I beg to move,
That this House has considered the importance of intellectual property to the British economy.
Thank you for chairing the debate this morning, Mr Gapes. I also thank the Backbench Business Committee for allocating time to the important subject of British intellectual property. I was particularly keen to have the subject before the House again because we are in the midst of a number of important developments in the area of IP. I hope that we can report on and flesh out some of those today, but I also reiterate my desire to debate the subject in the main Chamber in due course.
Intellectual property is one of the major areas of competence that will revert from Brussels to the UK when we leave the European Union. I welcome the Prime Minister’s plan to deal with that transition in part by converting the existing body of European law and regulation applicable to the UK into UK law for Parliament to debate, amend and repeal with sufficient time to consider each piece. I also understand her intention thus to create stability for business. Legislation, in particular in a complex area such as intellectual property, takes significant time to put in place, so it behoves us to start preparing to manage our own affairs in the area now, establishing what works, what does not and how we want to improve the latter.
I congratulate my hon. Friend on securing this important debate. He talked about the transition and legislation, but does he also share my support for the inclusion of intellectual property in the industrial strategy, given that key sectors rely on it, such as the creative industries which are so well placed to contribute significantly to economic growth?
Absolutely. I completely share my hon. Friend’s pleasure at IP’s inclusion. That tells us that the Government are taking IP, which cuts across so much of our country’s industrial policy, seriously. I am very much of his opinion.
The Digital Economy Bill, which is in the other place, has only three clauses on IP. I do not take the Government to task for that—it has been a long time since the previous legislation, the Digital Economy Act 2010, and there is much important ground to cover—but it serves to highlight the need to prioritise examination of the area in more detail.
To that end, I welcome the acknowledgement of IP’s importance in the Green Paper on industrial strategy, which my hon. Friend the Member for Warwick and Leamington (Chris White) mentioned, and the allocation of this important brief to the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), who is known for his seriousness and attention to detail, as well as his great cricketing prowess.
From established phenomena such as the Beatles and David Bowie to emerging superstars such as Stormzy and Skepta—a great favourite of the Minister for Digital and Culture, my right hon. Friend the Member for West Suffolk (Matt Hancock)—and from our brilliant film and television exports to our technological innovators, such as those who created the bagless vacuum cleaner and the worldwide web, the UK has never been short of ideas.
IP is critical to our growing our tech sector, but I will focus my remarks on the creative industries, in my capacity as chair of the all-party parliamentary group on music and as a member of the Select Committee on Culture, Media and Sport. Other hon. Members will, I hope, bring up other areas of interest during the debate. This month, for example, the all-party parliamentary group on intellectual property held an inquiry into IP enforcement, which was incredibly valuable. I believe the report has now been published. The APPG chair, the hon. Member for Perth and North Perthshire (Pete Wishart), is in his place, so I hope that he will share more of that report with us.
This debate is about the importance of IP to the British economy and, to give a brief reminder, the numbers speak for themselves: the creative industries account for approximately 7% of GDP; for £187.4 billion in gross value added, according to Department for Culture, Media and Sport estimates; and for exports worth almost £20 billion. That does not even account for the cultural soft power of having such a powerhouse in our creative and music industries. I would highlight the 35% growth in the export value of the live music sector between 2014 and 2015, and the fact that five of the 10 top-selling artists globally in 2015 were British. As anyone who has turned on the radio recently or watched the Brit awards last week will know, 2016 was surely another great year for the music industry.
Now to the problems. Piracy is obviously one of the biggest threats to creators being allowed to capitalise on their own efforts and to see returns on any growth in interest in their work. Without that, not only will they not be able to continue to create, but they will certainly not be able to invest in mentoring or developing new talent. We should keep in mind that all such issues are interconnected for the industry. We encourage record labels to advance social mobility through pioneering apprenticeship schemes or engagement with at-risk youth, for example, but it is harder for us credibly to ask them to put into society when we are not also making serious inroads into getting our laws and regulatory regimes up to scratch in dealing with the new threats to creative industry revenues.
In that vein, I welcome the agreement announced last week between the search engines, such as Google and Bing, and the Intellectual Property Office, with the aid of the DCMS, on an industry code of practice for tackling piracy. In changes that are expected to be rolled out by the summer, search engines will modify their algorithms to demote piracy sites in results, making them harder to find. That is a good first step.
Does the hon. Gentleman agree that welcome as that change is—along with him, we pressed for that during the passage of the Digital Economy Bill through the Commons—it is important for the search engines to follow through and genuinely and sincerely enforce the code, even without the potential threat of legislation hanging over them?
I completely agree with the hon. Gentleman, but it is a start. I understand we are the first country in the world to put together such a code of practice, but enforcement is really important, because without the ability to take a stick to the problem we are somewhat limited. I very much welcome the agreement as a start, but he and I both tend to speak on the side of creators, who would like to see even bolder measures. It is only one piece of the puzzle, but we need to welcome positive changes when they are made, so I commend Google and Bing on their agreement with the IPO. It is easy to bash big companies, but they should be commended in this case. I hope they will monitor changes in traffic to such sites, to see if the measure is having the intended effect, and share those results with us and with the creative industries in due course.
Last July, I organised a debate here in Westminster Hall on one small part of the topic, which was artist remuneration for online streaming. I highlighted the example of a songwriter who had told me how he was entitled to 25% of the revenue from a song he had written. It had had 3.2 million plays on YouTube, but the young man was hardly likely to retire on the princely sum of £5.39, which was what he received for those 3.2 million views. I have to report that since then, I have continued to hear similar stories, so I am keen for that to change. The area is ripe for more engagement between the Government and content hosts.
On the legislative side, the basis of the music industry’s concerns is the so-called safe harbour laws, which in the US, the European Union and the UK give user upload streaming services the same protection from copyright as host providers such as personal cloud locker services. That is despite the fact that they operate entirely differently and, more importantly, impact on the market in different ways. That is one area in which we could look now at what changes we might make once we have left, or while we are arranging to leave, the European Union. We need to build a consensus in the time available.
On the industry side, let me compare Spotify and the user-upload site Dailymotion. Both allow users to search for and listen to Adele’s track “Hello”, which is one of the fastest selling tracks of all time. Spotify is licensed to stream that track and therefore pays the artist, the songwriter, the producers, the musicians, the publishers and the labels—the people who are so crucial to the creation of that content. Dailymotion—rather an unfortunate name for a company—does not pay. Due to ambiguity in the safe harbour framework, user-upload services can claim to be mere hosts of their users’ content. As such, they are not required to share with creators the wealth that they generate. That is simply unfair. It would be great if all streaming services were proactive about improvement, rather than appealing to the lowest common denominator. I was in business before coming here, so I understand that the competitive world can be a difficult place, especially for such sites, but that does not change the fact that they profit from someone else’s intellectual property without paying them. I am a free marketeer, but that is not the free market—that is simply theft.
