The Government has helped broker a new deal between charities and music creators on the music licensing system.

From now on, a public venue, including those used by a charity or not-for-profit organisation, where music is played from records, CDs, the radio or television will now require a licence from both PPL and PRS for Music. These organisations collect and distribute royalties on behalf of copyright holders such as composers, lyricists, music publishers, record companies and musicians.

The new system will be fair for both musicians and charities. Those involved in creating music will be rewarded for their work while a package of measures have been agreed to protect charities from excessive costs.

In July 2008 the Government carried out a consultation into amending this legislation. In November last year the then Government responded to the consultation by saying it would reform the licensing system.

This was followed by more than 18 months of negotiations with PPL and charity representatives.

Since May this year it has been agreed that:

• Charities will be exempt from paying for a PPL licence for the first year giving them 12 months to prepare for the change
• The lowest tariff of £40 a year has been extended to cover more than 60 per cent of the buildings where voluntary groups meet instead of only 30 per cent of buildings
• The licence for community buildings has been extended to cover outdoor events like village fetes and carnivals
• The vast majority of charity shops will pay the lowest tariff of £54 a year
• The charity shop licence will cover back offices as well as the shop floor.

Charities will not face more red tape and bureaucracy. PPL and PRS for Music will create a single licensing system so organisations will only have to make one application.

Ministers have carefully examined the issues, looking at the results of the consultation and the months of negotiations between charities, not-for-profit organisations and PPL.

A statutory instrument ending the exemption was laid in Parliament today.

Minister for Civil Society Nick Hurd said:

“We have worked hard to ensure that charities, particularly small organisations and charity shops, get extra protection and that the impact of any changes is minimised.

“It will be difficult to satisfy everyone but we have achieved a fairer balance between the need to reward musicians for their work and the need to protect charities from excessive costs and additional bureaucracy.

“In addition, we hope that the agreed delay in implementing these changes will give the whole sector time to prepare and will allow discussions to continue.”

Intellectual Property Minister Baroness Wilcox said:

“The major aspects of the new licensing system have been addressed. The new system creates a balance between musicians and charities.

“Charities have been fully consulted throughout this process. The new licensing arrangements are balanced, just, and fair.”

Charities and not-for-profit organisations will not begin paying until next year allowing time for further discussions.

A new way to address complaints will be created by PPL. If organisations believe they have been treated unfairly, they will be able to appeal to a new independent reviewer.

PPL will operate the same voluntary exceptions as PRS for Music - at family occasions such as weddings, religious services, on hospital wards and for medical therapy.