HL Deb 14 December 1987 vol 491 cc485-512

5.31 p.m.

Lord Beaverbrook

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Beaverbrook.)

On Question, Motion agreed to.

House in Committee accordingly.


Lord Denham

It may be a convenient moment for me to say a few words about the progress we hope to make today on this Bill. As I informed your Lordships last Thursday, it is our wish to sit until midnight tonight, no later than 6 p.m. on Thursday, and to complete the Bill on Tuesday 12th January. Your Lordships may wish to know that so as not to overburden business on the last day, it would be helpful were we to try to reach Amendment No. 274AZA tonight—that is to say, to complete Part I and Schedule 1 of the Bill.

Clause 105 [Licensing schemes and licensing bodies]:

Lord Cullen of Ashbourne moved Amendment No. 238D: Page 44, line 12, leave out from ("society") to ("licences") in line 16 and insert ("corporate body or other organisation which negotiates or grants, either as owner or prospective owner of copyright or as agent for him,")

The noble Lord said: This chapter of the Bill, Clauses 105 to 131, sets out the jurisdiction which the Copyright Tribunal will have over the terms of licences offered by licensing bodies on behalf of groups of copyright owners; for example, the Performing Rights Society, Phonographic Performance Limited or the Copyright Licensing Agency.

The CBI which has suggested this amendment, together with others that I shall move later, is concerned primarily in relation to bodies which might offer licences for photocopying material although most of the proposed amendments are worded so as to apply across the whole range of the tribunal's jurisdiction and not simply to photocopying.

These amendments are particularly important as the amendment of my noble friend Lord Mottistone, Amendment No. 127 to Clause 29, was not accepted. Industry will now have to seek licences for photocopying which have hitherto been permitted as fair dealing. Chapter VII of the Bill gives the Copyright Tribunal jurisdiction over the terms of licences and licensing schemes only if they are operated by a "licensing body" as defined in Clause 105(2). That definition as currently worded restricts "licensing body" to organisations which have as one of their main objects the negotiation or granting of licences.

Why should this be? If an existing organisation of publishers decides to set up a licensing scheme for its members that would presumably—in terms of the constitution of that organisation—be a subsidiary rather than a main objective of the organisation. Hence the scheme would escape the jurisdiction of the copyright tribunal. I suggest that it would be far more reasonable that the jurisdiction of the tribunal should depend on the nature of the licences being offered rather than on the constitution of the body which is granting them. I beg to move.

Lord Morton of Shuna

The difficulty that I have with this amendment is that it would appear to give an opening for a publisher or a recording company which buys out copyright or negotiates copyright on behalf of its authors, music writers or performers to have complete control in negotiating schemes. It would therefore be a different type of organisation than the Performing Rights Society and the various other organisations with which we are dealing. This seems to me too wide a definition; it would let too many potential people in.

Lord Denning

In a way I should like to support this amendment. I wish to draw attention to a particular difficulty in the Bill. In my young days in chambers the Performing Rights Society was one of our customers. I got to know a good deal about licensing systems.

This amendment, or something to make the position clear, is very necessary. As I read Clause 105(2) it seems simply a statement of the company law as regards what is within a licensing body's powers and what is without its powers. Everyone knows that the objects clause in a memorandum of association is now drawn exceedingly widely so that the company can do practically anything it likes. A similar case exists in this definition of a "licensing body" which states that it is an organisation; which has as its main object, or one of its main objects this that and the other. It states what the objects include. That is typical of a wide objects clause in a memorandum of association of a limited company.

That is all very well. In a way one might like to see it pass, but throughout this part of the Bill the contrasting words, the operator of the scheme appear. Those words are not defined at all. Throughout the whole of the Bill it is the operator of the scheme who has to do this, that and the other. The operator of the scheme is well defined in what my noble friend Lord Cullen of Ashbourne said. He defined it as a, corporate body or other organisation which negotiates or grants, either as owner or prospective owner of copyright or as agent for him". In other words that definition really refers to the operator of the scheme. At all events it is most important in the clauses on licensing to distinguish between the licensing body on the one hand and the operator of the scheme on the other. Either this amendment should be accepted or, better still, a definition included to say what the operator of a scheme is. Then it will be the operator of the scheme who has to deal with the matter. My plea would be to accept the amendment in a sense but really to put it under the definition of the proposer of the scheme.

Lord Beaverbrook

This amendment would widen the definition of a licensing body significantly so that it was no longer a necessary condition that such a body had as its main object, or one of its main objects, the granting of copyright licences. The controls of ChapterVII are primarily intended to deal with the collective licensing of copyright. The effect of this amendment would be to bring within the definition of a licensing body many individual publishers, many of them no doubt small. Although we have not had time to consider the implications of this suggestion fully, it is unlikely to be acceptable since it comes close to bringing the licensing of individual works within tribunal control. For that reason, I feel it necessary to oppose this amendment.

Lord Cullen of Ashbourne

I am very grateful to the noble and learned Lord, Lord Denning, for his support. I beg leave to withdraw the amendment at this stage and I shall possibly come back to it later.

Amendment, by leave, withdrawn.

Clause 105 [Licensing schemes and licensing bodies]:

On Question, Whether Clause 105 shall stand part of the Bill?

Lord Simon of Glaisdale

I have two short drafting points to raise. I am reluctant to question the drafting of what has been generally accepted as a well-drafted Bill. However, I should like to ask the Minister to consider with the draftsmen whether lines 10 and 11 are necessary. I should have thought that they could be taken for granted.

The other matter concerns the words to which the noble Lord, Lord Cullen, referred in the context of Clause 29. The words are: its main object, or one of its main objects". When the Committee discussed Clause 29 at considerable length, I ventured to question whether the Minister was right in reading into that clause the words "primary purpose". If one now finds, as a matter of construction, that the words: its main object, or one of its main objects are correct, it seems to me that that argument is reinforced. I have written to the Minister concerning that matter. I doubt that he has had time to consider it. But perhaps he can also consider that aspect in view of the drafting of the clause.

Lord Williams of Elvel

I should like to make more or less the same point as that made by the noble and learned Lord, Lord Simon, concerning lines 10 and 11, partly because I do not really understand what they mean. The words are: in the nature of a scheme and the Bill goes on to say: whether described as a scheme or as a tariff or by any other name. Perhaps the noble Lord can give us some clarification as to exactly what that means.

Lord Beaverbrook

I am grateful to the noble and learned Lord for his comments. I received a letter from him on the point he raised earlier in our Committee debate concerning the phrase "primary purpose". I shall be considering what he has said to me in regard to that matter and responding to it.

The noble and learned Lord, Lord Simon and the noble Lord, Lord Williams, have mentioned to me lines 10 and 11. As regards the words: in the nature of a scheme what we are alluding to is that a description of a scheme is a difficult matter on which to be definitive. Many schemes will have a different nature, depending on what they arc dealing with and the way in which they are operated. However, I shall look further into the matter and write both to the noble and learned Lord and the noble Lord mentioning the matter. I shall place a copy of my letter in the Library.

Clause 105 agreed to.

5.45 p.m.

Clause 106 [Scope of general control of licensing schemes]:

On Question, whether Clause 106 shall stand part of the Bill?

Lord Williams of Elvel

I am sorry to ask the noble Lord another possibly trivial question. I understand the meaning of Clauses 106(a) and 106(b) except in respect of film sound-tracks when they do not accompany a film. The Bill as drafted specifically refers to licensing schemes operated in relation to copyright for this, that and the other, including film sound-tracks when accompanying a film. However, the Bill does not say anything about sound-tracks not accompanying a film. Perhaps the noble Lord can help me.

