Digital Economy Bill (First sitting)
Tuesday 11th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Chair
Before we begin, I have a few preliminary points. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Today, we will consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral evidence sessions, and a motion to enable the reporting of written evidence for publication. In view of the time available, I hope we can take those matters formally, without debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25am on Tuesday 11 October) meet—
(a) at 2.00pm on Tuesday 11 October;
(b) at 11.30am on Thursday 13 October;
(c) at 9.25am and 2.00pm on Tuesday 18 October;
(d) at 11.30am and 2.00pm on Thursday 20 October;
(e) at 9.25am and 2.00 pm on Tuesday 25 October;
(f) at 11.30am and 2.00pm on Thursday 27 October;
(2) the Committee shall hear oral evidence in accordance with the following Table:
Date | Time | Witness |
|---|---|---|
Tuesday 11 October | Until no later than 10.00am | BT/EE TalkTalk Three |
Tuesday 11 October | Until no later than 10.30am | Sky Virgin Vodafone |
Tuesday 11 October | Until no later than 11.00am | Which? Countryside Alliance |
Tuesday 11 October | Until no later than 11.25am | Open Data Institute The Co-operative Group |
Tuesday 11 October | Until no later than 2.45pm | The British Board of Film Classification NSPCC |
Tuesday 11 October | Until no later than 3.00pm | Dr Edgar Whitley, London School of Economics Wireless Infrastructure Group |
Tuesday 11 October | Until no later than 4.00pm | Big Brother Watch Open Rights Group |
Tuesday 11 October | Until no later than 4.30pm | ProjectsbyIF Open Corporates TUC |
Tuesday 11 October | Until no later than 5.00pm | Professor Sir Charles Bean, London School of Economics The Royal Statistical Society |
Thursday 131 October | Until no later than 12.00pm | StepChange Citizens Advice Dr Jerry Fishenden |
Thursday 131 October | Until no later than 12.30pm | OFCOM |
Thursday 131 October | Until no later than 1.00pm | The Information Commissioner’s Office |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 4; Schedules 1 to 3; Clauses 5 to 84; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00pm on Thursday 27 October. —(Matt Hancock.)
The Chair
On the basis of the motion, the deadline for amendments to be considered at the first line-by-line sitting of the Committee on 18 October is the rise of the House on Thursday 13 October.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Matt Hancock.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Matt Hancock.)
The Chair
Copies of the written evidence that the Committee receives will be made available in the Committee Room. We will now go into private session to discuss lines of questioning.
The Chair
Welcome to the Digital Economy Bill Committee. We will now hear evidence from BT/EE, TalkTalk and Three. Before calling the first person to ask a question, I should like to remind all Committee members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion that the Committee has agreed. We have until 10 am for this session, so I ask Members and witnesses to be as concise and to the point as they can be.
Nigel Adams (Selby and Ainsty) (Con)
Mr Stringer, may I put on the record and bring the Committee’s attention to my declaration of interest? I am a director of two telecommunications companies and a shareholder in both; my wife is a shareholder in those companies as well.
The Chair
Q That is now on the record. Does anyone else wish to declare an interest? No. Could the witnesses please introduce themselves for the record?
David Dyson: David Dyson. I am the CEO of Three UK.
Baroness Harding: Dido Harding, chief executive of TalkTalk.
Sean Williams: Sean Williams, chief strategy officer at BT Group.
Louise Haigh (Sheffield, Heeley) (Lab)
Q Thank you for coming to give evidence today. May I start with you, Sean? First, do you think that 2020 and 10 megabits per second are sufficiently ambitious targets for the universal service obligation?
Sean Williams: Yes, I do. We have made clear our willingness to deliver 10 megabits to every premises in the country by the end of 2020 without any further public funding and without even really progressing the USO regulations. On the way to doing that, we will be building on the fact that by the end of next year we should have fibre broadband coverage to 95% of the country.
As we get towards 2020, we will be building further fibre networks, so we expect to be getting more than 24 megabits to 97% or 98% of the country, and then fixed broadband of 10 megabits to 99%. We think that the last 1% needs to be done by 4G and satellite. Although we think about the issue as getting 10 megabits by 2020, in our view the vast majority will actually be getting a lot more than 10 megabits by then.
Louise Haigh
Q Baroness Harding, should the USO not have been an open tender process? If it had been, would it not have been right for it to have gone to more than one contractor, given the differences between the problems in inner city areas and those in rural areas?
Baroness Harding: Yes, maybe. I presume that you refer to the BDUK process that has taken place. I am actually very supportive of a universal service obligation. I do not agree with Sean Williams that 10 megabits will be sufficient as we look forward; it is very dangerous to try to set that number through primary legislation because technology is moving so fast. I fear that the rural communities who are furious that they do not have 10 meg today will be furious that they do not have 1 gigabit in three or four years’ time. I think you should be more ambitious, otherwise the political problem will never go away.
In terms of how then to get value for money for any form of Government subsidy, taxpayers’ money or levy going towards the final few per cent., I agree with the premise of your question. The more competition there is, the better, and it is a huge shame that there was none in the last process. To be fair to the Government of the time, I do not think that was because of how it was designed. The good news is that the market has changed quite a lot since then, and there are now a number of quite small providers building proper fibre-to-the-premises 1 gig services in rural areas, such as Gigaclear. I would be much more hopeful that, looking forward, it will be possible to design a process that is not reliant on one large incumbent.
Claire Perry (Devizes) (Con)
Q As you know, I represent a very rural constituency. I support what has happened; it is clearly far better than it was five years ago. However, what happens if no USO provider is willing to come forward to deal with the last 500 houses in the Devizes constituency? What should happen then?
The Chair
The acoustics in the room are terrible. If Members and witnesses could really speak up, that would be very helpful.
Sean Williams: To answer from our perspective, we are willing to enter into a binding legal commitment that we will deliver at least 10 megabit broadband to 100% of premises by the end of 2020. Our objective with this is really to give the Government and Ofcom comfort that we can get on and do this.
I would emphasise that I think that there is a lot of competition, as the Baroness just mentioned. We have Virgin expanding their network, we have Gigaclear and Hyperoptic expanding their network and we have the mobile operators expanding networks that can deliver 10 megabit broadband by 4G. There is a lot of competition to deliver this. For our part, we are willing to undertake to make sure that every single premises can get 10 megabits by the end of 2020.
Baroness Harding: The MP for Devizes raised a very good question. I am a firm believer that competition will do the majority of this, and we should try our damnedest to make the private sector fund most of this through competition, but I think there is a fair chance that in three or four years’ time a number of your constituents will not have broadband that they think is good enough.
I promise that I will not take up the whole session on this, but I think that the solution is to separate Openreach completely and put a universal service obligation on an independent Openreach. Once you have an infrastructure entity that is not owned by one of the retail providers, that takes away a lot of the industry issues with the public subsidy in some shape or form needed to get proper fibre for that final few per cent.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
Q Given that broadband speeds have doubled in the past three years, and that the pace of demand is accelerating, I find it staggering that we should say to rural constituents, “You are second-class digital citizens and must accept 10 megabits.” How do we bring forward a scheme that ensures that, in areas where they want to go further to ensure that they keep up or even get ahead, the universal service obligation does not peg them at a low speed? How could we design a flexible, regional USO model? Has that been considered by anyone on the panel?
Sean Williams: I do not want to occupy a disproportionate amount of air time here. We think that, by the end of 2020, we will be able to deliver fibre broadband speeds to probably 97% or 98% of households across the whole country, and at least 10 megabits to everybody by then, unilaterally and without any public funding or a USO. That will continue to go on after that as we continue to innovate networks.
We also have a commitment to deliver ultrafast broadband—more than 100 megabits—to 10 million premises, and fibre-to-the-premises deployment to another 2 million premises by 2020. There is going to be an awful lot of network investment, which, by the way, can only happen in an integrated, end-to-end business case.
Calum Kerr
Q Mr Williams, do you think that a tactical, on-demand USO only provided by BT can really provide the strategic outcome—a direction toward “gigabit Britain”—that I think we all agree is a matter of when and not if? If we continue to do this in a piecemeal fashion surely all we are going to do is cement the digital divide, rather than close it.
Sean Williams: To get these networks out to as many premises as possible, by as many providers as possible, through competition and commercial market action is exactly the right solution. To get good networks out to everybody, both mobile as well as fixed, it is important that everybody has an incentive to invest. Through competition and commercial investment, we will get to the answer.
The Minister for Digital and Culture (Matt Hancock)
Q I welcome the commitment from BT to reach 100% of premises by 2020, but I ask for a point of clarification on language. Mr Williams, you referred in the percentages to “fibre” and, separately, to “fibre to the premises”. Can you confirm that by “fibre” you mean a combination of fibre and copper and that by “fibre to the premises” you mean pure fibre? The use of the term “fibre” reflects statistics that I understand mean fibre to the cabinet, so I find confusing the offer to households being “fibre plus copper”. I would be grateful if you clarified that.
Sean Williams: I am happy to. When I use the term “fibre broadband”, I mean fibre to the cabinet, which is a combination of rolling out fibre further into the network but with copper into the end premises. When I use the term “fibre into the premises” I mean fibre all the way into the building. I apologise for being unclear.
When I say we will deliver fibre broadband, it will largely be, in my view, through a combination of fibre and copper, but we are also very positive about fibre to the premises and typically deploy fibre to the premises in all new building sites and in lots of Broadband Delivery UK areas. We are developing fibre to the premises solutions that are particularly targeted at small and medium-sized enterprises. We have made a commitment that we will get ultrafast broadband speeds, which is both fibre and copper, and also fibre-to-the-premises solutions to 1 million SMEs by 2020. We have heard the prioritisation that the Government have put on getting very good broadband speeds to small and medium-sized enterprises and we have made a commitment we will get that to 1 million of them by 2020 as well.
Claire Perry
Q I am conscious of what Baroness Harding said about perhaps not setting a quantum, but do you think there should be a separate quantum for SMEs? One of the challenges we have is that there is not enough. We do not have separate legislation or, indeed, powers for cabling to new business parks. If I may ask a supplementary question, in my experience the issue with the USO is often with the broadband speeds in the household; it is not just a question of getting the cable to the front door or the bricks. What could the process be for dealing with those claims and helping householders realise that that might be a problem?
One final question: we would like the USO to be an average speed, rather than being achieved 15% of the time, or whatever the current average regulations are. What are your views on that? Are you prepared to commit to our offering an average USO of 10 megabits per second?
Baroness Harding: At the risk of being dangerously technical, I think we all try to summarise in the form of speed, but actually consumers and businesses would say that reliability and consistency are every bit as important as speed. The small businesses that are customers of TalkTalk would say, “It’s not the headline speed I need. I need it to work every single second when my customers are using the chip and pin machine in my small corner shop”, for example. So while speed is a useful proxy, it is not perfect.
The Minister gets to the nub of the issue: when you have a proper fibre network that goes all the way to the premises, you have upgrade potential. You just change the card in the rack of computers back at the exchange and you can go from 1G to 100G. You also have a much, much more reliable network. When it rains, water does not get into the copper and it does not stop working.
The small businesses that we talk to are very cross that the fibre-to-the-premises roll-out has missed out a lot of business parks—not necessarily because they want speed, but because they want a reliable service where they can upload as much as they can download and customers can always buy things from them.
I would therefore support being clearer in the detailed regulations that I presume Ofcom would set in specifying the service requirements for small businesses as opposed to consumers.
Christian Matheson (City of Chester) (Lab)
Q What flexibility would you like to see within the legislation for either the Government or perhaps Ofcom to be able to deem the level of the USO in the manner that Baroness Harding described as technology increases?
David Dyson: I have a couple of points. Covering some of the previous questions, it is impossible to predict what will be the right speed in five years’ time. There are two elements to delivering that. One is effective competition. On the second, I agree with Baroness Harding that in those harder-to-reach less economic areas, the separation of Openreach is the only way that you will get assurance that those customers will get the right speed.
Fundamentally, Ofcom needs to have more powers to make the right decisions that effectively create the right competitive environment in the UK—an environment where it is not constantly worried about being litigated. At that point, you have a stronger regulator that will make the right decisions for the right reasons and a lot of these discussions will take care of themselves.
Baroness Harding: You can see from my nodding head that I agree with David. A lot of the provisions in the Bill are very good, pro-consumer, and I would encourage the Committee to look very favourably towards them. David has just alluded to one of them, which is to make sure that you have a stronger regulator that can get decisions taken faster without using up nearly 50% of the Competition Appeal Tribunal’s time.
Sean Williams: On the specific question about flexibility, as long as it is stable enough for network investors to deploy a certain investment in order to get to the target and then recover some of their investment money, it can be flexible after that. If it is too flexible, you never quite know what you are supposed to be investing in, so I think it needs to be definitive for a period and then it can move on progressively as society and the economy moves on.
I agree with Baroness Harding on the subject of reliability. Reliability is a very important metric, but SMEs are not typically the most demanding broadband customers. A big household streaming lots of HD videos is a very demanding broadband supplier. SMEs and large households have different kinds of requirements and we need to work with Ofcom to establish exactly what those standards should be.
It is true that some of the problems happen within the home or within the business premises. It is important to make sure that all the retailers—TalkTalk and all the others—are able to support their customers in the business or home. Making sure those networks and wi-fi work well is also very important, to answer Mr Perry’s earlier remarks.
Kevin Brennan (Cardiff West) (Lab)
Q Sean, do you recognise the figure that improving wayleave rights under the ECC will reduce costs for providers by 40%? Would you like to tell us whether any surplus from that will be used to invest in local communities or will it be going to your profit margins?
Sean Williams: I do not recognise the particular figure, to be honest, but I would not necessarily dispute it.
Kevin Brennan
Q Is it in the right ball park? Is that what you are saying?
Sean Williams: It is 40% of what? I do not know exactly where that figure comes from, to be perfectly honest with you, but what I would say is that on the EE network we have a commitment to get to 99%-plus of premises getting 4G, and 95% of the geographical area of the country, by 2020, getting 4G services. Also, that requires us to roll out new masts and new services, and every cost reduction in that vein will support the agenda of rolling out 4G networks everywhere as far as we can.
Kevin Brennan
Q So all that will be reinvested into the—
Sean Williams: I think it is all supportive of delivering more roll-out by all the mobile networks, yes.
Kevin Brennan
Q Can I ask you, how will we have competition in next generation access? Will certain areas of the country be limited to 10 megabits in the future?
Sean Williams: As I say, I think we are getting lots of competition already. Virgin is rolling out. Hyperoptic, Gigaclear and others, all the 4G networks, Three, EE, Vodafone, O2 are all rolling out competitive networks, so I think the large majority of the country will have availability of choice of provider.
Kevin Brennan
Q Will certain areas be limited, do you think, in reaching the 10 megabits?
Baroness Harding: I think the way that you ensure that there is sufficient competition to drive investment and create choice is by having a very strong regulator that does not believe any of us, actually, when we say “Trust us, we will be okay; we will do it for you.” If you live in any of the rural constituencies in the country, you do not have Virgin as an alternative. There is only one fixed line network provider. There are only two mast joint ventures for mobile networks, so I would argue that the telecoms market is not competitive enough at all and that the best way Government can ensure that all constituents across the country benefit is by having a much stronger regulator that forces competition. I think you should be very worried when you hear large incumbents saying, “Set up a universal service obligation but don’t let it get too far ahead of what we’ve got in our business case.” That is not what business should be doing. Businesses will invest more if they are scared their customers will go elsewhere, not because they have been given a promise by Government.
David Dyson: But also you should be very worried when you hear statements about how BT is planning to take profits from the duct access and reinvest in that, and in cross-subsidising mobile access. That is just fundamentally wrong, and is not supportive of competition.
Nigel Huddleston (Mid Worcestershire) (Con)
Q Far fewer people switch broadband and phone providers than gas or electricity, for example. Do you support the Government’s published principles of switching, which will make it easier for consumers to switch?
Baroness Harding: Yes, completely. I think it is extremely confusing for consumers, because how you switch depends on which network you are with today, and which one you are going to. It is not a level playing field among competitors, so, for example, someone leaving TalkTalk who takes mobile phone, broadband and TV—a proper quadplay customer—does not have to speak to TalkTalk at all, as they should not. They head off to whomever they want to go to, and the switching process will work its way through. On the other hand, someone leaving Virgin and going to BT, or leaving Sky TV and coming to TalkTalk, has to speak to Virgin or Sky respectively. We and, I think, Three as well have been campaigning for simpler switching for eight years. Finally we have a Bill that is very much on the consumer side, that will make switching easier and competition stronger. I think it is a great thing.
Sean Williams: And BT completely supports the position.
David Dyson: Three has campaigned for more than a decade on this issue. It is a complete joke that it has taken so long, and it fundamentally goes back to the point that Ofcom needs more powers to make decisions that are in the consumer interest. We are the bottom of the class from a global perspective, in terms of switching. I think Papua New Guinea ranks alongside us as the only country that still has donor-led porting. It is a joke. Ofcom tried to legislate on that five years ago, and Vodafone litigated on a technicality and won. Since then it has been kicked into the long grass. It is a major issue, but the more fundamental issue is that Ofcom does not have the power, right now, to make decisions that are fully in the interests of consumers and competition.
Nigel Huddleston
Q Baroness Harding, you mentioned that this is a consumer-friendly Bill in various degrees. Mr Dyson and Mr Williams, are there any other elements of the Bill that you see as consumer friendly that would benefit my constituents, for example?
David Dyson: Absolutely. The electronic communications code reform is critical in being able to roll out more coverage, more capacity and better quality from a mobile perspective. That is a really important step. We hear a lot about coverage, capacity and quality. Ofcom recognises that there is a major issue in consistency of access not just for operators across the country, but for different technologies. That will certainly help, but for me the most important element of the Bill is effectively to give Ofcom the powers to create competition in this market.
Fundamentally for us, the most important decision that Ofcom needs to take in mobile in the next five years is going to happen before the Bill comes through in that spectrum. The UK is bottom of the class not only in mobile number portability, but in spectrum distribution in this market. It is the most fundamental input in terms of a level competitive playing field and Ofcom is about to take that decision in the context that it is always worried about being litigated. The facts speak for themselves. We have a terrible position in the UK right now and I am worried that it will not get any better unless Ofcom has more powers.
Christian Matheson
Q I am hearing mixed messages about this industry and its ability to achieve a USO. On one hand, we hear that market forces will achieve it and, on the other hand, we hear that Ofcom does not have enough power and that there is a fear of litigation. Should this Bill be giving greater powers to Ofcom? For example, in areas such as Devizes, which Claire Perry talked about, where there are broadband not spots, should Ofcom deem a provider to provide for that area?
Baroness Harding: The key thing in the Bill is to reform the appeals regime. As David Dyson has just alluded to, between 2008 and 2013, which are the most up to date stats I could get last night, Ofcom accounted for just under 50% of all cases in the Competition Appeal Tribunal. Our industry is important, but it is not that important compared with the whole of the rest of competition issues because the standard of appeal is much lower in telecoms than in any other regulated sector. That means there is a very cautious regulator.
BT has managed to raise $45 million from private equity funds to fund its litigation pot. Ofcom spent £10 million in the last two years on litigation. That is awful use of taxpayers’ money. It means you have an industry that is used to appealing every single decision the regulator takes, so the regulator is too cautious. That is why we are saying, “Give them the powers and competition will do the job for you.”
Sean Williams: I am sorry, but I completely disagree with that point. First, it is not true to say that everything gets appealed. BT did not appeal a charge control this very year that took a billion pounds of profitability out of BT—in fact out of Openreach—over a three-year period. We did not appeal the previous charge control, which did a similar thing and we did not appeal the one before either.
Ofcom is an extremely powerful regulator that is accountable to nobody but the Competition Appeal Tribunal. No one in the Government can tell it what to do. It has extremely wide discretion. You will not get better decisions out of Ofcom if you reduce the standard of appeal to judicial appeal standard. Is it reasonable, is it fair, is it just that Ofcom can take £3 billion of shareholders’ equity value away from them on a judicial review standard? It is not. It is thoroughly unjust.
To keep Ofcom accountable, to keep its decisions high quality and to comply with the regulatory scheme, it is of the utmost importance to require an appeal on its merits. It is required across the communications sector across the whole of the European Union. It is not by any means unique. Ofcom makes many very impactful decisions and that is why it gets many of its decisions appealed to the Competition Appeal Tribunal, very often by the small players in the industry. The organisation that is appealing Ofcom’s most recent charge control is CityFibre Holdings, which thinks that Ofcom’s decision to drive down Openreach prices will kill off its business plan, not just Openreach’s. It is not BT that is appealing that decision. It is very important that the one piece of this that really needs to come out is the change to the appeal regime.
It is also true to say that the Supreme Court of the United Kingdom, only about two years ago, was absolutely clear that the scheme provides for an appeal on the merits.
David Dyson: There are two important points on this. First, Three is 100% supportive of the changes in the Bill in this regard. Secondly, it is really important to note that all the Bill proposes to do is raise the standard of appeal that Ofcom has to the same level as regulators in other industries, which does not feel excessive to me.
Sean Williams: Except that Ofcom has many more powers than any other regulator, including a dispute resolution power that is not available to any other sectoral regulator. That is the cause of many of the disputes and appeals that happen.
The Chair
Order. I am afraid that that brings us to the end of the time allotted. I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Daniel Butler, Paul Morris and David Wheeldon gave evidence.
The Chair
Welcome to this session of the Digital Economy Bill Committee. We will now hear oral evidence from Sky, Virgin Media and Vodafone. We will finish this session at 10.30 am. The time is very tight. May I ask the witnesses to identify themselves?
Paul Morris: I am Paul Morris, head of government affairs and sustainability at Vodafone.
Daniel Butler: I am Dan Butler, head of public affairs and policy at Virgin Media.
David Wheeldon: I am David Wheeldon, group director of policy and public affairs at Sky.
Louise Haigh
Q I will start with the question that I asked the last panel. Do you think that 10 megabits per second by 2020 is ambitious enough?
David Wheeldon: That is a very hard question to answer. The flexibility within the Bill for the universal service obligation threshold to change makes sense, in order to address the likely customer needs. Our view—we have said it very publicly—is that we have to be much more ambitious in terms of connectivity in this country.
We would like to see ubiquitous fibre to the premise, and we believe ultimately that the economy is going to depend on that. The USO will be a useful interim measure until we can get there, but one might hope that, over time, a USO will not be necessary if we have full connectivity across the country.
Louise Haigh
Q Are you saying fibre to 100% of premises?
David Wheeldon: Eventually, that is the ambition we should aim for.
Louise Haigh
Q How would that be achievable?
David Wheeldon: We believe there is an opportunity to create the right market structure to bring a lot more investment into the industry. We are being held back at the moment by relying on the copper network. There is an argument we have made, as you know, about Ofcom’s communications review with regard to the structure of Openreach. That is not directly relevant to this Bill, but ultimately, as far as the USO is concerned, it makes a lot of sense to be able to set a threshold that you may want to vary over time.
Daniel Butler: Virgin Media’s starting point is to ask what the purpose of a USO is and what it is designed to achieve. The definition is quite clear: it is to underpin a series of activities that produce some economic and social externalities that are to the broader benefit of society. Ofcom defines those as email, web browsing, maybe a little bit of video streaming and maybe some IP voice. Its use case for a four-person household is that 10 megabits is sufficient to enable all those activities to happen simultaneously.
We view 10 megabits as appropriate for that definition of a universal service obligation. We think that more bandwidth-intensive activities, such as HD streaming and real-time gaming, have a looser connection to the underlying principles of a universal service obligation, because the benefits of those types of activity are primarily to the individual, not to society as a whole, so why should they be subsidised?
