HC Deb 09 March 2001 vol 364 cc579-98

Order for Second Reading read.

1.6 pm

Mr. Andrew Miller (Ellesmere Port and Neston)

I beg to move, That the Bill be now read a Second time.

I will not begin the debate with the same biblical quotations as the hon. Member for Solihull (Mr. Taylor) used in the previous debate. I suppose the only close connection between the Bill and the bible is to be found in the first chapter of the Old Testament. Only one person had copyright.

I am delighted to have the opportunity to bring the Bill before the House. I hope to be able to convince right hon. and hon. Members that it is worthy of support. It is about intellectual property crime—theft—which should concern us all. The Bill should be welcomed by industry and consumers alike. I believe that it deserves widespread support.

I am particularly grateful to the Alliance Against Counterfeiting and Piracy and to the Patent Office for their help in recent weeks. Both organisations have given me far better insight into the effects of intellectual property crime. The alliance is an umbrella group of many industry bodies concerned about the theft of their intellectual property, especially copyright and trademarks.

Last year, the alliance assessed annual losses to United Kingdom industry due to intellectual property crime and came up with the extraordinary figure of £8 billion.

Mr. Eric Forth (Bromley and Chislehurst)

I hope that the hon. Gentleman will attempt to explain where that figure comes from. I hope that I shall have the opportunity to expand on these matters, but it strikes me, having read the papers, that to conjure up a figure in this area of all areas is somewhat paradoxical, if not entirely unreliable.

Mr. Miller

I shall help the right hon. Gentleman by citing some examples that he will see in his constituency. Members of the public are being ripped off, and the scale of the operation is enormous. The figure alone is sufficient to justify a Bill that will help to tackle counterfeiting and piracy.

Not everyone is impressed by large figures. They argue that big business makes enough money to cover the losses, but that is not true. Many small businesses suffer the effects of intellectual property crime and some might not be able to survive as a result of it.

I have been contacted twice about the issue in the past couple of days. Trevor Bayliss is a well-known inventor and, like hon. Members on both sides of the House, he keenly supported the proposal to create the Academy of Invention. The idea was supported by Lord Hunt of Wirral, who used to represent the constituency neighbouring mine, and by the hon. Member for Chesham and Amersham (Mrs. Gillan), who serves on that body's board. Trevor Bayliss urged me to make it clear to the House that the Bill has his support as an inventor. For a long time, he has wrestled with the problems of copyright theft.

I also received a letter dated 4 March from Branko Babic. Colleagues will remember that he was, in his words, "ripped off' by an American group that stole his invention, which cost him a significant sum.

I know that some regular attenders of Friday debates take a different view about the role of private Members' business. I respect their views, and it is an issue that the House should debate seriously at the appropriate time, but I urge those who take a different view not to take this opportunity to block the Bill by using the procedural vehicles open to them. I hope that I shall provide solid evidence to convince them that the Bill deals with a crime that not only affects ordinary consumers, but funds terrorism and organised crime. Such crime could result in the death of children.

Mr. John Bercow (Buckingham)

The hon. Gentleman is doing the House a signal service in introducing this important measure. Nevertheless, I would like to be clear about its scope. It deals with counterfeiting and piracy, but will he explain for my benefit whether it also covers plagiarism?

Mr. Miller

Yes, it does. I shall give examples of DVDs and CDs that I hope will illustrate that point.

Mr. Forth

The hon. Gentleman has made the plea that we should let this nice Bill go through because it is very important and many people want it. The House decided to devote much attention to the previous Bill, so we have but an hour and 20 minutes to consider what is by any measure a comprehensive and complex Bill. Does he believe that, regardless of the time available to us, a worthy Bill should necessarily be let through?

Mr. Miller

When I have completed my remarks and given the right hon. Gentleman and others the chance to speak, I hope that he will agree that the Bill should go through so that the matters of detail can be considered in Committee.

It is not a complex Bill. It merely proposes tougher action against criminals. Surely the House is in favour of tougher action being taken against crime. The problem reaches as far as organised crime and terrorists.

The £8 billion of losses covers a wide range of products. It includes clothing that is sold on market stalls, DVDs, CDs and videos. The scope of the scam extends to car components, which should concern the right hon. Member for Bromley and Chislehurst (Mr. Forth) given the relevance of Ford to his constituency. There is a worldwide scam of car components manufactured in Taiwan and China, which get on to the market, damage the vehicle industry in this country and put drivers and pedestrians at risk.

There is a big market in bogus perfumes, but many other products are involved, including cosmetics and alcohol. The nature of the products is such that they create a chain with a high added value. As it is so simple to produce and package an item that looks like the real thing, the figure that I have mentioned can easily be reached.

Some products are of an extremely high standard and it is difficult to tell them apart from the genuine article. The people who produce them rip off patent holders, inventors and legitimate businesses. Other products are downright dangerous and threaten life. For example, a couple of years ago car brake pads were found to have been made from compressed grass. It is unbelievable that they found their way on to the market, placing not only the driver who purchased them at risk—perhaps more fool him—but others too. We cannot allow such products to enter the market.

Mr. Forth

The hon. Gentleman has to satisfy the House as to why such examples would not be caught by the Trade Descriptions Act 1968 as not being fit for purpose or by other provisions that are on the statute book. It strikes me that we might over-provide legislation when a proper enforcement of existing laws and regulations should do the trick. I should have thought that his example would be covered by that.

Mr. Miller

The right hon. Gentleman is right, but I want the punishment to fit the crime. I am concerned about crimes that lead to people's deaths. I do not believe that existing legislation is sufficiently strong. I demonstrated that last week at the Bill's press launch. Hon. Members may have seen the example that was shown on the BBC website. I apologise to you, Mr. Deputy Speaker, and the Serjeant at Arms; I was not trying to be a latter-day Guy Fawkes when I set fire to a child's T-shirt in Canon row. The item was a sweatshirt with the character Kenny from Channel 4's "South Park". I do not know whether hon. Members are familiar with that programme.

