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Lords Chamber

Volume 747: debated on Tuesday 23 July 2013

House of Lords

Tuesday, 23 July 2013.

Prayers—read by the Lord Bishop of Birmingham.

Birth of a son to Her Royal Highness the Duchess of Cambridge

Motion for an Humble Address

Moved by

That an humble Address be presented to Her Majesty The Queen as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to congratulate Your Majesty, His Royal Highness the Duke of Edinburgh, their Royal Highnesses the Prince of Wales and the Duchess of Cornwall and their Royal Highnesses the Duke and Duchess of Cambridge on the birth of a son to Her Royal Highness the Duchess of Cambridge; to signify our great pleasure at this happy event; and to assure Your Majesty of our continued loyalty and devotion”.

My Lords, I beg to move that an humble Address be presented to Her Majesty the Queen to congratulate Her Majesty, and other members of the Royal Family, on the safe delivery of a son to their Royal Highnesses the Duke and Duchess of Cambridge.

This is a very happy day: first, for the Duke and Duchess of Cambridge personally, as it is for any young couple who experience that mixture of wonder and relief when their first child is born; but, secondly, for the whole country because it means that the succession to the Throne is further secured. No reigning British sovereign has been able to look quite so far ahead since the birth of His Royal Highness Prince Edward of York as a great grandson to Queen Victoria in 1894.

The bells are pealing from the Abbey; the guns have fired their salute. But it is the crowds which have once again gathered outside Buckingham Palace which are the real mark of the great affection in which the Royal Family is held. There, too, in the palace forecourt is the easel bearing the notice from the Queen’s gynaecologist, last used to announce the birth of Prince William of Wales in 1982. When moving a similar Address on that occasion, the late Lady Young said:

“The Monarchy, within our constitution, finds itself more securely based than ever before upon the affections of the people”.

My Lords, amen to that. It was true in 2011 at the Royal Wedding, it was true in 2012 for the Diamond Jubilee, and it is clearly true today.

The Duke of Cambridge has started his public life not only through royal duty and service in the tradition of his parents and grandparents but as a serving officer in the Royal Air Force. I am sure that his father is very proud of him, as would have been his mother, at today’s happy news.

The Duchess of Cambridge has won many admirers for the way in which she has taken up her royal duties, supporting the Queen and in her own interests of art, children and sport. She and the Duke of Cambridge were superb ambassadors for the Royal Family, and for the United Kingdom, during the Olympics and the Diamond Jubilee.

We are right to celebrate this birth as a national event, but I am sure we all hope that the Duke and Duchess, and perhaps particularly the new Prince, can have some privacy. Royalty carries burdens as well as privileges, and those burdens will fall on the young Prince’s shoulders all too soon.

Our Queen, raised in the imperial court in the first part of the 20th century, today sees a child who is not likely to succeed to the Throne until well into the second half of the 21st. When that time comes, one thing is certain. The new Prince could not have a better example of duty and service than that set by his great grandmother and, indeed, his great grandfather. We wish the child well; we wish his parents well for his upbringing; and we offer Her Majesty the Queen our continued loyalty and our warmest congratulations.

My Lords, on behalf of Her Majesty's Opposition, I warmly endorse the sentiments expressed by the noble Lord the Leader of the House to Her Majesty the Queen, His Royal Highness the Duke of Edinburgh and their Royal Highnesses the Duke and Duchess of Cambridge. This is a moment of real joy for the Duke and Duchess, and we send them our warmest congratulations on the birth of their son—an extraordinary event for any new parent. It is also a moment of real happiness for people right across Britain, who will think with special affection of the Duchess, as a new mother, and her son.

Especially since their wedding in 2011, their Royal Highnesses the Duke and Duchess have given a great deal of happiness to the nation, and the occasion of the birth of their first-born child gives the nation the opportunity to make known its feelings in reply. It is clear that the nation is indeed doing so. I trust, however, that the nation will also allow them privacy to delight in their family life.

The fact that the Duke and Duchess’s first-born is a boy means that the Succession to the Crown Act 2013, which your Lordships’ House and the other place passed earlier this year, will now not need to be applied in the way it would have been had their first-born been a girl. But even so, the Act is the right thing for Parliament to have done in the modern age. It is an historic change and a welcome one, and I am sure that it will be well used in future.

Britain will rejoice in what we know will be an added delight to Her Majesty the Queen in the year celebrating the 60th anniversary of Her succeeding to the Throne in 1953. We on these Benches wish the Duke and Duchess, and the new Prince, long life and lasting happiness.

My Lords, the Leader of the House and the Leader of the Opposition have moved and seconded this Address with eloquence and elegance. It is only left for me from these Benches, with a sense of honour and privilege, to wish the Duke and Duchess of Cambridge and their son a long and happy life in the service of this country.

My Lords, it is a great honour and a real privilege, on behalf of my colleagues in the Cross-Bench group, to be associated with the sentiments already so well expressed. This is indeed a very happy occasion, and we gladly offer both our sincere congratulations and our very best wishes to Her Majesty the Queen and her family.

Your Lordships’ House has, time and again, demonstrated a particular interest in the well-being of children and families, so it has given us a very great pleasure to learn of the safe delivery of a son to the Duke and Duchess of Cambridge. Like so many loyal citizens in this country and, indeed, across the Commonwealth, we wish the baby a very long and fulfilled life.

We are indeed most grateful for this opportunity to express to Her Majesty and her family the joy the news has given us. We wish them well and offer our warmest greetings.

My Lords, the day’s proceedings in your Lordships’ House begin far too often with the announcement of a death. My friend the most reverend Primate the Archbishop of Canterbury and my other colleagues on this Bench regret not being present today because they are attending the funeral of the late Bishop of Coventry, Colin Bennetts. None the less, it is a wonderful joy and delight for us to join in the words of colleagues in this House as we pause to celebrate the birth of a new baby. Their Royal Highnesses the Duke and Duchess of Cambridge can be assured not simply of the congratulations, prayers and good wishes of those who occupy this Bench but, I am sure, the whole of the Church and faiths in England and the rest of the country.

My friend the most reverend Primate the Archbishop of Canterbury, your Lordships may like to know, did not, as was the custom in times past, actually attend the birth. Instead, he has offered his own prayers and congratulations to their Royal Highnesses, sharing,

“in their joy at this special time”,

and praying that God would,

“bless this family with love, health and happiness”.

I am delighted to associate myself with his comments and offer my own prayers for their Royal Highnesses and their new son.

Every Sunday, up and down this country, we pray for our Sovereign Lady Queen Elizabeth that she will be guided by wisdom and by truth. It may well be that similar prayers are said for this newborn child in years to come. He will, too, we hope and trust, be the Supreme Governor of the Church of England.

It is not future responsibilities that prompt our celebrations today, but a desire that this child will have the strongest network of love and care. There has been huge interest in the royal birth around the country which, with sustained sunshine, British victories at Wimbledon and the Tour de France and an upsurge in that traditional English game of cricket, leaves the country basking in well-being. In all this warmth, we remember today that a new stage has begun for a young family. The infant has no idea what symbolic authority may one day be his; and so meanwhile, we pray that their Royal Highnesses will be guided and sustained as they take up the joys and challenges of parenthood. We humbly offer our congratulations, support and affection to the whole Royal Family.

Motion agreed nemine dissentiente, and the Lord Chamberlain was ordered to present the Address to Her Majesty.

Birth of a son to Her Royal Highness the Duchess of Cambridge

Motion to Convey a Message

Moved by

That a message be conveyed to their Royal Highnesses the Duke and Duchess of Cambridge in the following terms:

“May it please Your Royal Highnesses to accept the loyal congratulations of the Lords Spiritual and Temporal in Parliament assembled on the birth of a son to Her Royal Highness the Duchess of Cambridge; and to assure Your Royal Highnesses of our great satisfaction and pleasure at this news”.

Motion agreed nemine dissentiente, and it was ordered that the Message be conveyed to Their Royal Highnesses by the Lord Chamberlain.

NHS: Children’s Congenital Heart Services


Asked By

To ask Her Majesty’s Government what assessment they have made of the recommendation of the Independent Reconfiguration Panel in its report of 30 April on children’s congenital heart services that NHS England must ensure that any new review process properly involves all stakeholders.

My Lords, NHS England is taking forward the new national review of congenital heart services as quickly and effectively as possible, basing its actions on the recommendations of the Independent Reconfiguration Panel. I am advised by NHS England that it will ensure that all stakeholders have a chance to contribute to its review. Any decisions must carry the confidence of the public and be focused on the best outcomes for all patients.

My Lords, the now discredited Safe and Sustainable review proposed closing the Royal Brompton Hospital children’s heart surgery unit, yet over the past three years this unit, along with Newcastle, has been the best performing in the country. Will the Minister reassure me that, before there is another proposal to close this or any other unit, he will publish a detailed model showing exactly what factors will be taken into account in any future proposal and how each factor will be weighted?

My Lords, the first point to emphasise to my noble friend is that the new review is the responsibility of NHS England. It is not a piece of work that Ministers are in charge of. NHS England’s advice to me is that it is too soon to describe what the exact process will be. However, I can say that NHS England is developing a process that is, in its words, “rigorous, transparent and inclusive”, particularly in the use of evidence and data. As I have said, there will be opportunities for all stakeholders to participate in the review—including, importantly, the current providers of children’s congenital heart services.

My Lords, can the Minister give any estimate of how long this saga is likely to smoulder on? By all national and international comparisons, the unit at the Freeman Hospital in Newcastle upon Tyne has proved to be absolutely outstanding, and awaiting the outcome of this lengthy process is delaying a number of important and significant developments. Can the Minister give us any assurance about how long this will take?

My Lords, my right honourable friend the Secretary of State wrote to NHS England as soon as the IRP’s report was published to say that it will need to work with all interested parties to ensure that progress on its new review of congenital heart services is made as quickly as possible. NHS England’s aim is that by June 2014 it will have developed, tested and revised a proposition for the review and undertaken work to identify a preferred approach to implementation.

My Lords, does the Minister recognise that the south Asian communities of Yorkshire, who felt deeply neglected by the previous review, will be watching with great care to see whether this review takes account of travel times and ensures that those communities most at risk of these issues are not only properly consulted but fully weighed in the balance?

Yes, my Lords. The point that the noble Lord makes is extremely important. I think that there were a number of people who, for whatever reason when the Safe and Sustainable review was going on, felt left out of the picture. NHS England is clear that that should not happen again and that lessons have to be learnt so that this is a genuinely inclusive process.

My Lords, does the Minister agree that adult and children’s services for congenital heart disease should be located on the same site to ensure continuity of care? When young people reach the age of 16, they seem to be thrown out of children’s service provision.

My Lords, I am informed by NHS England that it will be including adult heart surgery in its review of the care for people with congenital heart disease, but of course I cannot pre-empt in quite what way the conclusions will flow from that.

My Lords, during the previous difficulties and confusion when there was much lobbying and debate, the people who found it most difficult to follow the information and the evidence were parents. Presumably, they are the most important stakeholders, particularly in the case of children’s congenital heart disease. Can the Minister convey to NHS England the importance of finding clear and sometimes simple ways of helping parents at a time when they are stressed, anxious, worried about the geography and not able to understand the outcomes? They do not always have the best information with which to make decisions.

My Lords, the noble Baroness makes an extremely important point. I know that NHS England is cognisant of the need to ensure not only that parents are included in this consultation but that there is a system going forward which will inform parents appropriately.

My Lords, I refer the House to my health interests as set out in the register of interests. In the mantra of the market in the health service, which the noble Earl and his party are so wedded to, can he tell me when the Competition Commission can be expected to intervene in this issue, given that under the market mantra the decision to reduce the number of children’s heart centres reduces choice?

My Lords, before I answer that, perhaps I may be so bold as to offer the noble Lord my congratulations on his silver wedding anniversary. I recognise why he has asked that question. It is too early to prejudge the final outcome of NHS England’s review, and I should stress that there is no preconceived result in its head. What I can say is that NHS England will need to engage with all key stakeholders throughout this review, including around any competition considerations.

My Lords, if I understood my noble friend correctly, he said that it would take until 2014 to test the process and then the review has to take place. Given the years that have been consumed in the past and that will be consumed in the future, what does my noble friend think all this is doing to the quality of service that is being provided and to the morale of those who are providing it?

NHS England fully recognises that morale is extremely important and that it is fragile in certain locations. That is why the timescale is actually quite ambitious. Contrary to what my noble friend has said, its aim is to have a preferred approach to implementation ready by next June, which, given the scale of the task, is a major piece of work. It will of course build on the modelling and analysis that has already been done, so it is not going to be a wasted effort. In the mean time, I can reassure the House that children’s heart surgery is being delivered safely in all locations.



Asked by

To ask Her Majesty’s Government what assessment they have made of the current social and economic situation in Lebanon.

My Lords, the Syria crisis and, in particular, the influx of more than 600,000 refugees has had a serious impact on Lebanon’s social and economic situation. As part of the UK’s strong support for Lebanon’s stability, the International Development Secretary announced during her visit to Lebanon on 9 July that we are contributing a further £50 million to help Syrian refugees and Lebanese host communities. This brings our total support for Lebanon’s humanitarian response to £69 million, in addition to our contribution through the EU and international organisations.

Does my noble friend agree that fate has been very cruel to Lebanon, which in living memory has suffered a terrible civil war, occupation by Syria which became destructive, an invasion, all the tensions now arising from the activities of Hezbollah across the border in Syria and, as my noble friend mentioned, the huge and tragic influx of Syrian refugees to the country? Given all this, can my noble friend give some detail about the broad spectrum of support being given to Lebanon at this extremely difficult time in its history?

My noble friend makes an important point. The country has 7,000 years of history as a hinge between various continents and civilisations. Sadly and tragically, since its independence it has also suffered ongoing political challenges. I assure my noble friend, and indeed the House, that the UK stands firm in its support for the Lebanese state. We have a strong relationship and I can refer to a number of recent visits and support. For example, we strongly supported the UN Security Council statement on 10 July reaffirming international support for Lebanon. The Chief of the Defence Staff visited Lebanon earlier this month and discussed our plans to increase our assistance to the Lebanese armed forces. We have since announced an additional £10 million to bolster the armed forces’ ability to protect and manage the border. We also support trade and investment. UK-Lebanon exports are up 31% on last year’s figures.

My Lords, the European Union has just decided to designate the military wing of Hezbollah a terrorist organisation. Will the Minister say how meaningful the distinction is between the military wing and the political wing of Hezbollah? What effect will it have on any representations we would wish to make to Hezbollah?

My Lords, we do not see why the EU designation should impact on Lebanese political stability or on EU relationships with the Lebanese Government. We do not think that it will affect the EU and the UK relationship, but we feel that it sends out a clear message that the EU is united against terrorism and that there are consequences for terrorist attacks carried out on European soil. It is important, as I am sure noble Lords are aware, that the designation is of the military wing of Hezbollah. We recognise that Hezbollah’s political representatives will remain a legitimate part of Lebanon’s political scene.

My Lords, would my noble friend tell the House what discussions Her Majesty’s Government have had with the political wing of Hezbollah regarding its participation in the Syrian civil war?

Discussions with all Lebanese political parties, including Hezbollah—it is a large part of politics in Lebanon—are ongoing. We have raised our concerns because there was an indication that Lebanon was to remain neutral in this particular conflict. Clearly, from Hezbollah’s own admission that has not been the case. We are deeply concerned and have raised our concerns with Hezbollah.

My Lords, is the Minister aware of some of the allegations of violence against women, perhaps even of rape? If so, could she tell the House what work is being done to support women and families in vulnerable situations in those refugee camps?

The noble Baroness may be aware of the Foreign Secretary’s specific initiative on preventing sexual violence in conflict. Part of that is to have experts advising at an early stage, when we look at how refugee camps are set up. For example, specific work is being done on where the toilets and wash facilities are for women—and to ensure that they are done in a way that means women are protected—and on where the food facilities are. That is part of the thinking going into the development of these refugee camps.

My Lords, the EU move to blacklist the military wing of Hezbollah is the right one, although it is a very sensitive area and EU interventions in the Middle East jigsaw have not always been a dazzling success. The Minister’s remarks about continuing and strengthening our own bilateral links with Lebanon are very welcome, but will she add to that our support for the development of its very considerable offshore oil and gas resources? If developed, they could bring prosperity to the whole region and maybe contribute to peace.

My noble friend always understands issues in much more detail than I ever could. I am not familiar with the particular oil and gas reserves to which my noble friend refers, but I of course support his comments. We have put huge efforts into making sure that we strengthen the trade relationship between our two countries.

My Lords, Lebanese communities have shown incredible generosity in coping with refugees but the flow is reaching breaking point. Will the Minister accept that, in addition to providing support for refugees, more work should be done to alleviate tension between communities and to strengthen the resilience of host families?

I completely agree with the right reverend Prelate that there has been a huge show of generosity and a real welcome from the Lebanese people. Noble Lords may be aware that the population of Lebanon is about 4 million. The number of registered refugees is 600,000 but it is estimated that the real number could be a lot higher—somewhere around 1 million. That is the equivalent of the whole of the Romanian population arriving on British shores over a very short period. A huge amount of pressure has been put on local resources, which has of course caused tensions. It is for that reason that we are supporting not just the refugee communities but the host communities as well.

My Lords, the noble Baroness may be aware that at the recent G8 women’s conference, considerable anxiety was expressed about the economic and social impact of disruption across the region on women. Can the noble Baroness say what specific help is given at the moment to Lebanese women in that respect?

Economy: Infrastructure


Asked By

To ask Her Majesty’s Government what plans they have for improving infrastructure to enable businesses and employment to grow.

My Lords, the Government laid out their infrastructure plans at the spending review in their document Investing in Britain’s Future, committing to fund publicly specific projects worth over £100 billion and facilitating private investment by both extending the UK guarantees scheme and providing policy certainty, for example to energy businesses and investors through the early publication of renewable strike prices.

I thank my noble friend. On this exceptionally happy day, could we perhaps spend a moment looking on the bright side? It might be too early to spot green shoots but there are certainly a number of blue shoots around. Growth is accelerating, exports are rising and unemployment is falling. Confidence among consumers and business is growing. However, many challenges still lie ahead. Does my noble friend agree that small businesses are consistently at the sharp end of economic revival? How do he and his colleague intend to ensure that the huge and very welcome infrastructure programme that he has announced gives a fair share to Britain’s small businesses?

I thank my noble friend for those observations about the signs of good news that are beginning to be seen in the economy. Based on my discussions with small businesses, they are most concerned about access to finance, improved broadband and better roads. The Government are addressing all of those through the Funding for Lending scheme to get cheaper financing and through the business bank to get about £1 billion of capital committed in non-bank funding. We are rolling out broadband as fast as possible both privately and through government intervention and we have committed a record amount not only to building new roads but to improving and repairing existing roads so that small businesses can get around. As for the participation of small businesses themselves in these large infrastructure projects, those businesses operate down the supply chain, and giving them a long-term warning that these projects are coming is extremely helpful. By way of example, I think that about 58% of the businesses which benefit from Crossrail spend would be classified as small and medium-sized.

The noble Lord will know that I strongly welcome the news of the amounts being spent. However, as he has now taken direct responsibility in this area, can he answer the vital question of how much will be spent in the next two years?

The actual expenditure on infrastructure is difficult to predict because, of course, the predominant portion of infrastructure is financed by the private sector. That is why we focused on developing our energy policy, so that we can trigger investments with offshore wind, with nuclear and with various gas developments. We have laid out our expenditure plans and the proportion of investment that is capital investment is laid out in the spending round for this year and for future years. We have shifted, I believe, £9.3 billion from current spending to capital spending during the time of this Government. We have put an extra £18 billion into capital investment in Budget 2013. As a result of those changes, public investment as a share of GDP will be higher on average between 2010-11 and 2020-21 than it was under the previous Government. We are trying to shift it into the more productive areas. Transport investment in 2013-14 will be higher than at any point under the previous Government despite the fact that we were in something of a boom time there, and it will rise every year until 2020.

My Lords, can my noble friend tell the House how much less would be spent on infrastructure and capital projects if the plans of Alistair Darling and the previous Labour Government had been implemented?

Again we are dealing with a hypothetical question because in 2010 our plans for capital investment were broadly similar. Since then, because of our ability to focus on government efficiencies and the delivery of other programmes more cheaply, we have been able to transfer, first, the £10 billion to which I referred into capital spending within our fiscal envelope and, then, a further £18 billion through 2020-21. These capital expenditure investments are very focused on the most productive areas—economic infrastructure—but they are also all fully costed and within a fiscal envelope that is affordable.

My Lords, given the palpable failure of the regional growth fund, can the Minister report on the Government’s proper ambition to try to switch access to finance for small businesses from the current 80% secured from their banks in the United Kingdom to the 80% secured from the capital markets which applies in the United States of America?

I share the noble Lord’s observation that the current performance of the banks in supporting small and medium-sized businesses needs support. That is why we introduced Funding for Lending and amended it to make it more effective in cheapening banks’ funding for those areas. It is also why we have the business bank in place. I agree that some of the schemes need time to bed in, and they need to be activated faster and more effectively, because this is a critical part of our plan to get the economy growing again.

My Lords, can the Minister say what part high-quality, affordable childcare will play in freeing up the workforce for small and medium-sized enterprises, particularly for women entering the workplace?

I thank the noble Earl for drawing attention to the importance of flexibility in the workforce, the way that it relates to our policies in the area of welfare and its reform and the support that we are giving to get valuable members of the workforce back into being productive members of this economy.

This goes back to the noble Lord’s earlier point about being creative about finding every possible way to get finance into smaller businesses. The noble Baroness is right: getting everybody to pay on time, including the ministries, is a critical part of that, and we have a programme in place to ensure that we perform in the same way as we are encouraging the rest of business to.

Police: Neighbourhood Policing


Asked by

To ask Her Majesty’s Government what assessment they have made of the finding by Her Majesty’s Inspectorate of Constabulary that neighbourhood policing is at risk of being eroded by budget cuts.

My Lords, the Government welcome HMIC’s report, which finds that police forces are rising to the challenge of reduced budgets. Crime is down by more than 10%, victim satisfaction is up and the proportion of police officers on the front line has increased. This Government have introduced a range of new measures to tackle community crimes and have empowered forces to respond to the needs and priorities of local communities. Decisions on how neighbourhood policing teams are resourced and deployed are now for each chief constable and their PCC.

My Lords, that slightly complacent Answer does not really address the Question I asked. The HMIC said that neighbourhood policing is the cornerstone of British policing, not something that it is simply nice to have. As police forces struggle with a further £2.4 billion of cuts, the remaining police are spending more time on paperwork and investigations and less in the community. The Police Federation fears that this leads to crimes not being prevented or reported. Do the Government value neighbourhood policing? If they do, how will they deal with this problem?

My Lords, as I said, neighbourhood policing is indeed very important but it is right that police chiefs, in consultation with their elected PCCs, decide on the priorities for their area. Crime is down and satisfaction is up. Another thing that this Government have done to ensure that the public are able to hold their police forces to account is to give them greater information about the performance of their local police forces so that they can properly assess that performance and hold those police chiefs to account.

My Lords, does the Minister welcome, as I do, another item in the report—namely, that forces are making greater efforts, as they have been doing over the years, but with variable success, to reduce the amount of patrolling in pairs? Patrols by single officers are more successful, not least because the public are not deterred from approaching an officer, rather than thinking that if there are two officers, they are interrupting a private conversation.

My noble friend highlights an important example of how police chiefs are now in a position to prioritise and make decisions in the way that they see best in order to meet the Home Secretary’s strategic goal of cutting crime. The survey shows that the public support some PCSOs patrolling on their own because it leads them to think that they are more approachable than when they are in pairs.

The HMIC report includes a survey of the public, and victim satisfaction is up from 82% in 2010 to 85% in March of this year.

My Lords, what increase in the volume of neighbourhood crime does my noble friend think would be attributable to the failure of the Government to implement minimum unit pricing of alcohol?

One measure that this Government have introduced is the late-night levy, which comes into force when pubs and clubs decide to stay open beyond midnight. We have taken real steps to address this kind of activity by ensuring that people take responsibility for the decisions they make in their local area that might lead to an increase in consumption and local crime.

My Lords, the Minister said that the performance to date has been satisfactory. Indeed, the police and others should be complimented. But will the noble Baroness address the Question she was asked in relation to the future cuts that are anticipated and the fears that have been expressed in the report that the police will not be able to maintain that level of performance in the future?

The report identifies neighbourhood policing as an area which needs to be monitored in order to ensure that its importance is maintained. It is important to police forces; there is no suggestion that it is not. The police college is already looking at new and innovative ways to modernise local policing. It is there to ensure that best practice is spread around from force to force. We want to see them using new technology in order to maintain standards in a modern world.

Are the Government not to be congratulated on their success so far? For the past 10 to 15 years, all we have heard about is more and more crime requiring more and more policemen. Furthermore, now that we have elected police commissioners working alongside chief constables, is this not an opportunity to make further progress in this challenging area?

My noble friend is right. It is worth quoting Her Majesty’s Chief Inspector of Constabulary, who said:

“In these times of austerity and considerable financial challenges, it is to the credit of the police service that so many forces have shown themselves able to protect the front line and make the necessary savings.”

As I said, crime is down.

My Lords, does the noble Baroness not agree that crime has actually been falling fairly consistently for about the past 14 years? It is a slight conundrum, because one feels that if we had no policemen there would be no crime. Is it not true that there has been this fall?

The noble Lord is right. Crime has been falling for several years, but I believe that it was his party which suggested that crime would increase, because of the cuts that were necessary. We have clearly proven the Opposition wrong on that count.

My Lords, there has been some suggestion that one of the reasons for these figures is that increased crime on the internet has not necessarily been detected. Are there any indications from my noble friend that internet crime is being monitored and included in these figures?

There is a range of crimes that are coming down, but one of the crimes that is increasing is fraud; my noble friend is right about that. That must be a priority and we must ensure that it is addressed.

National Minimum Wage (Amendment) Regulations 2013

Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013

Motions to Approve

Moved by

That the draft regulations and draft order laid before the House on 6 and 10 June be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 6th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 15 July.

Motions agreed.

Companies and Partnerships (Accounts and Audit) Regulations 2013

Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013

Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013

Motions to Approve

Moved by

That the draft regulations and draft order laid before the House on 10 and 24 June be approved.

Relevant documents: 4th and 6th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 July.

Motions agreed.

Intellectual Property Bill [HL]


Clause 8 : Accession to the Hague Agreement

Amendment 1

Moved by

1: Clause 8, page 6, line 12, leave out paragraph (b) and insert—

“(b) before subsection (5) insert—“(4B) The Secretary of State may not make an order under section 15ZA unless a draft of the statutory instrument containing the order has been laid before, and approved by a resolution of, each House of Parliament.””

