Enterprise and Regulatory Reform Bill — Third Reading

– in the House of Lords at 6:08 pm on 20th March 2013.

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Photo of Baroness Anelay of St Johns Baroness Anelay of St Johns Captain of the Honourable Corps of Gentlemen-at-Arms (HM Household) (Chief Whip, House of Lords), Deputy Chairman of Committees, Deputy Speaker (Lords) 6:08 pm, 20th March 2013

My Lords, it is at this moment on some Bills when I have a duty, as Government Chief Whip, merely to give indication of the Queen's Consent. It is only a procedural matter before we go into the Bill.

I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purpose of the Enterprise and Regulatory Reform Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Clause 1 : The green purposes

Amendment 1

Moved by Viscount Younger of Leckie

1: Clause 1, page 1, line 10, leave out "subsection (1)" and insert "this Part"

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, the amendments in this group make consequential provisions on the clause that the House agreed on royal charters and make some minor and technical improvements. Following the Government's acceptance of the amendment of the noble Lord, Lord Stevenson, earlier this week in relation to royal charters, we have brought forward a clause dealing with the extent of this provision. We have by that amendment limited the extent to England and Wales.

The Government have been clear that they respect the right of the Scottish Government and Northern Ireland Executive to consider how they wish to respond to the recommendations of the Leveson report. Only last week, the noble and learned Lord, Lord McCluskey, presented the report of his expert panel on how Lord Justice Leveson's recommendations could potentially be implemented in Scotland. The body created by the royal charter would be capable of operating throughout the United Kingdom, including Scotland and Northern Ireland, should the devolved Administrations want it to. The Government have been clear that whether it does so is a matter for discussion with the Scottish Government and the Northern Ireland Executive. However, it is important that we observe the boundaries between our respective powers, and it is for this reason that the extent is limited to England and Wales. This is because the measures, were they to have UK-wide extent, would also prevent Scottish Ministers or Northern Ireland Ministers from exercising their royal prerogative to make recommendations to Her Majesty in Council in respect of these devolved matters. It is therefore an issue that should be discussed more fully with the devolved Administrations to allow them the opportunity to comment.

It is important to note that nothing in this clause prevents the charter from operating across the United Kingdom, if that is desired. If the Government are asked by the Scottish Government or Northern Ireland Executive to extend the provisions, we will consider doing so.

As the Prime Minister announced in the House of Commons on Monday, the Secretary of State for Culture, Media and Sport and the Advocate-General for Scotland will shortly have discussions with Scottish Ministers. Such discussions will also be held with Ministers of the Northern Ireland Executive. Those discussions will consider whether the extent of the new clause should be amended to go beyond England and Wales, during consideration of amendments in the other place. The amendments before us also amend the Long Title of the Bill to reflect inclusion of the new clause, and provide that the clause will come into effect on Royal Assent.

Amendments 1 and 2 are minor technical amendments relating to the UK Green Investment Bank which seek to improve the drafting of Part 1 of the Bill. Amendment 1 ensures that references to greenhouse gases throughout Part 1 of the Bill-not just in Clause 1(1), as previously-are given the same definition as in Section 92(1) of the Climate Change Act 2008. Amendment 2 clarifies that the activities referred to in Clause 5(2)(b) have the same meaning as those referred to Clause 5(2)(a).

Moving on to competition, Amendment 14 is a technical amendment to Schedule 4. It has two purposes. First, it will enable us to provide for the appointment to the CMA panel of individuals who have already served eight years on the Competition Commission panel but require temporary appointment to the CMA panel to see out an existing inquiry. Secondly, it will enable us to make clear that other Competition Commission panel members who are appointed to the CMA panel can subsequently be reappointed to the CMA panel to see out an inquiry which began when they were members of the Competition Commission panel. I beg to move.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport)

My Lords, I am grateful to the Minister for introducing these amendments. We are broadly happy with the majority of them. I have just a couple of points concerning the territorial issues he talked about in relation to the royal charter, which may have eluded me. I am sure that he will be able to put me right.

As I understand it, the royal charter will operate across the whole of the United Kingdom but the intention of government Amendment 12 is to restrict the effect of the entrenchment clause-which was passed in this House on Monday-to England and Wales. However, if it is subsequently decided that the measures should be enacted for Scotland and Northern Ireland, what are the Government's intentions? I think the Minister said that he expected that these discussions would be concluded by the time we were in receipt of any comments that the House of Commons might want to make on the Bill. If my arithmetic is correct, that is only three or four weeks away so we are putting rather a tight timetable on it. In the unlikely event that these discussions continue beyond that date, can the Minister speculate on how it would be possible to amend the Bill once it has received Royal Assent, or does he have other plans that would allow us to take that forward?

My second point is a rather narrow one. We are dealing with royal charters and therefore the territories to which they apply. While Her Majesty has been gracious in allowing her prerogatives on this point to be surrendered to Parliament, what happens to other territories, such as the Channel Islands and the Isle of Man, where the royal charter will clearly have effect but the clause of the Bill will not run because it is limited to England and Wales specifically?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills 6:15 pm, 20th March 2013

I thank the noble Lord for those questions. It is anticipated that the discussions that are going on with the Scottish Government will be concluded within three weeks, or whatever the time period is. That is obviously not guaranteed but the talks are regarded as being urgent and are happening immediately. On what would happen if they were not concluded, it is a question of wait and see. I will certainly get back to the noble Lord with a reply. On the noble Lord's second question concerning the extension of the royal charter to the Channel Islands, I will need to get back to him with a response.

Amendment 1 agreed.

Clause 5 : Accounts, reports and payments to directors

Amendment 2

Moved by Viscount Younger of Leckie

2: Clause 5, page 4, line 9, leave out "its" and insert "those"

Amendment 2 agreed.

Clause 71 : Letting agents etc.

Amendments 3 to 6 not moved.

Clause 74 : Abolition of Agricultural Wages Board and related English bodies

Amendment 7

Moved by Lord Whitty

7: Clause 74, page 67, line 26, at end insert-

"(5) Prior to the commencement, under section 98(3), of this section and Schedule 20, the Secretary of State shall publish and lay before both Houses of Parliament an updated impact assessment of the effect of the abolition of the Agricultural Wages Board on the agricultural economy and on the wages and conditions of those who work in that sector."

Photo of Lord Whitty Lord Whitty Labour

My Lords, I make no apologies for returning to this subject. We have left the Agricultural Wages Board in a very difficult position. The substance of the matter was carried on 7 March and clearly the Government have the primary authority to abolish the board. In fact, they already had because it was in the Public Bodies Act. The difference is that the Public Bodies Act required a stringent and enhanced system of scrutiny to be followed before abolition could be implemented. We are now in the ludicrous position, after a very late amendment to the Bill, in which the only public body that is not subject to an enhanced scrutiny process-which this House insisted, after some very difficult and bitter debates, must apply to all public bodies-is the Agricultural Wages Board.

I am not sure if it is in order to cede the ground to the noble Baroness, Lady Gardner of Parkes. Clearly, her amendment preceded mine. I am getting a shake of the head from the Clerk at the Table. That is the procedure, I am afraid. I am sorry.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

I thank the noble Lord for that. Unfortunately I had to wait for the lift and I got stuck getting here. Apparently there is no way we can go back to my amendments. Is that correct? Perhaps the Minister or someone else will answer. I had every intention-I had waited here all day specifically-to move these amendments.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Lords Spokesperson (Department of Business, Innovation and Skills), Baroness in Waiting (HM Household) (Whip)

I am sorry to say to my noble friend that her amendments were called and not moved, so I am afraid that we have now moved on to Amendment 7.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I apologise to the noble Baroness. We almost missed this amendment as well so I quite understand the hurry. This indicates the rigidity of our procedures because my original intention at Third Reading, given that we got a printed copy of the Bill that had the Agricultural Wages Board in it only yesterday, was to insist that an equivalent procedure be written into this Bill for dealing with the implementation of the abolition of the Agricultural Wages Board in the same way as that applied to every single other public body.

