§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
§ 1.3 pm
§ Sir Paul Bryan (Howden)
I declare my interest as a director of Granada Television.
I bring to the attention of the House a scandal of which we should be thoroughly ashamed. Over the years the British law on copyright has been respected and has been a model for the law in many other countries. That is an area in which we presume to advise others. However, in the exploding trade of video tape recording we are the world leader, not in copyright, but in video piracy. The Government sit inactive in the background while an industry that should have been the saving of the film industry and a unique stimulus to artistic production is becoming a den of thieves.
When video piracy started no more than two years ago it was the plaything of amateurs, but with the rewards so great and penalties so laughable it is inevitably sinking into the hands of gangsters, the same people who run the drug rings. What I am asking for today is not a new copyright Act, which could take five years, but an immediate increase in the penalties provided for in the 1956 Act, which could be achieved in five hours by a simple noncontroversial amending Bill.
Britain is internationally regarded as the world leader in video piracy. Three factors combine to bring about that national disgrace. The first is the wide international use of the English language, the second is the fact that our PAL colour television system is used throughout the world, unlike the American system, and the third and most important is that our laws, and especially our criminal laws, do not provide remedies and punishments for piracy remotely adequate to deal with the size of the current problem.
The astonishing phenomenon that has left the Government standing and has frankly surprised us all is the speed and the size of the video boom. There are now 1.5 million video tape recorders in Britain. At the end of the year there will be 3 million—one recorder for every six homes. By the end of the decade half the homes in Britain will have video tape recorders.
People do not buy or rent expensive video recorders without meaning to use them every day. Therefore, an enormous video tape industry has sprung up overnight. "Star Wars", "Chariots of Fire", "Watership Down"—all the most popular films—can now be seen in the home. At first sight this looks like the rebirth of the film industry. In the event, no money from the sale of over half the tapes goes to artistes, producers, distributors, or in VAT to the Government. Video piracy now accounts for at least 65 per cent. of the market—a staggering £100 million.
One has only to see how simply copyright material can be recorded, and how rich are the pickings, to understand this eruption. At the amateur end of the trade is the lady on the council house estate who records feature films from her television and rents them to her friends. At the professional end there is the bent projectionist who, after the evening performance of "Star Wars" lends the film for a consideration, perhaps £300 or £400, to a local recording organisation. From the reels of celluloid film a master video tape is made from which hundreds of illicit video 578 casettes are made. The pirate operator can have up to 40 video cassette recorders working 24 hours a day to churn out copies at £30 a time.
Alternatively, the film will be taken from the cinema to a duplicating bank where it will probably be run through a Rank Cintel machine and transferred on to video tape. Thirty or 40 master copies might be made, and each one of those can be sold to dealers at a price of more than £1,000 each.
When the illicit trade started, one could easily detect pirate tapes by the crude packaging and labels. However, the trade has now been picked up by sophisticated criminals and the whole tape package is indistinguishable from the genuine article. Small-scale film piracy is now being superseded by internationally organised crime with professionally counterfeited video cassettes supplanting the easily recognisable pirated copies. London is at the centre of this illegal industry and London and the Home Counties boast more duplicating organisations than the whole of America.
The legitimate trade has not taken the illegal developments lying down. Independent television companies, the BBC and the Society of Film Distributors have formed the Video Copyright Protection Society under the chairmanship of Barry Heads. The British Video Association has been active in defending the legitimate trade.
Both those organisations are understandably desperate at the complete lack of any Government reaction as their industry sinks rapidly into this mire of corruption. The Government sit peacefully waiting for observations on last year's Green Paper which, in turn, is a commentary on the Whitford report published in 1977 but instigated in 1973.
§ Mr. Michael Shersby (Uxbridge)
I am most interested in what my hon. Friend is saying. Is he aware that I am looking after a Private Member's Bill designed to amend the Copyright Act 1956 which would be an interim solution until there is a major Government reform of the copyright law? That Bill has already passed through another place and I hope that it will have its Committee stage and its Third Reading on 9 July. That would be an interim measure to deal with this serious problem.
§ Sir Paul Bryan
I know about that and I hope that my hon. Friend will contribute to the debate and tell us all about it.
The Government are still waiting for observations on the Green Paper. All that is entirely irrelevant to the present crisis. Technology has raced past the Government's deliberations. Lord Lyell, speaking on behalf of the Government in another place, said:We are of the opinion that this particular subject, and piracy of videos and films, requires a little more detailed thought before we move to definite legislation, and when we introduce legislation, as we shall in due course—and I hope much sooner, rather than later— would hope to produce a series of effective measures, with effective remedies."—[Official Report, House of Lords, 15 February 1982; Vol, 427, c. 370.]He was speaking not only in another place but in another world.
