary to move from a very effective civil situation to criminalisation. However, I accept that it is important to consider whether criminalisation would help the design community. That is the question we have to resolve.

It is interesting that in his response in Committee and today, the Minister kept saying that these criminal measures would apply only to deliberate acts. I think he is using the mens rea argument, which is that if somebody has gone to the point of copying, by definition it must be intentional and deliberate. However, when discussing that, he used the word “deliberate”, which is what I sought to include in the Bill. Therefore, I am baffled in the sense that I do not understand why it is possible to talk about a criminalisation which is restricted to those who are deliberately engaging in this act, but not accept that it would be helpful to have that in the Bill. That is the important thing.

If we are talking about people who are blatantly ripping off individual designers, taking their designs, using them and obtaining financial reward from them without having paid for a licence, obviously there is a point where that has to become a criminal act. I am prepared to go along with that but the bar has to be set very high. I do not believe that it has been set high enough in the present wording. Therefore, I would like to test the opinion of the House.

3.58 pm

Division on Amendment 4

Contents 153; Not-Contents 233.

Amendment 4 disagreed.

Division No.  1


Adams of Craigielea, B.

Adonis, L.

Alton of Liverpool, L.

Anderson of Swansea, L.

Andrews, B.

Armstrong of Hill Top, B.

Bach, L.

Bakewell, B.

Barnett, L.

Bassam of Brighton, L. [Teller]

Beecham, L.

Berkeley, L.

Bhattacharyya, L.

Billingham, B.

Bilston, L.

Blood, B.

Bragg, L.

Brooke of Alverthorpe, L.

Brookman, L.

Browne of Ladyton, L.

Campbell-Savours, L.

23 July 2013 : Column 1188

Carter of Coles, L.

Chandos, V.

Christopher, L.

Clancarty, E.

Clarke of Hampstead, L.

Clinton-Davis, L.

Cobbold, L.

Collins of Highbury, L.

Crawley, B.

Davies of Coity, L.

Davies of Oldham, L.

Dean of Thornton-le-Fylde, B.

Donaghy, B.

Donoughue, L.

Drake, B.

Dubs, L.

Eames, L.

Elder, L.

Elystan-Morgan, L.

Evans of Parkside, L.

Evans of Temple Guiting, L.

Falkland, V.

Farrington of Ribbleton, B.

Faulkner of Worcester, L.

Foulkes of Cumnock, L.

Gale, B.

Giddens, L.

Glasman, L.

Golding, B.

Gould of Potternewton, B.

Grantchester, L.

Grenfell, L.

Grocott, L.

Hameed, L.

Hanworth, V.

Hardie, L.

Harris of Haringey, L.

Harrison, L.

Hart of Chilton, L.

Haskel, L.

Haworth, L.

Hayman, B.

Healy of Primrose Hill, B.

Henig, B.

Hilton of Eggardon, B.

Hollick, L.

Hollis of Heigham, B.

Howarth of Newport, L.

Hoyle, L.

Hughes of Stretford, B.

Hughes of Woodside, L.

Hunt of Chesterton, L.

Irvine of Lairg, L.

Jay of Paddington, B.

Jones, L.

Judd, L.

Kennedy of Southwark, L.

Kidron, B.

King of Bow, B.

Kinnock of Holyhead, B.

Kinnock, L.

Kirkhill, L.

Lea of Crondall, L.

Leitch, L.

Liddell of Coatdyke, B.

Liddle, L.

Lipsey, L.

Lister of Burtersett, B.

Low of Dalston, L.

McAvoy, L.

McDonagh, B.

Macdonald of Tradeston, L.

McFall of Alcluith, L.

McIntosh of Hudnall, B.

MacKenzie of Culkein, L.

McKenzie of Luton, L.

Mandelson, L.

Massey of Darwen, B.

Maxton, L.

Morris of Handsworth, L.

O'Loan, B.

O'Neill of Clackmannan, L.

Patel of Blackburn, L.

Patel of Bradford, L.

Pendry, L.

Pitkeathley, B.

Ponsonby of Shulbrede, L.

Prescott, L.

Quin, B.

Radice, L.

Rendell of Babergh, B.

Richard, L.

Rooker, L.

Rosser, L.

Rowlands, L.

Royall of Blaisdon, B.

Scotland of Asthal, B.

Sherlock, B.

Simon, V.

Smith of Basildon, B.

Smith of Gilmorehill, B.

Smith of Leigh, L.

Snape, L.

Soley, L.

Stevens of Kirkwhelpington, L.

Stevenson of Balmacara, L.

Stoddart of Swindon, L.

Symons of Vernham Dean, B.

Taylor of Blackburn, L.

Temple-Morris, L.

Thornton, B.

Tomlinson, L.

Touhig, L.

Triesman, L.

Tunnicliffe, L. [Teller]

Turnberg, L.

Uddin, B.

Wall of New Barnet, B.

Walpole, L.

Warner, L.

Warnock, B.

Warwick of Undercliffe, B.

Watson of Invergowrie, L.

Wheeler, B.

Whitaker, B.

Whitty, L.

Wigley, L.

Winston, L.

Wood of Anfield, L.

Woolmer of Leeds, L.

Worthington, B.

Young of Norwood Green, L.


Aberdare, L.

Addington, L.

Ahmad of Wimbledon, L.

Alderdice, L.

Allan of Hallam, L.

Anelay of St Johns, B. [Teller]

Ashton of Hyde, L.

Astor of Hever, L.

Attlee, E.

Baker of Dorking, L.

Bates, L.

Berridge, B.

Best, L.

Bichard, L.

Black of Brentwood, L.

Blackwell, L.

23 July 2013 : Column 1189

Blencathra, L.

Bonham-Carter of Yarnbury, B.

Boothroyd, B.

Bowness, L.

Brabazon of Tara, L.

Bradshaw, L.

Brinton, B.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Browne of Belmont, L.

Browning, B.

Butler-Sloss, B.

Byford, B.

Caithness, E.

Cameron of Dillington, L.

Cathcart, E.

Chester, Bp.

Clement-Jones, L.

Colwyn, L.

Condon, L.

Cope of Berkeley, L.

Cormack, L.

Cotter, L.

Courtown, E.

Coussins, B.

Cox, B.

Craigavon, V.

Crickhowell, L.

Crisp, L.

