§ 5.0 p.m.
§ LORD WILLIS
My Lords, I hope that this is a measure that will commend itself to your Lordships' House, because it is a simple and straightforward one. It is in a sense a rescue operation, directed towards helping a small yet very important section of our population. It seeks to remedy an injustice which was recognised by Parliament as long ago as 1956, 14 years ago, but on which no action has yet been taken. This Bill is concerned 318 primarily to improve the conditions of songwriters, composers and music publishers. It will also affect to some degree the interests of those companies who manufacture and produce gramophone records and other recordings of various kinds.
Before I go any further, I think I should declare a kind of negative interest, because it may be that at some time in the future, if this Bill is passed, I may well benefit. I am, as it were, a sort of failed lyric writer or lyricist. Some three years ago I wrote a book of lyrics for a musical which, after a successful out-of-London season, was booked for the West End. Just before it opened in London I wrote to the Performing Right Society— the organisation which collects money on behalf of composers, book writers and so forth—applying for membership and asking them to collect the performing rights for me. I imagined in my dreams that the 14 songs in the show would be sung and played on the radio and television; that there would be recordings and albums of sheet music, and that the money would begin to pour in. The Performing Right Society must be used to this sort of thing, because they sent me a polite little note in return which told me, in effect, not to count my chickens and to wait and see.
The show duly opened in London; the critics were almost unanimously disdainful, and it closed ten days later. Although some of the critics said some complimentary things about my lyrics, there were no broadcasts, no records, no publishing; and consequently no royalties. However, I have a bit of a taste for lyric writing, and it may be that one day I shall go back to it. If I do so, I hope that this Bill will then be the law and that I shall gel a reasonable return for my effort.
What I did not know when I wrote that unsuccessful musical was that my dream of a great torrent of royalties flowing into my packet was simply a dream, an illusion, and no more. The illusion was understandable, and it is one that is shared by a great many people: because success makes a good story, an interesting headline, an entertaining film; and nobody really wants to read about failure or about the average success. The public as a whole have little or no contact with, or experience 319 of, composers and songwriters. What image they have has been provided by the newspapers, by the cinema or by television.
We read that a certain song has become a fantastic hit, and that the songwriter is going to make a fortune out of it. We read of fortunes made by people like Irving Berlin, Jerome Kern, Oscar Hammerstein or the Beatles. We see Hollywood films in which a songwriter sits down at a piano, with a cigarette dangling from his lips, and in five minutes flat composes a song which becomes the rage of the world and makes him a millionaire. Or we see a film in which the young composer, with a fine Viennese haircut, struggles for years to write a concerto which is finally accepted by a great composer. It is a tremendous success, the audience, in their white ties rise to acclaim him, and from then on the young composer is rich and famous —and gets the girl.
My Lords, that may be entertainment, but it is not true. It has about as much relation to reality as Cinderella. Of course, there are songwriters and composers who do very well, just as there are a few, a handful, of very successful people in every profession. But these are the exceptions, the very rare exceptions. For every Cinderella among songwriters and composers who makes it rich, there are a hundred plain sisters who get left behind.
This Bill is concerned not with the highly successful few but with the many. It is concerned with the average, even successful, composer or songwriter whose works give immense pleasure to thousands of people, but who cannot make a consistent or fair living from his profession. I will give your Lordships in a moment some facts and figures which will prove this contention beyond any reasonable doubt, but I should like first to fill in a certain amount of essential background information.
A songwriter or composer earns his living from three different sources: first, from the sale of sheet music, on which he gets a fixed percentage of the sale price in the form of royalty; secondly, from performances of his work, the fees being collected in various ways by the Performing Right Society; and, thirdly, from a 320 statutory royalty payable on the sale of gramophone records and similar recordings. This Bill is concerned only with the third type of income, that which comes from recordings of all kinds. This royalty was first fixed by the Copyright Act 1911. The manufacture of gramophone records was then in its infancy, and to provide some protection for songwriters and composers Parliament laid it down that the copyright owners (composers, songwriters and publishers) should be paid a fixed rate of 5 per cent. of the sale price.
In those days records were on one side only. But very soon the manufacturers and their backroom boys found a way of putting songs on both sides. The simpleminded among us might think that, since the producers were now getting two for one and putting two songs on each record, the songwriters would now get two royalties, 5 per cent. for each song. Not at all! Although when the publisher in the book world publishes two books by the same author the author enjoys two royalties, this does not apply so far as songwriters and composers are concerned. In fact, the royalty remained fixed at 5 per cent. per record, and though the manufacturer was getting two for the price of one, at one stroke the songwriter's income from records was halved. That was the first step in a long process of erosion (which has been going on ever since) into the financial position of songwriters and composers.