My Lords, before I begin today, I should like to take this opportunity to thank noble Lords for their continued interest in this Bill and for their insightful contributions to the debate. The Government have listened to the points raised by noble Lords and have given careful consideration to all aspects of the Bill. Since Grand Committee, I have met representatives from the International Chamber of Commerce, and have been working with my officials to continue to engage with stakeholders to understand their concerns and alleviate them where possible. My officials have also issued a plain English guide to the Bill, particularly aimed at small and medium-sized businesses. It can be found on the IPO website. I hope that the amendments brought forward by the Government today will reassure both noble Lords and industry representatives that their concerns are taken very seriously. The Government believe that these amendments present a balanced and considered approach.

I am also pleased to report that since we debated the issue of e-lending in Grand Committee the Government have announced funding for the public lending right scheme, which will allow this valuable work to be taken forward. I am sure noble Lords will agree that that is a very positive development.

Turning to the amendments before us, during our first day in Grand Committee we had a brief discussion about the recommendations of the Delegated Powers and Regulatory Reform Committee. The committee and its members gave careful consideration to the order-making powers set out in the Bill. As my noble friend Lord Clement-Jones suggested in the debate:

“Simply reading the committee’s report is pretty persuasive by itself”.—[Official Report, 11/6/13; col. GC 344.]

The Government also found the report persuasive. We have given detailed thought to the committee’s recommendations and I am pleased to bring before the House today amendments that will implement the changes suggested.

Amendment 1 concerns Clause 8, which permits the UK to accede to the Hague agreement concerning the international registration of designs. The amendment specifies that any order giving effect to these provisions must be considered and approved by a resolution of both Houses. Amendments 2 and 3 relate to Clause 11, concerning the introduction of an opinions service for designs. These amendments ensure that the first time that regulations are introduced to implement the opinions service they, too, must be subject to the scrutiny and approval of both Houses. Noble Lords will note that the Delegated Powers and Regulatory Reform Committee recommended that thereafter the negative resolution procedure should apply. The Government believe that this is wholly the right approach. Once the service has been set up, following full discussion in Parliament, any changes that need to be made to suit the needs of business users can be implemented more quickly.

I also take this opportunity to briefly set out why the Government have tabled a further minor and technical amendment to Clause 21. As noble Lords are aware, Clause 21 is intended to simplify the way in which the UK currently meets its international obligations to extend copyright protection to works from other countries and their citizens, delivering clearer information for users. The need arises from the fact that the UK is a signatory to a number of international copyright conventions and treaties. This obliges the UK to extend copyright protection to works and performances created by citizens of other member countries or to works that originate in other member countries. These obligations are reciprocal: UK copyright holders benefit from the same protection in those countries.

One of these international agreements is the Berne convention, which has been amended a number of times since its original incarnation in 1886 and most recently in 1971. A small number of countries have not yet caught up with the 1971 update. This minor and technical amendment makes it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. The purpose is to ensure that countries that are not signatories to the most recent Act do not receive lesser copyright protection in the UK than those that are. I beg to move.

My Lords, these government amendments implement the DPRR 3rd report recommendations and we welcome them on that basis. On the Clause 8 orders giving effect to the Hague agreement, the DPRR Committee found that the Bill created a Henry VIII power, and commented that it,

“would therefore expect to see some justification for the negative procedure that is to apply”.

However, the committee did not consider that the case for the negative procedure had been made for orders under new Section 15ZA and recommended that the affirmative procedure should apply instead. We are glad to see the Government accepting that recommendation.

Clause 11(1) inserts new Section 28A into the Registered Designs Act 1949 to provide for the registrar—that is, the Comptroller-General of Patents, Designs and Trade Marks—to give an opinion about matters specified in the regulations with respect to designs of a kind described in subsection (1)(a) and (b). The new section is purely enabling in that the whole provision about the new opinions service is to be set out in negative regulations. Subsections (2), (4), (5) and (7) set out provisions that the regulations must contain—for instance, about protecting the registrar from liability in respect of an opinion and about appeals. BIS explains, in paragraph 13 of the memorandum, that the intention is that the new opinions service will be similar to the existing patents opinions service. That service is provided for in Section 74A of the Patents Act 1977, but it is important to note that almost all the provision appears in the Act, with only one power to make regulations to provide for an exception.

The committee was not convinced by the Government’s argument for a need for flexibility and was critical that they did not explain why more provision cannot go into the Bill—for instance, about the scope of the opinions service. The committee remained unpersuaded that the negative procedure was appropriate for the introduction of this new service entirely by regulations, and recommended that the affirmative procedure should apply on the first exercise of the powers under new Section 28A, which is why we welcome the Government’s decision in this regard. We also welcome the fact that the Government now make it clear that Clause 21 incorporates countries signed up to any Act of the Berne convention by bringing the language of the clause into line with that used in the CDPA 1988. As the Minister assured us, this ensures that countries that have not signed up to the most recent Act of the Berne Convention do not receive any less copyright protection in the UK than those that have, and therefore we welcome the government amendment.

My Lords, I join the noble Lord, Lord Young, in thanking the Minister for responding so effectively to the concerns raised on Report. I hope that these swallows which are already evident on Report will mean a summer for the rest of the Report stage.

My Lords, I am grateful for the short contributions to the debate on these government amendments by the noble Lord, Lord Young of Norwood Green, and my noble friend Lord Clement-Jones. I take this opportunity to thank again the Delegated Powers and Regulatory Reform Committee for its consideration of the Bill.

Amendment 1 agreed.

Clause 11 : Opinions service

Amendments 2 and 3

Moved by

2: Clause 11, page 10, line 26, leave out from “after” to “insert” in line 27 and insert ““under this Act””

3: Clause 11, page 10, line 27, at end insert “, and

(c) after subsection (4) insert—“(4A) Subsection (4) does not apply to the first regulations to be made under section 28A, but the Secretary of State may not make those regulations unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.””

Amendments 2 and 3 agreed.

Clause 13 : Offence of unauthorised copying etc. of design in course of business

Amendment 4

Moved by

4: Clause 13, page 11, line 30, after “person” insert “deliberately”

My Lords, I shall also speak to Amendments 5 and 6, which are in my name and in the name of my noble friend Lord Young of Norwood Green.

Clause 13 introduces two offences: unauthorised copying of a registered design, and dealing with unauthorised copies. Although these provisions have been welcomed by a small number of sectoral groups, the vast majority of businesses and representative bodies strongly oppose the introduction of criminal sanctions for design infringements. Many noble Lords will have received a copy of a letter from Sir James Dyson. He writes:

“In the law relating to copyright, acts of unintentional infringement are excluded from criminal sanctions. In the proposed clause of the Intellectual Property Bill relating to registered design infringement, the same is not true. If this Bill is passed unamended, innocent designers will be threatened with criminal proceedings. It is wholly wrong that a designer should go to prison for unintentional infringement. The current wording of the Bill does not exclude that possibility”.

He goes on:

“I have spent decades fighting to protect my ideas; taking on competitors who have flagrantly copied my patents and designs. I abhor intellectual property infringement. It is something I feel passionately about. But the Intellectual Property Bill's inclusion of proposals to criminalise infringement of registered designs is a serious mistake”.

There is a real concern that the legislation, as currently drafted, will open a Pandora’s box of unintended consequences, potentially discouraging the very kind of legitimate, competitive risk-taking that policymakers have been keen to encourage as a driver of growth. The arguments that the Government have deployed until now are deeply flawed. They say that the treatment of design rights needs to be brought into line with existing copyright and trade mark legislation; that there is an anomaly between the application of criminal sanctions for copyright and trade mark infringement and the lack of equivalent provisions to stop the copying of registered designs. However, there are good reasons to treat design right infringements differently from piracy and counterfeiting. This is because the scope and validity of registered designs depends, as with patents, on prior art. As a result, the scope and validity of a design registration are never black and white but instead are open to a degree of interpretation. Indeed, relevant prior art may not even come to light until years later.

It has been suggested that criminal sanctions would provide an additional layer of protection to small designers, which would spur greater innovation and investment in new design. While this line of reasoning is superficially attractive, it ignores the potential unintended consequences of the draft legislation, specifically the risk of significantly chilling innovation and competitive design in the wider UK economy. Senior executives advised us that even a very small risk of criminal action is likely to discourage the launch of some innovative products in the UK or significantly delay decisions on product launches, particularly where a company has to escalate concerns to board level. In the best-case scenario, this would entail additional costs for the business; however, it is possible to envisage circumstances in which executives might choose not to launch products on the UK market. It is clear that this would have a significant knock-on effect on employment, growth and consumer choice.

It has been said that criminal sanctions for design rights are necessary to protect small designers and to allow them to obtain redress for infringements. The first point is that most small designers do not register their designs and instead rely on the unregistered design right. There is a huge imbalance here, and it is odd—we will return to this issue—that the focus in this clause is only on the registered design route. Secondly, it is important to recognise that criminal sections are not the only tool that can be employed to address some of the very real issues faced by small designers in obtaining redress for design infringements. For example, the Patents County Court allows for design cases to be heard under cheaper and more streamlined procedures than in the High Court. As an alternative to criminal sanctions, the Government’s strategy could have focused on promoting access to the PCC so that it could continue to allow independent and small designers to protect and enforce their ownership of their products’ design.

There are also good reasons to avoid introducing highly technical cases into the criminal court system. Most criminal judges lack the relevant expertise and evidence that is required properly to evaluate infringement claims. It is instructive in this case that the Government chose to exclude registered designs from the small claims track of the PCC last year because, as they said, disputes are likely to involve more complex issues.

There is another danger: the risk of exposing small and independent designers themselves to criminal prosecutions. Small companies will be less able to afford expensive prior-art searches and legal support, leading to a greater risk of wrongful conviction. Cases of this kind would be likely to have a seriously chilling effect on the UK’s design industry. UK enforcement agents would be compromised by the drain on resources that would inevitably arise from extending criminal sanctions to the UK design frameworks.

It is said that the IP Bill will provide a competitive boost to the UK design industry, but the introduction of criminal sanctions would have far-reaching unintended consequences for the British business environment. The uncertainty that would be created by criminal measures will discourage large multinational companies from investing in and commissioning design in the UK, given the legal risks. This deterrent to inward investment in UK design may not only result in an innovation drought but threaten the future employability of UK designers. It is telling that no other leading common-law jurisdictions, such as the USA, Australia, New Zealand or India, have introduced criminal measures for design infringements.

Notwithstanding these reservations, we accept that criminal sanctions could play a part in the fight against counterfeiting. We have therefore tried in Amendment 4 to raise the bar for criminal proceedings by making it clear that they would be commenced only if it was clear beyond reasonable doubt that the action taken had been calculated and motivated by a wish to exploit the original registered design. We feel strongly about this issue, and believe that not only have the Government failed to make their case on this point but introducing new criminal penalties should be the very last resort, and one on which Parliament should expressly give an opinion—if necessary, by voting.

It may have been assumed that, since the offence is committed if a person copies a registered design, that act must have been intentional and therefore deliberate. However, there have been cases in the past where copying was unintentional—for example, where a design brief that was intended to ensure the creation of an independent design so as to avoid infringement was erroneously too prescriptive. We suggest, therefore, that the offence should be limited to cases where a person deliberately copies a registered design. I accept that the phrasing—using the word “deliberately”—may not be the best way of inserting that sensibility, but I hope that the Minister will give serious consideration to the concerns that we have expressed here and perhaps bring forward a more suitable phrasing at Third Reading.

If this approach does not find favour, we have, in Amendment 5, provided an alternative approach, limiting criminal proceedings to cases where the civil jurisdiction has been exhausted. Our belief is that the civil jurisdiction is to be preferred, so this gives a backstop position to the criminal sanction.

Amendment 6 focuses on the differences between deliberate copying and deliberate infringing. It proposes a defence where there is a reasonable belief that one is not doing anything legally wrong. We note that the IPO, in its report on the consultation, said in paragraph 84 that the criminal offence would contain defences against unintentional infringement of registered design rights. The new section introduced by Clause 13, however, does not contain that defence.

It has often been stated that imitation is the life-blood of competition, so focusing criminal liability on deliberate copying is problematic—ironically, because it focuses on something that is actually socially valuable. We propose, at the minimum, a defence for anyone who reasonably, or in good faith, believed that their actions were non-infringing.

Section 92(5) of the Trademarks Act 1994 offers an analogy. It states that:

“It is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark”.

Similarly, Section 107 of the CDPA premises criminal liability on knowing or having reason to believe that articles are infringing articles or that acts are infringing acts. Section 107(2A), for example, states in relation to communication of a work to the public that there is criminal liability only,

“if he knows or has reason to believe that, by doing so, he is infringing copyright in that work”.

We continue to oppose the introduction of criminal sanctions for registered design infringement as a matter of principle. However, should the proposal be approved, we think that the Bill should also contain a defence for any person who reasonably believed that they were not infringing. I beg to move.

My Lords, briefly, I express some bafflement, especially in the light of discussion in Committee, at what the noble Lord, Lord Stevenson, has said. On the one hand, half his speech was devoted to saying that the criminalisation of registered design rights under the Bill was wrong and therefore should not proceed. On the other, the second half seemed to say that, on the basis that it would proceed, it should be amended to add words such as “deliberately”, as in Amendment 4. Looking at Clause 13, however, it is quite clear that mens rea, as the term is used in criminal law, is contained within the clause as it stands.

I can understand the position of Sir James Dyson. He believes in principle that it is not right to criminalise registered design infringement. I happen to disagree with him. A number of particularly small designers represented by bodies such as Anti Copying in Design—ACID—feel strongly that this is a very important protection. It may not be favoured by the IP Federation, which represents the larger companies and their designers, but this is something that is very much to be desired by the smaller designers. The argument used that there is a chilling effect on innovation is completely rebuttable. I am sure that my noble friend will go through that in his own way.

Taking the second limb of the objections of the noble Lord, Lord Stevenson, it is clear that Clause 13 does exactly what he wants his amendment to do. There is no doubt that the act has to be deliberate on reading new Section 35ZA(1)(b)(i). I cannot see that there is any ambiguity there.

My Lords, in Grand Committee we had some detailed debates about the introduction of criminal sanctions for the deliberate copying of a registered design. This is a finely balanced issue, and concerns were raised by a number of noble Lords. On the one hand, some felt that criminal sanctions should not be introduced as the offence may inadvertently capture innocent infringement. On the other hand, some noble Lords agreed that the offence was necessary, and indeed some felt that its scope should be extended further.

We shall no doubt return to the latter point in the course of today’s debate. However, as we consider this particular group of amendments, I would like to speak first to government Amendment 7 in order to allay some of the concerns that noble Lords have expressed regarding the application of the offence. This amendment to Clause 13 sets out more precisely the scope of the term “use” within the context of business activities. The amendment will further focus the offence with the aim of ensuring that innocent infringement will not be captured.

Before I comment further on this amendment, I remind noble Lords of the purpose of this clause. As your Lordships know, Clause 13 introduces a criminal sanction for the copying of a registered design. This will create a more coherent approach to the protection and enforcement of designs, trade marks and copyright in the UK, and should help to reduce the scale of blatant copying of registered designs by acting as a deterrent. Under the clause, it will be an offence to deliberately copy a registered design without the consent of its owner. It will also be an offence to knowingly market, import, export, stock or use the design in the course of business activities.

Concerns were raised in Grand Committee as to whether the term “use” may inadvertently capture accidental and incidental use under the offence. As the noble Lord, Lord Stevenson, pointed out in relation to the offence, it,

“includes as a criminal act the use of a product in the course of a business and the stocking of the product for use. Does the Minister accept that the word ‘uses’ is an unacceptably vague notion for criminal prosecution?”.—[Official Report, 13/7/13; col. GC 399.]

Because the offence has been drafted to require an element of active knowledge in order to be found guilty, it should be the case that accidental use will not be caught. However, the Government accept there may be cases where incidental use could conceivably come within the scope of the offence. For example, a business may lease a vending machine, which is a copy of a registered design, for use by its employees. This is completely ancillary to its main business but some have suggested that because the business is “using” the machine, a responsible person within that business who knew the machine was copied but still tendered its lease would be liable for the offence. The Government believe that, in practice, such cases should not attract the criminal offence. This is because the use of the registered design in this case would be ancillary to the main purpose of the business.

I reassure noble Lords that the Government have listened carefully to their concerns, and believe that this amendment is the right way to clarify the detail of the offence. By qualifying the word “use”, it will ensure that the mere incidental use of a copy of a registered design in the course of business will not be subject to criminal proceedings.

Amendment 4 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, would add a qualification to proposed new Section 35ZA(1)(a) in Clause 13. The noble Lords have set out their position on this amendment. This would mean a person would attract the criminal offence contained in Clause 13 only if an act of copying was undertaken deliberately. The Government are of the opinion that “copying” refers to a deliberate “taking” of the design in question. In crafting the offence of registered design copying, the Government worked hard to ensure that it caught only cases of intentional and deliberate copying. For example, the existing test for whether, in civil law, design is infringed is to ask whether the product creates a “different overall impression” on an “informed user”. This was rejected for the proposed criminal offence because it left too considerable a margin for subjective judgment within a criminal case. The offence was purposefully drawn to be narrower than civil infringement, and while it of course remains a subset of such infringement, it will not be used in cases where there has been no blatant copying of a design. This ensures that designers can continue to be legitimately inspired by, and innovate around, existing designs without fear of their actions being caught by criminal sanctions.

The Government do not think it is necessary to specify that the act of copying is done deliberately, because the act of copying by its very definition requires an active choice to have been made; that is to say, a deliberate choice. Or, to put it another way, if a person comes up with a design from independent and objective means then, by definition, they cannot have copied it. Furthermore, the offence requires the person to know, or have reason to believe, that the design they have copied is a registered design. This is a high standard to achieve and will capture only acts which have been carried out with positive—that is to say, deliberate—intent. In view of this, the Government believe that it is unnecessary to further qualify that an act of copying must be carried out deliberately. To briefly summarise my point, this amendment would insert an element of tautology into the clause. As such, I suggest to noble Lords that it is unnecessary.

Amendment 5 would introduce an additional requirement to the criminal sanction for registered design copying. Broadly, a defendant would have to be found guilty of civil infringement before they could be charged with the criminal offence of design copying. I will reiterate why the Government are seeking to introduce criminal sanctions in the first place. Many businesses in the design sector do not believe that the civil courts are a viable option when it comes to protecting their rights as they find the cost of court action prohibitive. They also argue that those who take their designs use whatever means they can to delay proceedings when they are initiated, increasing the costs for the smaller party in the hope that they will be forced to give up or even go out of business.

In particular, stakeholders tell us that deliberate copiers of designs also use the fear of losing in court as a weapon against design owners. It is also their belief, as set out during the consultation process that preceded the introduction of the Bill, that a criminal sanction would act as a deterrent against those who copied their designs. The amendment would, therefore, in reality limit access to the criminal offence from precisely those small businesses that were most vocal in pressing for the offence, since they would be required to undertake the civil procedure first. The amendment would also set designs apart from other types of intellectual property to which a criminal sanction provision applies. For example, the offences that apply to trade mark and copyright infringement do not provide in the relevant legislation that the civil route must be exhausted prior to the commencement of criminal proceedings. There are good reasons for this, which relate to the differences between criminal and civil law.

First, the amendment would fetter the prosecuting authorities’ ability to act when there was the potential for public harm, such as in clear cases of counterfeiting. It is worth remembering that the objective of criminal law is to punish and protect society as a whole rather than to provide redress for the individual. Secondly, the amendment requires there to be a verdict through the civil procedure, which usually takes from 12 to 24 months, and for the appeal route to be exhausted. Prosecuting authorities would have to wait until this process was complete before charging an individual, who could be engaging in practices that harm designers and society as a whole. In both cases this would undermine the impact of the criminal offence and would not seem to be in the public interest. Nor would it seem to be in the interests of justice to require the additional hurdle of proving civil infringement before criminal proceedings could begin.

Amendment 6 would effectively extend the defences relating to infringement which apply in relation to criminal sanctions. The amendment would mean that someone who had sufficient reason to believe that their activity was not infringing would not be guilty of a criminal offence. I understand that noble Lords are concerned with the potential chilling effect that the criminal sanction may have, as the noble Lord, Lord Stevenson, mentioned, and they will recall that we had a very good debate on these matters in Grand Committee. Indeed, the noble Lord, Lord Stevenson, has said, with reference to a group opposed to the introduction of criminal sanctions, that,

“it argues that criminalisation would create a ‘chilling effect’ on innovation, where deliberate activities are genuinely believed to be non-infringing, but would have no defence”.—[Official Report, 22/5/13; col. 855.]

As I have mentioned previously, the Government were mindful of this issue in constructing the offence. They therefore built in several requirements which must be fulfilled before a criminal act can be considered to have taken place. These requirements include that copying—in other words, a considered act—must take place, and therefore “accidental” or independent activity will not be caught. This also shows why Amendment 4, to which I have already spoken, is not necessary.

The requirements also include having knowledge or reason to believe that the design in question was registered. Therefore, for example, retailers who do business in good faith with a third party which has itself wilfully copied somebody else’s design, will not fall foul of the sanction provided that they do not know, or have reason to believe, that the design is registered. The criminal sanction also incorporates specific defences. Again, these are intended to eliminate any likelihood of a chilling effect, and to prevent those who have acted in a decent manner being unfairly caught by the offence.

There are two specific defences. One relates to infringement, which is closely related to the amendment we are discussing now, and the other to a reasonable belief that the registration was invalid. Nevertheless, it is clear to the Government that the particular issue of a potentially chilling effect on legitimate business operations remains of great concern to stakeholders.

As I mentioned, I recently met the International Chamber of Commerce and other business representatives to discuss the effect of Clause 13. Even more recently, my officials had further constructive contact with stakeholder organisations and businesses on precisely these matters. In the light of the representations made, the issue is something to which the Government want to give careful consideration. Although I cannot make a commitment now, I would welcome the time to consider this further.

I will take the opportunity also to speak to Amendment 8 in my name. I thank my noble friend Lord Clement-Jones for originally proposing an amendment relating to the liability of corporate bodies and partnerships. The Registered Designs Act 1949 does not make reference to partnerships, and I am grateful to my noble friend for bringing this omission to my attention. In Grand Committee, he said:

“It is very interesting that there is no reference to partnerships in the existing legislation. Partnerships are interesting bodies. Some of them have unlimited liability whereas others are limited liability partnerships. Therefore, some interesting drafting needs to be done in that regard because LLPs are quite akin to corporate bodies”.—[Official Report, 13/6/13; cols. GC 395-96.]

As I said in Committee, the Government wanted to consider this point further, and have consequently done so. Although the liability of corporate bodies is already covered in Section 35A of the Registered Designs Act 1949, the Act does not specifically set out how an offence would be treated if it has been committed by a partnership. It is important that this gap in the law is resolved appropriately.

The government amendment will introduce into the Registered Designs Act 1949 a provision that specifies how offences committed by partnerships will be addressed. Where the partnership is guilty of an offence, every partner will be liable if they were aware of the offence being committed and did not intervene to prevent it. In addition, on conviction, any fine imposed on a partnership will be paid out of the partnership’s assets. This will broadly reflect the provision of the Trade Marks Act 1994, and will be consistent with the Partnerships (Prosecution) (Scotland) Act 2013 to ensure that Scottish law is adequately provided for. The amendment will provide legal clarity on the liability of partnerships and partners, and will address the gap that exists in the law.

I hope that noble Lords will forgive me for making a long speech. The noble Lord, Lord Stevenson, raised a number of questions that I will address now. He stated his belief that the majority of bodies opposed criminal sanctions. The majority of respondents to the consultation, including small businesses and individual designers, were in favour of the introduction of criminal sanctions. The noble Lord also asked for criminal sanctions to be replaced by improved access to the PCC. The Government recognise that improving access to the PCC is certainly also important. For example, the UK Government’s series of reforms in the patent county court have simplified and streamlined procedures. The introduction of a small-claims track means that low-value claims relating to unregistered designs can be dealt with quickly, informally and cheaply. It ensures that SMEs in particular are not deterred from innovation by the potential costs of litigation to safeguard their rights.

The noble Lord, Lord Stevenson, raised the question of whether small design businesses would be intimidated. The Government do not believe that criminal sanctions will lead to small designers being intimidated by larger businesses. The CPS has powers to intervene in cases where a private prosecution is vexatious: for example, where there is no case to answer, or where the public interest factors against the prosecution outweigh those in favour. As the noble Lord will know, each case is treated differently.

Finally, the noble Lord, Lord Stevenson, claimed that other common law intellectual property countries do not have criminal sanctions—for example, the USA. Some countries that operate within the EU legal framework, as the UK does, have criminal sanctions. These include Germany, Denmark and Finland. In the light of my comments and the government amendments tabled, I ask the noble Lord to withdraw the amendment.

I begin by thanking the Minister for his very full reply and his customary courtesy in dealing with all the points, for which I am most grateful. He sets a high standard in this House. However, let us be clear: we are talking about approximately 4,000 designs which are registered each year at the Intellectual Property Office and some 350,000 designers who suggest that about 18,000 unregistered designs are lodged with the asset database, so this is a very small proportion of the designs with which we are involved. We are probably arguing around a very narrow point but it is an important one. I want to come back to it, but before I do so I thank the Minister for his comments about Amendments 7 and 8, both of which we welcome, and which have gone a long way to answering points raised in Committee, for which we are grateful to him.

The issue that we are left with is the pleasing word “bafflement” which invaded the otherwise normally sane and sober noble Lord, Lord Clement-Jones. I am delighted to have struck a blow for those who believe in bafflement. However, I must say that I am not at all baffled by this. The situation is very clear: we are against criminalisation of this aspect of the design world. We accept that there may be a case for having as a very last stop a criminalisation process which would enable those who are constantly engaging in this sort of behaviour, or are doing so on such a scale, to be given appropriate penalties. The issue is whether or not the clause that we are debating has sufficient safeguards. My argument in Committee and today was that the Minister, on behalf of the Government, did not adequately defend why it was necessary to move from a very effective civil situation to criminalisation. However, I accept that it is important to consider whether criminalisation would help the design community. That is the question we have to resolve.

It is interesting that in his response in Committee and today, the Minister kept saying that these criminal measures would apply only to deliberate acts. I think he is using the mens rea argument, which is that if somebody has gone to the point of copying, by definition it must be intentional and deliberate. However, when discussing that, he used the word “deliberate”, which is what I sought to include in the Bill. Therefore, I am baffled in the sense that I do not understand why it is possible to talk about a criminalisation which is restricted to those who are deliberately engaging in this act, but not accept that it would be helpful to have that in the Bill. That is the important thing.

If we are talking about people who are blatantly ripping off individual designers, taking their designs, using them and obtaining financial reward from them without having paid for a licence, obviously there is a point where that has to become a criminal act. I am prepared to go along with that but the bar has to be set very high. I do not believe that it has been set high enough in the present wording. Therefore, I would like to test the opinion of the House.

Amendments 5 and 6 not moved.

Amendments 7 and 8

Moved by

7: Clause 13, page 12, line 12, at end insert—

“( ) The reference in subsection (3) to using a product in the course of a business does not include a reference to using it for a purpose which is merely incidental to the carrying on of the business.”

