§ Order for Second Reading read.11.48 am
§ Sir John Eden (Bournemouth, West)
I beg to move, That the Bill be now read a Second time.
The Bill logically and naturally follows the Copyright Act 1956 (Amendment) Act 1982, which was introduced in the last Session of Parliament by my hon. Friend the Member for Uxbridge (Mr. Shersby). That Act, like the Bill, had its genesis in a Green Paper, Cmnd. 8302, of July 1981, in which the Government set out in consultative form their observations on the Whitford committee report on copyright and design laws published in March 1977. Since then large numbers of people have been waiting and hoping for their comprehensive reform of copyright Law. As that has not yet been finalised, we have been forced to deal with the urgent matters in rather a piecemeal way. This is an interim measure. That it has come forward at all owes a great deal to the enthusiasm and industry of my hon. Friend the Under-Secretary of State for Trade who may be seeking to speak on behalf of the Government.
The Green Paper expresses unqualified agreement with the Whitford committee recommendations that, in view of the growing practice of piracy of video cassettes and cinematograph material, there should be two changes in section 21 of the Copyright Act 1956.
The first change, that possession by way of trade of illicit copyright material should be added to the list of offences, was dealt with in the 1982 Act, steered through this place by my hon. Friend the Member for Uxbridge (Mr. Shersby).
The second change, that the penalties for these offences should be increased, is the subject of the Bill. The Bill seeks to amend section 21 of the Copyright Act 1956 (Amendment) Act. That Act defines offences and fixes penalties in respect of specified forms of dealings that infringe copyright. Only the provisions relating to sound recording and cinematograph films, including video, would be amended. The most notorious and recent example of this type of infringement of the law is the way in which the film "ET" became available in video cassette form even before its release in this country as a film.
The public, in that and other cases, have been prepared to pay a premium to obtain an early copy of the video cassette. Wittingly or unwittingly, they were dealing in stolen property. That property, having been stolen, was then exploited by the thief for his own gain. I put it as starkly as that. It is well that hon. Members recognise the nature of the illicit trade that is taking place and growing rapidly in our midst. Enormous sums are being earned illegally. This onward and upward process must be reversed. An attempt must be made to stop it altogether.
The existing penalties under section 21 are totally inadequate for this type of offence. They provide for a maximum fine of £25 per infringing copy, subject to an overall maximum of £50 per transaction. There is also the option of two months' imprisonment on second and subsequent offences.
From April this year, under the terms of the Criminal Justice Act 1982, the £50 maximum per transaction will increase to £200 and the two months imprisonment option will apply to first convictions. Hon. Members will, I am sure, agree that fines of such a small size are not likely to 606 be any deterrent to those who choose to handle the infringing material; nor do they give much encouragement to those who want to stop this rapidly growing trade.
A further weakness is that section 21 treats all copyright offences as summary offences. This makes both the large-scale manufacturer and the small-time retailer subject to the same rather limited upper level of fine. The changes proposed in the Bill are designed to distinguish between two groups of offences; some are treated as more serious offences and others as less serious.
Clause 1(3) groups as guilty of less serious offences those who sell and hire or who by way of trade exhibit or have in their possession articles which they know to be infringing copies of copyright material. Within this group would come most retailers. Under the penalty proposals that appear in the Bill, offenders in those categories would be liable to a fine not exceeding £1,000—that is the present limit of level five on the standard scale as set out in the Criminal Justice Act 1982—or to a term of imprisonment not exceeding two months, or to both fine and imprisonment. I emphasise that these penalties would relate to each offence—to each illegal copying of copyright material.
Secondly, the clause identifies as more serious the action of those who manufacture, import and distribute on a commercial scale articles that are known to be infringing copies of copyright material. It is in these categories that the major criminal operators are to be found. The scale of penalties has been devised to reflect more closely the magnitude of the damage done to the legitimate trade.
The Bill suggests that such offences should be triable either way. They may either be tried summarily by a magistrate, in which case the maximum penalty would be a fine of £1,000 per offence, or the magistrate can determine that the case should go to a higher court where the fine would be unlimited and the term of imprisonment would be a maximum of two years. There would be the option of both fine and imprisonment. The fine and the term of imprisonment would apply to each offence.
I emphasise that this Bill is not concerned with home copying or own use. It would not be practical to attempt to deal with that problem by a measure of this kind.
The Bill attempts to deal with the commercial pirating and counterfeiting of copyright and audio-visual material.. The House will be aware of the way in which video piracy has grown. To illustrate that I quote what I find to be a rather alarming assertion made by Mr. Peter Ayres, the chairman of the east Sussex region of the National Federation of Self Employed and Small Businesses. He said:The Video industry is the fastest growing sector in the country. There are approximately 20 to 25 thousand Video film retailers who sell or rent films to the public; if one excludes the Multiples, there are less than 2,000 retailers operating within the law. The remainder are involved in the sale or rental of 'counterfeit' and 'back to back' copies, thereby stealing from the copyright owners and robbing both the public and the film industry.I am unable to vouch for Mr. Peter Ayres' figures. He does point out the magnitude of the criminal activity that is taking place and the scale of operation, which is cheating and defrauding the legitimate trade.
I am sure that the House will wish to take action to stop what is, in effect, trafficking in stolen goods on an enormous scale. It is estimated that there are 2 million 607 video cassette recorders in private hands in the United Kingdom. They must form a tempting and substantial domestic market for the video pirates to supply.
In addition to the opportunities that exist here, there is a flourishing export trade in pirated video cassette copies of films and television programmes. I am told, for example, that "Dallas" is one of the favourites and that it is frequently recorded off-air and flown out of the country. I am told also that it is available the following morning in the souks of the Middle East. I hope that they enjoy "Dallas" but they should enjoy it legally and watch lawfully acquired copies, having paid the levies and dues that the manufacturer of the product should legally have coming his way.
It is not possible to put a precise figure on the size of the trafficking but the British Videogram Association believes that losses through piracy are currently costing legitimate distributors as much as £120 million a year in lost revenue. That is more than their entire takings in the legitimate market. To our shame, London has the unenviable reputation of being the principal centre in the world for illicit copying.
Undoubtedly, the damage that is being done, serious as it is for the legitimate trade, goes very much wider. One can only guess at the loss of revenue to the Exchequer, while the undermining of employment opportunities can be gauged by the fact that in two years about 20,000 people have found jobs in the video industry. More jobs have been created in two years in the legitimate video industry than have been created by independent television in 26 years. If the evil of piracy could be ended, the opportunity for further growth would be greatly enhanced.
It is in recognition of the serious nature of the criminal activity involved in the pirating of video film material that the Bill makes provision, in clause 1(4), for additional powers of search and seizure to be given to the police. The present procedure is that in order to obtain evidence of illegal activity the injured owner or licensee of the copyright, and not the police, must first go through civil procedures in the High Court to enable him to enter suspect premises. This is generally referred to as an Anton Piller order.
It is natural that as the scale of the illicit trade grows more menacing and inflicts more damage on the legitimate dealer, the pressure to secure an Anton Piller order increases. This is reflected in the recent comments in the chancery division, where Mr. Justice Whitford is reported as having said:The Court of Appeal has repeatedly pointed out that Anton Piller relief should be granted only in exceptional circumstances…Recently, a chancery judge went even further to warn that Anton Piller orders may be resisted on the ground that these matters should be dealt with in the Crown court as they are essentially criminal matters. That they certainly are.
Video pirates are engaging in criminal activity. In some instances the profit derived from the videos—possibly as high as £70 million across the board— is almost certainly being used to finance other criminal operations. Those involved are unscrupulous and nimble-footed. Legitimate manufacturers and traders, who are doing their best to maintain a good service to the public, observing the rules of the game and paying all dues and taxes, rightly demand—in my view they fully deserve it—protection against the depredations of the dealers in illicit material.