The next significant date is 1928, when a public inquiry was set up. This inquiry recommended an increase in the statutory royalty, on the grounds:that the value of money has fallen severely since the Copyright Act of 1911 was passed and the sale price of records has not risen to compensate for this drop in money value.The royalty was then raised from 5 per cent. to 6¼ per cent. That, as I say, was in 1928.
We now move to 1956, when Parliament again took note of the matter when it debated what is now the Copyright Act of that year. The present Solicitor General, Sir Arthur Irvine, speaking in that debate in 1956, described the royalty of 6¼ per cent. as derisory. The Government of the time showed some sympathy with this view, but declined to alter the Bill or the statutory rate. Instead, the Copyright Act 1956 was amended to provide for a public inquiry to be set 321 up by the Board of Trade after the Act had been in force for one year. The idea was that a new, more equitable, royalty should be fixed, and that this should be reviewed every five years.
My Lords, that was 42 years ago, and nothing has been done about this. No public inquiry has been set up by the Board of Trade, and no regular five-yearly review of the royalty rate has been carried out. Substantially, it has remained static since 1928. That surely must be an all-time record. Is there any other section of the public whose income is pegged to the 1928 value of the pound?
The pound to-day is worth about one quarter of what it was in 1928, and most people connected with the recording industry have had an adjustment, in common with other people. The wages paid to technicians, the salaries paid to recording engineers, have been increased to about six times the 1928 level. Prices have also been adjusted, the retailer's margin has been adjusted, profits and dividends have been adjusted, all to take into account the changed value of the pound. Everyone in the business has had some financial advancement except the people who are the cornerstone of the whole thing, the songwriters and composers, without whom there would be no records to make, no songs to sing, no music to entertain us.
I do not wish to stun your Lordships with statistics, but I should like to give you some fairly simple and relevant figures. We hear a lot about "hit" records and the "Top Ten". A "hit" record is one which probably sells about 100,000 copies. Forget all the stories you read about "golden discs" and so on—they are the freak, runaway successes, and they are very rare. The average record in the top ten will sell 100,000 copies, and that is considered to be a substantial success. There are, as I say, the odd freak successes which sell double or treble that number and even more; but they are the very rare exceptions.
Now 100,000 records, selling as singles at 8s, 6d, each, will bring in a total of £42,500. Of this, the copyright owners— the songwriters, composers and music publishers—will get about £2,000. I suppose that £2,000 out of £42,500 does not sound too bad, until you realise that there are two songs on each record, so 322 that there are about six people who have to divide this sum between them. First of all, the music publishers take half, which leaves £1,000 for the songwriters and composer. This sum is then divided between them, and there may be a team of two or three people working on one song, so it is quite possible— in fact it is quite usual—for the writer of a "hit" song to end up with the princely sum of £250 for his success, as his share of the sale of records for which the public has paid £42,500.
From an equivalent revenue a novelist would make ten or twenty times as much in royalties. The Government themselves take in purchase tax fifty times more than the songwriter gets, and record manufacturers and artistes between them take sixty times more than the writers. And this, I would stress again, is for a success. When you remember the great mass of songs which sell 15,000 or 20,000 copies —and which are just as essential to the industry as the "hits"—then I think your Lordships will agree that Sir Arthur Irvine, in 1956, was being modest and controlled when he described the remuneration of songwriters and composers as "derisory".
The position is just as bad—or even worse—if you turn to long-playing records—the L.P.s. There may well be as many as 12 songs on one record. For every thousand sold at around £2 each, the songwriters will have just over £3 10s. to divide among themselves for each song. A serious composer, whose work might take a year to compose and cover both sides of an L.P., may be lucky to sell 1,000 records. Do you know what he would get for that year's work, my Lords? It would be £42. That is how we value these people who bring us so much pleasure. On low-priced budget L.P.s, which are basically a good thing, the songwriters or composers get about one-eighth of one per cent. as their share.
That is the background, my Lords; those are the figures, and there is the reason for this Bill. What we have here is an inverted pyramid in which the songwriter and composer is the tip of the pyramid, and above it is this huge superstructure of manufacturer, and so forth. I do not intend to go through each clause of the Bill because its purpose and intent is clearly explained in 323 the Explanatory Memorandum. In brief, it seeks to amend Section 8 of the Copyright Act 1956, so that the royalty to be paid to copyright owners shall take into account the depreciation of the pound. In effect, it increases the royalty to about 12 per cent., which is what it should be if the position is to be restored to what it was in 1928, when the original royalty of 6¼ per cent. was fixed. However, instead of a percentage rate it provides for a fixed payment of 1½d. per minute of playing time per record.