Mr. Forth

indicated assent.

Mr. Miller

I see that the right hon. Gentleman has been initiated in it. He will know that Kenny regularly gets killed and comes to a sticky end. Well, I killed Kenny last week. Although this may seem frivolous, the sweatshirt was bought for £5.95 and looked like the genuine article. It went up in a ball of flames and produced acrid smoke. It disappeared in 30 seconds. The toxic smoke would have killed and the melting plastic would have produced atrocious third-degree burns. We cannot allow such products to be in the marketplace. We have a duty to take every step to help purchasers understand that buying them puts their families at serious risk.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

The Opposition support, in principle, the Bill's objectives. Does the hon. Gentleman have a considerable number of examples of prosecutions that have occurred under existing legislation in which there has been a genuine feeling that the two-year sentence imposed was too short?

Mr. Miller

There have been cases of vehicle suspension units collapsing because fake wishbones supplied through what seemed to be a legitimate source then turned out to be counterfeit. The maximum penalty open to the court in those cases was two years' imprisonment. Given the risks not only to the individual driver but to the wider community, I am sure that the hon. Gentleman agrees that that penalty was not adequate. The industry and trading standards officers are saying that the current legislation does not have sufficient teeth to do the job and to act as the deterrent that we would like.

Mr. Bercow

Although It is for the hon. Gentleman to develop his own argument, I am interested in what he has to say about the gateway to terrorist offences, which is an important point. Further to the point my hon. Friend the Member for Bognor Regis and Littlehampton (Mr.Gibb) raised, has the hon. Gentleman done any research into recidivism on the part of people who have received those rather modest sentences? Have they reoffended in similar ways?

Mr. Miller

I do not have those details, but when I develop my argument on the point that interests the hon. Gentleman, he will understand the need to have available to the court a wide range of penalties that separate the Rodney and Del Boy characters from organised criminals and terrorists.

Mr. Don Foster (Bath)

I am broadly supportive of what the hon. Gentleman seeks to do. Does he accept that while there is widespread revulsion at the crimes that he is describing, it is vital that we improve the detection rate for those crimes? Is he saying that increasing the penalties will have a deterrent effect that will successfully reduce the number of crimes? Is that the intention of the Bill?

Mr. Miller

Those in the field, especially some trading standards officers, have expressed the view that their job would be made easier if there were greater penalties.

Mr. Foster

I wonder.

Mr. Miller

Well, that is their view, and they are the professionals.

Mr. Foster

The job of trading standards officers is predominantly to detect those crimes, and they clearly would wish that there were fewer such crimes. Can the hon. Gentleman tell us how those officers believe that their job would be made easier by the increased penalties that he proposes?

Mr. Miller

Simply because discussion in the House and in Committee will promote the tenets of the Bill and raise awareness of the scams that are operating, the risk that they pose to the public and the way in which they fund organised crime. The view in the industry and among the professionals who seek to enforce the legislation is that we can play a part, and that is what I hope we are doing.

Mr. Gibb

Returning to the case of the car suspension units, which sounds appalling, what sentence was handed down? Was it two years' imprisonment, and if so, has the culprit served the full sentence?

Mr. Miller

I think that the individual involved did not receive a prison sentence. That raises the question of Parliament's role in raising awareness of the problem. I am grateful to the Front-Bench spokesmen for the official Opposition and the Liberal Democrats for stating their broad support for the general principles of my Bill. The more the House collectively states that current standards are not good enough, the more public awareness will be raised.

On a more light-hearted note, the problem has involved perfume, including one case in which urine was used as a stabiliser; extremely low-quality video recordings, including pirated tapes made in the cinema ensuring that the viewer sees the back of the heads of the people in the rows in front, which might be regarded as making the experience of watching more real. There have also been software with viruses attached and children's videos recorded over old porn tracks, with the result that, every now and then, children get a glimpse of things that I am sure Parliament would prefer they did not see. Many other products are affected.

One could say that Parliament should not legislate in an area in which the principle of caveat emptor should apply. One could say that my Bill represents an attack on Del Boy and Rodney and that it will damage entrepreneurship. One could say that some manufacturers have made enough money out of their products and are thus fair game for the copyists. Such views are misguided—one need only see who lies behind the copying to realise that. Sweatshops, organised criminals and the so-called Real IRA are among those involved.

On 3 December 2000, The Sunday Times did the country a favour by publishing an article following some research its journalists had carried out focusing on software associated with the new Sony PlayStation. It states: Outwardly, the garish design on the cover of the hit computer game Street Fighter would fool all but the most fanatical player. Open it up, however, and the amateurish scrawl in black in on the disk shows that it is a counterfeit. The disk is one of thousands that the police suspect are being produced to raise funds for the Real IRA, the terrorist organisation responsible for the Omagh bomb that killed 29 people two years ago. According to a republican source, the fake disks, designed for Sony's new PlayStation 2 consoles, are being created in a secret factory in south Armagh to cash in on the pre-Christmas demand that has followed the machine's launch last month. It was launched in November last year. Selling on market stalls for £30 each—while supplies of the £45 originals run dry in the shops—they stand to make £20,000 a week for the Real IRA, according to the source. Disks obtained by The Sunday Times from a republican source have been passed to the RUC, which is investigating. At least two men involved in the counterfeiting—one a 42-year-old racketeer from Dundalk—have close links to the Real IRA leadership, police confirmed. In a fresh drive to raise funds, the Real IRA has also moved in on the IRA's tobacco-smuggling empire. Security sources say the Real IRA is making up to £500,000 per shipment, money that is supplemented by extortion, video and record piracy and dealing in drugs. Much of it eventually translates into guns and explosives.

Mr. Bercow

Before he concludes his remarks, will the hon. Gentleman say something about the way in which the Bill will strengthen search warrant provisions? That is an important matter which deserves detailed explanation.

