Lord Bassam of Brighton:

Moved by Lord Bassam of Brighton

57: After Clause 132, insert the following new Clause—“Private copy levy on digital access(1) The Secretary of State may by regulations make provision for the establishment of an annual private copy levy, to be levied when online digital content is accessed or stored.(2) Before making regulations under this section, the Secretary of State must consult such persons as the Secretary of State considers appropriate.(3) The provisions made under subsection (1) must include but are not limited to—(a) establishing governance arrangements to calculate the rate and application of the levy,(b) permitting relevant copyright collecting societies to collect and distribute monies raised by the levy to rightsholder funds, and(c) distributing any surplus funds raised by the levy for the purposes of funding arts and cultural initiatives in the United Kingdom.(4) The Secretary of State must lay before Parliament a draft of the statutory instrument containing regulations under subsection (1) within six months of the day on which this Act is passed and the regulations are subject to the affirmative resolution procedure.(5) The Secretary of State must commission an annual transparency report on the operation of the levy.(6) The Secretary of State must lay the report made under subsection (5) before Parliament.”Member’s explanatory statementThis amendment seeks to allow the Secretary of State to establish a private copy levy for digital content, with revenue distributed to rightsholder funds and cultural initiatives.

My Lords, I beg to move the amendment in my name and those of the noble Lord, Lord Freyberg, and the noble Earl, Lord Clancarty. When this Bill was introduced, I rightly praised the vision of the Minister, the noble Baroness, Lady Jones, and the noble Lord, Lord Vallance, who has since taken it forward, in setting it in the context of driving economic growth, supporting modern digital government and improving citizens’ lives. Technological adoption has had a profound impact on creators and performers’ remuneration. This amendment seeks to ensure that tech and creative sectors can flourish together. While 81% of people consider accessing culture through digital devices important, UK creators face unprecedented challenges in making a living.

Research shows that median earnings for visual artists have decreased by some 47% to just £12,000 per annum since 2010, with over half forced to find second and other jobs. The last Labour Government left a legacy when they introduced the Artist’s Resale Right Regulations in 2006, which has, thankfully, stood the test of time in protecting over 130 million royalty payments for UK artists since its introduction.

It is my contention that we must help creators and artists flourish in this new digital environment without curtailing the use of digital technology. We would not expect other professions to work without payment. My amendment seeks to create what is described as the “smart fund” solution, inspired by private copying levies in 45 other jurisdictions. It requires manufacturers of electronic devices to make a one-off contribution when a new device is sold. This contribution is typically a small fraction of the device price. In Spain, the 2022 levy on a €909 smartphone was just over £1, or 0.12% of the sale price.

In France, €285.5 million was collected in 2022, with €212.3 million redistributed to artists and creators and over €70 million allocated to cultural projects. The Commons Culture, Media and Sport Select Committee has endorsed such proposals, estimating that this could generate between £250 million and £300 million a year in the UK, at no cost to the Government, taxpayer or consumers. If we release 25% of the total funds for arts and culture initiatives, as they do in France, that would generate an extra £75 million a year, which would more than double the £60 million that the Government announced in just the last week as a boost for creative industries.

It is my belief that we can learn from established smart funds in France, Germany and Spain on how to put in place the necessary governance to administer the smart fund, bringing together stakeholders and collecting societies to distribute to artists and use the funds to support arts and cultural purposes in high-need areas. This was particularly important post pandemic, when European countries made income from private copy levy available as part of their cultural recovery funds. Making funding available to our national arts and culture sector, as well as individuals, could help them get off their feet and turbocharge growth.

Evidence from similar smart funds shows no impact on retail device prices. Introducing a smart fund here would help align us with other European countries, addressing the challenge of artists accessing royalties from abroad. It is my contention that we must seize this opportunity to protect and reward creators in an increasingly digital environment. Creative industries contributed some £124 billion to the UK economy in the 12 months to June 2024; it is one of the fastest-growing sectors in the UK economy.