Lord Beaverbrook

Clause 106 introduces a group of clauses concerned with the control of licensing schemes. The licensing schemes in respect of the first group of works come under the tribunal only if they are operated by a licensing body, cover the work of more than one author and concern the uses specified in subparagraphs (i) to (iii) of paragraph (a). That restriction is basically because the works concerned all come within the Berne Convention. We would be acting outside our Berne obligations if, for example, the tribunal could adjudicate a licensing scheme operated by an individual author or film maker in regard to his own productions.

Licensing schemes in respect of the second group of works, which is not covered by the Berne Convention, cone under the tribunal whether or not a licensing body is involved and whether or not the work of more than one author is involved. As regards the specific point on film-sound tracks not accompanying a film, those will be dealt with in the same way as any other sound recording.

Clause 106 agreed to.

Clause 107 [Reference of proposed licensing scheme to tribunal]:

Lord Morton of Shuna moved Amendment No. 238E: Page 44, line 37, leave out ("with the consent of the person proposing to operate the scheme")

The noble Lord said: Perhaps I may speak to Amendments Nos. 238E and 239L together. Amendment No. 238E suggests leaving out the words: with the consent of the person proposing to operate the scheme".

and Amendment No. 239L suggests leaving out the words: with the consent of the licensing body". In each case it does not appear that there is any particular reason why the consent of one side to the quarrel should be necessary before it should be referred to the tribunal who will resolve it. What happens if consent is withheld? If there is an agreement to differ and refer the matter to the tribunal, that is fine if the scheme proposers agree to go to the tribunal. However, what if they say, "No, we shall not agree to your suggestions" and "No, we shall not refer it to the tribunal"? Will we then have to go to the lengths of having a licensing scheme which is put into operation and then appealed to a tribunal under Clause 108? That seems to be a ridiculous procedure when it could all be dealt with cleanly under Clause 107 before this scheme comes into force. I beg to move.

Lord Denning

I support the amendment. The question which I raised earlier was: who is proposing to operate the scheme? The proposer is not defined. However, why should his consent he necessary? Why should he be able to give a veto? Surely if there is a proposed licensing scheme—it has not yet come into being—the terms should be able to be referred to by an organisation claiming to be representative of such people. The person proposing the scheme or operating, it should not have a veto.

Lord Beaverbrook

The purpose of Clauses 107 and 114 is to allow parties who are discussing prospective schemes or licences but who cannot agree on terms to go jointly to the tribunal before a scheme comes into effect and obtain a decision. That saves time and effort to all concerned. The corresponding provisions in the 1956 Act have proved useful in the past to such bodies as the BBC and the Performing Right Society when negotiating terms. To allow one side on its own to refer a prospective scheme or licence would achieve little. If the other side did not agree to the reference, it could merely withdraw from negotiations altogether. A provision along the lines of the amendment has not proved necessary up to now, and I doubt if it would be workable.

Lord Morton of Shuna

For the life of me I cannot see why not. If there is an intractable quarrel about a proposed scheme, why on earth can it not be referred to the tribunal and what difficulty will it cause? I hope the Minister will take this away and consider it. Clause 114 states: The terms on which a licensing body proposes to grant a licence may, with the consent of the licensing body, be referred to the Copyright Tribunal". Why on earth does the licence have to come into effect before appeal can be made to the tribunal without the consent of the proposed licensing body? I hope that the Minister will take away this amendment and consider it.

Lord Cullen of Ashbourne

I support what the noble Lord has just said. I feel that my noble friend should look again at this matter because it seems to me perfectly clear that it would be good to have this amendment in the Bill.

Lord Beaverbrook

I shall look carefully at what all Members of the Committee have said on this matter as I do on any other matter. The tribunal would come into the picture only when a willing buyer and a willing seller have found difficulty in negotiating financial terms for the transaction. Therefore it seems to me that if one side were to go to the tribunal it may well be that the other side (namely, the willing buyer or the seller) would no longer wish to enter into the transaction should the terms not be agreeable to them.

Lord Williams of Elvel

Does this not unduly restrict the scope of the tribunal? Clause 107(1) states: an organsiation claiming to be representative of persons claiming that they require licences". They need licences for all sorts of reasons. If there is not a willing seller of the licence on the other side, then they should properly have the right to go to the tribunal and ask for arbitration on that matter. If the tribunal is to be restricted to a willing buyer and a willing seller, it seems to me it is a much less powerful body than we thought it was.

Lord Beaverbrook

As I understand it, the idea of the tribunal is not to make it compulsory for copyright owners to become members of a licensing scheme in any way at all. If they wish to enter into a scheme as the willing seller, this comes into effect. It is not the idea to make it compulsory.

Lord Morton of Shuna

The difficulty is that there is some body proposing a licensing scheme, which presumably is a group of people who are owners of copyright. It is the users who will want to have the terms agreed by the tribunal. Owners of copyright are proposing a scheme. Why have they a veto on the proposed user (the consumer) going to the tribunal to fix the rate or fix anything else? But as it would be a help to get on with the Bill, I ask leave to withdraw the amendment at this stage in the hope that some rational consideration will be given to it.

Amendment, by leave, withdrawn.

[Amendment No. 238F not moved.]

On Question, Whether Clause 107 shall stand part of the Bill?

Lord Williams of Elvel

I wonder whether the noble Lord can help me with a very small point which I do not seem to be able to resolve from reading the Bill. What is the status of the order made by the tribunal under Clause 107(3)? The tribunal is entitled to make an order. Is it an order to be laid before Parliament by a department? What is the status? I understand it is possible to appeal to the Secretary of State, but how can it be annulled by Parliament?

Lord Beaverbrook

I understand that the order is an order made under the terms of this Bill. If it were made wrongly in the eyes of those involved it would be for them to make application to the courts to have the matter considered. I do not think that there is any provision for Parliament to look at these individual orders.

Lord Williams of Elvel

I am glad that the noble Lord confirms my interpretation of the Bill in that this order is not something which will come before Parliament. Presumably he is referring to the possibility of a complainant against the tribunal going for a judicial review of this order. Is that what the noble Lord means?

Lord Beaverbrook

Yes. The answer on the status of the order I believe can be found by referring to Clause 112. It is not a parliamentary matter but is similar to a court judgment.

Clause 107 agreed to.

Clause 108 [Reference of licensing scheme to tribunal]:

Lord Morton of Shuna moved Amendment No. 238G: Page 43, line 10, leave out ("claiming to be").

The noble Lord said: I intended to speak to Amendment No. 239A as well but in Clause 109 there is the same phrase; namely "claiming to be". At this stage of the proceedings why is it necessary to define the organisation loosely as, an organisation claiming to be representative of such persons"? Surely it either is or is not. These are unnecessary words in each clause and require deletion. I beg to move.

Lord Denning

I should have thought that this amendment was unnecessary. It is quite clear that a society cannot necessarily be representative of such persons but only claim to be representative. I should have thought that the clause is all right as it stands.

Lord Beaverbrook

Perhaps I may refer the noble Lord, Lord Morton, to Clause 137(3)(a). That provision requires rules to be made prohibiting the copyright tribunal from entertaining a reference under Clauses 107 to 109 which is made by an organisation claiming to be representative of interested persons unless the tribunal is satisfied that it is indeed reasonably representative. Thus the result desired by the noble Lord is already achieved. This wording already exists in the 1956 Act where it causes no problems. In this instance I see no reason to change it. Representativeness is a relative and not an absolute concept. It would seem to be right to leave the tribunal as the judge of it.