8: After Clause 13, insert the following new Clause—

“Offences committed by partnerships

At the end of section 35A of the Registered Designs Act 1949 (the title to which becomes “Offence by body corporate or partnership: liability of officers or partners”) insert—“(3) Proceedings for an offence under this Act alleged to have been committed by a partnership are to be brought against the partnership in the name of the firm and not in that of the partners; but without prejudice to any liability of the partners under subsection (6) or (7).

(4) The following provisions apply for the purposes of such proceedings as in relation to a body corporate—

(a) any rules of court relating to the service of documents;(b) in England and Wales, Schedule 3 to the Magistrates’ Courts Act 1980;(c) in Northern Ireland, Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981. (5) A fine imposed on a partnership (other than a Scottish partnership) on its conviction in such proceedings must be paid out of the partnership assets.

(6) Where a partnership (other than a Scottish partnership) is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, is also guilty of the offence and liable to be proceeded against and punished accordingly.

(7) Where an offence under this Act committed by a Scottish partnership is proved to have been committed with the consent or connivance of a partner in the partnership, or a person purporting to act in that capacity, he as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.””

Amendments 7 and 8 agreed.

Amendment 9

Moved by

9: After Clause 13, insert the following new Clause—

“Offence of unauthorised copying etc of a design protected by design right

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) After section 235 insert—

“235A Offence of unauthorised copying etc of a design protected by design right

(1) A person commits an offence if—

(a) in the course of a business, the person copies any design protected by design right so as to make a product exactly or substantially to that design, and(b) the person does so—(i) knowing or having reason to believe that the design is protected by design right, and(ii) without the consent of the owner of that design right.(2) Subsection (3) applies in relation to a product where a design protected by design right has been copied so as to make the product exactly or substantially to the design.

(3) A person commits an offence if—

(a) in the course of a business, the person offers, puts on the market, imports, exports or uses the product, or stocks it for one or more of those purposes,(b) the person does so without the consent of the owner of the design right in that design, and(c) the person does so knowing or having reason to believe that a design has been copied without the consent of the owner of the design right in the design.(4) In this section “design right” includes an unregistered community design and a reference to the owner of the design right is also to be read as a reference to the owner of a community design right in a design.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding ten years or to a fine or to both;(b) on summary conviction in England and Wales or Northern Ireland, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both;(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum or to both.”(3) In section 235B (enforcement) substitute all references to “35ZA” for “235A”.

(4) In section 235C (forfeiture in England and Wales and Northern Ireland) substitute all references to “35ZA” for “235A”.

(5) In section 23ZC, in subsections (2) and (3), substitute all references to “registered design” for “design right subsisting in a design”.

(6) In section 235D (forfeiture in Scotland), substitute all references to “35ZA” for “235A”.

(7) In section 235D substitute all references to “35ZC” for “235C”.

(8) For section 235E (offences committed by partnerships and body corporate) substitute—

“235E Offences committed by partnerships and body corporate

(1) Proceedings for an offence under this Act alleged to have been committed by a partnership shall be brought against the partnership in the name of the firm and not in that of the partners; but without prejudice to any liability of the partners under subsection (2) below.

(2) The following provisions apply for the purposes of such proceedings as in relation to a body corporate—

(a) any rules of court relating to the service of documents;(b) in England and Wales or Northern Ireland, Schedule 3 to the Magistrates’ Court Act 1980 or Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order 1981 (procedure on charge of offence);(c) a fine imposed on a partnership on its conviction in such proceedings shall be paid out of the partnership assets;(d) where a partnership is guilty of an offence under this Act, every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, is also guilty of the offence and liable to be proceeded against and punished accordingly;(e) where an offence under this Act committed by a body corporate is proved to have been committed with the consent, connivance or neglect of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.””

My Lords, my noble friend the Minister correctly said that later in the proceedings we would be coming to the issue of criminal penalties for infringement of unregistered design. This is a rerun of an amendment that I moved in Grand Committee to provide that criminal sanctions would also apply to the deliberate infringement of unregistered designs. As I explained in Grand Committee, design is of key importance to the UK economy. However, the great majority of designers rely on unregistered rights, a point that has already been made eloquently by the noble Lord, Lord Stevenson. The introduction of criminal sanctions for the deliberate infringement of registered designs is a progressive step, but for most lone and micro designers the cost of registering every iteration of a design would be prohibitive. The extension of criminal sanctions to unregistered design rights for the majority of UK designers would be a deterrent to persistent copying in much the same way as it is for copyright and trademark infringement.

Criminal sanctions have been available for copyright infringement since 1862 and for trademark infringement since 1994. Criminal prosecutions have been used sparingly, sensibly and appropriately. Persistently copying designs, however, is not a criminal offence at all, which is anomalous. Persistently copying a two-dimensional drawing of a design or a design document can give rise to criminal liability under Section 107 of the CDPA, but when this two-dimensional work is converted into a 3D design, unless it is protected as a work of artistic craftsmanship, which we have previously discussed on the Enterprise and Regulatory Reform Act, copying that 3D version would not be a criminal offence. Nearly all designs, however, are copied from the 3D original, not the 2D drawings. How do the Government justify providing a higher level of protection to a two-dimensional design than to the 3D manifestation of that design?

I have also described the inequality of arms between infringers and designers and said that, if anything, in these circumstances, there are stronger reasons for imposing criminal offences for unregistered design right infringement than there are for infringing a registered design. In Grand Committee, to my arguments the Minister riposted:

“Registered rights can be readily accessed through the Intellectual Property Office and the EU designs registry website. They include crucial information, including the design that is protected, the date on which protection commenced and whether it is still in force. This is not the case with an unregistered design right”.

However, there is no registration of copyright in this country, yet infringement is a criminal offence as I have described. Why is it not for unregistered design?

The Minister went on to say that,

“the uncertainties surrounding unregistered designs, such as the difficulty of knowing when the design right came into existence, mean that it is more difficult for third parties to ensure that they are not infringing that design right. Therefore, against the backdrop of a threat of a criminal conviction, third parties are more likely to wait longer than necessary to be sure that the design is in the public domain before building on it, thereby extending the design right beyond its term and delaying potential innovation”.

However, exactly the same arguments could be applied to copyright infringement. What is the difference between this and copyright? The evidential burden is exactly the same; it is very similar in these circumstances. It is simply that the term for copyright is longer.

The Minister went on to say:

“Thirdly, because the UK unregistered right affords protection to functional designs, this could cause difficulties in criminal proceedings”—

could cause difficulties in criminal proceedings—

“where such designs are complex, as they well might be. For example, determining whether the interior of one alternator”—

this must be a good example—

“has been copied from the interior of another is a highly technical issue, probably requiring expert knowledge”.

I am sure that that is the case. However, the use of expert witnesses is common right across our court system. It is all a question of testing the evidence. It happens in trade marks and in copyright, so why not in design?

The Minister ended by saying:

“This is not the sort of discussion the Government believe should be dealt with in the criminal courts, especially where any element of doubt means that the high standard of proof required is unlikely to be met”.

Again, we are back to the evidence.

On the specific 2D versus 3D argument, the Minister said:

“The copying of 3D products is not the same as copying the original design document. Competitors therefore take inspiration from existing designs. Copying original design documents is closer to theft and that is why the law treats these matters differently”.—[Official Report, 13/6/13; cols. GC 394-395.]

As I said in Committee, the Minister said that this should not apply to unregistered 3D because 2D is not the same, the latter being “closer to theft”. That seems an entirely circular argument and the passage of several weeks since Committee stage has not made me any less wondrous at that circularity. I do not see that theft of a 3D design and theft of a 2D design should be morally or legally different.

I think that the Minister’s argument in Committee—I hope that it is different on Report—really boiled down to a policy matter: “We cannot really explain why, but we just don’t want to give the protection of the criminal law to unregistered design rights”. It seemed almost as simple as that. I hope that, on mature consideration, the Minister really will reconsider this issue. It is a matter of huge importance to the 350,000 designers whom the noble Lord, Lord Stevenson, mentioned, and this proposal would rectify a major wrong. I beg to move.

My Lords, I rise briefly to support the noble Lord, Lord Clement-Jones, in this argument. I think that this provision should be exactly parallel to that for copyright. I would say that the Minister should have used these arguments in the copyright case to change that provision so that it was in line with the principles in this Bill—because I think that copyright is probably overprotected—but that is a different argument. However, I certainly think that the arrangements should be the same. At some time in the future we can rationalise, if we need to, the two arrangements so that they move together in the same direction. With the advent of 3D printing it is now quite possible easily to make a three-dimensional copy at not a huge cost, so I do not see the rationale for distinguishing 2D from 3D copying. 3D copies were not possible until very recently. Logically, the two principles should be aligned, as the noble Lord, Lord Clement-Jones, has just stated. Whether we think that this should be dealt with differently, in copyright or under this arrangement, is another matter.

My Lords, I found a lot of what the noble Lord, Lord Clement-Jones, said very convincing and want to hear how the Minister will respond. The noble Lord made a very good case for taking the situation that we have currently, under which copying registered designs will be subject to criminal penalties, and asking why the very large number of unregistered designs that are lodged in a different register from the registered designs—with the IPO—cannot be given a similar sort of protection. I think that the arguments comparing that with copyright and trademarks are very persuasive. The noble Earl, Lord Erroll, made the point about 3D printing, which of course begins to muddle all our previous conceptions of what 2D and 3D design were about. Again, that will require some movement, if not now, in the very near future, in order to keep pace with the way that technology is changing.

Our Amendment 20 departs from the principles articulated by the noble Lord in moving Amendment 9 because we think that we have to take the situation as it is on the ground. As I have said before, there are 350,000 designers in the UK and UK businesses spend around £35.5 billion annually on design. These are substantial figures and make up a significant slice of our creative industries. However, the vast majority of designers rely on unregistered rights. There are 4,000 registered designs against 18,000 unregistered designs. Something like 99% of designers in the country rely on unregistered designs, and there has to be a question about how the Government will provide an appropriate framework for that development.

Our amendment suggests to the Secretary of State that there is another possible route to think about, which makes clearer what the effect would be of having a register of unregistered designs, even if that is perhaps a contradiction in terms. If it was possible to have within the government machinery some system that allowed a way to evidence the existence of the design right, and document its existence on a particular date, that would go some way to giving us certainty about cases, whether they were criminal or not, affecting the unregistered design right. We could perhaps use the copyright harm analogy to find a way for metadata to be applied to designs that would allow them to be picked up and trailed.

The noble Lord, Lord Clement-Jones, asked why there was a growing discrepancy between the registered and unregistered design right routes. Presumably, the Government have made a decision that they are going to bulk up what is available to those who have registered designs and give them more in the hope that that will persuade designers to sign up to the registered design route. But what will happen if they do not? The problems and difficulties will still be there, particularly in the fashion industry, where unregistered design is the mode that is used.

We need to do something and our Amendment 20 tries to make some suggestions that we hope the Government will listen to. Although we cannot support the proposal to criminalise the copying of unregistered designs as a matter of principle, we would be very interested in hearing how the Minister will respond.

My Lords, the effect of Amendment 9, moved by my noble friend Lord Clement-Jones, would be to extend the proposed criminal sanctions to unregistered design rights. I thank my noble friend once again for presenting the Government with his strong views on unregistered design right protection. I can assure him that the Government are absolutely convinced of the value of the unregistered right and are very aware of its role in protecting small design businesses. That is why, following consultation, the UK right and its current term of protection was retained in the face of calls by some to remove it as a means of simplifying design law.

The United Kingdom has a very successful design industry and we tinker with the success of the industry at our peril. I am particularly concerned to ensure that any changes proposed in the Bill do not act as an additional burden on industry but enhance its accomplishments. As with all intellectual property systems, there is a delicate equilibrium between a reasonable return for creators and, on the other hand, access to the creation so that competitors can shape future innovation. This is the balance the Government have to be mindful of in the changes proposed. There is a real fear that extending criminal sanctions to unregistered rights will distort this balance for the following reasons.

First, the existence of the register represents a public database, which can be searched with relative ease. Third parties can quickly assess what has been registered and what has not. This means that they can take due notice of designs protected by registration with some degree of certainty. In particular, they will know accurately when it will be possible to copy a design with no degree of legal risk. With unregistered designs, there is the problem of not knowing exactly when the design right came into existence and the duration of its protection. This means that it is more difficult for third parties to discover when they can legally copy or exploit a design. Where information about the design of an article is limited but copying it attracts a criminal sanction, it is entirely possible that industry will become risk-averse. As I stated in Grand Committee, against the background of a threat of a criminal conviction, third parties are more likely to wait longer than necessary to be sure that a design is in the public domain before building on it, therefore extending the unregistered design right beyond its term and delaying potential innovation.

I will give your Lordships an example. A furniture manufacturer is aware of a rival’s design that is successful in the marketplace and knows that it is not protected by registration. That is easily discovered by a swift inspection of the registry. He is also aware that the unregistered design right is now protected by a criminal sanction. The manufacturer will have no ready knowledge of when the item was first protected—for example, when it was in a design document, made into an article or first marketed. These all affect the term of protection. To be on the safe side, it is likely that the manufacturer will avoid copying or even engaging in reasonable follow-on innovation until he is certain that the product is out of its term of protection. With registered designs, any potential chilling effect is much reduced by the certainty of facts on duration, scope of protection and ownership, which registration creates.

Secondly, the nature of the UK unregistered right magnifies the uncertainty problem. Unregistered right in an article can relate not only to the overall design but to the individual elements of the design. The unregistered design right can therefore be seen as a basket of individual rights. For example, a kettle may have design protection in its overall shape and configuration but also in its individual parts, such as the spout, the handle and the lid. The kettle may be one of a series of kettles, so different design components may have different timelines of protection. The handle may have 10 years of protection to run because it is new, the spout may have three years as it was used in an earlier version of the kettle, and the lid may be out of protection because it is an old design. None of this information will be readily available to a business which wants to use the design or aspects of the design itself. This creates a cumulative uncertainty about the rights, which is not shared where a design appears on the public register.

Thirdly, a chilling effect is likely to be more serious in particular industries. Some designers, such as those in the fashion trade, thrive on novelty, speed of change, imitation, and rapid turnover of seasonal ranges. It is in these industries where the Government have real concerns that criminalisation of unregistered designs, which are often relied on, would have a freezing effect.

Fourthly, the potential inhibiting effect on innovation that has been identified is likely to be a particular problem in relation to functional designs, which the UK unregistered right also protects. This problem does not apply to registered designs that specifically exclude functionality. I also remind noble Lords of a further issue that relates to functional designs, which could cause difficulties in criminal proceedings. Such technical complexity should be avoided in criminal proceedings if possible.

Finally, I will say something about the protection for unregistered rights holders and, at the same time, consider Amendment 20, in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, which would place, in effect, a reporting duty on the Secretary of State. I can assure noble Lords that the Intellectual Property Office is already aware of its responsibilities to SMEs and fully recognises the difficulty that designers face in enforcing their rights. The IPO will continue to work with representative groups for the design sector to help improve the situation for designers. There are many ongoing projects. For example, the IPO and the European design and trade mark office—OHIM—are working together to consider approaches to IP enforcement. This includes the costs of searching for prior rights.

The IPO currently funds IP audits to SMEs that are enrolled on one of our partner business support programmes. From next year, a number of these will be specifically allocated to design SMEs within the Design Leadership Programme run by the Design Council. This will help design-focused SMEs effectively to manage their rights, including unregistered designs, and the creation of audit trails. Such information is readily available from organisations such as the IPO and ACID.

I hope noble Lords will agree that by accepting this amendment the Government would be duplicating information already available. I have already referred to private companies such as ACID, which provide access to highly successful unofficial databases. The amendment would place the Government in direct competition with these companies.

The amendment also raises a number of questions. For example, would an official government-run unregistered designs database be compulsory for designers to use? What about the design rights that exist in other parts of the EU? These can have an effect on rights in the UK so would all European design rights owners be required to record their unregistered designs with the IPO?

These questions may warrant further thought. However, the Government do not believe that it is wise to legislate at this stage without more consideration, particularly given the ways in which the UK IPO is already working hard to ensure that designers are as informed as possible when making business decisions about their intellectual property. For example, the IPO will provide training to the Design Council’s business advisers, to help understand IP and the value of design rights, and to direct SMEs towards the audit programme. On that basis, I am not persuaded of the need for the noble Lord’s Amendment 20.

However, I would not want noble Lords to gain the impression that, in not extending the criminal sanction to the UK unregistered design, the Government regard unregistered rights as second-class rights. The Government recognise that the introduction of criminal sanctions for designs is an important issue that is subject to strong opinions. We believe that the sanction as drawn is the best option to maintain and enhance the success of the UK design industry.

My noble friend Lord Clement-Jones and the noble Earl, Lord Erroll, raised the issue of the discrepancy between protection for 2D and 3D works. There was some debate on this in Committee and it is worth reiterating a number of key points. In the view of the Government, this is a consequence of copyright protection vesting in the “work” that consists of a design drawing, and there is no direct protection of the 2D representation of the design per se. The protection arises as a by-product of the copyright in the work. As noble Lords will know, copyright will protect against the reproduction of the drawing where the defendant knows or has reason to believe that the reproduction is an infringement of the drawing. This is merely a coincidence, caused by the fact that the drawing is a literary or graphic work and nothing more, and is a result of the existence of parallel IP regimes that coincidentally overlap in this case.

It is questionable that the existence of this anomaly, which is hardly unique in IP law, counsels equalisation or harmonisation by criminalisation of unregistered design right. As the noble Lord, Lord Howarth of Newport, who I see in his place, stated in Grand Committee:

“My Lords, consistency is not necessarily a virtue and I think that we should be very careful in the field of intellectual property. We legislate not simply out of tidy-mindedness or a desire to achieve a satisfying consistency by transferring rules and regulations that may have applied relatively successfully in one area to another”.—[Official Report, 13/6/13; col. GC 392.]

Would it therefore be sensible to bring copyright in line with these provisions, and decriminalise the copyright?

The noble Earl makes an interesting point but I see the two as being very separate.

The noble Lord, Lord Stevenson, raised the issue of the low number of registrations. The importance of registration should not be underestimated. Official registers in the UK and OHIM contain approximately 728,000 registrations, which may be of help to the noble Lord.

My noble friend Lord Clement-Jones asked why expert witnesses cannot be used to determine technical matters under unregistered design matters. If the noble Lord’s proposed extension to include unregistered design rights was the right way to proceed, what he says about expert witnesses could indeed be helpful. However, as I have said, there are many reasons why the Government believe it is not right to criminalise unregistered design copying, which is the overarching issue.

Finally, the noble Lord, Lord Stevenson of Balmacara, raised the issue of the Copyright Hub to apply metadata to designs, which is an interesting point. The digital Copyright Hub is an industry-led initiative, of which the noble Lord will be aware. I am sure that the noble Lord will understand that I cannot therefore make commitments about what the hub will do in this respect. However, I am happy to speak to the industry team about the noble Lord’s suggestion. I therefore ask that the noble Lord withdraws his amendment.

My Lords, first of all I thank the noble Earl, Lord Errol, for his intervention. We do not often agree on matters in this kind of debate, but I very much appreciate his support on this occasion, and in particular his reference to 3D printing. That will give rise to a number of particular issues. I also thank the noble Lord, Lord Stevenson. I understand that he does not follow me down the same road of principle, but the horizon to which he is pointing in terms of the ability of the Copyright Hub to apply metadata on its database to unregistered designs, could be an extremely interesting salient. It may be that when the Copyright Hub is up and running and it includes a whole data bank of unregistered designs, I come back on a future IP Bill and say, “Right, we know exactly what the provenance of these designs is, we have the metadata applied to them and it is entirely appropriate we should now apply criminal offences to infringement of unregistered design”. I can see that on the horizon, coming down the road.

The Minister was entirely consistent. He may have praised the virtues of inconsistency, but his reply was entirely consistent with his reply in Committee. However, I thought it was more considered and more elegantly constructed than in Committee. Some of his points were good ones. The least convincing were the non-technical ones such as “tinker at our peril”, “the delicate equilibrium” and so on; but some of his more granular points about magnifying the uncertainty where you have different elements within an overall design, and those he made about functional design, had a plausible ring about them. On his point about making industries more risk-averse, in many ways people in the fashion industry would love people to be rather more risk-averse. One of the real issues is copyright and design infringement in that industry. A little risk-aversion would go quite a long way. I still do not see the plausibility of his argument about the chilling effect and so on. However, I understand that the Minister has taken great care to respond, and I thank him very much.

If we can use the principles contained in Amendment 20 to develop the Copyright Hub, we might see a better future for unregistered design, which, as we have heard in this debate, is relied on by 350,000 designers. Registered design is a very small part of that. In the mean time I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Clause 16 : Unified Patent Court

Amendment 10

Moved by

10: Clause 16, page 16, line 30, at end insert—

“(2A) In making an order under this section, which confers jurisdiction on a court, removes jurisdiction from a court or varies the jurisdiction of a court, the Secretary of State shall, where the number of patent cases is such as to meet the requirements as set out in Article 7 of the Agreement on a Unified Patent Court, consider conferring local divisional court jurisdiction on—

(a) in England and Wales, the High Court;(b) in Scotland, the Court of Session;(c) in Northern Ireland, the High Court.”

My Lords, this amendment seeks to ensure that the Secretary of State consults with appropriate consultees before conferring, removing or varying court jurisdiction. In addition, where sufficient numbers of patent cases in the UK allow, he should confer on each separate legal jurisdiction throughout the United Kingdom a court which has local divisional court status, allowing patent cases where appropriate to be heard in that legal jurisdiction. This will effectively preserve the status quo under the existing national and EU patent regimes.

Article 7 of the unified patent court agreement provides that each contracting member state may request and may have one division of the court of first instance of the unified patent court within its jurisdiction for every 100 patent cases in each calendar year during three successive years prior or subsequent to the date of entry into force of the agreement. That is subject to a maximum of four such divisional courts per such jurisdiction. The Intellectual Property Bill as drafted does not place any obligation on the Secretary of State to consider or confer divisional local jurisdiction on the High Court in England and Wales, the Court of Session in Scotland or the High Court in Northern Ireland.

The society believes that, given the constitutional make-up of the United Kingdom, it is important that each separate jurisdiction continues to provide local access to a court and is fairly represented within the overall unified patent court structure. Without a local designated divisional court, local businesses will be forced to litigate outside their geographical areas. We suggest that a failure to confer local divisional court status may raise access to justice concerns, increasing costs and inconvenience to all businesses and litigants—including SMEs who may be impacted heavily by a potential additional cost in bringing or defending actions. I beg to move.

My Lords, the amendments in this group relate to the unified patent court. Amendment 10, tabled by the noble Lords, Lord Stevenson of Balmacara and Lord Young of Norwood Green, seeks to ensure that the Secretary of State will consider setting up separate local divisions of the unified patent court in three parts of the UK should there be enough case load to justify more than one local division. As I highlighted in Committee, ensuring local access to justice is a key element of the unified patent court. That is why the agreement makes provisions for local divisions. The agreement does not oblige participating states to host a local division, which can be set up and disbanded upon request.

It is important that the unified patent court serves the needs of businesses throughout the United Kingdom and the Government are committed to ensuring that all areas of the United Kingdom will have access to the court. I can assure noble Lords that the Government are already giving careful consideration to the number and location of local divisions that may be hosted in the UK. I cannot say at this time exactly how many local divisions the UK may host because it is not yet clear whether there will be enough cases to justify having more than one local division. The reason for this uncertainty is that there is no common agreement among the participating states on how the number of cases in each jurisdiction will be counted. It is important that a consistent approach is taken to assessing the case load in different countries. The issue will be decided by the participating states before the court comes into being.

While it is not possible to say for certain how many local divisions may be hosted in the UK, I can give noble Lords every assurance that the Government are open to locating local divisions in different parts of the UK. The Government are working closely with the devolved Administrations and the court services in Scotland and Northern Ireland as well as England and Wales to ensure that the needs of businesses throughout the United Kingdom are taken into account. Noble Lords may be also interested to know that the Intellectual Property Office, in partnership with the Chartered Institute of Patent Attorneys and the IP Federation, is running a series of stakeholder events about the unified patent court rules in early September. One of these events will be hosted in Edinburgh. Given that the issue of UK-based local divisions is already under consideration, it is neither necessary nor appropriate to prescribe in primary legislation their number and locations.

I now turn to government Amendment 11. This technical amendment to Clause 16 is intended to provide certainty that the Government will be able to establish fully the unified patent court. The amendment introduces new Section 88B into the Patents Act 1977. It does not extend the scope of the power conferred by Section 88A of that Act. The necessity of tabling an amendment to this clause has only recently come to light as a result of the ongoing legal analysis being conducted as part of the implementation process. That analysis has identified a potential uncertainty which could, if not addressed now, result in a significant delay in bringing the unified patent court into effect.

The unified patent court agreement effectively sets up a new international organisation, part of which will be based in the United Kingdom. It is usual that any agreement which sets up an international organisation would include limited provisions as necessary for the fulfilment of that organisation’s purpose. The unified patent court agreement does not make specific provisions for all the necessary privileges and immunities that are likely to be required for the court to fulfil its function. For example, there are no provisions relating to the terms and conditions of staff other than the judges of the court. As a consequence, it is likely that the UK and the other participating states will need to finalise a further set of detailed provisions on privileges and immunities for the unified patent court.

It is normal that such an agreement would be given effect in UK law using an order under the International Organisations Act 1968. However, due to the way the unified patent court agreement is drafted, it is not clear that the International Organisations Act 1968 applies to the court. To avoid any doubt, it is prudent that we make this provision in primary legislation now in order to clarify that the International Organisations Act will apply to the unified patent court. A similar approach was taken to give effect in the UK to the International Tribunal for the Law of the Sea.

Subject to the agreement of the House, I will move Amendment 11 in turn. I ask the noble Lord to withdraw his amendment.

My Lords, I thank the Minister for his comprehensive, constructive and helpful answer. We welcome the fact that the principle is accepted and that it is a question of establishing some principles about how cases are counted and of eliminating uncertainty—that seems a very worthwhile approach. We also welcome the fact that the Minister is working with the devolved Administrations. We trust that as the Bill progresses in the other place the Minister will be able to report back on the progress made in this area. We have no adverse comment on Amendment 11 and, overall, we cannot help saying, in light of the debate to come later this afternoon, that we welcome the Government’s pro-European stance in this area. In those circumstances, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11

Moved by

11: Clause 16, page 17, line 2, at end insert—

“88B Designation as international organisation of which UK is member

The Unified Patent Court is to be treated for the purposes of section 1 of the International Organisations Act 1968 (organisations of which the United Kingdom is a member) as an organisation to which that section applies.”

Amendment 11 agreed.

Amendment 12

Moved by

12: After Clause 19, insert the following new Clause—

“Freedom of Information: lobbying

(1) The Secretary of State must maintain an online register, freely accessible to the public and up-to-date, of all representations, lobbying and advocacy concerning intellectual property addressed to Ministers, their officials and advisers and to staff of the Patent Office and their advisers.