That is not in order for Third Reading and, obviously, I accept the advice of clerks in these matters. I have therefore concentrated on a very narrow area which was not fully debated last time, although we touched on it in some detail. However, there was no amendment before us then that required a further economic assessment from the Government of the impact of the abolition of the Agricultural Wages Board.

The fact of the matter is that there was considerable confusion at the previous stage as to what the economic assessment was. The Government have not produced the kind of Explanatory Memorandum that is required under the Public Bodies Act, but there was a document called the "economic assessment", which went with the rather curtailed consultation and clearly indicated that the main effect of this Bill would be a significant reduction in the aggregate income of agricultural workers by nearly £0.25 billion over the next 10 years. Those were the figures provided by Defra via the Minister and the impact assessment.

On the day that we last debated this matter, and having queried whether that was still the Government's position, I received a letter from the Minister which said, "No, no, these figures were all got up"-I paraphrase slightly-"by the consultants", and that the department did not believe a word of it. He said that the consultants had advised at the top end of the range, whereas the Government thought that the outcome would be at the bottom end of the range. That is not a very satisfactory position in any circumstances and it is certainly not satisfactory when we are abolishing a body which has existed for many years and is the only one in this cull of the quangos which specifically tries to protect the living standards of a group of rural workers.

In the debate that followed, all sorts of interpretations came on to the agenda. I tended to agree, because I am conventional sort of person, that what the department had told us was probably right. Therefore, I agreed with the statisticians who were advising Defra. The Minister had already indicated that he did not really agree with them; others of his supporters said various different things. Some, whom one might characterise, perhaps unfairly, as being of the landowning tendency, said that it would be all right because they already treated their chaps decently, which is fair enough; other people said that the international competitiveness of English agriculture-because the other parts of Britain do something different-was dependent on being able to cut wages. Some of those people were the very same people who argue rather the opposite when it comes to banking, but let us let that pass. Others-I think that the noble Lord, Lord Cavendish, was among them-argued that agricultural wages were excessive already and were greater than those of hotel workers. That seemed rather to prove my point, because the wages councils in the hotel and catering industries were abolished some years ago.

However, it was clear that there was no compatibility between the various interpretations of the best estimate of the outcome as compared with the Government's own figures and as compared with the Minister's position and my position. There are four or five different interpretations. That is not good enough.

I am therefore proposing a very modest amendment: the Government should come up with a new economic assessment before they trigger the commencement proceedings on this Bill. Surely everybody who spoke in that debate and everybody who has an interest in this area should be in favour of that, because we want a robust economic assessment. Whatever we may think about the abolition of the board and whatever opinion we may have about the need to raise, reduce or protect wages, we should get a better economic assessment before we do it. That is really all my amendment proposes.

It would have one other benefit for the Government: it would take a bit of time and it would be interesting to know what timetable the Government have in mind for the implementation of abolition. After all, discussions on this year's round of wages have already started and would normally be for implementation in October. In effect, if the Government let that round go, the Agricultural Wages Board's underpinning of wages would run until October 2014 at least.

The Government need a bit of time because there are a number of issues which do not relate to wages but are covered by the agricultural system. One of them is the situation relating to Wales, which wants a different outcome. The position on Wales is not resolved by the Government's clauses as they now stand in the Bill, so they need a bit of time to sort out the Welsh situation. They also need to deal with the non-wage aspects of the agricultural wages order, in particular those aspects that deal with tied cottages for permanent workers and those that deal with adequate accommodation for migrant and seasonal workers. It is only the Agricultural Wages Board which provides that migrant seasonal workers are required to have one bed each rather than 20 of them sharing a six-berth caravan, as was the situation prior to it being regulated by the wages board. So those matters need sorting out. Some protection is needed in law or in regulation once the board goes.

I am doing the Government a favour by putting forward this amendment. The Minister has had a rough day so far, but I am offering him a way out here. So that we no longer argue about this-and subject to what the Commons say, because they have not seen this amendment yet-we need, before the Government implement this clause, a clear economic assessment which the House and another place can debate if necessary. That will also give the Government the time to sort out the other loose ends. I therefore assume that the Government will accept my amendment and that we can then move on and complete this Bill. I beg to move.

Photo of Earl Cathcart Earl Cathcart Conservative

My Lords, I farm in Norfolk. The noble Lord, Lord Whitty, argues his case well, as he always does. He calls for yet another impact assessment of the effect of the abolition of the Agricultural Wages Board on the agricultural economy and on the wages and conditions of those who work in the sector. I am afraid that I do not agree with his arguments, as I do not see the point of yet another impact assessment for three reasons.

First, average earnings in 2010 for full-time farm workers were 41% above the industry minimums set by the board. More recent data from the Annual Survey of Hours and Earnings, the ASHE, showed that more than 90% of workers employed in agricultural trades received gross pay above the agricultural wages order grade minimums. It is reasonable to conclude that the vast majority of farm workers are paid well above the agricultural wages order minimums already.

Secondly, current contracts will remain the same-that is, 41% above the wages board rates-so we are talking just about new contracts. The latest impact assessment states that if demand remains strong relative to supply, as evidence suggests is likely to be the case, wages are unlikely to be eroded as farmers will need to attract workers. The important point here is that if farmers want to attract workers, they will have to continue to pay at least what the worker might expect from comparable work outside farming, which is several thousand pounds more than the agricultural workers' rate.

Thirdly, to assist farmers and employers, the National Farmers' Union has agreed to publish a regular series of comparative indicators to help inform employers undertaking periodic pay reviews. These comparative indicators will take account of factors such as cost-of-living changes, the labour market, comparable industries and farm business conditions. They will also provide opportunity to focus on regional differences rather than national, one-size-fits-all data, which is in keeping with the flexibility that we need in our industry.

The National Farmers' Union has agreed to publish regularly all the data that the noble Lord, Lord Whitty, calls for in this amendment. Let us not duplicate the work. I do not see the need for yet another impact assessment.

Photo of Baroness Donaghy Baroness Donaghy Labour 6:30 pm, 20th March 2013

My Lords, it is extremely regrettable that the confusion about the failure to move Amendment 3 meant that attention was distracted from the moving of this amendment. I have sympathy for my noble friend Lord Whitty: he nobly stood in quickly but that distracted attention from the seriousness of the subject matter.

The Minister will know that I raised this issue of impact assessments in Committee. We had already had two different impact assessments. I thought that was rather worrying, although we got a bit of an explanation as to why it happened. I want to take this slightly wider than just the issue of the impact assessment. My concern is what happens after the Agricultural Wages Board disappears. I am not as optimistic as the noble Earl, Lord Cathcart, that some paternalistic system handed down by the NFU will be an adequate substitute for an equal system-perhaps a joint industrial system. Wearing my hat as former chair of ACAS, I think it important that there is equality of status between farmers and farm workers when it comes to discussing conditions of service and, more importantly, training. That was one of the things that the Agricultural Wages Board did and, incidentally, that was strongly supported by the NFU. It is regrettable that these issues have not been dealt with.

I am not talking about a standard impact assessment. We all have our doubts sometimes about the reliability of those. I mean sitting down and talking about what the future will be. What can we do as Members of this Parliament to ensure that there is an equality of consideration between those who work in the farm industry and those who own the farms? It is quite wrong in this day and age to stand up and say that we can rely on the representatives of the farm owners to give us the statistics. That is not the age we live in.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, I have huge respect for the noble Lord, Lord Whitty, and I thoroughly enjoyed working with him when he was a Minister in Defra. I admire his tenacity as far as the Agricultural Wages Board is concerned. I do not want to rehearse the arguments we went over when discussing this issue a couple of weeks ago but I will comment on the proposed amendment. I declare an interest as a farmer in Northumberland but I am not a landowner. I also chair the Better Regulation Executive.