The Government are oblivious to what is happening. They must increase the penalties at once. Although effective civil law remedies are available to copyright owners in the form of High Court injunctions, they are extremely costly, with preliminary private investigations, the acquisition of evidence and legal fees. The expense to 579 the copyright owners of a group of cases can amount to a six-figure sum. That means that copyright owners can deal with only a few of the piracy operations reported to them.
Civil law remedies are no deterrent. For video piracy to be crushed, it is imperative that the police should be involved and the criminal law invoked. At present the penalties under the Copyright Act 1956 are restricted on first offences to the imposition of fines not exceeding £2 per cassette with a maximum of £50. Partly because of the ludicrously low penalties and partly because of manpower considerations, many police forces, including the Metropolitan Police, have issued directives to their officers not to investigate or prosecute cases of video piracy but instead to leave it to the aggrieved copyright owners to take the civil action that I have described. Can one imagine a more agreeable bed of roses for the criminal?
Before setting off for Europe, President Reagan signed into law the Piracy and Counterfeiting Amendment Act 1982, which provides for stricter criminal penalties for record, tape and motion picture piracy and counterfeiting. Under the new law, which came into effect the next day, 25 May, sound recording and motion picture pirates and counterfeiters, including first-time offenders, face maximum felony penalties of up to five years imprisonment or fines of up to $250,000. Previously first time offenders faced maximum misdemeanour penalties of one year in jail and/or a fine of $25,000. That is the reaction of a Government in a country with less video piracy than Britain. It is precisely the action that I wish from the British Government and it would have an immediate affect.
At the same time, I ask my right hon. Friend the Home Secretary to direct the police, especially the Metropolitan Police, to tackle the problem before it gets even further out of hand. Until the penalties are made punitive, we cannot expect the police to take serious action. It is an affront to the police to expect them to bring people to court with the prospect of a £50 fine on those earning many thousands of pounds from their criminal business.
Finally, I warn the Government that the problem is not merely increasing but rocketing. I have already forecast the inevitable increase due to the rise in numbers of video tape recorders, but the advent of cable television will give the video cassette industry yet another boost, for there will be so much more to record. Time is running out. The longer this illicit industry is allowed to grow, the more criminals will be financially committed to it and the harder it will be to eradicate. Meanwhile, through lack of Government action, many honest businesses will go to the wall and artistes will continue to be cheated of their just rewards.
§ The Under-Secretary of State for Trade (Mr. Iain Sproat)
I congratulate my hon. Friend the Member for Howden (Sir P. Bryan) on bringing this matter before the House. I am pleased that my hon. Friend the Member for Uxbridge (Mr. Shersby) had the opportunity to intervene, albeit briefly, because I pay tribute to the hard work he is putting in behind the scenes in trying to ameliorate the present problems through a Private Member's Bill. Like him, I have every hope that when the Bill returns to the House on 9 July it will receive the blessing of the House.
580 We are grateful for the way in which he has helped us to try to find interim remedies for a problem that is quite shocking.
The Government share the concern of the film and video industries about the growth of commercial video piracy. Of course, there are legal remedies and they are most effective when applied energetically and systematically. Extensive damages can result from civil actions in the courts launched by copyright owners for infringement of their copyright. The civil remedies available under the Copyright Act 1956 provide for injunctions and damages, and prosecutions are helped considerably by Anton Piller orders. These empower a plaintiff to enter a defendant's premises to obtain evidence, that is, infringing articles. Anton Piller orders have been successfully used on a number of occasions as hon. Members may have seen recently in the newspapers.
The Copyright Act also provides criminal remedies against those making for sale or hire, importing, dealing in or exhibiting in public by way of trade, articles that they know to be infringing copies of copyright works. However, as my hon. Friend the Member for Howden made very clear, and I have great sympathy with his view, the penalties at present laid down are, to say the very least, not high but they do include imprisonment as a possible penalty for second and subsequent offences. Under the terms of the Criminal Justice Bill, the maximum penalty for each transaction that contravenes the Act will increase with the option of imprisonment being extended to first convictions. This goes some way towards meeting my hon. Friend's point and a further opportunity will arise when more general changes in the copyright law are introduced.
Nevertheless, I entirely accept that video piracy is a growing and extremely worrying criminal activity which, if allowed to continue to develop unchecked, can only undermine the legitimate market, including film producers, who need the profit from legitimate video sales as a contribution to the cost of film-making. Furthermore, pirate video films that appear on the market before the legitimate version—as many do—damage the trade of cinemas showing the screen version.