Cumberlege, B.

Dannatt, L.

De Mauley, L.

Deben, L.

Deech, B.

Deighton, L.

Denham, L.

Dholakia, L.

Dixon-Smith, L.

Dobbs, L.

Doocey, B.

Dundee, E.

Eaton, B.

Eccles of Moulton, B.

Eccles, V.

Edmiston, L.

Elton, L.

Empey, L.

Erroll, E.

Falkner of Margravine, B.

Faulks, L.

Fearn, L.

Fellowes, L.

Finlay of Llandaff, B.

Fookes, B.

Forsyth of Drumlean, L.

Fowler, L.

Framlingham, L.

Freeman, L.

Freud, L.

Garden of Frognal, B.

Gardiner of Kimble, L.

Gardner of Parkes, B.

Geddes, L.

German, L.

Glasgow, E.

Glenarthur, L.

Gold, L.

Goodhart, L.

Goodlad, L.

Greaves, L.

Greenway, L.

Hamilton of Epsom, L.

Hamwee, B.

Hanham, B.

Hannay of Chiswick, L.

Harries of Pentregarth, L.

Henley, L.

Higgins, L.

Hill of Oareford, L.

Hodgson of Astley Abbotts, L.

Hooper, B.

Hope of Craighead, L.

Howard of Lympne, L.

Howe of Aberavon, L.

Howe of Idlicote, B.

Howe, E.

Howell of Guildford, L.

Hunt of Wirral, L.

Hurd of Westwell, L.

Hussein-Ece, B.

Inglewood, L.

James of Blackheath, L.

Jenkin of Roding, L.

Jolly, B.

Jopling, L.

Kilclooney, L.

King of Bridgwater, L.

Kirkwood of Kirkhope, L.

Knight of Collingtree, B.

Kramer, B.

Laming, L.

Lamont of Lerwick, L.

Lang of Monkton, L.

Lawson of Blaby, L.

Lee of Trafford, L.

Lexden, L.

Lindsay, E.

Lingfield, L.

Linklater of Butterstone, B.

Liverpool, E.

Loomba, L.

Luce, L.

Luke, L.

Lyell, L.

Lytton, E.

McColl of Dulwich, L.

MacGregor of Pulham Market, L.

Mackay of Clashfern, L.

Maclennan of Rogart, L.

McNally, L.

Maddock, B.

Maginnis of Drumglass, L.

Mancroft, L.

Mar and Kellie, E.

Marks of Henley-on-Thames, L.

Marlesford, L.

Masham of Ilton, B.

Mawhinney, L.

Mawson, L.

Mayhew of Twysden, L.

Methuen, L.

Montagu of Beaulieu, L.

Montgomery of Alamein, V.

Moore of Lower Marsh, L.

Morris of Bolton, B.

Naseby, L.

Nash, L.

Newby, L. [Teller]

Newlove, B.

Noakes, B.

Northbrook, L.

Northover, B.

Norton of Louth, L.

O'Cathain, B.

O'Neill of Bengarve, B.

Palmer of Childs Hill, L.

Palmer, L.

Pannick, L.

Parminter, B.

Patten, L.

Perry of Southwark, B.

23 July 2013 : Column 1190

Phillips of Sudbury, L.

Plumb, L.

Popat, L.

Randerson, B.

Redesdale, L.

Rennard, L.

Ribeiro, L.

Ridley, V.

Risby, L.

Roberts of Llandudno, L.

Rodgers of Quarry Bank, L.

Rogan, L.

Roper, L.

Rowe-Beddoe, L.

St John of Bletso, L.

Sandwich, E.

Scott of Needham Market, B.

Seccombe, B.

Selborne, E.

Selkirk of Douglas, L.

Selsdon, L.

Sharkey, L.

Sharp of Guildford, B.

Sharples, B.

Shaw of Northstead, L.

Shipley, L.

Shrewsbury, E.

Slim, V.

Smith of Clifton, L.

Stedman-Scott, B.

Steel of Aikwood, L.

Stephen, L.

Stewartby, L.

Stirrup, L.

Stoneham of Droxford, L.

Stowell of Beeston, B.

Swinfen, L.

Taverne, L.

Taylor of Goss Moor, L.

Taylor of Holbeach, L.

Tebbit, L.

Teverson, L.

Thomas of Gresford, L.

Thomas of Winchester, B.

Tonge, B.

Trefgarne, L.

Trimble, L.

True, L.

Tugendhat, L.

Tyler of Enfield, B.

Tyler, L.

Ullswater, V.

Verma, B.

Wakeham, L.

Wallace of Saltaire, L.

Wallace of Tankerness, L.

Walmsley, B.

Warsi, B.

Wei, L.

Wheatcroft, B.

Wilcox, B.

Williams of Crosby, B.

Williamson of Horton, L.

Willis of Knaresborough, L.

Wilson of Tillyorn, L.

Younger of Leckie, V.

4.11 pm

Amendments 5 and 6 not moved.

Amendments 7 and 8

Moved by Viscount Younger of Leckie

7: Clause 13, page 12, line 12, at end insert—

“( ) The reference in subsection (3) to using a product in the course of a business does not include a reference to using it for a purpose which is merely incidental to the carrying on of the business.”

8: After Clause 13, insert the following new Clause—

“Offences committed by partnerships

At the end of section 35A of the Registered Designs Act 1949 (the title to which becomes “Offence by body corporate or partnership: liability of officers or partners”) insert—

“(3) Proceedings for an offence under this Act alleged to have been committed by a partnership are to be brought against the partnership in the name of the firm and not in that of the partners; but without prejudice to any liability of the partners under subsection (6) or (7).

(4) The following provisions apply for the purposes of such proceedings as in relation to a body corporate—

(a) any rules of court relating to the service of documents;

(b) in England and Wales, Schedule 3 to the Magistrates’ Courts Act 1980;

(c) in Northern Ireland, Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981.

(5) A fine imposed on a partnership (other than a Scottish partnership) on its conviction in such proceedings must be paid out of the partnership assets.

(6) Where a partnership (other than a Scottish partnership) is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have

23 July 2013 : Column 1191

attempted to prevent the commission of the offence, is also guilty of the offence and liable to be proceeded against and punished accordingly.

(7) Where an offence under this Act committed by a Scottish partnership is proved to have been committed with the consent or connivance of a partner in the partnership, or a person purporting to act in that capacity, he as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.””