608 Self-policing by the industry combined with Anton Piller orders is not enough. Apart from anything else, enforcement under the Anton Piller procedure is extremely difficult, as it is possible in those circumstances only to make an order of the court against the individual, and he can so easily disappear. I have no doubt that additional police powers are needed.
I had hoped that clause 9 of the Police and Criminal Evidence Bill would provide the answer, but that does not appear to be so. Clause 9 will not apply to offences under copyright legislation even when and if the Bill becomes law because it applies only to serious arrestable offences. An arrestable offence is defined as one punishable by five years' imprisonment. As I have explained, the Bill seeks to provide a maximum period of imprisonment of not more than two years.
I understand that the Government may not be entirely happy about the relevant subsection. I shall listen most carefully to any argument that may be advanced either now or in Committee. I shall readily consider amendments to meet any reasonable points. However, I must re-emphasise that the Bill is attempting to deal with a major criminal activity, to defeat which it is vital that evidence is secured of the display, copying or possession by way of trade of pirated cassettes.
The Whitford committee, in paragraph 718, recognised that provisions for search and seizuremay be most useful".However, it said that it wasnot … prepared to make a recommendation which would involve the police in what is essentially a civil matter unless and until it is clear that this is essential".That was in 1977 and much has happened since then. Technology has vastly facilitated the task of the pirate. New means of copying are being introduced almost daily and this explosive development will continue.
The law to deal with criminal activity needs to keep abreast of the more sophisticated techniques that are now being employed. It is essential that powers of search and seizure be made available, especially in respect of the more serious cases of video piracy.
In the Green Paper of 1981, the Government stated then that they acceptedthe need for stiffer penalties against those who knowingly deal with infringing products and hopes that this will provide an effective deterrent.I must tell the House that penalties on their own will not be enough. The evidence must first be secured. The search of premises can often produce useful information about retail outlets and sources of material. The industry itself has gone to considerable effort to combat illegal practices and it deserves to be supported by the involvement and commitment of the police. That is why the Bill seeks both severe penalties and powers for the searching of premises and the seizure of infringing material. Only a Bill that provides these will create what the Government and the industry want—an effective deterrent. That is what the Bill sets out to achieve and I commend it to the House.
§ Sir Paul Bryan (Howden)
I declare my interest as a director of Granada Television, Mr. Deputy Speaker.
Few people realise the importance of the Bill being introduced by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) today. Not one in a hundred of the growing crowd of citizens who happily hire tapes for the weekend's entertainment from the local radio 609 shop has the remotest idea that he or she is dealing with crooks who are bringing ruin to one of our most promising industries.
It is appropriate that my right hon. Friend, who was such a distinguished Minister with responsibility for posts and telecommunications, should be the knight who slays, or has volunteered to slay, this particularly odious dragon. I congratulate him on his initiative and on the admirable speech by which he has introduced his Bill.
I congratulate my hon. Friend the Under-Secretary of State for awaking the Government to the position. Within days of his appointment, on an Adjournment debate last June, I said: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.… 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 non-controversial amending Bill."—[Official Report, 11 June 1982; Vol. 25, c. 577.]We are discussing precisely such a Bill today. Under the Minister's influence, I believe that the Government will actively support it.
It is impossible to exaggerate the potential of video tape recording. In no time one household in every six has acquired a video tape recorder. It is now clear that within five years there will be as many video tape recorders as there are colour television sets today. No doubt by then the recorders will be built into the television sets.
The direct reaction of the industry to the huge and varied demands of such a host of recorder owners should be the creation of a vast, efficient and all-embracing national library of video cassettes. A supplier will continue to stock the more popular cassettes but, with computerised records, he will be able to draw on central libraries and, with no great delay, provide the customer with a tape on hire on every conceivable subject. There is simply no end to the national treasure house of music, art, entertainment, sport, instruction and education that can be built up. At the same time, modern technology will immensely improve the quality of the television picture.
We are often told of the wonders that cable will bring, but they are well over the horizon. The wonders that I have just described, if not immediate, are well in view. Development can pay for itself and provide much employment not only for those with artistic talents, but for the thousands occupied in organising and running the industry.
Until my right hon. Friend the Member for Bournemouth, West introduced his Bill today, that heartening prospect was not merely in danger of being thwarted but was being thwarted. The industry is in complete disarray. Many reputable concerns have declined to have anything to do with it. Last year it was estimated that 6.7 million pre-recorded video cassettes were available in the United Kingdom market. As many as 5 million of those may have been illegal pirate copies. As my right hon. Friend said, their sale and rental turnover exceeded £100 million—50 per cent. of the estimated consumer expenditure in that area for 1982. Money which has provided profits and finance for criminals should have gone to artistes, legitimate video cassette producers, 610 copyright owners, investors in the film and video industries and, of course, to the Government in the form of VAT, income and corporation tax.
Has one ever heard of a major industry bogged down in such a slough of corruption? The new penalties in the Bill will not stop that corruption significantly overnight, but they will provide a real deterrent. They will encourage the honest dealers to remain honest. The police, who have almost given up this area for lost, will take action and, I hope, courage. Trade associations, such as the Video Copyright Protection Society Ltd., the British Videogram Association and the new Federation Against Copyright Theft will feel tremendously strengthened. Many major firms, already well established in other areas of distribution will enter the industry. Finally, Britain will once again command some respect in the copyright world.
At the International Tape Association's home video conference in Cannes last October, speaker after speaker pointed at Britain as the source of video piracy from which all Europe was suffering. No British speaker could deny it. Every European country could claim to impose severe penalties on copyright thieves. The United States of America had resorted to fines of up to £250,000 and five years' imprisonment, Meanwhile, in Britain the maximum fine was a derisory £50. Those evil days are nearly over. I have great hopes of the Bill and wish it well.
§ Mr. John Fraser (Norwood)
I shall be brief, because my longer contributions can best be made in Committee. Indeed, I hope that by making a short speech I will help the Bill to go into Committee all the sooner.
The hon. Member for Howden (Sir P. Bryan) set out a catalogue of organisations that support the legislation, not in every detail but certainly in broad principle. To that list one can certainly add the film industry trade unions which are deeply worried, not just about their members' jobs but about the preservation of an important industry. I shall be short in the hope that the Bill will get into Committee and become the law of the land as early as possible.
In general, I give the Bill my unreserved support. One will need to look at details, such as the search powers and penalties, but this is the occasion to look not at detail, only at the principle.
I have not the slightest hesitation in agreeing with the right hon. Member for Bournemouth, West (Sir J. Eden) that we are dealing with theft, forgery and gross criminal activity. The right hon. Gentleman said that money comes out of video piracy into others forms of crime. I suspect that the reverse is also true—that video piracy has been the method by which the proceeds of one form of crime are laundered into another, making the money less easily traceable. One need not say too much about this, but there is strong evidence that this is, as it were, the semi-legitimate end of the criminal market. It is clear that the penalties, which are trivial and wholly ineffective, need to be strengthened. As the profit from video piracy is massive, so should be the penalties. At the moment enforcement is half-hearted and wholly ineffective because there are no adequate powers. Subject to looking at the matter in detail, I am willing to support the unusual but necessary powers that the right hon. Member has introduced.
611 Why is the Bill so necessary? Why are stronger powers and larger penalties needed so quickly? The answer is that this particular crime not only takes away the proceeds but destroys the very thing that is being stolen.