I want to deal with the process of the impact assessment. The Regulatory Policy Committee, the RPC, scrutinises all impact assessments as submitted and scrutinised this one. It is required to present the range of possible outcomes as a consequence of a decision such as this-I commented on this during my speech in Committee. It has to look at the worst-case scenario, which is that over time wages fall to the national minimum wage. The point I made in the debate was that that is absolutely unlikely to happen because of the demand there is for agricultural workers. The differential in wages that exists now, as referred to earlier, will continue and may widen because once you remove the Agricultural Wages Board the market will itself respond. In my view, farm employees will then be even better off.

Photo of Lord Deben Lord Deben Conservative

My Lords, I took part in the earlier discussions. I apologise to the noble Lord, Lord Whitty, for missing the first of his lambent sentences. I am concerned about what he asks for. The noble Baroness wanted it because she felt that somehow or other this would be a patronising view. The National Farmers' Union is not being patronising; all it will do is produce the figures. There is nothing patronising in that. You cannot have a negotiation to produce the figures. They are the figures, they will be the figures and we shall know what they are. Rather like speeches I have heard from the noble Baroness on this sort of subject before, she talked about a world that, if it ever existed, has long passed.

It is that that concerns me about the proposals of the noble Lord, Lord Whitty. I live in the country and own some land there-not much, but around the house in which I live-and I know the farmers round about. I find it insulting that farmers are the only group of the population that cannot be allowed to run their labour relations within the general context of the national system. As a countryman, I find great annoyance at the way in which urban people talk about farming as if it was so alien to the normal practices of life, so divorced from the normal issues of the marketplace and so unconcerned with the future, comfort and family life of its workers that it needs a special arrangement that no one else needs and that everyone else has shuffled off as being part of a historic circumstance. Yet the farmer has to be left with it and I find that insulting. That is also an indication that the party opposite does not understand the countryside at all, wishing to impress upon it things that have nothing to do with our knowledge in the countryside.

In the countryside today, good farmers are extremely difficult to get hold of. They are significantly better paid than the minima produced by the Agricultural Wages Board. No farmer worth his salt trying to compete in the modern world is unwilling to pay a proper wage to somebody doing what is an increasingly technical and difficult job. The Agricultural Wages Board was set up at a time when there was a wholly different farming structure. I admit that when I was Minister of Agriculture I would have liked to have got rid of the Agricultural Wages Board-even then-but since then the arguments for it have become even less pertinent. Agriculture is not like it was even 20 years ago. It certainly is not like it was when the Agricultural Wages Board was set up. I very much hope that the Minister will refuse to ask for yet another investigation.

To end, the noble Lord, Lord Whitty, very charmingly suggested that he was helping the Government and very charmingly suggested that he was only doing them a favour. I very charmingly suggest that he is actually trying to put this off again. This is another mechanism within the rules of the House to try to revisit this particular subject. Frankly, when the Agricultural Wages Board has gone, nobody will remember that it ever existed because life in farms will continue. We will have rid ourselves of an unnecessary burden, an additional cost and something that is a hangover from the past. Now, I am a great believer in tradition. I love the traditions of this House and am very keen on conventions of that sort but this is a tradition that we can do without. It is not necessary. I hope that my noble friend will not give this any shrift whatever.

Photo of The Duke of Montrose The Duke of Montrose Conservative

My Lords, I apologise for having missed the first few words spoken by the noble Lord, Lord Whitty, but I know where he was coming from. I cannot fully agree with my noble friend Lord Deben: I think it is actually the other way round. I employ a couple of agricultural workers and know the set-up as it now occurs up north. Of course, that is miles away from the historical situation that we used to have there, whereby agricultural workers had no security whatever. They had what the Scots termed a seeking-on day. If the farmer did not come and see you on your seeking-on day, you knew that you were leaving. That happened every six months.

The Agricultural Wages Board and other things came in and have satisfied that element. It has also covered a great many other things. The complaint on the other side should be that not enough agricultural workers have joined the union because the agricultural workers will be in a strong position when this is introduced. Admittedly, you get the awkward position, if there is a farmer who employs only one employee, that he could terminate his contract and immediately bring in something entirely new.

The Minister gave me a very good answer to my questions, which he was not able to provide in the debate, stating that there will be, on a new contract, no automatic right to special rates of pay, but if you sacked the only worker you had, you would immediately destroy any chance of an amicable way of working in future. Not only that, if you had to renegotiate the contract, the other side could say, "I'm going to get my union representative along, and he will make sure that you comply". Presumably, the union will also produce its own rates of pay. Of course, we now have these various certificates that you can gain, and from that you can develop a hierarchy of pay. So I should have thought that the fear of loss, while looking obvious initially, will, as the noble Lord, Lord Curry, said, work out the other way round.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, the amendment of the noble Lord, Lord Whitty, would require Ministers to publish and lay before both Houses of Parliament an updated impact assessment of the abolition of the Agricultural Wages Board prior to the commencement of the provision to abolish the board. The House has already debated the impact of the abolition of the Agricultural Wages Board at considerable length both in Grand Committee and at Report, and has voted in favour of abolition.

The best estimate of £250 million over 10 years, which includes the potential impact on wages, sick pay and annual leave, is based on empirical academic research, which looked at wage levels in the past.

As I have made clear previously, the impact on wages, which is the largest cost, would account for only 1% of the total agricultural wages bill over the 10-year period. However, the impact assessment makes clear that there is and will remain considerable uncertainty about the impact and that in fact there may be no reduction in workers' wages or other benefits. That is because the reality of the impact will depend on the behaviour of employers of farm workers and a range of other factors, such as relative strength of supply and demand for agricultural workers and the need to be competitive with other employers in the same area-points made most eloquently by my noble friends Lord Deben and the Duke of Montrose.

Moreover, there are a number of reasons why the impact is likely to be smaller than that suggested by the external research. A majority of workers already receive terms and conditions above the agricultural minimum wage rates, so it is probable that their wages would not be affected if the board were abolished. The underlying market conditions suggest that there will be a sustained demand for agricultural workers. Research indicates that there is a shortage of workers with relevant skills in the agricultural sector, and that that shortage is higher than comparable shortages in other areas of the economy. The agricultural workforce is also ageing, with 55% of the sector workforce aged over 45, which, again, is higher than in other sectors of the economy.

Moreover, agriculture is a huge industry, with tremendous potential for growth to meet the challenges of feeding the world's growing population. As I said in the debate at Report, £250 million over 10 years assumes that every agricultural worker would see a relative fall in their wages compared with what they would have been due. We think that that is a highly unlikely scenario given the evidence of the demand for workers-a point made most eloquently by the noble Lord, Lord Curry. However, we deliberately decided to adopt a cautious approach in the impact assessment, given that there is some uncertainty.

In the absence of the Agricultural Wages Board, agricultural workers will be fully protected by the national minimum wage, working time regulations and other, wider employment legislation applicable to all other sectors. Defra published an impact assessment as part of the consultation exercise on the future of the Agricultural Wages Board. Following the consultation exercise, the impact assessment was updated to reflect 2012 prices and to include a correction in the initial analysis by the independent researcher. The final impact assessment has been made publicly available on the Defra website.

We are satisfied that the impact assessment has been prepared with due care and diligence. As noble Lords will be aware, this is not an exact science. By its very nature, an impact assessment is bound to contain uncertainties, and that will not change, however many times it is updated.

I want to answer some questions raised. The noble Lord, Lord Whitty, said that he did not agree with the independent research and referred to a letter that I wrote to him.

Photo of Lord Whitty Lord Whitty Labour 6:45 pm, 20th March 2013

No, my Lords, my assertion was that the Minister clearly did not agree with the independent research.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My understanding was that the noble Lord was querying the letter that I wrote and I just want to clarify what I said in the letter. I said that,

"it did not take account of other factors which would have an effect on wages ... for example, the supply and demand for labour, prevailing economic conditions and so forth", which are points that I have already made.