Mr. Miller

Clause 6 deals with search warrants. As the hon. Gentleman will see, it covers all parts of the United Kingdom—hence the rather complicated wording. Reasonable grounds have to be provided, as is normal, but a justice of the peace may issue a warrant authorising a constable to enter and search the premises, using such reasonable force as is necessary. The hon. Gentleman will recall that we had a not too dissimilar debate when considering the Vehicles (Crime) Bill in Committee a while ago. That is a tidying up operation involving section 92 of the Trade Marks Act 1994.

Goods find their way to consumers by many routes. Some retailers are being taken in and are not aware that they are committing a crime, but many must know what they are doing. However, if they do not, and they are offered goods at discounted prices, they should always ask, "What is the source? Can we be sure of the supply chain involved?"

On 15 November last year, the Daily Express cited several products that it had identified with well-known brand names, such as Calvin Klein, Nike and Timberland. Some retailers will have great difficulty knowing whether they have purchased the real article. I want to ensure that, through our role as Parliament and through supportive mechanisms, trading standards officers and the Department of Trade and Industry, retailers are given good, solid advice on suspect shipments. I do not want to penalise the person who is genuinely had, just as I do not want to penalise the consumer who is had. I want to go back up the chain and hit the cowboys.

In January last year, the Evening Standard went on a little shopping expedition. In an articled headed, "Welcome to rip-off retailers inc.", it listed the goods that it had acquired. It said: in the drinks line bottles of "Glencarnie' whisky and "Kermanoff vodka costing £5.50 each. The "Glencarnie' bottle was labelled "whiskey' on one side and "whisky' on the other"— the difference will be well known to Scots people.

Mr. Forth

What idiots would buy it?

Mr. Miller

The right hon. Gentleman may ask that question, but the labelling on those products is more subtle than might be Imagined.

The article continued: If it was computer games you were after, a copied version of the South Park Rally PlayStation Game, complete with a photocopied label, cost £10. An original would cost normally cost around £40".

Mr. Forth

At this point in the hon. Gentleman's argument, it is important for us to understand where those items were purchased. I am intrigued to know whether they were purchased in a legitimate retail outlet of repute, or from someone with a fold-up suitcase or a barrow on a pavement. Surely the hon. Gentleman is not suggesting that if the average consumer buys a poorly labelled product from someone with a suitcase on the pavement, he can expect the same quality or consumer protection as he could if he bought it in a regular retail outlet.

Mr. Miller

I totally agree with the right hon. Gentleman. The particular example cited in the Evening Standard was bought at a car boot sale in Hackney Wick, London. My purpose in quoting that article, which lists products ranging from tobacco, whisky and vodka to CDs, is to invite Londoners to think about the events of last week. They may have thought they were simply purchasing cheap goods and that it was okay to buy them, but those purchases could be funding the terrorist atrocity that we saw in London. We must do more as a nation to raise awareness of that fact.

Mr. Richard Burden (Birmingham, Northfield)

The distinction between someone who sells goods from a suitcase and a reputable retailer is not always clear to the consumer. My hon. Friend will know that yesterday I observed a raid on several premises by trading standards officers and the police in south Birmingham. Court cases may follow, so it would not be appropriate for me to go into detail. Suffice it to say that those raids were on a combination of private houses and shops. Clearly, in that case we were talking about shops, rather than suitcases. The end result of the raid was that counterfeit goods with a total value of about £67,000 were recovered. It is important to record the big business involved and the fact that, for the consumer, it is not always easy to distinguish between the reputable and the disreputable.

Mr. Miller

I am grateful to my hon. Friend for his intervention and for the fact that he has taken such an interest in my Bill. I wrote to all hon. Members and told them that, if they wished, the Alliance against Counterfeiting and Piracy would provide them with information about what was happening in their constituency. Several colleagues have written to me asking for that information.

The Bill has three main aims: to increase penalties for the crime of copyright theft; to strengthen search warrant provisions; and to give greater powers to allow rights owners to obtain forfeiture of infringing material. It amends the criminal provisions in intellectual property law and, more specifically, copyright law. It deals with rights on performances, fraudulent reception of conditional access transmission by the use of unauthorised decoders, and trademarks.

In general, intellectual property law provides private rights that can be enforced by rights owners using civil remedies. In addition, it is a criminal offence to make for sale or hire, or deal with, illegal material. That material includes pirate copies, which are copies of material protected by copyright, such as music, films and computer software which have been made without authorisation; copies of performances which have been made without the permission of the performer holding the recording rights—known as bootleg copies; and unauthorised decoders that allow people access to transmission such as cable and satellite television.

Mr. Bercow

Inevitably, because this is the hon. Gentleman's Bill, he knows more about it than anyone else in the House. For my benefit, will he explain in a sentence or two how search warrant procedures would be strengthened? I accept that they would be, but I am not clear how the Bill makes them stronger, and how it differs from existing arrangements.

Mr. Miller

I hope to come to that shortly.

To finish my list of examples, illegal material includes counterfeit material, which comprises goods, packaging and labels bearing a trademark that has been applied without the consent of the trademark owner. Those criminal provisions are altered by the Bill.

Clause 1 increases the maximum penalty for conviction on indictment for offences relating to making for sale or hire, or dealing in, material infringing copyright, illicit recordings infringing performers' rights, and unauthorised decoders. The new maximum penalty is an unlimited fine, and may include up to 10 years in prison to reflect the seriousness of those crimes and bring penalties into line with those for similar trademark offences.

Clause 2 allows the police to obtain warrants for all the offences that I outlined. Those provisions are additional to any powers available to the police under the Police and Criminal Evidence Act 1984, and should ensure that there are no impediments to a full investigation of offending behaviour in the indicated areas, which could remain if PACE alone applied.

As I explained earlier, clause 6 introduces further warrant arrangements and seizure provisions relating to counterfeit goods and articles for making them. Clauses 3, 4 and 5 introduce measures to allow the forfeiture of goods infringing copyright and articles designed or adapted for making such copies.