Amendments 7 and 8 agreed.

Amendment 9

Moved by Lord Clement-Jones

9: After Clause 13, insert the following new Clause—

“Offence of unauthorised copying etc of a design protected by design right

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) After section 235 insert—

“235A Offence of unauthorised copying etc of a design protected by design right

(1) A person commits an offence if—

(a) in the course of a business, the person copies any design protected by design right so as to make a product exactly or substantially to that design, and

(b) the person does so—

(i) knowing or having reason to believe that the design is protected by design right, and

(ii) without the consent of the owner of that design right.

(2) Subsection (3) applies in relation to a product where a design protected by design right has been copied so as to make the product exactly or substantially to the design.

(3) A person commits an offence if—

(a) in the course of a business, the person offers, puts on the market, imports, exports or uses the product, or stocks it for one or more of those purposes,

(b) the person does so without the consent of the owner of the design right in that design, and

(c) the person does so knowing or having reason to believe that a design has been copied without the consent of the owner of the design right in the design.

(4) In this section “design right” includes an unregistered community design and a reference to the owner of the design right is also to be read as a reference to the owner of a community design right in a design.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding ten years or to a fine or to both;

(b) on summary conviction in England and Wales or Northern Ireland, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both;

(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum or to both.”

(3) In section 235B (enforcement) substitute all references to “35ZA” for “235A”.

(4) In section 235C (forfeiture in England and Wales and Northern Ireland) substitute all references to “35ZA” for “235A”.

(5) In section 23ZC, in subsections (2) and (3), substitute all references to “registered design” for “design right subsisting in a design”.

(6) In section 235D (forfeiture in Scotland), substitute all references to “35ZA” for “235A”.

23 July 2013 : Column 1192

(7) In section 235D substitute all references to “35ZC” for “235C”.

(8) For section 235E (offences committed by partnerships and body corporate) substitute—

“235E Offences committed by partnerships and body corporate

(1) Proceedings for an offence under this Act alleged to have been committed by a partnership shall be brought against the partnership in the name of the firm and not in that of the partners; but without prejudice to any liability of the partners under subsection (2) below.

(2) The following provisions apply for the purposes of such proceedings as in relation to a body corporate—

(a) any rules of court relating to the service of documents;

(b) in England and Wales or Northern Ireland, Schedule 3 to the Magistrates’ Court Act 1980 or Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (procedure on charge of offence);

(c) a fine imposed on a partnership on its conviction in such proceedings shall be paid out of the partnership assets;

(d) where a partnership is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, is also guilty of the offence and liable to be proceeded against and punished accordingly;

(e) where an offence under this Act committed by a body corporate is proved to have been committed with the consent, connivance or neglect of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.””

Lord Clement-Jones: My Lords, my noble friend the Minister correctly said that later in the proceedings we would be coming to the issue of criminal penalties for infringement of unregistered design. This is a rerun of an amendment that I moved in Grand Committee to provide that criminal sanctions would also apply to the deliberate infringement of unregistered designs. As I explained in Grand Committee, design is of key importance to the UK economy. However, the great majority of designers rely on unregistered rights, a point that has already been made eloquently by the noble Lord, Lord Stevenson. The introduction of criminal sanctions for the deliberate infringement of registered designs is a progressive step, but for most lone and micro designers the cost of registering every iteration of a design would be prohibitive. The extension of criminal sanctions to unregistered design rights for the majority of UK designers would be a deterrent to persistent copying in much the same way as it is for copyright and trademark infringement.

Criminal sanctions have been available for copyright infringement since 1862 and for trademark infringement since 1994. Criminal prosecutions have been used sparingly, sensibly and appropriately. Persistently copying designs, however, is not a criminal offence at all, which is anomalous. Persistently copying a two-dimensional drawing of a design or a design document can give rise to criminal liability under Section 107 of the CDPA, but when this two-dimensional work is converted into a 3D design, unless it is protected as a work of artistic craftsmanship, which we have previously discussed on the Enterprise and Regulatory Reform Act, copying that 3D version would not be a criminal offence. Nearly all designs, however, are copied from the 3D

23 July 2013 : Column 1193

original, not the 2D drawings. How do the Government justify providing a higher level of protection to a two-dimensional design than to the 3D manifestation of that design?

I have also described the inequality of arms between infringers and designers and said that, if anything, in these circumstances, there are stronger reasons for imposing criminal offences for unregistered design right infringement than there are for infringing a registered design. In Grand Committee, to my arguments the Minister riposted:

“Registered rights can be readily accessed through the Intellectual Property Office and the EU designs registry website. They include crucial information, including the design that is protected, the date on which protection commenced and whether it is still in force. This is not the case with an unregistered design right”.

However, there is no registration of copyright in this country, yet infringement is a criminal offence as I have described. Why is it not for unregistered design?

The Minister went on to say that,

“the uncertainties surrounding unregistered designs, such as the difficulty of knowing when the design right came into existence, mean that it is more difficult for third parties to ensure that they are not infringing that design right. Therefore, against the backdrop of a threat of a criminal conviction, third parties are more likely to wait longer than necessary to be sure that the design is in the public domain before building on it, thereby extending the design right beyond its term and delaying potential innovation”.

However, exactly the same arguments could be applied to copyright infringement. What is the difference between this and copyright? The evidential burden is exactly the same; it is very similar in these circumstances. It is simply that the term for copyright is longer.

4.15 pm

The Minister went on to say:

“Thirdly, because the UK unregistered right affords protection to functional designs, this could cause difficulties in criminal proceedings”—

could cause difficulties in criminal proceedings—

“where such designs are complex, as they well might be. For example, determining whether the interior of one alternator”—

this must be a good example—

“has been copied from the interior of another is a highly technical issue, probably requiring expert knowledge”.

I am sure that that is the case. However, the use of expert witnesses is common right across our court system. It is all a question of testing the evidence. It happens in trade marks and in copyright, so why not in design?

The Minister ended by saying:

“This is not the sort of discussion the Government believe should be dealt with in the criminal courts, especially where any element of doubt means that the high standard of proof required is unlikely to be met”.

Again, we are back to the evidence.