The noble Lord, Lord Whitty, questioned the position regarding Wales, which was also debated at some length in Committee and earlier. We have been clear throughout that we regard agricultural wages as a non-devolved matter tied to employment and wage setting. Wales Office and Defra ministers have had regular discussions with Welsh Ministers on the issue since the abolition was first proposed in July 2010. Those discussions will continue so that the transition from the Agricultural Wages Board is as seamless as possible for workers and farmers in Wales. I hope that, in part, that answers the question raised by the noble Baroness, Lady Donaghy, which concerns the need to look after the interests of farm workers during the transition.

The noble Lord, Lord Whitty, raised the issue of seasonal or migrant workers, who he stated would lose protection with the abolition of the Agricultural Wages Board. I remind him that it is the gangmasters licensing legislation that specifically protects migrant workers from exploitation, not the agricultural wages regime. General employment law provides for a high level of protection for all workers.

The noble Lord raised another issue which has been raised in the past which has no particular relevance to impact assessments. That is the issue of tied cottages. Workers in tied cottages will continue to be protected by the terms of their tenancy agreements and tenancy legislation. The Bill's provisions will not alter the status of protected tenancies under the Rent (Agriculture) Act 1976.

We therefore do not see what purpose it would serve to publish yet another impact assessment. That point was made by my noble friends Lord Cathcart and Lord Deben. Therefore, I hope that the noble Lord, Lord Whitty, will feel able to withdraw his amendment.

Photo of Lord Whitty Lord Whitty Labour

My Lords, with due respect to the Minister, it might have been better had a Defra Minister replied to the debate, because some of the information that he has just given is not accurate-for example, on tied cottages and the provisions for migrant workers. The requirements under the agricultural wages order and related matters were set by the board. They are enforced by the gangmasters authority these days if they involve gangmaster labour. I think that the noble Lord needs to get back to Defra to clarify some of those things.

However, let us to the main point. The noble Lord, Lord Deben, said that he thought that I was pushing the traditions of the House. One of the problems with this is that Ministers collectively have ignored what the House clearly decided in debate on the Public Bodies Bill only in relation to this quango. Whether we agree with its abolition or not, the Government have ignored what was clearly laid down two years ago after, as I said, bitter debate in this House and have not provided the House with adequate information or time to discuss this issue, as they have on all other quangos that they are abolishing, or else there has been a bit of new primary legislation.

That is why there is such a hoo-hah about the assessment; it is not good enough. The Minister has said that he does not agree with it. The assessment itself says that the estimate it contains was the best estimate, not, as the noble Lord, Lord Curry, and the Minister have said, the worst estimate. If we accept that Ministers have signed off on an impact assessment-this was all signed by the Minister-Ministers cannot then come to the House and say that they do not believe a word of it.

We have to start from that point. If the Government had gone through the normal procedure, we would have had a detailed Explanatory Memorandum and it would have gone through the enhanced scrutiny procedure under Section 11 of the Public Bodies Act. Instead, they have tried to cut corners. That is the problem.

That is why I do not apologise for raising the issue again. Yes, we are going over some old ground, but we are also hearing some of the old arguments. Under that procedure, what my noble friend Lady Donaghy has asked for-namely, a monitoring process so that when abolition occurs we can see what actually happens to agricultural wages-is required for other bodies that are being abolished, but it is not required here.

I find it difficult to understand those who argue that after this body disappears, nothing will happen to wages and no one will notice, as the noble Lord, Lord Deben, says. The noble Lord, Lord Curry, says that wages will probably increase. However, the only document that we have had says that although some people's wages will go up, on average and on aggregate they will fall. That is why we need a better assessment.

This is a very minimal requirement. If we had gone down the route that the House agreed, the Minister would have been subject to far more detailed requirements and debates. He would have had to explain himself far more convincingly than he has today. All I am asking is that before we implement this measure, we get a document from the Government that does what they are required to do for every other body apart from the one that protects some rural workers.

That does not seem to be a position that the House of Lords ought to be taking in the 21st century, and it may be seen that way. Although the noble Lord, Lord Deben, says that no one will notice, there are some people who will. The noble Lord obviously has conversations with the grain barons of East Anglia and maybe they would not notice, but a lot of small farmers have objected to the abolition-in the West Country, the north and Wales-saying that this was a bigger problem. They will notice because they will have to engage in rather difficult negotiations with their one or two staff.

The people who will really notice, though, will be those who are employed relatively casually and seasonally by the element of the agricultural sector that is really pushing for this change-that is, horticulture. The people who will notice are probably not so much those who are paid above the minimum rate but those who are on the lowest wages, at the minimum rate or even below it. Those at the bottom end of the agricultural labour market are going to notice. If the Minister persists in resisting this today, we will not even be able to assess properly whether I or the Government were right. That does not seem to be a sensible position to adopt in the tradition of this House.

Although it is late at night and I do not expect to win it, I think that I need to test the position of the House so that it is quite clear and our Commons colleagues can at least look again at the arguments, because the other way in which we are breaking with tradition is that this measure has come in on Report and the House of Commons has not even had a look at it yet. I will test the opinion of the House, for what that is worth.

Division on Amendment 7

Contents 110; Not-Contents 207.

Amendment 7 disagreed.

Division number 2 Enterprise and Regulatory Reform Bill — Third Reading

Aye: 108 Members of the House of Lords

No: 205 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Clause 78 : Power to reduce duration of copyright in transitional cases

Amendment 8

Moved by Viscount Younger of Leckie

8: Clause 78, page 68, line 17, at end insert ", other than photographs or films."

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills 7:06 pm, 20th March 2013

My Lords, I begin by thanking noble Lords for the constructive and positive debates we have had on this clause. Responding to an amendment tabled by my noble friend Lord Clement-Jones on Report, the Government are introducing two further amendments to the clause. These amendments mean that some unpublished films and photographs will remain in copyright until 2039 at the earliest, as they do under the current law.

I acknowledged on Report that films can be commercially exploited without having been published. This is because of the legal definition of the word "published". The same may be true of some unpublished photographs. Equally, there will be some film material and photographs in commercial archives that have yet to be commercially exploited in any sense. These archives may have built business cases on the basis that that material would remain in copyright until 2039 at the earliest and could be exploited until that point. Therefore, to provide some certainty to those businesses, the Government are exempting film and photographs from the clause.

However, a smaller proportion of unpublished films and unpublished photographs are affected by the 2039 transitional provisions than some think. Many films put on commercial release, including newsreels, will have been registered under film legislation, and the 2039 provisions do not apply to those films because they are regarded as published. With regard to photographs, only unpublished photographs taken between 1957 and 1969, whose author died during that period, are affected by the 2039 provisions. Photographs taken before 1957 were protected for 50 years from the end of the calendar year in which they were taken.

The second amendment means that regulations may provide for different provisions for work of different types and of different ages. This would mean that recent works, for example, could be treated differently from centuries-old works.

I hope that in the light of what I have said noble Lords will support these amendments. I beg to move.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I thank the Minister. If anything, what he has just said demonstrates the complexity of copyright legislation and the provisions of what is now Clause 78. One of the interesting things about this Bill is that when debating Part 6 we have continuously had to push our horizons forward. I think that when we started it was Clause 57 onwards, then it was Clause 66 onwards and it is now Clause 76 onwards, but we are very flexible and adaptable here. The amendment demonstrates not only the complexity of copyright law but the flexibility and willingness to listen that the Minister has demonstrated throughout our debate on Part 6. I welcome his response to the concerns, particularly of those in the news agencies and of photographers, about the possible impact of Clause 78, and I am delighted by the outcome.

If we were in Committee, we would probably want to probe the exact meaning of Amendment 9 to,

"make different provision for different purposes".

However, as we are at Third Reading, I think we will let the Minister get away without too much debate on those words. They are quite wide, and the other place or whoever might wish to have a discussion about them.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, I add a slight note of dissent. I entirely agree with Amendment 9, which gives greater flexibility to,

"make different provision for different purposes".

