Supporting the Creative Economy

Andrew Bingham Excerpts

Thursday 13th February 2014 Westminster Hall

[Mr Whittingdale]

Of course it is. In particular, historical dramas make use of some of our great heritage assets. There are a large number of reasons why people want to come to Britain to make films, but without the tax credit, they probably would not. We pay tribute to the previous Government for introducing it, and to this Government for continuing it.

I would be interested to hear from the Minister an update on the progress of discussions with the European Union on the introduction of the electronic games tax credit, because that, too, is welcome. The games industry is under pressure, and we have lost some companies already, so it is important for that tax credit to be achieved soon.

In examining the creative industries, we received a lot of evidence about an issue that lies at the absolute heart of their success: intellectual property rights. For a long time, Governments have sought to address some of the problems created by online distribution. In the previous Parliament, the Government passed the Digital Economy Act 2010, which was a valiant attempt to put in place measures to deter online piracy. Unfortunately, it has not come into force.

I will not recap the whole history of what has happened since the Act was passed—the judicial reviews, the arguments and so on. However, the principle behind it is that people who illegally download copyrighted material, and so jeopardise the success of the music, film, television, and, I suspect, in due course, games industries, need to be told that what they are doing is not only illegal, but poses a real threat to the economic viability and success of those industries. It was suggested that that should be done through the dispatch of warning letters. Once people were identified as serial downloaders, their internet protocol addresses should be identified and the internet service providers asked to send letters.

[Andrew Bingham (High Peak) (Con)]

Does my hon. Friend agree that some people download unwittingly—excuse the pun—because the websites all look plausible and completely legal? On the internet, there is no way to distinguish what is legal and illegal on occasions.

[Mr Whittingdale]

My hon. Friend is right. Some of the websites deliberately set out to appear legitimate. They might even make a small charge, although often they are distributing the content for free. Perhaps that would be another advantage of sending letters: it would increase awareness and oblige people to ensure that when they did download, they did so from a legal site, so that the artists and producers concerned received the remuneration due.

Despite the difficulties in enacting the DEA, the recent development of a voluntary agreement is in many ways preferable, if it can be made to work. In America, that is already working well. A voluntary copyright alert programme would involve an agreement between the rights owners and the ISPs that there would be a system through which letters were issued to those identified as illegally downloading. If that can be done voluntarily, that is preferable, and we should get on with that as quickly as possible. The Committee’s report is clear: we prefer a voluntary system, but if agreement cannot be reached, the Government need to stand by to bring into force the provisions of the Digital Economy Act 2010, and to use legislation.

Unfortunately, we were perhaps less optimistic on copyright law. The proposals on the modernisation of copyright law have given rise to huge controversy. The Minister will be only too aware of the concerns expressed right across the creative industries about the dangers of tampering. Copyright law supports the success story that I have described. The enormous economic contribution made to our GDP by the creative industries is possible because copyright law ensures that they receive the reward that they are due. Extending the exemptions on the basis that it might produce extra economic activity and income is dangerous if we do not take account of the risk of widened loopholes jeopardising existing success.

We viewed the Hargreaves report with some concern. When we tried to find out how Professor Hargreaves came up with the figures quoted in his report on the substantial potential benefits of some exceptions, we were concerned at the lack of hard evidence to support those figures, and no account was taken of the risk that widening exceptions poses to the industry’s success. That debate continues, and we await the statutory instruments implementing some of the exceptions. Great concern is still being expressed across the industry about the lack of clarity on some of the proposed exceptions, and on the loopholes that might be created. We are particularly concerned to ensure that Parliament has an opportunity to examine each exception in detail. There should be proper scrutiny.

The private copying exception has caused most concern, because it has the widest effect. No one would argue that transferring a piece of music that one has legally purchased from one device to another should not be permissible. Millions of people do that, and it is nonsense that putting a song on an iPod, for example, technically puts them in breach of copyright law. Legalising private copying, however, has to be done carefully. The Committee took evidence on that, and listened in particular to the concerns expressed by the film industry. Most of the rest of Europe has not applied a private copying exception to audiovisual material. The film industry said that the exception was unnecessary and that, in any case, legal means were already being developed through which consumers who purchased audiovisual material could store it in the cloud, or access it through different devices. The Minister will know that the film industry remains very concerned about the private copying exception. Perhaps he will say a few words on that in his speech.

We also talked to Google, which is responsible for some great successes and huge benefits; it is important to recognise that. The Committee visited the Google campus in east London, which is providing opportunities for start-up firms and app manufacturers to develop. It is at the forefront of the development of technology and making it available to entrepreneurs and small start-up firms. YouTube has been a great success in generating revenues for people who post material on it. More than £1 billion has already been generated in income.

The Committee was concerned about the issue of searching and the direction of people towards illegal download sites. Google has supplied us and, I am sure, other hon. Members present with statistics on how, if someone searches for an artist, most of the results that come up will be legal. Part of the argument is about the fact that Google is citing results of searches in which people simply put in the artist’s name, whereas the music industry points out that if, as well as naming the artist, people use the word “download” or “MP3”, that produces very different results. The latest figures that I have been given show that the proportion of links to infringing sites appearing in the top 10 search results remains roughly the same as before. The latest figure that I was given was 252 out of a possible 400, so 63% of results in the top 10 were illegal download sites.

Google will tell us about the huge number of pages that it takes down when it is notified that they contain copyrighted content being distributed illegally, but the notice refers to a single page, with the result that the music industry has sent more than 50 million notices to Google. Google does take the pages down when notified, but no sooner do they come down than they go up again. A much more sensible recommendation, which the music industry, among others, promotes, is that when a website is the subject of, say, more than 10,000 notices, it should be removed from the front page of search results, and when the figure of 100,000 notices is reached, it should be removed from the first 10 pages. Eventually, if that goes on, it should be blocked in its entirety, on the basis that it plainly consistently makes available copyrighted material illegally.

The Committee was persuaded that there was a very strong case for increasing the penalties for online copyright infringement from two years to 10 years, so that they were of the same severity as those for physical piracy. I know that the Government are looking at that. We were very impressed when we visited the new City of London police’s IP crime unit. That is an encouraging innovation. It is doing impressive work. However, there is a question about its long-term funding. I hope that the Minister can give some indication of whether the Government see it as a permanent part of our policing, with appropriate funding.

I now come to the final area that I want to discuss. I am sorry that the right hon. Member for Exeter (Mr Bradshaw) is not present, because he felt very strongly about it. I understand that the severe flooding in the west country prevents him from being with us. I am referring to education. It is obviously right that the Government focus on the promotion of the so-called STEM subjects—science, technology, engineering and maths—but, as the Minister knows, the debate is about whether STEM should in fact be STEAM. In other words, arts should be part of the core curriculum. I believe that the success of our creative industries is an ample demonstration of why it is so much in our interests to make arts a core part of the curriculum—so that this country can continue to produce the extraordinary talent that lies behind the success of all the industries that I have talked about.

I shall not go on talking any longer. I thank the Minister for the response that he has already given, but there are areas where we feel that he could go further, and I hope that he might be willing to do so later this afternoon.