On the specific 2D versus 3D argument, the Minister said:

“The copying of 3D products is not the same as copying the original design document. Competitors therefore take inspiration from existing designs. Copying original design documents is closer to theft and that is why the law treats these matters differently”.—[Official Report, 13/6/13; cols. GC 394-395.]

23 July 2013 : Column 1194

As I said in Committee, the Minister said that this should not apply to unregistered 3D because 2D is not the same, the latter being “closer to theft”. That seems an entirely circular argument and the passage of several weeks since Committee stage has not made me any less wondrous at that circularity. I do not see that theft of a 3D design and theft of a 2D design should be morally or legally different.

I think that the Minister’s argument in Committee—I hope that it is different on Report—really boiled down to a policy matter: “We cannot really explain why, but we just don’t want to give the protection of the criminal law to unregistered design rights”. It seemed almost as simple as that. I hope that, on mature consideration, the Minister really will reconsider this issue. It is a matter of huge importance to the 350,000 designers whom the noble Lord, Lord Stevenson, mentioned, and this proposal would rectify a major wrong. I beg to move.

The Earl of Erroll: My Lords, I rise briefly to support the noble Lord, Lord Clement-Jones, in this argument. I think that this provision should be exactly parallel to that for copyright. I would say that the Minister should have used these arguments in the copyright case to change that provision so that it was in line with the principles in this Bill—because I think that copyright is probably overprotected—but that is a different argument. However, I certainly think that the arrangements should be the same. At some time in the future we can rationalise, if we need to, the two arrangements so that they move together in the same direction. With the advent of 3D printing it is now quite possible easily to make a three-dimensional copy at not a huge cost, so I do not see the rationale for distinguishing 2D from 3D copying. 3D copies were not possible until very recently. Logically, the two principles should be aligned, as the noble Lord, Lord Clement-Jones, has just stated. Whether we think that this should be dealt with differently, in copyright or under this arrangement, is another matter.

Lord Stevenson of Balmacara: My Lords, I found a lot of what the noble Lord, Lord Clement-Jones, said very convincing and want to hear how the Minister will respond. The noble Lord made a very good case for taking the situation that we have currently, under which copying registered designs will be subject to criminal penalties, and asking why the very large number of unregistered designs that are lodged in a different register from the registered designs—with the IPO—cannot be given a similar sort of protection. I think that the arguments comparing that with copyright and trademarks are very persuasive. The noble Earl, Lord Erroll, made the point about 3D printing, which of course begins to muddle all our previous conceptions of what 2D and 3D design were about. Again, that will require some movement, if not now, in the very near future, in order to keep pace with the way that technology is changing.

Our Amendment 20 departs from the principles articulated by the noble Lord in moving Amendment 9 because we think that we have to take the situation as it is on the ground. As I have said before, there are

23 July 2013 : Column 1195

350,000 designers in the UK and UK businesses spend around £35.5 billion annually on design. These are substantial figures and make up a significant slice of our creative industries. However, the vast majority of designers rely on unregistered rights. There are 4,000 registered designs against 18,000 unregistered designs. Something like 99% of designers in the country rely on unregistered designs, and there has to be a question about how the Government will provide an appropriate framework for that development.

Our amendment suggests to the Secretary of State that there is another possible route to think about, which makes clearer what the effect would be of having a register of unregistered designs, even if that is perhaps a contradiction in terms. If it was possible to have within the government machinery some system that allowed a way to evidence the existence of the design right, and document its existence on a particular date, that would go some way to giving us certainty about cases, whether they were criminal or not, affecting the unregistered design right. We could perhaps use the copyright harm analogy to find a way for metadata to be applied to designs that would allow them to be picked up and trailed.

The noble Lord, Lord Clement-Jones, asked why there was a growing discrepancy between the registered and unregistered design right routes. Presumably, the Government have made a decision that they are going to bulk up what is available to those who have registered designs and give them more in the hope that that will persuade designers to sign up to the registered design route. But what will happen if they do not? The problems and difficulties will still be there, particularly in the fashion industry, where unregistered design is the mode that is used.

We need to do something and our Amendment 20 tries to make some suggestions that we hope the Government will listen to. Although we cannot support the proposal to criminalise the copying of unregistered designs as a matter of principle, we would be very interested in hearing how the Minister will respond.

Viscount Younger of Leckie: My Lords, the effect of Amendment 9, moved by my noble friend Lord Clement-Jones, would be to extend the proposed criminal sanctions to unregistered design rights. I thank my noble friend once again for presenting the Government with his strong views on unregistered design right protection. I can assure him that the Government are absolutely convinced of the value of the unregistered right and are very aware of its role in protecting small design businesses. That is why, following consultation, the UK right and its current term of protection was retained in the face of calls by some to remove it as a means of simplifying design law.

The United Kingdom has a very successful design industry and we tinker with the success of the industry at our peril. I am particularly concerned to ensure that any changes proposed in the Bill do not act as an additional burden on industry but enhance its accomplishments. As with all intellectual property systems, there is a delicate equilibrium between a reasonable return for creators and, on the other hand,

23 July 2013 : Column 1196

access to the creation so that competitors can shape future innovation. This is the balance the Government have to be mindful of in the changes proposed. There is a real fear that extending criminal sanctions to unregistered rights will distort this balance for the following reasons.

First, the existence of the register represents a public database, which can be searched with relative ease. Third parties can quickly assess what has been registered and what has not. This means that they can take due notice of designs protected by registration with some degree of certainty. In particular, they will know accurately when it will be possible to copy a design with no degree of legal risk. With unregistered designs, there is the problem of not knowing exactly when the design right came into existence and the duration of its protection. This means that it is more difficult for third parties to discover when they can legally copy or exploit a design. Where information about the design of an article is limited but copying it attracts a criminal sanction, it is entirely possible that industry will become risk-averse. As I stated in Grand Committee, against the background of a threat of a criminal conviction, third parties are more likely to wait longer than necessary to be sure that a design is in the public domain before building on it, therefore extending the unregistered design right beyond its term and delaying potential innovation.

I will give your Lordships an example. A furniture manufacturer is aware of a rival’s design that is successful in the marketplace and knows that it is not protected by registration. That is easily discovered by a swift inspection of the registry. He is also aware that the unregistered design right is now protected by a criminal sanction. The manufacturer will have no ready knowledge of when the item was first protected—for example, when it was in a design document, made into an article or first marketed. These all affect the term of protection. To be on the safe side, it is likely that the manufacturer will avoid copying or even engaging in reasonable follow-on innovation until he is certain that the product is out of its term of protection. With registered designs, any potential chilling effect is much reduced by the certainty of facts on duration, scope of protection and ownership, which registration creates.