Why a fixed rate instead of a percentage? There are two very good and cogent reasons. First, since the abolition of resale price maintenance there is in effect no fixed price. It is hardly possible to tie a royalty to an unknown and floating figure. That is, in effect, what we have with the abolition of resale price maintenance. A composer must sign a contract that he would have a certain percentage on records selling at 40s., only to find that this price could not be maintained, or was not maintained in the shops, and that in fact he was going to get a good deal less because the records were sold more cheaply.
The second reason—and this is probably more important—is that in the next few years we shall undoubtedly see tremendous technological advances in mechanical recording. Already it is possible to compress a programme which runs for over two hours into a cassette not much bigger than a paperback book or a tin of sardines. Just as the manufacturers were able, after 1911, to develop a two-sided record and thus effectively halve the royalty due to songwriters, so it will be possible very soon for dozens of songs to be compressed on to a single tape or recording. A percentage royalty would clearly be disastrous and unfair to the composers and songwriters. Those are the reasons why in this Bill we have gone for a fixed sum and not a royalty. I believe this is a sensible precaution, and it is one that works well in other fields. I have not yet heard any really sound arguments against it.
There is no magic about the idea of a fixed rate. If someone can suggest another way which will meet the problems I have outlined, I shall listen with interest. As I say, I have heard nothing yet which shakes me in my conviction 324 that it is much better to have a fixed rate, especially bearing in mind these great technological advances that are going to be made in the next few years.
Finally, my Lords, the Bill provides that this whole situation shall be reviewed every five years by the Board of Trade, and it makes it an offence to pay a lesser rate of royalty than is laid down by the Bill. Both of these points are clearly sensible and reasonable precautions. Before I sit down I should like briefly to touch on one or two questions that have been raised in connection with this Bill, in conversation with various organisations and in the Press. First: why do the songwriters and composers not press for a public inquiry now? The answer is that the songwriters are organised in a very small guild, called the Songwriters' Guild, which has done yeoman work on behalf of songwriters in the past few years. But it is a very poor organisation, and it is estimated that it could cost them between £8,000 and £10,000 to brief the necessary counsel to appear on their behalf at an inquiry. It is something quite beyond their pocket or their possibilities.
Therefore, one has to reject the idea of a public inquiry—at least from their point of view—unless something else can be suggested which would take the burden of expense from them. The machinery may be there, but at the moment it is almost impossible for anyone to be able to afford to drive it. It has been suggested that the position of songwriters and composers is not really so bad because the increased volume of sales of records has more than compensated for the decline in the value of money. I think that any impartial survey would show that this is certainly not the case. Songwriters have been forced by economic necessity to take up other jobs, to enter publishing, while composers are forced to teach, to take pupils to make ends meet, and it is practically impossible for all but a tiny handful of people to make a living from their profession. In any case, the argument is a false one. Why should a man be penalised by his success? An increase in the volume of sales means that the song is more successful; and the 1928 Inquiry, commenting on this, took the very sensible view that the return to authors and composers should be correspondingly greater if there is 325 greater use of their work. One does not penalise a man because his songs are being sung everywhere, and say that he does not really need any more money.
Finally, what is most important is that the songwriter and composer formerly enjoyed a very healthy income from the sale of sheet music. To-day, this has so declined as to be negligible. This decline is directly and mainly due to the increased volume of sales of recordings of all kinds. The songwriter has lost on the swings, in the sense that he has lost his sheet music royalties, and he has not gained on the roundabouts anything like sufficient real compensation.
The other question concerns the possibility that the price of records would be increased if the principle behind this Bill were to be adopted by Parliament. It is quite possible that there would have to be an increase; although I would point out, in all humility, that the Government, by making even a tiny concession in the matter of purchase tax, could more than cover the extra money required. But if composers and songwriters are denied a legitimate increase—an increase for which they have been waiting 42 years— because there is a fear that prices will go up, surely this is all wrong. What Parliament would then be saying to this small body of people is that they should indirectly subsidise this huge industry which has a turnover every year running into hundreds of millions of pounds.
My Lords, there can be nobody in this House, and I would think very few people outside it, who has not at some time derived pleasure and comfort from a song or a piece of music. The history of these Islands could be told through its songs. At moments of crisis, simple, sentimental, even "corny", songs have somehow caught the imagination and become something greater and more meaningful than even their composers intended— "Tipperary", "Keep the Home Fires Burning", "Roses of Picardy" in World War 1. And in the last war, such pieces of sentiment as, "We'll Meet Again", "Bluebirds over the White Cliffs of Dover", and "Roll out the Barrel"— "corny" every one of them, but they were sung by millions of men as they marched out to war from 1939 onwards. We found during the last war how valuable it was to have broadcast music and 326 songs in the factories. Who can possibly measure the value of a song, or of such songs, and who can imagine what life would be like without songs, without singing, and without music?
