Copyright (Rights and Remuneration of Musicians, etc.) Bill

Seema Malhotra Excerpts

Friday 3rd December 2021 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to speak in this debate with the Minister in his place.

I start by congratulating my hon. Friend the Member for Cardiff West (Kevin Brennan) on his campaign and his very effective speech, which highlighted his deep expertise on this issue. It is important that we pay tribute to his talent, as seen in his solo work and in MP4, of which there are several members here today and which has brought much entertainment both inside and outside the House. It is great to see the talent of Members of Parliament on display in different ways, connecting with the challenges that many of our constituents also face.

We have heard some excellent contributions from both sides of the House, and I will build on the comments made by my hon. Friend the Member for Sunderland Central (Julie Elliott), the hon. Members for Watford (Dean Russell) and for Perth and North Perthshire (Pete Wishart) and the right hon. Members for Maldon (Mr Whittingdale) and for Tatton (Esther McVey), who illustrated how, although there are many complexities in the debate, there is a common thread and the House recognises the depths of the issues. The question is how we move forward, not whether we move forward.

The UK has a special and unique place in the history of popular music. Our music industry is globally renowned and is an important part of our cultural offering to the world. To support the industry, from new artists to global artists, we must ensure they are part of a fair system and that they have equal bargaining power to enable them to flourish and to make sure we support a new generation of British talent to come forward and create new music.

British music has taken its inspiration from jazz, blues, gospel, rock and rap from Asia, Africa, Latin America, the USA and around the world, and it has given it a distinctly British twist to give new types of music to the world. The Beatles, the Kinks, Oasis, Blur, Adele and many more provide the soundtrack to our lives and the defining songs of our popular culture. Whether it is ska, Afrobeat or bhangra, music has benefited from immigration into the UK.

Down the decades, the music industry has contributed billions of pounds to the Exchequer, both in domestic sales and in exports, yet the industry has a dark side, a history of exploiting artists and ripping off the musical talent on which the whole industry’s success relies. The 1960s gave us some of the greatest bands, but they also gave us the sharp managers who invented new ways to rip off talented and often working-class youngsters.

Bands such as Small Faces powered the swinging ’60s, but they never saw the money they had earned. The recoupment deal was born when artists were working to pay the music companies, not the other way around. Of course musicians, often young and ambitious, might quickly sign away their future for the sake of a record deal. It is a form of exploitation, it is about imbalances in power and it is unfair.

I pay tribute to Tom Gray and the #BrokenRecord campaign. He is a talented musician and composer, and a worthy recipient of the Mercury music prize with the band Gomez. He has deployed his organisational and persuasive skills to help highlight the issue of performers’ rights and remuneration. Tom has worked so hard along with the Musician’s Union, the Ivors Academy, my hon. Friend the Member for Cardiff West and others to highlight the broken music market.

Labour supports the Second Reading of the Bill, which aims to address the unfairness in how the remuneration system treats musicians for their work on streaming platforms. In April, the campaign that is the backdrop to the Bill saw more than 150 musicians, artists and songwriters write to the Prime Minister to ask him to fix streaming and put the value of music back where it belongs: in the hands of music makers. The Bill would do that by placing the treatment of revenues gained from music streaming services on a common footing with revenues gained from other sources such as physical music sales.

As hon. Members have said, over the last 18 months musicians’ livelihoods have been shattered by their inability to perform live at gigs, concerts, festivals and shows—or even in the recording studio. We have also seen the disappearance of licensing income for artists as pubs, clubs, restaurants, hairdressers and so on have been forced to close. There has also been real destitution for session musicians, stage hands and the many trades associated with the music industry.

The Musicians’ Union is right to say that the last 18 months have highlighted the importance of streaming as a way for musicians to earn a living. As my hon. Friend highlighted, streaming has created huge opportunities for musicians. Let us be clear, however, that a fair income for musicians was a deep problem before the pandemic. It is also a classic example of technology outstripping our legal framework and of how it works to profit a few and exploit the many. It is the House’s duty to modernise the law to reflect the reality of the music industry and challenge the status quo whereby most streaming income—an estimated 55% of it—ends up in the pockets of record labels, streaming platforms and digital giants while 15% goes to artists and publishers. That is compounded by the imbalance, highlighted by the right hon. Member for Tatton, in the speed of payments.