Lord Morton of Shuna

I quite agree and I am not disagreeing with that argument. It is a matter of the English language. It seems to me to be unnecessary to have an organisation "claiming to be" representative when, before the organisation can be heard by reference to Clause 137, the tribunal has to be satisfied that it is representative. Those seem to me to be unnecessary words but I shall not press the point. I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 239 had been withdrawn from the Marshalled List.]

Clause 108 agreed to.

Clause 109 [Further reference of scheme to tribunal]:

[Amendment No. 239A not moved.]

Lord Cullen of Ashbourne moved Amendment No. 239B: Page 45, line 38, at end insert ("except that special leave shall not be required in respect of issues which were not argued before the Tribunal on the previous reference.").

The noble Lord said: This clause sets out the circumstances in which a licensing scheme that has already been considered by the tribunal can be the subject of a further reference either by the person who made the original reference or perhaps by a different person entirely. If the person who made the first reference wants to come back for a second bite, it is no doubt entirely reasonable that, as the subsection provides, he cannot come back within 12 months of the previous order without first convincing the tribunal that he has a good reason for doing so.

However, if the person who wants to make the second reference is a different person and if the issues he wishes to raise are ones which were not raised at the time of the first reference, why should he not have an automatic right to do so? The amendment is intended to give him that right. I beg to move.

Lord Denning

It is quite reasonable to have this amendment in the Bill. In the ordinary courts we know that once an issue has been raised and decided it is what we call res judicata and is not to be reopened. If it is a different issue raised by a different party why should it not be reconsidered even within the 12 months if necessary?

6 p.m.

Lord Beaverbrook

Perhaps I could clarify whether the noble Lord, in moving Amendment No. 239B, is also speaking to Amendment No. 239D, as they are grouped on my list.

Lord Cullen of Ashbourne

No, I was not.

Lord Beaverbrook

In that case, I will take Amendment No. 239B separately. This amendment is intended to ensure that where a scheme is already subject to a tribunal order, the rules preventing a further reference until a set period has elapsed shall not operate in respect of new issues which the parties may want to argue. We have not had time to consider fully the implications of this, but it would seem readily open to abuse. There is already power for the tribunal to give special leave for an earlier reference, and that should be sufficient. For that reason, I oppose this amendment.

Lord Cullen of Ashbourne

I am not quite sure that I have taken on board exactly what the noble Lord said but I shall read it in Hansard. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 109 agreed to.

Clause 110 [Application for grant of licence in connection with licensing scheme]:

Lord Morton of Shuna moved Amendment No. 239C: Page 46, line 23, leave out from ("exception") to end of line 26.

The noble Lord said: The amendment proposes to leave out subsection (3)(b). The reason for this amendment is that it is very difficult to understand what the subsection is aiming at. In Clause 110(2) we have a definition which reads: A person who claims, in a case excepted from a licensing scheme, that the operator of the scheme", either has refused to give him a licence or proposes charges which are unreasonable. He can then apply to the Copyright Tribunal.

Subsection (3) states: A case shall be regarded as excepted from a licensing scheme for the purposes of subsection (2) if … (b) the case is sufficiently similar to those in which licenses are granted under the scheme for it to be reasonable that it should be dealt with in the same way". It does not seem to read right and perhaps there is a negative missed out. What is intended to he covered is far from clear. I cannot expand on that. To me it does not appear to make sense. For that reason, I beg to move.

Lord Denning

I agree that it does not make sense and is not correct grammar.

Lord Beaverbrook

Perhaps it will help the Committee if I run through the subsections and what they are intended to do. Subsection (1) provides that a person who claims in a case covered by a licensing scheme that the operator of the scheme has refused to grant him a licence in accordance with the scheme or has failed to do so within a reasonable time after being asked may then apply to the Copyright Tribunal. Subsection (2) makes similar provision with respect to cases excepted from a licensing scheme and subsection (3) sets out what cases are to be regarded as excepted from a licensing scheme.

As a hypothetical example, subsections (2) and (3) might deal with a case where a licensing scheme for playing music or records in public covered a range of venues such as village halls, church halls and halls let by hotels or public houses but, for some reason, did not cover tithe barns. A society of some kind wanting to put on a social event in a tithe barn might find itself refused a license because tithe barns were not covered and the licensing body was unwilling to make an exception. An application could then be made that tithe barns were sufficiently similar to village halls to warrant being granted a licence.

Lord Morton of Shuna

That may be the purpose, but is it what the subsection says? It states: A case shall he regarded as excepted from a licensing scheme … if … the case is sufficiently similar". For example, one does not get the refusal of the licence: there is no definition that the licence has been refused. I entirely agree with the noble and learned Lord, Lord Denning, that it does not make sense. I hope the Minister will take away the subsection and think about it.

Lord Beaverbrook

I think we should look at this more carefully as the noble Lord may well have a point. We will check to see that what the clause actually says coincides with what I have described.

Lord Morton of Shuna

In that case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Cullen of Ashbourne moved Amendment No. 239D: Page 46, line 32, at end insert— ("( ) Following a reference falling within subsection (2) the Tribunal may also specify in its order such reasonable extensions to the licensing scheme as it thinks fit for the benefit of persons having similar needs to those put before it by the applicant.").

The noble Lord said: This amendment relates to the jurisdiction of the tribunal set out under subsection (2). I am not sure that I understand it. It looks as though somebody who the operators of the scheme have previously decided should fall outside the scope of their licensing scheme can apply to the tribunal and get the rules changed to his advantage. If so, and if he is able to persuade the tribunal of his case, the order made by the tribunal will say, "We must grant a licence to Mr. X, the applicant, though he would not normally qualify under your rules". In other words, the tribunal is extending the scope of the scheme purely for Mr. X's personal benefit. Why, if the tribunal feels that an extension of the scope of the scheme is justifiable and desirable, should it not be able to make an order extending the scheme generally for the benefit of all other persons in a similar position to Mr. X? The amendment is intended to have that effect. I beg to move.

The Earl of Stockton

The amendment proposed by my noble friend Lord Cullen of Ashbourne goes a long way to being interference in the contractual relationship. It is tantamount to compulsory licensing. Is it up to the tribunal to "think fit"? Surely it is for the parties to the voluntary agreement to "think fit". Does the tribunal need the very wide powers to define the similar needs of the persons who enjoy the extensions mentioned? These matters should be decided in the agreement to the licence and not in the Bill.

Lord Beaverbrook

Amendment No. 239D to Clause 110 provides that where the tribunal has made an order that a person who has been refused a licence in a case excepted from a licensing scheme, or offered one on unreasonable terms, shall be entitled to a licence on terms it shall lay down, the tribunal may extend the benefit of its order to others with similar needs. I am rather doubtful that this will prove acceptable, but we are prepared to have a look at the point if the noble Lord is willing to withdraw the amendment.

Lord Cullen of Ashbourne

I am very grateful to my noble friend and I willingly withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 110 agreed to.

Clause 111 [Application for review of order as to entitlement to licence]:

Lord Morton of Shuna moved Amendment No. 239E. Page 46, line 42, leave out ("except with the special leave of the Tribunal") and insert ("unless the applicant satisfies the Tribunal that there has been a material change of circumstance,").

The noble Lord said: This is in connection with a provision in the Bill which, at the moment, provides: Such an application shall not, except with the special leave of the Tribunal, he made—

  1. (a) within twelve months from the date of the previous order, or
  2. (b) if the order was made so as to be in force for 15 months or less, until the last three months before the expiry of the order".