To look at the other side of the picture for a moment, I could name a dozen songwriters and composers who have written songs which we have all known, which we have all whistled, which we have heard literally thousands of times, and our gratitude to them is that they have died in abject poverty. It is for them, my Lords, for the songs and the songwriters who are to come, that I ask your Lordships to move this Bill forward to-day. Parliament made a firm promise, an implicit promise, in 1956. I am now asking that it should redeem that promise. My Lords, I beg to move that this Bill be now read a second time.
§ Moved, That the Bill be now read 2a.— (Lord Willis.)
§ 5.24 p.m.
§ LORD ABERDARE
My Lords, like the noble Lord, Lord Willis, I start by declaring an interest, as I am a director of a small company that makes recordings. I do not think it is very much more profitable than he told us his experience was, although this particular company does not sell records to the public and therefore is not involved in paying these royalties. I have the greatest sympathy with the noble Lord. From the moment I heard of his Bill, and from the time I read it, I found myself in full sympathy with the contention that perhaps we are not being fair to our composers in the matter of the rate of royalty to which we entitle them. Certainly at a time like this, with floods of wage demands and strikes for increased pay, it is quite remarkable that, as the noble Lord has pointed out, the rate of reward for a composer remains to-day the same as it was in 1928.
However, I am bound to confess that when I had a chance of looking more closely at the Bill, and taking advice on it, I was not sure that it provided the right way to put matters right. Perhaps I may give some of my reasons. In the first place, as the noble Lord quite frankly told us, the Copyright Act 1956 contains a provision for the review of the rate that is paid. Section 8(3) gives the Board of Trade the right to hold a 327 public inquiry if they consider that the royalty rate has ceased to be equitable; and the Board of Trade may as a result of such a public inquiry make an order varying the rate. It seems to me to be wrong to try to alter the law before this procedure has even been tried out. The noble Lord said that nothing had been done by the Board of Trade, but so far as I know no one representing the composers or the publishers has ever approached the Board of Trade with a request for a public inquiry. He made much of the fact that this was an expensive procedure. But of course there are other bodies in this field besides the Songwriters' Guild, and all of them have expressed their sympathy with the underlying cause that he has at heart. I will say a little more about the other bodies later in my speech.
I should have thought that surely the first step, if one wants to increase the rate of royalty, should be to do so under the present legislation, which gives an opportunity for seeking a public inquiry, before trying to introduce new legislation. Certainly this procedure worked well in 1928, when a public inquiry was held and the rate was raised from 5 to 6¼ per cent. Although I know your Lordships pride yourselves on the expertise available in this House, I suggest it is rather difficult to expect us to decide on the rate of copyright royalty. It is an immensely complicated subject and one which, to my mind, should be properly sorted out in front of a competent tribunal, to which lawyers, accountants and those concerned in the various organisations affected can give proper evidence. I am quite sure that the musicians have a good case, and I should like to see them go to a public inquiry.
The second doubt I have is whether the time basis suggested, l½d. per minute, is indeed preferable to the present percentage basis, which stands at 6¼ per cent. It would, it seems to me, discourage the sale of cheap records. The noble Lord implied—in fact, I think he said—that the composers were suffering from the numbers of cheap records that were sold. To some extent this is true; to some extent, I should have thought, the opposite was true. He mentioned a record that could no longer support itself in the shops at 40s.—I think that was the figure he mentioned. If the alternative 328 were to cease selling that record, the composer would get nothing. As it is, there are now these cheap labels and the record continues to be sold at a cheaper price, and the copyright owner continues to receive the same percentage royalty as he would have done before. To introduce a fixed sum per minute would undoubtedly discourage companies from issuing the cheaper records which sell in many thousands.
The only other country that works its copyright royalty payments on a time basis is the United States of America, and even there considerable effort has been made to change it and make it into a percentage system. An Amendment to the copyright law was moved in the Senate last August, and for very much the same reasons that I am trying to argue this evening.
The other point to be made on the percentage basis is that all other European countries use it, and therefore all the countries within the Common Market use it, and if we are considering joining the Common Market it would obviously have advantage if we continued to use the same system as they use rather than switching to a fixed rate per minute system. Another much smaller, but interesting point that was put to me, was that the l½d. suggested by the noble Lord does not lend itself easily to conversion to decimal currency, though if he had chosen l¼d. it might have been much easier.