I stand ready to praise, both inside and outside this House, any steps that the Government or the industry take to improve the situation. I understand that a previous attempt by creator groups to reach a deal on streaming revenues with the industry went through 17 drafts over almost two years and ultimately ended in stalemate. Given that, if the Minister committed the Government to similar work to facilitate action on this issue as they undertook for the search engine code of practice, I would happily congratulate him immediately.
I am pleased to commend the “Get It Right from a Genuine Site” campaign, which is backed by major industry players such as the British Phonographic Industry—I am pleased that I pronounced that properly—and the Motion Picture Association, as well as the Government. The campaign educates people about the harms and dangers of piracy to both creators and their own identity security, which is threatened by dodgy sites, but there is significant evidence that the law in relation to illicit streaming is not sufficient.
USB sticks such as the Amazon Fire stick and boxes with Kodi software, which are used to facilitate the streaming of pirated material direct to users’ televisions, are a growing problem, because that material is made to look legitimate. A user buys such a device—on Amazon, ironically—which may be a legitimate tool for the storage and playback of purchased content, and then loads it with a program that sweeps the internet for high-quality streams. Such devices can also be bought fully loaded, with that software having been installed by a third party, many of which are criminal enterprises that profit from the mark-up that they charge.
As hon. Members who have seen demonstrations will know, the pirated content is well presented and well organised. There is a menu at the front end. One can have a brilliant array of television programmes and feature films, including those that were released in theatres only a matter of days beforehand or, in some cases, have not been released. One can even apply skins to the menus to make it look like the content is coming through a program such as iPlayer or a company such as Sky, even though every bit of content is pirated.
We normally go about agitating for legislative change by publicising a problem and then discussing solutions, but for a long time, companies affected by this problem have been reluctant to do even that, because it simply provides more air time for the instructions about how to load such programs and free advertising for fully loaded devices. Unfortunately, such devices are so widely known that trying to damp down publicity is no longer an option. Sky reported that six months ago, 14% of the population had access to a device that could be used for pirated technology. That figure is now nearer 19%. Uptake is highest among 30 to 50-year-olds, a group who were previously less likely to access pirated material because of the more dodgy nature of online streaming sites and file-sharing programs. As of only a couple of weeks ago, there were more than 2,000 search results for pre-loaded devices on Amazon Marketplace.
I understand that Amazon has taken action to require pre-approval to sell such devices and, if that is the case, I am pleased to hear it. I guess that it decided to do that because pirated streaming affects its own legitimate streaming business. However, it is still incredibly easy to access such devices through other platforms, such as eBay and Facebook, and for users to load the software themselves. It does not take a genius to follow a guide and load all this stuff on to a box.
As the Minister is probably aware, there is no legislation that deals specifically with such devices and practices. Trading standards authorities and the police intellectual property crime unit have set out instances where they have been unable to prosecute due to a lack of specific legislation. There has been one criminal conviction for supply of IPTV boxes—that was late last year—but that relied on complex conspiracy-to-defraud legislation. We need to simplify the legislation and make it possible for PIPCU to tackle this problem more efficiently and directly.
As I understand it, when boxes are imported pre-loaded with piracy software, it is sometimes possible for customs agents to stop them because they have a criminal purpose. However, if boxes are imported without such software and then loaded by pirates in the UK and sold on to consumers, who often think they are buying a legitimate device, nothing can be done at the time of import. Although some products, such as the Amazon Fire stick, are created to comply with relevant consumer regulations, others are created with criminal intent and meant for piracy.
Several hon. Members met industry representatives, Sky in particular, yesterday to discuss this very problem. Those representatives brought an imported box and demonstrated the issue. They told us that they had brought a similar device to the House last week to test it in advance of their presentation. That device promptly began to emit a foul smell and smoke, and then sparked and exploded. I am sure that hon. Members appreciate that that was quite a dodgy bit of equipment, and that tells us entirely how shabby the entire piracy industry is. It is dominated by criminals who do unsavoury things with their proceeds and do not have a care in the world for consumers—much less for creators.
This issue has a huge impact on content creation. Some 19% of people have such boxes, and ownership is growing fast. Not receiving their just returns for their content has a huge impact on the creative industries’ ability to reinvest. Will the Minister therefore agree urgently to engage with PIPCU and British film and television content creators on legislative action to combat this problem? I understand that in the other place recently, the noble Baroness Buscombe, on behalf of the Government, said that she would consider tabling an amendment to the Digital Economy Bill on Third Reading that would grant the Government powers to introduce new regulations on this issue, if needed. I do not know what more evidence I can give than exploding piracy boxes, but such regulations clearly are needed. Whether or not those are introduced through the Digital Economy Bill, we should get around the table as soon as possible to discuss this urgent matter.
I understand from my discussions that creators are broadly satisfied with the state of copyright law, so I have been talking broadly about enforcement issues and those to do with new technology. I am sure that other Members will expand on other areas. The Design and Artists Copyright Society believes that the artist’s resale right is fit for purpose, and it is interested in seeing that keep functioning well for the visual arts sector. I understand there is concern from authors to see the UK maintain and implement EU proposals giving them more access to information about the sale of their work and protecting them against unfair “take it or leave it” contracts, which see authors lose out when a book suddenly becomes a bestseller.
I understand that music producers would also welcome the introduction of a right to information regarding remuneration from copyright so that they can properly audit their royalties. That is really important. However, I want to emphasise that although there may be some improvements to be made in this area, I am not entirely sure that we need a complete overhaul—we may hear more on that from other hon. Members. Trade bodies such as the Publishers Association and UK Music have said that they would be grateful for a Government commitment to the current copyright regime following our exit from the EU. I hope that the Minister will take the opportunity to give everyone such an assurance.
I will focus my remarks fairly narrowly on an area that the hon. Member for Selby and Ainsty (Nigel Adams) dealt with in his speech. I congratulate him not just on securing the debate but on his continuing efforts in this area. Although we sit on opposite sides of the House, we find ourselves agreeing more often than not on what needs to be done in relation to intellectual property.
The area I want to focus on is so-called IPTV devices. Hon. Members may well be aware that through such devices it is possible to access content, including television programmes, films and music, without paying for it. Such services are normally paid for in some way, shape or form, and ultimately the owners of the intellectual property receive some reward from such a payment. It is a serious matter when a technology emerges that enables consumers to access content without its creators being able to get a reward. Ultimately, that gives rewards to criminals, often located overseas, who effectively steal that content and enable people who do not always fully understand that what they are doing is illegal to consume it in the UK.