There is no definition of the conditions on which special leave would he granted and, in putting forward this amendment, we suggest that it should be something fairly definite. We suggest adding the words: unless the applicant satisfies the Tribunal that there has been a material change of circumstance". I should also be speaking to Amendment No. 239S, which is the same provision for Clause 1 16. I beg to move.

Lord Denning

I support this amendment. There are many similar provisions as to time in regard to tribunals and the like. It seems to me that it helps the tribunal itself if it realises that the applicant must satisfy it that there has been a material change of circumstance. It is more definite for the tribunal to act upon.

Lord Campbell of Alloway

I support the amendment. "Special leave" is virtually meaningless but "material change of circumstance'' is well understood.

Lord Beaverbrook

When the Copyright Tribunal has made an order regarding a scheme or licence Clauses 111 and 1 16 provide that a further reference or application may not normally be made with respect to it within 12 months. If the order is for 15 months or less a further reference may not be made until the last three months before its expiry.

The amendment would limit the type of case in which the tribunal may permit an early further reference or application to cases in which there has been a material change in circumstances. We do not think that that would be right. There may be other cases in which an early return to the tribunal might be appropriate, such as where it turned out that it had been misled inadvertently, or deliberately, about the facts. It would not be right to fetter the discretion of the tribunal in the way proposed in the amendment. The Bill as drafted does not give the tribunal carte blanche in the matter. The tribunal is subject to general principles of law and if it permitted an early further reference, or application, for improper reasons, it could be subject to an application to the courts.

Lord Campbell of Alloway

The very instances that the Minister gives are those which would constitute a material change if the tribunal had been misled or erred. With the greatest respect, the argument is not understood.

Lord Morton of Shuna

I am much obliged to the noble Lord, Lord Campbell of Alloway, for putting so strongly and clearly the points that I would have endeavoured to make. The difficulty about the special leave is that over the years one will have to develop a case law as to what the tribunal may consider to be the grounds for granting such leave. The ease about a material change in circumstance is that we have it all over the law. We know exactly what a material change in circumstance may be. It is quite easy to fit or to say quite clearly that an application would not fit. Again, I hope that the noble Lord will take this matter away and consider it.

Lord Beaverbrook

I would say to the noble Lord that I think we are both heading in the same direction. It is simply a matter of trying to establish a means of getting there. In that respect I am always ready to look at what he has put forward.

The discovery of an existing error of fact is not always a change in the circumstances; it is merely recognition of existing circumstances. However, I will of course look at what has been said—but without commitment—to make sure that we are still happy with the wording. We believe that we have achieved this in a better way than the noble Lord has put forward.

Lord Morton of Shuna

In asking leave to withdraw the amendment, I hope it will not be taken that I agree with what has just fallen from the lips of the Minister about change in circumstance. I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

Clause 111 agreed to.

Clause 112 [Effect of order of tribunal as to licensing scheme]:

Lord Cullen of Ashbourne moved Amendment No. 239F: Page 47. line 25, after ("section") insert (" 107,").

The noble Lord said: In moving Amendment No.239F I would also like to speak to Amendments Nos. 239G and 239T. Subsection (3) of Clause 112 very reasonably gives the tribunal power, when it decides to order a reduction in the fees payable for a licence, to backdate the effect of that order to the date on which the reference was made to the tribunal.

However, for reasons which are not clear, this power to backdate at present applies only to the very limited categories of schemes which can be certified under Clause 131. Amendments Nos. 239F and 239G have two effects; firstly, to delete the reference to Clause 131 so that the power to backdate applies in all cases, and, secondly, to ensure that the power also applies to references made under Clause 107 which is in line with the arguments put forward previously for extending the scope of that clause.

Amendment No. 239T proposes a corresponding change to Clause 117. 1 beg to move.

Lord Beaverbrook

May I confirm that my noble friend is in fact speaking to Amendments Nos. 239F, 239G and 239T? On the groupings list we had Amendment No. 239H rather than 239T. However, I shall also speak to Amendments No. 239F, 239G and 239T.

Amendments Nos. 239F and 239G seem to us to be somewhat misdirected along with Amendments Nos. 254ZE and 254ZF which we shall come to later. These amendments are all connected to an attempt to change the certification procedure under Clause 131 to make it apply only where a licensing scheme has already been the subject of a tribunal order. The whole point of the certification procedure under Clause 131 is to provide a means of certifying that a licensing scheme exists, thereby ending any entitlement to free copying under Clauses 35, 66 or 130. The essence of the arrangement is that any reference to the tribunal comes later. For that reason we do not find these two amendments acceptable.

I turn to Amendment No. 239T. This amendment to Clause 117 would backdate tribunal orders under Clauses 114 and 115 so far as they reduced fees to the date of the reference. This would not be acceptable. It follows the pattern of Clause 112(3). That is limited to schemes certified under Clause 131 and is a means of preventing devices to avoid the purposes of the certification system.

Lord Cullen of Ashbourne

I shall study the reply of my noble friend. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn

[Amendment No. 239G not moved.]

6.15 p.m.

Lord Cullen of Ashbourne moved Amendment No. 239H: Page 47, line 42, at end insert— ("(6) Nothing in this section shall prevent the operator of a scheme which has been confirmed or varied proposing changes in the fees payable for licences under that scheme and giving effect to those changes by agreement; but the proposed changes may be referred to the Tribunal in accordance with section 109 and in respect of such reference subsection (2) of that section shall not apply.")

The noble Lord said: With this amendment I should like to speak to Amendment No. 239U. These are essentially probing amendments to check whether the existence of an order of the tribunal is intended to restrict the power of the licensing body to make reasonable increases in its fees by agreement with the licence holders—for example, in line with inflation—or whether it has, in each case, to go back to the tribunal and seek approval for each increase. I beg to move.

Lord Beaverbrook

I shall also speak to Amendments Nos. 239H and 239U. Amendment No.239H to Clause 112 would provide that where schemes have been confirmed, or varied, operators who want to change the fees payable, or licensees, may refer the scheme to the tribunal without having to await expiry of the time-barred period.

We believe that changes in fees structure, as much as anything else, should be subject to the time limits in Clause 109 (2). If special circumstances arise, a user can always apply to the tribunal for special leave to make an earlier reference or application. We therefore also find this amendment to be something we would wish to resist.

With regard to Amendment No. 239U to Clause 117. this would allow a licensee to refer a scheme, which is subject to a tribunal order, back to the tribunal without observing the time delays in Clause 116 where the licensing body has proposed changes in the fees payable. It is not clear why only the licensee should be privileged in this way. Amendment No. 239H to Clause 112 does not limit further references to references by the licensee. We think it would be wrong to do so in Clause 117.

Lord Cullen of Ashbourne

The reply from the Minister needs much further thought on my part. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 112 agreed to.

Clause 113 [Scope of general control of licences granted by licensing bodies]:

Viscount Simon moved Amendment No. 239J: Page 48. line 5, leave out ("more than one author") and insert ("one or more authors").

The noble Viscount said: In the very much regretted absence of my noble friend Lord Lloyd of Kilgerran, I rise to move Amendment No. 239J. I should also like, with the permission of the Committee, to speak to Amendments Nos. 239K, 239N, 239Q and 239R.