I will make one final point, which is that the debate around future-proofing the USO lacks one crucial bit of analysis. Bandwidth requirements might increase over time, but so too does the sophistication of networks in processing higher bandwidth applications. Video streaming is a case in point. When video streaming became ubiquitous, companies started investing in better video compression, and as a result video compression rates have halved every seven years. Networks are getting better at dealing with higher bandwidth applications.
Louise Haigh
Q Why should we be limiting ourselves to something that is barely sufficient now? What changes could we see in the Bill that would give us anything like the connectivity that Mr Wheeldon just mentioned?
Paul Morris: You have to make sure that the USO does not get in the way of future ambition. We have to think about how we move from what we have today, which is largely a copper and fibre mix, with the exception of Virgin. We still have telephone lines running broadband, essentially; as David says, we have to move on and be more ambitious. The point is to make sure that the USO does not get in the way of that ambition to do better and to use fibre for homes and businesses. We should make sure that the smaller networks have an option to be involved in the USO, and, if they have the ambition, that they know that a USO provider is not going to over-build them.
There is lots to be done outside the legislation, and clearly we do not need to repeat the mistakes of BDUK. We need to know where the assets are, who can do the work and where the green cabinets are. It needs to make sense and we need to have some kind of register. We need a practical approach and money needs to follow results—not the other way round, which was the other issue with BDUK. We can learn from some issues from the past, and we need to make sure that this USO does not get in the way of what we need to do next, which is to have much more fibre in the ground across the whole country.
Claire Perry
Q I represent a fairly rural constituency and I was interested to know what would happen if no USO provider came forward to do the right thing. What should happen in that case? How will the Government be able to mandate that provision?
Daniel Butler: We are not convinced that that situation will arise. What Mr Williams from BT just outlined was that BT was willing to enter into a legal obligation in which it would be the national provider for a universal service obligation. That is how it works today under the fixed telephony USO. Up to a relatively high cost threshold, BT is not allowed to pick and choose which areas and premises it connects and which it does not; it has a legal obligation to fulfil. The model does not need to radically change as we move to a broadband USO.
Paul Morris: Basically, you have to remember that most of these premises will have a telephone line—although not all, I grant you. That is a good start. It is about how we use what is already there well, and how we upgrade it.
Claire Perry
Q Exactly, but as I know from personal experience, having a copper line does not guarantee anything like the advertised speeds today. My previous question related to small businesses. Some of the most frustrated people in my constituency are small businesses in business parks, who could benefit hugely from an upgrade. Do you think the Government should be setting a separate USO for a small business, versus a household?
Daniel Butler: The evidence suggests that 10 megabits is sufficient for the average small business. An extensive study conducted by Communications Chambers for the Broadband Stakeholder Group found that in 2015, the average bandwidth requirement for a small business was 5 megabits per second. That was likely to increase to about 8 megabits per second by 2025.
As Mr Williams pointed out in the previous session, the bandwidth requirement of the average small business is likely to be less bandwidth-intense than the average household. The heavy-bandwidth applications that place the most pressure on a household connection— simultaneous usage and HD video—are less pronounced in a small business environment, where the majority of usage involves accessing Government websites, accessing websites more generally, sending emails and so on.
Claire Perry
Q That rather depends on the sort of small business. While that might be true for a farmer, for example, what I want in my constituency is the ability to have the sort of businesses that would locate to silicon roundabout come to a beautiful part of the country where property is much cheaper. I would be cautious about writing off rural areas as only ever being able to access Government websites and check their emails one at a time. I think we should be doing something much more ambitious with obligations—particularly for small business parks, so you have clusters of fibre around those.
David Wheeldon: We would probably part company with Virgin Media here, in as much as we do not think you should be constraining by type of usage in quite that way. All the history and evidence of the data that goes across our networks means we are seeing a continued exponential increase in data usage. Going back to what Daniel said earlier, it is hard to say that specific usages are worthy of a USO intervention and others are not. Those things will change over time, including small businesses—their use cases will change over time.
In the case of businesses and business parks, it is extraordinary that there are business parks, not just in rural areas but in city areas, that do not have sufficient fibre connections. Very often that is to do with the distortions in the market where it is to the benefit of the network operator to be selling expensive leased lines to businesses rather than investing in fibre to all premises.
When we come down to it, this is a problem based around the quality of the infrastructure we have at the moment and the incentives to continue to invest. As Paul Morris said, it is important that we get the USO right, but it must not stand in the way of the massive further investment we believe is required of the nation’s network.
Thangam Debbonaire (Bristol West) (Lab)
Q I am a little shocked to hear Mr Butler say that 10 megabits is okay for the average small business. In my constituency, high-tech industries and digital creative industries need something much more reliable, much more secure and a lot greater than 10 megabits. They are not just uploading the odd film; they are making the films. Can I push you on that? They need secure, reliable, consistent bandwidth. What on earth has blocked the roll-out of that so far in city centres as well as rural areas? What else could the Bill do to push business, provide the infrastructure or give Ofcom the teeth—whatever is needed—to help the high-tech and creative industries grow?
Daniel Butler: This is one part of the market where Paul’s concerns about market distortion are particularly pronounced, because the market for small business connectivity is evolving at a rapid pace. Broadband providers are beginning to target the types of use cases you outlined there: high-tech but small business where, realistically, a leased line is not an affordable solution. Virgin Media has been at the vanguard of product innovations to make symmetric business broadband connections available to high-tech businesses in London, but also outside of London, at more affordable, residential-type price points. This is one example where the market is evolving at a very rapid pace.
Business connectivity is starting to address the challenges you have identified. The use requirements I outline are what the evidence suggests is the typical requirement of a small business. Obviously, there will be outliers where the market is the right mechanism to deliver for those companies.
Thangam Debbonaire
Q I am not just talking about outliers, Mr Butler. You talked about providing to London and some areas outside London. London is overheating, with great respect to my London colleagues. A lot of these industries are looking to other cities and if they cannot get what they need they are going to stay put in London—and that is not good for the economy, both rural and urban. What else can be done by business or what else do you need in the Bill for this to be put right?
Paul Morris: As you will know, telecoms has got a lot going on at the moment. There are other things going on: we have an Ofcom strategic review, which is looking, in part, at how the relationship between Openreach works with the rest of the industry. There are a number of moving parts, not necessarily in the Bill, that need to be thought about.
I suggest we need to think about what we do next—that is, post-BDUK. I do not necessarily mean Government programme support, but what the ambition of the country is when it comes to traditional infrastructure. We have probably looked at other traditional infrastructure first; now it is time to look more at digital. That is beyond the Bill but it is something that needs to be done, certainly within this Parliament. We also need to start thinking about delivery because, frankly, that will take 10-plus years to do.
We need to look at the strategic review, including the relationship with Openreach. At least two of us here have that as businesses; frankly, that can be a bit more ambitious, deliver a better service, and be in control of its own investment, board and everything. Openreach needs to be independent. If that cannot work, then we have made the case to say that Openreach needs to be separate from BT. That is something that Ofcom needs to look at.
Within the Bill, the universal service obligation—you have both identified an issue. If you look at the Ofcom figures, small businesses are disadvantaged probably more than consumer households because you are not on the traditional phone network, effectively, if you are in a business park. So you have got the right point.
I would suggest that, with the USO the way it is today, we make a small step in the right direction with this idea of how we do more. I think Dan is right: there are connectivity options coming in as well. So it is a mixed picture, but I do agree—I do not think that 10 megabits is enough for most small businesses, unless of course they are one-person bands doing stuff for which they need the phone more than the computer. Again, it all comes down to a mixture of things going on that are in and around the legislation. There are a number of things going on.
Daniel Butler: I add one final point on provisions in the Bill that would help. There are provisions in the Bill that will reduce the cost of network expansion in the UK—an exercise that Virgin Media is currently undertaking with our £3 billion network expansion. That network expansion is benefiting business parks and small stay-at-home businesses. Last month, we announced 90 new business parks that we were connecting under Project Lightning. The specific way in which the Bill can support that is through reform of the electronic communications code that will lower the cost of and time taken to achieve a wayleave agreement. The measures in the Bill take us part of the way towards that reform, but could be more ambitious.
The Chair
Can I remind Members and witnesses to be as brief as possible? I call the Minister.
Matt Hancock
Q No—I was going to ask for more details on which bits of the Bill could help.
Kevin Brennan
Q I remember one of your predecessors in a predecessor company, Mr Butler, explaining to me why they were digging my street up in the 1990s. They basically said, “We are installing a straw to suck money out of people’s houses”, which I think is the best explanation I ever received of what was involved. On the electronic communications code, how can you assure us that its reform will actually benefit consumers principally and not just allow you to keep more of the money that you suck out of people’s houses?
Daniel Butler: The reforms that are envisaged will transform the economics of roll-out. The figures discussed in the previous session were a 40% reduction in the cost of roll-out. The primary way in which that benefits consumers is that that allows us to build to more premises on a commercial basis.
Virgin Media currently plans to build to 4 million premises by 2020. Wayleaves are a considerable line item on the balance sheet for that investment, and also it takes a lot of time to get agreement, so anything we can do to reduce the cost and improve the efficiency of getting those will have the consumer benefit of allowing us to connect up more premises. I mentioned that Government could be more ambitious in this regard. In effect, the Government’s reforms will deal with the worst abuses of the systems—that is communications providers’ exposure to ransom rents—but Ministers and the Secretary of State increasingly talk about broadband being equivalent to a utility and the reforms do not quite go that far. Water companies have the most advantageous wayleave regimes under their statutes. They do not pay what is called in the valuation jargon “consideration” and, as are result, they pay 60% less—these are Government’s figures—than communications providers.
Matt Hancock
I think the explanations coming from the witnesses are excellent. I did not have any other questions.
Nigel Huddleston
Q Are the switching proposals in the Bill, which make it easier for customers to switch and give them more power and information, a step in the right direction?
David Wheeldon: They clarify Ofcom’s existing powers, so to that extent they are a welcome clarification. We have some concerns about the direction of travel that Ofcom is going in, not least because we see and operate in a market where there is already extensive switching and all the customer satisfaction surveys suggest that the vast majority of customers are happy with it.
What we are worried about is that Ofcom might go down a direction that tries to mandate a certain type of switching between networks that do not have any obvious need or reason to engage with each other. It is one thing in telecoms where you have to exchange customer information and data, but in TV, where you do not have any need to speak to a different TV network or operator, the idea of putting in place a new system where we are required to talk to each other could end up being quite burdensome and bureaucratic.
I hope that, as we engage with Ofcom, we avoid doing that. In the end we want to make this as easy as possible for customers, because that is in all our interests. We compete pretty ferociously with each other on a day-to-day basis, so a system that works for customers is in all our interests. The provisions in the Bill that clarify Ofcom’s role are fine.
Matt Hancock
Q Could you remind me what proportion of the market Sky has?
David Wheeldon: In the overall broadband market we are below 40%, I believe. In TV, it is 60%—I am not sure quite what the breakdown between us and other pay TV providers is. We compete not just with Virgin and BT and others but increasingly with Netflix and free-to-air. Many of our customers will go to take a free-to-air package from us. So the market is pretty dynamic and I think that at the moment it seems to be working pretty well for customers.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Q I want to go back to the average speed, which we were talking about earlier. When you provide businesses with average services, and you give them average speed—give them the minimum they need to be average—you are locking them into being average businesses; you are not giving them the opportunity to be more ambitious. How do you square that with a programme of ambition for the 21st century, taking people forward? What do you do to encourage devolved Administrations such as the Scottish Government, and councils, where they want to go further and have faster speeds?
Paul Morris: We have got to figure out a way, and this is going to be a combination of things. We talked about the code earlier; that is part of it. How do you build the network? How do we make that easier? How do we focus on support that, frankly, has been there for more traditional infrastructure? We have talked about some of the other areas, such as how we ensure that Openreach serves its customer base better and has more ambition. That would get you to a point.
As you know, the Scottish Government have been thoughtful in this area. What do we do after that? I know you have got the 100% ambition, and there I think it is a case of a mixture of things. A better Openreach that is more independent, serves its customers better and is more ambitious gets you to a point. You then have either USO or some kind of intervention potentially in some areas where the industry can look at support and how that works across technologies.
So I think it is a combination of commercial roll-out, see how far we get—we will not know that until we reform the market—and then look at what is left and see where we go from there. I agree with you. I note that there is not a speed limit in the Bill and I think we do need to be more ambitious. Of course, we cannot solve this tomorrow, but we need to recognise that the data usage trajectory is upwards and we need to think in those terms. We do not build a little bit of a better railway; we build a much better railway. We need to think like that.
David Wheeldon: I absolutely concur with that. We look at this as a national service provider. We want to sell our TV services to every customer in the country if we can. We are agnostic about the kind of technology that we use, but increasingly using broadband services to do that is the way we are going. Therefore, if we are going to be ambitious, to enable companies like ours to continue to grow, invest and innovate, we need a national solution, and a national solution will depend upon the national network owner, which is Openreach. In the end, all these roads lead back to Openreach. That is why the structure of the industry does matter; the ability to get capital into the industry to invest in the kinds of future networks we need is critical. That is why we have made such a big noise about the structure of the industry and the Ofcom review. We really believe that it matters, not so much as a broadband provider, but as a user of the network. We want to be able to have a national solution.
Drew Hendry
Q Given that Openreach is pinning its position on getting 95% coverage by 4G by 2020, that surely leaves 5% in areas where they will be forced to use satellite. That is a group of consumers that cannot switch and cannot go across. What do you do for those people who find themselves in those geographically disadvantaged areas, where they are not going to be reached by that plan? How can you get that sense of ambition going for those people?
Daniel Butler: The first objective is to minimise the extent to which a backstop intervention, as you characterise it, is required. To our mind, Ofcom said a few things over the summer—it did not just talk about structural separation; it also talked about what the 10-year strategic direction for our sector should be and what conditions would best deliver for investment and for the consumer. It was unambiguous in saying that network competition, having multiple network operators in the ground and available to consumers, is the best driver of investment incentives, the best driver of superfast broadband penetration and the best driver of consumer outcomes.
To tie your two questions together, the Scottish Government have the opportunity to create the best possible environment for the deployment of new infrastructure using the devolved planning powers that they have at their disposal. Virgin Media is in the process of quite an extensive roll-out of our network in Scotland and I think there is an opportunity there to minimise the gap that is required for a universal service obligation to apply.
Nigel Adams
Q Returning to broadcast, I have a question for Daniel which may not come as a surprise, since I alluded to it on Second Reading. If you take out line rental and broadband charges, what is the cheapest way that someone can access a public service broadcasted channel, and how much does it cost on your platform?
Daniel Butler: Sorry, Nigel, if you debundle—?
Nigel Adams
The cost of the line rental and broadband charges, what would the charge be?
Daniel Butler: Our basic TV tier does not have a premium. If, as a customer, you get a triple-play bundle with a freeview-like TV service, it is effectively free; there is no added charge for the TV element. We do not sell TV as an individual product, if that is what you are asking.
Nigel Adams
Q Yes; it is all bundled in that cost. The reason I allude to it is that, clearly, there is currently no payment made to, effectively, the rights holders. A fair proportion—I would think maybe half—of your content is potentially driven through PSBs. I just wonder why you think that that is a reasonably fair position.
Daniel Butler: We think it is a fair outcome because there are flows of value in both directions—for the pay-TV operators in this market and the PSBs. As part of entering into the public service bargain, the public service broadcasters get a series of regulated benefits. The biggest of those are gifted spectrum and EPG prominence on our platform. EPG prominence guarantees them viewership, which translates into advertising revenue. From them, we get access to content, which is very valuable to our customers—it is much-loved content. That is the UK’s PSB bargain. Ofcom assesses that to be a balanced bargain, it does not think that either side is losing out as a result of that bargain, and the fact that PSBs continue to enter into that bargain reinforces the fact that they see it as sufficiently valuable too.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witnesses very much on behalf of the Committee for the evidence they have given.
Examination of Witnesses
Pete Moorey and James Legge gave evidence.
The Chair
We will now hear evidence from Which? and the Countryside Alliance. We have until 11 am for this session. Would the witnesses please introduce themselves for the record?
James Legge: I am James Legge, and I am head of political at the Countryside Alliance.
Pete Moorey: I am Pete Moorey, and I am head of campaigns at Which?
Louise Haigh
Q Should this Bill not contain a USO for mobile coverage?
James Legge: Yes, we think that it should.
Louise Haigh
Q What should that USO be?
James Legge: I think that a minimum at the moment should probably be about 3G but, a little like the USO for broadband, we need to be a bit more ambitious. We also have to realise that there is a big infrastructure problem for about 50% of rural premises. The infrastructure is not there to carry more than 10 megabits per second, and for one in five premises it will not carry more than 5 megabits. So there is not only the level at which the USO is set to begin with, but also the issue of upgrading infrastructure.
Louise Haigh
Q Do you think that there is potential for the USO to actually limit the investment for infrastructure in the future?
James Legge: It is important that it is seen in addition to the Government’s ambition to deliver superfast broadband at—at the moment—a speed of 24 megabits to 90% to 95% of premises. In my opinion it should really be seen as a safety net, as opposed to a situation in which we say, “Well, we’ve reached 10 megabits, we can leave it there.” If you take into consideration that universal access in the EU is being set at 30 megabits by 2020, and Sweden is looking at 100 megabits in the same timeframe, where we are is good but we have a way to go yet.
Pete Moorey: There is clearly a big issue in terms of mobile coverage. You may have seen the research we did with OpenSignal last week which pointed to the fact that in many parts of the country you can get access to a 4G signal only 50% of the time, while in London it is 70% of the time. Obviously, that is way behind countries such as the US and Canada where it is 80% of the time, and countries such as South Korea and Japan where it is 90% of the time. We have not specifically taken a position on a USO for mobile, but it is definitely something that needs consideration.
The other issue here is around what mobile operators themselves are doing with customers when they are in the phone shop and choosing a package. This includes the information that operators are providing to customers about the signal that they can expect, and indeed the opportunity that customers have to be able to get out of the contract when they are unable to get a signal.
Louise Haigh
Q What could the Bill do to achieve the level of investment in infrastructure that is necessary? Is separation of BT from Openreach absolutely vital for this?
Pete Moorey: We are satisfied with the position that Ofcom is taking on Openreach at this stage. One area where we are more concerned is around the way that Ofcom is seeking to regulate the standards for Openreach. We think there is a danger that actually regulators are not often well placed to do that and, as they set very prescriptive rules that operators have to achieve, operators are driven by those rules rather than good consumer outcomes. We would like to see Ofcom flip the way that they are looking at the new standards for Openreach and ensure that they are much more focused around consumer outcomes. That would drive the business to achieve against those measures rather than a set of prescriptive standards, which Openreach or others can say that they have achieved but actually has not resulted in a better service for customers.
Mark Menzies (Fylde) (Con)
Q On a slightly different point, I have a question for Which? around data sharing. Clearly, there are mixed views as to whether it is a good or a bad thing. I would like to understand what you think that the benefits would be, particularly to vulnerable groups, of the Government having access to this data?
Pete Moorey: In broad terms, we support the measures in the Bill and we see this from two perspectives. There is the work that we have done in our campaigning, particularly on areas such as energy, where we know that year after year the energy suppliers have said that they would like to be able to better target energy efficiency schemes at the most vulnerable households, and that they have struggled to do that. We think a lot of good steps could be taken as a result of that.
The other side is around the role we play in providing products and services for consumers. We run a number of excellent websites—Which? University, Which? Birth Choice, and Which? Elderly Care—which provide people with all the information they need to enable them to make a choice when they come to that decision. We have been hamstrung on occasion in being able to provide the richness of information that people would want when trying to make that decision where local authority data or other public service data have not been available. Taking steps in this direction would help not only Which? to do that better, but a lot of the other service providers in that space.
Kevin Brennan
Q On the point about coverage of broadband and mobile, where would we come in the European champions league of coverage? Will the Bill push us up the league at all, in your opinion?
James Legge: I cannot give you a precise figure. I am afraid I do not know the answer to where we lie in the overall league table of Europe.
Kevin Brennan
What do you think?
James Legge: I do not know. Our ambition certainly seems to be less than what the European Union intends to see delivered. I think there is scope for saying 10 is great, but we should be looking at more. We should also make sure that the USO moves up—I think the Bill makes provision for this—because there is no point in leaving it at 10 when we have 300.
Kevin Brennan
Q You listed a lot of countries that do better than us when you gave your answer earlier. If the Bill potentially brings some progress, are we running fast enough to keep up with our colleagues on the continent?
Pete Moorey: I think it was me who gave the list of countries. We can come back to you on that with the data we have on 3G and 4G and also on broadband.
Kevin Brennan
Q It would be very helpful if you could do that before we meet next week.
Pete Moorey: On the 10 megabit point, clearly for a lot of consumers it will not be enough; for others, it will be a godsend. Ofcom has done a pretty decent piece of work in understanding average consumer use at the moment. It has developed a speed that is probably appropriate to start, but will have to be addressed in time. The really important issue is how it does that and how it involves consumers in the process. There is a real danger that we get into an arbitrary point of view and say, “Well, it should be 15 or 20 megabits” rather than setting the speed with consumers themselves.
Claire Perry
Q I want to focus questions directly on Mr Legge. I represent a very rural constituency. We are very anxious about home building. We now have effective neighbourhood plans that rather than mandating giant developments plonked down wherever anybody wants them, require developers—often small developers—to work with communities. The preamble is to ask you whether you think the new law coming in next year to require automatic superfast broadband connection for sites of more than 100 homes is suitable for rural areas, or whether we ought to be going further and effectively making it a utility provision for all home builders.
James Legge: My view is very much that it should be seen as a utility provision. The whole way in which we have looked at the housing problem in rural areas has transformed over the last 10 years from the idea of plonking mini-towns on the edge of existing communities. We have realised that if you try to do that, all you do is create massive local opposition and nothing gets built. What you want is small-scale development that is sensitive and local to the community, provides local housing, and is affordable, often affordable in perpetuity.
The idea that you will only get broadband provision when you build 100 premises on the edge of a village or in a rural area is undesirable, simply on the grounds that where new properties are going in and we are putting in an infrastructure, it seems absurd not to take the opportunity. We would not say we are not going to put in electricity, water or, ideally, gas as well, although we do not have mains gas everywhere, to be fair. I think broadband is too important.
It is also important to realise that the population trend at the moment is a move from towns to rural areas. There is enormous potential. If you take a population of 10,000, there are more start-up businesses in rural areas. I think London and some of the major urban city centres exceed. The countryside is a largely missed opportunity, but all the signs are there that if it gets broadband it is ready to fire and go further; so the figure of 100 is too urban-centric in thinking.
Christian Matheson
Q Mr Legge, you talk about the need for a fair system of site rents for country landowners in terms of wayleaves and access.
James Legge: I do not think that I did—
Christian Matheson
There needs to be,
“clarity over the new system of valuation for site rents that is fair and equitable as well as a robust Code of Practice to ensure landowners, infrastructure providers and mobile phone operators are clear”.
Is there not a danger of conflict between looking after the needs of large landowners to get fair wayleave agreements on their properties and potentially preventing the roll-out of broadband and infrastructure services to other rural residents because we are keeping costs higher to benefit the landowners?
James Legge: I think we recognise that the new communications code must reduce the cost of putting in the infrastructure, both on public and private land, and must also encourage the sharing of masts and access to infrastructure. There is a difference between saying that we will do it and, say, paying a private landowner nothing, and paying them something that is reasonable and fair, taking account of the way in which we treat other utilities. I know that our view differs slightly, though, from some of the other landowning organisations that are focused on land ownership. We are very much focused on delivery to the consumer, but we think it should be fair, equitable and clear.