The Bill would give effect to certain recommendations in the Digital, Culture, Media and Sport Committee’s July report, “Economics of music streaming.” I pay tribute to the Committee for its forensic work on this issue. The Bill would update the law on performer, composer and songwriter rights to reflect the changing landscape. My hon. Friend the Member for Cardiff West laid out clearly why that is needed. When an original music work—or lyrics accompanying music—is created, the composer or composers of that work have rights under the 1988 Act to control exploitation of that work. Composers and performers may transfer the administration of those rights to a collecting society, which addresses the exploitation of members’ works on a collective basis and charges those who use their works. Composers and performers may transfer their rights to receive revenue from the exercise of making available rights to third parties such as record companies and publishing companies. Their entitlement to receive a share of that revenue is determined contractually.

With the change in consumption patterns, music streaming now accounts for the predominant part of the UK music industry’s revenue. However, it is suggested that about eight out of 10 performers earn less than £200 a year from music streaming. Performers have a right to authorise and control the making available of a work on which they have performed to the public via radio or television, for example, or music streaming. However, while performers are entitled to equitable remuneration for performances for radio, television and other channels, they are not in respect of music streaming due to the exceptions set out in the 1988 Act. The predominant part of income therefore typically remains with the person or persons to whom the performer has transferred their rights.

Composers and performers also do not have a general right to receive information on how their music has been used and on the revenue that it has generated from persons other than collecting societies. Further, composers and performers often enter into contractual arrangements for their work to be exploited at a very early stage in their careers, often without the benefit of legal or other advice. Such arrangements can be long term, and can result in the transfer of rights to those seeking exploitation. The Bill seeks to address those inequalities in bargaining power and rights.

Labour recognises that music streaming saved the recording industry over a decade ago, when piracy threatened the fundamental basis of copyright. Those issues were alluded to by the right hon. Member for Maldon. As with other areas of technology, the streaming market has little or no competition, which allows oligopolistic behaviour from platforms such as Spotify. The inquiry by the Digital, Culture, Media and Sport Committee exposed the inequity at the heart of the new global market in music streaming. We support Second Reading, but we know that the chance of that leading to meaningful change is slim unless the Government give the Bill parliamentary time. I believe that the Minister is listening, and I look forward to hearing what he says about how we can move forward.

We attach great value to the CMA market inquiry, which has been alluded to by hon. and right hon. Members, into the industry. We look forward to reading the report when it is published next year, and I echo calls from the right hon. Member for Tatton for an update from the Minister about when we can expect those findings.

The Bill’s proposals are an important step forward in this debate. There is cross-party support for change, as the Select Committee report showed. The Government have promised to act, but I worry that the response to the report did not go far enough. It concluded that the issues were complex, and needed to be better understood—indeed, that is the case, and is reflected in conversations that I have had with Sony Music and others—and the Government rightly committed to assess different models, including equitable remuneration, to explore how they might affect different parts of the music industry. We need a way to address unfairness without causing unintended consequences, which is why further inquiry is required and why the Bill should go into Committee. In my view, that is the right way forward. The Government proposed to explore the issues through engagement with the music industry contact group and to provide an update on progress.

We need to move forward. As has been highlighted, a report in November showed that Lucian Grainge, chief executive officer and chair of Universal Music Group, earned more this year than composers and lyricists earned in total in 2019 from streaming downloads and sales in the UK. Once again, that brings the issue into sharp relief. I do not agree, the right hon. Member for Maldon will not be surprised to hear, with everything that he said, as there is a fundamental inequity in how the system works. That is at the heart of what we are addressing today.