There is another rather more detailed objection to Clause 1(d); namely, the introduction into Section 8 of the 1956 Act of a new subsection (12). The position at present is that a copyright owner may make an agreement with a commercial firm for the exclusive use of his music on a record which is not for sale but which is used for free distribution for advertising purposes. I believe this is true at the moment, for example, of the song "Tea for Two", which is used by Brooke Bond and Company Limited. This is a right which at the moment the copyright owner enjoys; he can arrange the rate direct with the advertising firm, and to remove this right will only make the copyright owner suffer. He will be giving up a right that he has at the moment, and it is most unlikely that a commercial firm would wish to use a song in a similar fashion if it was open 329 to anybody else to use it as well. Frankly, I do not see how this subsection helps the cause of the copyright owner at all.
The last point I wish to make is on the question of the other bodies concerned in this matter. Perhaps I may briefly describe who they are and what they do. There are six of them. The Songwriters' Guild and the Composers' Guild between them represent the writers of music; the Music Publishers' Association represents the publishers; the Mechanical Rights Society negotiates agreements on behalf of owners with the record companies. The Mechanical-Copyright Protection Society Limited collects royalties for British owners of copyright, and the British Copyright Protection Society collects royalties for overseas owners, it is somewhat complicated, the more so because all these bodies are known by initials; but I have mentioned these six bodies simply to make the point that of all six of them only the Songwriters' Guild supports this Bill. The others are in varying degrees opposed to it, not because they are not sympathetic to he composer and the copyright owner, but for the general reasons that I have tried to give, that this is not the right way to set about improving the situation. That is my feeling, too, my Lords.
I have great sympathy with the motives that impelled the noble Lord to bring forward this Bill. I would go further, and say that he has done a real service in highlighting this situation. I would hope that as a result of what he has done it may well be that these bodies will get together and ask the Board of Trade for a public inquiry. But I hope the noble Lord will feel that he does not need to press this Bill too far.
§ 5.35 p.m.
§ LORD BEAUMONT OF WHITLEY
My Lords, we had a moving oration from the noble Lord, Lord Willis, on the subject of keeping the home fires burning on the white cliffs of Dover, and I was indeed moved. However I could have wished that he had spent a little more time on explaining some of the more detailed reasons for the changes that he wishes to introduce.
I have no interest to declare in this debate, the reason being that I have no particular expertise. But it is possibly as well that one Member of your Lordships' 330 House should query some ideas in this Bill which do not by themselves seem to be self-evident. For instance, if I correctly understood the noble Lord, Lord Willis, he said that the royalty was tied to the 1928 value of the pound, and was one of the few things that was so tied. But surely this is not so. Surely the royalty is tied to the sale price of the record, which has changed since 1928. The noble Lord said that the value of the pound had decreased to a greater extent than the price of the records had increased since that time. But one would have particularly liked to know the result of a comparison between the value of the pound and the cost of records since 1956, when the royalty rate was established because that would provide some key as to whether in point of fact since 1956 the songwriters and others have been "losing out."
I entirely agree with the noble Lord that, on the figures he has given, it would be better if the songwriters and other owners of the copyright could get a better deal, but I am loth to abandon the principle of a percentage increase, because even during the period of the five years between the Board of Trade inquiries which the noble Lord would make compulsory, and with which I have some sympathy (though I shall say a further word or two about them later), the percentage method catches up to a certain extent with the cost of living and the decrease in the value of the pound. It is highly unlikely that the cost of living will go up and the cost of records will go down. Almost certainly there will be some way in which the cost of records will go up.
The change in the methods of production seemed to me to be a valid point which the noble Lord put forward, but in effect what he wants to do is to have a situation where the changes in the method of production are looked after by this permanent arrangement of 1½d. a minute, and the changes in the cost of living—changes in the value of the pound sterling—are looked after by Board of Trade inquiries every five years. I would rather see a situation which it seems to me is dealt with to a certain extent by the 1956 Act, whereby the change in the value of the pound is looked after by means of a percentage system; and changes in the method of production 331 could well be the moment when there should be investigations by the Board of Trade as to whether there should be a change in the method of assessing royalties.
I agree with the noble Lord, Lord Aberdare, when he says that we should have liked to see some real effort made to invoke the present system before it is changed. Let us see whether or not it works. Indeed, it may have been that an Unstarred Question in your Lordships' House, asking for such an inquiry, would have had support from many parts of the House. Moving on to the question of the Board of Trade inquiries themselves, I do not know why it is that a Board of Trade inquiry at the present time is so expensive for bodies like the songwriters, whereas if it was held compulsorily every five years it would not be so expensive. It may be that the reason is that the only subject such an inquiry would be required to examine would be the value of the pound sterling; but, if so, that would seem unduly to limit their consideration, if they are to make changes in royalties. It seems to me just as costly to have that kind of quinquennial review as to have the occasional one we should be having now.
