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Music Licensing Levies

Oral Answers to Questions — Cabinet Office – in the House of Commons at 11:30 am on 10th March 2010.

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Photo of John Howell John Howell Conservative, Henley 11:30 am, 10th March 2010

What representations the Office of the Third Sector has received on the effects on charities and the voluntary sector of new music licensing levies.

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

I have had a number of meetings with third sector representatives to hear their concerns. I have also met representatives from Phonographic Performance Ltd and the Performing Rights Society for Music. These meetings are helping to facilitate negotiations, and subsequent agreement between the two sides, about detailed arrangements for music licensing, prior to implementation.

Photo of John Howell John Howell Conservative, Henley

I thank the Minister for her response but, on the basis of her own figures, the changes to the exemption in music licences for charities and voluntary groups will cost them £20 million a year. Does she not think it hypocritical that Ministers can write in letters to my constituents that they have developed an environment that encourages charities to thrive when they are saddling them with a cost of £20 million a year?

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

No, I do not. The hon. Gentleman has to understand that removing the exemption was not a whim of Government but a legal imperative. I think that we are the last country in Europe to remove it, but the important thing is that we proceed with agreement. Clearly, the Government do not want to put any additional burdens, including costs, on charities. It is very important that charities and the organisations that could be affected discuss the matter, and that is why I am very pleased to be able to facilitate those discussions between the two sides.

Photo of Tom Levitt Tom Levitt Labour, High Peak

Everyone recognises the right of PPL to get the income from its work that the courts say it deserves, but I am sure that it would not wish to be seen to be imposing in any way an undue weight of levy, on the smallest charities in particular. Will the Minister try to make sure that there is a measured response to the outcome of the negotiations, and in particular that the amount of bureaucracy that charities will have to face as a result of this change is kept to an absolute minimum?

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

Yes, of course. In fact, I met PPL and PRS this week after a meeting that I had the previous week with the Association of Charities Shops and the charities concerned, including the National Council for Voluntary Organisations and umbrella groups. We are very clear that we cannot have a system that imposes unreasonable burdens on charities, including administrative burdens. I pressed a joint system on PPL and PRS, and they are looking at it and are keen to facilitate it. Under that system, charities would get demands or letters only from those organisations, and not from others. The aim is to keep costs to a minimum, given the effect that the change could have on charities.

Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Does not the small print of the Government's impact assessment show that no fewer than 250,000 voluntary organisations would suffer from this new music tax? The consultation stated:

"There will be social costs for users who cease playing music because they cannot afford a PPL licence."

We know that Lord Mandelson is all powerful and sweeps all before him, but could not Cabinet Office Ministers have shown a little backbone in resisting this new music tax?

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

That question illustrates the right hon. Gentleman's fundamental misunderstanding. First, the levy is not a tax in any way, because no money at all accrues to the Government, whereas tax is money that goes to the Government. I therefore suggest that he gets his facts clear, as that might help him to understand the issues. Secondly, the Government have to make this change, as it is a legal imperative. We are working with all the organisations and charities involved and are having discussions in an attempt to reach agreement before any decision is taken forward.

Photo of Francis Maude Francis Maude Shadow Minister (Cabinet Office)

Does the Minister accept that it is by no means agreed universally that there is a legal obligation to make this change? We know that it will cost £20 million overall to the sector, and it will also impact on church halls, which are already suffering under the red tape imposed by the Licensing Act 2003. Among all his many other grand appointments, Lord Mandelson is now a Church Commissioner. Does she not find it curious that the person who is meant to be the Minister defending the Church of England is, at the same time, giving it a kick in the collection tins?

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

Witty but inaccurate. The right hon. Gentleman has to understand that the Government are seeking to minimise costs for all organisations, and that is why we are facilitating meetings leading to agreement. We intend to proceed with agreement between the charities and voluntary organisations and PPL. He suggested that the costs would be around £20 million, but I think that that is an overstatement. The organisations concerned- [ Interruption. ] That number was contained in the original consultation, but I think that we have moved on significantly from then, as a result of the negotiations. I shall keep him up to date, as he seems to sadly out of date at present.

Photo of Michael Connarty Michael Connarty Chair, European Scrutiny Committee

My hon. Friend will be aware that many hon. Members across all the Benches have campaigned for many years to ensure that the people who produce the music-the musicians-have the right to be rewarded for their efforts. That is what this is about. This is not a tax, but people deserve to get rewarded for the music that they record. The money happens to come through the PPL, but it is the artist who receives it. Does she agree that it is a matter of balance? It must be possible for the Government to work this out with the charities and the musicians: the charities must not be affected, but the people who make the music in the first place should not be robbed.

Photo of Angela Smith Angela Smith Minister of State (Third Sector), Cabinet Office, Minister of State (Cabinet Office) (Third Sector)

My hon. Friend makes a valid point about balance. We should have a balance and an agreement between the two sides that are affected.