Amendment No. 239J to Clause 113 restores the position under the 1956 Copyright Act so that the licence in question does not have to cover the works of more than one author. The really important amendment in this grouping is Amendment No. 239K. That is a new clause to follow Clause 113. These amendments relate to broadcasting. My noble friend has been advised on these matters by the ITV and BBC. The Bill contains no counterpart to Section 27(3) of the Copyright Act 1956 which permits applications to be made to the Copyright Tribunal where a licensing body unreasonably refuses or fails to grant a licence in a case not covered by a licence scheme. Section 27(3) of the Copyright Act provides: Any person who claims that he requires a licence in a case not covered by a licence scheme, and either—

  1. (a) that a licensing body have refused or failed to grant the licence, or to procure the grant thereof, and that in the circumstances it is unreasonable that the licence should not be granted, or
  2. (b) that any charges, terms or conditions subject to which a licensing body propose that the licence should be granted are unreasonable,
may apply to the tribunal under this section.

The Bill appears only to deal with cases covered by licensing schemes. Licensing bodies could escape the jurisdiction of the tribunal by not creating licensing schemes in selected areas of activity. The BBC's dealings with the licensing bodies representing owners of copyright in music and sound recordings are not usually conducted within the framework of a licensing scheme, but are freely negotiated against the background of the existence of Section 27(3), which I have quoted. That is available should negotiations break down.

In the opinion of my noble friend and myself, that position should be preserved. It is preserved by the proposed wording of Amendment No. 239K. All the other amendments in the group are consequential. I beg to move.

Lord Beaverbrook

The main effect of Amendments Nos. 239J and 239K is to widen substantially the scope of the general control of licences granted by licensing bodies provided in Clauses 114 to 117. They would do this by making it possible for licences granted by licensing bodies, and refusals by such bodies to grant licences, to be referred to the tribunal not only when the licences concerned covered the works of more than one author, as in the Bill, but also when they covered the works of a single author. Amendments Nos. 239N, 239Q and 239R are consequential.

This is not an acceptable proposition. The amendments come very near to subjecting all copyright ownership to a compulsory licensing. That is certainly not something we want to see, and it would incontrovertably be in breach of our obligations under the Berne Convention. Admittedly there would still be the requirement that the tribunal must first find a refusal to grant a licence unreasonable, but that is not a very strong safeguard.

The compulsory licensing provisions in the Bill are restricted to carefully defined situations; namely, where there is a monopoly and the copyright owner is willing to see his work exploited. and that is the way they should remain. The only exception to that is in the educational provisions in Clauses 126 to 130, which we shall discuss when we come to them.

Viscount Simon

I know that my noble friend did not intend to press the amendment and I am sure that he will read with interest what the Minister has said. He reserves his position to raise the matter again if necessary. I beg leave to withdraw the amendment.

Amendment. by leave, withdrawn.

Clause 113 agreed to.

[Amendment No. 239K not moved.]

Clause 114 [Reference to tribunal of terms of proposed licence]:

[Amendment 239L not moved.]

Clauses 114 and 115 agreed to.

Lord Cullen of Ashbourne moved Amendment No. 239M: After Clause 115, insert the following new clause:

("Refusal of licence.

.—(1) A person whose application to a licensing body for a licence is refused may refer his application to the Tribunal.

(2) The Tribunal shall consider the application and, if it considers that in the circumstances it is unreasonable that a licence should not be granted, it shall make an order declaring that in respect of the matters specified in the order the applicant is entitled to a licence on such terms and conditions and subject to the payment of such charges (if any) as the Tribunal may determine to be reasonable in the circumstances.

(3) The order may be made so as to be in force indefinitely or for such period as the Tribunal may determine.").

The noble Lord said: Clause 114 gives the applicant who is offered a licence an opportunity to object to the tribunal about its terms before accepting it. Clause 115 gives him a further opportunity to complain about its terms at a later date. Curiously, at present there is no provision whereby the person whose application for a licence meets with an outright refusal can complain to the tribunal. The proposed new clause attempts to rectify that. I beg to move.

Lord Beaverbrook

Amendment No. 239M which introduces a new clause to follow Clause 115 is a provision entitling anyone refused a licence by a licensing body to refer the application to the tribunal, which if it considers the refusal unreasonable, must make an order entitling the applicant to a licence. The aim seems to be to introduce parallel provision for refusals of licences in general to the special provisions in Clause 110 covering refusals to grant licences in cases covered by licensing schemes, and schemes excepted from licensing schemes as therein defined. This is, we think, misconceived, and would probably amount to a general compulsory licensing provision in contravention of the Berne Convention. For that reason, we do not feel able to accept the amendment.

Lord Cullen of Ashbourne

In that case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 116 [Further reference of terms of licence]:

[Amendments Nos. 239N, 239P, 239Q, 239R and 239S not moved.]

Clause 116 agreed to.

Clause 117 [Effect of order of tribunal as to terms of licence]:

[Amendments Nos. 239T and 239U not moved.]

Clause 117 agreed to.

Lord Morton of Shuna moved Amendment No. 240: After Clause 117. insert the following new clause:

("Variation of terms of licence.

On a reference or application under this Chapter relating to a licence or a licensing scheme the Copyright Tribunal may only vary the terms of the licence or licensing scheme if the Tribunal considers that there is such a difference between the terms of the licence or licensing scheme as proposed or operated by the licensing body and the terms which the Tribunal would regard as reasonable as to amount to an abuse by the licensing body of its monopoly position.").

The noble Lord said: This is an amendment to put into the Bill a specific reference to the regard that licensing tribunals should have to a monopoly position. That is not covered by the 1956 Act, but it would appear to be appropriate. The history of this aspect of the matter is that in 1948 the Government made a specific reservation under Article 11 of the Berne Convention. They stated: The United Kingdom delegation accepts the provision of Article 11 of the Convention on the understanding that Her Majesty's Government remain free to enact such legislation as they may consider necessary in the public interest to prevent or deal with any abuse of the monopoly rights conferred upon owners of copyright by the laws of the United Kingdom". That was said to be partly the purpose of the 1956 Act, but there is no reference to monopoly in the provisions of the 1956 Act or this Bill. I am informed that the tribunal does not prevent a collecting society acting in an arbitrary way. There should be some specific jurisdiction so that the tribunal could be stated expressly to be limited to the purpose of preventing abuse of monopoly. The purpose of the amendment is to state what I understand has been the intended position of governments of the country over the years. This is necessary especially when the licensing schemes may be owned by people whose interests conflict with those of some of the authors with whom they are dealing. There is a possible difficulty that the tribunal should be called on specifically to deal with if necessary. I beg to move.

6.30 p.m.

Lord Denning

I support the amendment. Under the Treaty of Rome, and in Europe now, we know that any abuse of a dominant position can be struck down and people made liable in regard to it. The licensing body should surely not have a monopoly position to such an extent that if it abuses the position, it can get away with it. I support the power of the tribunal to look into it, as the amendment proposes.

Lord Willis

I strongly support the amendment. Some controversies and a great many differences have been presented to the tribunal. To give one example, 60 per cent. of the turnover of music publishing companies are controlled by record companies. They are the major users of copyright. Warner Brothers is negotiating at present to buy Chappell. If it does—and the bid is currently being reviewed by the Monopolies and Mergers Commission—the figure will rise to 80 per cent. Thus one has a conflict where the operator of the licensing scheme, which theoretically should be under the control of the copyright owners, is in practice controlled by the users. That has thrown up a number of problems in the past. The amendment would prevent such copyright users from unduly influencing the operation. It takes no rights away from them but gives to what one might loosely call the minority certain rights and possibilities of appeal that I think are important. The Government have set their face firmly against monopoly in the past. I therefore hope that they will give the amendment serious consideration.