Lastly, apart from a passing phrase to say that it was obviously a good idea, the noble Lord did not say why this Bill of hisrenders the sale of a record in respect of which any less sum is paid by way of royalty an actionable infringement of copyright".It seems, on the face of it, a sensible suggestion; but, since it does not appear to replace any particular provision in the 1956 Act, why was it not in the 1956 Act? That is a question I think we should like answered. Were there good reasons then which have now come to an end? To sum up, I think there are a large number of questions which the noble Lord, Lord Willis, has not fully explained and which I hope he may be able to explain. On the face of it, it seems to me that the present system, produced by Parliament in 1956, has not been given a fair trial, that it has a very considerable weight of argument in its favour and that we certainly should not change it lightly or inadvisedly.
§ 5.43 p.m.
§ LORD CAWLEY
My Lords, about eighteen months ago I introduced in your Lordships' House a Bill from another place to amend the Copyright Act 1956, and it finally became the Design Copyright Act 1968. The noble Lord, Lord Willis, did not speak against my Bill, and I hope he will not think it churlish of me if I point out various defects which I think are fatal to his present Bill. There is obviously necessity for legislation on this matter and legislation quickly, because when the Resale Prices Act 1964 was passed the draftsman failed to notice that he was depriving a phrase in the Copyright Act 1956 of any meaning, the phrase being "ordinary retail selling price". That phrase no longer has any meaning, and, so far as I can see, it puts the whole royalty system into a state of confusion and uncertainty. I think that in all probability the present royalty rate of 6¼ per cent. is very low, but the Act of 1956 supplies a perfectly reasonable method of having this rate reviewed; and I must say that I think the estimate of the amount of money spent on counsel at a public inquiry is grossly exaggerated.
Copyright law is a very difficult subject and nothing is simple or straightforward, as suggested by the noble Lord. Some of your Lordships may remember that when the Copyright Bill was before this House in 1956 it was taken by the noble Lord, Lord Mancroft. He had been a pupil at the Bar of Mr. Skone James who was possibly the greatest authority on copyright in this country. We spent many hours on the Bill here, and honourable Members spent many hours on it in another place, but I think I can say that the Act that was produced bristles with ambiguities and is as full of lacunae as is sponge. In particular I would refer to Section 9(8) which was put into the 1956 Act for the first time and which has amazed the Court of Appeal and caused tremendous trouble. That is only one of the difficulties that arise in copyright law, and even my little Bill, or the little Bill that I introduced into this House, has produced various side effects that I did not realise would be attributed to it when I introduced it.
333 This present Bill is, in my view, unsound for various reasons. First, "playing time" has the meaning which shall be prescribed to it by the Board of Trade. "Playing time" is a phrase which is beset with difficulties. For example, the same piece of music played under two different conductors may have quite a different time, so you get two records of the same piece that pay different royalties to the composer. I am told that there is a new type of music called aleatoric music, of which I knew nothing until yesterday, and in this the composer merely produces the framework and apparently the artists fill in the gaps. When dealing with playing time, a point of that sort would I think raise considerable difficulties.
What this Bill does is to put an onus on the Board of Trade to produce a definition that covers playing time. It further appears that this definition will be immutable; that once the Board of Trade has prescribed playing time, nobody can do anything about it; it will have a given definition. I feel that it is the duty of Parliament to decide what "playing time" means and not hand it over to the Board of Trade. Indeed, in the 1956 Act, in Section 7, which deals with the supply of copies of articles from periodicals to libraries, Parliament has laid down a number of criteria which the Board of Trade use when making regulations under that section. There certainly should be some form of criteria that the Board of Trade should follow in deciding what "playing time" means in this Bill.
We have heard a certain amount about the action against someone for infringement in the case of a record which is sold to the public and on which an insufficient royalty has been paid. It appears that the Bill as it stands would make it a tort on the part of a retailer to sell a record on which the manufacturer has not paid a sufficient royalty. It appears to me also that the copyright owner would have no right of action against the manufacturer; he would have a right of action merely against the innocent retailer. I do not know whether that is the interpretation put by the Parliamentary draftsman upon Clause 1(b), but it is the one that seems to me to be the correct one.