In view of the time, and as I know that other hon. Members want to contribute to the debate, let me pose a question: is the Bill a panacea? No, it is not. It is a start. The subject is incredibly complicated. There are other issues to be addressed, such as electronic transmission. Those who are on the mailing list for Teleworker, as I am, will see an interesting article by David Flint about copyright problems in cyberspace. That is a massively complicated problem, far too big to deal with in a private Member's Bill, but I know that hon. Members on both sides of the House have indicated their desire to engage in the international discussions that may be necessary to develop law in that regard.

My Bill is a step in the right direction. By increasing penalties and improving definitions, I want the House to raise the profile of the crime and stamp out some of the activities that are going on. A partnership is needed between business and the consumer which, together with the courts, Customs and Excise and trading standards officers, can make a difference. Let us put aside party differences, and differences about private Members' Bills. Let us show the responsible side of Parliament, and demonstrate that the House is no friend to any criminal.

1.42 pm
Mr. Nick Gibb (Bognor Regis and Littlehampton)

The Opposition do not oppose the Bill in principle. In a free society, the preservation and enforcement of property rights is vital to that freedom. It is the essence of the rule of law. The enforcement and protection of property is key to the success of a capitalist society.

In an article in The Sunday Times a few months ago headed "The importance of title", Luke Johnson, the entrepreneur behind the Pizza Express chain, stated: The issue of ownership and title to property is a major reason why the Western world has made economic progress and why developing countries struggle to get richer. He went on: It is estimated that only 25 of the world's 207 nations have a contractual basis for property matters. He observed that in countries where ownership is uncertain, assets cannot be used to raise debt. Lenders will not extend credit". The consequence of that is that there is no investment, or insufficient investment, in those countries to bring about the wealth creation that is needed. He commented at the end of his article: All over the Third World, large proportions of the population are the equivalent of squatters: always at risk of eviction or having their property seized. In such shifting circumstances, long-term enterprise is impossible. In defining property in that article, Luke Johnson did not confine it to real estate. He included intangible intellectual property, such as patents, licences, franchises and copyrights. Without the protection of intellectual property rights, the incentive to innovate, design and discover is reduced, as the rewards for those endeavours are confiscated by others.

Mr. Miller

That is what attracted me to use the opportunity of private Member's legislation to develop the Bill. One of the ways in which we can help Britain's innovators and inventors is by closing some of the great gaps that the hon. Gentleman highlights. The House needs to take a strong lead.

Mr. Gibb

The hon. Gentleman is right. It is encouraging that the Bill has come from his side of the House—the left in politics, broadly speaking. Traditionally, the left has had a less "pro" attitude than supporters of the free market towards property. It is encouraging that a Labour MP is promoting the Bill.

Mr. Bercow

I agree with my hon. Friend about the welcome genesis of the Bill. However, does he agree that the reason is simple? It is entirely proper that where there is a choice between support for property or acceptance of piracy, most people would support property.

Mr. Gibb

My hon. Friend is right. Property is crucial to the functioning of a free society and to the rule of law. If people's property rights—especially in intellectual property—are not protected, the incentive to create such intellectual property is diminished through its confiscation by others who thus diminish its rewards. That disincentive applies whether such confiscation is carried out by Governments or by criminal individuals. The hon. Member for Ellesmere Port and Neston (Mr. Miller) is right in principle to introduce measures that help to protect those rights.

The Opposition have some concerns about the drafting of the Bill. It would be more appropriate to discuss some of its more detailed proposals in Committee, but they are of sufficient importance to air during Second Reading. I shall do so as briefly as possible.

The Opposition bow to no one in the Labour party when it comes to understanding the importance of property rights in securing a free and prosperous society. However, we take great pains to ensure that we do not undermine either those rights or others, such as the right to privacy and the free enjoyment of property unhindered by excessive intervention by the state. Those rights—those civil liberties—are the prime responsibility of Members of the House. I make no apology for saying that the Bill as currently drafted needs careful scrutiny to ensure that it does not unnecessarily or hastily extend the rights of the state to intervene in the activities and property of innocent individuals and legitimate businesses.

Mr. Miller

I completely agree.

Mr. Gibb

I am grateful for the hon. Gentleman's support; we seem to have a consensus on the issue in the House at present.

The principle and motivation behind the Bill are fine and good, but we need to consider the detail of its provisions. My first concern is that, as the Bill extends the power of the state to obtain search warrants and gives greater powers of forfeiture, it should really be a Government Bill. I am sorry to say that, with all due respect to the hon. Gentleman, we all know that the measure is a hand-out Bill.

The explanatory notes were prepared by the Department of Trade and Industry, which also carried out the regulatory impact assessment. In view of the important powers given to the Government in the measure, it should have been introduced by them, so that Ministers were accountable for its drafting and its passage, and so that the Government could be held accountable by the public at an election, if the public felt that the Bill went too far—or, indeed, not far enough.

The Opposition share the concerns of the Bill's supporters about copyright protection and counterfeit goods, but we must be absolutely sure that existing legislation is inadequate. The explanatory notes summarise the Bill as follows: The Bill seeks to rationalise these criminal provisions by removing some of the differences between them. The notes go on to state: There is considerable overlap between the offences relating to the different material indicated above (and other criminal offences such as those in trade descriptions law and law relating to fraud) in that offending behaviour invariably falls within the scope of more than one offence. It seems that the drive behind the Bill—its whole purpose—is to rationalise and simplify.

The explanatory notes contain no discussion or elucidation of the way in which lack of rationalisation impedes the work of the authorities or the police. No careful analysis has been carried out of existing legal provisions and the way in which they hamper or hinder the police and the enforcement authorities.