Lord Beaverbrook

It is true that in general terms the system of tribunal control over collective licensing is primarily designed to prevent abuse of monopoly power, but it does not follow from this that the tribunal should be able to vary terms only when clear abuse of a monoploy position enjoyed by licensee is established. This would greatly complicate the tribunal's deliberations. I should say to the noble and learned Lord, Lord Denning and the noble Lord, Lord Willis, that monopoly is a matter for competition legislation which is already administered by the office of Fair Trading and the Monopolies and Mergers Commission.

A large part of tribunal hearings would be taken up by users trying to prove that a monopoly position had been abused and by licensing bodies striving to refute the charge. The overall criterion of determining what is reasonable in the circumstances, buttressed as it is by the obligation to have regard to all relevant considerations and by special criteria that apply to particular types of cases, is surely quite enough. It is a simple and flexible criterion that allows the tribunal to take a balanced and sensible view of all circumstances pertaining to the case. From time to time there are bound to be instances where some variation of the terms of a scheme or licence is justified even though there is no obvious monopoly abuse. The amendment would prevent that.

Lord Williams of Elvel

The noble Lord in his reply referred to competition policy quite rightly because that is what the amendment is about. Would it not help if some reference were made in the Bill to the possibility of the Office of Fair Trading either at the instigation of the Copyright Tribunal or in its own right being allowed to intervene, and if necessary refer matters to the Monopolies and Mergers Commission where there was monopoly abuse? If we do not have that, I am afraid that the noble and learned Lord, Lord Denning, may well he right that the competition directorate of the Commission in Brussels will take its own action.

Lord Beaverbrook

I am not sure that reference to the Office of Fair Trading in the Bill and references to monopoly legislation would necessarily be helpful. However, I shall look at what the noble Lord said and see whether we can improve matters in any way.

Lord Willis

The noble Lord in an earlier debate said that the amendment was unnecessary because reference could be made to the Monoplies and Mergers Commission. Has he not just denied that and said that it is useless?

Lord Beaverbrook

I do not quite understand what the noble Lord is getting at. Perhaps he can clarify the point.

Lord Willis

I shall clarify it when I read Hansard. I had the feeling that the noble Lord was contradicting himself.

Lord Beaverbrook

I do not think so. I was just trying to be helpful to the Committee. I was not contradicting myself when I said that we would look at it.

Lord Williams of Elvel

I am sorry to come back to the noble Lord on the question, but there is a problem of monopoly. When we are dealing with monopolies, competition policy starts to intervene. Competition policy in this country is dominated by the Fair Trading Act 1973, and competition policy comes under Articles 85 and 86 of the Treaty of Rome. Those two articles, as the noble Lord well knows, stand on their own: they are super-national so the Commission has the right to intervene wherever it feels that one of the articles is being breached.

The amendment seeks to establish that there should be some arrangement if the tribunal feels that there is an abuse of monopoly. If the tribunal does not feel this or has no recourse to any other body in competition legislation. the whole position will be attacked—probably rightly—by the Commission. The amendment seeks to say that the tribunal has to look at the question and to chime in with competition policy, both domestic and European.

Lord Beaverbrook

The amendment would go further than that. The proposed new clause would provide that the tribunal can vary the terms of a licence or licensing scheme only where the difference between the terms offered and the terms that the tribunal would consider reasonable can be attributed to abuse of a monopoly position.

Lord Williams of Elvel

I suspect that it would be obliged to by intervention from the Commission; and, indeed, possibly by the Office of Fair Trading.

Lord Morton of Shuna

I think it would be appropriate for us to consider what has been said. In the circumstances. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 118 [Licensing schemes: general considerations]:

Lord Cullen of Ashbourne moved Amendment No. 240A: Page 49. line 27, after ("scheme") insert ("or a licence").

The noble Lord said: The principles set out in Clause 118 apply only when the reference relates to a licensing scheme, that is, to the tribunal's jurisdiction under Clauses 106 to 112. Why should they not apply equally when the reference is in respect of a licence under Clauses 113 to 117? I beg to move.

Lord Beaverbrook

The amendment would extend the criteria that the tribunal must apply in relation to licensing schemes to references or applications in regard to licences. I am rather doubful that this would be appropriate, but we shall have a look at the point.

Lord Cullen of Ashbourne

I am grateful to my noble friend. I beg leave to withdraw the amendment.

Lord Williams of Elvel

Before the Committee gives leave to withdraw the amendment, when the Minister says that he will look at the point, can he tell us in what light, in what respect and with what intention he will consider it?

Lord Beaverbrook

With the greatest respect, many of these amendments were put down fairly recently in the name of my noble friend Lord Cullen. We have not had enough time to consider precisely all the amendments, that he has tabled. We should like to consider this further because we feel that there may be a point here, but I have to say that we shall be looking at it without commitment.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 241: Page 49. line 28, after ("shall") insert ("take account of circumstances applicable to that reference or application otherwise than in the United Kingdom and").

The noble Lord said: It may be for the convenience of the Committee if I were also to speak to Amendments Nos. 242 and 243. The purpose of these amendments is to allow the tribunal to consider the position of other licensees both in the United Kingdom and elsewhere in the Community. The tribunal should be entitled to consider all factors relevant to rates and conditions. This would include the fact that under some schemes—as a result of the type of conflict of interest to which my noble friend Lord Willis referred as to ownership of music publishing—the licences may not be offered on arm's length terms or at normal market rates. That might occur when a large publishing company offered free or reduced licensing to a film company by which it was owned, for example. These three amendments are designed to allow such a circumstance to be clearly covered by Clause 118. I beg to move.

Lord Beaverbrook

I am happy to consider all the amendments, Nos. 241, 242 and 243. As to Amendments Nos. 241 and 243, Clause 124 puts the Copyright Tribunal under a general obligation to have regard to all relevant considerations. In our view this will require it to have regard to evidence of what occurs in similar circumstances in other countries if such evidence is pleaded during the course of a reference. Indeed the tribunal has done precisely that in at least one past reference, though its conclusion on that occasion was that the particular evidence offered did not allow valid comparisons to be made.

Similarly it seems to us that the tribunal will have to take account of the circumstances under which comparable licences have been negotiated between persons other than the parties to a reference, if these circumstances are relevant to the case it is considering. Again there are instances where it has done so in the past. Nonetheless, we shall consider these points again and if it appears that they need to be mentioned expressly we shall bring forward appropriate amendments not limited to Clause 118 but generally in the context of Clause 124.

I am also happy to consider Amendment No. 242. There is undoubted inconsistency in Chapter VII. For example, Clauses 105, 110 and 112 speak of "charges, terms and conditions"— although they must all be taken to include "charges". Clause 117 speaks of "charges and other terms". We have some housekeeping to do here and perhaps the noble Lord will leave it with me so that I can come back at a later stage.

Lord Morton of Shuna

I am happy to do that and grateful for the Minister's friendly response to these amendments. Perhaps he will permit me to say in relation to Clause 124 that there is a certain tendency to isolationism sometimes in the courts of this country. Unless it is spelt out clearly that one can look abroad, the courts tend not to want to do that. Therefore there is something to be said for spelling out a power to go abroad for comparisons. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 242 not moved.]

6.45 p.m.

Lord Mullen moved Amendment No. 242A: Page 49, line 32, leave out ("secure") and insert ("ensure").