Secondly, the nature of the UK unregistered right magnifies the uncertainty problem. Unregistered right in an article can relate not only to the overall design but to the individual elements of the design. The unregistered design right can therefore be seen as a basket of individual rights. For example, a kettle may have design protection in its overall shape and configuration but also in its individual parts, such as the spout, the handle and the lid. The kettle may be one of a series of kettles, so different design components may have different timelines of protection. The handle may have 10 years of protection to run because it is new, the spout may have three years as it was used in an earlier version of the kettle, and the lid may be out of protection because it is an old design. None of this information will be readily available to a business which wants to use the design or aspects of the design itself. This creates a cumulative uncertainty about the rights, which is not shared where a design appears on the public register.

23 July 2013 : Column 1197

Thirdly, a chilling effect is likely to be more serious in particular industries. Some designers, such as those in the fashion trade, thrive on novelty, speed of change, imitation, and rapid turnover of seasonal ranges. It is in these industries where the Government have real concerns that criminalisation of unregistered designs, which are often relied on, would have a freezing effect.

Fourthly, the potential inhibiting effect on innovation that has been identified is likely to be a particular problem in relation to functional designs, which the UK unregistered right also protects. This problem does not apply to registered designs that specifically exclude functionality. I also remind noble Lords of a further issue that relates to functional designs, which could cause difficulties in criminal proceedings. Such technical complexity should be avoided in criminal proceedings if possible.

Finally, I will say something about the protection for unregistered rights holders and, at the same time, consider Amendment 20, in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, which would place, in effect, a reporting duty on the Secretary of State. I can assure noble Lords that the Intellectual Property Office is already aware of its responsibilities to SMEs and fully recognises the difficulty that designers face in enforcing their rights. The IPO will continue to work with representative groups for the design sector to help improve the situation for designers. There are many ongoing projects. For example, the IPO and the European design and trade mark office—OHIM—are working together to consider approaches to IP enforcement. This includes the costs of searching for prior rights.

The IPO currently funds IP audits to SMEs that are enrolled on one of our partner business support programmes. From next year, a number of these will be specifically allocated to design SMEs within the Design Leadership Programme run by the Design Council. This will help design-focused SMEs effectively to manage their rights, including unregistered designs, and the creation of audit trails. Such information is readily available from organisations such as the IPO and ACID.

I hope noble Lords will agree that by accepting this amendment the Government would be duplicating information already available. I have already referred to private companies such as ACID, which provide access to highly successful unofficial databases. The amendment would place the Government in direct competition with these companies.

The amendment also raises a number of questions. For example, would an official government-run unregistered designs database be compulsory for designers to use? What about the design rights that exist in other parts of the EU? These can have an effect on rights in the UK so would all European design rights owners be required to record their unregistered designs with the IPO?

These questions may warrant further thought. However, the Government do not believe that it is wise to legislate at this stage without more consideration, particularly given the ways in which the UK IPO is already working hard to ensure that designers are as informed as possible when making business decisions

23 July 2013 : Column 1198

about their intellectual property. For example, the IPO will provide training to the Design Council’s business advisers, to help understand IP and the value of design rights, and to direct SMEs towards the audit programme. On that basis, I am not persuaded of the need for the noble Lord’s Amendment 20.

However, I would not want noble Lords to gain the impression that, in not extending the criminal sanction to the UK unregistered design, the Government regard unregistered rights as second-class rights. The Government recognise that the introduction of criminal sanctions for designs is an important issue that is subject to strong opinions. We believe that the sanction as drawn is the best option to maintain and enhance the success of the UK design industry.

My noble friend Lord Clement-Jones and the noble Earl, Lord Erroll, raised the issue of the discrepancy between protection for 2D and 3D works. There was some debate on this in Committee and it is worth reiterating a number of key points. In the view of the Government, this is a consequence of copyright protection vesting in the “work” that consists of a design drawing, and there is no direct protection of the 2D representation of the design per se. The protection arises as a by-product of the copyright in the work. As noble Lords will know, copyright will protect against the reproduction of the drawing where the defendant knows or has reason to believe that the reproduction is an infringement of the drawing. This is merely a coincidence, caused by the fact that the drawing is a literary or graphic work and nothing more, and is a result of the existence of parallel IP regimes that coincidentally overlap in this case.

It is questionable that the existence of this anomaly, which is hardly unique in IP law, counsels equalisation or harmonisation by criminalisation of unregistered design right. As the noble Lord, Lord Howarth of Newport, who I see in his place, stated in Grand Committee:

“My Lords, consistency is not necessarily a virtue and I think that we should be very careful in the field of intellectual property. We legislate not simply out of tidy-mindedness or a desire to achieve a satisfying consistency by transferring rules and regulations that may have applied relatively successfully in one area to another”.—[Official Report, 13/6/13; col. GC 392.]

The Earl of Erroll: Would it therefore be sensible to bring copyright in line with these provisions, and decriminalise the copyright?

Viscount Younger of Leckie: The noble Earl makes an interesting point but I see the two as being very separate.

The noble Lord, Lord Stevenson, raised the issue of the low number of registrations. The importance of registration should not be underestimated. Official registers in the UK and OHIM contain approximately 728,000 registrations, which may be of help to the noble Lord.

My noble friend Lord Clement-Jones asked why expert witnesses cannot be used to determine technical matters under unregistered design matters. If the noble Lord’s proposed extension to include unregistered design rights was the right way to proceed, what he says

23 July 2013 : Column 1199

about expert witnesses could indeed be helpful. However, as I have said, there are many reasons why the Government believe it is not right to criminalise unregistered design copying, which is the overarching issue.

Finally, the noble Lord, Lord Stevenson of Balmacara, raised the issue of the Copyright Hub to apply metadata to designs, which is an interesting point. The digital Copyright Hub is an industry-led initiative, of which the noble Lord will be aware. I am sure that the noble Lord will understand that I cannot therefore make commitments about what the hub will do in this respect. However, I am happy to speak to the industry team about the noble Lord’s suggestion. I therefore ask that the noble Lord withdraws his amendment.