However, Amendment 8 paints the regulation-makers into a corner. I quite see the point of the noble Lord, Lord Clement-Jones, on the commercial stuff. This is his word as a commercial lawyer among the large rights holders and the people who make money out of this material. I see their point. They have invested heavily in some of this stuff, as in other cases, and they want a commercial return on it.

The trouble is with all the other stuff. This is not just about photographs sitting in commercial archives or produced for a commercial purpose. This is not about film sitting in a commercial archive, or from which, published or not, somebody is trying to make some money. It is everything. The sort of stuff that has ended up with genealogical societies around the country and in libraries' photographic collections will all fall under this. I realise that this does not apply to pre-1957 photographs, so it will not affect people doing research on the Second World War, but you will suddenly have this strange cut-off point. It would have been wise to keep greater flexibility in this so that the Minister, using,

"make different provision for different purposes", could have introduced a definition of which kinds of photograph or film were covered. It would not have been difficult to do.

Therefore, Amendment 8 should perhaps be withdrawn because it can be covered in the rest of the provisions, which says that he can then go on to reduce the duration of copyright in existing works. It is made by regulations. If you can do different provisions for different purposes, I would have thought there would be the flexibility to be able to meet the concerns of the noble Lord, Lord Clement-Jones, and the perfectly valid commercial concerns, and also have done things for the libraries, universities, researchers and other people who want to do other things with the works where there was no commercial intent in the first place. Therefore, I would accept Amendment 9 for flexibility, and if I were the Minister, I would withdraw Amendment 8.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport)

My Lords, I echo the initial comments of the noble Lord, Lord Clement-Jones, on this. The Minister has again shown his willingness to listen to some of the concerns that have been expressed on this matter. I welcome the two amendments in this group, although I note the points recently made, which may bear further thought. However, the Government are in the right place on this. It is a question of sticking to where we are and recognising that.

We should also recognise that this has been a complicated journey through these legislative clauses. Copyright is never an easy issue to get into. I am sure that the noble Lord would recognise that; he has always looked a bit punch-drunk when we have had discussions on it but has come up smiling, which is one of his nice characteristics. However, there are a number of difficult and complex issues underneath this. They are not going to be resolved by what is in the Bill, although we have caught up in a number of areas and that is good. This is really about setting up discussions that we will have to have in this House and another place as the various changes that are being provoked by the Hargreaves report are brought forward as what are in generic terms called "copyright exceptions". They of course deal with a large number of issues that could have been, as we have argued, contained in this Bill but have been left deliberately to secondary legislation. That is not to say that we will necessarily agree with everything that we see when that comes through. There have to be a lot of complicated discussions on some of these points. We welcome the opportunity to have those, based on where we are now. On that basis, I am happy to agree with these amendments.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, I will make a few brief comments. I thank those who have contributed to this short debate: the noble Lord, Lord Stevenson, the noble Earl, Lord Erroll, and my noble friend Lord Clement-Jones. I am pleased that the amendments have been accepted, in general, in the spirit in which they were intended. To take up the comments of the noble Lord, Lord Stevenson, it is true that copyright is a complex issue. There are polarised views from both sides. We all recognise that.

I listened intently to the comments of the noble Earl, Lord Erroll. It would be good if I wrote extensively to him concerning the point of extending the provisions beyond normal photographs, to put it crudely. The noble Earl asked whether photographers' concerns could be addressed regarding Amendment 9. A relatively small number of photographs are covered by the 2039 provisions: as he may know, it is only those taken between 1957 and 1969. Those who want to use those photographs could seek a licence or use orphan work for business. However, I will follow this with a more thorough response to the noble Earl.

Amendment 8 agreed.

Amendment 9 agreed.

Clause 79 : Licensing of copyright and performers' rights

Amendment 10

Moved by Lord Howarth of Newport

10: Clause 79, page 69, line 25, at end insert-

"(7) The Secretary of State shall lay before Parliament, not more than three years after the coming into effect of regulations under this section, a review of the progress of licensing of orphan works, including an impact statement and a cost/benefit analysis."

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour 7:15 pm, 20th March 2013

My Lords, Amendments 10 and 11 in this group are intended to help refine the orphan works licensing scheme which the Government are rightly bringing in, to make it more fit for purpose.

I say at the outset, as much for the ears of officials as for noble Lords, that these amendments have been tabled entirely at my own instance. Those in various parts of the cultural sector with whom I have conferred on the whole question of orphan works over the weeks in which we have been examining this legislation would, I think, have preferred that I should not trouble your Lordships any further on these matters, trusting-as they wish to be able to do-that reason will prevail in the processes in Whitehall leading up to the regulations. However, I have thought it right to prevail for a few moments on the patience of your Lordships. This House is always a forum in which it is appropriate for us to consider policy decisions which, unintentionally of course, may damage the cultural life of this country. There are also principles here which, as parliamentarians, we ought to consider.

The term "orphan works", as we know, denotes material such as books, letters, diaries, documentation from the voluntary sector, broadcasts and newspapers held in our great public collections which may still be in copyright but where the owners of the copyright cannot be identified-or, if they have been identified, cannot be found. Vast quantities of such orphan works are held in our public collections. They would be capable of expressing and illuminating our shared national heritage. They represent a resource of enormous potential value educationally, academically, culturally and economically. Without a well designed orphan works licensing system, it will remain impossible, as it is at the moment, to digitise this material and make it available to citizens and scholars for the public benefit.

All are agreed on two things. We need a workable orphan works licensing scheme that will make this material accessible; and, contrary to suggestions made by some campaigners, rights-holders ought to be paid for the use of their intellectual property, whether they are identified in the process of digital search or appear subsequently, if they request that they should be paid-although we anticipate that nearly all of them will not make the request. There is no question of anybody proposing to steal other people's intellectual property. If an organisation wanted to do that, of course it should not be licensed. I certainly do not believe that our national cultural institutions wish to do any such thing.

Your Lordships made the decision, on Report, on a narrow majority, that it would be inappropriate to introduce a provision to provide for flexibility in respect of the requirement that fees should be paid up front for the licensing of orphan works. However, I must say to noble Lords that libraries, archives, museums, galleries and universities remain seriously worried about the decision that the House took last week. Of course, I accept that it was the will of the House, but these amendments seek to address entirely reasonable anxieties about elements within the architecture of the Bill as the House has approved it. Nothing in my amendments would undo the principle of the legislation.

I also suggest to your Lordships that these are not political issues. When we have legislated on copyright over the years we have never done so in a partisan spirit. Some noble Lords may have taken part in the parliamentary proceedings on the Copyright, Designs and Patents Act 1988. I well remember that John Butcher, the Minister responsible for that legislation, conducted the parliamentary proceedings in the spirit of a seminar. I was the government Whip on the Bill. We do not normally conduct legislative proceedings in the spirit of a seminar, but we were seeking to elicit from everybody who participated in those proceedings the best contributions they could make towards achieving an appropriate balance and a policy that would protect the legitimate rights of individuals and corporate interests, while providing for the maximum public benefit. We debated in the same spirit the proposals on copyright much more recently during the passage of the Digital Economy Act 2010. Those debates were strenuous but fair-minded. We should continue, even at this very late stage of the Bill, to legislate in the same spirit.

Amendment 10 would provide that, after not more than three years, there should be a review of the progress of the orphan works licensing scheme. The review should include an impact assessment and a cost-benefit analysis. If we have such a review we will be in a position to know whether the anxieties that are now being expressed will have proved justified. The anxieties are principally about the model of diligent search that may be required, particularly if it is to be insisted that there should be a diligent search for each individual item for which a licence is sought, rather than a diligent search on a rigorous but more generic model.