The noble Lord said: I understand that it would be convenient to discuss with this amendment Amendments Nos. 242B, 243A and 257A. In moving this amendment and some subsequent amendments on behalf of the Association of Independent Radio Contractors, I should perhaps declare a small personal interest in that I am a director of one of the independent local radio stations. While we recognise that the Bill and Clause 118 in particular go a little way to improving circumstances, we do not believe that it is generally known how far prejudice and discrimination have been shown against independent radio stations compared, for example, with the BBC. Even the BBC is paying enormous amounts more than comparable stations in Europe, in Australia or in the United States.

For example, it needs to be said that there was initially a great difficulty in getting permission for the independent stations to go on the air either with live or recorded music. To get started they had to agree what I believe were onerous terms. There is great disappointment among the stations not least because many of them are feeling the strong competition for advertising on which they must depend with the development of cable and other ways in which advertisers can spend their money. Very few such stations are in a healthy financial position and a number have already failed.

It is a great disappointment that the Bill goes very little of the way towards carrying out the Government's own policy as set out in the Green Paper published earlier this year called The Choice and Opportunities for Radio. The facts are that independent local radio on average is paying the Performing Rights Society about 6 per cent. on net advertising revenue, the PPL (Phonographic Performance Limited) a further 6 per cent. and 3 per cent. on the employment of live musicians. That is a total of 15 per cent. I should make it absolutely clear that the stations are willing to pay what they deem are reasonable fees both for copyright and for the employment of musicians. But they think that 15 per cent. is excessive when a comparable operation in the United States would cost between 3 per cent. and 4 per cent. In Australia the figure is a little over 2 per cent. in total. That is the purpose of the first amendment.

We take exception to the idea that there could be reasonable discrimination, because the 19 independent stations covering 65 per cent. of the population are paying about £1.7 million for 63 hours of needle time a week, whereas the BBC pays less than £1.2 million for the right to broadcast 127 hours of needle time a week—a difference in magnitude of about three times more. As the Green Paper said, it is impossible to envisage—whether it is a good idea is another matter—a commercial national network, for unless it were able to have sufficient needle time it would be unable to compete effectively with the BBC. The new clause, which is one of the amendments we are discussing, is directed to taking away from the PPL the power to determine the amount of needle time that stations can have.

Paragraph 2.14 of the Green Paper says specifically: The Whitford Committee on copyright and design law noted in 1977 that the United Kingdom has no international obligations as regards needle time".

I believe that we are the only nation that imposes on our radio stations—the national network and the privately operated network— a needle time ration. The Green Paper goes on to say: More needle time need not result in less live music broadcasts particularly if new radio services are allowed to develop. Given these new services there would be more opportunity for the exercise of consumer choice between live broadcasts and recorded music".

Paragraph 2.12 of the Green Paper says categorically: The Government recognise that a collecting society with a monopoly of the most popular repertoire may be able to exploit its position to the disadvantage of potential users". That is why the Performing Rights' Tribunal was set up. In the White Paper Intellectual Property and Innovation published in April last year the Government put forward proposals to enable the tribunal to function more effectively. The experience of independent radio has been that the tribunal does not function properly. There was lengthy litigation before the tribunal in 1979–80 and an appeal to the High Court.

After a lengthy hearing and consideration of the proceedings Mr. Justice Harman said that although the PRT refused the BBC royalty as comparable in fixing a reasonable royalty, in his judgment: this refusal was an error of law on the basis stated". It was the view of one of Her Majesty's judges that this discrimination against independent radio as compared with the BBC was an error of law. Nevertheless the PRT has refused to accept Mr. Justice Harman's decision. After further proceedings before the tribunal it has not materially altered the rates. Only one of the many stations has had a small reduction in its rates and a number of them are paying a higher percentage than previously—a differential of three times that of the BBC.

It is the Government's White Paper that says that some of the independent radio companies are called upon to pay £30 every time they put on a record. That seems an excessive amount. I admit that the language of the amendment is perhaps not legally satisfactory but we want to know the Government's policy on these matters. Will they give effect to the kind of radio environment that the Green Paper hinted at and which we discussed earlier on? We should like something similar to the policy set out in Amendment No. 257A so that the individual companies or the association would have the right to go to the tribunal and ask for it to determine whether the fees they are asked to pay are reasonable. Certainly, in the light of our experience—and this is the point of the first two amendments—we cannot see the basis for reasonable discrimination; we want to have no discrimination at all. I beg to move.

Lord Somers

I should like briefly to say one or two words about the amendment. The Committee should remember that while the composer wishes to retain his rights over his works—and I speak here from a personal point of view—he is nonetheless glad when they are performed because he receives a certain amount from performing rights. Therefore I do not think that broadcasting organisations should be in any way hindered in performing his work if they want to do so.

Lord Willis

I should like strongly to support the amendments of my noble friend Lord Mulley. There seem to be two issues here. The first is the question of needle time which as the Committee will be aware is a restriction on the number of records that can be played over the air. There is absolutely no reason in logic why this should exist. It was introduced on the basis that if the number of records played was restricted more opportunities would be opened up for live musicians to play and therefore musicians would not be put out of work. It has not worked that way. It is the most Luddite of operations. Here we have this great wealth of music but it can be played for only six, seven or eight hours a day. As my noble friend Lord Mulley said, independent radio companies are at a disadvantage in relation to the BBC in terms of the charges that are made.

My second point is that the charges are out of this world. They are exorbitant beyond belief. Indeed, 15 per cent. of the income of a radio company goes on playing music. It has to play the music but why cannot we have a fair assessment? 1 used to have an interest in this matter. I am happy to tell the Committee that I do not have an interest now. But I have always believed that this was a tremendous injustice. It does not exist anywhere else in Europe. Independent radio companies pay something like 15 per cent. In Europe they pay 2. 3 or 4 per cent. I strongly support my noble friend's amendments because I think they would put right a terrible injustice.

Lord Morton of Shuna

As we are supposed to be dealing with Amendments Nos. 242B and 243A I do not propose to make any comment on changing "secure" to "ensure". On Amendment No. 242B, I suggest that it is putting a quite impossible burden on any tribunal or court to try to work out that in no circumstances ever would there be discrimination. With regard to public services such as electricity one tends to see phrases such as, "There shall be no undue discrimination". When making a comparison between a farmer and a small factory there would be different rates of consumption and it would be quite impossible without a qualifying adjective to put a burden on the tribunal of having no discrimination at all.

I can see the difficulty as regards Amendment No. 243A. I should have thought that Amendment No. 242 giving the tribunal power to look at rates and various other things might cover this point. Amendment No. 243A seems to raise issues as to why the owner of the copyright in a sound recording should he put in a position totally different from any other author as defined in Clause 16. It is a fairly radical amendment. Perhaps there is another way around the problem, rather than giving one class of copyright owners a right to have their work performed which is not given in respect of any other class of copyright owner. Perhaps the amendment is looking at the problem in the wrong way.

7 p.m.

Lord Harris of Greenwich

It may be that this is a radical amendment, but on the other hand one has to accept, as was said by the noble Lord, Lord Mulley, that what we are talking about here is not individual acts of discrimination but a situation, an environment, which is damaging to the position of the independent local radio companies. As the noble Lord said, originally there was a belief that if this attitude was adopted there would be more live music on independent radio. That was one of the early reasons why there was a restriction on needle time. The noble Lord. Lord Willis, referred to this.

The fact is that for many years one has had a situation where small and rather weak independent radio companies have been outrageously treated. What we are anxious to find out from the Government is not whether the precise language of this amendment is right but whether they are prepared to acknowledge that there is a serious problem here and to look at it between now and Report stage to see whether they are prepared to move to some degree in the direction of the amendment.