The Government agree with this; they have identified the creative industries as a growth-driving sector and want to encourage it. The smart fund can be a catalyst for further growth, due to both the potential of higher personal earnings and the multiplier effect of new arts and culture funding. We must avoid too many creators being locked out of this new potential prosperity.

In bringing forward this Bill, the Minister plays an integral role in bringing together different government departments, including DCMS, the Treasury and DSIT, to help and ensure that the digital and creative sectors flourish together. I commend the Minister for meeting me and other colleagues recently to discuss this. I realise that the amendment is not perfection in itself but if we want to do more for the creative and cultural sector, this is one way of doing it.

We do not get free money for culture in this country. We have not had the investment we have needed over the past decade and a half. This is an opportunity at no cost to the Treasury for us to begin to unlock more resources so that we can drive further inspiring and brilliant work from our cultural community and ensure that communities that are harder pressed and have lost money through cuts to cultural budgets over that period are restored in some way, and so that we can make more progress in driving growth in the cultural industries.

For my part, I thank the Minister. I also thank DACS, the Authors’ Licensing and Collecting Society, Directors UK, BECs and Picsel, which helped brief and get this proposal this far. This move has tremendous potential and could help unlock further funding for cultural industries. I beg to move.

My Lords, I added my name to the amendment in the name of the noble Lord, Lord Bassam, and I, too, thank the Minister for the constructive meeting we had about the smart fund. While the creative industries are hugely important to this country, as was made clear in an earlier debate, artists’ earnings have suffered a real battering. As the noble Lord, Lord Bassam, said, the Authors’ Licensing and Collecting Society reported that authors earning all their income from writing decreased from 40% in 2006 to 19% in 2022, and performers and visual artists have comparable concerns about their earnings. The smart fund would provide a useful additional—I emphasise “additional”—means of funding in terms of fair recompense for creators.

The smart fund would be managed by established copyright societies, which have a track record of fair payment to creators, regulated by the Collective Management of Copyright (EU Directive) Regulations 2016. So that infrastructure, to a great extent, already exists. European schemes successfully provide royalties to UK rights holders. However, as acknowledged by the Government, this is under threat due to Brexit and alignment with such schemes would be extremely helpful.

I understand that discussions between DACS, the IPO and the Government have now opened up, and these discussions need to include DCMS. I say to the Minister that it would be helpful if Chris Bryant were made aware of what is said in this debate. This scheme could be introduced at little or no cost, which would be a win-win for everybody. Finally, I thank DACS and the ALCS for their briefings for this debate.

I support the amendment, to which I have attached my name, along with the noble Lord, Lord Bassam, and the noble Earl, Lord Clancarty. I declare my interest as a member of DACS, the Design and Artists Copyright Society, and I, too, thank the Minister for meeting us prior to this debate.

Today’s digital landscape presents unique and pressing challenges for visual artists that we can no longer ignore. A 2022 YouGov survey commissioned by DACS uncovered a revealing paradox in our digital culture. While 75% of people regularly access cultural content at least three times a week, with 63% downloading it for free, an overwhelming 72% of the same respondents actively support compensating artists for digital sharing of their work. These figures paint a stark picture of the disconnect between the public’s consumption habits and their ethical convictions about fair compensation.

The Netherlands offers a compelling blueprint for change through DACS’ partner organisation Pictoright. Its innovative private copying scheme has successfully adapted to modern consumption habits while protecting artists’ interests. Consider a common scenario in museums: visitors now routinely photograph artworks instead of purchasing traditional postcards. Under Pictoright’s system, artists receive fair compensation for these digital captures, demonstrating that we can embrace the convenience of digital access without sacrificing creators’ right to earn from their work. This proven model shows that the tension between accessibility and fair compensation is not insurmountable.

The smart fund offers a similar balanced solution for the UK. This approach would protect our cultural ecosystem while serving the interests of creators, platforms and the public alike. I hope the Government will look favourably upon this scheme.

My Lords, I thank the noble Lord, Lord Bassam, for retabling his Committee amendment, which we did not manage to discuss. Sadly, it always appears to be discussed rather late in the evening, but I think that the time has come for this concept and I am glad that the Government are willing to explore it.