There is no evidence of the courts handing out a series of two-year sentences in circumstances when higher sentences could be imposed if a 10-year maximum penalty existed. Earlier, I mentioned the case of the wishbone car suspension, which the hon. Member for Ellesmere Port and Neston gave as an example. I assumed that he was making the point that a two-year prison sentence had been imposed because of the inadequate state of the statute book. However, even in that case, no prison sentence was given.

Mr. Bercow

My hon. Friend is making an important point, which was raised with the hon. Member for Ellesmere Port and Neston during his opening contribution. Does my hon. Friend agree that it is important to show at some stage during consideration of the Bill that the current length of sentence is effectively a charter for recidivism, or a catalyst for copycat behaviour? Neither proposition has yet been demonstrated.

Mr. Gibb

My hon. Friend is right. That is not a reason for refusing the Bill a hearing in Committee, but in Committee, we must establish that existing provisions are inadequate, and that the Bill increases them only to the extent necessary to reduce counterfeiting crime.

Putting longer sentences on the statute book does not always act as a deterrent; their mere existence does not deter. They act as a deterrent only if they are imposed. I am therefore worried about the Bill's provision for an increase in penalties from two years to 10 years.

I am also worried about the strengthening of the search warrant provisions and the greater powers involving forfeiture of people's property. Those new state powers are significant, but the only reason given for them in the explanatory notes is to rationalise the law. That is insufficient reason for increasing the powers available to the state authorities so significantly.

Mr. Miller

The Alliance Against Counterfeiting and Piracy provided the following example: the court cannot grant a search warrant even in the face of evidence that a person is selling, letting for hire or offering for sale, in the course of a business, an article which infringes copyright. However, the court can grant a search warrant if that same person distributes the same infringing article in the course of the same business. Such contradictions need tidying up.

Mr. Gibb

I hope that we can cover those detailed issues in Committee, and I hope that the hon. Gentleman will give examples of sentences that were given and served, but should have been much longer.

Paragraph 16 of the explanatory notes states: Additional enforcement effort by public sector enforcers is not expected to be the consequence of the provisions in the Bill". That leads to the question of what constitutes the purpose of the Bill. After stating that there will be no additional enforcement effort, the paragraph continues: Cuts in manpower are not planned though, as the expectation is that any savings as a result of the Bill will be directed into additional enforcement effort. The same paragraph states that there will be no additional enforcement effort, but that there will be such an effort as a result of saving people's time. There is a considerable degree of confusion in the Bill and the explanatory notes—and confusion, as hon. Members now know, is a sacking offence.

There is also confusion in paragraph 6 of the regulatory impact assessment, which states:

The possibility of increased prison terms is unlikely to give rise to additional costs as in practice longer sentences for intellectual property crime are often already possible by prosecuting for another offence such as conspiracy to defraud (or trade mark offences) where at least seven years in prison is already possible". We often delude ourselves that simply passing a law or introducing a whole raft of new regulations will solve any problem that we identify. The reality, in most cases, is that the policy, in the form of Government action and Government priorities, needs changing, rather than the law. In Britain, we have a rather amateurish unprofessional approach to the management of the state sector. We pile ever more unworkable burdensome regulations on to business, while education continues to decline, our hospitals are filthy and inadequate, crime is rising and clear-up rates are falling.

The Minister for Competition and Consumer Affairs (Dr. Kim Howells)

Come on, Nick.

Mr. Gibb

Well, that is what the public think about public services; it is certainly what I think of them.

Dr. Howells

It ill becomes the hon. Gentleman to cast aspersions on the NHS in that way and to describe all our hospitals as filthy. We have some brilliant hospitals, and he well knows it. I have heard of over-egging, but that was almost obscene.

Mr. Gibb

For a moment, I was being political. However, what I said reflects people's concern about the state sector services. The point that I was making was that all the problems in the state sector stem not from inadequate laws but from wrong priorities and wrong policy from Government, regardless of party. This is a "state versus the individual" issue.

It seems odd that we are discussing tough new 10-year sentences for copyright theft when 30,000 convicted criminals are being released from prison early, 1,300 of whom have been convicted of robbery and given sentences of only 26 months, but served only 11 months. There is also early release for people convicted of manslaughter, attempted murder, wounding, actual bodily harm, grievous bodily harm, drug dealing, cruelty to children, sex offences and burglary. I am not making a party political point about the early release scheme, because even under the Conservative Government, the average sentence for burglary was usually much less than 18 months.

The courts are not passing tough sentences for real serious crime. My concern is that the House can introduce whatever maximum sentences we like—provision for long sentences for this kind of crime is already on the statute book—but the courts will simply not hand them down. Perhaps we ought to examine the priorities of the courts and the criminal justice system, rather than placing another string of laws on the statute book.

Mr. Forth

My hon. Friend is making an important point about the gulf that exists between what statute law provides in relation to sentencing and what the judiciary, in its robust independence, decides to do. Will he comment along similar lines about whether he believes that sufficient constables will be available to discharge the duties placed on them by the Bill? I refer to the important new powers in new section 297B(4) of the Copyright, Designs and Patents Act 1988 which is added by clause 2(4).

In Bromley, there are 50 fewer policemen than there were four years ago. It was suggested earlier that Bromley was a hotbed of counterfeit products. How on earth are the police going to protect the people of Bromley if fewer police are to be given more responsibilities under the Bill?

Mr. Gibb

My right hon. Friend has made a point that I was about to raise. We must assess our priorities in tackling crime. In Littlehampton, in my constituency, a 13-year-old boy received 24 stab wounds one night a few months ago. We do not have enough police to patrol the promenade in Littlehampton during the night. Yet here we are piling more duties on to the police, such as collecting fraudulent "Star Wars" videos. We need to reassess our priorities, and we must consider that issue in detail in Committee.

Here we are proposing a 10-year sentence for copyright theft, but no one would receive such a sentence for counterfeiting a Louis Vuitton handbag, in which case the statute would have zero deterrent effect. Worse, the disrepute and contempt in which our criminal law is held by the law-abiding public would be deepened, as would their cynicism about this country's law and order system, and politicians and politics in general. Alternatively, 10-year sentences would be passed, which seems disproportionate given the light sentences being delivered for much more serious offences such as mugging and burglary that directly affect people's quality of life.