Matt Hancock
Q May I clarify that? You said that the new communication code must do those things. Did you mean by that, that it does do those things and that that is right, or that you do not think it fits what you set out? What you set out is entirely concurrent with the Bill.
James Legge: Yes, and we are supportive of that. We support the fact that we have got to start seeing broadband on the same par as a utility, as opposed to something where there is a premium cost to the provider, which limits provision—
Matt Hancock
Q I was seeking clarification on whether you are looking for something more than is in the Bill. You were saying that that is what is in the Bill and it is right that that goes through.
James Legge: Not at this stage.
Nigel Adams
Q I suspect that the Bill is not going to be subject to the most detailed discussion around the country. However, as a question to both of you, having had an opportunity to analyse the Bill, if we were all pitching this to our constituents across the country, what do you see as the key benefits for consumers?
Pete Moorey: The telecoms sector needs to catch up with where consumers are. That is part of what the Bill is trying to do: we need to recognise that people increasingly see their mobile phones and broadband as essential items. Yet we know that customer satisfaction is very low and that people are increasingly frustrated about their inability to get a signal or to get the broadband speed they are paying for.
There are critical things in the Bill that will start to bring the telecoms sector kicking and screaming into the 21st century. For me, those elements include switching—I think it is incredible that we do not have provider-led switching in the telecoms sector. Automatic compensation is very important. With water, electricity and gas, if we lose a connection we get a compensation payment, but that is not the case in telecoms. The appeals process, which we have heard a lot about this morning, has had a chilling effect on the regulator’s ability to introduce measures that would both improve competition in the sector and better protect consumers.
The final area, for us, is nuisance calls, which we know are some of the biggest bugbears that people face—they are sick to death with receiving annoying calls and texts. To put the ICO guidance on nuisance calls into statute is another step towards tackling that everyday menace.
James Legge: Yes, I think that switching and compensation are important: it is important to hold the feet of the telecoms companies to the fire. But there is possibly an opportunity in the legislation to empower the consumer. At the moment, we have a sort of opaqueness around data and provision. We do not have address-level data. If I want to decide where I am going to get my mobile or broadband from, I cannot just put in my address and find out that the company that provides the best service is x. I have to sign up to someone. Then I can test the level of my service through their internet connection as a customer.
If there was more transparency, and if people had the information to hand, they would be able to make better choices. The market would also be more competitive for mobile or broadband providers, because if they do not provide the coverage, they will lose customers. It is no good waiting for someone to sign up and then find out that switching is jolly difficult, so customers say, “Well, I’ll just put up with this and complain”. We do that terribly well.
We should be able to say, “No, sorry. You didn’t tell me this. I didn’t have the data. Your service is appalling. I’m switching, and it is easy.” The level of switching at the moment is extremely low. A previous witness suggested that there was general contentment, which is not my experience.
Calum Kerr
Q There has been a lot of discussion in this session about fixing mobile coverage. Do you think that the Bill will achieve that? It comes down to licence obligations. If we want to do it, we need to set the right licence obligations. I accept that you are going to get less money.
On the electronic communications code changes, if we want the measures to be about driving more coverage, should we actually just exclude existing sites—you will have a lot of landowners and we will have local government bodies that will lose a lot of money—and say, “Access will change but, in terms of valuations, let’s exclude existing sites; this is about you going to new sites and doing them more cheaply”?
James Legge: I had thought—if I have understood the question correctly—that the Minister indicated previously to the House that it was not going to be retrospective.
Calum Kerr
Q It is not retrospective, so you will not revisit deals. Essentially, when a site comes up for renewal, the valuation of that land will be treated differently, so costs will drop dramatically. My suggestion is that they should be excluded from a valuation perspective, and the old rules apply for valuation.
James Legge: So you keep the old rules at the renewal point for old sites.
Calum Kerr
So you will still see some price erosion, but not as much.
James Legge: I would have thought that anything that brings the cost down for the providers when it comes to rolling out and upgrading infrastructure—
Calum Kerr
Q This is existing infrastructure.
James Legge: But a lot of it needs upgrading.
Calum Kerr
Q They will be allowed to do it, but the rental cost of that land would go down.
James Legge: Well, we would agree with that. If the rental goes down and it costs less to upgrade the infrastructure, that is a good thing from our point of view. Presumably that would be under the newer system, not the older one. My understanding—and this may be wrong—is that the new code values land and access in a slightly different way, and the cost should be less to the person putting the infrastructure in. I had a discussion with the Local Government Association about that issue. The LGA said that it would potentially get slightly less money on public land, but that there are savings at the other end. If, for example, you have more efficient provision of digital government—“digital by default”—there could be savings at the other end. The LGA has a slightly mixed view. Yes, it might lose some income but, ditto, landowners will—
Calum Kerr
Okay. I do not think you understood my question, but I will leave it there.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
Q Mr Moorey, let us return to your comments about Which? being hamstrung by a lack of data sharing. Could you give a fuller explanation of that? Will you put on record the views of Which? about the public services delivery power, and the potential benefits that it might bring, particularly to the most vulnerable in society?
Pete Moorey: As I said, we are broadly supportive of the measures in the Bill. We are hamstrung from two perspectives. The first is a service delivery perspective. When we are delivering something such as our Which? elderly care website, we want to have the richest possible data available to help people make decisions. Yet on occasions when we have gone to certain local authority providers or certain care home providers, we have had an inability to gather that data and provide it in a comparable way. There is also the need to get that information in a clear and comparable format so that organisations like us can do that much better. It is something we have worked on a lot over the past few years with regard to universities. We are starting to see some of the data coming through at the kind of level that students want when they are making those choices. Clearly, having such legislation would better allow us to do that.
Chris Skidmore
Q Any comments on, particularly, the public services power, and how that might affect it?
Pete Moorey: No, no specific other comments on the Bill itself.
Thangam Debbonaire
Q I particularly direct this question at Mr Moorey, because I noticed you mentioned unsolicited calls and the problem of people receiving them despite registering with the Telephone Preference Service. I can declare that I am one of those. I am particularly concerned about the example of a constituent in a neighbouring constituency to mine, Olive Cook, who was one of Britain’s longest-serving poppy sellers, having started in 1938. She fell to her death after being plagued by nuisance callers, particularly from charities. My experience has been that there are also private companies making them. Who is it? Who makes nuisance calls? How are they being dealt with? Does the Bill go far enough to ensure that those companies are held responsible—the directors, if necessary? Should they be made more accountable? Can you tell me some more, please?
Pete Moorey: We have made a lot of progress, I think, on nuisance calls over the last three or four years. That is thanks to an awful lot of people around this table. The Government have made progress with the action plan that we have had, and then in setting up the taskforce, which Which? chaired. We have seen changes to the powers of the Information Commissioner’s Office, and it is now much better able to take action against nuisance callers, and hit them with bigger fines. Caller line identification has been introduced. However, you are right that there is still an awfully long way to go.
Nuisance calls come from a range of places, all over the place. Frequently they come from claims management companies and lead generators. Sometimes they come from reputable businesses. Sadly, too often they also come from scammers and fraudsters. The important measure in the Bill is putting the Information Commissioner’s code into statute, which I think will give it more clout. However, we agree that more could be done about director-level accountability. We recognise that many MPs support that, as do the Scottish Government. Indeed, the Information Commissioner herself, who I believe you are seeing this afternoon, has made supportive noises about it.
We would like director-level accountability to be introduced. It is important, because while in recent years the ICO has used its powers to fine companies, it has collected only four out of the 22 fines it has imposed in the past year. We are concerned that some of the more disreputable firms simply abolish themselves once they are fined—and they are phoenixing. Directors pop up elsewhere and continue the behaviour of making nuisance calls and sending texts. That behaviour needs to be stopped. We need to ensure that those directors are struck off, and that they cannot do the same thing again.
Thangam Debbonaire
Q Is the Telephone Preference Service system now completely pointless? My constituents say to me that they feel completely unprotected by it. Could the Bill do more to strengthen it?
Pete Moorey: It is not pointless. Our research shows that if people sign up to the TPS they usually have a reduction in calls. The problem is that there are too many firms out there that either just abuse the Telephone Preference Service and call people who are on the list, or indeed have consumers’ consent to call them, because, sadly, the customers have incorrectly ticked a box at some point, and thought they were not giving consent when they were giving it. More needs to be done about the data consent issue. I know that the Information Commissioner’s Office is doing more about it.
Kevin Brennan
Q So just to be clear, you would welcome amendments to the Bill that would strengthen action, including direct action against directors to avoid the shutting down of shell companies. Is there a case for some kind of aggravated offence where people are on the Telephone Preference Service, or where older people are specifically targeted in such a way?
Pete Moorey: I know there is a local police commissioner who is looking at the issue at the moment—particularly around making scam calls a hate crime. That is an interesting development. There is more that could be looked at in that area. I think a good start in the Bill would be the introduction of director-level accountability.
Kevin Brennan
I introduced a ten-minute rule Bill on this in 2003, so it is depressing that it is still a problem.
Kevin Brennan
It is according to the Government that there has been much progress.
Rishi Sunak (Richmond (Yorks)) (Con)
Q Mr Moorey, to elaborate on what you said about the provisions in the Bill to reform the appeals process, I think you described the current set-up as having a chilling effect on competition and pro-consumer impacts. It would be great if you would elaborate on what the Bill will do to improve that situation.
Pete Moorey: I think it has. I think the reason why we do not have things like a gain in provider-led switching and automatic compensation in the sector is in part due to the fact that the regulator has not felt able to move ahead with those things without appeal. Indeed, the speed at which the regulator acts is also a result of the appeals mechanism. We see proposals coming from Ofcom, particularly around things like switching, where it seems to go through a process of repeated consultation really out of a fear of being appealed by the companies. So I think it has had a chilling impact, and those are a couple of examples.
As other panel members have said, moving to a system that every other economic regulator in the country uses, which means that you are able to challenge on the process rather than the merits, would therefore be a significant change. I simply do not see the case for the telecoms sector being any different from energy or any other economically regulated sector.
Nigel Huddleston
Q A great frustration in rural areas in particular is being promised mobile coverage or broadband speed that is not delivered. What in the Bill can ensure that those speeds are delivered and that coverage is acceptable?
Pete Moorey: The automatic compensation element is an important part of that. If you are not receiving the speed or signal required, there could be a case for compensation. Clearly, a big issue that we want to see addressed that is not in the Bill is around the Advertising Standards Authority code and the fact that companies can advertise that you will get a certain speed when actually only 10% of their customers get that. I know that the ASA and its committees are looking at that, but I think that needs to move forward much quicker. That is clearly not something for the Bill, but it is something we would support.
Nigel Huddleston
Q What about terminating contracts?
Pete Moorey: Ofcom has taken a lot of steps in recent years to allow people to terminate contracts when they are not getting the speed they want. I think that is an area that needs to be looked at with regard to mobiles as well. Vodafone has introduced a new rule that means that you can get out of a contract within 30 days if you are not getting the signal you expected. Again, I do not think that is necessarily something for the Bill, but it is certainly something the regulator should be looking at.
Claire Perry
Q I wanted to confirm with Mr Legge that he was aware that there are provisions in the Bill to report broadband speed by household. That is something I welcome, and I hope he does too. I suppose that, like me, he is concerned about Mr Huddleston’s point about the provision of service speed to many households in rural areas. I hope that, as a representative of a large chunk of the country, he will welcome that as a positive step for many rural households.
James Legge: Yes, we absolutely think the Bill is very much a step in the right direction, but it is like everything: one can always ask for more and hope for more. Certainly, from our point of view, increasing competition and empowering the consumer is one of the most important aspects of the Bill. Otherwise, people are not in a position to make choices and then take action when the companies do not deliver. As I said, it is important that that is seen as a first step and not as, “We have got 10 megabits—then what?”
Calum Kerr
Q Have you considered whether automatic compensation should be not just for download speed but for upload speed? On the USO, have you put forward proposals on other, more granular levels, such as cost and latency as well as upload and download?
Pete Moorey: Our general view on compensation is that it really should be down to the regulator to set the specific areas that are covered. It needs to do that with consumers, and it needs to be based on consumer expectations. We need to look hard at what the consumer expectations in this world are. If you look at things like water and energy, actually a lot of those compensation levels and what they cover have not been reviewed for some time. We would not want a situation in telecoms where an arbitrary figure of £30 or £40 was set for particular things and then over time that was not addressed.
Calum Kerr
Q They are on or off-type services, though, which, to go your point, should do what it says on the tin. There should be a more granular—
Pete Moorey: Absolutely, and it should meet customers’ expectations for that service.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the whole Committee, I thank the witnesses for their evidence. Thank you very much.
Examination of Witnesses
Jeni Tennison and Mike Bracken gave evidence.
The Chair
Q We will now hear oral evidence from the Open Data Institute and the Co-op Group. We have until 11.25 am for this session. Will the witnesses please introduce themselves for the record?
Jeni Tennison: My name is Jeni Tennison. I am the CEO at the Open Data Institute.
Mike Bracken: My name is Mike Bracken. I am the Chief Digital Officer at the Co-operative Group.
Louise Haigh
Q Mike, to what extent do you think the Government have achieved their stated objective of open policy making by default?
Mike Bracken: I do not have a strong opinion on that. You would have to ask the person responsible overall for policy in Government or the Minister responsible.
Louise Haigh
Q Do the proposals on Government data sharing give you assurance that the Government have sufficiently considered safeguards on privacy, personal data and criteria for data sharing and time limitations?
Mike Bracken: In short, no. The sentiment behind many aspects of the Bill is to be applauded. The Co-op is a big supporter of open data and we see it as the catalyst of a digital economy. There are many complicated issues in this space, privacy and security being highest among them. While we applaud the sentiments of the Bill, there is much detail in the operational management of how data can and should be shared around Government Departments.
While we, of course, are looking for our members’ interests in accessing open sets of public data, it is not yet clear that the current sharing agreements of data within Government are appropriate and it would appear that the move away from open registers of data may hamper the appropriate levels of sharing data in Government. It also may be the case that the friction that our members and members of society feel in dealing with duplicate sets of data, inconsistent sets of data and so on, which lead to substantial problems in accessing Government and their services, may not be improved by the current sharing policies as set out.
Louise Haigh
Q Do you think it is a backward step in public trust in Government data handling?
Mike Bracken: We think the Bill is a positive forward step in terms of the sentiment behind it—
Louise Haigh
Q But in terms of public trust in Government data handling?
Mike Bracken: I could not comment on that. The sentiment of the Bill overall is a positive one, but there is not enough detail on the sharing arrangements within Government and within Government Departments.
Louise Haigh
Q Jeni, my first two questions to you, please.
Jeni Tennison: I agree with much of what Mike has said. The important thing for securing public trust in the measures in the Bill is to have them clearly communicated to the public. Currently, the way they are written is quite complicated and it is quite hard to understand what they really mean.
It is also hard to understand the measures in the Bill in the context of the existing data-sharing agreements in the public sector. We would like to see a lot more transparency around what existing measures there are within Government for data sharing and how the Bill fits with those existing measures so that people can really get to grips with the way in which data are flowing through Government.
Mike Bracken: May I add to that? I completely support what Jeni has said. The issue is that, while we agree that making services and data better and easier to access—the current sharing arrangements are opaque at best—we question the sentiment behind widening those sharing arrangements when they are currently not fully understood. It would appear that that sentiment is driven more by the operational structures of Whitehall and Government agencies than by the needs of users accessing that data.
Rishi Sunak
Q Jeni, do you mind giving us some specific examples that I can explain to my constituents about where increased use of data sharing can help their lives, and where public services can be improved, especially for those who are more vulnerable and benefit from public services? Where will data sharing help them to get the right policies to them?
Jeni Tennison: I tend to work in the open data area rather than around data sharing so many of the examples I tend to use are around data that are openly available for anyone to access using Share. The example I tend to use, which helps people to get to grips with it, is Citymapper, which makes data available to us to enable us to navigate around cities very easily.
When you look at the public sector and the kind of decisions it needs to make, such as planning decisions about where to place schools or transport links, where to put more infrastructure, such as physical infrastructure like mobile masts, for example, you can see that having better access to data about people’s needs—who they are and what their requirements are—might enable it to make better decisions about where those facilities are needed.
Q Thangam Debbonaire: This is for Jeni Tennison about the evidence in the Open Rights Group’s submission. In points 37 and 38 in your objections to the definition of pornographic material, you objected to the inclusion of all 18 materials.
Thangam Debbonaire
I am sorry. I mixed you up with someone else. I withdraw my question.
Chris Skidmore
Q Mr Bracken, you were responsible for launching the Government’s data programme when you were head of the Government Digital Service, so I think that some of the measures in the Bill are very much trying to build on your fantastic work when you were setting a vision for transforming the management and use of data within the Government and driving the use of data as a tool when making decisions in Government. Do you have thoughts about your work in GDS and how the Bill is now building on that work? How do you feel that the powers in the Bill will try to unlock some of the opportunities for better use of data?
Mike Bracken: Obviously, I am here as a member of the Co-op, so I am not going to give a review of my time in Government.
Chris Skidmore
You were closely integrated into this approach.
Mike Bracken: Of course. The first thing is to recognise the positive sentiment in the Bill. There is much in it to admire and applaud and I believe it builds on some of the sentiment for providing better public services that certainly ran through my time in Government, pressed by various Ministers in the Cabinet Office, one of whom is sitting next to you now.
As I said earlier, I think the concern is not the sentiment and support, but in the lack of detail and the operational change that goes with that. Much of the work done previously, to date, has centred around things like single, canonical sets of data, so that there are accurate datasets about individuals, about place, about location, and that they are used within Government. That sentiment too often flies in the face of Whitehall’s demand to own its own data, or what it perceives to be its own data, in every piece of Government. That leads to the current sharing agreements around Whitehall, which are opaque at best and create friction for our members, friction for members of society and friction for business. It is harder to find accurate data, it adds an economic downside to people dealing with Government. The Bill currently seems to move away from the sentiment of sorting that problem out. It seems to reinforce the primacy of Whitehall’s willingness to share more data in ways that it has been sharing data over time. So while the sentiment of the Bill overall is positive, this area of how data are shared does not seem to be looking at the sort of open registers, those single approaches, that we started to look at in the latter part of the previous Parliament.
Matt Hancock
Q Do you agree that those areas in addition that you are looking for are essentially administrative rather than legal changes? That is to say, the Government need to move in that direction, I would argue that they are moving in the direction that you set out, but you would not put that in a Bill; you need to make it happen.
Mike Bracken: Yes. Absolutely, Minister. Too often, there was an assumption that those things would need regulatory or Bill backing. My experience was pretty much 100% that that was not the case; these are largely about administrative and operational management of data across Whitehall and across Departments. Clearly, there are some areas, security being an obvious one, where you need more legal oversight, but primarily it is not so much about a Bill.
Kevin Brennan
Q First, I agree with what Jeni said about Citymapper; it has changed my life, it is absolutely fantastic—I actually use the bus now. However, either witness, will the Bill in any way help to avoid another care.data type of scandal?
Jeni Tennison: I will go back to what I was saying around transparency and public trust. For me, the important part of any dealing with private, personal data has to be that we drive towards trust by being open about what is being done with those data, by being transparent about how they are being used, what decisions are being made with them, whom they are being shared with and under what circumstances. Those principles of having openness around the handling of personal data are what will drive public trust in their use. We are in a very difficult space here between trying to balance the right to privacy of an individual with the public good we can get from the use of data. It is a fuzzy and difficult one, one we are going to be working through for many years, but having transparency and openness about it enables us to have an informed debate about where we are making that balance.
Kevin Brennan
Q Will the Bill make a care.data scandal in the future less likely, more likely or make no difference?
Jeni Tennison: For me, it does not go far enough in the need for transparency around where the sharing is going on, which is what I think would be necessary in order to avoid that.
Kevin Brennan
Q Finally, should the Bill be strengthened in some way in order to achieve that, and could that be done by an amendment to it, either of you?
Jeni Tennison: I think it could be strengthened by adding some provisions around openness and transparency, putting that at the heart of what you need to do whenever there is a data-sharing arrangement.
Claire Perry
Q I appreciate that point, but does either of you agree that there is a real asymmetry of concern between data which an individual may share with a public body and data which individuals share with a corporate body? One thing I am fascinated by, and it relates to so many provisions in the Bill, is that we knowingly or unknowingly give away rights to all kinds of information with every keystroke we make on the internet. We give huge chunks of personal information to corporate bodies which do not have the definition, as per clause 31, of improving the welfare of the individual, but are simply in it for profit. How would either of you help us to address that? Perhaps the Government—rightly, as an elected organisation—are being scrutinised about this, but my constituents are willy-nilly giving away vast chunks of their data, and in some cases giving away private data to very insecure storage facilities, almost without knowing it. It is frustrating for a Government who are trying to do the right thing to make digital government far more effective—as you did, Mike, during your time—to constantly be facing concerns and criticisms that ought properly to be applied to corporate bodies, but never are.
Mike Bracken: I completely understand your point about asymmetry and I agree with that. I would suggest that in corporate, public and private life it is a fair assumption that many people in the country are waking up to how their data have been used, how they have released that data and, increasingly, the repercussions of that, whether on social media, transactional data with a private company or, indeed, the public sector. There is a general awareness of and unease about some of the practices in all three of those sectors.
Having said that, the Government are held to a different account. Our members—we are a member-based organisation—hold the Co-op to a different account. We are the custodian of their data, and we are owned by our members. Many of the services we provide or help to provide to our members, such as wills, probate and funeral care, are deeply emotive at a certain time of life. These services often depend on Government data being in very good shape about place, location and identity. It is a fair correlation to draw that there should be a symmetry between how an organisation like us should be governed and managed, and the rules that should apply to public sector data. That is not to say that all the data regulations which apply to all corporations and trading organisations need to be exactly the same as those for the Government. That would be a political issue far beyond my position to comment on. The Co-op would look to see that the Government uphold the highest possible standards, so that our members can get the best possible use of that public data.
Jeni Tennison: Perhaps I can add a couple of things. Mike has made the point well that the Government need to act as a model for how to do data sharing well, and how to be open and transparent about handling people’s personal data. The Government are in a position of authority there. However, the other thing to bring up is that we have a mixed economy for the delivery of public services, including the private sector, charities and social enterprises. There should be some scrutiny over the way in which those organisations are handling personal data in the context of delivering those public services.
Nigel Huddleston
Q Do you believe that there is a lot of work to do in terms of clarity, in order to allay some of the fears about which data are being used here? I have had emails from constituents, and there is a perception that Excel spreadsheets will be floating around universities with personal financial data and personal health records. It is nothing like that, is it? It is aggregated and anonymised. What can we do, what can Government do and what can you do to help clarify the opportunity, move the debate on to those opportunities and allay some of those fears about data protection?
Jeni Tennison: I completely agree that there needs to be greater clarity about which data are being shared with whom, and why and how. You say that we are talking here about the transfer of aggregate and anonymised data, but that is not necessarily the case for some of the pieces of data sharing that are in the Bill. Some of it is the sharing of individual-level data, but it is not clear whether those are bulk Excel spreadsheets or through APIs. Those are the kinds of details that actually make a difference to how anybody might think about this trade-off between privacy and the public good.
Mike Bracken: Perhaps another way of thinking about that would be to question whether there needs to be sharing at all. As Jeni said, the sharing of data in Government has many different forms. Hopefully, many of those are secure and anonymised. I have doubts about our overall data-sharing operations, simply because Government is so distributed and there are so much data. Adding more sharing, without a clear landscape under which that is happening, seems to add more risk of privacy violation and more risk to security. Perhaps a way to think about it is access rather than sharing. Many Government Departments, and many organisations, are able to provide individual data points at point of request to people who they trust. You can query a dataset using an application programming interface rather than sharing an entire dataset with Departments. I suspect it is that willingness to share very large sets of data in different ways for the convenience of Government Departments and agencies that is the root cause of the unease around the data sharing part of the Bill.