There is a great risk that the film industry will be destroyed because of theft and piracy. That would be a tragedy, because film is the great original art form of the 20th century. In a way, people such as Cecil B. de Mille and Selznick were the Rubens and Michelangelos of the 20th century. There can be no doubt that the creations of the great film producers and directors have probably had more influence on patterns of thought, values and knowledge in the 20th century than any of the great artists and writers of earlier years. I am not saying that that is necessarily a good thing or that the values portrayed are necessarily good, but it must be beyond dispute that the great producers, directors, writers and artistes in the film industry have had such influence and that it should be recognised.
There are 2 million video cassette recorders in Britain, and the number is probably growing rapidly as equipment becomes cheaper. There is a potential audience of about 10 million for video cassette recorders. That should lead towards the rebirth of the film industry. It would be a tragedy if the very item that creates such a massive demand for film should, at the same time, destroy that industry not only in Britain but in the United States of America and Europe. We must seek to avoid that tragedy.
We should encourage the rebirth of the industry and ensure that the users' money returns to the industry. Unless that happens, we shall be left with low-budget television films. Without criticising television in any way, it would be wrong for a monopoly of that form of entertainment to lie in the hands of television companies. For all those reasons, I have no doubt that this Bill, which will protect jobs and will do something about the sweated labour in the copying industry, will be rapidly and unanimously accepted by the House.
Enforcement powers certainly need to be strengthened. In principle, I support the provisions put forward in the Bill. I am not in favour of bureaucracy. All Governments should reduce it to a minimum. However, there is a case for a simple form of registration by the video retailers. I am not suggesting an elaborate licensing system, but there is a good case for having a simple form of notification of trading activities with the local authority. An even stronger case can be made for video retail outlets keeping records of the sources of their cassettes. I am not sure whether the right hon. Member for Bournemouth, West intended to do so, but he seemed to absolve retailers from full responsibility for what has been happening. We must not do that. They are not naive; they know their job pretty well. If put to the test, they know whether they are dealing with pirate films. Therefore, they must have responsibility for ensuring that the law is properly enforced.
§ Sir John Eden
I very much agree with that point. Far from absolving retailers who knowingly handle illicitly copied material, the Bill would include them in the first part of the new two-tier structure of penalties and they would be liable, on summary conviction, to fines up to a maximum of £1,000 per offence. It is important to emphasise that I am not in any way proposing that they should be absolved.
§ Mr. Fraser
We can look at that point in Committee. I am not sure that £1,000 is not too small a fine. Parliament 612 talks about a maximum fine of £1,000, but those who practise in the courts know that courts seldom approach the maximum fine. On re-examination, perhaps we should have a higher penalty for illicit dealing by retailers. However, that can be examined in Committee. There is a case for a simple form of notification of trading and for keeping records. It would make enforcement easier and be very much welcomed by the Inland Revenue.
I wholeheartedly support the Bill in principle. It would be wrong for a country that has played such a prominent part in the invention and development of the cinema industry to lay the basis for its destruction. However, I am sure that the Bill's rapid passage will ensure that such a sad state of affairs will not come to pass but will instead protect the industry and give it the strength to grow.
§ Mr. Tim Brinton (Gravesend)
I declare an interest as a professional broadcaster and as someone who has been involved in the film industry. I shall take up the points made by the hon. Member for Norwood (Mr. Fraser) about the protection that the Bill will afford to the British film industry.
The Under-Secretary of State is reviewing the film industry. I cannot stress enough the continuing difference—albeit that the two media are merging—between film made for television and that made for the cinema. The film made for the cinema takes much longer to create. It almost inevitably has a higher budget and, whether it is shown on the cinema screen or on the smaller screens in our homes, it is more popular with audiences. The quality of a properly made feature film must be retained. That is why video pirates almost always centre on film made for cinema. That is the popular film, which can be sold easily.
I too welcome the great support for the Bill expressed not only in the House but in all sections of the industry. It is astonishing that I have not received one letter opposing the Bill. Apart from those who are involved in such illicit trade, no one could object to the provisions. The Bill is a first-aid measure. Those of us who consider the problems of the media know that there must be a major review of all copyright laws in the next five years or so. However, this matter is too urgent to be left aside and must be dealt with now.
Compared with four or five years ago, it is astonishing how quickly the problem has emerged. Only about 10 or 15 years ago the ways of copying film illicitly on to tape were clumsy and expensive. Almost always the processes were slow and there were very difficult types of duplication. Nowadays, things have changed. A few weeks ago some of us saw a firm that had 1100 VCR machines laced up to one telecine machine that was rolling the film. In that way, it made legal and perfectly honest copies.
May I illustrate how easy it would be for a person who was out to make money illicitly to set up such an operation? If he bought 100 video recorders, it might cost him about £40,000. As the hon. Member for Norwood suggested, it might be illicit money that was being laundered through the system. With those 100 video recorders and a suitable machine on which to put a film, it is not unrealistic—it is pessimistic—to suggest that the operator could copy two feature films a day. In 300 days a year, allowing for staff holidays and other benefits, he could make 60,000 copies of feature films a year. If he 613 sold them at a conservative price of £10, without declaring them to the Inland Revenue, he could make £600,000. That is perhaps too simple an illustration of the vast amount of money involved in this illicit trade.
As hon. Members have said, the present penalties are quite inadequate and something must be done about them. In France, for example, a first offence carries a fine of 30,000 francs and imprisonment for up to two years. In America one can be imprisoned for up to five years or be fined $250,000. Compared with that, our provisions are ludicrous. It is no wonder that the world is pointing the finger at Britain as the centre of video piracy.
Cautious words may be said in Committee about the powers of search and seizure. I, like all other hon. Members, am cautious about making further provision for such entry into private dwellings. However, in this case, it is the only way, albeit reluctantly, to curb such trade.
There is much unemployment in the legitimate industry, but not of those who make cassettes. There is growing employment in that industry, with 20,000 people employed during the past two years, and many more will be employed if we can stamp out the illicit trade. I was talking about the feature film industry, where highly qualified technicians and artists are struggling to find work. We could increase film production in Britain considerably if we stamped out that trade. The proceeds from legitimately sold video cassettes of films would then return to the right quarter.
My hon. Friend the Under-Secretary of State will know that I hope that contributions can ultimately be made through the Eady levy from tapes of feature films, as they should when feature films are shown on television. The cinema audience declines every year in terms of going out to the local Odeon or ABC, but the cinema audience in people's homes is growing every year. We must adjust ourselves to the swift change in technology that has meant that, in one day, one can copy thousands of films and push them out.
The export trade must also be curbed for the sake of our reputation. One knows the story of a well-known film that was brought from the United States of America to Europe under heavy escort. The courier forgot to look after the film for about two hours. He then regained it and took it to his final destination. Within two weeks of his forgetting, there were 29,000 copies of that film circulating in Europe, all of them illegal. That shows the immensity of the trade. One must not forget that another aspect of the illicit trade, as was pointed out by Mr. Ayres of the National Federation of Self Employed and Small Businesses, is that theirgreed for money has led some to rent sick horror and pornographic adult movies to young children".That, too, must be stamped out.
I have great pleasure in supporting the Bill, which I hope will soon become law.
§ Mr. Michael Shersby (Uxbridge)
I warmly congratulate my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) on his good fortune in the ballot and on bringing in this Bill, which is another important step in modernising the law on copyright. I am pleased to be a sponsor of the Bill, which as the House has heard, provides increased penalties for video piracy.
614 The Bill is designed to provide an effective deterrent of the type I said was necessary when I presented the Copyright Act 1956 (Amendment) Bill, which was enacted in the last Session. When I spoke during the Third Reading debate on that Bill on 9 July 1982 I said:It is said that the profitability of pirating is such that, unless substantial penalties are introduced, there can be no effective deterrent by way of summary proceedings. My Bill is an interim measure—a valuable interim measure, if I may say so, pending new comprehensive Government legislation on copyright—to provide a real deterrent against the piratical manufacture, sale and hire of sound recordings and video recordings."—[Official Report, 9 July 1982; Vol. 27, c. 589ߝ90.]Little did I know that six months later we should be debating a Bill to provide the substantial penalties to which I referred last July. That we are doing so is due to my right hon. Friend's determination to help the film industry, to close the net around the video pirates, and to stop the film industry losing well over £100 million a year.