There is a concern that this requirement and the requirement to lodge payments for the vast number of orphan works that we hope to digitise en masse would be burdensome. In particular, there is a fear that this would be an expensive additional cost, on top of the costs that must already be incurred in the process of digitisation. Universities UK, the Wellcome Trust and the British Library have all said, as the House knows, that if up-front payments are required, they anticipate that they will not, after all, feel it possible to embark on large-scale digitisation projects. If that proves to be the case, the Government's very laudable policy will have bitten the dust.

If we have the review, it will enable us to know whether those who are now expressing those anxieties are right, and whether we, as parliamentarians, may have made a wrong decision. The material in the review -the impact assessment and cost-benefit analysis-would, of course, be extremely valuable in enabling Parliament to undertake post-legislative scrutiny, which is something that many of your Lordships feel is appropriate to be carried out by this House, and of which we should do more.

Amendment 11 would provide that after five years, royalties that had been paid up front to the licensing authority but remained unclaimed by rights-holders should be returned to the institutions that had deposited the funds with the licensing authority. On Report, the Minister briefly discussed the question of what might happen to these funds in due course. He indicated that it is not the intention that the funds should remain indefinitely in the escrow account of the licensing authority for the eventuality that rights holders would turn up, but that after a period, which I understand to be five years:

"Unclaimed fees could be used to subsidise the cost of running the orphan works scheme".

The Minister must be intending to bring in a mighty expensive quango, because there will be quite substantial funds in the account. Otherwise, he contemplated, the unclaimed fees could be used,

"to pay for preservation costs in public institutions or industry training. There will be further consideration of these options".-[Hansard, 11/3/13; col. 49.]

Will the Minister explain why BIS should determine how these sums should be spent? The great cultural institutions, such as the national museums and galleries, and the British Library, are funded not by his department but by DCMS, which very rightly operates on an arm's-length principle. It does not believe in telling these institutions how they should use their funds. This is, therefore, a question of principle. However, the most important principle is that these funds should not revert to the Exchequer. The Minister did not discuss that possibility. Although I raised it in my speech on Report, he did not refer to it in his wind-up. Of course, it was quite explicitly contemplated in the impact assessment last year.

If that were to be the case-if, after five years or after whatever interval, the money, instead of going back to the institutions that had deposited it, reverted to the Exchequer-that would, in effect, be double taxation. It would be a tax on funds that had already been provided by the taxpayer by way of grant, and otherwise it would be a levy on charitable funding, whether that is funding raised charitably by public institutions or by great charitable institutions such as the Wellcome Trust.

These institutions are-I repeat, and again emphasise -happy to pay rights-holders when they are found, and would of course remain happy to pay those rights holders even after the money had been returned to them by the licensing authority. They are happy to contribute to the reasonable administrative costs of the licensing authority. They are not happy to forfeit precious funds notionally for the benefit of rights-holders but in reality for the benefit of the Exchequer. I cannot imagine any justification for that.

To speak of competition in this particular context is, in any case, meaningless. Publically-funded institutions that are not for profit, but that hold collections and provide services for the public benefit, have different obligations and accountabilities, and face different costs from private institutions, operating for profit in the marketplace. You cannot reasonably make a comparison or invoke the principle of competition here.

If the Government were to confiscate funds that had been derived from public and charitable institutions we would be cutting off our nose to spite our face. I hope that the Minister will, in his response, definitively rule out any such intention on the part of the Government. I beg to move.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat 7:30 pm, 20th March 2013

My Lords, I am not unsympathetic to the first of the noble Lord's amendments, Amendment 10, but on the argument that he makes for a review of the orphan works scheme-and many of us have doubts about how that is going to operate in practice-I wonder whether it could not be done more frequently in the Intellectual Property Office's annual report. The Minister demonstrated in the course of our debates on the Bill that it will be flexible enough to cover a number of areas. If licensing in the form of a digital hub and perhaps ECL can be covered, or meta-data, why not the state of orphan works?

In passing, perhaps I could raise another matter relating to orphan works. In the debate on Report, my noble friend the Minister said:

"In relation to Amendment 84AE, my noble friend Lord Clement-Jones was concerned that there might be a loophole regarding sublicensing. The answer to this is that the Bill does not permit sublicensing, if that is a help to my noble friend".-[Hansard, 11/3/13; col. 33.]

I believe that the advice the Minister has received may not be correct in that respect. As the Bill currently stands, it seems expressly to contemplate sublicensing. New Section 116A(4) states:

"The regulations may provide for the granting of licences to do, or authorise the doing of, any act restricted by copyright that would otherwise require the consent of the missing owner".

An act of authorising another to do the relevant act would clearly permit sublicensing.

Because of the timing of the Third Reading, I was caught on the hop and have been unable to put down a probing amendment on this, but I would be very grateful if the Minister could examine the issue and give an assurance now, or subsequently in correspondence, that the regulations will not permit this.

Photo of The Earl of Clancarty The Earl of Clancarty Crossbench

My Lords, briefly, I support Amendment 10, proposed by the noble Lord, Lord Howarth, although I support Amendment 11 as well.

To emphasise how important it is that the new orphan works scheme works and how culturally significant that is for Britain, I agree with everything that the noble Lord said. It is impossible to overestimate the importance of this development for our national museums. For instance, being able to show orphan works-there being such a huge number, indeed millions, of records, papers, photographs and artefacts, some over 1,000 years old-may well make a difference to the quality of display and exhibitions and increase the viability of our collections for international scholarship.

As an artist and creator myself, I might have been expected to vote against Amendment 84AG, which the noble Lord, Lord Howarth, tabled on Report, to allow flexibility in the up-front payment of fees to creators. I did not do so, and I think that I speak for other artists and creators who in this instance can see beyond the minimal benefits to them, if indeed they exist at all, from this aspect of the Bill in the direction of the far more significant wider picture of displaying work, which is often one of the major aims of artists and creators in the first place.

It would be a great shame if, because of this component of the Bill or for any other reason, the orphan works scheme failed or did not operate properly, having come this far. We may find out fairly quickly if this is the case, so three years will be ample time. Given how significant the enabling of orphan works to be shown will be in deepening a sense of British and world culture within our own institutions, we should be able to review the situation at the very least. I support the noble Lord's amendment.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat

My Lords, I thank the noble Lord, Lord Howarth of Newport, for these two amendments, which are very helpful in trying to balance and find a bridge between the two very distinct sides of the argument that we have seen during the various stages of this Bill-and, in particular, the problems already outlined about whether arrangements for orphan works will work. I am grateful, too, to my noble friend Lord Clement-Jones, for saying that Amendment 10 might be helpful to all parties. I hope that the Minister can give us some encouragement on that.

On Amendment 11, I wanted to point out that I am as concerned as the noble Lord about a large amount of licence fees sitting in a large black hole and then returning to the Government in whatever form as a double taxation. My only question-I apologise as it is rather a technical one, but I saw the amendment only earlier today-is about the five years of royalty payments. If it goes into bona vacantia, how long does it have to sit there before it is released into general Treasury funds? Is it another blocking account? I recognise that the proposal refers to "bona vacantia or otherwise", and that "otherwise" might refer to the general coffers of the Treasury. It would be helpful to know. My only suggestion to the noble Lord, Lord Howarth, is that five years might be too short a period to search for authors of orphan works.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, I support both amendments, which were spoken to most ably by the noble Lord, Lord Howarth of Newport. The noble Earl, Lord Clancarty, also made comments that were absolutely right on the nail.

A review is only sensible. An awful lot of the figures should be obtainable from the licensing authorities, whoever is going to be appointed, on the financial stuff, how much is done, and so on. I do not imagine that it will require a huge amount of public money to try to do a review at whatever period is thought best.

As a taxpayer, I am concerned about the up-front fees. The noble Lord, Lord Howarth, almost did not stress that point enough. The notion is that those fees should be set at a rate that means that orphan works do not undercut stuff that might be in a commercial library of works that people can license. They would probably not be on the same subject in most cases; they would be for different purposes. If one of the big national libraries or a university was trying to prepare a work of academic interest, they would not rush around paying fortunes to these libraries that have collections of pictures or text. They cannot do that; they will not have the budget for it. If someone was to look at what this stuff was currently sold for, or licensed for, we could be talking about a huge sum of money going into the bodies collecting for orphan works. We are not talking about a petty million, or something like that.