Lord Clement-Jones: My Lords, first of all I thank the noble Earl, Lord Errol, for his intervention. We do not often agree on matters in this kind of debate, but I very much appreciate his support on this occasion, and in particular his reference to 3D printing. That will give rise to a number of particular issues. I also thank the noble Lord, Lord Stevenson. I understand that he does not follow me down the same road of principle, but the horizon to which he is pointing in terms of the ability of the Copyright Hub to apply metadata on its database to unregistered designs, could be an extremely interesting salient. It may be that when the Copyright Hub is up and running and it includes a whole data bank of unregistered designs, I come back on a future IP Bill and say, “Right, we know exactly what the provenance of these designs is, we have the metadata applied to them and it is entirely appropriate we should now apply criminal offences to infringement of unregistered design”. I can see that on the horizon, coming down the road.

The Minister was entirely consistent. He may have praised the virtues of inconsistency, but his reply was entirely consistent with his reply in Committee. However, I thought it was more considered and more elegantly constructed than in Committee. Some of his points were good ones. The least convincing were the non-technical ones such as “tinker at our peril”, “the delicate equilibrium” and so on; but some of his more granular points about magnifying the uncertainty where you have different elements within an overall design, and those he made about functional design, had a plausible ring about them. On his point about making industries more risk-averse, in many ways people in the fashion industry would love people to be rather more risk-averse. One of the real issues is copyright and design infringement in that industry. A little risk-aversion would go quite a long way. I still do not see the plausibility of his argument about the chilling effect and so on. However, I understand that the Minister has taken great care to respond, and I thank him very much.

If we can use the principles contained in Amendment 20 to develop the Copyright Hub, we might see a better future for unregistered design, which, as we have heard in this debate, is relied on by 350,000 designers. Registered design is a very small part of that. In the mean time I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

23 July 2013 : Column 1200

Clause 16 : Unified Patent Court

Amendment 10

Moved by Lord Young of Norwood Green

10: Clause 16, page 16, line 30, at end insert—

“(2A) In making an order under this section, which confers jurisdiction on a court, removes jurisdiction from a court or varies the jurisdiction of a court, the Secretary of State shall, where the number of patent cases is such as to meet the requirements as set out in Article 7 of the Agreement on a Unified Patent Court, consider conferring local divisional court jurisdiction on—

(a) in England and Wales, the High Court;

(b) in Scotland, the Court of Session;

(c) in Northern Ireland, the High Court.”

Lord Young of Norwood Green: My Lords, this amendment seeks to ensure that the Secretary of State consults with appropriate consultees before conferring, removing or varying court jurisdiction. In addition, where sufficient numbers of patent cases in the UK allow, he should confer on each separate legal jurisdiction throughout the United Kingdom a court which has local divisional court status, allowing patent cases where appropriate to be heard in that legal jurisdiction. This will effectively preserve the status quo under the existing national and EU patent regimes.

Article 7 of the unified patent court agreement provides that each contracting member state may request and may have one division of the court of first instance of the unified patent court within its jurisdiction for every 100 patent cases in each calendar year during three successive years prior or subsequent to the date of entry into force of the agreement. That is subject to a maximum of four such divisional courts per such jurisdiction. The Intellectual Property Bill as drafted does not place any obligation on the Secretary of State to consider or confer divisional local jurisdiction on the High Court in England and Wales, the Court of Session in Scotland or the High Court in Northern Ireland.

The society believes that, given the constitutional make-up of the United Kingdom, it is important that each separate jurisdiction continues to provide local access to a court and is fairly represented within the overall unified patent court structure. Without a local designated divisional court, local businesses will be forced to litigate outside their geographical areas. We suggest that a failure to confer local divisional court status may raise access to justice concerns, increasing costs and inconvenience to all businesses and litigants—including SMEs who may be impacted heavily by a potential additional cost in bringing or defending actions. I beg to move.

Viscount Younger of Leckie: My Lords, the amendments in this group relate to the unified patent court. Amendment 10, tabled by the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, seeks to ensure that the Secretary of State will consider setting up separate local divisions of the unified patent court in three parts of the UK should there be enough case load to justify more than one local division. As I highlighted in Committee, ensuring local access to justice is a key element of the

23 July 2013 : Column 1201

unified patent court. That is why the agreement makes provisions for local divisions. The agreement does not oblige participating states to host a local division, which can be set up and disbanded upon request.

It is important that the unified patent court serves the needs of businesses throughout the United Kingdom and the Government are committed to ensuring that all areas of the United Kingdom will have access to the court. I can assure noble Lords that the Government are already giving careful consideration to the number and location of local divisions that may be hosted in the UK. I cannot say at this time exactly how many local divisions the UK may host because it is not yet clear whether there will be enough cases to justify having more than one local division. The reason for this uncertainty is that there is no common agreement among the participating states on how the number of cases in each jurisdiction will be counted. It is important that a consistent approach is taken to assessing the case load in different countries. The issue will be decided by the participating states before the court comes into being.

While it is not possible to say for certain how many local divisions may be hosted in the UK, I can give noble Lords every assurance that the Government are open to locating local divisions in different parts of the UK. The Government are working closely with the devolved Administrations and the court services in Scotland and Northern Ireland as well as England and Wales to ensure that the needs of businesses throughout the United Kingdom are taken into account. Noble Lords may be also interested to know that the Intellectual Property Office, in partnership with the Chartered Institute of Patent Attorneys and the IP Federation, is running a series of stakeholder events about the unified patent court rules in early September. One of these events will be hosted in Edinburgh. Given that the issue of UK-based local divisions is already under consideration, it is neither necessary nor appropriate to prescribe in primary legislation their number and locations.

I now turn to government Amendment 11. This technical amendment to Clause 16 is intended to provide certainty that the Government will be able to establish fully the unified patent court. The amendment introduces new Section 88B into the Patents Act 1977. It does not extend the scope of the power conferred by Section 88A of that Act. The necessity of tabling an amendment to this clause has only recently come to light as a result of the ongoing legal analysis being conducted as part of the implementation process. That analysis has identified a potential uncertainty which could, if not addressed now, result in a significant delay in bringing the unified patent court into effect.