This is a timely Bill because, unhappily, there is still no sign of a comprehensive Government Bill to implement the recommendations of the Whitford committee, or the Government Green Paper, which was published last year. We all realise that copyright is a complex matter and that consultation with all the interested parties is essential, but I hope very much that in the next Session of this Parliament—should there be one—or early in the next parliament the Government will deal with this urgently needed reform of other aspects of copyright law, including the problem of copyright infringement resulting from home audio taping.
It is now clear that unless substantial penalties are introduced it will not be possible to stem the enormous losses to the film industry and the Exchequer through lost revenue. The increase in penalties, to which my right hon. Friend referred, when the Criminal Justice Act 1982 provisions come into force—from £200 to £1,000 maximum—is therefore welcome.
I am glad that the Bill has the wholehearted support of the Tape Manufacturers Group, which represents the interests of blank tape manufcturers in the United Kingdom. It includes some big names, such as BASF, 3M, Maxwell, Memorex, Sony and TDK. In a letter to hon. Members the group pointed out that it is the victim of piracy in the form of counterfeit blank tapes. I hope that we can consider this matter in more detail in Committee, but in the meantime I am sure that my right hon. Friend and, indeed, the whole House will be grateful for the support of the Tape Manufacturers Group for the increased penalties.
The hon. Member for Norwood (Mr. Fraser) said that perhaps the £1,000 maximum fine would not be enough. My understanding is that that fine can be imposed for each offence, which means for each tape let for hire by way of trade or for exhibiting or where it is processed. It is therefore possible to envisage a situation in which premises are raided, where a number of infringing copies are found and where the subsequent prosecution would enable the courts to impose a fine up to a maximum of £1,000 in respect of each infringing copy. If someone is found with, for example, 100 of these tapes on the premises, the maximum fine imposed could be £100,000, if the court considered that was appropriate. Imprisonment for up to two months is an option in respect of a first offence. The fines in the Bill are substantial and appopriate. We look forward to debating them in more detail in Committee.
615 I am glad that my right hon. Friend the Member for Bournemouth, West and his advisers have also dealt with the more grave offence of making, importing or commercially distributing pirate video tapes. I hope that those who engage in that nefarious activity will take note that such an offence can lead to their being sent for trial on indictment if the magistrates decide that a higher penalty is appropriate.
There are two parts of the operation. On summary conviction the maximum penalty is £1,000 for each infringing copy, but the magistrates have the option of sending a person for trial on indictment, which could lead to an unlimited fine or a sentence of up to two years' imprisonment for each offence. I trust that the courts will not hesitate to impose penalties that fit the crime and that, in using the power to impose an unlimited fine, they will have regard to the vast illegal profits made from video piracy. Perhaps by providing such penalties Parliament will, in the words of the Mikado,Let the punishment fit the crime.The use of unlimited fines will not only protect the film makers' copyright but will help to encourage the expansion of the legitimate video industry to which my hon. Friend the Member for Gravesend (Mr. Brinton) referred. As he said, the industry is relatively new. It is just the type of industry that we need in Britain today. As my hon. Friend said, the industry has taken on a work force of about 20,000. I am told that it could take on several thousand more if video piracy were suppressed.
I have often asked myself, as have other hon. Members, what we can do about unemployment. What industries will take the place of the traditional industries that are in decline? Who would have thought, 50 years ago, that adjoining my constituency there would be an industry employing 60,000 people? That industry is London airport. Who would have thought, five years ago, that there would be an industry employing 20,000 people in an entirely new activity with the possibility of taking on still more? I refer, of course, to the legitimate video industry.
My hon. Friend the Member for Howden (Sir P. Bryan) referred to another fascinating opportunity that exists for setting up a national treasure house of visual material of all kinds, which the population can enjoy. That means more jobs in London and elsewhere. I mention London because London is considered to be the world's principal centre for illicit copying. The British Videogram Association has pointed to that and to the losses in revenue of about £120 million a year, which apparently is more than the entire takings of the legitimate industry.
My right hon. Friend the Member for Bournemouth, West is right to seek approval for stiff penalties for offences that are costing the country thousands of jobs in addition to lost revenue for the film industry and the Exchequer. As he said, one of the most important parts of the Bill provides search and seizure provisions. They are in clause 4. They are the teeth of the Bill. They should command the support of Government and Parliament. Without such powers or teeth it will be possible for criminals engaged in an illegal trade worth hundreds of millions of pounds a year to evade the law and to continue their activities relatively unchecked.
After all, we are dealing not with a trivial offence but with organised crime, when the police must be able to enter premises and seize pirate tapes without first having to apply for an Anton Piller order in civil proceedings. The Anton Piller order procedure is not satisfactory, for the 616 reasons that my right hon. Friend has given. The House might be interested to know that, despite its unsatisfactory nature, it has been the best procedure available and has yielded some remarkable results in the six months ending 31 December 1982. During that period 120 Anton Piller orders have been served. Damages and costs awarded to date amount to £1,250,000. Damages and fees received amount to £60,000. I understand that there is a likely maximum settlement in 74 further cases of £187,000. That figure is much higher than normal because two large and established printing companies became involved through the carelessness of their staff and were co-defendants, with easily accessible assets. Most pirates have no such assets. They steal all they need and transfer the money they earn out of reach of civil seizure.
Pirate cassettes seized under civil action during that six-month period amounted to 71,000, and counterfeit inlay sleeves seized under the orders amounted to 280,000. That gives the House an idea of the extent of the operation that has been uncovered so far by the Anton Piller orders, which I believe is touching only the tip of the iceberg.
We all know, because it has been explained to us this morning, that that procedure is unsatisfactory. It is important that, when the police decide that they should bring proceedings for breach of copyright in the criminal courts, they should be able to enter the premises upon which the video tapes are stored or displayed without themselves becoming trespassers. That can be done only by giving the power to obtain a search warrant. In turn that can be obtained only when a magistrate is satisfied that it is necessary. Only in that way can the vital evidence be obtained. It is the evidence of display, copying or possession by way of trade that is needed to give the Bill real teeth.
My hon. Friend the Member for Gravesend reminded us that the House rightly takes great care only to give the police such powers when it is absolutely necessary. That matter exercises my hon. Friend's mind, my mind, my right hon. Friend's mind and the minds of many other hon. Members on both sides of the House. We do not like giving additional powers unless they are absolutely necessary when search and seizure are involved. However, in this situation, search and seizure powers must be given because of the criminal offence that is committed when a person makes, imports or distributes infringing copyright material. That activity not only is theft on a major scale, but steals jobs from those who need them badly in a legitimate industry which, but for that massive theft, could expand and prosper.
For hon. Members and outside observers who are concerned about search and seizure powers being given it is worth noting that Parliament has given powers of search without even the safeguard of a search warrant having to be obtained from a magistrate in earlier legislation dealing with the protection of badgers and the protection of birds' eggs.
Surely powers should be made available for the more serious offence of video piracy, in this case with regard to the need to obtain a search warrant.
It might be worth examining that point in a little more detail. My hon. Friend the Member for Gravesend was right to remind the House of the anxiety that we all feel before agreeing to give the police such powers. From my researches, I find that there are a vast number of Acts of Parliament where the express power to obtain a search warrant is given to police officers and a number where the 617 power is given to Government and local government officers. For example, trading standards officers have the right to enter premises, other than premises used only as a dwelling, without a warrant and have the right to obtain a search warrant to enter any premises under certain conditions. That power is given by section 28 of the Trade Descriptions Act 1968.