The industry now claims—I have no reason to dispute it—that pirate copies constitute almost three-quarters of the market in this country, with a retail value of perhaps over £100 million. These are deeply worrying statistics and something must be done to check this activity.
The Green Paper on copyright, published last July, makes several proposals to strengthen and improve existing remedies. They include extending the scope of the courts so that they can award exemplary penal damages in cases of flagrant infringements, making the possession of an infringing copy of a video recording in the knowledge that it infringes copyright an infringing act, and increasing the fines applicable in the cases of criminal proceedings to a deterrent level.
I should certainly want to consider the legislation that President Reagan has recently signed to see what lessons can be learnt from the American experience. It is, indeed, extraordinary that the larger and more populous country of America—I must consider my words carefully—where criminal activity is usually further advanced than in Britain, should appear to be less criminally advanced than Britain in this case, although it has been quicker to take action.
581 The Government must consider that example closely and quickly. I certainly undertake to do so. However, consultations on the Green Paper will pave the way for negotiations with our Community partners on harmonising copyright laws in the Community and, beyond that, will lead to a major reform of United Kingdom copyright law. Therefore, these procedures cannot be short-circuited. They can be extremely exasperating for those involved but they must he gone through.
Meanwhile, we must bear in mind the damage to legitimate commerce and the standing of the law. That is an important point. If nothing is being done about the fact that people believe that three-quarters of the video cassettes on sale are pirated and the result of criminal activity, the law will be undermined more by that than by those activities themselves.
I hope that I have said enough to show that I accept that more needs to be done to reinforce the law. I agree that there is a great discrepancy between the extended remedies proposed in the Criminal Justice Bill and what President Reagan has apparently been up to in the United States of America. That discrepancy between the present remedies, the proposed British remedies and the American remedies must be considered carefully. We must try to relate it to the facts and figures that the trade brings to our attention.
It has been said that £100 million of pirated cassettes are on the market and that value added tax is being lost. Many hon. Members might be jolly pleased that I am not a Treasury Minister, but even those Ministers who are most remote from the Treasury would quickly understand that £100 million of goods that are not paying VAT cause considerable suffering to the Treasury and to the Revenue. I am acutely aware of that because in my Department there are many areas in which £15 million would make a great difference to the amount spent on services, such as safety at sea.
§ Sir Paul Bryan
Will my hon. Friend comment on my remarks about the inactivity of the police and the directions received by some police departments that they are not to intervene in this world of crime?
§ Mr. Sproat
I am keen to respond to that point but I am restrained by the fact that this is primarily a matter for the Home Office. I agree with the implication of my hon. Friend's remarks, if I have understood that implication correctly. It is always worrying when one is told that the police have been instructed not to proceed against a 582 criminal activity. That is worrying in principle at any time, but it is perhaps particularly worrying when it affects a criminal activity with a turnover of £100 million a year. I suspect that £100 million is an underestimate now and with 1½ million video recorders and the number growing all the time—I am one of the 1½ million—we can expect that £100 million trnover figure to increase rapidly.
§ Mr. Shersby
Does my hon. Friend agree that the issue of police manpower would undoubtedly arise in dealing with the problem in the way that my hon. Friend has so rightly suggested? My investigations of the matter over many months now have made me aware that police manpower is one of the problems. It is not that the police are unwilling to deal with the matter but that the huge extent of the problem means that any increase in penalties, which I would fully support, must take into consideration the issue of police manpower.
§ Mr. Sproat
My hon. Friend raises an extremely interesting point. A turnover of £100 million with a VAT figure of £15 million could be used to increase manpower to fund the necessary exercise. I shall see that my lion. Friend's point about instructions to the police not to prosecute in such cases is drawn to the attention of my right hon. Friend the Home Secretary.
I have done all that I can to encourage the passage of the Copyright Act 1956 (Amendment) [Lords] Bill which was introduced by the noble Lord Fletcher. The Bill states that it is an offence for anyone to have in his or her possession by sway of trade a copyright, sound recording or cinematograph film which he knows to be an infringing copy.
The Bill is a good step in the right direction even though it perhaps does not go far enough. The Bill passed through all its stages in the House of Lords. It received its Second Reading in the House of Commons on 7 May and appeared for its remaining stages on 14 May. I thought then that the Bill was well on its way to the statute book as did my hon. Friend the Member for Uxbridge. We were all disappointed when it was blocked, perfectly properly, on procedural grounds for reasons we understand. It was an important Bill that was lost in one of those not too rare House of Commons deliberate procedural tangles. When the Bill returns on 9 July, I hope that it will receive the approval of the House. In the meantime, I hope that that will satisfy my hon. Friend that the Government are not so comatose or inactive as he might think.