(2) The register must provide information about the names of all individuals and organisations engaged in such communications and the dates, modes and whereabouts of them.

(3) The register must provide a report of the contents of each such engagement, but need not disclose matter that, in the opinion of the Secretary of State, is properly regarded as commercially confidential.”

My Lords, Amendment 12 is a development of an amendment that I tabled in Committee, and I was sufficiently encouraged by the Minister’s response to feel that it was worth tabling this amendment on Report.

I start by saying that I have no interest to declare. No one has asked me to table any of the amendments that I have put down in the course of our proceedings on the Bill and I have no financial interest in any aspect of this legislation. I mention this simply because I think that it is helpful to parliamentarians in both Houses and to other people who may follow our proceedings to know whether any noble Lord participating in the proceedings has such an interest.

I venture to suggest that this amendment is timely. Recent unhappy events have propelled the Government finally to publish their Transparency of Lobbying, Non- party Campaigning and Trade Union Administration Bill. The Second Reading of that Bill in the House of Commons will not take place until September, so the Minister has the opportunity, with this amendment, to show that he is ahead of the game and, indeed, to do rather better than the Government seem minded to do in their Bill.

In Committee the Minister acknowledged the importance of this issue. Intellectual property can be a very valuable thing. It creates monopoly of a kind and it is not surprising, therefore, that lobbying is intense in relation to policy on intellectual property and, indeed, on specific decisions. Officials working in this area effectively have the power to enrich other people, and in that respect they are rather like planning officers. It seems to me that procedures relating to intellectual property policy formation and decision-making, just as with procedures in planning, ought to be as transparent as possible. Indeed, I was encouraged that the Minister said to us in Grand Committee:

“The Government are committed to transparency”.

He helpfully explained that Ministers, special advisers and the Permanent Secretary in his department, as in other departments, disclose on a quarterly basis on the government website the names of external organisations that they meet. It was very welcome that he announced that this practice would be extended to the chief executive of the Intellectual Property Office. He said that the publicity on the website would state what the main topic had been at the meeting, but he disagreed with my suggestion that there should be some further disclosure of the contents of the meeting—he said that disclosure must be proportionate. He observed that freedom of information law applies in this area and that an FoI request would be considered in the light of the requirements of the Act. However, at that point he said:

“We feel that we have gone as far as we can”.—[Official Report, 18/7/13; col. GC 54.]

I submit that the Minister did not go far enough in Committee. Indeed, the ministerial code, as it is, requires that the disclosure of meetings between Ministers and others with external organisations should be at least quarterly, so the Minister adopted a minimalist position in this regard.

Mr Cameron, when he was leader of the Opposition, made a speech in February 2010 entitled “Rebuilding Trust in Politics”, in which he said that,

“it’s time we shone the light of transparency on lobbying”.

Then nothing happened for three years until scandals forced the Government to act, but even now their proposals are inadequate—many would say derisorily so. I believe that the minimalist position taken by the Government will not hold. The disclosure of only the names of organisations that Ministers, special advisers, Permanent Secretaries and the chief executive of the IPO have met is palpably inadequate. The lobbying consultancies sell their services on the basis that they know how to get to the officials who are formulating policy options and briefing Ministers. There is much agitation in the media about the lobbying of politicians, but the lobbying of officials is at least equally important. Therefore, my amendment would require much fuller transparency than the Minister has so far been willing to contemplate. My drafting is amateur and could no doubt be improved, but if noble Lords are kind enough to read the amendment I think that they will be clear about what I am driving at.

I have of course made an exception to the requirement for disclosure of matter that can properly be regarded as commercially confidential. I think that that must be right, although I also have to say that the mantra of “commercial in confidence” induces quite a lot of scepticism among Members of Parliament and noble Lords who again and again have been fobbed off with its deployment when they have sought to probe government contracts for the public service—contracts that are extremely important and about which parliamentarians should be entitled to know more than the Government customarily allow. However, that is a side issue.

I make it clear that I am not opposed to lobbying. Of course it must be right in a liberal society and a democracy that people can make representations on behalf of themselves and other interests to those who are in power. It is legitimate and indeed positively a good thing that interested parties should have an opportunity to explain their case to the IPO. However, equally, other interested parties and other citizens ought to be entitled to know who is making such representations and, in broad terms, what the content of those representations may be. After all, they may have another legitimate case. Indeed, they may be able to assist the Intellectual Property Office and the Minister as they seek to make the right decisions in the public interest.

The IPO is, I believe, in receipt of a very great deal of lobbying—much of it aggressive. The public are worried about lobbying. Mr Cameron spoke of the,

“far-too-cosy relationship between politics, government, business and money”.

He spoke of the need to shine the light of transparency on,

“who is buying power and influence”.

In those words, it seems to me, Mr Cameron made a fairly serious allegation, although I note of course that it was not specifically in relation to intellectual property.

Last week in a column in the Guardian on 19 July, Sir Simon Jenkins went so far as to say:

“Doing the right thing is hardly a consideration in Whitehall now”.

I think that that remark is grossly exaggerated and unjust, but if prominent columnists are saying such things, no wonder there is some cynicism among the public.

I do not in any sense impugn the motives or the honesty of officials in the IPO, in the business department or anywhere else, but I believe that they are under great pressure. The drug companies, for example, are prepared to exert pressure on an enormous scale. I again quote Sir Simon Jenkins in that article. He says that,

“the NHS allows drug companies to spend £40m a year on gifts to doctors, blatantly, to use their products at the expense of the same NHS.”.

We have been reading in the newspapers about the extraordinary allegations against western pharmaceutical companies and their practices in China. I do not doubt that pharmaceutical companies will spend whatever it takes to influence decisions on the patenting of new drugs.

I simply think it is important to reassure the public. We have an opportunity through this amendment to protect the reputation of the Intellectual Property Office and to protect the reputation of the intellectual property regime all in all. The Government were slow to act on the commitment made in the coalition agreement, but this amendment offers the Minister the opportunity to provide an exemplary policy. I hope he will seize that opportunity. I beg to move.

My Lords, my noble friend Lord Howarth has comprehensively analysed the need for more transparency and the need to protect integrity. We support the basis of the amendment and I look forward to hearing the Minister’s response.

My Lords, Amendment 12 tabled by the noble Lord, Lord Howarth of Newport, relates to representations, lobbying and advocacy concerning intellectual property. It would place a duty on my right honourable friend in the other place, the Secretary of State Vince Cable, to maintain an open register of all lobbying which has taken place.

I wish to assure noble Lords that this Government take the issue of lobbying very seriously. This is the most transparent Government ever. I am pleased that the noble Lord, Lord Howarth, while not necessarily agreeing with that, certainly recognised it in his speech. We are the first Government to publish proactively meetings that Ministers and Permanent Secretaries have had with external organisations. We publish an unprecedented amount of information about whom Ministers and senior officials meet. This information is published on a quarterly basis.

The noble Lord, Lord Howarth, is right in saying, however, that the public are worried about lobbying. The Government also recognise that the public are concerned that some lobbying activity is opaque, allowing certain powerful organisations and individuals to exert a disproportionate influence on government in the shadows. We need to combat the sometimes negative perceptions of the relationship between lobbyists and government by giving people confidence that the process is transparent.

That is why only last week the Government introduced the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill, which again the noble Lord, Lord Howarth, alluded to. This Bill will bring forward a statutory register of lobbyists, which will make it clear whom lobbyists are lobbying on behalf of when they meet Ministers. Noble Lords will have the opportunity to debate this Bill, which, subject to timetabling, will be before the House later this year.

The noble Lord, Lord Howarth, tabled an amendment in Committee which would have required the annual report on the IPO’s activities, which is to be introduced by Clause 20, to include information on approaches by third parties. In Committee, as Minister for Intellectual Property, I committed to publish proactively a list of all meetings between the chief executive of the IPO and external organisations. This demonstrates the Government’s very real commitment to transparency. I also remind the noble Lord that the IPO responds to requests made by Parliamentary Question and through the Freedom of Information Act. Since 1 July 2012, the IPO has received 184 FoI requests, only five of which relate to lobbying activity.

Proactive publication of the level of information required by the amendment would be highly resource-intensive. It would mean the documentation of contact between external parties and some 1,000 IPO staff. In the previous financial year, the IPO received 41,150 applications for trade marks and 22,818 patent applications. Representations on these applications would be covered by the amendment. Such a system would therefore be a highly bureaucratic addition to many of the IPO’s statutory functions concerning the administration of IP rights and applications, which quite properly involve receiving many tens of thousands of representations from the public concerning their IP. The vast majority of such contact would be of no significance or interest to others. Furthermore, the amendment would require in some cases a duplication of the work already carried out in relation to transparency and under the draft lobbying Bill.

The Government’s approach therefore represents a proportionate response to legitimate concerns about the influence of external organisations on policy development. A balance needs to be struck between the need for transparency and the resources required to collect, maintain and, indeed, read through potentially large amounts of information. My points about the Government’s approach generally in this area, when taken with the additional reporting duty in Clause 20 and the further commitment I made in Grand Committee with respect to IPO meetings with external organisations, should, I believe, reassure noble Lords about just how much the Government are doing in this area. I therefore request that the noble Lord withdraw his amendment.

My Lords, I am grateful to the noble Viscount for his response, not least for the facts and figures that he gave us, which I will certainly look at carefully. I welcome the progress that has so far been made. In particular, I thank the noble Viscount for the decision he announced in Committee about the new responsibility of the chief executive of the IPO. However, as he says, there are a lot of meetings and a lot of opacity. I do not think it will be possible for the Government to hold their present line. Of course, I note and respect the Minister’s point that the procedure that I have suggested in the amendment might be excessively resource-intensive and costly. On the other hand, I take it that it is the practice of the IPO, as of the business department, to take minutes of its discussions and meetings. I am therefore not convinced that it would not be possible to produce some sort of streamlined version of those same minutes or that that material could not be adapted to be appropriately displayed on the website.

There will be much more debate about this whole issue of lobbying. We should wait and see what the new Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill eventually produces. I think it will emerge at the end of its parliamentary proceedings looking very different from the air that it has as it moves towards Second Reading. On that basis, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Clause 20 : Reporting duty

Amendment 13

Moved by

13: Clause 20, page 18, line 19, after “Kingdom,” insert—

“(iii) progress has been made in protecting metadata”

My Lords, briefly, this is a shameless attempt to publicise a success story from the Copyright Licensing Steering Group, the people who are bringing us the Copyright Hub. I take your Lordships back to the passage of the Enterprise and Regulatory Reform Act 2013, when a number of us argued for progress on metadata protection to be included in the Secretary of State’s annual report. On 6 March of this year the Minister said,

“The Government are keenly aware of and sensitive to the concerns of creators in relation to metadata. They believe that an industry-led approach is most likely to identify the key issues and the most effective solutions. … The Intellectual Property Office will also be working with the Technology Strategy Board to consider other options to tackle the issues around the misuse of digital images as well as search and stripping of metadata. I hope that in the light of what I have said in my brief comments my noble friend can withdraw his amendment”.—[Official Report, 6/3/13; col. 1602.]

It is very gratifying to be able to report that a sub-group of the Copyright Licensing Steering Group has produced, with a very comprehensive range of people within the industry, a draft code of practice that aims to ensure that relevant licensing metadata is identified in a consistent manner and remains readily available for licensing purposes. It calls on creators of images—photographers, and so on—to make it easier for potential users to find them by ensuring that they include key information such as their name, the date of creation of the image and a contact address. For users of images, the code of practice recommends that they take all reasonable steps to check that licensing metadata is attached to an image before they use it.

I understand that the draft code of practice is currently out to consultation and the Copyright Licensing Steering Group is seeking views on whether it is pitched at the right level and whether having general principles rather than more detailed principles is the right way forward. The Copyright Hub itself is now using Getty Images technology to search and identify images. It looks as though the Copyright Hub will fulfil the hopes placed in it, together with this whole development of protection of metadata.

The irony is that metadata stripping is unlawful under Section 296ZG of the CDPA 1988. The problem until now has been the issue of policing and enforcement. It looks as though photographers will be able, through a combination of the code of practice and the fact that the Copyright Hub is coming into existence, to remedy the unlawful stripping of metadata. It is good to know that other aspects of the Copyright Hub are being developed; some of them involve metadata, others do not. In the case of music, that is in conjunction with the new Global Repertoire Database.

It is useful to reflect briefly that this has been an interesting year in terms of debating and discussing intellectual property so fundamentally, and that there is some good news out there. I beg to move.

My Lords, the noble Lord, Lord Clement-Jones, takes us back quite nostalgically to the days of the passage of the Enterprise and Regulatory Reform Bill. He is absolutely right to remind us of the importance of the metadata issue. It would be welcome if the annual report were to include a section describing such progress as may be being made on that important issue.

I will speak to Amendment 14, in my name. I very much welcome the commitment that the Minister has made in the Bill to the publication of an annual report. Policy on intellectual property is arcane and is vigorously contested among specialists and between special interests. It is very important—its effects are far-reaching—yet it is not well understood, either by Parliament or the public. I therefore hope that the annual report will be more ambitious than is suggested by the terms of the clause in the Bill. I want it to range rather more widely to help Parliament and the public better understand the major policy issues and the principles which animate the Government in taking their specific decisions and formulating their broader policy.

I take it that the role of government is to judge the balance of the public interest in relation to intellectual property between affording protection to creative individuals and enterprises, and opening new possibilities as early as possible to the wider public, consumers and other originators of ideas and knowledge, such as academics, designers and other creative people.

Of course we need to protect intellectual property in certain circumstances. It is essential to incentivise innovation. Often there is a strong public interest in that—but not invariably. It should not be axiomatic that we grant more and more intellectual property rights. Applications should be judged on their merits. The Intellectual Property Office and the Government should not be negative but should be sceptical about applications, and should all the time be ready to question the consensus. While it is desirable to achieve an alignment of international regimes, for example through agreements at European Union level, it is important not to rest on the achievement of those agreements. As the noble Viscount reminded us, consistency is not necessarily a virtue.

Intellectual property is a form of monopoly. It leads to some rigging of the market and restraint of trade—and rigged markets and restraint of trade carry with them inefficiencies and opportunity costs. Others are restrained from accessing or exploiting new knowledge as early as they might do. Price competition is postponed. The holders of intellectual property, being protected, may become complacent and less innovative. That would be an ironic outcome of a policy intended to promote innovation. The incumbent may try to use monopoly power to crush rivals and new challengers who dare to enter the field.

Historically there have been vast benefits when decisions have been taken not to patent new discoveries. Jonas Salk declined to patent his invention of the vaccine for polio—to vast human benefit. Sir Tim Berners-Lee thought it was wrong to patent the world wide web. While it will be many decades before we can begin to assess the benefits or otherwise of that decision, it certainly created large new freedoms.

In Committee, my noble friend Lord Stevenson and I used the historical metaphor of the enclosures movement. We agreed that we preferred intellectual commons to intellectual enclosures. As the House will know by now, my view is that intellectual property is a necessary evil and that we should keep it to a minimum—just enough but no more than is needed to incentivise. Yet the tendency of policy has been to lengthen protection, and Governments have been prone to brag about the number of patents that are held in the UK, as if it was a measure of success. It is a measure of inventiveness, but it is also an index of economic rigidities. The Government should not simply equate maximising the profits of intellectual property holders with the public good. The question must be asked: cui bono?

It is commonly preferable to enlarge opportunities for small and medium-sized enterprises rather than to buttress the monopoly strength of giant multinational corporations. If we want to generate more jobs, spread wealth, tackle the negative externalities of certain business practices and raise more taxes, it may be preferable to support SMEs as against corporate giants.

The methodology needed to establish the necessary minimum has to be pragmatic and based on an assessment of the benefits and disbenefits of protection in relation to the economy, social well-being, research and culture. There are different effects of intellectual property depending on different timescales, industrial sectors, amounts of market share and geographical scales, just as there are different effects between luxuries and necessities.

The Government’s vision should not just be of what is in the narrow interest of the United Kingdom. They should not take the view “my country right or wrong” in relation to intellectual property. We should not always reflexively back UK plc. As we move towards a world with a population of perhaps 10 billion people and with vast migrations, it will be enormously in the interests of the United Kingdom that the poorer peoples of the world should be able to make rapid progress in knowledge, education and the growth of their economies. Judgments about intellectual property policy need to be economically farsighted, humane, ethical and wise. They will be very difficult indeed to make in, for example, the burgeoning field of the life sciences and where bioethical issues are at stake. I very much welcome the judgment by the US Supreme Court in relation to Myriad Genetics. However, as the noble Lord reminded us in Committee, it poses a significant challenge to the European Union. The EU biotechnology patents directive may need to be reconsidered in the light of that American judgment. As we see the development of techniques of so-called human enhancement, such issues are likely to proliferate. I hope that, year by year, the annual report will offer discussion of these matters.

The Minister very understandably and rightly said in Grand Committee, at col. 53 of Hansard on 18 June that each annual report should not be “a Hargreaves-like review”. But it should be thoughtful and instructive and should be more than a catalogue or parade of BIS or IPO activities, statistics, lists of negotiations and seminars and an account of assistance given to business. It should articulate values and principles and the Government’s vision. I mean the vision of the whole Government, not just the business department but other departments that have a vital interest in intellectual property such as the DCMS, the Department of Health, the schools department and the Department for International Development.

I conclude by noting that the noble Viscount, as Minister for intellectual property, has vastly important responsibilities which go beyond what is written into the clause as we have it now—that is,

“the promotion of innovation and of economic growth”.

The annual report ought to reflect those wider responsibilities and should be the basis of Parliament’s and the public’s continuing consideration of this policy area, which has such wide significance.

My Lords, I would like to pick up on the points made by the noble Lord, Lord Clement-Jones, about metadata. I endorse his feeling that good work is going on in this area in the Copyright Hub, which I think will bridge a gap between where everybody would like to be and where photographers think we are. I think that a number of steps still need to be taken on that but if the Government will keep a close eye on it and help where they can there is a reasonable expectation and hope that we will find something of lasting good coming out of that. As regards the amendment proposed by my noble friend Lord Howarth, he makes his point with great elegance. I look forward to hearing from the Minister.

The first amendment in this group from my noble friend Lord Clement-Jones would require that the annual report from the Secretary of State to Parliament include specific mention of,

“progress … made in protecting metadata”.

As I said in Committee, this report will have value to the extent that it addresses issues pertinent to the year in which it is published. While some issues such as innovation and growth are bound to endure, other issues may rise and fall in their topicality.

My noble friend Lord Clement-Jones talked about the work being carried out currently by the industry-led Copyright Licensing Steering Group to develop a voluntary code of practice on the handling of metadata. The Government support the voluntary approach being taken by industry to look at this problem, and we welcome the consultation that was published on 27 June. This consultation exercise, which is indeed good news, ends on 28th August, and I would encourage anyone working in this area to contribute their thoughts. I am sure that noble Lords join me in hoping that this work by industry will mean that metadata stripping is not a significant problem in years to come, and as such I hope they will also agree that although it is topical today, it would not be right to require the Secretary of State to report on progress with the issue every year. Of course, that does not mean that the Secretary of State cannot include such information in the annual report at his discretion while it is both topical and of interest. It is fair to say that, for the initial report at least, that will be the case. Accordingly, I am happy to commit today that the first report will contain an assessment of progress made on this issue.

Amendment 14, tabled by the noble Lord, Lord Howarth of Newport, is intended to require the Government to report on how the activities of the IPO impact on the interests of wider society and the economy. The amendment returns us to the debate which we had during Grand Committee on the detail of what should be included in the Secretary of State’s annual report on innovation and growth. Indeed, the noble Lord tabled a similar amendment at that time. In Committee, I explained:

“I entirely agree with what I believe is the principle behind the noble Lord’s amendment, that the wider interests of society are important in the context of IP rights. I can assure the noble Lord that the report will indicate where other policy objectives have been taken into account, alongside economic considerations—for example, where, say, freedom of speech, public health, or international development considerations have taken priority over economic ones”.—[Official Report, 18/6/13; col. GC 51.]

However, as the noble Lord has returned to the issue today, I return to the Hargreaves review to which the report responds. The review stated that the IPO should focus,

“on its central task of ensuring that the UK’s IP system promotes innovation and growth through efficient, contestable markets”.

The intention of the report is to sharpen the focus of the IPO on this core objective. Broadening the scope of the report would reduce its effectiveness in clearly setting out what the IPO is doing to promote innovation and growth.

However, I reassure the noble Lord that the Government take very seriously the need to balance the protection of intellectual property with the promotion of the wider interests of society and the economy, both in the UK and throughout the world. I was delighted to see that international negotiators, including representatives from the IPO, came to an agreement last month on a new treaty to improve access to books for millions of people who are blind, visually impaired or print disabled.

Also last month, the World Trade Organisation Trade-Related Aspects of Intellectual Property Rights Council decided to extend the transition period for least developed countries to comply with the TRIPS agreement until 30 June 2021. This has been government policy since 2011 and is about balancing the potential value of IP policy to least developed countries with the real-life priorities in those countries. The report will include such examples where the interests of wider society have been balanced with economic objectives.

The noble Lord, Lord Howarth of Newport, said that the Government should not rest on the achievements of international agreements. The Government are determined to improve the global IP system so that it benefits the UK and the global economy. I reassure him that we are certainly not resting on our laurels. Whether it is reducing patent backlogs or agreeing transitional periods for least developed countries in TRIPS agreements, we take a global view and seek continuous improvement. In the light of this, I hope that the noble Lord will feel able to withdraw his amendment.

My Lords, I thank all noble Lords for their remarks during the course of the debate, particularly about the importance of the protection of metadata. I thank my noble friend in particular for his assurances that the first annual report will include a report on progress on metadata protection. The marvellous thing is that it will be a good news report in that respect. I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

Amendment 14 not moved.

Amendment 15

Moved by

15: After Clause 20, insert the following new Clause—


(1) A person (“A”) shall not, in relation to any goods or services, use any features of packaging, marking, labelling or decoration in such a way that the public is likely to attribute to A’s goods or services the reputation of another person (“B”) or the qualities or reputation of B’s goods or services.

(2) For the purposes of subsection (1) it is immaterial whether there is any similarity between the goods or services of A and those of B.

(3) Subsection (1) shall not apply to features of packaging, marking, labelling or decoration that are commonplace.”

My Lords, I return to an amendment on lookalikes which was first proposed by my noble friend Lord Jenkin in Grand Committee on 18 June. He and the noble Lord, Lord Borrie, from the opposition Benches, made an eloquent case that this kind of parasitic copying was designed to—and did— confuse and mislead the consumer, and should have a remedy available to those whose products are copied in this way.

The Minister responded with a number of points on, first, the IPO study, the amendment itself, the Consumer Protection from Unfair Trading Regulations, the Which? report and TRIPS compliance. I will take each of his statements in turn and comment on them. First, the Minister said that the findings of the IPO study,

“were, perhaps surprisingly, fairly equivocal”.—[Official Report, 18/6/13; GC63.]

Having now studied the IPO study findings, I believe that they are unequivocal in key areas. The review of existing surveys concluded the following:

“It is clear across all these studies that consumers report making mistakes in what they have bought and in high numbers”.

In addition,

“where the packaging is similar then it appears that more people think the own brand has a common origin with the manufacturer”.

The study also states that,

“as the similarity of packaging increases it becomes more likely that consumers will perceive the quality of products to be the same”.

The study’s own consumer surveys found:

“Increased perceived similarity of packaging to manufacturer brand product packaging of one own brand product relative to another is significantly correlated with higher perceptions (ratings/expectations) of price, quality, suitability for intended use and (marginally) value for money … Substantial proportions (50-60%) of the UK, German and US populations report having purchased a lookalike accidentally or mistakenly at least once or twice … In summary, across the three national samples 5-15% of accidental purchasers of lookalikes rated the purchases as having been of the highest level of disadvantage … to them, and 30-40% rated the purchases as having been of the next highest level of disadvantage”.

The study also concluded that,

“some lookalikes are already unlawful in the United Kingdom as they are contrary to the Consumer Protection from Unfair Trading Regulations 2008”.

Tellingly, it went on to say:

“However, certain lookalikes already being unlawful under the 2008 regulations is of little significance if trading standards (or others) do not have the resources to take action against those breaching the regulations”.

The Minister went on to say that,

“there is a fine line between confusing packaging and the use of ‘generic cues’ to signal to customers”.

Competitors may adopt a category cue—typically this is one design element. The Minister quoted green for mint toothpaste. Nevertheless, each product can be distinct from others carrying the same cue. There is a big difference, however, where competitors set out to mimic a range of features associated with a familiar brand in order to create a similar overall appearance. Where there are borderline cases, the courts should have no difficulty in drawing an appropriate line. They must do so, for example, when determining whether or not a product is a counterfeit.

Category cue arguments are often used to justify copying familiar brands. However it is one thing to say that green equals mint or yellow equals lemon, it is quite another to say that red equals cola or squat, dark bottles equal Marmite. The Minister went on to say that,

“a substantial majority of consumers had deliberately purchased a lookalike and, of those consumers, most of them found the experience to be advantageous. The research did not analyse why some consumers perceived the purchase to be advantageous”.—[Official Report, 18/6/13; GC63-64.]

It should not be inferred from these findings that similar packaging is benign. A copy may be purchased deliberately, in the belief that it is comparable to the brand. This is what the copy intends to convey and the consumer may feel advantaged. However, the consumer would be misled were the copy not to share all the functional and emotional attributes normally associated with the brand. The IPO study demonstrates that similar packaging increases perceptions of quality and price. A consumer may feel advantaged, but actually may be paying more than would be the case were the product not free-riding and boosting its appeal artificially on the back of a brand.

The IPO study also demonstrates that similar packaging increases the belief that the product comes from the same manufacturer as the brand. The consumer may feel advantaged, but is actually misled when the product is not made by the brand owner. As the study states, crucially the research did not analyse why consumers perceived an advantage. It also makes a far-reaching and rather far-fetched assumption that shoppers have perfect information about the products on offer in supermarkets. This is clearly absurd. The finding therefore has little value in policy analysis.

It should also not be forgotten that some consumers believe that purchasing counterfeits is advantageous to them. Indeed, some buy them deliberately. The Minister went on:

“Although a high number of consumers felt disadvantaged by the accidental purchase of a lookalike, a substantial number saw it as an advantage”.—[Official Report, 18/6/13; col. GC63.]

Suggesting that because some consumers feel advantaged in some way balances those who feel disadvantaged is an unusual approach to policy. It is akin to suggesting that were rogue traders to satisfy at least 51% of their customers, their exploitation of the remainder should not be open to challenge.

The last comment made by the Minister on the study was that,

“only in a limited number of categories was there an association between, ‘a reduction in the sales of the brand leader and an increase in the sales of the lookalike’”. —[Official Report, 18/6/13; col. GC64.]