Nigel Huddleston
Q Forgive me, but is that not the point? I said let us focus on the opportunities but already we have gone on to the negatives and the concerns. It is often commented that by sharing health records we could cure cancer in 10 years. If I asked my constituents if they would share their health information with a university, 99 out of 100 people would say yes. We have to be more ambitious on the communication of the opportunities as well, have we not?
Mike Bracken: The opportunities are great and we are very supportive of that, but I suspect you did not ask each individual constituent if we should share everybody’s health data. That is the point. When we ask for data sharing it is down to an individual’s point of view. The Government use bulk data too often when what is actually required is only a small amount of data by another Government Department. There are different mechanisms that can do that more safely.
Chris Skidmore
Q The research power for data sharing, as presented, has been welcomed by many academics and civil society groups as a means of unlocking data for research for public benefit. Looking particularly at that data sharing with non-public bodies, do you recognise the benefits of that power? In terms of your point about communicating the value of the Bill, we have the research power and other things. Looking at vulnerable groups, such as troubled families, we have other powers that are there for public benefit. How do you feel we should express that public benefit?
Jeni Tennison: The benefits of each of the individual pieces of the Bill are different kinds of benefits to different kinds of people. I think they need to be separated out in some ways and not be muddled up together. That is one of the challenges with the Bill.
Matt Hancock
Q Can you set out what some of those might be?
Jeni Tennison: The benefits?
Matt Hancock
Yes.
Jeni Tennison: The research power enables us to provide data to researchers and academics who can then draw broad conclusions about, for example, the state of our economy, or who can give more accurate and up-to-date information about the way in which we are functioning as a society in general. Having those is of great benefit to society. The pieces around fuel poverty and so on are more specific benefits to both individuals who would be touched by that and to the efficiency of the public sector.
Matt Hancock
Q And in terms of the data measures to tackle fraud?
Jeni Tennison: I have not looked at the detail of the individual measures for those kinds of benefits.
Louise Haigh
Q Is the point not that these benefits cannot be achieved unless the risks are tackled head-on, which is exactly what happened with the care.data issue in the last Parliament? That health data could not be shared because the public did not trust the Government or insurers with that risk. I worked in insurance at the time and that came as quite a blow. Is the point not that the Government need to take on the issues around transparency and trust in this Committee? Mike, on your point about data access, do you think Government are currently geared up to allow that, rather than bulk data sharing?
Mike Bracken: “Government” is a very broad organisation. There are promising moves around registers of data and around reinstating an address register. I do not know quite where that is now. There was a promising move but that now seems to be a little on the backburner—I am not sure. The point is that that question needs to be asked to 20-plus Government Departments and more than 300 agencies and non-departmental public bodies, each of which has a different answer. It is hard to summarise where “government” is at any one point without any open standards between those and without any clear framework under which Government data are already being shared.
The Chair
Order. That brings us to the end of the time allotted to the Committee to ask questions. On behalf of the Committee, I thank the witnesses for their evidence.
Digital Economy Bill (Second sitting)
Tuesday 11th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 11 October 2016 - (11 Oct 2016)
The Chair
Colleagues and members of the public, welcome to our second evidence session on the Digital Economy Bill. Before we get under way and introduce our first set of witnesses, a number of colleagues wish to declare an interest.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I do not have any direct interests, but for full transparency I draw the Committee’s attention to my share ownership in Teclan Ltd, which is in the Register of Members’ Financial Interests.
Nigel Huddleston (Mid Worcestershire) (Con)
Again for full transparency, prior to becoming an MP I worked for Google, in which I have a small share interest at the moment.
Nigel Adams (Selby and Ainsty) (Con)
As I stated in the earlier session, I am a director and shareholder of two telecommunications businesses, and I believe my wife is also a director and shareholder.
Examination of Witnesses
David Austin and Alan Wardle gave evidence.
The Chair
Q 83 For this session we have until 2.45 pm. Will the witnesses please introduce themselves for the record?
David Austin: My name is David Austin. I am the chief executive of the British Board of Film Classification.
Alan Wardle: I am Alan Wardle, head of policy and public affairs at the National Society for the Prevention of Cruelty to Children.
Louise Haigh (Sheffield, Heeley) (Lab)
Q David, am I right in interpreting the amendments that the Government tabled last night as meaning that you are intended to be the age verification regulator?
David Austin: That is correct. We reached heads of agreement with the Government last week to take on stages 1 to 3 of the regulation.
Louise Haigh
Q Are you sufficiently resourced to take on that role?
David Austin: We will be, yes. We have plenty of time to gear up, and we will have sufficient resource.
Louise Haigh
Q Will it involve a levy on the porn industry?
David Austin: It will involve the Government paying us the money to do the job on our usual not-for-profit basis.
Louise Haigh
Q What risks do you envisage in people handing over their personal data to the pornographic industry?
David Austin: Privacy is one of the most important things to get right in relation to this regime. As a regulator, we are not interested in identity at all. The only thing that we are interested in is age, and the only thing that a porn website should be interested in is age. The simple question that should be returned to the pornographic website or app is, “Is this person 18 or over?” The answer should be either yes or no. No other personal details are necessary.
We should bear in mind that this is not a new system. Age verification already exists, and we have experience of it in our work with the mobile network operators, where it works quite effectively—you can age verify your mobile phone, for example. It is also worth bearing in mind that an entire industry is developing around improving age verification. Research conducted by a UK adult company in relation to age verification on their online content shows that the public is becoming much more accepting of age verification.
Back in July 2015, for example, this company found that more than 50% of users were deterred when they were asked to age verify. As of September, so just a few weeks ago, that figure had gone down to 2.3%. It is established technology, it is getting better and people are getting used to it, but you are absolutely right that privacy is paramount.
Louise Haigh
Q Are you suggesting that it will literally just be a question—“Is the user aged 18?”—and their ticking a box to say yes or no? How else could you disaggregate identity from age verification?
David Austin: There are a number of third-party organisations. I have experience with mobile phones. When you take out a mobile phone contract, the adult filters are automatically turned on and the BBFC’s role is to regulate what content goes in front of or behind the adult filters. If you want to access adult content—and it is not just pornography; it could be depictions of self-harm or the promotion of other things that are inappropriate for children—you can go to your operator, such as EE, O2 or Vodafone, with proof that you are 18 or over. It is then on the record that that phone is age verified. That phone can then be used in other contexts to access content.
Louise Haigh
Q But how can that be disaggregated from identity? That person’s personal data is associated with that phone and is still going to be part of the contract.
David Austin: It is known by the mobile network operator, but beyond that it does not need to be known at all.
Louise Haigh
Q And is that the only form of age verification that you have so far looked into?
David Austin: The only form of age verification that we, as the BBFC, have experience of is age verification on mobile phones, but there are other methods and there are new methods coming on line. The Digital Policy Alliance, which I believe had a meeting here yesterday to demonstrate new types of age verification, is working on a number of initiatives.
Claire Perry (Devizes) (Con)
Q May I say what great comfort it is to know that the BBFC will be involved in the regulatory role? It suggests that this will move in the right direction. We all feel very strongly that the Bill is a brilliant step in the right direction: things that were considered inconceivable four or five years ago can now be debated and legislated for.
The fundamental question for me comes down to enforcement. We know that it is difficult to enforce anything against offshore content providers; that is why in the original campaign we went for internet service providers that were British companies, for whom enforcement could work. What reassurance can you give us that enforcement, if you have the role of enforcement, could be carried out against foreign entities? Would it not be more appropriate to have a mandatory take-down regime if we found that a company was breaking British law by not asking for age verification, as defined in the Bill?
David Austin: The BBFC heads of agreement with the Government does not cover enforcement. We made clear that we would not be prepared to enforce the legislation in clauses 20 and 21 as they currently stand. Our role is focused much more on notification; we think we can use the notification process and get some quite significant results.
We would notify any commercially-operated pornographic website or app if we found them acting in contravention of the law and ask them to comply. We believe that some will and some, probably, will not, so as a second backstop we would then be able to contact and notify payment providers and ancillary service providers and request that they withdraw services from those pornographic websites. So it is a two-tier process.
We have indications from some major players in the adult industry that they want to comply—PornHub, for instance, is on record on the BBC News as having said that it is prepared to comply. But you are quite right that there will still be gaps in the regime, I imagine, after we have been through the notification process, no matter how much we can achieve that way, so the power to fine is essentially the only real power the regulator will have, whoever the regulator is for stage 4.
For UK-based websites and apps, that is fine, but it would be extremely challenging for any UK regulator to pursue foreign-based websites or apps through a foreign jurisdiction to uphold a UK law. So we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal. We think that that would be effective.
Claire Perry
Q Am I right in thinking that, for sites that are providing illegally copyrighted material, there is currently a take-down and blocking regime that does operate in the UK, regardless of their jurisdiction?
David Austin: Yes; ISPs do block website content that is pirated. There was research published earlier this year in the US that found that it drove traffic to pirated websites down by about 90%. Another tool that has been used in relation to IP protection is de-indexing, whereby a search engine removes the infringing website from any search results. We also see that as a potential way forward.
Thangam Debbonaire (Bristol West) (Lab)
Q First, can I verify that you both support adding in the power to require ISPs to block non-compliant sites?
David Austin: Yes.
Alan Wardle: Yes, we support that.
Thangam Debbonaire
Q Good. That was quick. I just wanted to make sure that was there. What are your comments on widening the scope, so that age verification could be enforced for matters other than pornography, such as violent films or other content that we would not allow in the offline world? I am talking about things such as pro-anorexia websites. We know that this is possible to do in certain formats, because it is done for other things, such as copyright infringement. What are your views on widening the scope and the sanctions applying to that?
Alan Wardle: We would support that. We think the Bill is a really great step forward, although some things, such as enforcement, need to be strengthened. We think this is an opportunity to see how you can give children parity of protection in the online and the offline worlds.
It is very good, from our perspective, that the BBFC is doing this, because they have got that expertise. Pornography is not the only form of harm that children see online. We know from our research at the NSPCC that there are things like graphic violence. You mentioned some of the pro-anorexia and pro-suicide sites, and they are the kind of things that ought to be dealt with. We are supporting developing a code of practice with industry to work out what those harms are—and that is very much a staged approach.
We take it for granted that when, for instance, a child goes to a youth group or something like that, we make sure there are protections there, and that the staff are CRB checked. Somehow it seems that for children going on to the internet it is a bit like the wild west. There are very few protections. Some of the content really is upsetting and distressing to children. This is not about adults being blocked from seeing adult content. That is absolutely fine; we have no problem with that at all. But it is about protecting children from seeing content that is inappropriate for them. We would certainly support that widening, but obviously doing it in a staged way so that the regulator does not take on too much at once. We would certainly support that.
David Austin: I would echo what Alan says. We see this Bill as a significant step forward in terms of child protection. We absolutely agree with the principle of protecting children from a wider range of content—indeed, that is what we do in other areas: for example, with the mobile network operators and their adult filters. Like Alan, I think we see it in terms of more of a staged approach. The BBFC taking on this role is a significant new area of work—quite a challenge to take on board. I think there is a potential risk of overloading the Bill if we try to put too much on it, so I would very much support the NSPCC’s phased approach.
Thangam Debbonaire
Q Is there anything further that you think needs to be added to the Bill to make the sanctions regime work? I am also thinking—at the risk of going against what you just said, Mr Austin—about whether or not we should be considering sites that are not designed for commercial purposes but where pornography or other harmful material is available on a non-commercial basis; or things not designed for porn at all, such as Twitter timelines or Tumblr and other social media, where the main purpose may not be pornography or other harmful material, but it is available. Do you think the Bill has enough sanctions in it to cope with all of that, or should that be added? Is there anything else you would like to add?
David Austin: There were a few questions. I will try to answer them all, but if I miss any of them please come back to me. In terms of sanctions, I have talked about ISP blocking and de-indexing. We think those could be potentially effective steps. In terms of commercial pornography, we have been working on devising a test of what that is. The Bill states explicitly that the pornography could be free and still provided on a commercial basis. I do not think it is narrowing the scope of the regulation an awful lot by specifying commercial pornography. If there are adverts, if the owner is a corporate entity, if there are other aspects—if the site is exploiting data, for example: there are all sorts of indications that a site is operating on a commercial basis. So I do not see that as a real problem.
In relation to Twitter, which you mentioned, what the Bill says the regulator should do is define what it sees as ancillary service providers. Those are organisations whose work facilitates and enables the pornography to be distributed. There is certainly a case to argue that social media such as Twitter are ancillary service providers. There are Twitter account holders who provide pornography on Twitter so I think you could definitely argue that.
I would argue that Twitter is an ancillary service provider, as are search engines and ISPs. One of the things that we plan to do in the next weeks and months would be to engage with everyone that we think is an ancillary service provider, and see what we can achieve together, to try and achieve the maximum protection we can through the notification regime that we are taking on as part 3 of the Bill.
The Chair
Just before we move on, shall we see if Mr Wardle also wants to contribute to things that should be in the Bill?
Alan Wardle: On that point, I think it is important for us that there is clarification—and I would agree with David about this—in terms of ensuring that sites that may for instance be commercial but that are not profiting from pornography are covered. Again, Twitter is an example. We know that there are porn stars with Twitter accounts who have lots of people following them and lots of content, so it is important that that is covered.
It is important that the legislation is future-proofed. We are seeing at the NSPCC through Childline that sexual content or pornography are increasingly live-streamed through social media sites, and there is self-generated content, too. It is important that that is covered, as well as the traditional—what you might call commercial—porn. We know from our research at the NSPCC that children often stumble across pornography, or it is sent to them. We think that streamed feeds for over-18s and under-18s should be possible so that sort of content is not available to children. It can still be there for adults, but not for children.
Nigel Adams
Q Can you give us your perspective on the scale of the problem of under-18s’ access to this sort of inappropriate content? I guess it is difficult to do a study into it but, through the schools network and education departments, do you have any idea of the scale of the issue?
Alan Wardle: We did research earlier this year with the University of Middlesex into this issue. We asked young people—under 18s—whether they had seen pornography and when. Between the ages of 11 and 18, about half of them had seen pornography. Obviously, when you get to older children—16 and 17-year-old-boys in particular—it was much higher. Some 90% of those 11 to 18-year-olds had seen it by the age of 14. It was striking—I had not expected this—that, of the children who had seen it, about half had searched for it but the other half had stumbled across it through pop-ups or by being sent stuff on social media that they did not want to see.
It is a prevalent problem. If a determined 17-year-old boy wants to see pornography, undoubtedly he will find a way of doing it, but of particular concern to us is when you have got eight, nine or 10-year-old children stumbling across this stuff and being sent things that they find distressing. Through Childline, we are getting an increasing number of calls from children who have seen pornographic content that has upset them.
Nigel Adams
Q Has there been any follow-on, in terms of assaults perpetrated by youngsters as a result of being exposed to this?
Alan Wardle: It is interesting to note that there has been an exponential rise in the number of reports of sexual assaults against children in the past three or four years. I think it has gone up by about 84% in the past three years.
Nigel Adams
Q By children?
Alan Wardle: Against children. Part of that, we think, is what you might call the Savile effect—since the Savile scandal there has been a much greater awareness of child abuse and children are more likely to come forward, which we think is a good thing. But Chief Constable Simon Bailey, who is the national lead on child protection, believes that a significant proportion of that is due to the internet. Predators are able to cast their net very widely through social networking sites and gaming sites, fishing for vulnerable children to groom and abuse.
We believe that, in developing the code of practice that I talked about earlier, that sort thing needs to be built in to ensure that children are protected from that sort of behaviour in such spaces. The internet is a great thing but, as with everything, it can be used for darker purposes. We think there is increasing evidence—Simon Bailey has said this, and more research needs to be done into the scale of it—that children, as well as seeing adult content, are increasingly being groomed for sex online.
Nigel Adams
Q Mr Austin, what constructive conversations and meetings have you had with ISPs thus far, in terms of the potential for blocking those sites—especially the sites generated abroad?
David Austin: We have not had any conversations yet, because we signed the exchange of letters with the Government only last Thursday and it was made public only today that we are taking on this role. We have relationships with ISPs—particularly the mobile network operators, with which we have been working for a number of years to bring forward child protection on mobile devices.
Our plan is to engage with ISPs, search engines, social media—the range of people we think are ancillary service providers under the Bill—over the next few weeks and months to see what we can achieve together. We will also be talking to the adult industry. As we have been regulating pornography in the offline space and, to an extent, in the online space for a number of years, we have good contacts with the adult industry so we will engage with them.
Many companies in the adult industry are prepared to work with us. Playboy, for instance, works with us on a purely voluntary basis online. There is no law obliging it to work with us, but it wants to ensure that all the pornography it provides is fully legal and compliant with British Board of Film Classification standards, and is provided to adults only. We are already working in this space with a number of players.
Nigel Huddleston
Q Obviously, the BBFC is very experienced at classifying films according to certain classifications and categories. I am sure it is no easy task, but it is possible to use an objective set of criteria to define what is pornographic or disturbing, or is it subjective? How do you get that balance?
David Austin: The test of whether something is pornographic is a test that we apply every single day, and have done since the 1980s when we first started regulating that content under the Video Recordings Act 1984. The test is whether the primary purpose of the work is to arouse sexually. If it is, it is pornography. We are familiar with that test and use it all the time.
Nigel Huddleston
Q In terms of skills and resources, are you confident you will be able to get the right people in to do the job properly? I am sure that it is quite a disturbing job in some cases.
David Austin: Yes. We already have people who have been viewing pornographic content for a number of years. We may well need to recruit one or two extra people, but we certainly have the expertise and we are pretty confident that we already have the resources. We have time between now and the measures in the Bill coming into force to ensure that we have a fully effective system up and running.
The Minister for Digital and Culture (Matt Hancock)
Q I just want to put on the record that we are delighted that the BBFC has signed the heads of agreement to regulate this area. I cannot think of a better organisation with the expertise and the experience to make it work. What proportion of viewed material do you think will be readily covered by the proposed mechanism in the Bill that you will be regulating the decision over but not the enforcement of?
David Austin: I am not sure that I understand the question.
Matt Hancock
Q I am thinking about the scale of the problem—the number of views by under-18s of material that you deem to be pornographic. What proportion of the problem do you think the Bill, with your work, will fix?
David Austin: So we are talking about the amount of pornography that is online?
Matt Hancock
Q And what is accessed.
David Austin: Okay. As you all know, there is masses of pornography online. There are 1.5 million new pornographic URLs coming on stream every year. However, the way in which people access pornography in this country is quite limited. Some 70% of users go to the 50 most popular websites. With children, that percentage is even greater; the data evidence suggests that they focus on a relatively small number of sites.
We would devise a proportionality test and work out what the targets are in order to achieve the greatest possible level of child protection. We would focus on the most popular websites and apps accessed by children—those data do exist. We would have the greatest possible impact by going after those big ones to start with and then moving down the list.
Matt Hancock
Q So you would be confident of being able to deal with the vast majority of the problem.
David Austin: Yes. We would be confident in dealing with the sites and apps that most people access. Have I answered the question?
Matt Hancock
Q Yes. Given that there is a big problem that is hard to tackle and complicated, I was just trying to get a feel for how much of the problem you think, with your expertise and the Bill, we can fix.
David Austin: We can fix a great deal of the problem. We cannot fix everything. The Bill is not a panacea but it can achieve a great deal, and we believe we can achieve a great deal working as the regulator for stages 1 to 3.
Louise Haigh
Q My question follows on neatly from that. While I am sure that the regulation will tackle those top 50 sites, it obviously comes nowhere near tackling the problems that Mr Wardle outlined, and the crimes, such as grooming, that can flow from those problems. There was a lot of discussion on Second Reading about peer-to-peer and social media sites that you have called “ancillary”. No regulation in the world is going to stop that. Surely, the most important way to tackle that is compulsory sex education at school.
Alan Wardle: Yes. In terms of online safety, a whole range of things are needed and a whole lot of players. This will help the problem. We would agree and want to work with BBFC about a proportionality test and identifying where the biggest risks are to children, and for that to be developing. That is not the only solution.
Yes, we believe that statutory personal, social and health education and sexual relationships education is an important part of that. Giving parents the skills and understanding of how to keep their children safe is also really important. But there is a role for industry. Any time I have a conversation with an MP or parliamentarian about this and they have a child in their lives—whether their own, or nieces or nephews—we quickly come to the point that it is a bit of a nightmare. They say, “We try our best to keep our children safe but there is so much, we don’t know who they are speaking to” and all the rest of it.
How do we ensure that when children are online they are as safe as they are when offline? Of course, things happen in the real world as well and no solution is going to be perfect. Just as, in terms of content, we would not let a seven-year-old walk into the multiplex and say, “Here is ‘Finding Nemo’ over here and here is hard core porn—off you go.”
We need to build those protections in online so we know what children are seeing and to whom they speaking and also skilling up children themselves through school and helping parents. But we believe the industry has an important part to play in Government, in terms of regulating and ensuring that spaces where children are online are as safe as they can be.
Christian Matheson (City of Chester) (Lab)
Q To follow on from the Minister’s question, you feel you are able to tackle roughly the top 50 most visited sites. Is there a danger that you then replace those with the next top 50 that are perhaps less regulated and less co-operative? How might we deal with that particular problem, if it exists?
David Austin: When I said “the top 50”, I was talking in terms of the statistics showing that 70% of people go to the top 50. We would start with the top 50 and work our way through those, but we would not stop there. We would look to get new data every quarter, for example. As you say, sites will come in and out of popularity. We will keep up to date and focus on those most popular sites for children.
We would also create something that we have, again, done with the mobile operators. We would create an ability for members of the public—a parent, for example—to contact us about a particular website if that is concerning them. If an organisation such as the NSPCC is getting information about a particular website or app that is causing problems in terms of under-age access, we would take a look at that as well. In creating this proportionality test what we must not do is be as explicit as to say that we will look only at the top 50.
First, that is not what we would do. Secondly, we do not want anyone to think, “Okay, we don’t need to worry about the regulator because we are not on their radar screen.” It is very important to keep up to date with what are the most popular sites and, therefore, the most effective in dealing with under-age regulation, dealing with complaints from members of the public and organisations such as the NSPCC.
Alan Wardle: I think that is why the enforcement part is so important as well, so that people know that if they do not put these mechanisms in place there will be fines and enforcement notices, the flow of money will be stopped and, crucially, there is that backstop power to block if they do not operate as we think they should in this country. The enforcement mechanisms are really important to ensure that the BBFC can do their job properly and people are not just slipping from one place to the next.
Claire Perry
Q Of those top 50 sites, do we know how many are UK-based?
David Austin: I would guess, none of them. I do not know for sure, but that would be my understanding.
Claire Perry
Q Secondly, I want to turn briefly to the issue of the UK’s video on demand content. My reading around clause 15 suggests that, although foreign-made videos on demand will be captured by the new provisions, UK-based will continue to be caught by Communications Act 2003 provisions. Do you think that is adequate?
David Austin: That is my understanding as well. We work very closely with Ofcom. Ofcom regulates UK on demand programme services as the Authority for Television On Demand, but it applies our standards in doing so. That is a partnership that works pretty effectively and Ofcom has done an effective job in dealing with that type of content. That is one bit that is carved out from the Bill and already dealt with by Ofcom.
The Chair
We have given the witnesses a good half-hour grilling, so if no one is seeking to catch my eye—yes, Calum?