4.45 pm

The unified patent court agreement effectively sets up a new international organisation, part of which will be based in the United Kingdom. It is usual that any agreement which sets up an international organisation would include limited provisions as necessary for the fulfilment of that organisation’s purpose. The unified patent court agreement does not make specific provisions for all the necessary privileges and immunities that are likely to be required for the court to fulfil its function.

23 July 2013 : Column 1202

For example, there are no provisions relating to the terms and conditions of staff other than the judges of the court. As a consequence, it is likely that the UK and the other participating states will need to finalise a further set of detailed provisions on privileges and immunities for the unified patent court.

It is normal that such an agreement would be given effect in UK law using an order under the International Organisations Act 1968. However, due to the way the unified patent court agreement is drafted, it is not clear that the International Organisations Act 1968 applies to the court. To avoid any doubt, it is prudent that we make this provision in primary legislation now in order to clarify that the International Organisations Act will apply to the unified patent court. A similar approach was taken to give effect in the UK to the International Tribunal for the Law of the Sea.

Subject to the agreement of the House, I will move Amendment 11 in turn. I ask the noble Lord to withdraw his amendment.

Lord Young of Norwood Green: My Lords, I thank the Minister for his comprehensive, constructive and helpful answer. We welcome the fact that the principle is accepted and that it is a question of establishing some principles about how cases are counted and of eliminating uncertainty—that seems a very worthwhile approach. We also welcome the fact that the Minister is working with the devolved Administrations. We trust that as the Bill progresses in the other place the Minister will be able to report back on the progress made in this area. We have no adverse comment on Amendment 11 and, overall, we cannot help saying, in light of the debate to come later this afternoon, that we welcome the Government’s pro-European stance in this area. In those circumstances, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11

Moved by Viscount Younger of Leckie

11: Clause 16, page 17, line 2, at end insert—

“88B Designation as international organisation of which UK is member

The Unified Patent Court is to be treated for the purposes of section 1 of the International Organisations Act 1968 (organisations of which the United Kingdom is a member) as an organisation to which that section applies.”

Amendment 11 agreed.

Amendment 12

Moved by Lord Howarth of Newport

12: After Clause 19, insert the following new Clause—

“Freedom of Information: lobbying

(1) The Secretary of State must maintain an online register, freely accessible to the public and up-to-date, of all representations, lobbying and advocacy concerning intellectual property addressed to Ministers, their officials and advisers and to staff of the Patent Office and their advisers.

(2) The register must provide information about the names of all individuals and organisations engaged in such communications and the dates, modes and whereabouts of them.

23 July 2013 : Column 1203

(3) The register must provide a report of the contents of each such engagement, but need not disclose matter that, in the opinion of the Secretary of State, is properly regarded as commercially confidential.”

Lord Howarth of Newport: My Lords, Amendment 12 is a development of an amendment that I tabled in Committee, and I was sufficiently encouraged by the Minister’s response to feel that it was worth tabling this amendment on Report.

I start by saying that I have no interest to declare. No one has asked me to table any of the amendments that I have put down in the course of our proceedings on the Bill and I have no financial interest in any aspect of this legislation. I mention this simply because I think that it is helpful to parliamentarians in both Houses and to other people who may follow our proceedings to know whether any noble Lord participating in the proceedings has such an interest.

I venture to suggest that this amendment is timely. Recent unhappy events have propelled the Government finally to publish their Transparency of Lobbying, Non- party Campaigning and Trade Union Administration Bill. The Second Reading of that Bill in the House of Commons will not take place until September, so the Minister has the opportunity, with this amendment, to show that he is ahead of the game and, indeed, to do rather better than the Government seem minded to do in their Bill.

In Committee the Minister acknowledged the importance of this issue. Intellectual property can be a very valuable thing. It creates monopoly of a kind and it is not surprising, therefore, that lobbying is intense in relation to policy on intellectual property and, indeed, on specific decisions. Officials working in this area effectively have the power to enrich other people, and in that respect they are rather like planning officers. It seems to me that procedures relating to intellectual property policy formation and decision-making, just as with procedures in planning, ought to be as transparent as possible. Indeed, I was encouraged that the Minister said to us in Grand Committee:

“The Government are committed to transparency”.

He helpfully explained that Ministers, special advisers and the Permanent Secretary in his department, as in other departments, disclose on a quarterly basis on the government website the names of external organisations that they meet. It was very welcome that he announced that this practice would be extended to the chief executive of the Intellectual Property Office. He said that the publicity on the website would state what the main topic had been at the meeting, but he disagreed with my suggestion that there should be some further disclosure of the contents of the meeting—he said that disclosure must be proportionate. He observed that freedom of information law applies in this area and that an FoI request would be considered in the light of the requirements of the Act. However, at that point he said:

“We feel that we have gone as far as we can”.—[Official Report, 18/7/13; col. GC 54.]

I submit that the Minister did not go far enough in Committee. Indeed, the ministerial code, as it is, requires that the disclosure of meetings between Ministers and

23 July 2013 : Column 1204

others with external organisations should be at least quarterly, so the Minister adopted a minimalist position in this regard.

Mr Cameron, when he was leader of the Opposition, made a speech in February 2010 entitled “Rebuilding Trust in Politics”, in which he said that,

“it’s time we shone the light of transparency on lobbying”.

Then nothing happened for three years until scandals forced the Government to act, but even now their proposals are inadequate—many would say derisorily so. I believe that the minimalist position taken by the Government will not hold. The disclosure of only the names of organisations that Ministers, special advisers, Permanent Secretaries and the chief executive of the IPO have met is palpably inadequate. The lobbying consultancies sell their services on the basis that they know how to get to the officials who are formulating policy options and briefing Ministers. There is much agitation in the media about the lobbying of politicians, but the lobbying of officials is at least equally important. Therefore, my amendment would require much fuller transparency than the Minister has so far been willing to contemplate. My drafting is amateur and could no doubt be improved, but if noble Lords are kind enough to read the amendment I think that they will be clear about what I am driving at.

I have of course made an exception to the requirement for disclosure of matter that can properly be regarded as commercially confidential. I think that that must be right, although I also have to say that the mantra of “commercial in confidence” induces quite a lot of scepticism among Members of Parliament and noble Lords who again and again have been fobbed off with its deployment when they have sought to probe government contracts for the public service—contracts that are extremely important and about which parliamentarians should be entitled to know more than the Government customarily allow. However, that is a side issue.