I do not believe that that fairly and accurately represents the IPO study, which actually states in the data analysis that this effect was not proven. The brand owners believe this to be the case because the study used a limited number of products, inappropriate data and poor control products, and were unable to match the sales data to the packaging designs, and the effect of similar packaging could not be isolated from other influences such as advertising promotion, shelf display formulation and the many other factors that affect rates of sale. With similar packaging prompting mistaken purchase and creating false assumptions about the origin and quality of product, there must be a sales effect. Generally on the IPO study, to reiterate, there are significant findings in crucial areas that are conclusive such as shoppers buying the wrong product and making mistaken assumptions about the origin and quality of goods. These are underplayed when the study as a whole is presented as equivocal.

The Minister commented on the nature of the amendment put forward. He said that it would prohibit the use of packaging which tells consumers that a product has similar qualities to those of a competitor’s product even where it is true. The amendment, which is in exactly the same form as the amendment moved in Grand Committee, would prohibit only the use of similar packaging to indicate such similar qualities, including reputation.

Quality can be conveyed to consumers in many distinctive ways that would be unaffected by the amendment, such as unique label design, materials, imagery and printing techniques such as embossing and metal foils. If a competitor mimics the brand’s packaging to convey similar or identical qualities, it is not competing on its own merits, but free-riding on the brand’s hard-won reputation. The copy is essentially inferring that the product is similar in every respect. Under comparative advertising rules, such a claim would not be permitted as it is neither objective nor verifiable. Were such a message to be conveyed through words in an advertisement, the advertisement would be banned. Why should the principle differ when the product packaging is the medium, especially as such imagery conveys the false message far more powerfully? The comparative advertising rules, while applying to a wide range of marketing communications, regrettably do not apply to similar packaging. Furthermore, the comparative advertising rules were not considered in the IPO study.

On the second major point under this heading on the amendment, the Minister said:

“The law already provides for the protection of distinctive packaging … First, where packaging is distinctive, it may be registered as a trade mark”. —[Official Report, 18/6/13; col. GC63.]

While packaging may be registered as a trade mark, it would have to be well known to have protection against unfair competition. It is uncertain whether most packaging would be deemed well known, and certainly it would discriminate against small suppliers who were copied. Furthermore, protection by Cadbury, for example, for its purple colour, has been a hugely long and drawn-out process taking many years. In reality, copiers are able to design around registered trade marks while still conveying a similar overall impression. The Minister went on to say that there are,

“remedies under the common-law tort of ‘passing off’”.—[Official Report, 18/6/13; col. GC64.]

As the interviews in the IPO study convey, a passing-off action is very difficult and expensive to bring in cases involving similar packaging. Often the pack clearly displays the producer’s name, reducing the likelihood of misrepresentation, and consumer confusion is extremely difficult to prove to a court’s satisfaction. Consumers tend not to complain about low-priced items. Evidence cannot be gathered in stores, and courts often dismiss survey evidence as unreliable. These factors explain why in 2006 the Gowers review commented:

“The review believes that passing off does not go far enough to protect many brands and designs from misappropriation”.

The Minister’s final point on the amendment was:

“Any proposal which changes the status quo should be considered with caution”.—[Official Report, 18/6/13; col. GC63.]

This amendment was first tabled in 2000 when my noble friend Lord McNally’s Copyright and Trade Marks Bill was presented to the House. There have been something like 13 years for careful consideration of the amendment. As the IPO study states in relation to the Gowers review:

“This response was criticised by some commentators for largely reflecting the same wait-and-see approach that had been taken when the Trade Marks Act 1994 had been adopted. Such criticism argued that wait-and-see had been used as a strategy for too long”.

That criticism was made in 2006.

Coming on to consumer protection through unfair trading regulations, the Minister said that civil powers to enforce were rejected at that time,

“because of the danger that such powers in relation to regulations with a very broad, principles-based application could lead to a great deal of costly and burdensome litigation before the courts”.—[Official Report, 18/6/13; col. GC65.]

This statement appears to acknowledge that there is a significant problem in the UK with many potentially unlawful products on the market. The IPO study indicates that the Government’s fears are groundless. Other countries where civil powers to enforce have been granted to companies have not seen a wave of litigation. The Minister’s second point on the CPRs was that such actions,

“would also need to be based on consumer detriment”.—[Official Report, 18/6/13; col. GC63.]

I do not believe that that is the case and it would amount to government gold-plating. There is no consumer detriment test under the CPRs. The IPO study verifies that consumers make mistaken purchases and are misled in significant numbers, with many considering themselves disadvantaged. I appreciate that the OFT and trading standards may wish to adopt a consumer detriment test to determine their enforcement priorities, but this would be less of a constraint on brand owners were they to have civil enforcement rights. The outcome would be higher levels of consumer protection at no cost to the taxpayer.

Penultimately, the Minister dealt with the Which? report by saying:

“The Which? survey of 2,244 of its members, conducted in February of this year, also found that of those who had mistakenly purchased the lookalike product, 38% were annoyed by the fact and 30% felt misled. However”—

this was the Minister’s point—

“the survey also reported that 18% of participants had deliberately purchased an own-brand product because it resembled a branded product, some of them because it was cheaper than the branded product. Taken together, the Government consider that these measures grant a proportionate level of protection to the packaging of brand owners and that therefore the amendment is not necessary”.—[Official Report, 18/6/13; col. GC65.]

This Which? finding should not be taken at face value—it refers to only 18%. A consumer may deliberately purchase a copy, but may still be misled over its source and/or its quality.

Finally, the Minister responded to the point on the TRIPS agreement and the Paris convention. He assured me,

“that the UK is fully compliant in its obligations under TRIPS and other international agreements.—[Official Report, 18/6/13; col. GC65.]

In response to a Parliamentary Question in 2000 from my right honourable friend Norman Baker, the Government were unable to substantiate that the UK complies with its obligation to give nationals effective protection against unfair competition. This is a requirement under the Paris convention and TRIPS. In the same year, Christopher Morcom QC reviewed all the documents referred to in the Answer, but could find nothing that was relevant to the UK’s compliance. In 2006, the Gowers review of the UK’s IP regime, undertaken at the behest of the Treasury, found that brands in the UK are not well protected from misappropriation. The review was accepted by the then Government.

Other than this reply, I am not aware of any substantiating evidence from the Government of the UK’s compliance, only assurances such as those that were given by the Minister on 18 June. The IPO study suggests that the protection required by Article 10bis of the Paris convention is now met by the UK’s implementation of the unfair commercial practices directive through the CPRs. This statement ignores the reality of the fact that the CPRs are not being enforced by the OFT or trading standards. Without enforcement, the CPRs cannot be deemed to meet the “effective” threshold required by the Paris convention.

I hope that, in the light of what I believe is a comprehensive rebuttal of the points made by the Minister in Grand Committee, the Government will reconsider their position on lookalikes and on this amendment. I beg to move.

My Lords, the noble Lord, Lord Clement-Jones, has gone through the case originally made in Committee together with the Minister’s response. He has done it in some detail, so I do not want to delay the House going forward further. I should just like to pick up on two points.

It is certainly true that, as the noble Lord said, lookalikes are to a large extent already unlawful in the United Kingdom because they are contrary to a variety of measures introduced by previous Governments—in particular, the Consumer Protection from Unfair Trading Regulations 2008. The point that he made—and I think that it is important—is that these regulations are of little effect if the responsible authorities, such as trading standards, do not have the resources to take action against those breaching the regulations. Therefore, the point that the noble Lord makes, and I support it, is that we need a bit more detail from the Minister when he responds on whether it is true that trading standards are able to deliver on this point.

The noble Lord also mentioned that there was a fine line between confusing packaging on the one hand and the use of generic cues to signal to customers. This was something that the Minister gave us examples of when he spoke in Committee. However, the point here is that, if similar packaging prompts mistaken purchases and creates false assumptions, there must be a sales effect. If there is a sales effect, then it is surely right for the Government either to strengthen the existing powers so that they are effective or to introduce new legislation.

My Lords, the effect of the amendment put forward by my noble friend Lord Clement-Jones would be to protect the distinctiveness of product packaging. Noble Lords will be aware that the amendment reflects the one tabled by my noble friend Lord Jenkin in Committee, which was mentioned by my noble friend. I thank my noble friend Lord Clement-Jones for his detailed and eloquent introduction to the amendment. Indeed, his and other noble Lords’ contributions in Grand Committee caused me to reflect at some length in the interim. This reflection has reinforced my understanding that the Government are committed to protecting intellectual property.

Like my noble friend, the Government recognise the importance of brands. In recent years the Government have held two brands conferences and established the Brands Industry Forum—a vehicle for brand owners to discuss directly with the Government the policy issues that matter to them. The research on lookalike packaging, which I spoke about when we discussed this issue during Grand Committee, was commissioned by the Government in response to concerns raised by brand owners. This demonstrates that the Government are receptive to the needs of brand owners and willing to explore their concerns. However, we also have a duty to the public and wider economy. It is on this basis that the Government will be resisting the amendment. We consider that it would impact on competition and risk damaging future growth.

I now propose to set out the key issues in more detail. First, as I said during Committee, protection for brands already exists through the IP rights of trade marks and registered designs, and through the tort of passing off. A trade mark is a very powerful monopoly right—the most important identifying feature for any brand. It can last in perpetuity. The first ever trade mark registered in the UK, the Bass red triangle and motif, is still in use nearly 130 years later. If packaging is distinctive, it can be protected as a trade mark.

Secondly, registered design rights protect the appearance of a product if it is novel, has individual character and is not dictated by technical function, which I hope my noble friend agrees would be necessary elements of distinctive packaging. Thirdly, passing off protects one trader’s goods from being represented as those of another. An act of passing off requires existing good will in the goods, a misrepresentation causing confusion as to the origin of the goods and likely damage to the good will from this misrepresentation. These three aspects address the issues that lookalike packaging is suggested to cause, so it is logical that redress is sought through this existing mechanism.

Passing off is an effective remedy when a competitor’s packaging has strayed too close to an existing brand. An example is the Jif lemon case, where highly distinctive packaging in the form of a plastic lemon was found to indicate that specific brand of lemon juice to consumers. More subtle imitation resulted in passing off in United Biscuits v Asda. This case, which noble Lords may remember, concerned Puffin and Penguin biscuits. The High Court found that packaging depicting seabirds of similar physical appearance, and with names that were not very different, amounted to passing off. More recently, the threat of a passing off-action was used by Diageo to settle a dispute surrounding its Pimm’s brand.

I appreciate that securing the evidence for a passing-off action is not always a straightforward exercise—a point made by my noble friend Lord Clement-Jones. However, from the successful cases that I have cited, it is clear that it is possible to obtain redress. It is right, however, that the courts set a testing evidential burden because the remedy is so powerful. On this basis, I hope that my noble friend will agree that the answer cannot be to side-step this evidential burden by creating a new right that is less rigorous.

My second reservation is founded on the difficulty encountered in defining a lookalike product. Lookalikes are said to mimic the look and feel of the branded product on a wide range of features such as colour, shape, wording, logos, iconography and layout. The question is: how many features have to be present or how strong do they have to be to form a lookalike? This can often be a subjective judgment—something that brand owners admitted when speaking to the researchers who conducted the lookalike packaging research. One brand representative interviewed described identifying a lookalike as,

“an art and not a science”.

Another admitted that drawing the line between similar packaging and a lookalike was,

“very difficult, and very subjective”.

Furthermore, consumers surveyed for the research did not consider that any of the 12 products identified were a good example of a strong lookalike.

That illustrates the uncertainty inherent in the identification of lookalikes. Translating this into statute is likely to create a right that is unfocused and too widely drawn. The challenge has always been to find a remedy that is effective but also targeted, and I do not believe that the amendment would meet these requirements. It would create an ill-defined property right—neither a trade mark, copyright nor a registered design but appropriating elements of them all. The creation of such an all-encompassing right, if it were deemed to be desirable, would require extensive consultation with industry, given its potential impact. However, even without a consultation, it is a reasonable assumption that requiring businesses to add this opaque assessment to product development would lead to increased costs, deterring investment. The clear risk is that such a broad right would create anti-competitive monopolies for brands.

My final reservation concerns the currently available evidence surrounding lookalikes. It does not point to a clear course of action. Much research has been carried out but the economic impact of lookalikes remains unclear. There is some evidence of consumer benefit through increased innovation, greater choice and multiple price points, but balanced against this is a slight suggestion that brand owners may suffer lost sales, although the picture is mixed. Furthermore, while brand owners may incur increased research and development costs, they benefit from the resultant innovation. It is therefore difficult to conclude that lookalikes harm the economy.

I understand that some interpret this evidence differently and we welcome the discussion. However, we are clear that legislating as suggested is not justified given the evidence that we have seen to date. That the Government cannot support the amendment should not be taken as an indication that we do not have a real and continued interest in the lookalikes question. This remains a complex issue and, in the absence of a definitive answer, it is right that the Government maintain the search for an appropriate policy response. My noble friend can be certain that we will continue to do so. As part of this search, the Government will maintain a dialogue with all interested parties. Indeed, my officials are due to meet the British Brands Group to discuss the issue following publication of the research.

My noble friend Lord Clement-Jones raised the issue that some of the IPO study is fairly unequivocal. Our view is that the findings of the report are equivocal when viewed as a whole. For example, the consumer research found that the lookalike effect is weak and that it varies substantially across product categories. My noble friend Lord Clement-Jones stated that there was no analysis of why people found picking up the lookalike copy to be advantageous. It is fair to say that the consumer surveys were not designed to pick up these points. That is recognised in the report, and the possibility of further work to explore the issue is raised.

My noble friend Lord Clement-Jones also raised the issue of comparative advertising rules and the point that the IPO had not considered applying it to lookalikes. The connection between comparative advertising and lookalikes is an interesting one, and I am happy to reflect further on any possible connection and afterwards to write to my noble friend.

My noble friend Lord Clement-Jones raised the issue of the Which? magazine findings, which should not be taken lightly. However, the Which? report is just one component of the evidence that exists in this area. As I said, the picture is far from complete and more evidence needs to be collected before we act. I hope that that is some reassurance to my noble friend. For the reasons that I have outlined, I fear that this amendment will cast too great a shadow, which is why I ask my noble friend to withdraw it.

My Lords, I thank my noble friend the Minister for a very careful and well crafted reply, which had resonance in a number of areas. I particularly appreciated him saying that he and his officials were committed to protecting IP, that the Government are very receptive to the interests of brand owners, and that he had a real interest in discussions with brand owners and in continuing that dialogue. That is very important. I do not think that we are going to get very far in debating equivocal versus unequivocal—that seems to be a tomahto versus tomayto-type debate—but it will no doubt continue nevertheless. That continuing discussion and dialogue is extremely important and the noble Lord, Lord Stevenson, put his finger on it when he said that it could well be that enforcement of the CPRs is absolutely at the root of this. They are not being enforced currently. It may well be that there are some equivalent remedies to the comparative advertising rules that the Minister mentioned and I very much hope that, whichever way it goes, that continuing dialogue bears fruit. In the mean time, I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Clause 21 : Recognition of foreign copyright works and performances

Amendment 16

Moved by

16: Clause 21, page 20, line 17, leave out “the Berne” and insert “any Act of the International”

Amendment 16 agreed.

Amendment 17

Moved by

17: After Clause 21, insert the following new Clause—

“Copyright in broadcast

Omit section 73 of the Copyright, Designs and Patents Act 1988 (reception and re-transmission of wireless broadcast by cable).”

My Lords, this is a rerun of an amendment I tabled in Grand Committee. On 18 June in Committee, the Minister said in response to this particular amendment:

“Given the interrelation between Section 73 and many other rules and regulations, it is key that this is looked at in the context of the wider framework”.

He said that the DCMS was essentially leading the work on this and that the department,

“will set out the next steps on this issue when it publishes its approach to digital connectivity, content and consumers, which is planned for publication before the end of July”.

I hope that the Minister can give us some news on that hot off the press but I am not totally optimistic. He also said:

“It is right and proper that any proposal will be consulted on with the relevant stakeholders and interested parties. This proposed amendment to the CDPA would pre-empt the Government’s approach to this area”.—[Official Report, 18/6/13; col. GC 94.]

I set out, fairly comprehensively, the reasons why it was not right to retain Section 73 of the CDPA, largely because of the outcome of the case involving an app that is retransmitting ITV and other commercial—

I wonder whether the noble Lord will give way. He has spoken eloquently and diligently in Committee and now on Report on this matter, as he did on the previous amendment. I wonder whether he could give the House and me some reassurance as to whether there is any link between any of these subjects and the interest that he has declared in the register.

My Lords, there is no connection at all. I am very surprised, quite honestly, that the noble Lord is asking that question, since I have spoken on this issue both in Committee and today.

My Lords, none of those clients of DLA Piper are personal clients and therefore I have no obligation either to include them in the register or to declare them when I stand up in the House. I am sure that when the noble Lord reads the Code of Conduct, he will be absolutely clear on that point.

I was not raising it as a question of obligation or, indeed, challenging what he has properly declared in the register. All I was seeking to ascertain was whether any of the many clients of DLA Piper—personal or otherwise—have interests in these matters. I wonder whether he could clarify that.

My Lords, DLA Piper has something like 80,000 clients. I am sure that some of them have interests in virtually everything that passes through this House on a daily basis. However, that does not require a partner in a law firm, like me, to make a declaration or, indeed, to state who their clients are. Otherwise, I would take up even more of the House’s time than I already am. Perhaps I could continue.

The current regulatory regime governing the relationship between PSB channels and TV platforms rests on three assumptions: that some of the analogue terrestrial value enjoyed by the PSBs should be used to encourage platform competition in the UK; that platforms effectively offer audiences to commercial PSBs to sell to advertisers; and that platforms do not inhibit the ability of commercial PSBs to exploit content, originally delivered free to air, in secondary markets.

The first assumption no longer holds—there is no analogue spectrum and there is a highly successful and well resourced pay-TV platform in the UK. Increasingly, however, the second and third assumptions are also in jeopardy, in particular as a result of the rise of subscription-based, high-capacity personal video recorders. PVRs are now in the vast majority of Sky and Virgin households and are key to both platforms’ proposition to consumers. PVRs are rented or sold by the main pay-TV platforms to their subscribers as added-value services and enable pay-TV platform customers to record and keep copies of very significant amounts of commercial PSB content. They also allow viewers to skip the advertising in such content, as they are doing in increasing volumes, particularly in genres such as drama.

For example, the Sky+HD 2TB box is now capable of recording the entire ITV peak-time schedule for 11 months of the year, and storage space is expanding exponentially. The concern is not about PVRs per se—they are a great enhancement to consumer choice—but rather the fact that the regulatory regime now allows platform operators to extract further value from PSB content, which is supplied either for free or, worse still, following payment to the platform operator in the first place. The PSBs are not able to capture any of this value by renegotiating the original terms of supply to the platform, as a result of the following components of the current regulatory regime: Section 73, which this amendment attempts to deal with; the Ofcom-regulated technical platform services regime, under which PSBs have to provide content for free and have to pay several million pounds to a platform operator for the technical platform services that enable viewers to receive the PSB channels; and thirdly, the time-shifting exception to copyright that allows customers to record and keep TV content. Around 10% of all viewing is now time-shifted, which is nearly five times greater than the highest level of time-shifting in the VCR era. PSB content is the most time-shifted—drama in particular, where levels of time-shifting and advertising-skipping are far higher.

I want to deal with some of the arguments made in Committee. The first is that repealing Section 73 would unbalance a delicate equilibrium in the UK broadcasting market. The market is evolving very rapidly as technology changes and convergence continues. In no sense is the UK market in equilibrium, whether technologically or economically. The second argument is that Section 73 ensures that consumers who have already paid for PSB content through the licence fee or indirect taxation can access this content through a cable platform at no additional cost. This is not the case for ITV, Five and, arguably, Channel 4. These are commercial channels with no government funding. The third argument is that Section 73 continues to provide cable subscribers with access to the PSB channels without their having to pay twice. Cable subscribers would not have to pay twice for ITV and Channel 4. As I have described, they do not have to pay even once at the moment. Watching advertisements is really the way that they pay, and that is being undermined by subscription.

A further argument is that the broader channel-platform relationship should be on a level playing field —that is, zero fees either way. Rather than repealing Section 73, a clause should be drafted to ensure zero fees either way. This surely would not be the right outcome. If platforms increasingly enable consumers to skip advertisements, extracting more value from channels and reducing the size of the secondary market for programme rights via subscription PVRs, such as Virgin’s TiVo and Sky+, it will become impossible for the free-to-air channels to sustain investment in high-value content such as drama.

The penultimate argument is that repealing Section 73 would be contrary to the interests of 4 million cable customers who access PSB content, at no cost to those broadcasters, through cable platforms. There is an increasing cost to broadcasters as the TV market continues to evolve. Subscription PVRs generate content for platforms and extract increasing value from FTA content, reducing the opportunity for PSB channels in secondary content markets.

The final argument is that the Government believe that Section 73, properly interpreted, is consistent with EU law. In that case, the UK Government are substituting what they think is the proper interpretation of Section 73 for that of the UK High Court. It was the UK court’s interpretation of Section 73 that the European Commission suggested was in breach of the UK’s obligation under the 2001 copyright directive. Therefore, I am unclear what the words “proper interpretation” might mean. The fact is that the European Court of Justice did not comment on compatibility in its recent judgment because the UK court did not agree to the request by the broadcasters to refer the question to the European Court of Justice in the first place.

We discussed these arguments in Committee, and those are some of the points of rebuttal to the arguments made. I am not sure that we had a particularly enlightened debate last time. I hope very much that the Minister will be able to respond with greater particularity. In addition, I very much hope that he can give some reassurance that this issue is being seriously addressed and will be dealt with when the expected White Paper sees the light of day. I beg to move.

My Lords, despite the points made by the noble Lord, Lord Clement-Jones, Section 73 of the CDPA 1988 is but one component of a complex web of regulations that provides equilibrium in the UK broadcasting market. It is true that Section 73 is relatively old, created when the cable industry was in its infancy. It is also true that the cable industry is in a different position now. I certainly acknowledge that the catch-up TV case referred to by the noble Lord, Lord Clement-Jones, raises legitimate concerns about the use of Section 73 as a defence for the retransmission of free-to-air channels online.

However, the point surely is that this amendment points out the need to look again at the objective of Section 73 and to ask whether the outcomes it delivers today are still relevant to the Government's public policy objectives. I understand that the Government are currently looking at how Section 73 might be amended and tightened to ensure that the beneficiaries of the clause are the intended platforms that are acting within the law. Perhaps when he responds, the Minister will let us know what progress is being made in that review and indeed, as has been mentioned, what progress is being made on the communications White Paper, which has been promised on a regular basis since 2010.

While the recent catch-up TV case may require an adjustment to the current law, abolishing the clause entirely, as the noble Lord, Lord Clement-Jones, proposes, seems entirely contrary to the interests of 4 million cable customers who access public service content, at no cost to those broadcasters, through the cable platform. The right thing to do is to ensure that this issue will be considered in some detail when the Government eventually publish their communications White Paper. In these circumstances, the amendment proposed by the noble Lord, Lord Clement-Jones, seems somewhat previous, as well as being contrary to consumer interests. I hope that the Government will resist this amendment.

My Lords, I note the continuing interest that my noble friend Lord Clement-Jones shows in this area. The legislative framework that supports our vibrant and successful TV industry is incredibly important and is deserving of our time and attention. This amendment would repeal Section 73 of the Copyright, Designs and Patents Act 1988. This would remove the copyright exemption for the retransmission by cable of certain public service broadcasts, or PSBs. This issue will be addressed shortly when the Department for Culture, Media and Sport sets out its approach to digital connectivity, content and consumers. I reassure my noble friend that we still anticipate publication of the strategy paper by the end of this month.

This is an area where many competing interests must be balanced. As such, it is of vital importance that the Government proceed carefully, giving each of the opposing views due consideration. I can assure my noble friend that it will be consulted on fully to ensure that the views of all those affected are taken into account. I hope that I might be able to help the development of this debate by setting out some of the key points of discussion and their relationship to key pieces of legislation, including Section 73.

Discussions about Section 73 tend to focus on two key areas. First, they are concerned with the impact on the relationship between PSBs and cable platforms. Secondly, they relate to the use of the Section 73 exemption by internet-based television streaming services. I will look at each of these areas in turn.

This piece of legislation affects the relationship between PSBs and cable platforms by providing cable platforms with an exemption for the retransmission of certain PSBs. This means that PSBs are not able to charge cable services for the inclusion of certain channels on their services. However, this piece of legislation fits within a much wider framework that supports the availability of TV and investment in television programming in the UK. This framework consists of a variety of rules and regulations that affect the production, availability and ease of discovery of public sector programming and its relationship with the services or platforms that carry it. These include the obligations on PSBs to offer their content to all relevant platforms, the rules governing payments by broadcasters for technical platform services, and the powers for regulators to compel these services to carry PSB content.

The Government have been clear that their objective is to ensure that, for the core PSB channels, there is an overall zero balance of payments between the PSBs and the services or platforms, regardless of whether these are based on cable or satellite. This is a fair and pragmatic approach that ensures the wide availability of PSB content and allows PSBs to continue their high level of investment in high-quality UK content. The current framework, including Section 73, is delivering this outcome for TV delivered by cable, and we want to see this continue. However, there is still a way to go before we see net zero fees on satellite, and we want to investigate how net zero fees can be achieved across the main platforms. Therefore, it is right and proper that any proposal will be consulted on with the relevant stakeholders and interested parties.

The second issue at stake is the use of the Section 73 exemption by internet-based television streaming services. This issue is the subject of ongoing legal proceedings and, as such, it is not appropriate for me to comment on the specifics. However, I can say that the Government are concerned about the use of this exemption in this way, and will address it when we set out our approach to connectivity, content and consumers by the end of this month. This proposed amendment to the CDPA would pre-empt the Government’s approach to this area. A complex framework governs the balance of payments between platforms and broadcasters, so we need to consider any changes in the round or risk unintended consequences.

In view of the fact that the Government are actively looking at this matter, I would be grateful if my noble friend would withdraw the amendment. Just before I sit down, I will answer a question raised by my noble friend Lord Clement-Jones and the noble Lord, Lord Stevenson, about when the communications paper will be published. To reiterate, the Government still anticipate that this will be published by the end of July.

Before the Minister really sits down, perhaps he could unpick that a little. “Connectivity, content and consumers” is to be the title of what? Is that a strategy paper, as the noble Viscount mentioned in reply to the noble Lord, Lord Clement-Jones, or is that the White Paper?

To clarify for the noble Lord, it is indeed the strategy paper, which is due to be published by the end of July.

My Lords, I thank the Minister for that response. We have elicited a very useful heralding of the communications White Paper, which the Minister has carefully labelled a strategy paper, so perhaps we are being invited not to expect too much detail. That will be very welcome, since it has been anticipated for quite some time.