All powers of search by warrant are statutory. There are some serious offences, such as murder, for which there is no power to apply for a search warrant, and many less serious offences for which there is such a power. Some examples might be of interest to the House. There is the Betting, Gaming and Lotteries Act 1963, section 51 of which deals with that matter, and where evidence of offences is obtained. Further examples are section 26 of the Theft Act 1968, which relates to stolen property; section 14 of the Prevention of Fraud (Investments) Act 1958, dealing with circulars advertising schemes rendered unlawful by section 3 of the Act; section 19 of the Protection of Depositors Act 1963, where the search for books and papers is involved, the production of which is required by the Board of Trade; section 11 of the Coinage Act 1936 which deals with counterfeit coins and machinery; section 6 of the Criminal Damage Act 1971, where an article has been or is intended to be used to destroy or damage property; section 46 of the Firearms Act 1968; section 3 of the Obscene Publications Act 1959, which deals with obscene articles; section 43 of the Sexual Offences Act 1956, which deals with women detained for immoral purposes; section 43 of the Gaming Act 1968 dealing with illegal gaming; the Official Secrets Act 1911; the Indecent Displays (Contract) Act 1981; the Forgery and Counterfeiting Act 1981, which deals with the search for offending articles; the Misuse of Drugs Act 1971, which deals with the possession of controlled drugs, and the Cinematograph (Amdt) Act 1982, which deals with the use of unlicensed premises for cinematograph exhibition.
From that catalogue of statutes we can see that Parliament has provided these teeth to deal with serious criminal offences where the power of search and seizure is necessary.
When the Whitford committee reported, the problem of video piracy was a small cloud on the horizon. Today, it is a problem on a massive scale. Parliament has the duty to prevent it, and to provide not just substantial penalties but the power to search premises and seize tapes and other material without delay so that the offenders can be brought to justice.
I support the Bill strongly, and I trust that it will receive an unopposed Second Reading. It is of great importance, not just to the film industry, but to many of my constituents who make their living in the film industry at the nearby Pinewood studios. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) and the hon. Member for Hayes and Harlington (Mr. Sandleson), who also represent constituencies within the borough of Hillingdon, support the Bill strongly and wish it well. They join me in wishing my right hon. Friend the Member for Bournemouth, West well, and hope that the Bill will have a speedy passage through the House and receive the Royal Assent before long.
§ Mr. Neil Thorne (Ilford, South)
I congratulate my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) on introducing the Bill. I, too, am delighted to be a sponsor. I should also like to associate myself with many of the remarks of my hon. Friend the Member for Uxbridge (Mr. Shersby).
I am appalled at our reputation as the video piracy capital of the world. It is unfortunate that we should achieve such an unpleasant reputation. There is no doubt that it is big business these days. As my right hon. Friend explained, the clauses in the Bill will go a long away towards putting the situation right.
In clause 1 those groups that are considered to be less serious—those who sell, hire or rent by way of trade articles that they know to infringe copyright—would become liable to fines up to £1,000. The Opposition spokesman, the hon. Member for Norwood (Mr. Fraser), said that he thought that £1,000 was even too low in those cases, but I expect this would be in each case. In premises, such as a video shop, I would imagine that there would be scope for many similar offences to be committed. Therefore, when action is taken against any person, the likelihood is that he would have to defend a number of cases and the fine might well be multiplied by 10 or even 100, which would have a salutary effect.
The more serious cases are the manufacture, importation and distribution of these articles. The Bill proposes that for such offences the penalties should provide for unlimited fines and up to two years' imprisonment. I am glad to see that. I believe that one of the major reasons why video piracy has grown so much in this country in recent years is that we have not addressed ourselves properly and quickly enough to the threat that has been created.
Elsewhere in Europe much more severe penalties have been introduced. We should look at what is happening elsewhere. For example, in Belgium it is possible, on conviction for counterfeiting, for up to two years' imprisonment to be imposed with a maximum fine of 80,000 francs. That is a much heavier penalty than we have. In Denmark, imprisonment is up to one year; in France it is up to two years, and business establishments may be closed, and a maximum fine of 30,000 francs for a first offender. The Federal Republic of Germany provides for maximum imprisonment of one year.
In Greece there is up to three months' imprisonment, which is much more in line with our own penalties, but I believe that in Greece the level of operation is not as great. In Ireland the approach is similar to our own, and there is a maximum fine of £100 per transaction. In Italy we go back to imprisonment for a year for counterfeiting and also for dealing in these goods. In Luxembourg there is a maximum sentence of imprisonment of up to two years; and in the Netherlands there is provision for six months. Our provisions seem entirely inadequate. I believe therefore that they are responsible in large measure for the current situation.
If we allow this type of operation to take place, it must have a direct effect on employment prospects. My hon. Friends have also mentioned the effect on the Exchequer with the loss of taxation revenue, and the other side effects.
We are being cheated in every possible direction. Taxpayers are suffering, as are those who are involved in 619 the entertainment industry. We are trying to persuade organisations to sponsor the arts. It would appear that we are wasting our time in trying to persuade banks and other substantial organisations to back the arts if we are not making proper provision for artistes and enterprising people who are backing the entertainment industry with their own capital to receive a proper return on their enterprise because we are allowing too many people to short-change them by cheating and swindling them out of their copyright. Unless we do something positive about the problem, it is likely to grow.
The modern criminal tends to move into any sphere where he can make money easily. There is no doubt that the criminal fraternity is taking over video piracy in a big way. We must be prepared to take vigorous and definite action to stamp out the vast gains that they are making.
In Britain, we tend to step back and not act too hastily. That means that we nearly always come in for considerable criticism when our behaviour is compared with other Governments who act vigorously and determinedly to stamp out such problems and prevent this type of operation from developing.
I hope that the Bill will have a successful Second Reading. I hope that it will be developed properly in Committee where it can be considered in some detail. I hope that it will not be too long before it becomes law so that we can properly protect those who do much to provide us with excellent entertainment and are being treated so badly now.
§ 1.2 pm
§ The Under-Secretary of State for Trade (Mr. Jain Sproat)
I congratulate my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) on his Bill and on the splendid way in which he has presented it. One cannot present a Bill so lucidly and comprehensively unless one has done a great deal of work. I pay tribute to the tremendous amount of research that he has done in preparation for today and, I trust, the forthcoming Committee stage.
I shall make a few general comments from the Government's point of view and then deal with some of the extremely interesting and wide-ranging points that have been made. I should like to make it absolutely clear, if I had not already done so by the praise that I have showered on my right hon. Friend, that the Government warmly welcome his initiative in presenting the Bill. I am deeply worried at the rapid spread of video piracy that has taken place in Britain, especially—I do not know whether it is curious—in the London area, although other parts of the country are affected.
It is unfortunate that the somewhat glamorous title of "pirate" is used to describe the people who participate in this activity. Such people are, quite plainly, criminals. They pose a serious threat to many branches of the legitimate film and video industry. They threaten all those involved in the production of films—in both the creative and commercial spheres—either for showing or for sale as video tapes. The pirates reduce the funds available to invest in new film productions. They strike at the cinemas by seriously reducing the already low box office receipts. They threaten local dealers in video tapes who want no part of the criminal video piracy. They are a serious threat to the ability of the entertainment industry to continue to provide new material.
620 The Government's concern to stamp out video piracy was reflected in our support last Session for the Bill introduced in another place and so ably piloted through the House by my hon. Friend the Member for Uxbridge (Mr. Shersby). That Bill, which became law as the Copyright Act 1956 (Amendment) Act 1982, introduced a new offence of possession by way of trade of an infringing film or record in the knowledge that it was such.