I make it clear that I am not opposed to lobbying. Of course it must be right in a liberal society and a democracy that people can make representations on behalf of themselves and other interests to those who are in power. It is legitimate and indeed positively a good thing that interested parties should have an opportunity to explain their case to the IPO. However, equally, other interested parties and other citizens ought to be entitled to know who is making such representations and, in broad terms, what the content of those representations may be. After all, they may have another legitimate case. Indeed, they may be able to assist the Intellectual Property Office and the Minister as they seek to make the right decisions in the public interest.

The IPO is, I believe, in receipt of a very great deal of lobbying—much of it aggressive. The public are worried about lobbying. Mr Cameron spoke of the,

“far-too-cosy relationship between politics, government, business and money”.

He spoke of the need to shine the light of transparency on,

“who is buying power and influence”.

23 July 2013 : Column 1205

In those words, it seems to me, Mr Cameron made a fairly serious allegation, although I note of course that it was not specifically in relation to intellectual property.

Last week in a column in the Guardian on 19 July, Sir Simon Jenkins went so far as to say:

“Doing the right thing is hardly a consideration in Whitehall now”.

I think that that remark is grossly exaggerated and unjust, but if prominent columnists are saying such things, no wonder there is some cynicism among the public.

I do not in any sense impugn the motives or the honesty of officials in the IPO, in the business department or anywhere else, but I believe that they are under great pressure. The drug companies, for example, are prepared to exert pressure on an enormous scale. I again quote Sir Simon Jenkins in that article. He says that,

“the NHS allows drug companies to spend £40m a year on gifts to doctors, blatantly, to use their products at the expense of the same NHS.”.

We have been reading in the newspapers about the extraordinary allegations against western pharmaceutical companies and their practices in China. I do not doubt that pharmaceutical companies will spend whatever it takes to influence decisions on the patenting of new drugs.

I simply think it is important to reassure the public. We have an opportunity through this amendment to protect the reputation of the Intellectual Property Office and to protect the reputation of the intellectual property regime all in all. The Government were slow to act on the commitment made in the coalition agreement, but this amendment offers the Minister the opportunity to provide an exemplary policy. I hope he will seize that opportunity. I beg to move.

Lord Young of Norwood Green: My Lords, my noble friend Lord Howarth has comprehensively analysed the need for more transparency and the need to protect integrity. We support the basis of the amendment and I look forward to hearing the Minister’s response.

Viscount Younger of Leckie: My Lords, Amendment 12 tabled by the noble Lord, Lord Howarth of Newport, relates to representations, lobbying and advocacy concerning intellectual property. It would place a duty on my right honourable friend in the other place, the Secretary of State Vince Cable, to maintain an open register of all lobbying which has taken place.

I wish to assure noble Lords that this Government take the issue of lobbying very seriously. This is the most transparent Government ever. I am pleased that the noble Lord, Lord Howarth, while not necessarily agreeing with that, certainly recognised it in his speech. We are the first Government to publish proactively meetings that Ministers and Permanent Secretaries have had with external organisations. We publish an unprecedented amount of information about whom Ministers and senior officials meet. This information is published on a quarterly basis.

The noble Lord, Lord Howarth, is right in saying, however, that the public are worried about lobbying. The Government also recognise that the public are

23 July 2013 : Column 1206

concerned that some lobbying activity is opaque, allowing certain powerful organisations and individuals to exert a disproportionate influence on government in the shadows. We need to combat the sometimes negative perceptions of the relationship between lobbyists and government by giving people confidence that the process is transparent.

That is why only last week the Government introduced the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill, which again the noble Lord, Lord Howarth, alluded to. This Bill will bring forward a statutory register of lobbyists, which will make it clear whom lobbyists are lobbying on behalf of when they meet Ministers. Noble Lords will have the opportunity to debate this Bill, which, subject to timetabling, will be before the House later this year.

The noble Lord, Lord Howarth, tabled an amendment in Committee which would have required the annual report on the IPO’s activities, which is to be introduced by Clause 20, to include information on approaches by third parties. In Committee, as Minister for Intellectual Property, I committed to publish proactively a list of all meetings between the chief executive of the IPO and external organisations. This demonstrates the Government’s very real commitment to transparency. I also remind the noble Lord that the IPO responds to requests made by Parliamentary Question and through the Freedom of Information Act. Since 1 July 2012, the IPO has received 184 FoI requests, only five of which relate to lobbying activity.

5 pm

Proactive publication of the level of information required by the amendment would be highly resource-intensive. It would mean the documentation of contact between external parties and some 1,000 IPO staff. In the previous financial year, the IPO received 41,150 applications for trade marks and 22,818 patent applications. Representations on these applications would be covered by the amendment. Such a system would therefore be a highly bureaucratic addition to many of the IPO’s statutory functions concerning the administration of IP rights and applications, which quite properly involve receiving many tens of thousands of representations from the public concerning their IP. The vast majority of such contact would be of no significance or interest to others. Furthermore, the amendment would require in some cases a duplication of the work already carried out in relation to transparency and under the draft lobbying Bill.

The Government’s approach therefore represents a proportionate response to legitimate concerns about the influence of external organisations on policy development. A balance needs to be struck between the need for transparency and the resources required to collect, maintain and, indeed, read through potentially large amounts of information. My points about the Government’s approach generally in this area, when taken with the additional reporting duty in Clause 20 and the further commitment I made in Grand Committee with respect to IPO meetings with external organisations, should, I believe, reassure noble Lords about just how much the Government are doing in this area. I therefore request that the noble Lord withdraw his amendment.

23 July 2013 : Column 1207

Lord Howarth of Newport: My Lords, I am grateful to the noble Viscount for his response, not least for the facts and figures that he gave us, which I will certainly look at carefully. I welcome the progress that has so far been made. In particular, I thank the noble Viscount for the decision he announced in Committee about the new responsibility of the chief executive of the IPO. However, as he says, there are a lot of meetings and a lot of opacity. I do not think it will be possible for the Government to hold their present line. Of course, I note and respect the Minister’s point that the procedure that I have suggested in the amendment might be excessively resource-intensive and costly. On the other hand, I take it that it is the practice of the IPO, as of the business department, to take minutes of its discussions and meetings. I am therefore not convinced that it would not be possible to produce some sort of streamlined version of those same minutes or that that material could not be adapted to be appropriately displayed on the website.