A department always expands to spend the money provided, so if it is going to be ploughed into trying to collect these things will get enormous and complex, and they will spend money like water. On the subject of BIS sponsoring training programmes, well, we know what happens with most government training programmes, so just to get the point across and to see the horror on the Minister's face, I volunteer to be either one of the societies collecting the money so that I can have a huge scheme, or one of the chief accredited training agencies, because this will be a licence to print money.

The point is well made by the noble Lord, Lord Howarth. The funding of universities and libraries and institutions like that, which this provision is aimed at, comes out of public or charitable funds, and it is there for a purpose. The concept that this is a hidden tax that then goes back to the Exchequer or to fund a nice quango or whatever is totally unethical. I cannot put that strongly enough. If the public woke up to the fact that that was happening, they would be absolutely horrified, so the Minister would be incredibly well advised to accept this amendment to protect the Government from all sorts of accusations in future-unless, of course, they do not expect to be in power by the time this happens and think that another Government will take the flack. However, given that most politicians think they will still be in power, if I were them I would protect myself.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport)

My Lords, my noble friend Lord Howarth, when introducing this amendment, mentioned that in Parliament as a whole there was a genuine sense that issues to do with copyright were dealt with in a non-partisan way, and he explained some of the background to the CDP Act 1988 and to the Digital Economy Act. This debate has shown that the spirit lives on. I stress that I do not think that this is a partisan issue; we are all very interested in this new and broadly welcome provision, which anticipates the EU directive and perhaps gold-plates it a little. However, there is no doubt that we need an orphan works scheme. It is right that it should be introduced and we are backing it all the way. Within that it is absolutely clear that rights holders must be remunerated if they wish. However, as many of them will not be easy to find, a diligent search of a high standard must be carried out. I recognise that the way to prove all that is to create this escrow account approach, and that that should be done for a reasonable period. However, the more one listens to the points that are made round here, the more one feels that this is going in the wrong direction in this respect. As virtually all speakers have said, surely it cannot be in the best interests of the Government to tax the institutions that are expected to carry out this work and mainly benefit from it. That cannot be right. The Minister was reported in Hansard as saying that if the escrow funds were building up and not being used, they could be used to defray the costs of running the licensing body, to pay for preservation costs and for training. However, that escrow funding is the money that would be paid to rights holders, so it does not really belong to the licensing body to do with it as suggested.

We are at the fringe of moving in the wrong direction here. It would be sensible if the Government were to pause and think about this again. This is a good scheme and is the right thing to do, but perhaps there is a way in which one can retain the funds that are going to be held for potential rights holders within the original institutions. At least then they would have the benefit of the money even if they could not allocate it, and the sensibility that this somehow was a taxation scheme would be avoided because it would not work. It would be the worst of all possible worlds if, at the end of this process of trying to get these proposals scheduled and incorporated in legislation, the whole scheme was stillborn because people could not see how it could be financed. I very much want to hear what the Minister has to say on this matter. Some movement towards the position of the noble Lord, Lord Howarth, would be much appreciated.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, I thank the noble Lord, Lord Howarth, for his amendments. They raise important issues and I trust that I can provide some satisfactory assurances. I say at the outset that I very much welcome his support for an orphan works scheme and, indeed, for the principle that creators should be paid. He recognises that there is a balanced approach to this issue in this respect.

Regarding Amendment 10, the Government agree that there will need to be a full and proper evaluation of the effectiveness of the orphan works scheme, and its impact on users and rights holders. That is why the Government have committed to a review of the functioning of the scheme one year after it is fully functional. This post-implementation review would be undertaken by the orphan works authorising body and would include, for example, data on the number of orphan works registrations, and permissions issued by the authorising body. The scope of any review, as determined by discussions with stakeholders, would be incorporated into the authorising body's regulations. I assure the House that the outcome of the review will be reported to Parliament.

Separately, the Government have committed to another impact assessment of the orphan works scheme in April 2015: that is, one year after the scheme is fully operational. According to government guidance, the first review of regulations,

"should in most cases be carried out and published no later than five years after the relevant regulation comes into force".

In undertaking to do a post-implementation review after one year, with accompanying impact assessment, the Government's plans will be fully consistent with these principles and guidance.

Amendment 11 would require regulations to make provision that unclaimed fees paid for the use of orphan works were returned to the licensee within a five-year period. Under the proposals currently in the Bill, in the event that fees remain unclaimed for the licensed use of an orphan work, a variety of options are possible: for example, unclaimed fees could be used to help creators; subsidise the cost of running the orphan works scheme-I believe that that point was raised by the noble Lord, Lord Howarth-pay for preservation costs in public institutions; or pay for industry training. I know that there are wide-ranging views on the appropriate use of unclaimed fees. This is why the wording in the Bill is permissive; it requires regulations to deal with this issue but does not rule any particular option in or out. It does not rule out the return of the fee to the licensee. The current wording allows for further consideration of all these options, with the input of all relevant stakeholders.

The noble Lord, Lord Howarth, supported by the noble Earl, Lord Erroll, raised the issue of the money going to the Exchequer. The use of the funds will be the subject of a full consideration. I hope that gives some reassurance to noble Lords. In other words, all options are open and there will be no presumption that the money will go to the Treasury under this scheme. I hope that that also reassures the noble Baroness, Lady Brinton. The noble Baroness raised a related matter concerning how long the money would sit in bona vacantia. As a general principle, money falling into bona vacantia is dealt with by the Treasury Solicitor, and there is no time period as such. I do not know whether that helps. I hope the House will agree that this is the right way forward. I again assure the noble Lord that it is the Government's intention that the licence fee for the use of an orphan work should be proportionate to the type of use. However, particularly where orphan works are used commercially, the Government believe it is vital that the conditions of use do not inadvertently undermine the market for known works, particularly, for example, where we are concerned with the livelihoods of creators such as photographers.

The noble Lord, Lord Howarth-

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport)

I am sorry to interrupt the noble Viscount but this is a crucial point. Will he go back over what he said as I was slightly confused by the wording? Is he saying that before any decision is taken about how the money held in the escrow account is to be utilised if no claims are taken up in the five-year period-that money is held against potential claims-there will be full consultation about that? He used the word "consideration". If he could confirm that it is a consultation process and that all options are on the table for that, we would be very reassured.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills 7:45 pm, 20th March 2013

The word I used was "consideration" rather than "consultation" but there is a fine line between the two. I must stick with "consideration" but I think the best thing to do is to define precisely what is meant by "consideration". My understanding-I give this commitment today-is that "consideration" does indeed mean consultation. However, I would like to follow up with yet another letter to confirm that.

On Report, the noble Lord, Lord Howarth, concluded that a search would be required for each and every rights holder. The orphan works scheme never intended to promise mass digitisation without a prior diligent search. If we wanted to do this, we would have to find another means of achieving it as the scheme we are now considering could not do so. That might be achieved using ECL, but that depends on the existence of the relevant collecting societies. Those are all questions that we cannot answer at this point.

My noble friend Lord Clement-Jones asked whether there could be a review of orphan works produced as part of an annual report. This seems to be a sensible suggestion. I will certainly consider this idea, along with my officials. He also asked about sublicensing and whether it would be permitted. Every act will require a licence. If someone wishes to use an orphan work-for example, in a television documentary-the licence will need to cover all the issues envisaged. The licensing body will not be able to delegate its powers to license to another person. The provision for orphan work licensing will be construed restrictively by the courts.