The status quo cannot continue. Indeed, we want Britain to be the best place in the world to be a musician and work in the music industry, and it should be a trailblazer for how the rest of the world can be. The issues that the Bill seeks to address and fix in streaming are vital if we are to secure the reforms to copyright law that will create a fairer system for musicians and new talent to know they will be rewarded fairly. We firmly support Second Reading and I hope, given the consensus across the House that action is needed, that the Government support the Bill and keep their promise to address this injustice. If otherwise, we expect the Minister to pledge urgently to introduce Government legislation. Let this be a day on which everyone in the House sings from the same song sheet, and backs our musicians through a commitment to reform the music industry to leave it fit for purpose for the future.

--- Later in debate ---

[George Freeman]

I am delighted to give that assurance. I take the opportunity to thank my hon. Friend as a stalwart advocate of the Watford cluster and as someone who has been at the heart of music and online creativity. He is a tireless advocate for it in his constituency and in this House. The answer is absolutely yes.

I promised to give the House some details on the taskforces. We have commissioned multiple research pieces, including on equitable remuneration, rights reversion and the contract adjustment mechanism. We have established a music industry contact group, which I met this week. In addition, two industry working groups are being convened. One will look at a voluntary code of practice on contract transparency and the other will seek solutions to the data issues that the industry faces. The Government will assess the progress of those two groups.

I know that other hon. Members want to speak, so I will be brief. On the CMA market study, one of the first things I did as Minister was to write to the chief executive of the CMA. In that letter, I outlined my support for the Select Committee’s recommendation and asked the CMA to conduct a market study on streaming, which is under way. I am sure the House will appreciate that I cannot jeopardise its independence by saying here what conclusions it has reached. We will come back and report in due course.

We have also launched a market study into how other markets around the world are working and the lessons from those. In particular, we are looking at the independent advice from academics at the universities of Leeds, Middlesex and Ulster commissioned by the Intellectual Property Office, “Music Creators’ Earnings in the Digital Era”, which deals with a number of the issues that the Bill tackles.

Furthermore, in response to the Select Committee, we have asked the Intellectual Property Office to start gathering information on the potential impact of an equitable remuneration right. We have also commissioned a piece of work from the IPO on copyright reversion and a piece of research on the potential impact of introducing a contract adjustment mechanism, as proposed in the Bill.

I highlight that the EU directive on copyright in the digital single market, which we are not party to, having left the EU, will provide an interesting insight into whether and which measures are effective. Brexit gives us the freedom to learn from others and put in place the world’s best framework in the way that works best for our industry. I think I have made the point that we are deeply committed to stakeholder engagement, but I emphasise that over the coming weeks and months my officials and I want to move quickly, talking to everyone with an interest. I am determined to make that clear, and I ask anyone who is listening to the debate, or reading it, to contact me, and officials, if they have views that they want to be taken up.

We think that the Bill is well intentioned and speaks to a problem whose existence we recognise. Our instincts are to try to solve the problem through an industry-led package of measures that artists and musicians support, and we will be moving quickly to receive evidence and put proposals to the House, but I must make it clear that if we conclude that legislation is required, we will not hesitate to act.

I thank all Members who have spoken today. The debate has been a powerful demonstration of the level of interest across the House, across all parties and in all parts of the country.

[Seema Malhotra]

I thank the Minister for spending so much time outlining what the Government will do. He mentioned an industry-led solution. What does he consider to be within the scope of the term “industry-led”, and how much of that package would be musician-led and artist-led?

[George Freeman]

By “industry” I meant the whole industry, including the musicians who are key to it. The hon. Lady can rest assured that we will not just be talking to the record labels or the streaming companies; we will be listening to artists and musicians as well. We are keen to hear from people who have profited from the existing system, and from those who have not. We recognise what my right hon. Friend the Member for Maldon (Mr Whittingdale) referred to as the value gap. We want to hear from everyone who is affected by this issue, across the music spectrum, not just the bands that we have heard about but singers, session musicians, and all the other individuals who are affected.

I know that others want to speak—