Mr. Bercow

I have thought through that precise point, which is an important consideration, but in fairness to the promoter, the hon. Member for Ellesmere Port and Neston (Mr. Miller), does not my hon. Friend accept that—unless he proposes to truncate the independence of the judiciary by introducing mandatory sentences—the hon. Gentleman is at least entitled to argue for his Bill in Committee and to show to Members' satisfaction that it is likely to improve matters without a requirement for mandatory sentences?

Mr. Gibb

That point needs to be raised, and I am sure that the hon. Member for Ellesmere Port and Neston will raise it in Committee.

We must think about the timing of the Bill. For every 100,000 members of the public, 10,111 criminal offences are committed every year. There were 129,000 recorded incidents of violent crime in 1979. The figure is 703,000 today. The British crime survey records 2.1 million instances of violent crime in 1981 and 3.2 million today. Clearly, crime is increasing hugely, so we need to ask ourselves whether it is right to divert scarce resources to deal with such property crimes.

Recorded crime clear-up rates are also down to less than 25 per cent.—only one in four crimes is cleared up. We need to consider the priorities carefully. Should we, as a nation, put ever more resources into tackling motoring offences, when we have some of the safest roads in Europe? Such a question needs to be addressed when we propose adding to the list of offences and penalties. Yes, we need to protect intellectual property, but last weekend, in Bersted in my constituency, an elderly lady of 82 was tied up for five hours by young thugs and £60,000 worth of her antique furniture was stolen.

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I have given the hon. Gentleman some latitude, but he should now return to the Bill. His examples are straying further and further afield.

Mr. Gibb

I shall obey your stricture, Mr. Deputy Speaker, but the point that I was making goes to the root of my concerns about some of the provisions. People are not protected against such crimes. Stealing £60,000 worth of furniture is a property crime, and the lady was tied up for five hours. That should not happen. We should protect such people before we protect Louis Vuitton.

I hope that such issues will be considered in Committee. I also hope that the Committee will examine the proposed new powers of entry for the enforcement authorities. The concept that a man's home is his castle is an ancient one that goes to the very heart of our legal system. William Pitt said: the poorest man in his cottage bid defiance to the Crown. It may be frail—its roof may shake—the wind may enter—the rain may enter—but the King of England cannot enter—all his force dares not cross the threshold of the ruined tenement. We in the House should tread warily before extending even further the exemptions from and exceptions to that ancient rule.

All hon. Members are concerned about the protection of intellectual property rights. We are perhaps a little less concerned about protection against false "Star Wars" videos or false Chanel perfume—both of which were referred to in the explanatory notes—than about protecting people against fake goods that cause injury to children. We are more concerned to protect patents for important, expensively developed drugs than to protect the income of Paul McCartney and producers of overpriced CDs. None the less, private property rights should be protected by the law, just as we give protection to people in their own homes.

Dr. Howells

I have rarely heard such nonsense. Is the hon. Gentleman saying that the famous people and brands that he has mentioned are not worthy of protection? They offer employment to tens of thousands of people in this country, and are involved in a global trade in which this country should play a great part. In his diatribe against the Bill and all it stands for, is he saying that that does not matter? The Bill is about intellectual property rights, but I suspect that he does not understand that issue.

Mr. Gibb

No, it is a matter of priorities. We have extensive laws that protect intellectual property, which are correct and should be strengthened. We live in a society in which violent crime is out of control and people are scared in their homes at night. Is it more important to protect the income of Paul McCartney and manufacturers of overpriced CDs than to protect elderly ladies in my constituency who are alone at night?

Mr. Miller

Will the hon. Gentleman reflect on the example that I gave of the Real IRA, and similar examples involving Russian organised crime?

Mr. Gibb

Is the hon. Gentleman saying that the only way to deal with terrorism in this country is to have a huge army of trading standards officers looking out for all the sources of income used by terrorists—or should we clamp down on the terrorists themselves? The Government are releasing terrorists, so they should consider their policy on terrorism and not use consumer protection legislation to deal with the problem.

The Conservatives support the principle and thrust of the Bill. We want to protect all intellectual property rights, which go to the heart of a free capitalist society. I hope that the Bill will receive a Second Reading so that we can debate these issues at greater length in Committee.

2.7 pm

Mr. John Bercow (Buckingham)

My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) was coruscating in his critique of the Bill. His manner was a little more acerbic than I had expected. He is a good personal friend outside the House, but I am bound to say to him that he was a little uncharitable towards the hon. Member for Ellesmere Port and Neston (Mr. Miller).

I have crossed swords with the hon. Gentleman a number of times, not least during the passage of the Vehicles (Crime) Bill. I irritated him, and he irritated me. I think that there is a powerful rationale for the Bill, and I respect his good intentions. I think that there would be widespread, if not universal, agreement about the importance of counteracting counterfeiting and piracy. Probably the only people who would dissent from the principle that we should do something about it are those who are engaged in that practice and are deriving enormous profits in the process.

One can argue the toss about the rigour, detail, exactitude and scope of copyright and patent law. There is genuine room for disagreement about how extensive it should be, and an argument about the balance between the protection of the creator or originator and the legitimate entitlements of others who seek to enter a market. I do not think that the hon. Gentleman and I would disagree about the scope for a discussion on that subject.

However, the central purpose of the Bill, which is to counteract a widespread and apparently growing phenomenon, is cogent. I was taken aback by the figure of £8 billion a year that the hon. Gentleman gave.

Mr. Miller

So was I.

Mr. Bercow

Moreover, we must bear in mind the £1 billion annual loss to the Exchequer in revenues forgone. These are not trifling matters, and they ought to be weighed carefully when we consider whether to give the Bill a Committee stage.