On this basis, I hope that the noble Lord, Lord Howarth, feels able to withdraw his amendment. As he considers his reply, and before I conclude, as this is the last group of amendments, I would like to take this opportunity to thank all noble Lords who have participated in our many and varied debates on the important issues covered by the Bill during its passage through this House. As ever, they have brought considerable experience to our debates. In particular, the noble Lord, Lord Stevenson, has led the opposition Front Bench in an insightful and wise way and has rightly subjected the detail to a constructive challenge. We sing in harmony in the Parliament choir-he is more harmonised than me-and we have managed to find a pretty good degree of harmony on this Bill.

It is certainly the case that the Bill is better for the scrutiny that it has received in this House. I should like to place on record my thanks in particular to my noble friend Lady Stowell for her able support on the equalities provisions. I thank the House officials, the Hansard writers and especially the Bill team and all officials who have been deeply involved in supporting me so ably.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport)

My Lords, it would be wrong of me to let the noble Viscount's concluding remarks pass, particularly as I was named. I also thank him for his considerable work on the Bill, his courtesy during debate, and his incredible letter-writing abilities. I have never been in receipt of so many letters, both by e-mail and by hand. Sometimes people actually checked up whether a letter had arrived that I had not even received. It was helpful to know that it was on its way. We even received three further letters overnight in anticipation of this debate. It shows the quality of the service that we received. I am sure that the noble Viscount will accept that that was not entirely his work.

I also thank the Bill team, although not all of them are present. I hope that my words will go back to those who are not here. The team has been extremely helpful in giving us information and facilitating meetings. I also thank my Front Bench team, the noble Baronesses, Lady Worthington, Lady Hayter and Lady Thornton, and the noble Lords, Lord Young, Lord Whitty and Lord McKenzie, who, along with our legislative support team, have taken much of the load off my shoulders and done a brilliant job in scrutinising the legislation. It has been four months-a considerable amount of one's time-since we began consideration of the Bill. That explains why the choir has been bereft of our support during that time.

The Bill runs to 266 pages, which, as the noble Lord, Lord Clement-Jones, reminded us, is a bit more than when it was first published. That represents a fair number of trees. This was never going to be an easy job. It is also important to put on record that the Bill did not come to us sanctified by work in another place. A lot of changes were added just as the Bill left the House of Commons, and the Government have added a number of measures while we have been considering it. There will presumably be further consideration in another place on matters such as health and safety, abolition of the Agricultural Wages Board and Midata, which were never discussed in the House of Commons. I should be interested to see what happens when the Bill comes back after Easter.

As the Minister said, the Bill is in a better shape from its time here. It was amended and concessions were offered on 27 major points, which is pretty good. I do not claim credit for them all but in the spirit of bipartisanship, I think we can agree that in most cases the changes were of benefit. There are one or two matters on which we divided, but I am sure that the Government will want to reflect carefully on whether they wish to change the will of the House, which was expressed in many cases narrowly, but nevertheless firmly. I hope that those matters will weigh heavily on the Government.

It has been a most enjoyable time, made better by the good responses that we have received, and I hope that the Bill will fulfil its purposes, even though in some areas it never quite lived up to its name.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

My Lords, the last bars of the music are dying away, the curtain is falling, moving valedictory statements have been made but, unfortunately, I have again to be the grit in the oyster because I need to respond to the debate, and the House may wish to know my intention in respect of these amendments.

I thank all noble Lords who have participated in a genuinely helpful debate. I was particularly pleased that the indefatigable noble Lord, Lord Clement-Jones, with whom I have had some degree of disagreement, was willing to support the proposition in the amendment that there should be a review. The noble Earl, Lord Clancarty, supported it, as did the noble Baroness, Lady Brinton, the noble Earl, Lord Erroll, and my noble friend Lord Stevenson. I am grateful to them all.

I am grateful to the noble Earl, Lord Clancarty, for speaking as an artist, because his perspective was valuable. If he, as an artist, has been willing to see another side of the argument on orphan works that is in the public interest, it is particularly telling. The noble Earl, Lord Erroll, spoke as a taxpayer. We cannot all be artists but we all have to be taxpayers. He was absolutely right in what he said about the inappropriateness of setting the tariffs by reference to market values. It is wrong to introduce market values in every area of public life and I wish we could get away from that in our modern political culture. The noble Earl was extremely forthright in his characterisation of the ethics of the Government's proposition.

However, I was grateful to the noble Viscount, who spoke thoughtfully and constructively, and I very much appreciate the spirit of his response. He acknowledged that there needs to be review. He asked us to be content with the prospect that there will be a review after only one year by the orphan works authority. There is a question as to whether it is appropriate for the body to review itself. Of course it should always do so, but is that sufficient? I hope that whatever Government there is after 2015 will look again at the methodology for monitoring the progress of the orphan works licensing scheme and ensuring that it is fit for purpose and not producing unintended, unfortunate consequences. We all want it to succeed, and if it is not going to succeed we will need to take further legislative steps to get it right.

It would be helpful to have the second impact assessment that the Minister promised for 2015, but we will need subsequent impact assessments. They need to be proper assessments, not ones whereby you just press a button and the computer produces. Whitehall is getting adept at producing impact assessments. They need to be of high quality.

The noble Lord, Lord Clement-Jones, rightly suggested that the progress of the orphan works licensing scheme would be an appropriate topic to be in the annual report of the Intellectual Property Office. That is so, but a whole range of matters will need to be covered in that annual report and there will from time to time be the necessity for a document that is more particularly focused on the orphan works scheme, unless we can all be confident that it really is working according to our best hopes.

On Amendment 11, the noble Viscount again gave me some grounds for encouragement in his emphasis that a variety of options is possible. He did not explain why the Government do not simply accept that the money ought to be returned after a reasonable interval to those who have lodged it because no rights holders have come forward. Even if they subsequently come forward, of course, they will be paid by the licensing bodies. He did not explain why we do not simply and straightforwardly return the money after a reasonable interval. However, he does not rule it out and he promises full consideration, as well as promising to write to us to clarify what that full consideration may mean, and I am appreciative of that.

The Minister has, as my noble friend Lord Stevenson said, been a most abundant and generous letter writer. However, before he lays down his pen, it would also be helpful if he could bring himself to write one further epistle to us about what diligent search and extended collective licensing the Government envisage at this stage. I recognise that there is more work to be done by the working group, but he will know that probably the greatest anxiety of the cultural institutions, even greater than their anxiety about the requirement for up-front payments, is that the regulations may land them with an impossible task in terms of diligent search. It seemed to me that the Minister made helpful remarks on this subject on Report, but if he were willing to elaborate a little and clarify in another letter to us what he intended when he made those observations on Report, we would be particularly appreciative.

In view of the constructive and helpful tenor of the Minister's response, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11 not moved.

Clause 97 : Extent

Amendment 12

Moved by Viscount Younger of Leckie

12: Clause 97, page 89, line 31, at end insert-

"( ) section 92 extends only to England and Wales."

Amendment 12 agreed.

Clause 98 : Commencement

Amendment 13

Moved by Viscount Younger of Leckie

13: Clause 98, page 89, line 41, at end insert-

"( ) section 92;"

Amendment 13 agreed.

Schedule 4 : The Competition and Markets Authority

Amendment 14

Moved by Viscount Younger of Leckie

14: Schedule 4, page 118, line 21, at end insert-

"( ) The power conferred by section 95 includes power to make provision for the appointment of panel members of the Competition Commission as members of the CMA panel, or for the re-appointment of persons who are appointed as members of the CMA panel by virtue of sub-paragraph (2), for the purpose of enabling anything in the process of being done by or on behalf of the Competition Commission immediately prior to its abolition to be completed by or on behalf of the CMA; and nothing in sub-paragraphs (1) to (4) restricts the provision that may be made for that purpose."

Amendment 14 agreed.

In the Title

Amendment 15

Moved by Viscount Younger of Leckie

15: In the Title, line 9, after "insolvency;" insert "to make provision about certain bodies established by Royal Charter;"

Amendment 15 agreed.

Title, as amended, agreed.

Bill passed and returned to the Commons with amendments.

House adjourned at 8 pm.