The Minister has been very helpful in responding. Clearly, I believe that the discussion about Section 73 is part of an ongoing discussion, which will no doubt take place when the White Paper is consulted on and any Bill comes forward. The Minister talked about the objective to have a zero balance of payments. While that is very helpful in clarification, it is not particularly welcome to the PSBs. The DCMS can expect some argument about that, since the PSBs believe that that means they are at a disadvantage when it comes to the use of their programmes and people inserting advertisements in them for their own benefit and not for the benefit of the public service broadcasters.

I welcome the Minister’s point about the exemption being used by internet-based companies and so on. Again, that tilts the other way in terms of helpfulness. The debate will carry on, I am sure, but this has been a useful canter round the course in anticipation of the White Paper. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Amendment 18

Moved by

18: After Clause 21, insert the following new Clause—

“Criminal liability

(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In section 107(4A)(b) (criminal liability for making or dealing with infringing articles, etc) for “two” substitute “ten”.

(3) In section 198(5A)(b) (criminal liability for making, dealing with or using illicit recordings) for “two” substitute “ten”.”

My Lords, this amendment was tabled in Grand Committee and I am certainly not going to repeat everything I said in relation to it.

Criminal offences for online copyright theft have maximum penalties of two years’ imprisonment. Criminal offences for physical copyright theft have maximum penalties of 10 years’ imprisonment. This discrepancy came about because the new offences were introduced by secondary legislation using the European Communities Act as part of the UK’s implementation of the copyright directive in 2003. Penalties for new criminal offences introduced by secondary legislation via the ECA are limited to two years’ imprisonment.

In addition, my right honourable friend Vince Cable’s Private Member’s Bill, which became the Copyright, etc. and Trade Marks (Offences and Enforcement) Act 2002, increased penalties for criminal copyright offences to harmonise them with those available for trade mark offences at 10 years.

Criminal sanctions should not be dependent on whether the offence is taking place in an online or physical environment. Intellectual property is being stolen, whichever format is being used. This amendment is essentially about addressing an anomaly that arose simply because of timing. These are exactly the same offences—they are just being committed online—and therefore should have the same maximum penalties.

Having a maximum penalty of only two years for online offences can be used by defendants to argue that these are not serious offences. Prosecutors have on occasion managed to work around this anomaly by using charges of conspiracy to defraud but it will certainly not always be appropriate to use fraud legislation. The circumstances of the Vickerman case—which we discussed in Committee; he got four years in prison—will not always be repeated. In other cases there may not be a conspiracy or the Fraud Act may not be applicable. Some cases are copyright cases pure and simple but we cannot currently risk using the CDPA in serious cases because of the reasons given above.

In his response in Grand Committee, the Minister said:

“With existing legislation already providing the necessary penalties and prosecutors having a range of options already at their disposal, at the present time I see no reason to increase sanctions under the Copyright, Designs and Patents Act, despite there being a slight discrepancy”—

I would have thought that eight years was rather more than a slight discrepancy. He went on to say:

“In particular, changes should not be made without carrying out the appropriate consultation to gather evidence of the impact”.—[Official Report, 18/6/13; col. GC 98.]

Existing legislation does not provide the necessary penalties. Rather, they are different. Why would it be necessary to consult in these circumstances? I remind the Minister of comments made by my right honourable friend Vince Cable when he was steering his Private Member’s Bill through Parliament. He said:

“There is no logical reason for two sets of intellectual property law to impose different criminal sanctions … it is important that we have legislation that makes criminal sanctions effective deterrents … There are some who have argued that we do not need to change the law because it is possible to find some existing power under which sanctions can be imposed. That is an unsatisfactory way to proceed. The approach is cumbersome and costly, and often it does not work. There is an enormous inherent advantage in having a law that is clear, open and completely honest in what it is designed to achieve”.—[Official Report, Commons, 23/11/01; cols. 628-30.]

All these points are apposite today as regards physical versus digital online copyright infringement. I hope that the Minister will reconsider his position on that amendment.

On Amendment 19, in responding to the Hargreaves review, the Government committed to introducing a limited private copy exception to allow copying of content lawfully owned by an individual for their own personal use. The Intellectual Property Office has recently issued the draft private copy statutory instrument, which can be summarised as follows. First, an individual who has lawfully acquired a work on a permanent basis can make a private copy for his or her own personal, non-commercial use. Secondly, the individual cannot circumvent technological protection measures but—interestingly—will be able to appeal to the Secretary of State to intervene to obtain a private copy if the work is protected by technological protection measures. Thirdly, it does not allow contract terms to override the exception.

Amendment 19 inserts a new clause in anticipation of this draft statutory instrument. The draft SI has provoked considerable concern among the audiovisual sector—indeed, across all the creative industries. I strongly believe that copyright exceptions should be adopted only in response to a well defined public policy objective and market failure. In this regard, the Government’s draft statutory instrument disregards altogether consumers’ ever-widening choice of commercial offerings facilitated by a rapidly evolving technological landscape, and risks jeopardising these market-led developments altogether. The purpose of this amendment is to ensure that a private copy exception should not apply where a commercially available alternative already exists. This principle is entirely consistent with European and international copyright norms and, indeed, is an existing principle in UK law.

Historically, private copy exceptions were established in an analogue environment where business models and technology could not accommodate consumer offerings that provide secure copies. With the rapid conversion to digital business models in recent years, the technological and therefore the commercial landscape has changed considerably. The audiovisual sector has recognised the growing consumer demand for additional copies and portable content, and already provides many avenues for consumers to obtain legal digital copies of content they buy for their own use. Most commonly, the purchase of a DVD or Blu-ray Disc includes access to a digital copy. In addition, products such as UltraViolet allow legal and secure access to that content through the cloud among six family members for up to 12 personal devices such as laptops, tablets, smart phones and televisions, thereby enabling format shifting. Additional multicopy offerings are being brought to the market, and none requires the consumer to pay twice for the same content. At the same time, an explosion of new digital audiovisual services—currently there are more than 30 in the UK—has occurred under the existing legal framework. There are an increasing variety of means which put increased choice and control in the hands of the consumer, and are made possible only through industry-led investment and innovation.

The UK already leads Europe in its range of audiovisual services and technologies, without any change being required to the current legal framework. In proposing the introduction of any copyright exception in the absence of a clear public interest, surely the burden of proof should rest firmly with the Government to define and quantify the extent of the market’s failure to meet consumer needs. It is very questionable whether the Government have made a convincing argument in support of a private copying exception. Indeed, far from incentivising the market to continue innovating in the interest of the consumer, it may be that the private copy exception proposed will fundamentally undermine the technologies and services that the market is developing.

There are numerous other concerns expressed about the draft copying statutory instrument, not least its apparent conflict on a number of points with EU law. It needs to be strengthened to ensure that the exception applies only for the sole personal use of an individual and is not to be used by commercial operators. It should not authorise the making of a further copy by another person or entity, such as an electronic storage provider, in relation to a further copy. Without such clarification, the exception could seriously impact on the ability of the music industry to license innovative value-added services, such as “scan and match” services in the cloud.

Given the widespread concerns about the latest wording of the exception, I hope the Minister can assure us that a further draft will be presented before the formal publication of the SI. I had a letter today from the Minister saying that the SI may be tabled later on in the year but that it is not intended to bring it into force until 2014. So there is no rush; there is ample time for another draft before proceeding with implementation. However the purpose of the present amendment is to ensure that, where private copying is permitted under the terms of the original product purchase, the exception is not invocable. There is no doubt in my mind that the absence of any commercial availability test when applying a private copying exception would be incredibly damaging for the health of our audiovisual sector. I beg to move.

My Lords, this group is in two quite separate halves. Amendment 18—to which the noble Lord, Lord Clement-Jones, spoke first —is the continuation of a debate that was held in Committee. It will be interesting to hear how the Minister wishes to respond to it. There is a good case here for trying to unpick some of the discrepancies between the various regimes, and in particular to try to anticipate the way in which technology is moving forward.

In Amendment 19, which has been linked in this group, we are hearing a different debate, which is about the Hargreaves exceptions which are currently in consultation. As the noble Lord obviously anticipated, some changes may well occur as that debate goes forward. However, I do not think that it fits well into this Bill and confidently expect the Minister to say that it is a matter for another time. The question, of course, is when.

At the conclusion of the Committee stage the Minister offered—and we gratefully accepted his invitation—to have a broader-based debate around the sort of issues that the noble Lord, Lord Clement-Jones, has been raising. We felt that the recourse to secondary legislation for this important issue in itself makes it difficult for the House to exercise a broader view on these matters. In particular, as there are so many of these exceptions, there is a need for what might be considered a more general debate around the overall balance and overall approach which the Government could have taken in this matter. The noble Lord made that offer and we look forward to hearing whether he has had any success in finding time for that debate. It would be helpful, for exactly the reasons that the noble Lord, Lord Clement-Jones, has given, to have a broader-based discussion around some of the more far-reaching ends of these 11 different exceptions so that when the time comes for both Houses of Parliament to consider these matters—as they will in the secondary legislation process—we are better informed and can make better decisions about how to respond to them. I look forward to hearing the Minister’s response.

My Lords, Amendment 18, tabled by my noble friend Lord Clement-Jones, would increase the maximum penalty for online copyright infringement to 10 years. Under the Copyright, Designs and Patents Act—CDPA—the current maximum penalty that can be incurred by online copyright infringement is two years, while for physical copyright infringement, the maximum penalty available is 10 years. This is not a new proposition. A similar recommendation was made by Andrew Gowers in the report he wrote for the previous Government. At the publication of the Gowers report, the previous Government indicated their intention to implement all of its recommendations. However, after a consultation, they decided to increase the financial penalties to £50,000 but left the maximum custodial sentence untouched. I am sure that they did not reach their conclusions on this matter lightly.

This issue is sometimes presented as if there is a gap in the fabric of criminal offences which apply in this area, and that this change will plug that gap. I am not entirely convinced. The statute in question is not the only way in which criminals can be charged for copyright infringement. There is already a range of options for prosecutors looking to obtain a conviction for such activities. Many of these require a lower evidential burden than copyright offences, require less specialist knowledge and offer the sort of sentencing options which my noble friend seeks to add to this offence. Indeed, I am told that prosecutors would usually prefer to charge under the Fraud Act 2006, which carries a maximum penalty of 10 years, or use “conspiracy to defraud”, which also carries a penalty of 10 years. The Fraud Act in particular seems to have met the challenges posed by developments in technology and internet crime, helping industry to report crime as fraud, and has garnered praised from the City of London Police, among others.

There is another issue here of sentence length, by which I mean convictions and sentences actually handed down, rather than those that are theoretically available. The average custodial sentence given for physical copyright infringement under CDPA offences in 2011 was 12.7 months, the highest for five years. So the questions that occur to me are these: is this a necessary change? Is it a useful change to make? I would like to reflect on this matter further, and perhaps have the benefit of views from experts and practitioners in the field. I therefore ask my noble friend if he would be prepared to withdraw his amendment in return for an assurance that I will set in hand a study of this question, the timing of which I will confirm following the Summer Recess. If there is a need for a change to the law then I will, of course, look for a suitable legislative opportunity.

I turn now to the private copying exception, to which Amendment 19 relates. This is a measure that the Government are preparing to introduce under secondary legislation, separate to this Bill, as the noble Lord, Lord Stevenson, pointed out. I remind noble Lords of the lengthy Committee discussions which have already been held on copyright exceptions, and of the detailed information already provided to this House on the Government’s ongoing technical review process. Noble Lords will recall my invitation for contributions to that process from all interested parties. I am very grateful for the contributions we have received to this review process so far. I also remain committed to having further debate on these issues prior to the draft regulations being laid before Parliament. The noble Lord, Lord Stevenson, asked when the exceptions debates might take place and about the timing. I believe that we agreed that the timing would need to be agreed through the usual channels. I would like to await the results of these discussions first before I commit to a particular time.

In light of all this—and I am sorry to strike a rather discordant note—I will admit that I am surprised, and slightly disappointed, to see that my noble friend Lord Clement-Jones has chosen to lay this amendment on private copying, on Report, on one of the proposed changes to copyright exceptions. It is rather late in the day for an amendment that would add a new clause to the IP Bill, and appears to ignore the many opportunities there have been to debate the private copying exception. However, I will endeavour to provide my noble friend with some reassurance in the interim.

By introducing a copyright exception for private copying, it is the Government’s aim to give consumers greater certainty over what they can do with products they have bought. It will not allow people to bypass commercial markets to acquire products for free. Instead it sets out basic rules on how people can use copies that they have already purchased lawfully. The new law will allow people to make further copies for their own personal use but will not allow them to give any such copies to other people. To that extent, the new exception will be very narrow—the narrowest in Europe. It will only grant very basic permissions that are necessary to allow reasonable consumer use.

Consumers in other common-law countries, such as Australia and Canada, already benefit from similar laws, as do consumers in most of Europe. In many ways, we are only playing catch-up by giving British consumers some of the advantages people already enjoy in many countries around the world. The proliferation of licences online has created even greater confusion for consumers. Consumers deserve basic rights, set out in law, to use the things they have bought without having to deal with multiple and complex licences. The approach set out in this amendment, which foresees a greater role for licences, risks undermining that principle. The Government’s view is that this narrow private copying exception will, first, make life easier and simpler for ordinary people; secondly, remove unnecessary regulation from businesses; and thirdly, help our copyright law catch up with the rest of the world.

My noble friend Lord Clement-Jones asked why consultation would be necessary. It is important that the Government take a proper look at what the impact of increased sanctions would be. An increase in prison sentences of eight years is a serious one and the decision needs to be given the appropriate level of consideration and be based on the right evidence. Making changes such as those in the first amendment without first assessing their impact can often lead to a complex and confusing statute book that is unable to respond to new crimes as technology and techniques advance. In view of that, I ask my noble friend to withdraw his amendment.

My Lords, I thank the Minister for his two replies, which were rather different in their tenor. I very much welcome some of the points he made in his reply to Amendment 18. While not necessarily agreeing that it is inappropriate to change the penalties available for online infringement, the Minister said he would reflect further, set in train a review and consult with experts on this subject. That gives us a chink of light. He said that he would advise later on the timing of that review. At this stage, with noble Lords gathering for the next debate, that is as good as it gets.

Amendment 19 should be treated as a preliminary canter. I very much hope that there will be a more extended debate on this. This is the problem with secondary legislation: we may be faced with a debate simply when the order comes and we will not be able to amend it in any shape or form. The Minister should know that there is very deep disquiet about the private copying exception among various members of the creative industries. I hope that he will keep channels open to them because there is basically a fundamental difference of opinion here. Some members of those creative industries believe that their interests are threatened by the private property exception as proposed. They believe it is not narrow but actually quite broad and not explicit about the cloud. They have considerable interest in further discussion.

I hope that the Minister will keep all his channels open in that respect—on the exceptions as a whole but on the private property exception in particular. In the mean time, I beg leave to withdraw the amendment.

Amendment 18 withdrawn.

Amendments 19 to 21 not moved.

Arrangement of Business


My Lords, there are 24 speakers for this evening’s debate. If Back-Bench contributions are kept to less than five minutes, this should allow for the Question for Short Debate to commence at approximately 9 pm.

EU: Police and Criminal Justice Measures

Motion to Agree

Moved By

That this House considers that the United Kingdom should opt out of all European Union police and criminal justice measures adopted before December 2009 and should seek to rejoin measures where it is in the national interest to do so; endorses the Government’s proposals in Cm 8671; and invites the European Union Committee to report to the House on the matter before the end of October, before the Government opens formal discussions with the Commission, Council and other Member States prior to the Government’s formal application to rejoin measures in accordance with Article 10(5) of Protocol 36 to the Treaty on the functioning of the European Union. 13th Report of the European Union Committee, Session 2012-13 (HL Paper 159).

My Lords, today this House has the opportunity to debate and vote upon the Government’s proposal to: opt out of all pre-Lisbon police and criminal justice measures; invite various parliamentary committees to issue reports on the list of measures applicable; and then begin formal discussions with the European Commission and the other member states.

It would perhaps help our deliberations if I begin the debate by providing a little context. Between 1995 and 30 November 2009, some 130 measures in the field of police and criminal justice measures were adopted in Brussels under the so-called third pillar. These were not subject to either Commission enforcement powers or the full jurisdiction of the European Court of Justice. As a result, the Commission could not take action where it considered measures had not been properly implemented. There were no ECJ infringement rulings and unanimity was required to pass decisions in Council. The Lisbon treaty changed the constitutional structure of the European Union in police and criminal justice matters. A five-year transitional period was negotiated to delay these pre-Lisbon measures from becoming subject to Commission enforcement powers and the full jurisdiction of the European Court of Justice. This transitional period applies to and will end for all member states on 1 December 2014.

However, the previous Labour Government negotiated a provision that applies only to the United Kingdom. Under the terms of the Lisbon treaty, the United Kingdom has until 31 May 2014 to decide whether to opt out of around 130 justice and home affairs measures covered by the treaty. If the UK so chooses, the opt-out will come into effect on 1 December 2014. An opt-out of individual measures may have been preferable—I believe that was what the previous Government initially tried to negotiate—but that is not an option. The opt-out can be exercised only en masse. Only after we have opted out can we seek to rejoin individual measures. That is subject to a negotiation with the European Commission and other member states.

Two weeks ago, I repeated in this House a Statement made by my right honourable friend the Home Secretary to announce the list of 35 measures that the Government will seek to rejoin—those being in the national interest to do so. Command Paper 8671 outlines this list of measures and includes the Government’s Explanatory Memoranda on the full set of measures. I want to make clear that the Government are strongly committed to the set of 35 measures in the Command Paper and to a successful negotiation of rejoining these measures.

I am aware of concerns about the difficulty of opting back into some of the more important measures. For example, it is clearly not in the interest of any parties to have operational gaps for those subject to a European arrest warrant or any of the other measures that we seek to opt back into. These matters will be discussed further with the Commission. It is our intention to try successfully to resolve any issues in that regard but, because there is much to consider and much at stake, the exercise of the opt-out must be preceded by careful and intelligent analysis of the 130 or so measures covered by this exercise.

The Government have approached the question of the measures we should seek to rejoin from the perspective that our citizens should not have fewer protections after 2014 than they have now. We have listened to the views of law enforcement and other agencies that operate on the front line to keep our country safe. The piece of work we have put before both Houses is the result of that careful analysis. We want to continue to co-operate with our European partners where there is value in doing so—where it is in the national interest to do so. That commitment is reflected in the 35 measures listed in the Command Paper that we ask the House to endorse today. As a package, they enable co-operation over invaluable practical measures to aid our police forces and criminal justice system. These measures are a crucial tool in the fight against international crime and terrorism.

However, other measures in the original 130 are not so useful: they may be obsolete, defunct or simply unused. That is why the Government’s thinking on this issue has focused on the practical use of measures and whether we consider them valuable in the fight against crime and terrorism. This is why, for example, the Government wish to seek to rejoin the European arrest warrant. With free movement through the European Union, we clearly need strong extradition arrangements in place to see that justice is done. The record shows that since 2009, the arrest warrant has been used to extradite from the United Kingdom 57 suspects for child sex offences, 86 for rape and 105 for murder. In the same period, 63 suspected child sex offenders, 27 suspected rapists and 44 suspected murderers were extradited back to Britain to face charges. A number of these suspects would probably have never been extradited back to Britain without the arrest warrant.

The arrest warrant has transformed the extradition process within the EU from one that typically took years to a system that now takes weeks. A perfect example of this is the extradition of Hussein Osman, one of the failed July 2005 bombers, from Italy to the UK in just eight weeks. This is in contrast to the era before the arrest warrant, when it took a decade to deport terrorist suspect Rachid Ramda to France. Such success would have been unthinkable in the absence of EU police co-operation. As noble Lords and others have said, the functioning of the arrest warrant can be improved. The Government recognise this and the Home Secretary has already announced a proposed list of changes in the other place.

Another measure that the Government have also expressed a wish to rejoin is the European supervision order. This will improve the functioning of the arrest warrant by allowing suspects, in the appropriate circumstances, to serve their bail conditions in their country of residence, rather than remaining locked up in a foreign jail awaiting trial. Furthermore, we want our law enforcement agencies to continue to be able to establish joint investigation teams in order that offenders can be brought to justice as effectively as possible. One example of this is Operation Fry. This saw a joint investigation team with the Netherlands target the abuse of free movement through sham marriages. To date, this has led to 122 arrests, with 77 convictions and sentences totalling more than 100 years, and allowed us to initiate action to remove non-EEA beneficiaries of such sham marriages from the UK. That sort of co-operation would be infinitely more difficult as part of bilateral arrangements rather than as part of a wider EU framework of agreements.

We also want to rejoin Eurojust and measures aimed at fighting child pornography and other crimes that occur across borders. These measures offer a crucial method of combating cross-border crime with other member states.

On another front, I am sure all noble Lords want to see as many foreign national offenders as possible removed from the UK. The prisoner transfer framework decision provides for non-consent-based transfers throughout the EU. The Government support both the principles underpinning this measure and the measure itself, as an effective means of getting those who have abused our hospitality out of Britain to serve their sentences back where they came from.

Then there are measures such as the Naples II convention and the customs information system, which allow us to co-operate and gain access to information from across Europe that makes a real difference on the ground, such as the seizure of 1.2 tonnes of cocaine with a street value of up to £300 million that came from information received under the convention. There is also the second generation of the Schengen information system, a new way of sharing law enforcement alerts throughout Europe, which has the capacity to bring significant savings to our criminal justice system, as well as making it easier to identify foreign criminals and terrorists. The Government have been very open about their wish to connect to this database, which requires us to rejoin the police and criminal justice parts of the Schengen convention itself.

These are but a selection of the instruments that the Government believe it is vital to opt back into. The Government have done a lot of work to prepare the Command Paper and it outlines our strong commitment to measures to facilitate cross-border law enforcement. The Minister for Europe committed to a debate and vote in both Houses of Parliament. Not only do we want a debate and vote, however, we also want consultation with the committees. In inviting the committees both in this House and in the other place to submit reports, the Government are ensuring that Parliament is fully involved in the decisions taken.

Although the Command Paper outlines the Government’s current thinking, we will not begin formal discussions with the Commission and member states until after Parliament has had the chance to express its views. That is why today’s Motion from the Government also invites the appropriate committees to contribute to an analysis of the measures. The committees in the other place were invited to do the same in last week’s debate. The result of this process will inform the Government’s formal negotiations with the European Commission and the other member states.

While talking about scrutiny, I want to thank the European Union Committee of this House for the production of such a comprehensive and thoughtful report on this matter. The committee’s chair, the noble Lord, Lord Boswell, and the two sub-committee chairmen when the report was drafted, the noble Lord, Lord Hannay, and my noble friend Lord Bowness, have done us all a service by their work. I look forward to seeing the outcome of the further work of the committee to scrutinise the set of measures the Government believe it would be in the national interest to seek to rejoin.

When repeating the Home Secretary’s Statement two weeks ago, I made clear that the process ahead would be one of open debate and scrutiny, not smoke and mirrors. The full list of 130 or so measures has been available for all to see and scrutinise throughout this process. As this decision under Protocol 36 is triggered only once, we will want to make sure that we make the right decision ahead of the notification deadline of 31 May 2014. As I said, Parliament’s role in this decision will be key. That is why the Government are proposing this Motion today, as it did a week ago in the other place.

Finally, let me clarify the position on Europol: the Government fully support our participation in Europol, the advantages of which self-evident. It is led by a British director, Rob Wainwright, and in 2012 law enforcement agencies of the UK were involved in more than 300 of the 600 major operations against serious and organised crime and terrorism supported by Europol. These included a variety of serious crimes, including Operation Golf, which broke up an international child-trafficking gang operating in Ilford and led to more than 100 arrests.

However, the new Europol proposal, which is subject to a separate, individual opt-in decision not related to Protocol 36, poses some challenges. It includes a proposal to change the powers of Europol, potentially allowing it to direct national police forces and to require intelligence crucial to our national security to be shared with it. These powers are not necessary and the Government would like to see them removed from the new proposal. That is why we have chosen not to opt in at the beginning of negotiations, but we are committed to opt in at the end, once our concerns have been addressed. I reiterate that continued UK involvement in Europol is vital to keeping our citizens safe and combating the scourges of cross-border crime.

In this and the Protocol 36 measures, the Government have put their cards on the table. They are involving both Houses in both the analysis and the debate about the decisions we have to take. I believe that the approach set out by the Government in our Motion is a sensible way forward and I commend the Motion on the Order Paper to the House.

Before my noble friend sits down, will he give us a categorical assurance that the opt-out will not result in a referendum or referenda having to be held in respect of what the nation has to opt back into? It appears that the opt-out moves responsibility and competences back to this country, whereas the opt-in would move them to the European Union and it might fall foul of the Government’s own Act.

My Lords, that is hypothetical and we could spend the rest of the night on it. I have made a very clear statement of government policy, and it does no service to the House at all for hypotheticals such as that to be thrown across.

Amendment to the Motion

Moved by

To move, as an amendment to the above Motion, to leave out from “House” to the end and insert “declines to give an opinion on the block opt-out under Protocol 36 to the Treaty on the functioning of the European Union until such time as the Government have (1) given a detailed written response to the Report of this House’s European Union Committee EU police and criminal justice measures: The UK’s 2014 opt-out decision (13th Report of 2012–13, HL Paper 159), and (2) sought endorsement for the list of measures the United Kingdom should seek to re-join set out in Cm 8671”.

My Lords, before I address the procedural issues covered by the amendment to the Government’s Motion that stands in my name on the Order Paper, I would like to make some observations about the substantive issues raised by the Home Secretary’s Statement of 9 July and the introduction to this debate by the noble Lord, Lord McNally, which set out the Government’s intention to trigger the block opt-out under Protocol 36 of the Lisbon treaty and to seek to rejoin 35 of the measures that fall within the scope of that opt-out. In doing so, I do not speak in the name of the sub-committee on home affairs, health and education that I chair since, lamentably, due to the Government’s delay in replying to the recommendations in the EU Select Committee’s report of 23 April, that report is not formally part of today’s debate, so I speak in a personal capacity.

The subject matter of our debate is, I fear, formidably complex and difficult to address in a simple and straightforward way. Just in case anyone is inclined to blame these complexities on the fearsome Brussels bureaucracy, though, I should point out that the complications are entirely of our own making. No other member state is in such a quandary. It is legitimate, I think, to criticise the previous Government, who negotiated the Lisbon treaty, for leaving such a cat’s cradle to their successors. I suggest that the challenge we face in this debate is to sort out the wood from the trees, tempting though it is to linger over some of the individual trees—for example, the Government’s decision to opt out irrevocably from the measure dealing with xenophobia and racism, surely a bizarre choice that could be considered sinister, just plain silly or a combination of both. It is a trifle difficult to explain or defend.