The Bill we are considering will introduce substantial increases in the penalties applicable for piracy offences, both the new offence of possession and the existing offences that include commercial manufacture, imports, distribution, sale and letting for hire. The Government accept the need for the increases to provide an effective deterrent against piracy. We welcome the way in which the Bill provides the necessary deterrent against those who act as a source of pirate material, with a threat of heavy fines and prison sentences, while retaining the flexibility to deal less severely, but still more heavily than under the present law, with other offenders.
The Bill also contains provisions to give the police powers of search and seizure for film and record piracy offences. I must make it clear that the Government accept the need for powers of that general nature, but stress that it remains for chief police officers to determine the priority that they assign to the new powers. The onus must continue to rest primarily on the industry to investigate and pursue pirate operations. I know that that is recognised by the industry and that it is expanding its vital activities, primarily through the new Federation Against Copyright Theft—known by the acronym FACT. Its initiative is most welcome and is complementary to the provisions contained in the Bill.
My colleagues in the Home Office have been in touch with my right hon. Friend the Member for Bournemouth, West with reservations about the form of the search and seizure provisions. For example, we must bear in mind that the provisions will be overtaken by the corresponding general provisions of the Police and Criminal Evidence Bill currently being considered in Committe.
I have intimated to my right hon. Friend that it will be necessary to go over the search and seizure powers in Committee. The general principle is accepted beyond question.
The Bill is seen by the Government as an interim measure and solution to the immediate and serious problem of video piracy as opposed to the copyright problem. My right hon. and hon. Friends have raised the question of copyright reform, of which this is a part. There are many other inter-related areas of copyright for which revision of the law is needed. I assure the House that it is the Government's intention comprehensively to reform the area of copyright as soon as possible.
I shall say a word or two about copyright to assure my right hon. and hon. Friends who have raised this matter that any delay that they may perceive in the Government's respose to the Whitford report and to the Green Paper is simply occasioned by the complexity and wide range of the subject. We have to deal with films, books, textiles, phoney markings coming in from the Far East and spare parts for cars that are stamped as having been made by a reputable manufacturer but are not. It is a complicated area.
My hon. Friend the Minister for Consumer Affairs is taking a tight grip on the problem. It is the Government's intention to bring proposals before the House as soon as 621 possible. The matter cannot be hastened along in view of its complexity and also the fact that the European Commission is, naturally enough, involved. It is making its own proposals. We have to make certain that our proposals dovetail, or do not unreasonably fail to dovetail, with its proposals. It was hoped that the European Commission would make its proposals by Christmas, but it did not. It is extremely unlikely to bring forward its proposals even by the spring of this year.
The Government, to some extent, are dependent upon what the European Commission wants to see happen concerning copyright. The Bill indicates, where necessary, that we are prepared to deal piecemeal with vital areas of copyright.
I hope that hon. Members on both sides of the House will accept that the Government are determined to press ahead with copyright reform as fast as possible, but there are serious legitimate problems in the way.
§ Mr. John Golding (Newcastle-under-Lyme)
What are the problems? What is delaying matters? It is easy for the hon. Gentleman to say "Europe is dragging its feet. I expected it by Christmas." What is happening in Europe? Can he tell us why our industries are being destroyed because of inactivity in the Commission? Can he spell out the complexities? The new technologies will be obsolescent before the Minister has acted. What are the complexities? What are the difficulties?
§ Mr. Sproat
The hon. Gentleman has raised two extremely important points. First, he asked why Europe is dragging its feet. Secondly, he asked "What are the complexities?" I should be extremely concerned if I gave the impression that Europe was dragging its feet, or if that term was taken to mean deliberate deleteriousness.
On the contrary, the European Commission appreciates the complexities with the same vividness and acuteness as ourselves. As it began on the exercise rather later than us, it will no doubt finish its deliberations rather later than us. It is certainly not dragging its feet. It has, however, come anew to the perception that we are in the midst of a difficult problem. None the less, I hope that it will make progress as fast as it reasonably can.
It would give me a great deal of pleasure to dilate, for example, on the complexities that are facing the book industry and the problems that arise from the technologies of photocopying. It is difficult to protect the copyright of a book when there are photocopying machines that can take advantage of printed work by the operator merely pressing a button and running off hundreds of copies. This is an example of the way in which technology is advancing and how it is having an effect on the book trade. That example can be paralleled in almost every sphere that we consider.
The central problem is that our copyright law has remained unchanged for many years. On the other hand, technology is advancing extremely swiftly. It is exceptionally difficult to try to match our copyright laws with new technology, which every day advances. Only yesterday I met a delegation from The British Phonographic Industry Ltd. The delegation complained about the problems that are confronting its industry. Its members referred to a new high-speed recording deck that has been produced by the Japanese. It can reproduce at 622 four times the speed of anything that is now known. Who knows, tomorrow a machine may be introduced that will reproduce 10 times as fast as the current decks.
The rapid advance of technology makes it extremely difficult for any Government to draft laws which will take account of technology either not invented or barely invented. Also, I am not the Minister who deals with these issues. I do not have ministerial responsibility for dealing, for example, with the importation of cheap sweatshirts from the Far East. I am the Minister who is glad to deal with video piracy, but I am not competent to deal with sweatshirts from the Far East, and if I were to dilate too extensively on the subject I am sure that you, Mr. Deputy Speaker, would bring me swiftly to order. That is why I have cut short my remarks to the hon. Member for Newcastle-under-Lyme.
§ Mr. Golding
At one stage I thought that I had exposed a power struggle within the Conservative party. I understand the Minister's argument that changes in technology are making copying very much easier. I understand, too, that the damage caused to certain industries is becoming much greater. Advances in technology make it easier and quicker to copy. However, I cannot understand why it is impossible for the Government to step in and stop copying. If the Government are constantly to wait for technology to freeze before they take action, we shall never see them act. The right hon. Member for Bournemouth, West (Sir J. Eden) and I have shared this view almost since the introduction of new technology. A point must be reached when the Government say "We shall take a decision now". They cannot justify the delay in taking action merely by drawing attention to the increasing complexities.
§ Mr. Sproat
Were we to be acting in the way that the hon. Gentleman suggests, we would be wrong. We are not acting in the way that he suggests, and we are right. We are not waiting for technology to freeze. We are seeking to draft our reform of copyright law in a way that will encompass the advances of new technology. This is not easy, but it is what we are seeking to do. In particular, my hon. Friend the Minister for Consumer Affairs is now taking a tight grip on the matter.
My right hon. Friend the Member for Bournemouth, West spoke about thieves. It is important for people to understand that we are now dealing with a branch of organised crime. All hon. Members who know about video piracy have heard allegations of Mafia-type criminal involvement. My hon. Friend the Member for Gravesend (Mr. Brinton) described how criminal money could easily be laundered through investments in video piracy. Such thieves steal the fruits of creative talent.
Almost everybody in the cinema and film world believes that Britain has an abundance of artistic talent—a reservoir of creative genius—which is matched by no other country. That is a commodity which we should exploit, in the best sense of the word, as fully as we are able to do. It is a crime against us all that the creative talents of British artists should be stolen by thieves in that way. It means that the artists do not have the return on their work through royalty payments which they deserve and which enables them to go on creating.
Not only is it theft of the fruits of creative talent but, in a straightforward way, it is theft of commercial property. I can illustrate that by taking the example of the 623 cinema industry. At the height of the cinema's popularity about 1.5 billion visits a year were made to the cinema. I do not have the latest figure, but I think that for last year it would be about 50 million. That is a terrifying decline in what was once a successful—and, who knows, may be again—British industry. If on top of the natural decline of the British cinema, due to who knows what factors—television is certainly one—the market is flooded with pirate video cassettes at cheap prices, an even greater burden is placed on the cinema.