As the hon. Gentleman pointed out, use of these devices is growing like wildfire. I therefore say to the Minister that the time for inaction is over. The woods are burning out there. This is rapidly becoming a serious issue and, quite frankly, the Government’s response so far has been too slow. I feel justified in saying that because this issue was raised in the Committee that considered the Digital Economy Bill last year—many months ago—when we tabled amendments to encourage the Government to focus on it. In fairness, the Government are well aware of it, because they have referred to it and to the need to do something about it in reports. Why they produced a piece of legislation—it is currently in the House of Lords—entitled the Digital Economy Bill containing all sorts of measures that are perhaps peripheral to the digital economy without tackling this issue is a question that the Minister might care to answer.
When the Government were reminded of their own awareness that there was a serious issue with IPTV devices, and when amendments were tabled in Committee, they took no action, which is another mystery. When, further down the line, they have been reminded of that in the other place—the Bill has also been debated extensively in the House of Lords—all they have come up with so far, many months later, is a call for views. The call was issued recently by the Intellectual Property Office, located in Newport, next door to the constituency of my hon. Friend the Member for Newport East (Jessica Morden).
The debate rightly focuses on the regulatory regime, and there are important points to be made about that, but can I put on record my appreciation of the staff at the Intellectual Property Office in Newport? They are a highly skilled, high-performing workforce, who are a big asset to the city. Does he agree that continuing to invest in developing the office and those staff is important, given the challenges highlighted earlier by the hon. Member for Selby and Ainsty (Nigel Adams)?
Yes, my hon. Friend makes a good point. She is right to praise the workforce at the Intellectual Property Office and she is also right to point out that continuing investment in their work is extremely important. I have been concerned for many years about a culture in Government; I do not point the finger simply at the current Government, because it has existed for quite a long period of time, particularly in the old Department of Trade and Industry but also in the Department for Business, Innovation and Skills, in which I was a Minister for a short period. It is a culture that is rightly suspicious of regulation of business but too cautious about taking steps to regulate when to do so would be good for business. This is one instance in which it is quite clear that good regulation is good for business and good for a business and industry that is hugely important to this country.
It is welcome that the Government have gone from a position of denying that we need an industrial strategy, which was the ludicrous position before the current Prime Minister took over, to including the words “industrial strategy” in the title of the Department that the Minister represents, and even including the creative industries as part of our industrial strategy. There is recognition of the importance but not of the urgency of the action required.
Does the hon. Gentleman agree that the speed of uptake of IPTV devices is quite breathtaking? As he will know, a user can watch effectively any channel from more or less anywhere, including the public service broadcasters. What sort of a threat does he think that is to the PSBs?
This is not just a problem with a few young guys who want to watch premier league football. Viewing content that has been illegally acquired is being normalised in households up and down the country, across the generations. The studies into that, which the hon. Gentleman mentioned in his speech, show that it is becoming an issue across the generations. People who would not have dreamed of going up to their bedroom with their laptop and illegally streaming something are, in the comfort of their living room, with other members of their family, across the generations, watching illegal content because the way in which it is presented makes it look like they are watching Sky or Virgin Media and because they can buy the devices through reputable online retailers. People think, “Well, if I can buy it there, how on earth can I be doing anything wrong?” Quite frankly, who could blame them for thinking that? That is the scale of the challenge that the Government need to get to grips with.
I read with great interest what the Government said in response to Lords amendments to the Digital Economy Bill that were similar to those I tabled and the House of Commons Committee discussed, which I withdrew at the behest of the Government so that they could go away and do some more work. Quite frankly, we have not moved very far. Yes, we have had the call for views—I have a copy of it here—but according to Baroness Buscombe, whom the hon. Gentleman mentioned in his remarks:
“The call for views runs for six weeks, until 5 April 2017, at which time the Government will assess the responses and determine the best course of action. … The Government fully understand the harm done by illegal set-top boxes and IPTV, which is why it is crucial that we have a robust evidence base for effectively tackling this problem.”—[Official Report, House of Lords, 22 February 2017; Vol. 779, c. 373.]
As the hon. Member for Selby and Ainsty pointed out, we already have a robust evidence base, and the Government acknowledged the problem some considerable time ago. It will be too late to do anything about it if the Government wait until the Bill passes through the House of Lords and returns to the House of Commons, with any amendments.
I am sure that the hon. Gentleman will agree that in other contexts the Government are rightly concerned about children getting access to pornography. Having seen yesterday’s demonstration and a previous one given by Sky, does he share my concern that on some of the platforms in question it is possible to access pornography alongside children’s television programmes? It seems to me that the Government should look at that area closely when they consider other measures on pornography in the Bill.
There is no doubt that there are safeguarding issues, because material suitable for young children is presented on illegal set-top box platforms together with material that is suitable only for viewing by adults. Elsewhere in the Digital Economy Bill, as the hon. Gentleman will know, the Government are, with our support, creating powers to block sites that do not age-verify the sort of content that is restricted to adults. However, the platforms that we are considering are a lawless area—the wild west. The wild west is being imported into homes throughout the country. The problem is that it will become normalised to the extent that the Government will be too scared to do anything. They will be upsetting too many people, unless they act quickly; and that will damage our creative industries significantly. They are a serious, significant export earner. In this deeply regrettable era of Brexit, when we are trying to do individual trade deals around the world, it would be short-sighted for us to damage one of our most significant export earners.
Towards the end of the Lords debate on the Digital Economy Bill, the Minister indicated that the Government might be able to consider further changes to the Bill, at some point—the stages of a Bill in the House of Lords are different from ours. I understand that there is still an opportunity, under Lords procedure, for further changes to the Bill. My noble Friend Lord Stevenson of Balmacara pointed out at column 371 the danger that the Bill will run out of time in the Lords before the Government have an opportunity to consider what to do about the issue. Another legislative vehicle may not come along for some time. Bills of this kind are not like buses; they do not come along that often. My plea to the Minister is that he should talk to his DCMS colleagues about something that it is unusual for Opposition Members to suggest to the Government—whether it is time to take Henry VIII powers. Will he talk to Ministers about taking the present opportunity to pass the necessary measures to stop something that will seriously damage the creative sector?
Order. I hope to call the Front-Bench speakers just before half-past 10, so that there will be sufficient time for the winding-up speeches.
It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing a debate on an important subject that is, as we have heard, particularly relevant in the context of Brexit and the Government’s industrial strategy consultation.
As hon. Members have said, the issue is a complex one. It is right that creatives—inventors, scientists, artists, musicians and writers—should have protection for their ideas and achievements and be allowed to benefit commercially from their endeavours, but it is important to get the balance right, so that products developed for the public good do not become the subject of overly restricted access, or profiteering, and so that the intellectual property controls do not end up having a counter-productive effect. I want to talk about that in the context of some constituency experiences in the creative, commercial, industrial and scientific sectors, and perhaps to finish with some questions to the Government.