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
May I move on to intellectual property?
Calum Kerr
Q Thank you. There are some welcome measures in the Bill relating to making the protection of intellectual property online as same as it is offline. I note, though, that there is some concern about search engines and how intellectual property would be policed. What is your view on how that will work? Do there need to be additional powers?
David Austin: To be honest, we do not deal with intellectual property. Our core work is the protection of children, and intellectual property is another issue. We do work with an industry for which the protection of intellectual property is very important, but I am afraid I am not the person to ask.
Alan Wardle: I am not an expert on intellectual property, regrettably.
The Chair
Colleagues, are there any other questions for these excellent witnesses? No. In that case, thank you very much indeed, David and Alan, for your evidence. We appreciate it.
Examination of witnesses
Dr Edgar Whitley and Mr Scott Coates gave evidence.
The Chair
Q We have roughly 45 minutes for this group of witnesses, if necessary. Will the witnesses please introduce themselves?
Dr Whitley: My name is Dr Edgar Whitley. I am an academic at the London School of Economics. Of particular importance for this session is the fact that I am the co-chair of the privacy and consumer advisory group of the Government Digital Service.
Scott Coates: Good afternoon. My name is Scott Coates and I am the CEO of the Wireless Infrastructure Group, an independent British wireless infrastructure company that builds and operates communication towers and fibre networks.
Louise Haigh
Q In your written evidence, Mr Coates, you talked about the need for greater diversity in the ownership of mobile infrastructure. Does the Bill go far enough on that?
Scott Coates: We welcome the measures in the Bill to improve the speed at which infrastructure can be deployed and to improve the economics of deploying the infrastructure. It is critical to understand that there are different ways of deploying infrastructure. There are different ownership models, for which the Bill could have different impacts. When I say “infrastructure”, I mean the kind of mobile and fixed infrastructure that you see in the field, whether that is cables, ducts, cabinets or communication tower facilities.
There are two different types of owners of those types of infrastructure. First, the vertically integrated players are effectively building and operating that infrastructure for their own networks, primarily, and their business case is based on their economic use of that infrastructure. Secondly, you have a growing pool of independent infrastructure companies, of which we are one. We are very different from the traditional, vertically integrated players in that we are investing in infrastructure not for our own network, but to provide access, on a shared basis, to all other networks.
Louise Haigh
Q What are the current proportions for ownership?
Scott Coates: If I talk about mobile infrastructure, around a third of the UK’s communications towers—of which we think there are around 27,000 in the UK—are independently operated. It is really interesting that, globally, there has been a very firm shift over the past decade towards more independent operation of such upstream digital infrastructure.
Currently, more than 60% of all communication towers globally are held in an entity separate from the networks that use them. In countries such as India or the US, that figure is somewhere between 80% and 90%. There are real benefits that flow from the independent ownership of infrastructure. We are trying to do more in the UK, but the UK currently lags behind in the global statistics I mentioned.
Louise Haigh
Q Does the Bill do anything to address that?
Scott Coates: One of the things that we acknowledge and welcome in the Bill is that it is very clear about maintaining investment incentives—not just for the vertically integrated players, but for the independent infrastructure players such as ourselves—
Louise Haigh
Q It will not do anything to address the proportion, will it? It will only entrench the division already there.
Scott Coates: I do not think that the Bill does anything to encourage more independent infrastructure. The Government’s policy position at the moment is very clear: they want to maintain investment incentives for independent infrastructure. To achieve clarity on this requires that the Bill is worded very carefully.
When we deploy our tariff facilities and infrastructure on or adjacent to land, as things are now one of the definitions of UK land often covers things that sit on that land. One of the potential risks is that if the activities we engage in and the facilities that we deploy are not carefully carved out, they risk being treated as land. Under the new valuations principles in the communications code, that potentially risks giving them no value or low value, which would obviously be devastating to investment appetite. The consequence of that would be further concentration of infrastructure ownership in the hands of the larger, vertically integrated players who have different incentives from us when they approach this.
Louise Haigh
Q So there is potential for this to get worse, but what could be done to actually encourage more independently owned infrastructure?
Scott Coates: We would like to see a carve-out that is as clear as possible for the activities that we are engaged in. We would like to see it made absolutely clear that the communications code, which is a compulsory purchase tool to bring land into the telecoms sector, does not drift beyond that focus and risk entering into what is really Ofcom’s territory, which is to govern the relationships between telecoms companies.
Louise Haigh
Q Dr Whitley, if I may jump to part 5 of the Bill, we heard earlier that there were concerns that the Government have not taken sufficiently into account safeguards around privacy and personal data. Do you think that this strikes the right balance between open policy-making and privacy?
Dr Whitley: My main concern with part 5 is that the detail is just not there. The codes of practice that one would expect to have there, which would give the details about how privacy might be protected, are not present. We have been involved with the privacy and consumer advisory group. As far as I can tell, we had our first meeting with the team who were developing these proposals back in July 2013. We said from the very beginning that we want detail, because when we have specific details we can give advice and suggestions and review it, but we have never had that level of specific detail.
Louise Haigh
Q So the proposals do not reflect at all the three years of consultation that have taken place?
Dr Whitley: Obviously, that is reflected in some parts of the proposals, but we asked for more details specifically on how privacy will be protected regarding the data-sharing proposals, and that is still not there.
Louise Haigh
Q Should that detail be in primary legislation?
Dr Whitley: Whether it is in primary legislation or in codes of practice, my personal view is that you need a certain level of detail to be able to make an informed decision. Otherwise there will be some vague position of, “We will share some data with other people within Government. Trust us, because we are going to develop some codes of practice that will be consulted on and will then be put in front of Parliament. There will be protections and it will all be fine”. We are saying that there are lots of different ways of doing that. The earlier you give us at least a first attempt at those details, the better we can improve it.
Louise Haigh
Q In that period of consultation, was the detail around transparency never discussed?
Dr Whitley: It depends. There has been talk along the lines of there being codes of practice and liaison with the Information Commissioner’s Office, so at a very high level there has obviously been some discussion. But at the very specific level—for example, the civil registration clauses talk both about allowing a yes/no check around whether there is a birth certificate associated with a family, while on the other hand there will be bulk data sharing within Government so that different Departments can know stuff and possibly make things better for society.
One half of that seems to be quite specific, and you can see how it could well be designed as a simple “Does a birth certificate exist for this person?” and the answer is yes or no. The privacy protections around that are reasonably well known and not very much data is being shared. Then the other illustration just says, “we will share these data with other bits of Government” and there is nothing there about what kind of privacy protections might be put in place. There are many different ways in which that can be done, but until we have some specific details, we cannot give you sensible reviews as to whether that is a good or not so good way of doing it.
Nigel Huddleston
Q Mr Coates, what role should wireless technologies play in achieving the universal service obligation?
Scott Coates: There is no doubt that for the last 5%, maybe a greater proportion than that, wireless technologies have a significant role to play. Six of the seven trials run by the Department for Culture, Media and Sport earlier this year were of a wireless-based structure. I think there is a role for it. It is also interesting, as you look beyond 10 megabits to the future when universal service means something far more substantial than that, that a new disruptive technology is coming.
Everyone is talking about 5G; it does not really exist at this stage, but we know it is going to be ultra-high bandwidth, ultra-low latency, with the potential to be a disruptive technology and replace fixed line to the home. Some countries around the world that have not had the wave of fixed line technology roll-out will be moving straight to wireless as their domestic broadband service.
Nigel Huddleston
Q What kind of timescales were you thinking about for the achievement of 5G?
Scott Coates: With 5G, it is really hot and talked about now, but it is still some way off. Mobile operators will market it strongly and talk about it strongly, but there was something last week from France Telecom admitting it does not know what it is yet, and that is the substance of the matter.
As we come in to the early 2020s, at the beginning of the next decade, we will start to see something. Interestingly, the infrastructure that is going to enable it is starting to go down now, so particularly in urban areas; as the concentration of cell sizes needs to get smaller and smaller, the infrastructure needed to power faster 4G services will ultimately be the infrastructure used to power 5G.
Coming back to the structure of the industry, it is critical that there is a competitive infrastructure market for 5G. As a new technology that is a combination of wireless and fibre, it has the opportunity to have multiple infrastructure parties competing. It also carries the risk of being a monopolised infrastructure.
Nigel Huddleston
Q Is this roll-out likely through purely commercial models or do you see a role for some kind of Government support here?
Scott Coates: In terms of using wireless to achieve USO, mobile as a technology has a very clean and efficient way of pushing out coverage to rural parts of the population, and that is through the licences. There is another major round of licensing, with something called 2.3 and 2.4, which is coming soon.
There is also 700 MHz, which is a really powerful frequency for delivering coverage into rural areas and which has already been licensed in many European countries. It is not licensed here yet, but the rules of those licences create an opportunity to get coverage out to the most rural parts of the country. You could do things like in Germany, where they said rural areas have to be covered before urban areas. That is the most efficient way of unlocking coverage from a wireless perspective in rural areas.
Scott Mann (North Cornwall) (Con)
Q One of the biggest challenges facing coastal and rural communities like mine is the problems with undulating coastlines and areas of outstanding natural beauty. I am interested in your thoughts on how we can strengthen the Bill to make sure we get out to some of the rural areas left behind in the past.
Scott Coates: I refer you back to the last question. The most efficient way to deal with that is through the licences. There is licensing coming up that will create an opportunity. Unfortunately, it is going to be a few years before the airwaves that deliver that are available for deployment.
There is a lot of activity happening in the sector at the moment. The mobile operators are very busy investing in their networks and we are working hand in hand with them to help them deliver that. I know we are building new towers in coastal areas right now; I do not know if we are building one in your constituency. So it is getting better. Bear in mind that the Government struck a deal with the mobile operators 18 months ago and the operators are busy investing on the back of that. In the last 4G licence, when the 800 MHz got auctioned, one of the licence lots, bought by Telefónica, required it to cover more of the country, so Telefónica is investing on the back of that as well.
Claire Perry
Q I want to push Dr Whitley on the privacy question. I think that what you are asking for, a code of conduct and some clarity, is reasonable, but equally, we cannot know what the demands and the questions might be going forward, or the data requirements. I look back on where Government do share data, querying the national insurance database, or, indeed, the Government ID project, where DVLA records were queried as a measure of identity, it all appeared to be fine, there were no issues of privacy or data loss, to my knowledge. In a way, should we not be taking on trust—I know that trust is a word people never like to use with Government, whereas we trust corporates all the time with all kinds of data—that we have not had a problem and that the right rules and procedures and the spirit of privacy will be protected?
Dr Whitley: You have highlighted a very privacy-friendly way of checking data that says, somebody has a database and you look it up and you say, “This particular person, or this particular attribute, is it true, yes or no?” Referring to the previous evidence session and the question, “Is this person over 18 and therefore able to access?”, yes/no seems a perfectly reasonable way of doing that and that is the kind of thing that we have been encouraging Government to do. As you say, the Verify programme uses exactly those kinds of checks. The problem is that, without that level of detail, it is not at all clear that that is going to be proposed for all parts of the data sharing. Again, with the civil registration data, they say explicitly, “We want to do bulk sharing” and that is, by definition, not a yes/no check. That is, “Here is a set of data that we have that we think will be useful for your Department to match against and thereby tailor particular services.”
As the National Audit Office reported a few weeks ago, there were 9,000 data incidents within Government in 2014-15. If you start just moving the data around, you really run the risk of data incidents of varying levels of severity, and if you do not have that detail you have to rely on trust. Is it not better to have that detail, so you can say, “This is what we want to do, this is the way we are thinking of doing it”, and ask experts, not only in PCAG but in general, “Do you have any issues or concerns about that and, if you do, what alternative ways might there be for addressing those?”?
Claire Perry
Q Do large corporate families do that? Nobody ever reads the Ts and Cs, but if they do, do you give explicit permission for your data to be handled around the Facebook family, for example, in the way that you suggest Government should specify? That is just a question from ignorance.
Dr Whitley: I do not know exactly how Facebook would handle it, but even if you are not worried about the data breach and data loss issue there is just a simple efficiency thing: it is a lot easier to have small pieces of data—yes/no, they are interested in this form of cat food, they are interested in those kinds of holidays, therefore target adverts based on that—than sending huge swathes of data to other parts of the system for duplication and therefore increasing the risk of data loss.
Claire Perry
Q It is an operational concern as well as a privacy concern?
Dr Whitley: Yes. From my perspective you start with a privacy concern that says, minimise the data that you are handling, do not have it in duplicate locations all over, but a consequence of starting with that privacy concern is that you also have very clear operational efficiencies; that you are not duplicating data and you are not having large amounts of data in your system, because the more data you hold, the more likely it is that there will be a breach, an attack, an accidental loss or whatever.
Rishi Sunak (Richmond (Yorks)) (Con)
Q Mr Coates, will you expand a little on your experience, internationally, of licence requirements in broadening coverage to rural areas? What is the specific benefit of independently owned infrastructure for rural communities, in bringing access to places which struggle with mobile signal today?
Scott Coates: I am going to pick on two countries that we have looked at making investments into. Germany, which I mentioned earlier, has an outside-in policy, so you have to cover their rural areas with your new batch of spectrum before you are allowed to deploy it into urban areas. France has got a very interesting model, in which they have compartmentalised the whole country. At the moment the Ofcom licences ensure that Scotland, England and Wales have their own targets, but if you break it down even further, the demands become higher on those targets. We have seen some targets in France where, by compartment, we are looking at 99.6% coverage by 2027. They have given the industry a long time to reach that target, but it is very bold. If people knew it was going to get better, maybe it would become a bit more understandable. This is not like changing a lightbulb; this is infrastructure that needs to be built.
I think there are three benefits of independent infrastructure. First, there is clear evidence that it enables better connectivity. Because our infrastructure is operated independently of a network, we do not have any of the conflicts of interest that normally exist in the vertically integrated model, in which the infrastructure owner is forced to provide access to their competitor. Because we focus only on infrastructure—it is our core business model—we tend to build better infrastructure, and we share it with more networks. There is evidence out there. Ernst and Young looked at this last year and studied independent communication tower ownership across north America and Europe. They compared it with communication towers that are owned as part of mobile networks. They found that there are twice as many networks using the independent infrastructure, compared with the vertically integrated owned infrastructure. That is twice the productivity coming off a piece of infrastructure, which is transformational, when it comes to enabling connectivity, particularly in rural areas.
The second benefit is around investment. At the end of the day, solving these problems comes down to investment. Independent infrastructure opens up a whole new channel of investor and brings a different type of investor into our industry: long-term, low-cost-to-capital infrastructure investors who are targeting infrastructure only. They do not want to invest in the retail operations or in buying premiership football rights; they want to invest purely in infrastructure. We can be a conduit to bring in that capital to invest in infrastructure. Earlier this year, after 10 years of various rounds of financing, our business announced a major fundraising transaction with a UK blue chip infrastructure investor—3i Infrastructure plc—and a north American investor that invests on behalf of state pension plans. That is exactly the kind of capital you want—long-term, patient capital—fuelling the growth of infrastructure.
The final benefit is in and around competition. We create competition at the infrastructure level. On the fixed-line side of the market, you can see some of the challenges from a lack of competition. But we also enable competition at a retail level, because our infrastructure is open for everyone to use. Mobile operators are the biggest users of our infrastructure, but well over 100 different network use our infrastructure in rural areas. Sometimes that can mean a local wireless broadband company that simply cannot afford to build its own infrastructure and would find it very difficult to get access to a mobile operator on a piece of infrastructure. On average, every one of our towers in the UK supports a non-mobile operator network running over it. Those are the three benefits of independent infrastructure.
Calum Kerr
There was a Coates who played for Liverpool. He was from Uruguay, so they called him Co-ah-tez.
Scott Coates: He played against England once.
Calum Kerr
Q He will again.
I would like to ask you about the USO, and then I would like to come on to the mobile environment. I have a problem with the USO not just because of the lack of ambition and what 10 megabits means for people living in those areas, but because the tactical low-speed USO will not push fibre a lot further. The lines between wired and wireless are blurring all the time, so would a more ambitious USO with faster speeds help you, in terms of pushing fibre further and putting other infrastructure out there?
Scott Coates: I think it comes down to the cost element. The further out you go with fibre, the more expensive it becomes. Our infrastructure in rural areas tends to be bigger pieces of infrastructure, so quite often there is fibre coming through it or it links to a site that has fibre, and that creates more bandwidth to power the wireless services coming over it. More generally, I would say that the USO is a start. No one is going to be happy with 10 megabits in a few years, but I would say that you need to start somewhere and it needs to be manageable from a cost point of view.
Calum Kerr
Q I will not ask you, then, whether the Scottish Government’s policy to have 30 megabits everywhere is more appropriate. I think that everyone is in agreement that the electronic communications code needed to be reformed, and there are some welcome measures in there, but as an independent infrastructure provider, do you honestly think that that will lead to more coverage by mobile providers, or will it simply give them a better bottom line?
Scott Coates: There are certainly measures that will make it easier to get rid of the bottlenecks and faster to resolve disputes. Running cables to connect up mobile sites has been a real challenge, so being able to fix those problems—that is not really about economics; it is about having faster resolution. Some of the pricing elements I do not think will have a material impact in rural areas when the commercial case to invest is not really there for the mobile operators anyway. The only way you can deal with that is through the licences. The new code will help to remove some of the ransom costs that we see in the industry and certainly give us a much more powerful weapon against those, but on a day-to-day basis, we do not expect to be moving towards compulsory-based conversations with our customers. The industry needs to work on a voluntary basis. That is absolutely essential; it is how it works everywhere else in the world. We have busy infrastructure facilities. We are there on average every 12 days. We need to have a good partnership with our land providers. The code is a really helpful and powerful new tool of last resort, but our whole industry needs to maintain a voluntary basis of engaging as our MO for dealing with landowners.
Calum Kerr
Q Thank you very much. Mr Coates, I thought you gave a great overview of why independent infrastructure is really important. You obviously feel a concern, so is there specific wording that you would like to see in the Bill that we could discuss at the next stage to ensure that you are protected and the value of your assets is not lost?
Scott Coates: Thank you for that question. We have had a really engaging journey with the Minister’s officials. They have been very diligent and transparent in engaging with us all the way through this fairly long process on the communications code. Our concern generally is that there is a fine line between the technical drafting that says that what we do on land is not covered by the communications code, and the risk of a legal challenge that it might be and might have nil or low value. What we have really asked for is as much clarity as can be provided. That will help to enhance the investability of our business. We are in a different place from the mobile operators and some other network providers, because we do not get any economic benefit from our own infrastructure; it is built for other people to use, so we are not a net user of infrastructure.
Calum Kerr
Q So that is a, “Yes, if possible, please.” It is okay; do not answer that. You have already answered. My final quick question is this. Although this is not retrospective, is there any case for excluding existing sites, if this is really about building out more network, in terms of the valuation element, given that a lot of those sites are actually on publicly owned land?
Scott Coates: There is certainly a difference in the substance of a transaction when you are approaching a farmer, a sports club, a university or whatever and asking for access to build a new piece of infrastructure where there is new coverage, and you are having that negotiation in the context of a new communications code that has tighter reference points on pricing. You will have more leverage for that conversation. You will still end up, I believe, paying them a rate way in excess of what zero value would be because that is just how you have those conversations, but it will be less than what is paid today, that is for sure, because you have got this new reference point. The substance of that is very different from the substance of a voluntary agreement you entered into with a firm six or seven years ago and that comes up for renewal in two to three years and the infrastructure is already there.
I think it is important that we have a robust set of tools as an industry but, as I mentioned earlier, it is equally if not more important that the industry acts responsibly and avoids behaviour such as forcing situations where they need a new compulsory purchase tool, even though they have already got access today. There is definitely a way of engaging on existing sites that should be a bit different from new sites, as part of a package of trying to maintain the voluntary support of the land and property sector for our industry.
Matt Hancock
Q Could you set out in more detail—you have already gone into this a bit—about what you mean when you say that the code should include land owned by the infrastructure providers but not the apparatus, and the distinction there in the written evidence?
Scott Coates: It comes back to this. Under UK property law, anything that affixes to land could be considered land. At the moment, the code effectively is to regulate land coming into the telecom sector, not to regulate the relationships between telecoms companies. It carves out from land the apparatus.
I am advised that there is a risk of ambiguity. That is probably the best way I could describe it. It may be challenged down the line. This is an evolving and dynamic industry where we don’t exactly know the physical things we are going to be deploying in future. There is a risk that some of the things we do might receive a challenge that it is land not apparatus. I do not know.
Is a new runway at Heathrow infrastructure or land because it sits on top of land? Is the national grid transmission network an infrastructure asset or land because it sits on land? It is a fairly technical point. Like all these things, once the lawyers are running around looking at them, they will find concerns.
All we are saying is that we invest over 20 to 30-year horizons. The more clarity that can be provided is helpful. We acknowledge and clearly appreciate the intent behind Government policy to protect investment and passive infrastructure but more clarity around that will only help the investability of what we do.
Matt Hancock
Q Thanks. I am also grateful for what you said about the team at DCMS, who will have picked up on your kind words I am sure. I wanted to follow up on 5G. You talked earlier about the 5G roll-out. This is a bigger-picture question. What do think the Government need to be doing now to ensure that we are in the lead when it comes to the roll-out of 5G?
Scott Coates: People must be exhausted with hearing about the challenges with Openreach and what can be done there. The key thing is to help facilitate our competitive market for infrastructure. So 5G has the ability to be driven by the mobile operators, by the fibre players, by independent infrastructure companies. If you look at the US, half the small cells that power 4G and 5G are actually going in by independent infrastructure players; mobile operators as well as fibre players are in there, too.
It comes down to helping to facilitate as competitive a market as possible. We have started deploying infrastructure in at least one city in the UK: 4G initially, but it will lead to 5G. We would love to be able to get a competitive basis of access, or any access, to BT ducts. We cannot do that, despite the fact that they can access every single piece of our infrastructure.
That is one thing. The other thing is around the planning permissions for affixing equipment to lampposts. We are working in Aberdeen and I have to say that we have had a fantastically positive experience with the local council, which has been amazing and very supportive in everything we have been trying to do there. That experience is not shared across other councils in the UK.
Matt Hancock
Q Thanks very much. Dr Whitely, would you say that, done right and should the codes come out right, the clauses in the Bill have the potential to improve public services through better use of data?
Dr Whitley: Absolutely. You could have a side question about whether, for example, focusing on subsidies from energy providers is the best way to deal with fuel poverty, but in terms of that specific focus—if it is done right—then, absolutely. Our concern is that we just do not have the detail as to whether or not it is going to be done right. That has been the frustration over the last three years.
Drew Hendry
Q I want to talk about the spectrum licensing issue. We spent a lot of time in earlier sessions talking about the minimum average speed, particularly for SMEs, as being 10 megabits per second and whether or not that was ambitious for the future.
You talked about the outside-in licensing regime that could be possible—and is possible in other countries since it is being deployed, particularly for new tech and for the 700Mhz and the 5G licensing that will come. If that approach is adopted by the UK Government in terms of licensing, is it your belief that it would make that inequality almost go away and that it would deliver much greater equality across the pace of speeds for people to access business and other methods that they need?
Scott Coates: If a policy objective is to ensure that rural areas get a high quality mobile signal, then forcing the industry to invest in rural areas—and effectively funding that by allowing them to pay less money for the licences that they acquire—is the most efficient way to deliver that. It would have positive outcomes, for sure.
Drew Hendry
Q So it would achieve that aim, in your view, and it would to a great extent future-proof the need to go to that level of where you are going from 10 megabits per second to a higher level, and then a higher level again. Is that correct?