British cinema did pretty well last year with that splendid film by Mr. David Puttnam "Chariots of Fire". If people go to the cinema to see that film, it is good for the cinema, but if they buy an illegal tape and watch it at home, that is a loss of trade to legitimate cinemas. That is a particular example of how the effect of video piracy spreads ever outwards and impinges on many branches of the entertainment industry.
My hon. Friend the Member for Gravesend was right to say that I am currently reviewing the British film industry. I hope to be taking evidence for a few more months, perhaps until the end of March, and to reach some conclusions at the end of June. However, even before I have finished taking evidence, it is clear that if one removes the rewards of legitimate videos, one is removing money which could be reinvested in films. Thus, one is killing the goose that lays the golden egg, because legitimate film producers and investors are not getting the return on their money that they would then use to make new films. Given those examples about the commercial side, cinemas are reinvesting in new films, one can understand why organised crime has gone into the business.
§ Mr. Golding
What are we to make of the Minister's remark that we can understand why organised crime has become involved? Is the Minister encouraging individuals to go in for such activities?
§ Mr. Sproat
Indeed not. By supporting the Bill, I am encouraging unlimited fines and two years imprisonment, and thus doing the very opposite of encouraging crime. By supporting the Bill, I am doing my best to ensure that such crime will not pay. I said that I understood why people had gone into such crime because of the enormous returns that such illegal and despicable activity can bring. Indeed, the House is deeply indebted to my hon. Friend the Member for Gravesend, who pointed out that for the relatively modest investment of £40,000 someone could earn £600,000 in one year alone. That is a very conservative estimate. It is an attractive rate of return for anyone. If British Airways obtained that sort of return on its investment, I would be privatising it even more quickly. [Interruption.] I am sorry to have lost the support of the House with that remark. If the hon. Member for Newcastle-under-Lyme could wipe it from his memory, we could return immediately to the subject of video piracy. However, I am indebted to my hon. Friend for having brought those statistics to our attention. They illustrate the magnitude of the crime that we are attempting to prevent by the Bill.
I well remember when my hon Friend the Member for Howden (Sir P. Bryan) made his first speech on video piracy in June. He told me to look closely at what President Reagan was doing to bring in much tougher penalties. He drew attention to a Bill that had just gone or 624 was about to go through Congress. He pointed out that fines of about $250,000 were being imposed. He said that it was strange that it was not America, which had about four times the population of the United Kingdom, a gigantic film industry in Hollywood and a powerful cinema industry, which had produced the video pirate kings but Britain. He pointed out that London had become the world capital for piracy and that that was a shameful achievement.
I took very much to heart the comments of my hon. Friend the Member for Howden. I cannot remember my exact words, but I certainly said that I would do everything I could to ensure that a Bill was introduced to emulate the severer penalties being introduced in the United States of America. He and I are therefore greatly indebted to my right hon Friend the Member for Bournemouth, West who has, in a proxy way, fulfilled my promises on that occasion.
I had a lengthy brief concerning what is done in Belgium, Denmark, France, the Federal Republic of Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands and the United States of America. However, my hon. Friend the Member for Ilford, South (Mr. Thorne) covered that matter and made the point about the difference in approach between the United States, with its fine of $250,000, and Greece, where the maximum fine is 10,000 drachmas. That sounds a lot of money, but it is only £75. However, that is three times more than our fine, because our maximum is only £25. However, there is great variety in the ways in which different countries approach this matter.
The hon. Member for Newcastle-under-Lyme was rather critical about the European Commission. Although I understand the reasons for his criticism, when one considers the difference between £75 in Greece and what Britain is now doing—remembering that Greece is a member of the European Community—it is difficult to encircle everyone in one acceptable piece of European legislation. None the less, difficulties should never be an excuse for inaction. I am sure that the whole House will support that proposition. It should be a maxim for the European Commission as well as for the House of Commons The hon. Member for Norwood (Mr. Fraser), in a most intriguing throwaway comment, said that Cecil B. de Mille was the Rubens—or was it the Rembrandt?—of the twentieth century.
§ Mr. Sproat
The hon. Gentleman combines their virtues in one. I do not disagree with him, because it is a stimulating idea.
The role of the film in informing public opinion has been very important. Without wholly agreeing with the idea of Cecil B. de Mille being the Rubens of the 20th century, the spirit that I take to have animated the hon. Gentleman's comment is the spirit that animates my consideration of the film industry. I accept its importance and that it is both an area of artistic and aesthetic expression and a legitimate area of commercial operation. We support the Bill because we accept the spirit behind the hon. Gentleman's remarks. That is why we are conducting a review of the film industry.
My hon. Friend the Member for Gravesend said that video would help the rebirth of the film industry. That was 625 a percipient remark, and I know that my hon. Friend wishes to see the present Eady levy, which in a small way helps to fund the British film industry, supported by a levy on video cassettes. I give the undertaking that that most interesting idea will be fully considered in the review that I am undertaking.
The Eady levy, which is levied upon the box office receipts of cinemas, is then funnelled into the film industry. At one time it was believed that it provided a substantial amount of money to the film industry, but today, with a declining cinema attendance from 1.5 billion to about 50 million, a levy on a box office that is shrinking as fast as that is not the same levy as before. We must consider whether the Eady levy is the best way of funding the film industry. As part of the review, video piracy is an important consideration. If video piracy is allowed to run rampant, the chance—without saying that we will take it or not—of getting a decent levy from video cassettes would be, if not totally negated, at least decimated.
§ Mr. Shersby
My hon. Friend will be only too aware that the original purpose of the Eady levy was to assist the British film industry and to ensure that more British films were seen by the cinema going public. I hope that, if my hon. Friend is seriously to consider the possibility of imposing such a levy on video tapes, he will remember that that money should be used to stimulate British film production and should not be allowed to be used more widely. It is an interesting proposal but one which raises considerable complexities. No doubt we shall be able to return to it on another occasion.
§ Mr. Sproat
My hon. Friend is correct. It is a matter of great complexity. I should make it absolutely clear that I have not reached a decision about such a levy. I was simply referring to the fact that my hon. Friend the Member for Gravesend had mentioned it and that such an idea should be considered. When we are considering it, the problems that my hon. Friend the Member for Uxbridge raises are exactly the type of problems we have to sort out. The Eady levy was introduced to fund the British film industry. We have to make certain that we do not find ourselves being taxed as purchasers of video films or as cinemagoers so that American film tycoons can sleep easier in their beds at night. That would be a ludicrous result of anything that we decided in the House.
There is an additional problem, although I do not wish to go into it at great length at this moment. Now that we are in the European Community, we cannot talk about British films quite as readily as once we could. We have to talk about European films. We cannot discriminate in the way we once could between what is British and what emanates from the rest of the world and from the rest of Europe. That is another matter to be examined when I consider the point of my hon. Friend the Member for Gravesend about a levy on video cassettes.
There is no matter closer to the hearts and minds, collectively, of the House of Commons than the present appalling rate of unemployment. Any industry which apparently provides a means of reducing unemployment or which provides some hope of jobs for the future is something that the House would never wish to ignore. Today gives us a good opportunity to underline the fact that the new video industry, with all its ramifications, has produced an amazing number of new jobs—20,000 in the 626 past two years, as my hon. Friend pointed out. We should like that trend to continue and we believe that it can continue. We should take away any bar or shackle on the legitimate development of the video industry if for no other reason than that it is a major creator of jobs. Those who are inclined to belittle the crime of video piracy would do well to remember that we are talking not only about the theft of creative talents and of commercial interests, but also about something that destroys jobs.