I am proud to represent a constituency with a thriving creative sector, in the west end of Glasgow. There is a vibrant cultural scene, which by definition also benefits the local economy. Music venues and art galleries help to stimulate the cultural scene and of course they are an important source of income for artists and musicians. Indeed, Glasgow City Council as a whole benefits from Salvador Dalí’s incredible painting “Christ of St John of the Cross” in Kelvingrove Art Gallery and Museum, just outside my constituency. The city acquired it at the cost of some £5,000, and at the time was heavily criticised for doing so. That work of art is now priceless, and control of the image as intellectual property has brought considerable wealth and income streams to the city. However, that has also been a challenge, because the image is so famous that it is often reproduced without the appropriate permissions. That is perhaps a good case study of some of the challenges that arise.
As I mentioned, the west end of Glasgow has a large number of small, vibrant venues, which provide a focus for a creative musical scene. I was approached by the owners of a small venue called the Hug and Pint, on Great Western Road. It is an intimate venue with approximately 100 covers a night, providing an important showcase for up-and-coming bands. Like the hon. Member for Selby and Ainsty, I am now a proud political patron of the Music Venue Trust, which supports such small venues. The Hug and Pint, and similar venues, are required by the Performing Rights Society to pay a minimum fee of approximately £38 every time they host a band. That does not necessarily sound like much, but when a venue has only 100 covers, and has live bands six nights a week on average, 52 weeks a year, it adds up to a quite significant amount—about £12,000. That has a significant impact on its operating margin.
There is a bureaucratic element; it would be quicker and easier just to give the money directly to the bands on the night, rather than sending a cheque to London so that a cheque can go to the bands. However, the requirement also represents a squeeze on margins that could ultimately have an effect opposite to what the licence is intended to achieve. If such small venues cannot host up-and-coming bands, the bands miss their chance of a break in the first place, and the creative sector narrows rather than widening. I understand from the Music Venue Trust that some flexibility, or perhaps a system in which the fee is proportionate to the take on the door, would be welcomed not just by the venues but many of the bands that play in them. I appreciate that that is not necessarily the direct regulatory responsibility of the Government, but it would be interesting to know what discussions they have had or would be prepared to have with the various industry bodies about that issue.
I also have a constituency interest in the commercial, industrial and scientific sectors. I am proud that the West of Scotland Science Park and the University of Glasgow—home to world-leading commercial and academic research—are within my constituency boundaries. Last week, my hon. Friend the Member for Glasgow North West (Carol Monaghan) and I welcomed M Squared Lasers to a meeting of the all-party group on photonics at the House of Commons. There was a demonstration of just one aspect of its world-leading laser technology: a way of detecting chemical agents, which could be deployed either in military situations or to deal with hazardous spills and leaks in an industrial or commercial context. It is important that there should be an effective patenting system to protect such inventions, as well as clarity and streamlining in the system.
I also recently visited the Centre for Virus Research at the University of Glasgow’s Garscube Campus. It undertakes world-class research into virus vectors to help to develop methods of control, prevention and vaccination. Again, an intellectual property system that is clear, easy to navigate and recognises and rewards discoveries is vital for that centre.
The hon. Member for Selby and Ainsty mentioned Sir Tim Berners-Lee, the UK citizen responsible for developing the world wide web at the CERN research centre in Switzerland. I had the immense privilege of visiting that incredible facility with the Science and Technology Facilities Council. Fascinatingly, that centre is at the other end of the intellectual property spectrum; it undertakes pure, Government-funded research, all of which is published online, with totally open access and available to anyone to make of it what they will. We were encouraged to take photographs of all of the machines and all of the research, and to speak in great detail to the researchers. Again, I recognise the role of Glasgow University in developing the large hadron collider beauty detector and working on the ATLAS experiment, both of which were crucial to discovering the Higgs boson.
The world wide web was first invented to help CERN researchers and their partners around the world to communicate with each other. The decision was taken in 1993 to make the world wide web public domain software, making it free to access and free to develop. It is well worth bearing that in mind when hearing the contributions that have already been made about how the world wide web is now being exploited for, as the hon. Member for Selby and Ainsty described, the theft of other people’s intellectual property. As an intellectual system that was set up and essentially gifted to the world, it really should not be used to profiteer from other people’s endeavours without their benefiting.
I am also the Scottish National party’s International Development spokesperson. Again, at the other end of the intellectual property spectrum, we see some of the challenges that can arise if the balance is not carefully managed, such as risks to corporate control of patenting—patenting of genetically modified organism crops, for example—and the impact that that can have in developing countries and on individual farmers. While researchers of course need to benefit from their endeavours, we have to look carefully at exactly how these things are controlled.
There is a spectrum of uses and challenges with regard to intellectual property, and it will be interesting to hear how the Government intend to take that into account as they develop their strategy. How will Brexit impact concerns about the existing bureaucracy, and are there any risks of duplication? How do the Government work with industry bodies such as the PRS for Music, and how do they support the Creative Commons licence concept for those who want to use it? I echo the points that were made about remuneration for artists from online streaming services. This is a complex but vital area to the development of our economy. I look forward to hearing from the Minister and to contributing to future similar debates.
Thank you for calling me to speak, Mr Gapes. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on getting the matter on the Order Paper. It is important that other hon. Members have touched on piracy—or the normalisation of theft, as it has been rightly called—as we also see it in many other sectors. For example, 25% of all cigarettes smoked in the UK are illicit. In my country, 40% of all petrol and diesel sales are illicit; in other parts of Great Britain, it is up to 20%.
Piracy is a huge problem, and the hon. Gentleman has really only touched on the tip of the iceberg of how deep that problem is. The people driving piracy are not Sunday school teachers; they form the most evil crime syndicate imaginable. They are gangsters, racketeers and criminals, and they will stop at nothing in pursuing their trade. We should call them out, and I hope that the Government recognise that they must address that— and fast.
Those are startling figures. Does the hon. Gentleman have any idea of the potential tax revenues—on 40% of fuel sales and 25% of cigarette sales—that the Government are losing out on? Those are extraordinary numbers.
On fuel sales alone it was half a billion pounds last year in Northern Ireland. The revenues are incalculable; they are measured in billions of pounds, not thousands. The Government really do therefore need to step up to the mark on these issues. It is something that has been called out many times.
I will focus on the music industry, in particular. I believe it has already been stated that the industry is worth billions of pounds to the UK economy; musicians alone contribute about £3.5 billion to the UK economy. It is therefore right and essential that musicians know that their rights and intellectual property are valued by this country and will be protected by Government action. I used to buy vinyl records and listen to Radio 1, but technological advances haven driven change in the sector; the revolution started in 1987—I bought my first CD in February 1987—and the music industry changed. My children do not even know what a compact disc is; they stream music and use Spotify, which is something I hardly even begin to understand.
The potential now exists to reach billions of people easily all over the world and give them enjoyment and entertainment. However, that process also contains the potential to rip off musicians, songwriters and performers. Streaming services are part-owned by big record labels, which, as has already been said, license music under contract—the terms and conditions of which are hidden from many and are protected by special non-disclosure agreements. Such NDAs have the potential to obscure the basis and chain of payments, and it is only fair that performers and creators of the music that we so enjoy have knowledge of who benefits from their IP and where.