Scott Coates: Yes. The industry invests in order to stay competitive in areas where the market is working, and—where the licences oblige them—to invest in areas where the market is not working. The infrastructure needed to support some of these new services needs to be high bandwidth to support that, which will then support the uplift into the future in quality and speed of service.
Nigel Huddleston
Q Dr Whitley, are you excited by the potential opportunities of the use of big data by Government?
Dr Whitley: This is not about big data but data-sharing, but there are opportunities there for big data to be used. There are questions about how you manage it and about how you handle it.
One of the other things that I am involved with is a steering group for the Administrative Data Research Network, which is where administrative data can be used by researchers in very strictly controlled environments to answer interesting research questions, generate hypotheses and explore those hypotheses by matching data from various different Government datasets. But that is done in a very locked down, secure environment with no mobile phones and no taking out of data and so on. So there absolutely are opportunities, but doing it right is what I particularly care about.
Nigel Huddleston
Q We are one of the most sophisticated digital economies on the planet and we have some of the brightest brains on the planet. Surely we can work this out.
Dr Whitley: Yes. The process has been going on for three years and we still do not have codes of practice. That is the bit that puzzles me. If we have all these brilliant brains can they not put together even a draft code of practice, so that we can know what we are talking about?
For example, in the consultation around fuel poverty, it talked about gathering data and matching up potential houses and individuals who might benefit or be at risk, and it says that they will inform the licensed energy suppliers as to which of their customers should receive assistance. That, to me, sounds like a push: “Here is a big set of customers that may or may not belong to your company. Check through that list to see whether or not any of them are your customers and give them a fuel discount.”
But then a couple of paragraphs further on—this is the consultation relating to the proposals—the Government would simply have an eligibility flag along with customers’ names or addresses for doing that. Even in the consultation, it does not seem that these brilliant minds have been applied as well as they could be.
Nigel Huddleston
Q Once we work that out, which I am confident we will, where are the opportunities? Where is the up side? Where is the positive stuff coming out of this? How can Government be better as a result of this? I am always an optimist.
Dr Whitley: Done right, there are fantastic opportunities. Government is digitising. The GDS has got lots of experience about how to manage and handle and do attributes checking, which is what most of this is. There are definitely opportunities and the skills, but somehow something has gone wrong with regard to these proposals.
It is not as if the proposals have been rushed through in the past few minutes. We have been looking at these and asking for more details since July 2013 and we are still here without even a resemblance of a code of practice. Part 5 has six codes of practice that need to be developed and none of them is here. Yes, please, but some detail. I am academic; I want to see the detail.
Louise Haigh
Q As you say, it is an enormous shift in terms of data sharing within Government. Clause 29 would allow personal data on citizens to be shared if there is a
“contribution made by them to society”
or wellbeing to be gained. That basically covers anything, doesn’t it? Why have the Government not produced even a draft code of practice at this stage? How can we possibly be expected to vote on this while plainly placing blind faith in the Government?
Dr Whitley: You are basically saying what I was going to say. If you compare the comprehensive replies that Mr Coates has been able to give, talking about very specific details, with the vague “we don’t know anything” comments that I have made, you see that it is a real problem and also an issue for more general scrutiny of technological issues. If you do not have details about the different mobile phone frequencies that you are talking about, you cannot make detailed policy. Yet when it comes to data sharing, there is a sense that it will all work out in the end because we have the right people to do it.
Louise Haigh
Q How would you advise the Government to achieve that code of practice?
Dr Whitley: We have consistently said—the Privacy and Consumer Advisory Group particularly, because we have this existing relationship with Government, but civil society and experts more generally—that we are more than happy to engage. We have repeatedly said, “Give us some detail. Don’t just come and talk about high-level stuff. Give us the detail and we will give you detailed comments to improve the process.”
That has worked very well in relation to the Verify scheme; that is privacy friendly and has a lot of support from the kinds of people who are very concerned about privacy. So the expertise is there and the working relationships are there. Give us an opportunity to help; we want to. It is just that we need something to work on.
The Chair
Thank you very much to Mr Coates and Dr Whitley for some excellent evidence. We are very grateful. We will now move on to our next set of witnesses.
Examination of Witnesses
Jim Killock and Renate Samson gave evidence.
The Chair
Thank you to our next two witnesses for being here promptly. We will now hear evidence from Big Brother Watch and the Open Rights Group. For this session we again have broadly half an hour to 45 minutes. Will the witnesses please read their names into the record?
Jim Killock: I am Jim Killock, executive director of the Open Rights Group.
Renate Samson: I am Renate Samson, chief executive of Big Brother Watch. We were also a member of the open policy making group and the Privacy and Consumer Advisory Group, to which Dr Whitley referred earlier.
Louise Haigh
Q I will pick up where we left off, if that is okay. You were both involved in the consultation process for part 5 of the Bill. Did the proposals come as a surprise to you? Do they make sense to you as data experts?
Renate Samson: No, they do not make very much sense, if I am honest. As I said, we were a member of the open policy making process and we also submitted to the consultation. I am genuinely surprised that after a two-year process, all of a sudden it felt very rushed. There were conversations and meetings happening right up to the Queen’s Speech; there was still a general lack of clarity, particularly on safeguards, and many questions were still being asked, such as how, why, when and so on. The next thing we knew, it was in the Queen’s Speech and the Bill was published.
Reading through part 5—and I have read through it a lot and scratched my head a great deal, mainly for the reasons given in evidence earlier today—you see that the codes of practice, which would explain an awful lot of what we imagine is meant or may not be meant, just have not been published. I have repeatedly asked for them and been given various expected dates, and we are sitting here today without them but with the Bill already having been laid before Parliament.
We have also done a lot of work on the Investigatory Powers Bill, for which the codes of practice were there right from the start. There was clarity as to what was intended and what was going to be legislated for, straight up. So, I am profoundly disappointed, because data sharing and digital government are hugely important and we seem to be very far away after a very long process.
Jim Killock: It is worth considering why the open policy making process was put in place. Data sharing is known to be potentially controversial. It was knocked out of at least one previous Bill a few years back when proposed by Labour because of the lack of privacy safeguards. Everyone understood that something more solid was needed. Then the Cabinet Office was very keen to ensure it did not raise hackles, that it got the privacy and the safeguards right, that trust was in place. It was therefore a surprise, after that intense process, to get something back that lacked the safeguards everybody had been saying were needed.
We are particularly concerned not only about the lack of codes of practice, but the fact that a lot of these things should be in the Bill. Codes of practice are going to develop over years. We need to know about things like sunsetting, for instance—that these things are brought to a close, that you do not just have zombie data sharing arrangements in place, where everyone has half-forgotten about them and then suddenly they are revived. You need to have Parliament involved in the specifics.
As we have heard, data sharing has a huge range of possibilities, starting with the benign and the relatively uncontroversial: statistics and understanding what is happening to society and Government policy, where privacy is relatively easy to protect. You use the data once, you do the research and that is it. It ranges from that through to the very intrusive: profiling families for particular policy goals might be legitimate, but it also might be highly discriminatory. Getting to the specifics is important.
You need the safeguards in place to say, “These are the kinds of things we will be bringing back; these are the purposes that we may or may not share data for.” That way, you know there is a process in place. At the moment, it feels like once this has passed, the gate is opened and it is not necessarily for Parliament to scrutinise further.
Louise Haigh
Q We talked earlier about the bulk transfer and bulk sharing of data, and an earlier witness talked about providing data access, rather than data sharing. Should the Government not be pursuing trials on that basis, rather than these enormous powers without any kind of assurances to the public or parliamentarians about how they will be using them?
Renate Samson: It was very specific at the end of the open policy making process that, for example—put the bulk to one side for a moment—but regarding the fraud and debt aspect of the Bill, it had been agreed that three-year pilot projects would take place with subsequent review and scrutiny potentially by the OPM or by another group. They are in the Bill as a piece of legislation with the Minister deciding whether or not it is okay and potentially asking other groups, which are not defined. That is half an answer to half your question. Pilots are an excellent idea if they are pilots, not immediate legislation.
With regards to the bulk powers in the Bill, civil registration documents were a late addition. We are still not clear as to their purpose. The purpose given in the consultation to the OPM process, but also in the background documents relating to the Bill, is a whole mix of different reasons, none of which, I would argue, are clear and compelling or, indeed, necessary and proportionate. But again, as you have heard a lot today, without detail, how can we properly answer your question?
Jim Killock: I have a quick observation on this. We currently have a data protection framework. The European Union is revising its data protection laws; they are somewhat tougher, which is quite a good thing, but we do not know what the future of data protection legislation is in the UK. It might be the same or it might be entirely different in a few years’ time.
That is a very good reason for ensuring that privacy safeguards are quite specific and quite high in some of these sensitive areas, because we do not know whether the more general rules can be relied on and whether they are going to be the same. That is not to say that we do not need higher safeguards in any case here, because you are not dealing with a consent regime. People have to use Government and Government have to look at the data, so it is not a mutual agreement between people; you have to have higher safeguards around that.
Thangam Debbonaire
Q My questions are directed at Mr Killock and relate to paragraphs 37 and 38 of your submission, “Definition of pornographic material”. We heard earlier that both the NSPCC and the British Board of Film Classification support a provision to require ISPs to block websites that are non-compliant. There was also discussion of widening the scope to apply the restrictions to other harmful material that we would not allow children access to in the offline world. Here, you seem to be questioning the value of that:
“This extension of the definition…also raises questions as to why violent—but not sexual—materials rated as 18 should then be accessible online.”
I also question this consistency but the solution, to me, seems to be that we should include other material, such as violent material and pro-anorexic websites, as we talked about earlier. Will you tell us a bit more about what your objection is to creating a framework to keep children as safe online as they are offline?
Jim Killock: We have no objection; it is a laudable aim and something we should all be trying to do. The question is, what is effective and what will work and not impinge on people’s general rights? As soon as you look a little beyond pornography, you are talking about much more clear speech issues.
There will be a need to look at any given website and make a judgment about whether it should or should not be legally accessed by various people. That starts needing things like legal processes to be valid. Some of the things you are talking about are things that might not be viewed by anybody, potentially. The problem with all these systems is that they just do not work like that. They are working on bulk numbers of websites, potentially tens of thousands, all automatically identified, as a general rule, when people are trying to restrict this information. That poses a lot of problems.
I also query what is the measure of success here. Because I feel, I suspect, that the number of teenagers accessing pornography will probably not be greatly affected by these measures. There is more of an argument that small numbers of children who are, perhaps, under 12 may be less likely to stumble on pornographic material, but I doubt that the number of teenage boys, for instance, accessing pornographic material will be materially changed. If that is the case, what is the measure of success here? What harm is really being reduced? I just feel that, probably, these are rather expensive and difficult policies which are likely to have impacts on adults. People are saying it is not likely to affect them, but I rather suspect it might, and for what gain?
Thangam Debbonaire
Q You have mentioned your feelings and your suspicions but, actually, the British Board of Film Classification already has a system for identifying for instance pro-anorexic, pro-suicide and violent websites. It already has a system for use on mobile networks.
Jim Killock: No, it does not.
Thangam Debbonaire
Yes, it does. They sat right here this afternoon.
Jim Killock: No it does not. The mobile providers have a system that the BBFC—
Q Thangam Debbonaire: So a system exists?
Jim Killock: They have a system, which is not wildly accurate that people choose to use. To the extent that they are choosing to use it, there is some legitimacy around that. People choose to have websites blocked and they understand that a certain number of them may be incorrectly blocked, that is OK.
Thangam Debbonaire
Q Are you saying that that sort of system does not exist, because we were told that it did earlier?
Jim Killock: This is what they are currently doing: they are blocking websites, which are sometimes the right websites, sometimes not; sometimes the right websites are not blocked. It is essentially automated decision making that comes with the problem that you can only really do this by things like keyword search. There are not enough humans available at the right price to do the review, so all kinds of things get blocked for essentially no real reason. For instance, we have had a widget manufacturer—
Thangam Debbonaire
Q Forgive me for interrupting Mr Killock, but there is a good reason. You asked about successful outcomes—and if you are going to ask a question, I am going to answer it—the successful outcome is that children are protected in the online world in the same way as they are protected in the offline world. I have to reiterate this to you: I do not understand why you think it is a risk worth taking that some adults may or may not have their own personal preferences infringed, balanced against the harm which we know is done to children. On teenage boys, just saying that because teenage boys may or may not continue to watch pornography there is no point, that seems to be a very sad conclusion to come to.
Jim Killock: The point is that you can help children to be protected, the questions is, what is the best way? For instance, I agree with the NSPCC’s calls for the compulsory education of children. Of course that should be happening and it is not. Similarly, Claire Perry’s initiative to have filters available has its merits. Where I have a problem is where adults are forced into that situation, where they are having websites blocked and where there is little redress around that. I caution you around large-scale blocking of websites because we know from our own evidence that a very large number of websites get blocked incorrectly and it has impacts on those people too. The question is, what is effective? I am not sure that age verification will be effective in its own terms in protecting children.
Claire Perry
Mr Killock, it is nice to hear you finally supporting the initiative. Indeed, all of the shroud waving about false blocking was brought out with vigour many times over the past five years—
Jim Killock: We stand by that.
Claire Perry
Q My point is that it is sad that the campaign once again from your organisation is that the perfect must be the enemy of the good. I am afraid I would also question this issue of false blocking, and I would appreciate written evidence if you have it. It is a tiny fraction. It has never reached anything like the levels your organisation has claimed, and the processes for notification and unblocking have massively improved over the last five years. My question to you is: at what point does your organisation stop dealing with this world where it is, “Hands off our internet” and start accepting that content provision via the internet, which is just another form of provider, should have exactly the same safeguards as exist in the offline world?
Renate, your points around this are also quite disturbing because you are holding up for a perfect world—
Renate Samson: What points?
Q Claire Perry: Around privacy and data recognition. At what point do we accept that what is proposed in this Bill is actually a good step forward? While it may not be perfect, it is a massive step-change improvement on what we have today.
Jim Killock: The first question is: “What is the impact on everyone?”
Claire Perry
Q No, the question is: will you provide us with written evidence of this issue of false blocking, in detail, because I happen to think it is completely untrue, your words on this?
Jim Killock: Yes, we can.
Claire Perry
Q We would appreciate written evidence by next week. Thank you.
Jim Killock: We have literally hundreds.
Claire Perry
Q Hundreds? Of the 1.5 billion websites that are out there?
Jim Killock: The error rate does not appear so large; but when you multiply that by the number of providers that have different blocking systems it becomes quite significant.
The Chair
Do not interrupt the questions, or the answers.
Jim Killock: On the wider question, what is effective, the question is how are children protected, versus what is the impact on adults. At the moment we do not know, because the system is not in place, what that effect on adults will be; but we have to be concerned that adults should feel free to access legal material, no matter what it is. They should not feel like they are being snooped on or having their privacy or anonymity removed.
I was encouraged by some of things that were said earlier, but I have to say that when we sent some technical observers to hear about the systems that are likely to be put in place—the sort of things that vendors want to do—we heard a rather different story. The sorts of things they want to do include harvesting user data, maybe using Facebook and other platforms, to pull in their data to verify people’s age by inference. These things were not privacy friendly. Let us assume that the BBFC has a job, as apparently it does. It would be good if it had clear duties around privacy and anonymity, to make sure that it has to put those things first and foremost when it is choosing and thinking about age verification systems.
Claire Perry
Q As a supplementary, does your organisation campaign against age verification on gambling sites on the internet?
Jim Killock: No, we do not.
Claire Perry
Q Even though exactly the same issues of privacy could apply?
Jim Killock: I think they are rather different, are not they?
Claire Perry
Q Why? They are legal.
Jim Killock: The first thing is that gambling sites are dealing with money. They have to know a little bit about their customers. They need to do that for fraud purposes, for instance. The second thing is, I think, it is much harder to argue that there is a free expression impact for gambling, compared with accessing legal material, whether it is pornographic or not.
Claire Perry
Q So your interest is not about legality. It is about your interpretation of legal and illegal material.
Jim Killock: It ultimately is about what the courts think is the boundary around free expression, and what sort of things are impacting on people’s free expression and privacy. That is our standpoint. What we are asking for, the same as you, is the same standards online as offline. One of those standards is human rights and what we are entitled to do.
The Chair
Let us hear from Ms Samson; and then we are moving on.
Renate Samson: Just to be clear, we submitted evidence and we have concerns about part 5 of the Bill. The questions you have been asking Mr Killock—I am unclear; are you asking me about the same issues you are asking him?
Claire Perry
No, specifically about the part 5 questions.
Renate Samson: Okay. We have not, in our evidence and our concerns, asked for a perfect Bill, although I do not believe there is any harm in trying to make the best piece of legislation we can. The work that we do with the Privacy and Consumer Advisory Group and as part of the open policy making process is about having engagement, to ensure that we are the leading light in data sharing, but also data protection. As Mr Killock has mentioned, we are currently looking at the Data Protection Act 1998. That will probably expire in May 2018, and we will get the general data protection regulation. Right now the measure in question does not even refer to that, or, indeed, to the Investigatory Powers Bill. It refers to the Regulation of Investigatory Powers Act 2000 and the DPA. Also, it will probably fail on a number of the key points of the GDPR, in relation to potential profiling, consent of the individual, and putting the citizen at the heart of data sharing and data protection.
I am not looking for “perfect”, but I think “perfect” is a good place to head towards.
Nigel Adams
Q My question is for Mr Killock, with regard to what the Bill is seeking to do in terms of equalisation of copyright offence penalties. I just wondered why your organisation was not in favour of rights holders—the tens of thousands of content creators. Why is your organisation not keen on the idea in the Bill?
Jim Killock: That would be a misrepresentation. We are quite clear in our response. We are worried about the impact of this on people who should not be criminalised and who we thought the Government were not trying to criminalise in this case. Our position is that if the Government are going to extend the sentence and have the same sentence online as offline for criminal copyright infringement—that is to say, 10 years—then they need to be very careful about how the lines are drawn, because the offences are quite different. Offline, in the real world, criminal copyright infringement covers a number of acts. It is all about copying and duplication. Essentially, it is about criminal gangs duplicating DVDs and the like. Online, making that separation is harder, because everything looks like the same act—that is to say, publication. You put something on the internet, it is a publication. So how do you tell who is the criminal and who is the slightly idiotic teenager, or whatever it happens to be? How do you make sure that people who should not be threatened with copyright criminal sentences are not given those threats?
We particularly draw attention to the phenomenon of copyright trolling. For instance, there is a company called Golden Eye International, a pornographer which specialises in sending bulk letters to Sky customers, BT customers and so on, saying, “Please pay us £300 because you downloaded a film that is under copyright.” These are obviously pornographic films and they then wait for people to pay up. They have no specific knowledge that these people are actually the people doing the downloading, all they know is that somebody appears to have downloaded.
Nigel Adams
Q Sorry to interrupt, but the idea of the Bill is not to go after people who are downloading content, it is purely for those who are uploading content for commercial gain. That is the whole purpose.
Jim Killock: Unfortunately, that is not how the language of the offence reads. The test in the offence is that somebody is “causing a loss”, which is defined as not paying a licence fee, or is “causing the risk of loss”, about which your guess is as good as mine, but it is essentially the same as making available, because if you have made something available and somebody else can then make a copy, and then infringe copyright further and avoid further licence fees, basically that is a criminal act. So file sharers, whether they are small or large, all appear to be criminal copyright thieves. Similarly, people who are publishing things on websites without licence are also potentially criminalised. Those things can be dealt with much better and more simply through civil courts and civil copyright action. What we are calling for is either to get rid of those things which are attacking individuals and wrongly bringing individuals into scope, or to put thresholds of seriousness around the risk of loss and/or causing loss. Something like, “Serious risk of causing significant loss” would be the way to deal with this. Similarly, “Causing serious loss”.
Nigel Adams
Q But if you are knowingly uploading creative content online for commercial gain, to my mind it does not matter whether it is 50 quid or 50,000 quid, you are knowingly stealing someone’s content.
Jim Killock: The commercial gain is not part of this offence. That is what I am saying. The offence is purely to cause loss—in other words, to not pay a licence fee—or to cause risk of loss. There is no “commercial” in it. So you have to put the threshold somewhere. You have an offence for the commercial activities and, separately, individuals who cause risk of loss or fail to pay a licence fee.
Nigel Adams
Q What do you think is a reasonable limit? Where would you set the limit?
Jim Killock: In terms of taking someone to court, there is no particular limit. If I cause £20 of damage to somebody where I should have paid it, the small claims court should be available and I should be able to either prosecute someone or be prosecuted in a civil court in the normal way. The question of how much is “serious” is, in all likelihood, something we should probably leave to the discretion of judges. It will not be very easy to fix a particular amount, but I think “serious” is usually the word used.
Nigel Huddleston
Q As you have already recognised, this part of the Bill has already been subject to a consultation. There were 282 responses to that consultation, with the majority of them being broadly supportive. You have raised quite a few perfectly valid concerns, but do you accept that there is broad public support for the sharing of data when there is a clear social upside?
Jim Killock: I think we are all clear that data sharing should be enabled. The question is how you do that without it being a completely wide open process. The principle is not something that anyone has ever objected to.
Renate Samson: On the consultation that you referred to, you just told me that there were 282 submissions and that most of them were broadly supportive, but the Government response did not indicate who was supportive and who was not, and I have not seen the submissions on the website to be able to see for myself who was broadly supportive and who was not.
Having been part of the open policy making process, I would say that several people in that room had a large number of concerns. They were not concerns to prevent data sharing, but concerns to ensure that data sharing could happen in the safest way possible, and not just in terms of privacy. That way, not only can Government benefit from it and clear processes can be established in Government, but the citizen can understand why their data are being shared and can then be supportive of it and can trust that their data are going to be looked after. It is about the citizen being able to feel as though their personal data, which are now part of the air we breathe in a connected, digital society—we cannot function without our data—are safe and secure. It is about not only data being private, because there are varying degrees of privacy, particularly when you are sharing, but the Government understanding that.
Nigel Huddleston
Q I am not sure whether we got a clear answer there. The Commons Library published a briefing, which includes statistics from an Ipsos MORI survey that you have probably seen before. The things that get public support are things such as:
“Creating a DNA database of cancer patients…Using data from electronic travel cards…to improve the scheduling of buses or trains…Using police and crime data to predict and plan for crimes that might take place in future”.
There is a clear public upside for some of the most vulnerable and hurt people in society; are we ever going to reach a point where you are satisfied with the use of data?
Renate Samson: You took evidence this morning from two witnesses whom you asked a very similar question, and I support the answers that they gave. People are happy to share data if they understand why and are asked. I believe that the answer you were given earlier referred to the individual. If you ask me whether I am happy to share my data to cure cancer, I go away and I make the decision about whether or not I am happy to do that. As you have pointed out, the majority of people are probably going to say, “Yes, of course.” Big Brother Watch has no desire to restrict that. We are asking for information that we feel is lacking from part 5 of the Bill. We are asking for information for the individual so that they can give their consent based on proper guidance. That is going to be a key part of data protection law going forward.
This is about the way the questions are being asked. Similar questions have been asked throughout the day. We are not trying to say no. We have never said no. We are just trying to say, “Please present us with as much information as possible, so that we can see how.”
Jim Killock: It is really in the interests of Government to get this right, because in the long term it is a matter of trust. We know that accidents happen. If at least the safeguards are in place and as many accidents are avoided as possible, and if people are not left embarrassed at either data leaks or programmes that turn out to be intrusive or prejudicial against people, then you have won. That really was the purpose of the open policy process: to ensure that the risks were understood so that the Government could legislate on the basis of dealing with the complex risks rather than heading straight into a situation where they got a huge backlash and/or stored up problems for the future.