334 The question of minimum royalty has been raised. Of course, as my noble friend Lord Aberdare said, it is in our present monetary notation and not in the form of .625p, which is, I believe, the conversion. In view of the fact that we are going to convert to decimals next February and that this Bill will not come into operation for six months after it has been passed, I think some effort should be made, if the Bill does get to the Committee stage, to convert this sum into a decimal payment. Another point arises as to why, after five years, the only reason that can be adduced for changing the rate of royalty is in relation to the purchasing power of the pound sterling. Surely, as the noble Lord, Lord Beaumont of Whitley, said, the change of the processes used in making records must be relevant and the inquiry cannot be confined merely to the change of the value of the pound sterling. I would conclude by asking whether the noble Lord, Lord Willis, has considered the question of the cost of collection. It might easily be considerably higher than the present royalty on selling price rate. I am not averse to a change in the law on royalties, but I consider that the present Bill does not fulfil the purpose for which it was introduced.
§ 5.51 p.m.
§ BARONESS PHILLIPS
My Lords, I should like at once to express sympathy with the thought behind the Bill which the noble Lord, Lord Willis, has so eloquently introduced. I am only sorry that on this occasion he will not get the "girl", if I may use that euphemism, thinking of the Government in the feminine sense.
I should like to underline what various noble Lords have already said. We have had mentioned the interests of another group concerned with this Bill in the person of the noble Lord, Lord Aberdare. We have also had the layman who has taken a very intelligent and knowledgeable look at the Bill in the person of the noble Lord, Lord Beaumont of Whitley, and we have had the splendid analysis from the noble Lord, Lord Cawley, who is extraordinarily skilful in this matter, as I know from the baptism of fire that I had when I had to deal with the original Trade Descriptions Act. I would merely repeat to the noble Lord, Lord Willis, 335 some of the points which have already been raised and which make the Bill defective.
The Explanatory Memorandum on the Bill is said to amend the provisions of the Copyright Act 1956, to take account of the Resale Prices Act 1964, and of other factors which render the existing royalty rate inequitable. The royalty prescribed by the Act is 6¼ per cent. of the ordinary retail selling price of the record and, because it is a percentage, it of course automatically takes account of changes in the price of gramophone records. The noble Lord, Lord Willis, said, of course, that the royalty is too low, and he also mentioned that the figure of 6¼ per cent. was decided on after a very full inquiry in 1928. But I must remind him that there were 20 witnesses representing music publishers, composers, lyric writers and record manufacturers, all of whom gave evidence.
If the copyright owners, or the record industry, feel that the rate should be revised there is, as we have heard, Section 8 of the Copyright Act which gives the Board of Trade power to hold a public inquiry into the royalty rate and, if the inquiry reveals a need for it, to make an order changing the rate. As your Lordships have already heard, no request has been made for such an inquiry. It appears to be a sensible and equitable means of setting the current rate, and no good reason has so far been advanced by the noble Lord for ignoring this machinery and making the arbitrary choice proposed by the Bill. I take his point about the cost, but I think this has been disposed of in subsequent discussion.
As to the effect of the Bill on the price of gramophone records—and the noble Lord, Lord Willis, made much of this point—the royalty on a record with a playing time of 40 minutes and selling at 14s. 6d. would be 9d. under the existing Section 8 of the Copyright Act, and the proposed Bill would make it 5s. Even a record costing £2 and having a playing time of 40 minutes on which the royalty is at present 2s. 6d., would show an increase in the royalty of 100 per cent.
However, I can give the noble Lord, Lord Willis, a little comfort. It is true that since resale price maintenance in gramophone records came to an end, the wording of the regulations framed under 336 the Copyright Act may not be quite apt for enabling the royalty to be calculated —though there is the point about the highest price at which it is sold—because the connection between the marked or catalogued price and the actual selling price cannot any longer be relied on. Some change in the wording of the regulations may prove to be desirable, and Board of Trade officials have been consulting the Mechanical Rights Society and the British Record Producers' Association and are awaiting their replies.
As the noble Lord, Lord Cawley, has pointed out, there is a further defect in Clause 1(b). The note which I have received suggests that the effect is not clear, and perhaps the noble Lord, Lord Willis, could make his point when he finally winds up the discussion. Taking into account the defects within the Bill, I should like to repeat what was said by the noble Lord, Lord Aberdare, that I hope the noble Lord, Lord Willis, will not feel that he needs to press the Bill at this time.
§ 5.56 p.m.
§ LORD WILLIS
My Lords, perhaps I may say to my noble friend that in this particular debate it was not so much the girl I was after as the money. In that sense, I do not think that we have received a great deal of comfort. A number of the points that have been made have been really points of detail which one would normally thresh out in Committee. However, perhaps I may just deal with one or two of the arguments that have been raised—and I should like to refer first to all the points that have been made about this question of the public inquiry.
The history of this matter goes back quite a long way. I was trying to be a little careful in my opening speech, for reasons which I think will probably be obvious to your Lordships. All I will say is that one must remember that in this field there are powerful vested interests who are not concerned and do not want any particular change in royalty. Therefore at a public inquiry they are able, because of their resources, to deploy the greatest legal brains, accountants, and so on; and to compete against that is a pretty hefty proposition.