As the technology modernises, so too the chain of payments should be made transparent. As we move towards Brexit, I urge the Government to make the United Kingdom the gold standard for protection of performers’ IP. It is essential that we do that to grab this generational opportunity to make the UK the best and the safest place for IP to be placed, contracted and protected. That would benefit performers and drive the industry, and would see that billion-pound industry grow. That is what we really want to see.
Since 2000, the music industry has undergone revolutionary change in how it does business, from physical sales of vinyl and CDs to digital downloads and subscription streaming. It is now essential that the UK makes the contract framework for streaming as equally modern, robust and revolutionary as the actual streaming services themselves. Streaming music is set to become the most significant revenue stream for recorded music. It is essential that the rules and contracts governing distribution keep all parties safe and protected from exploitation in that process.
We can see that being done, in terms of transparency of contracts. I have already touched on how NDAs should be open and transparent, so that performers, musicians and songwriters know who benefits from their IP. Payments to performers should be fairly calculated and easily understood by the performer, whose statutory rights the Government should seek to protect in a robust manner so that they are encouraged to stay, perform and create in the UK, and to be part of the thriving industry. The UK could be recognised as the safest place to do business in this field—I think we can see that happening—and not a place where people get exploited. Giving a performer or artist the right to know who benefits from their IP is essential in my view.
There are three main music labels in the UK, which control 70% of the music market between them: Warner Brothers Records UK, Sony Music UK and Universal Music UK. They are not yet fully signed up to the fair digital deals declaration; I urge the Government to take this moment to encourage them to do so, so that there is a good agreement between the big labels and people who wish to perform. Streaming has opened up an exciting, rich vein and existing contracts could now be exploited. The Government need to put their mind to funding a contract adjustment mechanism that brings old contracts into sync with new technology in a fair way. If they do, we will see the industry thrive, and we will make the big licence controllers and big labels pay to do good business here in the UK. I again congratulate the hon. Member for Selby and Ainsty on getting this matter on the Order Paper and allowing us to get these issues out in the open and discuss them today.
I welcome your chairing, Mr Gapes. I also congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on the fantastic work he does in stewarding and chairing the all-party parliamentary group on music. I refer Members to my entry in the Register of Members’ Financial Interests.
We do not do much wrong when it comes to intellectual property. We are an IP-rich and creative nation, with an IP framework that is pretty much the envy of most comparable nations around the world. Based on any global IP indexes, the UK is about the top country in all areas, such as protection of copyright, looking after patents and enforcement. We need that because we are an IP-rich nation with a thriving creative sector and an abundance of world-class creative industries. In any of the major disciplines in the creative environment—whether it is music, TV, design or fashion—the UK is among the top three. It is imperative that we create the optimum conditions for our inventors, creators, designers and wonderful artists to develop their businesses and grow, so that we can continue to do well as a nation.
Intellectual property affects every single one of us and impacts on nearly every aspect of our day-to-day lives. The content we consume, support for our small businesses and the research and development arms of our multinational companies are all predicated on a successful IP framework. We tinker and mess with it at our own risk. It is vital to economic prosperity in the UK and is the foundation from which people can derive value from their innovation and investments.
The statistics speak for themselves. As the hon. Member for Selby and Ainsty said, the creative industries alone are worth £87.4 billion a year in gross value added. They employ almost 1.5 million people in the UK, and about £1 out of every £10 of UK exports is predicated on IP-supported industries. It is perhaps the fastest growing sector in our economy. Is it not a wonderful way to reindustrialise our nation, by building and growing our economy on the imagination, creativity and talent of the people of this country? What a fantastic way to grow our economy.
It is particularly good to see the Minister in his place. He is the first Conservative Minister with responsibility for intellectual property we have had in this House; all the others have been in the House of Lords. That is a welcome development, because it allows hon. Members with an interest to debate these critical issues with the Minister and question him at departmental questions. I think he is the first IP Minister in this House since the right hon. Member for Tottenham (Mr Lammy) back in 2008. I look forward, as chair of the all-party parliamentary group on intellectual property, to working closely with the Minister. I would not say that it has been chaotic, but there has been an issue with how intellectual property has been stewarded by this Government. It has been shunted between various Departments, with no clear chain of command. At last, we have that, and I hope the Minister will take full advantage of the opportunities it presents.
As well as being valuable to our economy, our IP framework is constantly evolving, and we have to deal with current issues and new ones that await us around the corner. That is because IP and most of the things it is responsible for stewarding and looking after exist on the very cutting edge of technological innovation. We have to remain vigilant about where the dangers will next appear and how they will present themselves.
I am on my second Digital Economy Bill since joining the House. Looking around the Chamber, I note that the hon. Member for Cardiff West (Kevin Brennan) and the right hon. Member for Wantage (Mr Vaizey), who has just taken his place, bear the scars of the previous Digital Economy Act 2010. We just about managed to escape that one unhindered and in one piece. We now have a second Digital Economy Bill going through Parliament. There have also been two significant reviews of our IP framework over that period: the Gowers review and the Hargreaves review, which concluded a few years ago. Both of those have flavoured the Government’s response to the big issues in intellectual property.
The APPG on intellectual property has produced a series of reports and reviews, one of which was published today, about protecting intellectual property. I hope the Minister will give a considered response to the many things we discovered in the conversations we had with many stakeholders. I will turn to some of the conclusions we reached in the course of my contribution.
First, I want to look at the big external issues that impact significantly on our intellectual property framework. They do not come bigger than leaving the European Union. The most significant innovation in the European Union is the delivery of the digital single market. So much effort and energy has been put into that really important work over the past few years, and we are coming close to its conclusion.
While the digital single market has presented a number of difficulties and issues for our creative industries in the United Kingdom, it would be better to be in there, shaping that agenda, than to have to respond to what has been decided by others. Leaving the European Union will mean we have no access to shaping the agenda for the digital single market. The UK has been a strong pro-content industry voice in those EU deliberations, which sometimes balances the views of other member states that do not have the same sort of interests we do in ensuring that the content agenda and industry are properly protected. That will be lost when the UK leaves the European Union.
Does the hon. Gentleman agree that the single largest market for digital is actually not a country but the cloud? Where the legal protection resides for people who put their IP on to the cloud is really important, so making the UK the home of legal enforcement will therefore be essential.
It is difficult to disagree with the hon. Gentleman on that. We have to look at where the force of traffic is going, particularly when it comes to things like copyright, which is critical for a number of our creative industries. The copyright directives we have signed up to were designed within the European Union, but we are leaving the EU at a critical moment in the development of the digital single market. That could have a massive impact on our own IP legislation.
Most people we spoke to in the course of the APPG’s inquiry said that they would prefer to see the existing legislative framework maintained. We also looked at identifying some of the gaps in legislation that will have to be fixed in order to ensure that UK creators and businesses are properly able to protect their IP in a global market. For example, the erosion and loss of access to EU design rights for our design industry post-Brexit would have a significant and negative impact on our designers.