We have to accept that there is widespread public support for local radio. There is certainly substantial support for these relatively small (in many cases) independent radio companies which do a useful job in many communities. What we are asking for on this occasion is that this form of discrimination should no longer be applied against them. We hope that the Government will accept our general analysis of the situation.

Lord Beaverbrook

The amendments of the noble Lord, Lord Mulley, are designed to ameliorate what independent radio in the United Kingdom sees as unfair treatment by the record industry with regard to the broadcasting of commercial records. The complaint of independent radio is twofold. First, it alleges that it is restricted by what are known as needle time limits imposed on radio stations by the record industry; that is to say, contractual limits on the number of hours a day it may broacast records.

Secondly, it complains that the industry, through its collecting society, Phonographic Performance Limited, charges too much for the needle time which is at present permitted. I would say to the noble Lord, Lord Mulley, that I do not want tonight to get into detailed discussions on the evidence put forward by both sides in that dispute. I shall only say that the information on such matters as fees paid abroad, and indeed fees paid by the BBC, put to us by the record industry differs considerably from that put forward by independent radio.

I would say to the noble Lord, Lord Willis, in answer to his point, that I believe there arc some countries where copyright fees are higher than in this country; for example, Germany. The noble Lord referred to radio stations having to pay 15 per cent. of revenue for nine hours a day needle time. I do not intend to pass judgment on these fee levels, but I would point out that for 15 per cent. of their revenue independent radio is getting over 50 per cent. of its programme input.

The dispute between independent radio and the record companies goes hack a long way, and we considered representations from the AI RC on these matters when the Bill was being prepared. I have to say that at that stage we were not convinced that the case for major changes in the law in this area had been made. In the first place the fees for broadcasting records on independent radio have since 1980 been entirely as laid down by the Performing Rights Tribunal following a reference by the AI RC in 1978.

The 12/5/2006 decision was, it is true, appealed to the High Court on points of law and has since been revised. Nonetheless both decisions followed a full consideration of evidence put before the tribunal by both sides. The Government cannot lightly step into an area which is subject to the jurisdiction of what is in effect a court of law.

Secondly as to needle time, we have been assured by Phonographic Performance Limited that it is perfectly willing to grant whatever needle time independent radio requires up to 24 hours a day if necessary provided appropriate payment is made. Further, I would point out that needle time restrictions are also within the tribunal's jurisdiction, and Al RC could apply to the tribunal for a raising of the limits if it was not forthcoming through negotiation.

Further, the Bill as printed contains several provisions that will be helpful to independent radio. First, the fair dealing exception is being extended to cover the broadcasting of sound recordings for purposes of criticism or review; in effect, a measure of free needle time. Secondly, in revising the tribunal rules, as we shall have to do to bring them into line with its new responsibilities, we shall endeavour to ensure that the delays in the legal process which unfortunately occurred during the tribunal hearings between AI RC and PPL cannot happen again in the future.

I must say in this connection that delays of that kind in tribunal proceedings are extremely rare and I am not aware of any current complaint in this respect. Nonetheless independent radio still believes that it is not getting a fair deal and has made representations seeking further changes in the law. Some of these are contained in the amendments moved by the noble Lord, Lord Mulley. These have been countered by equally strong representations from copyright owners that the present arrangements are not unfair and that ILR's demands, if granted in full, would severely damage the music industry.

If the development of radio services envisaged in our Green Paper, Radio: Choices and Opportunities, is to come about, it is important that independent radio has access to the needle time it needs, and at reasonable cost. We are therefore looking carefully at the evidence put to us by independent radio and the measures it has proposed to assess whether further action is needed and, if so, of what it should consist.

But this is a difficult issue and any decision must be fair to both sides. We shall therefore need more time to come to a conclusion. I have to say that this might be before the Bill leaves your Lordships' House, but I am not in a position to give a firm promise on that point. But I hope that on the basis of my assurances the noble Lord will feel willing to withdraw his amendment and the others addressed to this issue.

I should just like to refer to the noble Lord, Lord Morton of Shuna, and his point that the tribunal cannot allow any discrimination. We have considerable doubts about Amendment No. 242B even to meet the concerns of independent radio. It would gravely restrict the tribunal's discretion if it had to avoid any discrimination in terms between licensees. There can be helpful discrimination as well as bad discrimination; for example, the concessions under which new radio stations pay specially low rates of net advertising revenue to the PPL in their early years of existence. Surely it is enough that the tribunal should have to ensure that any discrimination in terms is not unreasonable.

Lord Willis

I should like to thank the noble Lord for that reply. May I ask him to bear in mind two or three points when he says that he is going to take the matter away? The first is his point that the PPL is quite prepared to allow independent radio stations to have 24 hours needle time if they want it. Most independent radio stations cannot afford that. At least a third of them are running at a loss and another half are running at a minimal profit which is not returning anything on the investment of people who put in money years ago. It is not entirely due to needle time costs but it is largely due to that.

Further, would the Government bear in mind that they have put forward a policy of community and minor radio stations? If the present needle time restrictions and payments remain as they are, there is no hope and no future for community radio except through piracy, and I am sure that that is not what the Government want.

Lord Mulley

I also should like to thank the Minister for his reply. However, let me just reply to my noble friend Lord Morton. The reason why one seeks to remove the word "unreasonable" discrimination is by virtue of bitter experience. Over a long period the tribunal declined to allow a comparison to be made with the charges and needle time allocated to independent radio as compared with the BBC.

The Minister may say that he has no evidence, and so forth. I should have thought that his Government who, after all, are responsible and have produced Green Papers and White Papers on this would take steps if they are not satisfied about the figures that AI RC put forward to check them. After all, in their Green Paper the Government said that the PPL was in a position of monopoly and could abuse it. The so-called tribunal, which has to determine what is equitable remuneration and what is reasonable charge, has declined to allow evidence of the most obvious comparison, which pays approximately one-third per hour less for using records than does independent radio, to be brought before it over a period of several years.

I accept that perhaps we have not couched our requirements in the most suitable language. We are not asking not to pay a proper fee or not to retain an obligation to employ a percentage of live musicians. There is no question of that. However, I should like to say to my noble friend Lord Morton that, so far as I am aware, when one buys music manuscripts, for example, one does not have to sign a document undertaking that one will not play them for more than so many hours a week. So far as I know, if one buys a book one does not have to give an undertaking that one will allow only a certain number of people to read it for a certain number of hours a day.

I do not think that what we are asking for is an anomaly. The anomaly is that the owners (not the individual owners, such as composers or orchestras, but the monopoly that they represent) specify the number of hours. That does not happen in any other country. We have the opinion of a committee which was set up to inquire into this subject stating that there is no UK international obligation in the matter.

I hope that this aspect can be dealt with while the matter is before the Committee and I understand the fact that the Government want time to think about it. Two departments are involved; the Department of Trade and Industry is the sponsor of the Bill but the Home Office is responsible for radio. However, it is over 30 years since the last Copyright Bill received Royal Assent so I hope that we can obtain inprovements while the Bill is before us or another place. On the understanding that the Minister will exercise his best endeavours to that end. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos, 242B, 243 and 243A not moved.]

Clause 118 agreed to.

The Earl of Dundee

The Committee may feel that we have reached a suitable moment to break and not to return to further consideration of the Bill until the expiry of 45 minutes at 7.58 p.m. The noble Lord, Lord Morton of Shuna, puts forward a plea for generosity, which I accept, and I think that we should not resume before 8 o'clock. If that is the wish of the Committee, I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.