Renate Samson: May I add something quickly? The first line of Big Brother Watch’s submission says that we support data sharing across Government. I want to be very clear on that.
My second point is about individuals doing well out of this. The Bill, well, the factsheets accompanying the Bill, refer to wellbeing. I direct you all to the Supreme Court’s review of the named persons scheme in Scotland, where it was deemed that wellbeing was not a high enough bar—it did not meet the bar of “vital”, which the Data Protection Act requires. We want to do this properly so that people can benefit, but let us ensure that it is proper—that is not perfect, but the best it can possibly be.
Matt Hancock
Q A couple of questions. Would you be happy to share your blood type data to help cure cancer?
Renate Samson: I do not even know what my blood type is. To answer your question, I don’t know. I would have to give it serious consideration, just as I would seriously consider whether I would be prepared to donate organs after I die. It is not something to which I can give you a snap answer.
Matt Hancock
Q Okay. You referred to the open policy-making process, which was a big process with lots of people involved, and the large majority are content with that process. Have you read all the individual responses to the consultation?
Renate Samson: No, because I do not know where they are published. I looked for them but I could not find them.
Matt Hancock
Q They are on the internet, so you are very welcome to have a look at them.
Renate Samson: My understanding is that I would have to go into every single organisation’s website separately to look at them. They are not collated on the consultation’s website itself.
Matt Hancock
Q No, they are all published online.
Renate Samson: On the consultation’s website itself?
Matt Hancock
Q They are all published online. In an earlier exchange, you talked about the broad purposes of the Bill and the problem with parliamentary scrutiny of those purposes. I would just like to understand a bit more about what you meant.
Renate Samson: Sorry. Could you repeat that?
Matt Hancock
Q In an earlier exchange with Louise, you talked about the broad purposes of the Bill and how they are defined. You said that those purposes are very broad, and I think you said something like, “and therefore it can mean whatever the Government wants it to mean”. I do not understand that, because any sharing of data must be for purposes very specifically set out, for instance supporting troubled families and supporting families in fuel poverty. I think it would be very hard to be against those goals.
Renate Samson: Forgive me, I do not recall that being quite as you have said; I know that Dr Whitley said something very similar to what you just said. Our concern is that I cannot give an answer, because I do not feel as though the Bill has defined clearly what data sharing is or what are personal data. I cannot give an answer without being able to understand what the Government intend to do with regards to data sharing. Troubled families and the retuning of televisions are not included in the Bill, they are referred to in the factsheet accompanying the Bill.
Matt Hancock
Q They are referred to in secondary legislation, which will be scrutinised by Parliament.
Renate Samson: I feel—I can only say how I and Big Brother Watch feel—that having looked through the Bill in great detail, we have more questions than answers. If the codes of practice had been published, it might not have been necessary for me to be sitting here, because I would probably know exactly what is the intention. However, based on what has been published so far, I do not feel that it is clear.
Jim Killock: Future secondary legislation is quite a weak way of Parliament safeguarding a process like this, because essentially you then need to ensure that civil society, Parliament and everyone make sure that all the relevant safeguards are included in each statutory instrument.
Matt Hancock
Q No, the safeguards are in the Bill. It is the purposes that are in the statutory instruments. It is interesting—
Jim Killock: I do not think that the safeguards are in the Bill.
Renate Samson: Could you explain where they are and what they look like? I cannot see them other than the reference to the misuse of data, and we absolutely support the proposal that those guilty of that could be subject to a prison sentence.
Matt Hancock
Q Okay. I want to refer to another point that I did not understand. You said that the problem with the Bill was that it referred to RIPA and the Data Protection Act 1998.
Renate Samson: Because that is current legislation.
Matt Hancock
Q But what exactly would you propose?
Renate Samson: My concern, and this is not a telling off, is that a large chunk of RIPA will no longer be applicable by the end of year when the Investigatory Powers Bill comes in, and the Data Protection Act is about to be replaced with the general data protection regulations. Of course it cannot say that on the face of the Bill and none of the supporting documentation even refers to those two pieces of legislation.
Matt Hancock
Q It just seems a totally odd point, because the Investigatory Powers Bill is not yet law and, as you can see from the screen, it is being debated in the Lords today. GDPR is not in domestic law yet.
Renate Samson: We were trying to be “assistive”—if that is a word—in that there are elements of the Bill about which not just Big Brother Watch but other individuals and organisations are concerned that if it passes, when the general data protection regulations come in, it will not adhere to that law. It was merely a note of what is coming down the line so we have legislation that has longevity.
Matt Hancock
Q I do not think it is possible to legislate on the basis of other legislation that has not yet passed.
Jim Killock: GDPR is passed; it is just not implemented.
The Chair
Thank you to our two witnesses. Thanks very much indeed for your evidence. We release you.
Examination of Witnesses
Sarah Gold, Chris Taggart and Paul Nowak gave evidence.
The Chair
Q We will now hear oral evidence from Projects by IF, OpenCorporates and the TUC. We have three witnesses, so, colleagues, could we have more concise questions and I am sure concise and expert answers? Could the witnesses please introduce themselves for the record?
Chris Taggart: My name is Chris Taggart. I am the CEO and co-founder of OpenCorporates, which is the largest open database of companies in the world.
Paul Nowak: My name is Paul Nowak I am the deputy general secretary of the TUC. We represent 52 affiliated unions who in turn represent about 5.7 million workers.
Sarah Gold: I am Sarah Gold, director and founder of Projects by IF: a design studio that helps companies understand privacy and security by making products and services that empower people.
Matt Hancock
Thank you very much for coming. I want to put on the record something relating to what happened at the end of the last session. For anyone who is interested and has not yet had the chance to find the responses to the consultation on data sharing, they are available on gov.uk/government/consultations/better-use-of-data-in-government. All the responses to the consultation are there.
Louise Haigh
Q Paul, the Government have delayed by a year outlining their digital strategy. Could you give the Ministers a hand here? What would you like to see in a digital industrial strategy?
Paul Nowak: There are a number of points in the Bill where we think there are positive steps forward: things like the universal service obligation. I am happy to talk about some of those points. The missed opportunity for us is really getting a handle on what the emerging digital economy means for working people. Tomorrow, we will have the outcome of the court decision on Uber. That is just one example of where changing technology potentially affects working people’s lives. We believe there should be a proper framework and employment law should properly reflect the change in the world of work. The point was made by a number of MPs on Second Reading that the Bill missed a trick in terms of that new framework of rights and responsibilities for people who work.
Louise Haigh
Q What would that framework look like?
Paul Nowak: It would tackle issues around, for example, employment status. We have this curious interface between the new, emerging digital economy and what I would characterise as some old-fashioned exploitative employment practices. It is great that we can all order new goods and services online via eBay, but often the person who delivers that package will be working so-called to an app and they will be so-called self-employed, driving their own vehicle and with no rights to paid holidays, maternity or paternity leave and so on.
So a framework of laws that is fit for the digital age. It is welcome that the Government have announced that Matthew Taylor will be looking at some of these issues, but I would have thought that for a Digital Economy Bill there is a gap in the Bill itself.
Louise Haigh
Q Has the TUC been consulted on that by the Government?
Paul Nowak: We have had no engagement in terms of the process I described with Matthew Taylor and, as far as I am aware, we have had no input in terms of the Bill and the thinking around what a decent framework of employment rights will look like to respond to that emerging digital economy.
Louise Haigh
Q What about the digital skills gap—where could the Bill go further there?
Paul Nowak: That is not something that we have looked at particularly, but I think it goes without saying that the need for digital skills will go well beyond those core digital industries. The proof of the pudding will be in the eating. We are pleased that the Government are now talking about industrial strategy, and we think that the digital economy should play a key role at the heart of that industrial strategy. It is not just about digital industries themselves; it is about how those digital industries can support jobs in our manufacturing, engineering and creative industries, but you need to make sure that people have the skills—not just at one moment in time, but ongoing skills throughout their working lives—to enable them to adapt to the changing world of work. For example, one of the things that we have pushed heavily through our Unionlearn arm is equipping people with those skills, but making the case that people should have access to careers advice and guidance all the way through their working lives rather than just at the point at which they leave school, college or university.
Louise Haigh
Q Sarah and Chris, I do not know whether you were here for the earlier sessions, but we have heard quite a few concerns about the data-sharing proposals in part 5 of the Bill. Do you share the concerns about the lack of privacy safeguards in those proposals?
Sarah Gold: I do. There are quite a few pieces of information missing that I would like to see in the Bill to protect individuals’ privacy. I think I heard Jeni Tennison talk earlier about openness and transparency, and I agree with her that one of the major pieces that is missing from the Bill is transparency about how people’s information will be used.
For me, this is also a missed opportunity to talk about consent, which is increasingly becoming a design issue, not necessarily just one of policy. That means making sure that there are steps in place to ensure that people understand how their data will be used, by whom, for how long and for what purpose. That is really important, because currently, the only models of consent we seem to default to are terms and conditions, and I have to ask the Committee: when was the last time any of you read or understood a set of terms and conditions?
Louise Haigh
Q Claire Perry brought up the poor standards in the private sector earlier. Presumably you agree that the Bill misses an opportunity to deal with consent for the private sector’s use of data as well.
Sarah Gold: It does, because I think the Government should set best standards on this. There is a real opportunity to do that, and I cannot see that on the face of the Bill.
Chris Taggart: I broadly agree. There was a comment in one of the submissions that despite this being a Digital Economy Bill, it felt like it was from almost 10 years ago. We have the ability to treat data in a much more granular way—dealing with permissions, rights and so on; having things selectively anonymised; having things almost time-boxed, and so on. It struck me that it felt like the Bill was using the broad brush of how we used to exchange data 10 years ago. That seemed like a missed opportunity, particularly given that what we are talking about here is Government to Government. While it is very difficult for the private sector—or even between the Government and the private sector—to come up with some of those solutions, when you are talking essentially about one organisation, particularly one where there is the ability to legislate that everything should happen in the right way, it seems to be a missed opportunity.
I was asked a couple of years ago to be on the Tax Transparency Sector Board, which talked about opening up some of the tax data. Of course, pretty much no data were actually opened up, but some of the discussions were interesting. For example, the Bill talks a lot about individuals, which is absolutely right—I believe that we have innate human rights—but from a tax point of view, individuals and companies are exactly the same thing. There is no difference. HMRC was saying, “Hey, look, whatever we think and whatever we would like to do, we have no ability to treat individuals and companies as the same.” The idea of allowing companies to tick a box and say, “Yes, we’d like our tax to be reported and to be open about it,” or saying, “These offenders will be treated differently if they are corporate offenders,” for example—many countries do report tax offences by companies—was not even possible because of the underlying legislation. There is a sense that that sort of attitude slightly pervades some of this. Again, I am extremely in favour of the Government being more effective and efficient and using information sharing for that, but I would like the Bill to be as good as it possibly can be.
Finally, there are little things—I used to be a journalist but now I am a full-time geek—such as what is being reported? What things have been shared? How are those organisations being identified? The Government do not even have a coherent way of identifying Government Departments or non-departmental public bodies. Those sorts of things. There is a lot more that could be done to make this a genuinely effective Bill.
Thangam Debbonaire
Q Mr Taggart, you mentioned something about its feeling like it is 10 years out of date. I want to bring us bang up to date by chucking in a Brexit question. Is there anything that the three of you could very quickly add to the discussion about what might need to be in the Bill given that we are now in Brexit? Brexit has implications for the digital economy, about which I am sure you know more than me.
Chris Taggart: I will try to be brief. One is to do with policy aspects of what happens. I believe you are hearing from the Information Commissioner later. What happens to data protection in a post-EU UK? From our perspective, the UK has generally taken a slightly different perspective on data protection from the information commissioners in some other countries and is generally taking things like public interest into account and treating paid-for and free information the same, which we welcome. We have some concerns about the general data protection regulations because of that sort of stuff and some of the stuff that is coming from the EU. There are some potential benefits, but there are also some downsides about whether people’s rights will be defended. I think the digital economy becomes much, much more important, and my position here is as an advocate of open data and the potential for open data in driving a thriving digital economy. As a digital entrepreneur, I think we are missing some significant opportunities for that. If you were to sit down today and do a digital economy Bill with the knowledge that in a couple of years we perhaps would not be part of the EU, I think we would be doing something quite different.
Paul Nowak: May I pick up the point about post-Brexit? I think there is growing political consensus that one of the implications of the decision on 23 June is that we need to think seriously about how we invest in our national infrastructure. For the TUC that goes beyond Heathrow, Hinkley, High Speed Rail. It talks to issues around, for example, high-speed broadband. It is about thinking about how this Bill would interface with, for example, announcements that might come in the autumn statement about investment in high-speed broadband. I note that the Chair of the Committee talked about the interface between rail and high-speed broadband, which is something that should be borne in mind. Again, valid points were made on Second Reading about requirements for developers to incorporate high-speed broadband into new housing developments, which is absolutely essential. I reiterate the point I made earlier about seeing this in the context of the wider approach to industrial strategy and how the digital economy can support other parts of the economy that are going to be even more important as we move forward post-Brexit.
Sarah Gold: For me, particularly looking at privacy, security and personal data, it is about the age of some of the language used in the Bill. Even talking about data sharing feels to me like the wrong language. We should be talking about data access. Data sharing suggests duplication of databases, with data being slopped around different Departments, whereas data access suggests accessing minimum data via APIs or by using the canonical Government registers, which is an excellent project that is not mentioned in the Bill but should be.
Nigel Huddleston
Q There is a lot in this Bill, everything from BBC regulation to child protection, the universal service obligation and making switching easier. Can each of you say what are the top two or three positive features of the Bill that you believe will be of benefit to your members, clients or, indeed, the general public?
Chris Taggart: Yes. First of all, I agree that what I would like to see is that the Government—
Nigel Huddleston
I do not think that was the question. I asked what you like about the Bill that would be of benefit to your clients or customers. It is quite long.
Chris Taggart: To be perfectly honest, we operate in the new economy in places like Canary Wharf. We are a growing company and so on. I do not think there is anything in there that is going to benefit us as a growing, innovative digital company, to be honest.
Nigel Huddleston
Q The universal service obligation? Easier switching? None of that?
Chris Taggart: No.
Nigel Huddleston
Q You do not think that is a benefit?
Chris Taggart: Not to us. If you are talking about whether there are benefits to the wider world and to the UK as a whole, yes, I do not have an argument, but you asked whether it is of any direct benefit to us and I said no. There are plenty of things I could put into the Bill that would be of benefit and would be very simple to implement and so on, but in terms of measures in the Bill that would be a direct benefit to us and to the thousands of innovative digital companies in the UK that are making a difference to things like open data and financial services and solving real world problems and so on? Maybe it was not the intention for it to do that, and it does not.
The Chair
A clear answer.
Paul Nowak: If I could start on a positive and then give you a couple of areas where I think the Bill could be strengthened, the universal service obligation is something we would support. I note the discussion on Second Reading that 10 megabits per second is just a starting point. If you want a digital economy that is fit for the future you need to go well beyond that, but the universal service obligation is welcome. Some of the points in clause 4 are important, in terms of protections for musicians and other creative performers. Useful suggestions were made on Second Reading about how some of those provisions could be strengthened, such as ensuring online providers are accountable for any illegal pirated materials that they host and making sure the Government are prepared to step in if voluntary approaches to those sorts of issues fail. That would be a positive set of issues.
I have concerns about the interface between the Bill and the BBC. I know that the NUJ—which is one of our affiliates—is particularly concerned about the role of Ofcom as a potential regulator of the BBC. I am particularly concerned about the BBC taking on responsibility for TV licences for over-75s, not just in terms of the budgetary implications for the BBC but in terms of the BBC effectively taking responsibility for a key part of our social security system.
There are some positives, and the one I would draw out first and foremost is the universal service obligation. No matter what job someone does or where they live, having access to decent high-speed broadband is increasingly essential.
Sarah Gold: I agree with the overall sentiment of the Bill—that having better access to data and to the right infrastructure can lead to better services and a more open society. One of the details I think is good is the significant consequences for individuals should they be part of data misuse. That is really necessary and I see that as a positive step.
Drew Hendry
Q Sarah Gold has given us a really good example of how we could approach terms and conditions in a different way. As somebody who actually went through the Apple iPad terms and conditions three days ago I can tell you it is a mind-numbing experience, so I have great sympathy with that view. What examples can we take into account from other countries that are dealing with these issues as the Bill goes forward? My question for Paul Nowak is what is required to protect workers’ rights with the onset of new, disruptive technologies?
Sarah Gold: In terms of other countries, that is not something I am an expert in. I know that Estonia’s e-citizenship cards can be used as a form of identity across many services, which is certainly helpful. There is an emerging question about what forms of identity individuals, particularly those who are less affluent, will be able to access. That is increasingly becoming a design problem. My work and work at projects by IF is more focused at the moment on UK-based companies and how they approach different forms of consent. We are thinking about privacy through a design lens. We are thinking about the minimum viable data that a service needs to operate and how we can display information in a simple, readable way so people can understand what they are giving away and why, and also get back shared insights. I can speak about some of the emerging trends in technology, such as general transparency and certificate of transparency, which I think have very interesting applications, and about how we can begin to see better forms of consent and permissions across the services. Unfortunately, I am not an expert on other countries.
The Chair
Thank you. Mr Nowak is an expert, I am sure.
Paul Nowak: I have maybe three things to say. First, going back to the point I made before, we should absolutely clarify some of the issues about employment status. I do not think it is acceptable that a multinational corporation can hide behind an app or say, “You’re employed by an algorithm.” It needs to be recognised that it does not matter whether you are getting your work via an app; you are still an employee. If you were a small building contractor, you could not get away with claiming that the person who works for you day in and day out is an independent contractor. HMRC would be down on you like a ton of bricks. I think you need to tackle those issues.
There is a set of issues about what I call sectoral approaches. We know that these new disruptive technologies have an impact across whole sectors. I mentioned parcels delivery. It is no longer the default that the man or woman who delivers your parcel is directly employed by Royal Mail and drives a Royal Mail vehicle. They could be “self-employed” and driving their own vehicle. They may be doing two or three different jobs. There is an argument that we should be thinking about how we bring together players right across a sector at the sectoral level, involving employers, new entrants, trade unions, the Government and others, to think about issues to do with not just employment regulation but skills.
I think it flags up a set of interesting issues about having an employee voice at every level. It is very welcome that the Prime Minister has raised the issue of workers on boards. I think that the value of having an employee voice from the shop floor all the way up is important. I note that, on Second Reading, Huw Merriman made the point that the BBC is a good place to start—the new BBC board can have employee representation. Ensuring that there is an effective employee voice, by whatever means somebody is employed, is important. Crucially, that is about social partnership and dialogue, and engaging workers and unions in thinking about what the best form of that employee voice is and how we ensure that people are not exploited in a particular sector.
Chris Taggart: To pick up on something that Sarah said, the truth is that we live in a data world these days. We cannot move from one side of the street to the other without interacting with data. Everything we do—every phone call we make, every website we visit, every time we use a smartphone—is about interacting with data. Unfortunately, individual citizens are increasingly the products—the data—so we really need to be thinking about what citizens’ rights look like in a data-centric world in which the data could be held anywhere.
It is about not just the legal rights, but the effective rights. One of the things that companies such as Google are doing is disintermediating. Sometimes you may have local monopolies, but you may end up with one global monopoly. Who owns the information from smart meters, and so on? The person who pays the electricity bill, the electricity company, the Government or some third party that can see when you turned on the lights, when you went to bed and those sorts of thing? We really need to be thinking about what rights, abilities and agency comes with being a citizen in the modern world. I think that means having access to the data we need—official registers—and licences that actually work for us, and having a critical eye on some of the emerging global power structures of data.
Paul Nowak: That point about data throws up some profound questions for the employer-employee relationship. For example, it is entirely reasonable for TfL to want to know where their buses are at any given moment of the day or night, but it is less reasonable for an employer to access information about whether or not I turn on my phone at seven o’clock or eight o’clock, or about where I might happen to be outside normal working hours. That speaks to the need for the Government to think about how you facilitate and encourage employers and employees to reach reasonable agreement about the use of data. What is the line? It is going to be different in different sectors and different jobs, but the important thing is that there is a shared understanding of what data are collected, what they are used for and how they might be used. I suspect that in a lot of workplaces that is just not a live conversation.
Sarah Gold: Also, who in the workplace has permission to access that information? That is certainly not clear on the face of the Bill, which suggests that any sharing between civil servants would be okay. That really makes me feel quite scared.
The Chair
Thank you. We have two more questioners: Nigel Adams followed by Louise Haigh.
Nigel Adams
Q Mr Nowak, you alluded earlier to the element of the Bill that you support and referred to musicians. The Bill is trying to bring in measures that would equalise the measures for copyright theft. That is a really good thing to try, and the Musicians Union is very supportive of that measure. Is there anything else that you think would strengthen the Bill in terms of protecting rights holders? We have a huge problem in this country of content creators—rights holders—not getting rewarded because their work is put online illegally. There is quite a bit of work that the tech companies could be doing, but how do you think we could strengthen this area to protect many of your members?
Paul Nowak: I reiterate the points that I made before, but perhaps I can also make an offer. That is certainly an issue on which our Federation of Entertainment Unions—including the Musicians’ Union, the National Union of Journalists, the Broadcasting, Entertainment, Cinematograph and Theatre Union and Equity—would welcome the opportunity for further engagement with the Committee, and we could certainly provide more written information.
First of all, though, we should ensure that online providers are held accountable for any material outside of copyright that they host online. The second point that I made before is that if there is no voluntary, agreed way forward, the Government should be prepared to introduce a code of practice. If you are a musician, the online world and the emerging digital economy clearly throws up all sorts of opportunities, but there is also a real risk. It is not about the creation of a piece of work over three or four minutes; the hours, the days, the weeks that went into the creation of that piece of work could quite easily be dissipated and lost, and somebody else is profiting from the input you have made. It is not an area in which I am an expert, but our entertainment unions would certainly wish to give more evidence.
Nigel Adams
Q That is useful. It is not only about musicians; there are also the people who create content, such as authors, artists and writers.
Paul Nowak: For your information, the latest TUC affiliate is the Artists’ Union England, which represents visual artists. We represent people right across the creative industries, including the musicians, the Writers’ Guild of Great Britain, Equity, which represents actors, and, as I say, visual artists. We would be happy to feed in more information directly from those unions.
Louise Haigh
Q Thinking about algorithms beyond the workplace, we know that Uber, for example, will charge more if your battery is low. Having worked for an insurer before I was elected, I know that the amount of data that is available to insurers to set prices would make your hair curl. How much transparency should there be around the algorithms that companies use to set prices, while protecting the intellectual property of those algorithms?
Chris Taggart: That is a fantastic question, and it comes to the heart of our ability to understand our world and influence it. I take quite strong, almost like democratic first principles with this: you need to be able to understand the world and have the ability to understand the world, and then to be able to influence it. That is what democracy is about. If we do not understand the world—if we do not understand that we are being given this particular news story in this particular way; that we are being given this particular price; that we are being influenced to walk down this street rather than that street in order to do this—then we really do not have that possibility. A question that is not asked often enough but that is starting to be asked more in academic circles is: what are the algorithms on which our lives depend? If we do not understand that we are being driven by algorithms, still less what those algorithms are, how do we have agency? How do we have free will, if you like? I think it is a really important question.
I think that increasingly we will see that we need transparency around that, and that with transparency there is always the ability for there to be negative downsides. You could argue that, by having courts open, people can just walk in off the street and see that this person over there is being prosecuted; some neighbour, or whatever. But if we are not starting to ask those sorts of questions and staring to come up with some informed answers, we will be in a world where we have lost the ability to ask those sorts of questions.