I have several concerns. The first relates to the scope of the Bill. When I asked the hon. Member for Ellesmere Port and Neston about plagiarism, he said he thought it was broadly covered. I am not criticising him, but I fear that the Bill does not cover what many would regard as the offence, or the injustice, of plagiarism. A few moments ago, with characteristic thoughtfulness, the Under-Secretary of State showed me a note—presumably provided by those whom we are not entitled to identify in the House, still less to name, but who are employed in his service—informing me that plagiarism itself was not covered. However—this is important—if someone copies another person's work with a view to commercial distribution, that offence will be covered.

The worry in relation to plagiarism is that, if the provisions were too widely drawn the Bill might cover someone copying another's work in a school, further education college or higher education institution. That is certainly not the intention, and, as I have said, I do not criticise the hon. Member for Ellesmere Port and Neston; but I think it important to understand what the Bill does and does not cover. What it does cover is very significant.

I have a couple of concerns which, although they certainly should not prevent the Bill's progress today, will need to be properly scrutinised in Committee. One relates to clause 2(4). Not for the first time and probably not for the last, my hon. Friend the Member for Bognor Regis and Littlehampton somewhat anticipated me on this point, as did my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth). My thunder was slightly, although not entirely, stolen.

Subsection (4) refers to the execution of a warrant issued under subsection (1). Subsection (4) of the proposed new section states that a constable may seize an article if he reasonably believes that it is evidence that any offence under section 297A(1) has been or is about to be committed. I think it important that, in conferring powers on the police, we do so confident in the knowledge that they will have the wherewithal—in terms not merely of resources but of intelligence and know-how—to practise those powers effectively.

As I am sure the hon. Gentleman will understand, I do not mean to cast aspersions on the police in any way. Nevertheless, these matters involve considerable detail and, as far as the criminal is concerned, no little sophistication. The hon. Gentleman said earlier that his Bill, in essence, was not complicated: he said that it was conceptually simple, or words to that effect. That may be true, but the hon. Gentleman made the equally valid point that the overall challenge of counteracting counterfeiting and piracy was enormous, and that a great deal of complexity was involved.

I rather appreciated the hon. Gentleman's self-effacement and modesty. So often, a Member proposing a measure will give the impression that it is a panacea. The hon. Gentleman wisely played down expectations, and said that of course it was not a panacea; it was a first step, or a start, which would no doubt be built on in the future. It is important, however, for us to be sure that the police will know how to give effect to the powers conferred on them by the Bill.

My observation at this stage—it may be that the hon. Gentleman can reassure us in Committee—is that if there is considerable complexity involved, and if a criminal has made an extremely clever copy of an original work, such as a CD or a DVD, how can we be confident that a police officer, with the many and varied responsibilities that fall within his or her remit, will be competent to judge whether a particular article is evidence of the commission of an offence under the highly complicated and detailed Copyright, Designs and Patents Act 1988?

My understanding is that the Bill is designed to amend the 1988 Act, which was passed under the Conservative Government. I remember, partly because I had a modest commercial interest through a client at the time, that it was a formidable piece of legislation. I make the simple point—I do not want to dilate on it or to exaggerate its significance—that we need to know that it is reasonable for us to expect the police to grasp the detail sufficiently to exercise the warrant in a way that is prudent and in a fashion that does not do violence to the legitimate rights of those who have not at that stage been convicted of any offence. I would not go beyond that today, but I think that it is a legitimate point. I hope that the hon. Member for Ellesmere Port and Neston will respond to the concern in Committee. That is my first main anxiety about the likely effectiveness of the Bill as unamended.

Secondly, I shall pick up on what my hon. Friend the Member for Bognor Regis and Littlehampton said about sentencing, about which I have a little anxiety. I am no wet, do-gooding, hand-wringing, feeble liberal. It will be well understood in the House that I am not an enthusiast for such an approach. Many a time and oft, I have excoriated the Government for their institutionalised wimpishness in countering crime. I am not soft on sentences. However, it is important for the integrity of the House, which I would like to see restored and enhanced, that we do not place upon the statute book provision for sentences willy-nilly and without proper regard to their likely impact.

On that point, I was a little less satisfied with what the hon. Gentleman had to say. That is no reason why we should not get on, as I hope and expect we will, to consider the Bill in Committee. I think that the hon. Gentleman owes it to himself, to the industry, to the House and to potential victims of the commission of such crime to let us know exactly what he expects from the penalties that he envisages.

The hon. Gentleman is suggesting penalties of 10-year custodial sentences. That is a significant sentence.

Mr. Miller

A range of sentences.

Mr. Bercow


There is a precedent—I accept that the figure has not been plucked out of thin air—because a number of offences that come within patent law already attract such sentences. In a sense, what the hon. Gentleman is proposing is by way of co-ordination of sentencing policy or—dare I use the term?—perhaps he has in mind harmonisation.

We must know whether the imposition of such sentences would be likely to deter the recidivism that might now be apparent, or would act as a disincentive and deterrent to commit copycat offences. I am not sure. I do not want to be in the business of knee-jerk sentencing policy, or the passage knee-jerk legislation with what might be described as provision for symbolic penalties, which it is not seriously envisaged will be implemented in practice. We need to know more about these matters than we know now.

There is a related concern, and here I fear that some people, including the hon. Gentleman, will think that I am being somewhat feeble, but I hope that I am not. In terms of justice and equity, we must have a sense of proportion about penalties for these offences and how they relate to those applied for the commission of other arguably more serious and certainly more violent offences.

Even if the 10-year penalty were not applied under the terms of clause 2 but a substantial penalty exceeding four years' imprisonment were applied, it would necessarily follow that the culprits would not be eligible for early release under the Government's home detention curfew scheme. I admit that that causes me a flutter of anxiety about the Bill.