I also chair the all-party parliamentary writers group. We have great concerns about retaining the harmonisation of copyright across Europe. Europe is the largest market for books and will continue to be an important market for book publishers and writers in the future. It is therefore imperative that the UK’s copyright legislation is consistent with remaining EU members, to reduce additional costs for business.
We have two years left at the top table when it comes to the negotiations, consultations and conversations about the shaping of the digital single market. I encourage the Minister to use those two years as productively as possible, to ensure that the UK’s content industry will be properly looked after and represented after we leave the European Union. I hope he will reassure me today that IP rights and IP-supported business will be at the heart of any new trade arrangements and agreements we have with other nations throughout the world in the next few months and years.
As well as concerns about the EU and external issues, the APPG on intellectual property heard from witnesses about a number of emerging threats being faced by IP owners. What concerned us more than anything was the sheer range of those threats and how quickly they are emerging and developing. While technology provides huge opportunities for businesses to expand their market and access new customers, it can also undermine a creator’s ability to commercialise their intellectual property.
Those who seek to profit from IP infringement are more than prepared to exploit new technological developments to challenge the law, and they do not come any bigger than digital TV piracy. It is absolutely right for hon. Members today to have focused their remarks on the real threat of digital TV piracy. The hon. Member for Cardiff West is right that the Digital Economy Bill presents an opportunity to put that right. He is also right to say how slow Government seem to be to respond to those emerging threats and challenges. He and I both remember the early days of the music industry, which faced the same range of challenges, being at the forefront of technical innovation. The first Digital Economy Act, of 2010, probably had the music industry in mind more than anything else when it tried to deal with the issues of piracy by the sending of notifications and by talking about certain measures that could ensure that rights holders and artists would be properly protected. The Government have an opportunity with the current Digital Economy Bill to deal with the threat that has emerged and is now completely apparent. Nineteen per cent. of households have access to IPTV boxes. It is now television—production companies and satellite broadcasters—that is at the forefront of the challenges, and the Government have an opportunity to deal with that and put it right.
Another threat to intellectual property that we have heard about in the all-party groups is stream ripping. That is an increasing problem for the music sector and threatens not only musicians, but the new, legitimate safe-harbour streaming services. Again, the hon. Member for Selby and Ainsty was right to raise it as a concern.
What concerns me more than most of the things that we have heard about is the parasitic or copycat packaging used by competitors to boost sales by confusing and misleading consumers. That is not a new or emerging threat; it has existed for a long time, and we constantly hear about and return to it in the all-party IP group. However, something has to be done about it now. When we go to a supermarket and look for our favourite products, we see all the poor copies sitting right next to them—the packaging is deliberately designed to confuse customers. The Government now have to challenge this. It is totally legal at the moment, but it short-changes consumers and lets down some of our famous brands, which would expect customers to be able to go straight to them.
We have heard about a few issues with 3D printing. That offers immense opportunities for creators, businesses and consumers, but also presents many risks, which we are understanding more and more. Responding to the challenges is not easy, but I think that we have a means of doing that with the Digital Economy Bill. It is some six years since the last digital economy legislation and, if possible, the Government should look to do what they can to address some of the new challenges in the current Bill. It certainly provides an opportunity to tackle digital TV piracy.
There are some positive developments, as we have heard. The new voluntary code of practice agreed by the Government and some of the web hosts is progress. It does not solve or deal with the problem conclusively, but it is right to characterise that arrangement and agreement as progress. The code, which has been signed by Google, Bing, BPI, the Motion Picture Association and the Alliance for Intellectual Property, seeks to demote links to websites that are dedicated to infringing content for consumers in the UK.
While I was listening carefully and intently to my colleagues today, I had a look at some of the sites again. We still find that illegal sites selling artists’ works appear at the top of any searches too regularly, so the code is welcome and is clear progress. It shows what can happen when we consistently and continually ask the Government to do something. It was a Conservative party manifesto commitment. It is right to encourage Government as much as possible to focus on how this is all going to work out and not to rule out the prospect of legislation if it does not work. I think it was the hon. Member for Cardiff West who said that if there is no stick to encourage some of the web hosts, a further sanction will be needed—the Government should consider legislation if the current measure does not look as though it will work.
I also want to support the hon. Member for Selby and Ainsty on what we refer to as the value gap. We must ensure that the artists who produce all the wonderful works that we admire and appreciate are properly rewarded for the work that they do. Too many services use copyright-protected content to build businesses. They do not actually create any of the works—they just host them—but they seem to be earning the huge profits on the back of the artists and creators. They create that gap whereby they are earning millions and millions of pounds, while we still see struggling artists in our communities. We need to see the likes of Facebook, YouTube, Dailymotion, Bandcamp, Vimeo and Metacafe properly dealt with and see whether we can reduce the value gap. UK Music’s “Measuring Music” report, which we have heard about, highlighted the fact that one service, YouTube, increased its payments to music rights holders in 2015 by 11%, despite consumption on the service growing by 132%. That clearly demonstrates a value gap.
The hon. Gentleman highlights a very important issue. Would he welcome, for example, YouTube developing a subscription service so that creators could benefit more widely from any income driven through there?
The hon. Gentleman makes a fantastic suggestion. We have to encourage YouTube, which is, as we can see from the figures, one of the key players in all this, to see what it can do to ensure that musicians and artists are properly rewarded.
The growing significance of the music streaming market must not go unremarked. In the last four years, the UK music industry has grown by 17%, and the same period has seen a massive shift from consumers owning music to streaming it. The value of subscription streaming services jumped from £168 million in 2014 to £251 million in 2015. Consumers can access content by a means that was unavailable to our generation—I think I am roughly the same generation as the hon. Member for North Antrim (Ian Paisley)—while we were growing up. There are several means and methods whereby people can access the finest, newest content in the most convenient way, but as we consider all these things, and great though they are, please let us never forget the artists who produce those fantastic, wonderful works. What is the point of having all these hosts and all these things available to us if we do not treat properly those who produce the content? When we consider things such as the value gap, it is very important that we put the musician at the heart of all this. IP rights exist to protect our artists, creators, inventors and scientists, but it is vital that we get the IP framework right and remain vigilant for new threats and challenges.
I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing this important debate. There has been a large amount of agreement across the Chamber on the nature of the challenges and what we are asking the Government to address.
Intellectual property is the sum of a person’s or a business’s creativity and unique knowledge: their industrial designs, trademarks and inventions. Intellectual property gives ownership to ideas. It secures, for the creator, a stake in the value generated by their creations. Whether we are talking about the knowledge economy, the digital sector, high-end manufacturing or renewable energy, the UK has a deserved global status in all those fields. We have that status not just because British people are particularly good at having ideas, but because we are very good at safeguarding the ownership of those ideas, although, as we heard in great detail from hon. Members, we have a significant amount more to do to protect that ownership. Intellectual property is a catalyst for growth and jobs—for a successful economy. That is becoming increasingly apparent and it will be increasingly important if we are to be an economy of high pay and prosperity, and not an economy of low skill and low wages, competing on the basis of price alone, in an uncertain world.