The first salient point that I would make is that the Government clearly have no objection of principle to the extension of the jurisdiction of the European Court of Justice and the enforcement powers of the Commission to cover justice and home affairs matters. Why otherwise have they opted into a large number of the post-Lisbon measures adopted in the past three years, as well as the 35 pre-Lisbon ones that they now say they are seeking to rejoin? No doubt, as the Minister has said, it is in our national interest to do so, but why then deny those extensions to the European Court of Justice and the Commission in the case of rather a large number of less significant measures? Presumably, that is to placate their critics on the wilder shores of Euroscepticism. However, they have obviously not succeeded in doing that, since some of those critics want to rejoin nothing and quite a few of them actually want to repatriate the post-Lisbon opt-ins as well.

A second salient point emerges from a study of the Explanatory Memorandums provided in Command Paper 8671. In not a single instance is it suggested that a measure currently in force is damaging to the national interest, or would be damaging if the Court’s jurisdiction were extended to cover it. The Explanatory Memorandums also state that not a single one of them impairs the human rights of British citizens. Why then do the Government want to opt out irrevocably? The most that can be said is that it would not make much difference. However, I suggest that that is a singularly feeble basis on which to found negative decisions that could have far-reaching implications for our wider relationship with the other member states. I should add that in the course of taking evidence we asked all our witnesses, some of whom were strongly in favour of the block opt-out, whether they could identify a single measure that was damaging to the national interest, and they could not do so.

It is sometimes suggested that to accept the European Court of Justice’s jurisdiction would be to undermine fatally the basis of our common-law system. Not one of our legally expert witnesses could substantiate that, and most of them contested it vigorously. There are, after all, three other member states that have common-law systems—Ireland, Cyprus and Malta—and they do not seem to be feeling any stress. Much is made of the so-called judicial activism of the European Court of Justice, but an examination of its track record in the justice and home affairs field provided no evidence at all for those assertions. In fact, the treaty requires the Court to pay proper respect to national jurisdiction in these criminal justice matters, so it is perhaps not altogether surprising that it actually does so. However, that seems to be overlooked by the Court’s critics.

If so far I have been rather critical of the Government’s position, let me say how much I welcome their decision to seek to rejoin Europol, Eurojust and the European arrest warrant. To have done less than that would have been to have put at serious risk important aspects of our national security—I was glad to hear the Minister recognising that quite explicitly—not least those relating to our greatly improved and crucial relationship on these matters with Ireland. We looked carefully at the assertions that we could comfortably move to a network of bilateral arrangements, in place particularly of the European arrest warrant, but we found no merit in that approach, which would in all likelihood be slower, more costly and less effective than the European arrest warrant.

The Government’s intention to implement the European supervision order is also very welcome. As the Minister said, that will enable British citizens sought under an arrest warrant to be bailed here rather than held abroad for long periods awaiting trial, one of the most justified criticisms of the arrest warrant. The fact that this country missed the deadline for implementing that European supervision order, which expired last December, should be a cause of shame for the Government, and the sooner that it now comes into force the better.

Where does that leave the debate over whether Britain should make use of the block opt-out, which it is undoubtedly entitled to do under the provisions of the Lisbon treaty? Nothing contained in the Home Secretary’s Statement in the other place on 9 July, in the Explanatory Memorandums published in Command Paper 8671 or in what the Minister has said today seems to justify a change in the judgment that your Lordships’ Select Committee reached last April: that the Government have not yet made a convincing case for triggering the opt-out. Indeed, the Government’s recent decision to ignore the views expressed by this House on 1 July, and therefore not to opt in from the outset to the negotiations on the new post-Lisbon Europol regulation, further undermines the credibility of the Government’s approach and further increases the potential risks to our national security.

What is new is that the Government have now, very belatedly, revealed the list of 35 pre-Lisbon measures that they will seek to rejoin. That is welcome, as is the content of that list—at least, so far as it goes. It seems to cover most of the main pre-Lisbon measures that the European Union Select Committee identified as being essential. Whether it covers all that needs to be covered remains to be seen; I am afraid that the period since the publication of Command Paper 8671 has been far too short to give the matter the detailed consideration that it requires. That consideration will now be undertaken by the two sub-committees working together as before, and will form the object of a further report that will be provided to your Lordships’ House before the end of October, as the Government have invited us to do, with a new call for evidence issued on 18 July.

That brings me to the procedural issues covered by the amendment standing in my name on the Order Paper. I placed that amendment on the Order Paper when it seemed as though the Government were seeking authority to trigger the block opt-out while doing no more than asking the House to take note of the list of measures that they might seek to rejoin. In this way, they were dividing in two the integrally linked parts of a single set of decisions which our report to the House made very clear had to be taken together. How could this House reasonably be asked to endorse the block opt-out when it was not being asked to endorse the list of measures we should seek to rejoin? The amendment to the government Motion that was moved by the noble Lord last night has, however, changed that position and has asked the House to endorse the list of 35. That is a major step forward.

It meets the more important of the two requirements set out in my amendment and, as so often when you are standing waiting for a bus, two come along together. So on this occasion the Government have now, in something close to a death-bed conversion, produced their response to our report, which I spent the afternoon reading, but on which I will certainly not attempt to comment now. Although I can do a bit of speed reading, these matters require a little more care than that. In any case, the result of this is that the two points in my amendment have been met by the Government. I therefore make it clear that I do not intend to divide the House on that amendment.

My Lords, it is a pleasure to follow the noble Lord, Hannay of Chiswick, with whom I, as the then chairman of the justice, institutions and consumer protection sub-committee, worked closely in the previous Session of Parliament when that sub-committee and his home affairs sub-committee conducted the inquiry into the UK opt-out. I agree with many of his comments and I should tell your Lordships that, had a new Motion not been laid before the House tonight, and had we been debating the terms of the original Motion, I would have supported the amendment of the noble Lord, Lord Hannay, and voted for it, had he called a Division.

I speak tonight, however, on my own account and I cannot speak for the current chairman, the noble Baroness, Lady Corston, or the current members of the committee, of which I am no longer a member. Members will understand that for that reason, and because it arrived in the House at about 2.30 pm, I will not comment on the Government’s response to that report.

I can however speak of the findings contained in that report and the evidence on which it was based. The sub-committees had decided to carry out an inquiry prior to 15 October and the announcement of my right honourable friend the Home Secretary, who stated on that occasion that the Government were minded to exercise the option, that it would be the subject of a vote in each House, and that the relevant committees of each House would be consulted before reaching a definitive position, the process of which tonight’s Motion forms part was set in train.

Subsequent to my right honourable friend’s Statement, five Explanatory Memorandums were promised to your Lordships’ committees. They were promised for January or early February—and latterly promised an impact assessment. The impact assessment has not yet, to my knowledge, been seen and the Explanatory Memorandums were produced as the White Paper referred to by the noble Lord, Lord Hannay, only on 9 July, when the Home Secretary made her Statement to the other place. She also made it clear on that occasion that what must happen next is a process of negotiation with the European Commission and other member states, and that those negotiations will determine the final list of measures that we formally apply to join.

The Motion originally laid before the other place expressed the belief that we should opt out, rejoin the measures that were described as being in the national interest to rejoin and seek further reports from the relevant committees prior to formal discussions with the Commission and the Council on the set of measures in the White Paper—all prior to formal application to rejoin. In parentheses, I think the delay in opening the negotiations until October will prove unfortunate, as time—and as much time as possible—will be needed for the negotiations to rejoin.

That original Motion at least contained a definitive linkage between the decision to opt out and the 35 measures described at various times as being in the national interest and a commitment to negotiate on those matters. However, that Motion was amended and the Motion carried in the other place omits reference to those matters in the national interest and the Command Paper. The right to exercise the opt-out is absolute and is in the treaty, but readmission to measures to which we wish to be readmitted is not.

The Schengen measures require unanimity in the Council; the other JHA measures are dealt with by the Commission, who may present a proposal to the Council for transitional arrangements—decisions in which we will not necessarily participate. The principle of coherence means that we may not be able to rejoin one measure without rejoining another linked measure, and that may not be acceptable to the UK

This will all take time and there is no certainty. When we were preparing the report, we received no evidence that the Commission would seek to frustrate our rejoining. As to the other member states, the Government were unable to tell us what conversations had taken place. However, like the noble Lord, Lord Hannay, I agree with the proposal to reapply to join the 35 measures described as being in the national interest.

The Motion originally laid before the House, as has been stated already, was merely to note those proposals and that was not good enough. I am therefore very grateful to my noble friends Lord McNally and Lord Taylor of Holbeach for recognising the significance of these measures and agreeing that the Motion should endorse the Government’s proposals in the Command Paper, which sets out the 35 measures that they will seek to rejoin.

The final decisions as to opting out and the measures to apply to rejoin are executive decisions for the Government, albeit that they have spoken about consulting Parliament. So I ask the Government to assure the House that the House will be informed if their intentions regarding the 35 should change.

What of the other 130-odd measures? These, together with the 35, are the subject of the Explanatory Memoranda in the White Papers. I have to say with regret that the Explanatory Memoranda are extraordinarily badly prepared—and even worse presented. It is not clear on what basis the Government chose the 35. No clear reasons are given, apart from the Prüm decisions where there are concerns about costs. Some are stated to be defunct and so presumably of no real concern; some are said not to be needed because we have dealt with them administratively or in domestic legislation. As the noble Lord, Lord Hannay, said, none is stated to be harmful.

House of Lords reports are generally acknowledged as being evidence-based. The report on the opt-out was so based. We made it clear that decisions on the opt-out should not be made without certain information on which to base that decision. In our report, members of all parties and none concluded that the Government had failed to make a convincing case in favour of the opt-out. We also made it clear that we could not form a view about which measures we should seek to opt back into without a provisional list of measures and an analysis supported by the impact assessment, and that the decision to exercise was necessarily linked with the measures that the Government wished to be able to rejoin.

We were struck by clear and preponderant evidence from witnesses from the legal, law enforcement and prosecutorial professions as to the potentially negative impact of exercising the opt-out. Now, somewhat belatedly in the whole process, we have the provisional list of measures but not the other elements required for final decisions. We are being asked to express a view about opting out without a proper assessment or analysis of whether the benefits of opting out outweigh the possible risks and uncertainties of an application to rejoin. In short, is the game worth the candle? I ask the Government in due course to report to Parliament on the progress of the negotiations so that judgment may be made.

In the mean time, while I remain profoundly unhappy about many aspects of the whole process, I will not oppose this Motion, which goes some way towards addressing the concerns of those who believe the idea of exercising the opt-out to be misconceived. However, and this is crucial, were we to defeat this Motion, we would lose the opportunity, which was lost in the other place, of placing on record and binding in our belief that the 35 listed measures are in the national interest; and we will have lost the opportunity to endorse the Government’s welcome intention to apply to rejoin the same. We can return to the other 130 later, and no doubt they will feature in the reports that have been requested from committees of your Lordships’ House.

My Lords, I will deal with a small point to start off with. As I understand it, no impact assessment will now be coming until the final list of measures to which the Government are proposing to opt in is determined, as the noble Lord, Lord Bowness, will notice from the document that we got this afternoon—at long last, the government response to the Select Committee report.

I find it difficult to see the reasons for this debate. I am not absolutely certain why it is being held, or held in this way, or of the procedures through which we are being put. The Government have produced a procedural mess into which, unless we are very careful, they, the country and these issues will sink. It may be worth while briefly going back to the origins of this whole affair.

The Government having declared that they were minded to exercise the opt-out, the matter was then inevitably transferred to your Lordships’ Select Committee for scrutiny. The committee decided that, since the matter was so unusual, the scrutiny should be conducted by a joint committee consisting of Sub-Committee E and Sub-Committee F sitting together. This was a precedent but it seems to have worked extremely well. As a former member of Sub-Committee F, I express my thanks to the noble Lords, Lord Hannay and Lord Bowness, for the way in which they jointly chaired that committee.

I will not bore the House tonight with details of how the committee proceeded. Suffice it to say that we took a great deal of evidence and heard from a large number of witnesses, including the Home Secretary and the Lord Chancellor. Rarely—I think never before—have I participated in a process in which the evidence was so overwhelmingly in one direction. It was really quite extraordinary. Members of the committee were actually looking hard for evidence on the other side of the argument, but evidence was there none.

I will quote two paragraphs from the report. We said:

“Beyond concerns about the EAW, which we have already discussed in Chapter 6, very few of our witnesses drew our attention to any specific measures that they considered to be detrimental to the interests of the UK”.

The committee’s conclusions were clear and quite firm:

“We therefore consider that there are compelling reasons of national interest for the United Kingdom to remain full participants in most of the measures and agencies referred to in this Chapter. As to the remainder we have identified no persuasive reason for the United Kingdom to withdraw from them”.

We have waited until today to get the Government’s response to that report. On the very day of this debate, indeed, at last we got it. That is very interesting and, indeed, rather revealing.

In the mean time, however, the Government acted by tabling a Motion in the House of Commons last week, and in your Lordships’ House today, determining that the opt-out should be exercised. It is not a question of discretion. It determines that the opt-out should be exercised, and that is expressly the opinion of this House if it passes the Motion. At the same time, the Government accepted an amendment in the other place that the process of opting back in should be delayed until after three Select Committees of the House of Commons had reported on the measures in respect of which we should exercise the opt-back-in.

The reason for this extraordinary mix-up seems to have been the inability of the Government to produce Explanatory Memoranda in the timescale that they had themselves specified. They had told us that we would get them in February of this year. Had they produced them in Feburary, those Select Committees in the other place could have been engaged in their scrutinising role for some months past. As it is, they will have to do it by October.

The main difficulty that arises from all this relates to the credibility of the Government’s commitment to opt back in to the 35 measures that they have set out. The Lord Chancellor, in his closing speech in another place, said:

“The Government have taken a decision in principle that it will be in the interests of the UK to join a number of measures that involve international co-operation in fighting serious … crime”.—[Official Report, Commons, 15/7/13; col. 851.]

That statement understandably provoked a reaction from Mr Cash, who immediately asked whether the Government could take the view that it was not appropriate to opt in if the evidence taken by the three committees led to the conclusion that that was not in the interests of the United Kingdom.

That is precisely the point on which some of us on this side of the argument need reassurance. Can I take it—and I hope that the Minister will deal with this directly in his summing up—that the Government’s firm intention is that they wish to opt back in to the 35 measures set out in the Command Paper and that they consider those to be in the national interest?

This is really a political argument and not a legal one. There are obvious risks in the policy that the Government are pursuing. There is no guarantee that the Commission and member states will be prepared to give Britain an easy route back in. There are bound to be some gaps and delays.

If one looks at the 35, I do not think that one can objectively doubt that they are in the national interest. Indeed, if one looks at the Government’s response to the Select Committee’s report, it is clear that they are quite warm towards these measures; I am conscious of time and will not go into the details on that. The tone of the Government’s response is favourable to the opt-back-in of the 35 measures, but this brings us to the real difficulty. If we pass this resolution, that, coupled with the Commons, will give the Government parliamentary authority to exercise the opt-out. There is no such parliamentary authority for the Government to exercise the 35 opt-ins, and there is certainly no obligation—only a declaration of intent. Let us assume that we opt out and then nothing happens. What are the consequences of that? The result is that the 35 measures will lapse. Moreover, the procedure now being used by the Government in the other place—namely, giving Select Committees opportunities to look at this matter in the way that they are—is itself a recipe for delay and continued friction.

The truth is that this procedure is politically disingenuous. The noble Lord, Lord McNally, referred to smoke and mirrors. There is a lot of smoke, and there are certainly one or two mirrors around the Government’s position on this. The noble Lord shakes his head. I do not agree with him. The Government position is to pretend that they are getting rid of significant things in the hope that nobody will notice that what they are doing is not getting rid of significant things but getting rid of things which are defunct, unimportant or irrelevant. Then they will opt back in, so it is said—if they can get the Commission and other bodies to agree—to things which are important and relevant.

The safe way to do this would have been not to opt out in the first place. There is absolutely no reason why we should have taken that risk. Alternatively, if we did opt out, the other way of doing it would be to do the two things together, at least as far as Parliament is concerned. Why could we not have had a vote on a Motion approving both the opt-out and the list of measures to which the Government wish to opt back in? We do not have that. It is not in this Motion. It was certainly not in the Motion that was debated in the House of Commons last week. If that had happened, it would have been neater, crisper and more comprehensive. As it is, we should not vote to approve one side of the equation without being in a position also to approve the other side. That is by far the safer way to proceed.

My Lords, today’s version of the Government’s Motion asks your Lordships to approve the block opt-out of 133 JHA measures. It also asks us to approve the rejoining of measures that are in the national interest and now suggests, without quite saying so in the Motion, that these are the 35 measures set out in the Command Paper. The Motion also invites your Lordships’ EU Select Committee to report on the matter before the end of October, when negotiations with the EU institutions will start—which is, perhaps, an unusual way for the Government to communicate with a Select Committee.

The Government, or some parts of it, seem to have got themselves into rather a tangle over all this. This tangle seems to have led them into, at the very least, discourtesies to Select Committees here and in the Commons and, by extension, perhaps to both Houses as a whole. The very long delay in providing the promised Explanatory Memoranda is a case in point, as is the failure to respond to the report of your Lordships’ EU Committee in the agreed timeframe.

Perhaps the most important and straightforward interpretation of the events of the past few months is the following. The Prime Minister seems to have decided, on or before the date on which he made his now famous Rio speech, that he would exercise the block opt-out. That was on 28 September last year, 10 months ago. There followed a series of not wholly convincing denials that the Government had in fact made up their mind to exercise the block opt-out, and not wholly convincing assertions that they had an open mind on the issue. It seemed pretty clear that the Prime Minister and, perhaps just a bit later, his Conservative colleagues in the coalition had in fact decided to opt out. The moment this became clear—and it was pretty immediately clear—the real political task was not to try to prevent the block opt-out but to agree a sensible, comprehensive and coherent package of rejoin measures. I doubt that, despite the overwhelming evidence against opting out, it was ever going to be possible to persuade the Prime Minister not to do exactly that. The Prime Minister had committed himself and his colleagues far too early and much too clearly.

It is easy to see that the Government were almost certainly not going to be moved. They were going to exercise the block opt-out, come what may, as it were. That meant that the real political debate would be over which measures to apply to rejoin. I know that there has been very extensive debate within the Government over exactly this. The Government’s original Motion appeared to be coy about exactly what these measures might be, but today’s version of the Motion is pretty unambiguous. The rejoin measures for negotiation are the 35 set out in the Command Paper. These rejoin measures proposed in the Command Paper represent the outcome of negotiations within the coalition. On any objective reading, this list of proposed rejoins seems to be entirely satisfactory. In fact, the Lib Dem negotiators, and Danny Alexander in particular, should be congratulated on what they have persuaded their Tory colleagues to accept. It may be, of course, that to pass the Commission’s legal requirements for coherence we will have to add to this list one or two other minor and technical measures. However, this would not be difficult and would certainly not be harmful to the national interest.

One of the oddest things about this whole imbroglio is that the Government have not been able to demonstrate that any of the measures they do not want to rejoin is harmful to the national interest or damaging at all. I repeat that the list of proposed rejoins set out in Command Paper 8671 seems to be entirely satisfactory. We must acknowledge that we are where we are but we must also acknowledge the time pressure. It is critical that we get on with this so that we absolutely reduce the chances of any interregnum where we are out of 133 measures and not yet back in to 35, or however many it turns out to be.

I hope that the House will agree with this and will agree to the Government’s Motion. I look forward, as a member of your Lordships’ EU Sub-Committee F, to examining and reporting on matters as they will then stand.

My Lords, I declare an interest which is in the register. Because of the advisory time limit I intend to speak as fast as Benedict Cumberbatch, who plays Sherlock Holmes on the television.

I shall speak separately about the opt-out—the Government’s decision to exclude the application to the UK of some 130 measures, which of course the UK is entitled to do under the Lisbon treaty—and the opt-in, which is a separate proposal to opt in again to the 35 measures. That requires confirmation by the European Commission, which can impose conditions in the case of the non-Schengen measures, and in some cases agreement of other member states—the so-called Schengen measures.

In order to judge the best result for Britain, the two issues should be examined together. I welcome the Government’s decision to do this in the Home Secretary’s Statement of 9 July and in the submission of these issues to Parliament in the House of Commons and now in this House. We have also had the advantage of the careful examination of these questions in the EU Committee and the very substantial 155-page Command Paper 8671. I did not find it easy bedtime reading but it is a very thorough statement of the Government’s position which we are now invited to endorse—a vital and important change, which I welcome. I have noted that as a result of discussion in the House of Commons the timing is now not quite as speedy as was originally thought.

Although I will first speak about the opt-outs, it is the choice of the 35 opt-in measures and the conditions that we might wish to apply which are the more interesting. However, I will begin with the opt-out. It is important to stress that we are in the five-year transitional period under the Lisbon treaty—Article 10.1 of Protocol 36—and infraction powers under Article 258 of the treaty do not currently apply. However, if we do not opt out, of course all these measures will become subject to the European Court of Justice and the enforcement powers of the Commission on 1 December 2014. Quite simply, if we do not want that, we must opt out. If we are satisfied with it, we do not need to opt out. That is the basic situation before us.

An examination of these measures, set out in Command Paper 8671, shows that in the Government’s view, a good number of measures have little or no impact in the UK. Your Lordships will frequently find statements such as:

“The Government considers the economic impacts of non-participation in this measure to be negligible”,

or that a measure,

“does not appear to be in force, nor is it likely that it will come into force”.

There are many examples of this. We can draw two conclusions. First, these measures do not matter very much to the UK, which is the Government’s view. Secondly, as a general principle—which for me is important—it is always wise to question the need for legislation, whether from national or EU sources, unless it can be shown to be essential.

A mountain of secondary legislation passes through this House—there were 11,414 pages in 2009. This legislation is dominantly of national origin and the proportion that is Brussels-derived and under the European Communities Act is quite small. However, in the area of justice and home affairs there are a lot of regulations and legislative measures and the Government have decided that they want to go for the full opt-out. We might say that whatever the arguments advanced so far—and I respect them—this may make a small contribution to reducing exaggerated claims of the role of EU legislation in Britain.

I turn to the opt-in proposal, which is intended to safeguard and reinforce our national interest against organised crime and trafficking and to favour the most efficient administration of justice across frontiers. As I have already indicated, there are two types of these measures, the Schengen and the non-Schengen, and the procedures are quite different for bringing this to a conclusion as recommended by the Government.

There are some quite important measures among the 35, but they are mainly non-Schengen measures in the form of Council acts or decisions. Examples are the Council act on mutual assistance and co-operation through customs administrations—the so-called Naples II, which I believe is the basis which we use now. Then there are the Council decisions strengthening Eurojust in the fight against serious crime; the Council decision establishing Europol, whose excellent work was specifically pointed out by the Home Secretary in her Statement; and, of course, there is the decision on the European arrest warrant, which was dealt with extensively in the Home Secretary’s Statement together with the specific proposals she put forward for amendment of UK law to respond to some problems in practice.

I will say a few words—speaking as fast as I can but not as fast as Benedict Cumberbatch—about Europol and the European arrest warrant. Europol is just the sort of organisation that we need if we are to keep pace with—or preferably outpace—trans-border crime. It is common sense that we should stick with it in the interests of our law-abiding citizens, and that we should obtain the two assurances mentioned by the Home Secretary on data sharing and security and on there being no power for Europol to initiate investigations. I hope that we can deliver the Europol opt-in simply and quickly, by whatever method we go at it, because I am in favour of it.

The European arrest warrant is highly valued but it is much more controversial. It makes sense to operate on an EU-wide basis in order to avoid the complexity of negotiating extradition agreements with many different countries. The Home Secretary has indicated the changes that she wants to make in national law. I will not go over them again. They are in her Statement. They are all very sensible and we should endeavour to stick with them as the decisions on opt-ins go forward.

To conclude, the Government have made their choice, but the end of the operation will be when the Commission confirms the opt-ins, or in some cases when the member states agree them. It will be a good thing to have another report from the EU Committee. The changes that we have just discussed—the introduction of the word “endorse” and the other actions by the Government—indicate that we have a basis for responding to the motivation behind the amendment that the noble Lord, Lord Hannay, will not now press.

My Lords, I am a recently appointed member of Sub-Committee E. It has been an interesting baptism, dealing with the opt-out decision: all or nothing. From time to time it seemed that we were dealing with a booby trap on which was written, “I wonder how they’re going to get out of that”.

As the noble Lord, Lord Hannay, and my noble friend Lord Bowness said, we came to a clear, utilitarian answer to a rather complicated question. We made quite a long answer to that question, which was that the case was not convincing. As the Irishman said when he was asked for directions, “I wouldn’t start from here”. Perhaps it never was a utilitarian question; perhaps it was political; and perhaps we came up with the wrong answer.

I am a European. I am in favour of co-operation and against centralised control. I was lucky enough to be in Strasbourg in 1949 when there were 10 members of the Council of Europe and Winston Churchill made the keynote speech. One member of the 10 is not a member of the Community, but now, 64 years later, there are 47 members of the Council of Europe, and more than half of them are members of the European Union. Since the Commission and the Council are, as it were, the children of the Council of Europe, they should refer to the Beatles’ song, “When I’m Sixty-Four”, the last line of which is:

“Will you still need me, will you still feed me,

When I’m sixty-four?”.

From time to time, any institution needs a renewal of its mandate. Many people in this country and elsewhere are not sure why the Commission and the Council should have that renewal. Every now and again, a wild card is thrown on the table that makes people worry. The preamble to the Lisbon treaty refers to,

“ever-closer union among the peoples of Europe,”


“a new stage in the process of European integration”.

I suggest that many people will not know what either of those aspirations means. As far as I know, nobody has ever given them a clear definition. Are we still intent on the avoidance of a third world war? I rather think that we no longer have the weapons with which to create it. Are we just a trading bloc? Will harmonisation of law across Europe one day end the defence of members’ legal systems? In short, what is the European project now? Is it intent on enhanced co-operation or centralised control? The public do not know the answer. It is a very complex question—not just this decision but the whole state of Europe—and it needs clearing up. The complexity and uncertainties must be exposed and discussed, and this Government are doing just that.

Tonight, the decision to opt out and opt back in is about co-operation and not central control. It is almost a housekeeping issue. However, the uncertainty about where it might lead means that many people do not see it that way. Therefore, the Government are entirely right to decide to opt out and opt back in to the 35. They will do that successfully, and that will restore public confidence in their ability to level with the European Union—not always a certainty in many people’s minds, and certainly not seen by many members of the public as being the case.

The relationship with the Commission and with the Council will be improved by our willingness to enter into long and serious negotiations. Therefore, it is entirely right to take this opportunity to renegotiate a system of international justice to the best advantage of ourselves and of other members of the European Union. I fully support the Motion.

My Lords, over recent months, so many things have been said on so many occasions about opt-outs that most people had not heard about before the decision was taken to consider the consequences of Protocol 35 of the treaty of Lisbon. We heard so many contradictory statements. Today, we are not really having a debate about what our relations should be. Our debate has nothing to do with the improved governance of Britain. It has precious little to do with our relations with the EU on police and criminal justice measures. Our debate has everything to do with appeasing Eurosceptics on the Conservative Benches in the House of Commons. So concerned are we about appeasing them that we cannot even put the same Motion before the two Houses. The Motion that they approved did not ask them to endorse anything, and, as recently as yesterday, we were not asked to endorse anything. It is all down to the process of changing your mind as you go along to appease the Eurosceptics. I warn the Government that what they are doing is not appeasing them but driving them to seek ever greater concessions.