I will make two points. Many countries worldwide, including in the EU, have their own version of the smart fund to reward creators and performers for the private copy and use of their works and performances. Our own CMS Select Committee found that, despite the creative industries’ economic contribution—about which many noble Lords have talked—many skilled and successful professional creators are struggling to make a living from their work. The committee recommended that

“the Government work with the UK’s creative industries to introduce a statutory private copying scheme”.

This has a respectable provenance and is very much wanted by the collecting societies ALCS, BECS, Directors UK and DACS. Their letter said that the scheme could generate £250 million to £300 million a year for creatives, at no cost to the Government or to the taxpayer. What is not to like? They say that similar schemes are already in place in 45 countries globally, including most of Europe, and many of them include an additional contribution to public cultural funding. That could be totally game-changing. I very much hope that there is a fair wind behind this proposal.

My Lords, I thank the noble Lord, Lord Bassam of Brighton, for laying this amendment and introducing the debate on it.

As I understand it, a private copying levy is a surcharge on the price of digital content. The idea is that the money raised from the surcharge is either redistributed directly to rights holders to compensate them for any loss suffered because of copies made under the private copying exceptions or contributed straight to other cultural events. I recognise what the noble Lord is seeking to achieve and very much support his intent.

I have two concerns. First—it may be that I have misunderstood it; if so, I would be grateful if the noble Lord would set me straight—it sounds very much like a new tax of some kind is being raised, albeit a very small one. Secondly, those who legitimately pay for digital content end up paying twice. Does this not incentivise more illegal copying?

We all agree how vital it is for those who create products of the mind to be fairly rewarded and incentivised for doing so. We are all concerned by the erosion of copyright or IP caused by both a global internet and increasingly sophisticated AI. Perhaps I could modestly refer the noble Lord to my Amendment 75 on digital watermarking, which I suggest may be a more proportionate means of achieving the same end or at least paving the way towards it. For now, we are unable to support Amendment 57 as drafted.

I thank my noble friend Lord Bassam for his Amendment 57 on the subject of private copying levies. It reinforces a point we discussed earlier about copying being covered by copyright.

The smart fund campaign seeks the introduction of a private copy levy. Such a levy would aim to indirectly compensate copyright owners for the unauthorised private copying of their works—for example, when a person takes a photo of an artwork or makes a copy of a CD—by paying copyright owners when devices capable of making private copies are sold.

Noble Lords may be aware that, in April 2024, the Culture, Media and Sport Committee recommended that the Government introduce a private copying levy similar to that proposed by this amendment. The Government’s response to that recommendation, published on 1 November, committed the Intellectual Property Office to meet with representatives from the creative industries to discuss how to strengthen the evidence base on this issue. That process is under way. I know that a meeting with the smart fund group is planned for next week, and I can confirm that DCMS is included and invited. I know that the IPO would be glad to meet my noble friend, as well as the noble Lord, Lord Freyberg, and the noble Earl, Lord Clancarty, to discuss this further. I also absolutely assure him that Chris Bryant is aware of this important issue and will be following this.

I am sure my noble friend will agree that it is essential that we properly engage and consider the case for intervention before legislating. Therefore, I hope he will be content to withdraw his amendment, to allow the Government the opportunity to properly explore these issues with creative and tech industry stakeholders.

My Lords, I will happily withdraw my amendment. I am delighted to hear of the progress that the Minister has set out. I view his comments as a positive endorsement of the progress made so far.

It is essential that we get more money into the hands of creators, who are an important driving force and part of our economy. It is essential too that we make more funds available for arts generally across the country. This is one way of doing it. The approach was endorsed in a recent Fabian Society publication, Arts For Us All. It identified a number of other potential sources for generating income that could be distributed to the arts and arts organisations.

I commend the Government for taking up the challenge posed by the smart fund and I look forward to playing my part, along with my colleagues on the Cross Benches and others who support this initiative. It could do much to strengthen the funding base for the arts as a cultural sector, which was sadly eroded by the previous Government over the last decade and a half. I beg leave to withdraw my amendment.

Amendment 57 withdrawn.