As the hon. Member for Selby and Ainsty said, the Digital Economy Bill has only three clauses on intellectual property. He is right to make that point and to say that the Government need to give the area of IP far greater attention. He, along with a number of other hon. Members, spoke about the impact of piracy on investment and emerging talent, the threat to the creative industries’ revenues that that brings, and the importance of the code of practice. As my hon. Friend the Member for Cardiff West (Kevin Brennan) pointed out, if we have a code, there needs to be proper enforcement, and the Government have a vital role in ensuring that enforcement takes place.
As the hon. Member for Selby and Ainsty said, it is easy to bash big companies. We need to be careful about doing that and should praise them when they get things right—the code of practice is a prime example—although I hope he agrees that those big companies should pay their taxes where they generate their profits. He spoke about the safe harbour laws and touched on some of the challenges for IP as we leave the European Union. He was right to raise those challenges, which I look to the Minister to respond on. I will come back to that a bit later.
My hon. Friend the Member for Cardiff West made the point that there is large-scale agreement on the need for IP policy. He mentioned IPTV, which gives access to content without rewards to the creators but with enormous rewards to criminals who are out of our reach overseas. While he was speaking I searched on Google for IPTV and came up with Amazon, eBay and Gumtree offering very low-priced mechanisms for accessing such content. It is there, easily available in front of us, and hon. Members have pointed out just how widespread access to it is.
I am afraid that I have to agree with Members about the slow response in the Digital Economy Bill, which has happened despite the Government accepting the need for action. My hon. Friend the Member for Cardiff West raised the seriousness of the problem and expressed frustration about the lack of action on Members’ amendments tabled during the Commons stages of the Bill. Will the Minister tell us why there is such a lack of action?
My hon. Friend the Member for Newport East (Jessica Morden) rightly praised the staff based in her constituency and the excellent work they do at the Intellectual Property Office. She said, importantly, that the Government need to invest in the staff’s work for the long term because of the critical nature of IP to the success of our economy. I hope the Government will do just that.
My hon. Friend the Member for Cardiff West talked about the difference between good and bad regulation. Good regulation helps business and the economy, and that includes the need to protect smaller businesses when it comes to copyright and unregistered design rights. He and the hon. Member for Selby and Ainsty rightly highlighted the need for a proper approach from the Government on safeguarding online. That point was extremely well made and well heard; I believe it is also understood by Government. My hon. Friend talked about the damage to exports if we do not get our approach to IP right. As we leave the EU, trade deals will be important for exports, and IP is a crucial part of that agenda. The hon. Member for Glasgow North (Patrick Grady) rightly talked about the exploitation we have seen of the world wide web, and the challenges that have grown since 1993.
The hon. Member for North Antrim (Ian Paisley) spoke of the loss of revenues to the Government from illicit fuel sales—I think he said that 40% of fuel sales in Northern Ireland are illicit—and made the comparison between fuel sales and the importance of preventing illicit sales online. I was grateful to him for expressing his lack of understanding of technology and products such as Spotify—I am glad I am not the only one in the room who faces such challenges with my children and their access online.
The hon. Gentleman and others spoke of the need for fairness to the performer in benefiting from their own intellectual property. He said that there is an opportunity for the UK to provide the gold standard for IP as we leave the EU. I think we should be doing that anyway—that should have been our priority regardless of whether we were staying or leaving. It is crucial we do so in the time we have left before we finally leave. We should not be waiting to leave to achieve that goal. He made a very important point about the case for a Government role in creating a fair market and a level playing field so that industry can thrive and performers can receive the appropriate rewards for their industry, innovation, creativity and hard work.
The hon. Member for Perth and North Perthshire (Pete Wishart) was the second member of MP4 to speak in the debate. I did wonder whether he was going to contribute for the other two members as he went on, to make up for them not being here. He made some good points. He spoke about the challenge of leaving the EU and the importance of the digital single market, and called on the Government to use our remaining time to help shape the agenda before we leave. He repeated the concerns of my hon. Friend the Member for Cardiff West about how slow the Government have been in responding to protection against theft.
The UK’s system of regulating IP is considered to be one of the finest in the world, rated number three by business in the 2016 Taylor Wessing global IP index in respect of obtaining, exploiting and enforcing the main types of IP rights: trademarks, patents and design rights. The investment pays off—intellectual property makes a significant and growing contribution to the UK economy. As the Intellectual Property Office notes, UK investment in intangible assets protected by intellectual property rights has risen from £47 billion in 2000 to £70 billion in 2014 and has been estimated at 4.2% of total GDP. It is therefore clear that intellectual property is of great importance to the UK economy.
We welcome the Government’s recognition of the importance of IP in the industrial strategy Green Paper. Investment in science, research and innovation is one of the 10 pillars of the Green Paper and, as part of that, the Government are
“reviewing how to maximise the incentives created by the Intellectual Property system to stimulate collaborative innovation and licensing opportunities”.
I hope that that is going to include university spin-outs and making sure that we make full benefit of the commercial applications that come from them.
Labour is committed to investing the full 3% of GDP in research and development, and has long called for the Government to improve their record. That is the level of investment needed to place rocket boosters under the R and D pillar of the industrial strategy, and I hope we will see more of it from Government. Sadly, we have seen a decline in Government spending on R and D from 0.56% of GDP in 2009 to 0.49% in 2013. That is considerably lower than the OECD average of 0.7% and the EU average of 0.64%, so more needs to be done by the Government on investment in R and D.
IP is crucial to the success of the economy and business, and to those in industry—especially those in the creative industries, as we have heard. Clear, early action is needed on piracy, on arrangements for leaving the European Union and on making IP a key part of the success of our economy. I look forward to the Minister’s reply.
It is a pleasure to serve under your chairmanship in this debate, Mr Gapes. I am grateful to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) for securing this important debate and welcome the contributions of many of the hon. Members who have spoken.
During this important debate we have already heard about some of the many ways in which intellectual property and the creators and creative minds behind it contribute to the British economy. The Government recognise the importance of IP, as we expressed in our manifesto, in which we committed to making the UK the best place to patent, innovate and grow a business and to protecting IP online by working with internet service providers. I will use this opportunity to outline some of the steps that we are taking to make that happen.
It is clear that IP influences many parts of our daily lives and has an undeniable role to play across the economy. As hon. Members have noted, we as a country are rightly proud of our creative and innovative heritage. Our TV and film industries continue to enjoy worldwide success and, as anybody who watched the Brit awards last week knows, the same is very much true of our music industry, which produces what seems like an endless supply of chart-topping talent. The likes of Stormzy and Skepta were mentioned by my hon. Friend the Member for Selby and Ainsty, but there are others, such as Rag’n’Bone Man and Ed Sheeran, all of whom delivered great performances last week.