Everywhere, the tactic has failed. Their Motion to appease Euroscepticism differed from the one we are dealing with here. They could not be asked to endorse the list of the 32 measures. When we were beginning to have controversial arguments about the measures for police and criminal justice measures, I was somewhat reassured by a Written Ministerial Statement made on 20 January 2011 by Mr David Lidington, the Minister for Europe. He included references, for example, to consultation before the Government make a formal decision. He also referred to consultation on the arrangements for the vote. All those ideas were there.

There were further statements on the issue. The Home Secretary wrote two letters to the European Union Select Committee which repeated the undertaking and provided the first list of these police and criminal justice measures. She assured us of prior consultation. Yet within the space of the two letters, between the first one promising continued consultation and the second one promising continued consultation, the Prime Minister, probably thinking that he was escaping the glare of publicity by speaking in Rio de Janeiro, made a speech in which he promised that we would opt out. He announced it at a press conference, saying that,

“the opt-out is there. We’ll be exercising that opt-out”.

This was at a time when your Lordships’ Select Committee was working hard on the basis of the promises that we received from the Minister for Europe and in two letters from the Home Secretary. Yet the Prime Minister pulled the rug from under their feet because he thought that that would gain him a few extra brownie points from the Eurosceptics in the House of Commons—so much for the assurances of the Minister for Europe and the Home Secretary.

I contrast the work of your Lordships’ Select Committee with the rather tawdry, shoddy apology of a response to Parliament from the Government which they sneaked into the Printed Paper Office today, several months too late. Your Lordships’ report was a thorough, evidence-based analysis. However, the Government’s response to it came at the very last moment and is hardly worth the paper on which it is written. There are some good bits in it but most of it comprises points which the relevant Members should be ashamed of writing. It has the same level of competence as what purported to be an Explanatory Memorandum.

I have almost observed the five minutes speaking limit. However, at the risk of really getting up the nose of the noble Lord, Lord McNally, I will ask him the same question that the noble Lord, Lord Maclennan, has asked. We are opting out of all the relevant measures by 31 May next year. At that point none of those measures will apply to us. We will apply to rejoin some of them but by the time we do so we will be extending new competences to the European Union which we have given up through the opt-out.

The noble Lord, Lord Maclennan, asked a fair question and did not deserve to be muttered at and abused by the Front Bench: namely, are these the sort of measures—where there is a transfer of competence back to the European Union—whereby, under the rather stupid legislation that the Government introduced in relation to European referenda, we will be required to have a referendum? Will the referendum be on the whole package or will there be one on each of the 35 measures? The noble Lord, Lord Maclennan, has a right to know that. When the Minister replies to him, I would like to be told the answer as well.

My Lords, I, too, would have voted for the amendment moved by the noble Lord, Lord Hannay, if the Motion had remained in its original form. Now it is one which I can support because it commits the Government to opting in as their official policy to the measures which matter most. However, the history of where we have got to needs to be borne in mind because it is a reason for exercising a certain amount of caution. When the negotiations started between Oliver Letwin and Danny Alexander, the Government—at least the Conservatives—were absolutely clear that certain red lines existed, including the European arrest warrant and more jurisdiction for the European Court of Justice. There was strong opposition from Open Europe and, naturally, from the UKIP tendency inside the Conservative Party, but there was also opposition from leading figures in the Conservatives such as Dominic Raab, who kept on explaining that you did not need Brussels at all and that you could organise a whole lot of separate bilateral negotiations. Fresh Start said that it would not opt back into anything. However, matters have changed and we are now in a position whereby, on the face of it, the Government are committed to serious opt-back-ins.

However, the House of Commons debate was not exactly reassuring. In particular, the speech by the Home Secretary was in my view pretty disgraceful, reiterating the claim that this was the first step in the major repatriation of powers because 100 measures would be left opted out of. It was in fact one of the ablest of the Europhobes, Mr Jacob Rees-Mogg, who completely exploded that idea by asking which were the important measures that we were no longer going to opt back into. In addition, the whole tone of the Home Secretary’s speech was one of trying to appease the Europhobes. She assured them that they did not have to worry too much because they always had the right to vote against the opt-ins when they came to Parliament again.

I want an assurance from the Government, which I believe the Minister will give, having talked to him on this issue very recently. We need an absolute assurance that the Government will not yield one further inch towards the Europhobes. It is not a happy history. The Prime Minister had made a number of pro-European remarks but when the going has got tough he has always given in. That is why he bought peace with the promise of a referendum in 2017, which is a ridiculous commitment because by 2017 we will not yet know what sort of Europe—which is in a state of flux—we will either have to stay in or leave. Therefore we need an assurance that there will be no further surrender and that there will be a strong Whip in the House of Commons and not be endless speeches that would delay the whole procedure—because every single opt-in measure will be challenged by the Europhobes, who will not give up their opposition.

If the Government stand firm, I think this is a good result. I am not as worried as the noble Lord, Lord Tomlinson, about a legal challenge. Having looked at this, I do not think that there are grounds for a legal challenge. However, the tactic of judicial review could be used to try to delay a decision. I am more worried about that than about the merits of a challenge. If the Government stick to it, this will be a good result. It will be the first defeat for the UKIP tendency and for UKIP and I hope that there will be many more. I hope that in the 2014 elections all the parties—or at least those that support these opt-in measures—will expose UKIP’s position as that of a party which is soft on crime and does not want measures that can deal with people traffickers, money launderers, porn merchants and all the rest. We should seize that opportunity provided that the Government stick firmly to what they have now promised.

My Lords, as a member of the Joint Committee I was surprised that neither in the Statement to Parliament on 9 July nor in the Command Paper of the same date did the Government bother to refer to, let alone commend, our work. However, as if attempting to remedy this slight, the Home and Justice Secretaries, in an undated letter sent about 19 July, went perhaps over the top in glowing superlatives relating to our report. Yet, at the same time, they compounded their cavalier attitude to the committee by informing us when we should conclude our next inquiry on the subject without consulting us in advance.

The point of criticism of the Government’s process has already been well made, so I turn to substance. I pose this simple question: how would a judge conclude if the evidence that we had received were placed before him or her? Surely that judge would find the one-sided comparative weight of the witnesses before us absolutely compelling and overwhelming.

Supporting the Government were Mr Dominic Raab, both in his own right and again as the drafter of the Open Europe submission. Then, of course, there was the United Kingdom Independence Party. The committee staff managed to locate Mr Martin Howe, a senior lawyer but also a Conservative activist, having sought nomination on several occasions.

However, critical of the Government’s position were all the professional bodies, all the enforcement agencies and the prosecutorial bodies. Our committee report was endorsed by the Law Society of England and Wales, the Bar Council, the Faculty of Advocates and the Scottish Government. Our one witness from the Republic of Ireland was, frankly, baffled by the Government's stance. In short, the weight of critical evidence was overwhelming and our judge would surely have been driven to the same conclusion as that which the committee reached unanimously—namely, that the Government had not made a convincing case for exercising the opt-out and that to do so would have significant negative repercussions for the national interests of our country. Nevertheless, the Government have ploughed on regardless and claim to have acted in the national interest.

The noble Lord, Lord McNally, was moved to write in the Liberal Democrat Voice that “we”—the Liberal Democrats—

“have fought hard to keep the public safe, in the face of a Euroscepticism which would put public safety at risk in the pursuit of its anti-European agenda”.

That is hardly a flattering description of his Conservative colleagues in the coalition. In the same article, he proudly claimed that the deal with those Conservative Eurosceptics illustrated the influence of Liberal Democrats on the Government. The truth, of course, is that the Liberal Democrats could have blocked the opt-out entirely had they so wished, but chose not to do so.

Again, having reviewed all the evidence, our learned judge would have noticed the leitmotif of suspicion, almost obsessive in its intensity, of the Government's attitude to the Court of Justice of the European Union. That is particularly puzzling in the light of the fact that the Government have over recent years opted into a number of measures subject to the court and must therefore have no objection in principle to subjecting themselves to the court's jurisdiction—paragraph 104 of the report. It is puzzling also because the court already has jurisdiction over pre-Lisbon EU civil asylum and immigration matters, surely central to national sovereignty. Paragraph 96 of our report pointed out that there are very positive aspects regarding preliminary references to the court. In paragraph 89, the committee, having examined all the evidence—as no doubt would our judge—dismissed the bogeyman of excessive activism:

“we can discern no convincing evidence that the CJEU has been either judicially activist or that its rulings set out to undermine the autonomy of Member States’ criminal justice systems”.

Our judge would probably consider the question of costs not to be within his remit, but there are threefold elements of costs: potential financial costs of seeking to opt back in; the general uncertainties and potential hiatus in the transition period; and, of course, the potential loss of influence in Brussels by the signal which the Government have so clearly given. Who can forget the position of the then Conservative Government from 1993 to 1997, when we lost much influence by the turmoil in the Conservative Party at the time?

All that turmoil for what? Again in the words of the noble Lord, Lord McNally, in the same article:

“The measures which are being dropped on the other hand are, by and large, those which are now redundant, those which have been superseded by newer instruments, those which have already been incorporated into UK law, and those which have very little operational use for the UK. So we’re keeping the wheat and losing the chaff”.

Similarly, the Economist of 15 July headed its article,

“Britain wants opt-outs from EU rules, as long as they don't much matter”.

Of course the Government have made some positive suggestions, for example by remedying deficiencies in the European arrest warrant, but not by diktat. The normal European method is by consensus, by forming alliances, and by working with our European partners consensually. Again, the Economist stated:

“Mrs May’s statement was designed to please Eurosceptic Tories. Instead they denounced it”.

That is, all this trouble is a political decision not a legal decision, one designed to please what one senior German parliamentarian called the Tea Party tendency within the Conservative Party.

I have one warning for the Home Secretary—I end on this. Her Tory colleagues will not be satisfied by her gesture. Like the keeper in the zoo's penguin house, she may regularly be inclined to throw fish to them, but they will swallow them down and ask for more. She should be warned: they will indeed ask for more.

My Lords, it is a pleasure to follow the noble Lord, Lord Anderson, with whom I so often find myself in agreement. I hope that tonight he is not casting me in the role of his hypothetical judge.

I was of course very glad that the Government decided to include Europol, Eurojust and, above all, the European arrest warrant among the 35 measures, but I am not yet persuaded that an opt-out in 2014 is the way ahead. One argument used by those in favour of the opt-out is that it would set limits on the jurisdiction of the Court of Justice of the European Union over our domestic affairs. I could understand that argument—although I would not agree with it—if we were going to get shot of the court of justice altogether. Of course, that would be pure fancy. We would still be subject to the jurisdiction of the court in respect of all the many police and criminal justice measures we have signed up to since Lisbon, and would also be subject to its jurisdiction in respect of the 35 measures which we all hope to rejoin. So the European court will be there anyway in one way or the other, and I think we should pay little attention to that argument in favour of the opt-out.

The argument against opting out is simple. We may not succeed in rejoining all 35 measures which are agreed to be in our national interest, at least on terms which we would want. When I put that point to the noble Lord, Lord McNally, on 9 July, he replied that of course there would be that risk, but he said that with good will on all sides and with colleagues who want us to succeed, the risks would be minimised.

If we do opt out, I can only hope that the noble Lord, Lord McNally, is right. If there is indeed that risk, as I think that he accepts, in opting out, surely the next question should be: what do we actually stand to gain by opting out; what are the advantages? Here, I find myself in agreement with the speech of the noble Baroness, Lady Smith of Basildon, on 9 July. It is true that the Government could say that they had repatriated, to use that great word, 95 powers taken from us by the European Union, but what would that mean or be worth in practice? How many of those powers have any importance for us today? How many are even relevant today? I am, of course, not referring to the 35, but to the other 95.

The noble Baroness asked the noble Lord, Lord McNally, to give us some details about what we have to gain by opting out of the other 95. As I remember, she pressed him for some figures. At the bottom of column 234, the noble Lord did give some figures. However, he went on to say that, in asking for figures, the noble Baroness was missing the whole point. He said:

“Through today’s Statement, the Government have sent a clear message that we have addressed the problem left by Protocol 36”.—[Official Report, 9/7/13; col. 234.]

With respect to the noble Lord, it was surely he who was missing the point, not the noble Baroness. If we have nothing to gain by repatriating the powers contained in the 95 measures, what on earth is the problem to which the noble Lord referred? What is the point of opting out? It could be said that we might be able to renegotiate the European arrest warrant if we opt out, but why cannot we do that without opting out? What is the objection to our attempting to do so?

Until, therefore, it is demonstrated that there is something to gain from opting out, there is, to my mind, no problem. The game on which we are embarked—as the noble Lord, Lord Bowness, said on 9 July and repeated again today—is simply “not worth the candle”. That was the view expressed by the European Union Committee at paragraph 274 of its report and it was the view expressed by a group of distinguished academics led by Professor John Spencer last August. I hope that even now the Government will listen to that view and call a halt to this unnecessary and possibly even dangerous exercise in which we seem to be involved.

My Lords, I must declare an interest, as a member of EU Sub-Committee E, one of the two sub-committees that produced the report that we have been discussing this evening. I also remind the House that I am a trustee of Fair Trials International, which has a particular interest in the operation of the European arrest warrant. Given the lengthy speakers list and the short time available to us, I will cut to the chase.

For me and my noble friend on the Front Bench, judging by some of his opening remarks, one of the fundamental problems that the Government faced in addressing this opt-out decision is the nature of the wording of the opt-out negotiated under Protocol 36 by the last Government. This is its all-in or all-out nature. There is no picking and choosing; no matter how futile, irrelevant or unnecessary a particular measure may be, the totality has to be accepted or rejected.

I was glad to hear from the noble Lord, Lord Hannay, that on reflection he would not divide the House on his amendment. That would have seemed an unwise course of action. First, it would have treated the issue as black and white. As I said, while that construction is placed on us by the wording of Protocol 36, within the areas covered by the protocol the pluses and minuses of the policy issues are much more nuanced. Secondly, while the Government should have responded earlier to the joint sub-committees’ report—I entirely share the view of other noble Lords that producing the response at noon today is really not good enough—nevertheless Members of the House not on those sub-committees should have the opportunity to express their views this evening. That answers the point made by the noble Lord, Lord Richard, about the rationale for this debate. It will no doubt help to inform the Government’s thinking. Finally, as I understand it, this is only the first time round the track, because we will come back for a further debate and discussion as the Government’s thinking and approach to each individual opt-in or opt-out decision become clear.

My Lords, since the noble Lord quoted me, I thank him for giving way. He says that the purpose of this debate is to help to inform the Government’s views. Why, in that case, is this not a take-note Motion? Why is it framed in the express terms of the opt-out?

If the noble Lord reads the Motion before the House, he will see exactly what it is. It gives Members of your Lordships’ House, particularly those who have not participated in the sub-committees’ deliberations, a chance to express their views. That is entirely appropriate.

My Lords, earlier in the noble Lord’s speech, he congratulated me on the wisdom of not putting my amendment to a Division. However, he failed to note that the reason was that the Government had conceded both points that were contained in it.

That is true, but it would have been unwise to have proceeded with a black-and-white decision along the lines that we are operating, as I explained.

In the remainder of my remarks, I want to concentrate on just three points. These are the different categorisations of the 130 opt-out decisions that we are looking at. First, there are the 40 or so that are considered redundant or inapplicable. Some noble Lords and some members of the sub-committee have argued that there was no point in disturbing these particular sleeping dogs. I am afraid that I take a more fundamental approach than that. Where possible, one should remove redundant provisions from the statute book. Leaving such provisions extant, however innocuous they may seem at the time, can cause unforeseen problems in the future, as to both applicability and compliance. From my point of view, the Government were right to take this opportunity to clean up the directives in this way.

The second category is of those directives to which the Government seek to opt back in. Primarily, they focus on enhancing the international dimension of the fight against organised crime. It is more than ever a self-evident truth that crime, along with many other activities, has gone global. The European dimension to this global challenge has formed important elements of many reports from your Lordships’ various EU sub-committees. I strongly support decisions to continue with hard and practical measures in this field: the joint investigation teams, exchange of information under ECRIS, mutual recognition of confiscation orders and so forth.

Not all the directives are perfectly formed. I am pleased that, while recognising the value of the European arrest warrant—I entirely share the views of noble Lords who have pointed to its particular importance in the relationships between the UK and the Republic of Ireland—nevertheless improvements can and should be made. These should be in areas such as proportionality, not allowing people to be held for long periods without trial overseas and using videoconferencing to enable people not to have to travel, particularly where the case against them is not as sure as it might be. For these global security matters, we should opt back in and I am glad to see us doing it. If it is in our interests to improve global security, I see no reason why fellow European members should not wish to collaborate with us to ensure that.

Finally, I turn to the third category of directives, to which the Government propose not to opt back in—the most challenging area of our discussion. I am no lawyer, but my concerns as an external viewer are threefold. First, how does one combine into one legal framework cases that emerge from two different legal traditions: the investigative approach, followed by most EU member states, and the adversarial common law approach of the UK, Ireland, Cyprus and Malta? Secondly, to what extent does any potential judicial activism of the European Court of Justice represent a challenge to our established legal procedures? Thirdly, what will be the long-term impact of the European Convention on Human Rights, although an entirely separate structure, on the first two? I do not pretend to have clear answers to these questions and I am not sure that many other people do either. In the circumstances, the Government are wise to proceed slowly, to watch developments and to react accordingly. Joining in will surely represent a one-way ticket and I am not yet convinced that the UK should be embarking on that journey.

In conclusion, given the restrictions imposed by the wording of Protocol 36, the Government are taking a broadly sensible approach by, first, removing superfluous and redundant legislation; secondly, by rejoining those directives that help to increase the security of Europe as a whole; and, thirdly, awaiting the clearing of the fog that still hangs over a number of important public policy issues. That is why I shall be supporting the Government tonight.

My Lords, my old friend the Minister was right on one thing, anyway—the European Union Select Committee’s report is an excellent one. That is why it was deeply disappointing not only that we did not get the Government reply until around lunchtime today but that it is such a flimsy response. It is 22 and a half pages long, most of it just repeating the recommendations of our Select Committee and making inadequate responses to them. In apologising for the delay, the Government have said that it arose to ensure as comprehensive and as detailed a response as possible. Comprehensive and detailed—that is an unbelievable description of this reply. Perhaps the Minister who is to reply could tell the House what detail we had to wait for. What detail could not have been provided many weeks ago?

This is a serious matter. We are talking about the threats of terrorism and organised crime. The Government, in moving in this direction, are putting back the fight against terrorism and organised crime and thus putting citizens in danger in a vain attempt to appease anti-European Tory MPs and particularly the UKIP-ers, as my noble friend Lord Tomlinson said. It is a vain attempt. The Guardian today reported that the first report of the balance of competences review has been published, which is supposed to help to appease the anti-Europeans and UKIP. It has failed to satisfy Mr Farage, the Alf Garnett of British politics, who described it as a,

“futile and cynical PR exercise”.

Perhaps I can say this to my friend the noble Lord, Lord McNally: Mr Farage will never be satisfied. One of my colleagues likened him to Oliver. He will continually ask for more and more, so it is no use trying to appease him.

Over the past five or six hours I have been able to look at the reply to the report. On the balance of competences review, of which we have had the first part today, the Government claim that they are two separate exercises. That is complete nonsense. Of course the balance of competences review has a much wider remit, but reviewing justice and home affairs and not completing that until 2014 means that these two exercises are related to each other. Surely there must be some follow-through or cross-over between one and the other.

The response to the report refers to the devolved Administrations and gives a list of all the meetings. In fact, almost a page is taken up by a list of the meetings that have taken place, but what the response omits to say is that as far as Scotland—just one of them—is concerned, the Lord Advocate and the Cabinet Secretary for Justice have grave concerns about opting out of the European arrest warrant without any guarantee of being able to opt back in. The crucial point is that lack of a guarantee of the ability to opt back in. They point out that the European arrest warrant is an important tool to combat cross-border crime; I think that we would all agree with that. So why opt out of the warrant? In its report, the Select Committee said that,

“there are compelling reasons of national interest for the United Kingdom to remain full participants”,

and that,

“we have identified no persuasive reason for the United Kingdom to withdraw”.

The noble Lord, Lord Hodgson, has just said that all these defunct measures clutter up the scene, but given his background I would ask him to take a look at some of the defunct measures that we have in our United Kingdom legislation. There are 10 or even 100 times as many, but we are not spending time clearing them up or repealing them. If they are doing no harm, why are we going through this huge exercise just to get rid of things that are not causing any harm to anyone when we do not know whether we will be able to opt back in to things that are absolutely vital to everyone? The Government say that they are “seeking” to rejoin. The word “seeking” is the important one. The European institutions may “seek” to impose conditions, as the Government have conceded.

The delay also means that we are wasting valuable time, as a huge number of officials are involved in these kinds of debates. The cost is enormous as well. The noble Lord, Lord Maclennan, asked a serious question: if we opt out and then we opt back in, are we then subject to the terms of the European Union Act 2011? Do we have to go through the referendum procedure? The noble Lord, Lord McNally, did not have time to consider it so I do not blame him for not replying, but the noble Lord, Lord Taylor, has had a few hours to do so. He has officials, around five of them, who no doubt are on the telephone to lots of others. I hope that they will come back so that he is able to answer that question.

I do not want to go on for too long so I shall make two last points. I must say that I think that this is a very sad day for the Minister. As I said, the noble Lord, Lord McNally, is a good friend of mine. I ask him to remember the 1970s and early 1980s when he and I were members together of the Labour Movement for Europe, arguing for greater competence and more powers for the European Union. Indeed, he went much further than I did; he went so far as to leave the Labour Party and set up a new party with the noble Baroness, Lady Williams, and others so that he could fight for Europe. Where is he today? Where is that Lord McNally now? Where is the Tom of those days? He comes in and reads out verbatim something handed to him by the Tories—his master’s voice.

Finally, I must say that the one person who disappoints me even more than the noble Lord, Lord McNally, is the noble Lord, Lord Hannay. The noble Lord, Lord Hannay, knows more about this than anyone else. It reminds me of the Schleswig-Holstein question. There were three people who knew about it: one had subsequently died, one went mad and the other one was the noble Lord, Lord Hannay of Chiswick, in this case. The noble Lord, Lord Hannay, knows more about this issue than anyone else. He knows—I have heard him say it in the committee—better than anyone the dangers of opting out without any guarantee of being able to opt back in on these vital issues. That is why I am very disappointed that he has been conned by the Government. In all the machinations that have taken place, the noble Lord, Lord Hannay, and his supporters have been conned. The opt-out is bristling with problems. The only way to express concern about it is to vote against the Government today. I urge any Member—not just on this side and on the Cross Benches but on the other side—who has real worries about opting out to take that course of action.

My Lords, it is a pure joy to follow the noble Lord, Lord Foulkes, and also to be able to say that I agree wholeheartedly with everything that he has said. I declare an interest as a member of Sub-Committee E of the European Committee.

We are dealing with 130 different measures. Whether that figure is exactly right—whether it is 128 or 132—matters not. We are dealing with a body of measures that essentially constitute a potpourri. There is no family or monolithic consistency to them. They spread over a huge range of possibilities. Some of them are vital to the national interest. Some are highly relevant and useful. Others, at the other end of the spectrum, have fallen into dissimilitude. Many of them have never been relevant at all. Others had only a most minimal and marginal impact upon our interests. If anybody therefore concentrates upon one, two, three, five or 10 of those, one is doing the whole issue a disservice. One can look at them only as a totality. Looking at all of them together and asking where the United Kingdom’s interest lies—whether it is a disbenefit or an advantage to take course A or course B—is surely the only possible way that reasonable, fair-minded and balanced people can look at this situation.

This has now been going on for five years; we have had a long time to think about the matter altogether. It seems to me that the Government can never say that from any point in time have they had an open mind on the matter. If they were able to show that, I would gladly withdraw that serious accusation. However, I do not think that there can be any question of their having looked at the matter in an objective, cool and statesmanlike way and having asked, “What is our duty towards this kingdom in the circumstances?”.

In fact, there is a howling fallacy in the government case and it is as simple as this. If one looks at the Motion tonight or the matter that was placed before the House of Commons, the Government’s argument is on two levels. As far as 95 matters or thereabouts are concerned, they say nothing in justification of their being ousted for ever. As far as 35 matters are concerned —the ones to be rejoined and readopted—they say that there is a test of the national interest. The question that I very humbly ask the House is: why should the test of national interest be applied to one group but not the other? Why should the test of national interest not be applied to each and every one of the 130? However, that is not the test. In so far as the question of ousting some 95 or so is concerned, the test is a knee-jerk one. It is Europe. We do not like Europe. One can almost hear the words of Cato in the Roman Senate—not “Carthago delenda est” but “Europa delenda est”. That is the clarion call. Europe must be defeated and challenged at every point. That is the real issue.

If one looks at the statements made by the Government over the past few years, it is abundantly clear that there has never been any objective, open-minded approach to the question. Mr David Lidington, the Minister for Europe, in December 2011 made it quite clear that as far as he was concerned all the evidence would be produced, all the discussions would be reported and Parliament would be assisted in every way to come to the most mature and objective conclusion with regard to this matter. Then, on 15 October last year, we had the Home Secretary making clear that there would be a general opt-out—it had to be en masse; there was no other way—but that the 35 would be regarded in the light of the national interest. However, three weeks previous to that, as we have already heard, the Prime Minister had seen fit to speak to journalists in Rio de Janeiro and had said that we would exercise the opt-out.

The situation, therefore, is that the opt-out is a fact and a reality. It is an irrevocable legal consequence once it occurs; but in so far as rejoining is concerned, that is an aspiration. We may be able to achieve that in respect of all 35, but we may not be able to, as there may well be conditions that we will find impossible to accept. There may well be a hiatus. I cannot remember now whether hiatus is a second declension noun and therefore whether “hiati” is the plural, but there may be several hiatuses and it may very well be utterly destructive as far as many institutions are concerned, including the European arrest warrant, Europol and Eurojust and so on. Therefore, a high price may well have to be paid. What for? For nothing at all. The Home Secretary made it clear on 15 October last year that some of these 95 matters never applied to us in the first place. Many were redundant and many were minimal in their effect. What earthly motivation can there be to take a risk just in order to wipe the slate clean of such irrelevant matters?

I believe that the Government are acting here with less than total sincerity and honesty. Somebody asked Cardinal Richelieu, at the end of this life, why he had been so successful in the government of France. He said, “My son, I lied, I cheated, I dissembled, I misrepresented and I swept it all inside my cardinal’s robes”. The Government here have hidden a very great deal about what their actual selfish motivation is and swept it all into the silken robes of the union jack.