It would be interesting to learn how many illegitimate jobs are created by video piracy. It would also be interesting to know how much tax is lost to the Treasury. Between £100 million and £120 million of the retail value of video cassettes goes through our shops. VAT at 15 per cent. on £100 million or more amounts to a substantial sum. We are talking not only about crime, losses to the cinema, losses to creative talent and genuine investment in legitimate video, but about the destruction of jobs and clogging the development of an industry that could create new jobs. We are also talking about a loss to the taxpayer.
§ Mr. Golding
Does the Minister have figures for the impact on earnings by actors, musicians and entertainers generally who have different levels of earnings at different times of the year?
§ Mr. Sproat
That is an interesting question. I must admit that I had not looked at the problem in that way. Two areas are involved. The first involves how much money is paid to people to make video films—the actors and actresses. Reference has been made to the sweated labour in some places where pirated cassettes are manufactured.
The problem does not arise quite as the hon. Member for Newcastle-under-Lyme suggests. Video pirate cassettes do not generate the royalties that go back to the actors and actresses in them and therefore they will be done out of any part that they may have in the retail sales—although I think that usually they are paid a fee rather than royalties or box office receipts. Let us assume that they have a box office stake. They would certainly be done out of that. None the less, we are talking about copying a film already made and counterfeiting labels. They are the two main crimes. Actors are not affected by copying. There is no question of their being paid less in wages or salary, but the legitimate royalties to the manufacturer of the film are denied.
It is interesting to speculate how actors may be done out of some benefit as a result of copying and counterfeiting but they probably do less badly than others. However, when I think about it, I realise that if a manufacturer is not earning legitimate royalties he has not the money to invest in new films. At one remove the opportunity for actors to take part in films is diminished because the revenue to finance films is removed.
In the full and certain knowledge that, short of a political cataclysm, the Bill will go into Committee, the Government are deeply indebted to my right hon. Friend the Member for Bournemouth, West for introducing the Bill. We have one or two detailed reservations about the powers of search and seizure, but we have no quarrel with the argument in general. We can return to that in Committee. I commend the Bill to the House.
§ Mr. John Golding (Newcastle-under-Lyme)
This morning has been notable for the quality of legislation 627 before the House. Earlier we discussed the Diseases of Fish Bill, which is excellent. I know that many hon. Members will support it. To follow the Bill that we are now discussing is the Lead-Free Petrol Bill, which is another important Bill. I hope that its sponsors get a hearing. Before us now is the Copyright (Amendment) Bill. Perhaps it is fortunate for the House that we shall not reach the Social Democratic party's Bill on trade union reform because the other Bills have so much more to recommend them.
I thought that the Minister was an entirely appropriate choice to speak from the Dispatch Box. [HON. MEMBERS: "Hear, hear."] No one knows more about piracy than the hon. Gentleman. I appreciate that I have the support of Conservative Members on that point. The Minister reminded me of his familiarity with piracy when he referred to his privatisation measures, which we described as acts of piracy. The hon. Gentleman is an authority of state theft, taking possessions that have been created by other people, stealing them and handing them over or selling them at lower prices to others. His experience of privatisation has prepared him for seeing the moral defects in video piracy and other forms of theft. The hon. Gentleman is an expert—the appropriate Minister to deal with piracy.
It is important for the Minister to distinguish between different forms of piracy. I think that he will follow the analogy of poaching. Poaching is theft. Most of us distinguish between poaching in rivers by individuals who want to take one or two fish for their own consumption and poaching on a massive scale for pure profit. A distinction must be drawn.
We must make it clear to the country that the Bill deals not with the individual who takes a video recording for his or her own benefit, which is a technical infringement, but with the person who, on a massive scale, steals and sells to other people for profit. It is an important distinction.
I take the point that was made in the House of Commons research note. In saying that, I suppose that I can be accused of piracy. The research note makes it absolutely clear that copying for private use, while a technical infringement, is no real threat to the film industry. It is something that the Minister will have to take into account. I believe that he will find himself in some difficulty. The Bill would have found itself in difficulty if it were dealing with single copying for private use in the home. It would be difficult to persuade people not to do that, although it is an infringement of the law.
In London and elsewhere there are individuals who are prepared to copy illegally and to sell for massive profit. The problem that we face is that individuals do not believe it to be wrong to buy such tapes. We must tackle both sides of the problem.
§ Mr. Neil Thorne
The hon. Gentleman makes an important point about the public's ready acquiescence in borrowing or buying these pirated tapes. Does he acknowledge that it is part of the black economy and that the public now are much more inclined to participate when they believe that they can obtain goods on the side that they think will be less expensive? That is one of the evils of which we have to rid society. The readiness of people to accept short-term benefits from video piracy ignores the fact that it could lead to the collapse of the entire entertainment industry and their enjoyment.
§ Mr. Golding
I do not believe that the nation's moral fibre is weakening. People among whom I grew up often had goods that fell off the back of a lorry. The purchase of stolen goods has long been a great problem, particularly when people do not believe that it is wrong to purchase such goods. It is not new, but it is a real problem to persuade people that it is as reprehensible for them to purchase stolen goods as it is to steal them. We have a problem because people often do not realise that stealing has taken place. They do not understand that if they buy a video tape for £2 to £5 cheaper than elsewhere, that is because someone has stolen it and can therefore sell it more cheaply. One has to say to people, "You are putting other people's livelihoods at risk because you are purchasing stolen goods."
It is a widespread problem. I have come across it not just in the pirating of video tapes. I understand now that there is a problem for computer manufacturers because computer tapes are being copied. The computer industry is being undermined by the pirating of tapes. The problem is very substantial.
I wish to protest to the Minister about his slackness. The hon. Gentleman said that difficulties should not be a barrier, but his record has not been good. My hon. Friend the Member for Keighley (Mr. Cryer) in a written question under the heading,Films and Video Tapes (Copyright)",asked the Minister for Tradeif he will introduce legislation to provide for criminal penalties for those persons who copy without authority film of video tapes; and if he will make a statement.
§ Mr. Golding
It is a word that causes everyone shock and horror.
The Official Report continues:Mr. Sproat: It is a criminal offence under section 21(1)(a) of the Copyright Act 1956 to make for sale or hire an unauthorised copy of a copyright film or video tape in the knowledge that it infringes copyright."—[Official Report, 4 May 1982; Vol. 23, c. 1.]What an answer!
We have listened to the Minister at the Dispatch Box today telling us that this is an enormous problem with which it is very difficult to cope, impeded as we are by Europe. However, we face all these complex technical problems. What is his answer to the question? I draw attention to the fact that the Minister was asked to make a statement. He made no statement at all. With a flick of his hand, he said that the problem was dealt with in 1956.
I despaired when I heard the hon. Gentleman say that difficulty should not be a barrier, as it struck me that difficulty for him is a great big pit. It is apparent that he had decided to do nothing at all.
We must congratulate the right hon. Member for Bournemouth, West (Sir J. Eden), not the Minister. It is a disgrace that it should have been left to the right hon. Gentleman and other hon. Members, including my hon. Friend the Member for Derbyshire, North (Mr. Whitehead), to introduce the legislation. I wonder whether 629 in all the other problems and legislation of which the Minister has spoken this morning, we shall have to rely on private Members tackling them. Will we have to wait for the private Members' ballot next year to find others with the initiative of the right hon. Member for Bournemouth, West before the Government wake up and deal with these problems?
I could speak for a long time on the Government's failures in this regard. I could express even greater indignation. I experienced dismay when the Minister this morning blamed everyone but himself for the inactivity.
I know that my hon. Friend the Member for Fife, Central (Mr. Hamilton) wishes to introduce his important Bill on lead-free petrol. Therefore, I shall conclude now.
This is an excellent Bill. I hope that it has a fair wind in the House of Commons. I congratulate the right hon. Member for Bournemouth, West on having the initiative that the Government so sadly lack.
§ Question put and agreed to
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)