Our cutting-edge research base stands at the forefront of global innovation. The hon. Member for Sefton Central (Bill Esterson) asked what commitment the Government were making to support that R and D base. I ask him to look at the recent autumn statement, in which we delivered the single largest increase in research and development expenditure in 40 years, and we are committing a further £2 billion a year by the end of this spending review period to R and D. That clearly underlines the Government’s commitment to this country’s remaining at the cutting edge of science and innovation for years to come.
This is not just about pride; the statistics speak for themselves. Every year since 2001, investment in intangible assets has outstripped investment in physical assets. In 2014, UK businesses invested over £130 billion in intangible assets—£11 billion more than in physical assets. Over half of that £130 billion was protected by IP rights. That not only highlights the sheer demand for UK IP rights, but demonstrates the fact that many businesses, innovators and creators already recognise the benefits of IP protection, of which there are many.
IP rights encourage investment in research and innovation, reward original design and branding, and support all types of creativity. Businesses that manage their IP well grow faster and are more resilient. The use of patents, trademarks and designs is linked with the better creation, transfer and use of knowledge and higher firm productivity. One reason behind that is that the UK’s robust IP regime plays an essential role in improving the balance between risk and reward for innovation and creativity.
Hon. Members have noted that IP enjoys a prominent place in our industrial strategy Green Paper, in which the Government touch on IP in several ways. For example, we have announced a new piece of independent research on approaches to commercialisation in universities, as the hon. Member for Sefton Central mentioned. That will look at approaches to commercialisation, including how universities approach licensing intellectual property. That is just one of a number of announcements that were made in the Green Paper, which sets out the Government’s plans for a long-term strategy that builds on our strengths and prepares us for the years ahead.
The Prime Minister has been clear that we need an economy that works for everyone. The Green Paper marks the beginning of a dialogue to develop a strategy to deliver that. The UK already boasts one of the best independently judged IP systems in the world—the hon. Gentleman mentioned the Taylor Wessing ranking, which puts us third—but the Green Paper clearly signals the steps that the Government are taking to ensure that our IP system is not just fit for purpose, but unlocks the potential for creativity and innovation up and down the country. That includes a commitment to review how to maximise the incentives created by the IP system to stimulate collaborative innovation and licensing opportunities. The emphasis is on developing a strategy that spreads the benefits of our economic success across the UK. That is why the Government have also announced that IP representatives will be placed in UK cities in the northern powerhouse and the midlands engine—Manchester and Birmingham—to build local capability to commercialise intellectual property.
Let me turn to the importance of IP enforcement, which was a theme in several hon. Members’ remarks. Wherever the market—at home or overseas—the success and economic value of the UK’s intellectual assets highlights the potential risks when IP rights are not respected. The Government take IP enforcement seriously and believe that effective enforcement plays a vital part in supporting our creative and innovative industries. Effective IP enforcement also plays a vital part in denying funds to the many organised criminal gangs involved in counterfeiting, and in mitigating the harm—mentioned, for example, by the hon. Member for North Antrim (Ian Paisley)—caused by unlicensed manufacturing, which often goes hand in hand with labour abuse and environmental abuse.
The UK boasts one of the most innovative IP enforcement networks in the world, but we can never afford to rest on our laurels.
In our inquiry into protecting intellectual property, we heard just how threadbare trading standards is now, with the smallest resources that have ever been applied when it comes to protecting some of these areas. Will the Minister promises to look at that and perhaps to address some of the failings in resourcing trading standards?
We certainly want trading standards to perform the function that we need it to perform, and we believe that the resources are in place to enable it to do so.
As I was saying, the UK boasts one of the most effective and innovative IP enforcement networks in the world, but we cannot afford to rest on our laurels. There are always new challenges to address. My hon. Friend the Member for Selby and Ainsty and the hon. Members for Cardiff West (Kevin Brennan), for North Antrim, and for Perth and North Perthshire (Pete Wishart) were right to recognise the serious challenge that illicit TV streaming and IPTV boxes pose to our creative industries. We will vigorously combat the normalisation, as the hon. Member for Cardiff West put it, of that harmful activity. It is theft. Last Thursday, the Government published a call for views, as Members have mentioned, to determine whether the existing legislation is working to tackle this important issue. It would not be appropriate to pre-empt the outcome of the call for views, but if the case is made that legislative change is required, the Government will take the necessary steps.
I again urge the Minister to consider trying to do something about this issue in the Digital Economy Bill before it completes its stages in the House of Lords.
I am pressed for time, so I will give the hon. Gentleman a short reply. A number of cases in the legal system are currently testing whether we have sufficient legal powers to take the kind of action that we all want. Bits of legislation are potentially relevant—including the Copyright, Designs and Patents Act 1988, the Fraud Act 2006, the Proceeds of Crime Act 2002 and others—and we need to see whether they will prove adequate for the task at hand. Cases that are in the pipeline will give us a good sense of whether further legislation is needed.
More broadly, we continue to build on our success in the area of IP enforcement, guided by the new IP enforcement strategy, which was launched in May last year. Innovative solutions that are already in place include the IP intelligence hub and a wide range of voluntary initiatives with partners. Being active on so many fronts has enabled the Government to ensure that UK rights holders have a system that they can rely on.
One of our strongest assets is the police intellectual property crime unit, which is an operationally independent body that works with industry, Government and other law enforcement agencies to counter IP crime, such as counterfeit goods of the kind so graphically described by the hon. Member for North Antrim, which are so detrimental to the economy and businesses and which can be harmful to consumers. The Government are in the process of discussing how PIPCU will be funded in future and will make a statement in the coming weeks. However, the unit is just one aspect of the work that the Government are supporting to address IP crime. We remain committed to tackling the multiple challenges that are posed by IP infringement.
The hon. Member for Glasgow North (Patrick Grady) asked about the Government’s role with respect to the Performing Right Society and the minimum £38 tariff for live music concerts, and that is primarily a commercial negotiation between the rights holders and licensees. I know that the Music Venue Trust has been active in that area. Licensees and their representatives can bring a case to the Copyright Tribunal, which is an independent judicial body, if they are unhappy with the terms of a licence.
Turning to the point made by the hon. Member for North Antrim with respect to whether Governments should create a contract adjustment mechanism, we are currently looking at that issue at a European level, as he knows. Intervention on freedom to contract needs careful consideration before Governments weigh in. The risks of reducing the incentives for businesses to invest in new talent are ones that we must take exceptionally seriously, but we need to listen to creatives too. In particular, I welcome the hon. Gentleman’s support for the digital deals declaration—
Motion lapsed (Standing Order No. 10(6)).