I would feel more comfortable about the Bill if the hon. Gentleman can reassure me that the proposed sentencing policy is open to change. However, I am concerned by the idea that someone committing such an offence could be banged up for a lengthy period with no opportunity for remission. After all, members of the Labour party—possibly including the hon. Gentleman himself—have regularly complained about overcrowding in our prisons. This country has a very large prison population by comparison with the rest of Europe, so we should take great care not to add gratuitously to it.

Mr. Miller

I understand the hon. Gentleman's point and I welcome the thrust of his remarks. I assure him that I am prepared to countenance debate and amendments in Committee if the Bill meets with the approval of the House.

Mr. Bercow

I am grateful to the hon. Gentleman for that reassurance.

My final point relates to the summary of the regulatory appraisal. The hon. Gentleman knows that many of us are unhappy about regulatory impact assessments and the Government's attitude to them. Paragraph 17 of the explanatory notes refers to possible additional costs, but it is gloriously vague and unspecific. Frankly, that is not good enough. I am confident that the hon. Gentleman can do and will do a lot better, but paragraph 17 states: Additional costs to the public sector are not expected except with respect to consumer awareness where some expenditure has already been committed. I am sorry, but that is not very reassuring. What is the "some expenditure" that "has already been committed"? What is the strength of the expectation that additional costs will not be incurred?

Sometimes the Government go much further than that and say that there will be no increase in costs at all. We all know that it is a case of "What are those pigs I see flying in front of my very eyes?", and that, in due course, the costs will increase as surely as the passage of the seasons. When we consider the Bill's detail rather more thoroughly in Committee in the way that the hon. Gentleman's advocacy of it warrants, I hope that we shall receive more satisfactory answers.

I congratulate the hon. Gentleman on the introduction of the Bill. A serious evil is apparently growing, it imposes enormous costs, it needs to be tackled and he was right to draw it to the attention of the House. I hope that we shall have a thorough debate about the detailed manner in which we give effect to the laudable principles that he has articulated.

2.23 pm
The Minister for Competition and Consumer Affairs (Dr. Kim Howells)

I am pleased to speak about the Bill and confirm that the Government support it. I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) on introducing it.

I welcome the interesting and useful debate that has taken place. It has highlighted very well the need for the Bill and exposed the inadequacies of the arguments of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), who clearly has no conception of the importance of intellectual property rights and the part that they play in any advanced economy. He gave a disgraceful performance when he attempted to pooh-pooh some of the best products that are made in this country. In doing so, he attempted to trivialise my hon. Friend's argument that the crime should be treated seriously.

Mr. Bercow

Will the Minister give way?

Dr. Howells

No, the hon. Gentleman has had his penny's worth.

The Bill is aimed at giving enforcers better tools to allow them to tackle a crime that should concern us all, even if it does not worry the hon. Member for Bognor Regis and Littlehampton. Intellectual property crime may not mean much to many people—as we have seen—but most people have heard of counterfeiting and piracy. I prefer to use the term IP crime because other terms often lead people to believe that it is a Robin Hood crime, which is how the hon. Gentleman described it. He thinks that the offence does not matter because the products are overpriced and the criminals, even if they are terrorists, should be allowed to get on with selling their products. We believe that counterfeited goods and piracy are a disgrace.

We are all victims of IP crime. We have heard a good deal about that today.

Mr. Andrew Dismore (Hendon)

Will my hon. Friend give way?

Dr. Howells

I hope that my hon. Friend will permit me to continue.

Legitimate business may, and does, lose money because of IP crime. Consumers are also seriously affected by it. I have been involved in various initiatives over the past couple of years to highlight the consumer angle, because it is not widely understood. Consumers often think that they are getting a bargain when they buy a fake, but the bargain could have cost jobs in their local area or helped to fund serious organised crime. In addition, it could do them much physical damage.

I am pleased that the Bill will close some of the loopholes in the law on IP crime. Intellectual property is a reserved matter and as such the Bill will extend to the whole of the United Kingdom. In supporting it, the Government are mindful of the implications for human rights. I have taken advice and consider it to be compatible with the European convention on human rights.

The Bill is a harmonising measure. It reaches across the criminal provisions in different aspects of intellectual property law which relate to offences of making for sale or hire, or dealing in, illegal material. It copies the best provisions and transfers them to existing legislation, so it contains nothing new. It builds on existing best provision and is a worthwhile measure.

It is entirely appropriate that the penalties for offences relating to certain copyright cases are increased so that the maximum matches those that are available for trademark offences. Although there is much overlap between copyright and trademark offences, it is right that even when there is no trademark offence, an unlimited fine or up to 10 years imprisonment is available for the most serious offending behaviour. My hon. Friend made that clear. The copyright offences that the Bill covers can be as serious as trademark offences.

I am in a generous mood and I know that the right hon. Member for Bromley and Chislehurst (Mr. Forth) wants to speak, so I shall finish by commending the Bill to the House.

2.27 pm
Mr. Eric Forth (Bromley and Chislehurst)

I am grateful to the Minister for allowing me the time between now and 2.30 pm to explain my view on the Bill. I shall do my best to get started on my remarks.

I have identified several problems. The first concerns the relationship between genuine and copy or fake products, which lies at the heart of the Bill. It is not clear whether we are dealing with consumer protection, safety, or profit and investment. There has been some confusion if we are talking about all three. There has also been a lack of validity in the size or scale of the problem. We have been given figures, but very little—if anything—to support them.

The explanatory notes give rise to several issues. On the first page, there is a reference to maximum penalties, police search and seizure powers and forfeiture of illegal material. Those are serious and grave matters. Any Bill that attempts to tackle such issues would require the most thorough examination on Second Reading, in Committee and beyond.

We also have the options that are helpfully laid out in the regulatory impact assessment. Although one could never tell from this debate, there was a process for considering different options for approaching the problem that everybody has so far agreed is very serious. However, we have not received an explanation for the rejection of some of those other options by the promoter of the Bill and, by implication, the Government—

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed on Friday 23 March.