The second point is that one should remember that these vested interests overlap in a great many areas, and in fact 337 some of the other organisations in the industry are to some extent so dependent upon the great record manufacturers that it is very difficult for them, as it were, to go out on a limb. I am trying to put it as tactfully as I can, but I think your Lordship will probably get the drift of what I am saying.
We are here dealing literally with a situation that occurs quite rarely, I suppose, where we have on the one hand a little group of creative people, with very few resources, and on the other a very large body of vested interests. I am not saying that they are necessarily bad vested interests—on the contrary. But clearly they have their business to attend to; and the less they have to pay out the better. And they have very long arms and very great influence. Those points have to be borne in mind when we hear in this debate about the reluctance of some others to come forward.
The little Song Writers Guild did, in fact, reach a situation some years ago when it got together some of these other organisations with a view to invoking the 1956 Act and getting a public inquiry going. However, at the last moment, alas!, most oil the other organisations dropped out, and it was not possible to get unanimity on the need for a public inquiry. Why some of them should suddenly drop out, after showing great enthusiasm at the beginning, must be left to the imagination; but that was the situation. Whether it would be possible to get them all together now, and press for a public inquiry, I do not know. It might be worth having another try. But one has to bear in mind these two points that I have made about the cost and about the vested interests.
The point was made about budget records, and I think that on this point there was some confusion in the mind of the noble Lord, Lord Aberdare. A budget record is not a record that has been turned out at £2 and is marked down because it cannot be sold; a budget record is a record that is deliberately turned out to be priced at about 15s., and to hit a certain market. Naturally, of course, if a certain number of records are processed at £2 each, and if half of them remain unsold, it is in everybody's interests that they should be marked down and sold. Long-playing records which 338 are sold at 14s. 6d. or 15s., and which are deliberately turned out on a budget basis, are a much different proposition. I accept the point made by the noble Lords, Lord Cawley and Lord Aberdare, about the decimal and the 1½d. and that is something which clearly could be adjusted.
I was asked by the noble Lords, Lord Beaumont of Whitley and Lord Aberdare, about the removal of the right of the copyright owner to sell music outright. Again, this is a rather long and complicated question and it has a great history. The history of songwriters and composers, many of whom have died in poverty, is littered with cases of people who have sold copyrights on very valuable material outright and lived to regret it afterwards. Unfortunately, there is a large number of these people whom one has to protect, as it were, against their own circumstances. There are many people who would be quite prosperous today if they had not been "broke" on one occasion, walked into a music publisher's or producer's office and sold outright quite a valuable copyright. It is impossible to stop them from doing this unless some restraint is, so to speak, put on the other side. Just as with door-to-door salesman we now have a 36-hour or three-day thinking period, we need protection, if not necessarily what we have in the Bill, so that copyright owners do not sell on the spur of the moment without adequate protection or thought. That is the purpose behind the provision. I am sure that some way could be devised of not interfering with those people who write advertising jingles and so on and who want to sell them outright.
The noble Lord, Lord Cawley, made a point about getting a criterion for "playing time". I must say that I do not agree with his pessimism on this matter. There is clearly a certain limit to the speed at which one can play a piece of music. One conductor will play it a good deal faster or at a greater tempo than another, but the frontiers between which that piece of music can be played are not so very extensive—a minute or two either way. So I do not think that that is necessarily something which should worry us. I do not share the noble Lord's views about the difficulty of finding a criterion. I take his 339 point about the complications of copyright law. The more I have gone into this subject, the more I realise how complicated it is in many ways. I once spent the worst two days of my life in Berne at a copyright convention, where I am quite sure I did not understand a word, from morning till night, throughout the entire conference. But I came home an acknowledged expert among my friends on the subject of copyright.
I have been turning over in my mind, in the light of the debate to-day, whether I should keep the option open and ask your Lordships to give this Bill a Second Reading, or whether I should withdraw it for further consultation among the organisations mentioned by the noble Lord, Lord Aberdare, with the possibility, if they were unsuccessful, of reintroducing the Bill later on, perhaps in an amended form. In these circumstances, and in view of the fact that I do not think one speaker has supported the Bill, though there has been obvious sympathy for the plight of songwriters, I shall not ask your Lordships to give the Bill a Second Reading on this occasion. As I said, we shall try to get together at these consultations to see whether we can back a proper public inquiry; and if that fails we can reintroduce the Bill in an amended form to meet some of the objections. I beg leave to withdraw the Bill.
§ Motion for Second Reading and Bill, by leave, withdrawn.