Paul Nowak: I am not particularly well versed in this area, but I suppose that it is a little bit like the terms and conditions question. You could provide so much transparency that it would give the illusion of people being informed, and I think what you want to do is to allow people to understand what are the potential implications of those algorithms. So, if you are using Uber you know that if there is a spike in demand or a lack of supply, you are likely to pay more, and what the implications of that might be, and what the parameters of that are. I do not think that means that Uber needs to make all of its software open source—frankly, that would mean nothing to me—but I want to know when I get in what the fair contractual exchange is between me and the company that is providing the service.
Sarah Gold: I am very well versed in this area but I have very little time to talk about it, which is very frustrating. However, I think that looking at how individuals can question algorithms is very important; I agree with both of your comments. Particularly in GDPR, there is a clear piece that is about people being able to question automated decisions that are made about them.
As a design problem, that is really fascinating. For instance, if you think about when you buy flights on browsers, I think that everyone has probably seen that when you go back to book the flight again, your IP address has been tracked, you are a cookie, and so you see the same flight booked for—it costs you more. So you go into kind of incognito mode to check that.
What I am quite interested in at the moment is that sort of incognito testing of algorithms, so that you can see how your inputs might change an output. In the context of Uber and insurance, I am very interested in this emergence of insurance for, say, a single day of driving or for a particular route, and being insured—say, it costs you far more to go down the M1 than just the A1. And you should be able to understand why that decision has been made about you, because it has a significant consequence for your life.
However, that comes down to the quality of the training data, too, and that comes back to some of the terms of the Bill—we should be working towards greater data minimisation, I think, and also the ability for people to be able to audit not only those data, to correct those when they go wrong, but to provide an audit of data access. While it may not mean everything to all of us, because not all of us are developers, I think that for those individuals who are able to scrutinise the code and check for digital rights management or security vulnerabilities, or biases in data sets, that information is really crucial, because it is those individuals who are our greatest defence against data misuse or fraud.
The Chair
Thank you very much indeed; that is a high note on which to conclude. I thank our three witnesses for your evidence. We may now release you and we will call our final two witnesses for the afternoon to come forward.
Examination of Witnesses
Professor Sir Charles Bean and Hetan Shah gave evidence.
The Chair
Welcome to our two final witnesses today; I am sure you will keep us on our toes in our final session. Could you please introduce yourselves for the record?
Hetan Shah: I am Hetan Shah, Executive Director of the Royal Statistical Society.
Professor Sir Charles Bean: Charlie Bean, London School of Economics and soon to be Office for Budget Responsibility.
Louise Haigh
Q We have heard from witnesses today about a lot of the negatives and potential pitfalls of data sharing across Government. I have nothing against the Government’s intentions here, but do you share the concerns of previous witnesses about the lack of safeguards for privacy in part 5 of the Bill?
Professor Sir Charles Bean: You will have to excuse me; since I was not here for your earlier discussions, I am obviously not aware of what earlier witnesses have said and what their reservations are. My interest obviously is in the use of the information for statistical purposes. It is important that there is a clear and well understood framework that governs that, and there clearly need to be limitations around it.
I have to say that I think the current version of the Bill strikes a reasonably sensible balance, but there are bits that will clearly need to be filled in. The Office for National Statistics will need to spell out a set of principles that govern the way it will access administrative data, and so forth.
Louise Haigh
Q Do you think there is any framework in part 5 around the sharing of data?
Professor Sir Charles Bean: Sorry—
Louise Haigh
You said you are satisfied that it strikes the right balance. Do you believe there is any framework in terms of the principles for data sharing in part 5?
Professor Sir Charles Bean: By “appropriate balance”, I mean in terms of the statistical authority having in-principle access to the administrative data that it needs to do its work, subject to certain limitations.
Louise Haigh
Q Do you believe there should be transparency for—
Professor Sir Charles Bean: I certainly believe in transparency. I am a big fan of transparency. Anyone who has worked at the Bank of England would like transparency.
Hetan Shah: May I come in and build on this? Privacy is absolutely critical to maintaining public trust, and in a sense we think the Bill has missed a trick here. On the research side, the framework is embedded on the face of the Bill. In our view, the ONS has a very good track record—it has maintained 200 years of census data, it has the best transparency, it publishes all the usage of the data and it has already criminalised the proceedings of misuse of data—but that has not been put on the face of the Bill. A tremendous amount could be done to reassure by taking what is already good practice and putting it on the face of the Bill, and I think that will answer the issue for the statistics and research purposes.
Louise Haigh
Q My full question was not, “Do you believe in transparency?” It was going to be: do you believe in transparency in terms of how citizens’ data will be shared with the Government and between Government agencies? That principle, as you say, is not only not on the face of the Bill but not anywhere in the Bill. We have been asked by the Government to rely on codes of practice that have not even been drafted yet.
Professor Sir Charles Bean: I agree that transparency about the principles that will govern sharing of information makes a lot of sense.
Louise Haigh
Q As you say, Mr Shah, for Government data sharing to work requires public trust, and digital government and the use of your statistics absolutely requires trust that the Government will handle data with due purpose and cause.
Hetan Shah: Another thing is that the UK Statistics Authority is directly accountable to Parliament, not the Government. That actually makes the statistics and research strand more accountable compared with other parts of the Bill. I remind you of that, which is very important.
Matt Hancock
Q I would be interested if you could explain and put on the record some of the consequences you see of having this Bill and the underlying secondary legislation on the statute book. What impact will that have on the areas in which you are experts?
Professor Sir Charles Bean: The key thing is that it greatly improves the gateways that enable the Office for National Statistics to use administrative data—tax data and the like—in the construction of official economic statistics. We are well off the pace compared with many other countries. Scandinavian countries, Canada, the Irish and the Dutch make very heavy reliance on administrative data and only use surveys to fill in the gaps. Here, the Office for National Statistics is essentially an organisation that turns the handle, sending out 1.5 million paper forms a year and processing those. Essentially, you are acquiring the same information again that you have already got in some other part of the public sector, where the information is being collected for other purposes.
The key gains here I see as twofold. First, because you access something close to the universe of the sample population rather than just a subset, which would normally be the case with a survey, you potentially get more accurate information. It is potentially also more timely, which for economic policy purposes is important.
The other side of the coin is that by enabling you to cut back on the number of surveys you do, there is a cost gain, which I should say would probably not mainly be a gain to the ONS, because they have to do the processing of the administrative data, but a gain to the businesses and households who are currently spending time filling in forms that they would not need to do if more use was made of administrative data.
Matt Hancock
Q Mr Shah, what do you see as the impact of the data sharing clauses?
Hetan Shah: I completely agree with Charlie Bean that we are really in danger of being left behind compared with where other countries are on this agenda. The European statistics peer review, which happened last year, said that this was the key weakness in our statistical system. If you look at bodies like New Zealand, Finland and Canada, they all have this ability to access, so we have got to have it. We are spending £500 million on the census and you have got a lot of that data that you could be using through administrative data.
Similarly, on inflation, which is a critical economic indicator, at the moment we send out people with clipboards to take price points of 100,000 items in 140 locations around the country every month, but there is scanner data that tells you the price that people paid. This could really revolutionise. It is not statistics for statistics’ sake; it is to answer the questions that parliamentarians and policy makers have on issues about social mobility and productivity. For all these questions you are asking yourselves, we need the data. And if we are criticising the ONS about not being quick enough, we need to give them the powers to be quicker.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
Q In terms of the provisions in the Bill on sharing data for research purposes, could you shed a bit more light on how that will benefit the wider research community? I was also wondering what the immediate priorities will need to be for the UK Statistics Authority as the accrediting body for the infrastructure provided by the research powers in the Bill.
Hetan Shah: The Bill creates a permissive power and it really streamlines what at the moment is quite a complex legal environment for researchers accessing Government data. This makes it much clearer that if a researcher meets a set of conditions—the research is in the public interest, the researcher is accredited and it will use the research in a safe haven, as it were, and so on—they are able to access that Government data.
We gave some case studies in our evidence of research that is obvious, such as what affects winter mortality and understanding the productivity gap. Those are questions that researchers want to investigate, but they cannot get hold of the data from Government Departments. To be fair to the Government, there is concern from their side about handing over data when the legal framework is not clear enough. I think this process will really streamline that.
One caveat is that it is slightly odd that health data are out of scope. Most of the biggest concerns that researchers have are in trying to build the relationship between survey data and, often, the health outcomes in certain areas. I understand the reasoning behind this: because of care.data there were some concerns. Health is very important. Our view is that the Bill should build in the scope for health data and then allow for future legislation to say how that will be dealt with, in particular once Fiona Caldicott, the national data guardian, has consulted on her framework, which is happening right now.
Professor Sir Charles Bean: I would endorse a lot of that. I should say that in Canada, where I spent some time talking to Statistics Canada in the course of doing my review, they have exactly this model. There are clearly defined criteria under which researchers can get access, with a sort of prescribed laboratory where they can use it. I think there is something like 30 requests a year to use information, so it is quite heavily used.
Certainly when I was talking to people here during the statistics review, the issue was raised during the consultation process by people such as the Institute for Fiscal Studies, who wanted access to the microdata to be able to study the impact of tax structure on decisions and so forth. The difficulty of getting that microdata inhibited good research. I am sure the demand is there.
Chris Skidmore
Q Several witnesses have expressed various degrees of concern about issues of privacy, whether merited or not. In terms of what is taking place in Canada, have you seen any data leaks or anything that would raise concerns about what we are pursuing?
Professor Sir Charles Bean: I am certainly not aware of any leaks or anything. They are clearly very concerned about making sure that personal information is not divulged. It is very important that the information made available is not only anonymised but cannot be reverse engineered to find out who the agent concerned might be.
If you are looking at information on companies, there may well be, if you are not very careful, information that might be reverse engineered to find out that the name of the company is probably such and such. It is very important that you have good processes to make sure that the information that is provided to researchers is sufficiently anonymised but, as I say, the Canadian experience suggests that you can do that quite happily.
Scott Mann
Q One of the biggest contributing factors for people moving house is having access to a decent broadband signal. Have you done any statistical or economic modelling of population densities and movement away from cities to rural areas? Is that a piece of work that you would be prepared to do to find out the economic benefits to rural areas as part of the USO?
Professor Sir Charles Bean: That is not really my territory.
Hetan Shah: Ditto. I am here to talk about the stats and research clauses. I do not know about the other bits, I am afraid.
Thangam Debbonaire
Q You have both talked about other European countries and Canada. Forgive me for not knowing whether this is the correct term, but are we talking here about big data? Is that the term I hear bandied about? Either way, could you tell me a bit more about the benefits and outcomes in terms of policy information? Give us a bit more information about what these other countries are doing better and how their politicians are better equipped as a result.
Professor Sir Charles Bean: I think most people use the term “administrative data” to refer to large information held within the public sector that accrues as a by-product of whatever the public authority is doing. Tax information is a classic example, and it is something that is obviously potentially of use to the Office for National Statistics in constructing economic statistics. Big data is a wider concept that embraces the vast range of information that is generated by various sorts of private sector organisations, which includes the scanner data that Hetan mentioned. It is the sort of information that is generated by the likes of Google and phone companies. Big data is much broader.
There is a question about the extent to which you can use big data in the construction of official statistics. I think there are two obvious areas that you might want to exploit. One is scanner data for constructive price indices, which Hetan has already mentioned. The other area where I could see private sector big data being of considerable use is on payment information—information from payments processors and payments providers.
Of course, there is a vast amount of other information that is generated by the private sector. Some of that information might be useful for shedding light on new puzzles or new phenomena in the economy. One might want to be a little bit wary about relying on them to build the regular official statistics because you cannot be sure they are always going to be there, whereas you will probably have a reasonable presumption that the payments information and scanner data will continue to be available, and the Office for National Statistics could therefore use them on a regular basis.
Hetan Shah: I can give a couple of examples or case studies. One is pensions. In this country we have made quite a lot of changes in recent years around pensions policy, but it is very hard to track the impact of that. The Bill will allow for the ONS to bring together the benefits and pensions data, which are held by the DWP, the HMRC data, and also to go out to companies or to either regulatory bodies or federated bodies and get their data and bring those together so that we can see what auto-enrolment has actually meant, in terms of the amount people are putting into their pensions, and you can actually start tracking policy.
Another example is international student migrants, which is clearly a hot topic at the moment. At the moment there are Home Office data in one place, the Higher Education Statistics Agency holding useful data in another place and there are labour market data held in a third place. You could bring all those things together to actually track the impact and the numbers and so on, which at the moment we just do not have a good handle on. Those are the sorts of things that are possible if you give your statistical office access to the aggregate data from other Departments and also some access to private sector data.
Thangam Debbonaire
Q Is that the sort of data other countries are using in that way?
Hetan Shah: Yes, that is right. Other countries have different set-ups, as it were, but these are the sorts of puzzles they can solve because they can bring those data together in different ways.
Nigel Huddleston
Q Mr Shah, you have partly answered my question, so I will turn to Professor Sir Charles Bean first. What kind of Government data would you personally like to get access to; what would you do with it; and how would the public benefit from your having it?
Professor Sir Charles Bean: You do not mean me personally? Presumably you mean the Office for National Statistics and the UK Statistics Authority?
Nigel Huddleston
Absolutely.
Professor Sir Charles Bean: First and foremost, I would say the tax data that HMRC holds—value-added tax, income tax and corporation tax. Value-added tax is particularly useful because it tells you something about inputs and outputs of businesses. It is potentially quite good, up-to-date, timely information on activity in the economy. I should say, when I was on the Monetary Policy Committee, we used to get informal briefings each month from the Treasury representative on what they knew about the tax receipts coming in that month, but having more detailed information about what was going on would be potentially very useful. In principle you can envisage building the national income accounts almost entirely on that sort of information if you have access to it, and you can make sure that the income-outcome expenditure sides are all balanced. That, as far as I am concerned, is by far and away the most significant thing.
I think it would be quite useful to bring in another dimension here about why administrative data are useful. There is obviously a lot of interest in regional issues. As it is at the moment, most regional information is collected to align with administrative areas of one sort of another, but those are not always the most natural units to be looking at for studying a phenomenon. If you think of Wales, north Wales is not actually trading with south Wales, it is trading across with Manchester and Liverpool, while south Wales is trading across with Bristol and so forth. If you want to think about the regional economics, you need things that allow you to look at those nexuses, rather than the information you might be given on the Welsh economy. If you have administrative data, with regional, locational identifiers, you can in principle aggregate the information in whatever way is best suited to the particular issue that you want to look at.
In terms of thinking about statistics for the 21st century, we need to be thinking about a framework that is actually quite fluid and flexible, rather than one in which everything is pushed into a set of standard definitions for GDP and stuff like that, and standard regional definitions and so forth. When you have access to the underlying micro information, providing you have appropriate identifiers that you can manipulate and link, you have open to you all sorts of possibilities that we do not currently have.
Nigel Huddleston
Q Mr Shah, do you have anything to add to that?
Hetan Shah: I have just a couple of examples. One is systemic financial risk. Post 2008, I think there was a recognition that we had focused too much on the risk for individual financial institutions and not looked at risk at a systems level. There is a possibility of doing that. The Prime Minister has indicated an interest in how the labour market is changing with the rise of zero-hours contracts and so on. Using a mixture of administrative and private sector data would allow us to start to get a handle on how the economy is changing.
Louise Haigh
Q Mr Shah, you keep mentioning access to data, but the problem we heard earlier is that the Bill talks not about access to data but about data sharing, which implies duplication. We should really be moving towards data minimisation. Do you think that the language of the Bill should reflect access to data, rather than data sharing?
Hetan Shah: My view is that for the clauses on statistics and research the Bill is pretty clear that it is about data access.
Louise Haigh
Q It discusses the transfer of data. It does not talk about your accessing data. It does not mention the technology through which you would do it. There are no codes of practice alongside how it would happen. It is very broad and explicitly talks about data sharing in certain areas.
Hetan Shah: I think I said this earlier, but in case I was not clear I shall repeat it. For statistical and research purposes, statisticians and researchers are interested only in aggregates; they are not interested in us as individuals. It is a key point that the relevant clauses are quite different from some of the other parts of the Bill. Others have indicated in their evidence that this area should be seen as slightly different.
It is also worth noting that there are safeguards that have been tried and tested over many years. There is the security surrounding the data—the ONS will not even let me into the vault where they hold the data. You need to be accredited and to sign something saying that you will not misuse the data. If you do, you will go to jail. The trick that has been missed has been not saying all that, because it is almost assumed that that is how the ONS works. My suggestion is that if you want to strengthen that part of the Bill, you should just lay out the safeguards that are already common practice in the ONS.
Claire Perry
Q Thank you both for setting out some very factual and helpful arguments as to why the provisions are a good thing, particularly when it comes to aggregate statistics. I was struck by a quote in your report published in March, Professor Sir Charles. You mentioned the
“cumbersome nature of the present legal framework”,
which the Bill will clearly help to solve, and you also said that there was a
“cultural reluctance on the part of some departments and officials to data sharing”
and, in many ways, to working together, as we know from experience. How do we solve that problem and get Departments to realise how helpful some of these datasets might be?
Professor Sir Charles Bean: A key thing about the Bill is that it shifts the onus of presumption. There is a presumption of access unless there is a good reason not to comply or explain, if you like, as opposed to the current arrangement, which is that the data owner has the data and you say, “Can you please let us have a look at it?” There is civil service caution. I was a civil servant very early on in my career, so I am aware of how civil servants think. Inevitably, you are always worried about something going wrong or being misused or whatever. That plays into this, as well.
In the review I said there are really three elements and I think they are mutually reinforcing. There is the current legal framework, which is not as conducive as it could be; there is this innate caution on the part of some civil service Departments, or even perhaps on the part of their Ministers on occasion; and then the ONS has not been as pushy as it might have been. It is partly that if you know it is very difficult to get in—people are not very co-operative at the other end and the legal frameworks are very cumbersome—you are less inclined to put the effort in, and you think, “Oh, well, let’s just use the surveys, as we’ve always done.” So I think you need to act on the three things together, but they are potentially mutually reinforcing if you get the change right.
Hetan Shah: This is one area where I think the Bill could be strengthened. At the moment, the ONS has the right to request data; similarly, the researchers have the right to request data. The Department can still say, “No”, and in a sense the only comeback is that there is a sort of name-and-shame element of, “Parliament will note this”, as it were. My worry, given the cultural problems that have been seen in the past, is that that may not be enough. So why do we not do what Canada does? It just says, “The ONS requests”, and the Department gives.
Claire Perry
Q It is a presumption in favour of sharing?
Hetan Shah: Yes, precisely. Similarly, with research you could have the same situation where, as long as the researcher meets the code of practice this required, the presumption would be in favour.
Chris Skidmore
Q Professor Bean, in terms of the current legal framework and the problems with it as it exists, am I right in saying that there is an issue with legislation that was passed in the previous Government, under Gordon Brown’s premiership, that caps the use of data and research material, and which needs to be addressed quite urgently?
Professor Sir Charles Bean: Yes, I think it does need to be addressed. The existing Act was introduced with the intention of trying to improve the ability to share data, but it just has not operated in the way that people maybe hoped it would. In practice, having talked to the ONS and other Departments, it sounds like an extremely cumbersome process. So I think this is a case where the original legislation may have been well intentioned, but—
Chris Skidmore
Q Will there be a problem even with accessing some datasets after a certain point in time—?
Professor Sir Charles Bean: There is a point after 2007, yes. You have to specifically write into the legislation that, in principle, the information can be shared, yes, whereas these information-sharing orders—
Chris Skidmore
Q So that is creating a real problem in the infrastructure that needs to be addressed?
Professor Sir Charles Bean: Yes.
The Chair
Thank you, colleagues. Thank you very much indeed to our final two witnesses; you gave very clear and expert answers. Thank you; it is much appreciated.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Digital Economy Bill (Third sitting)
Thursday 13th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 October 2016 - (13 Oct 2016)
The Chair
Welcome. I remind everyone to switch electronic devices to silent. First, I believe that Calum Kerr would like to declare an interest.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I would like to declare that I am a trustee and voluntary director of Advice Direct Scotland, which also operates as Citizens Advice Direct.
Examination of Witnesses
Peter Tutton, Alistair Chisholm and Dr Jerry Fishenden gave evidence.
The Chair
We will hear oral evidence first from StepChange, Citizens Advice and Dr Jerry Fishenden from the Cabinet Office’s privacy and consumer advisory group. Before I call Louise Haigh to ask the first question, I remind all hon. Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion that the Committee agreed to. For this session, we have until 12 o’clock. Will the witnesses please introduce themselves for the record?
Peter Tutton: Hello everybody. My name is Peter Tutton and I am from StepChange Debt Charity.
Dr Fishenden: Good morning. My name is Jerry Fishenden. I am a technologist working with private and public sector clients. Today, I am here in my capacity as co-chair of the Cabinet Office’s privacy and consumer advisory group.
Alistair Chisholm: Hello. My name is Alistair Chisholm and I am here from Citizens Advice.
Louise Haigh (Sheffield, Heeley) (Lab)
Q 214 I will start with part 5 and ask about debt collection. My questions are particularly aimed at StepChange and Citizens Advice. What concerns do you have about the principles of public authority debt collectors when dealing with their creditees?
Peter Tutton: Sorry, did you say local authorities?
Louise Haigh
No, just the public sector.
Peter Tutton: We recently did a poll of our clients and asked them which of the different types of creditor they face treats them the most unfairly. Our clients are all people in heavy financial difficulty; they are really struggling and under pressure. Of the top five creditors that treated them the most unfairly, four were Government Departments or agents collecting Government debt.
We are concerned that the way in which public debt is collected is not subject to the same sort of oversight and scrutiny as private sector debt. Organisations from banks to payday lenders are part of a regulated sector that still has problems, but those problems can be addressed. In the public sector, we do not see the same kind of control and oversight, or even any sense of regulation about how that should be done. As a result, we see a lot of problems, with the sort of debt collection practices that we might have seen 20 years ago from banks now coming from the collection of public debt.
Louise Haigh
Q Can you give us an example of those kinds of problems?
Peter Tutton: With central Government debt, it will be things such as persistent aggressive phone calls; old debts suddenly popping up with no explanation; and people trying to arrange affordable payment, getting short shrift and being told, “Pay this or else.” With local government debts, bailiffs are used and there is a lack of any kind of mechanism to make affordable, sustainable payments, which are at the core of what people need.
Our clients typically have six debts. They are often in difficulty because they have lost their job or become ill, and they need a period to recover control of their finances. We need creditors to show some forbearance and help people to make affordable, sustainable repayments. When that happens, about 60% of people say that their finances start to recover straight away. When that does not happen, none say that.
If people get shouted at and told to pay money they cannot afford, they actually go and borrow somewhere else—about a third of our clients went to a payday lender when they received an aggressive payment demand that they could not afford—or they do not pay another bill. The financial chaos continues, and gets worse and worse.
Alistair Chisholm: There is a particular issue around the way in which debts can be disputed. There is a difference between the way in which that is dealt with in the public sector and in the private sector. I certainly agree that the Government need to apply to their own collection activities the standards and protections they have asked financial, energy and water services to offer to consumers. The Bill is an opportunity to make that change and, if they do, sharing data can be helpful.
We see a lot of cases in which bad data sharing has a wasteful effect on Government and a detrimental effect on our clients. For example, in a survey of our advisers last year, 55% of them had seen more than one case the previous 12 months in which a debt was sent to a bailiff but in which the debtor’s council tax benefit had actually not been processed. It is a common, systemic problem that bits of Government do not use their own data to try to resolve people’s problems. That is an opportunity for the Government, but there are big risks.
Take the recent debacle with Concentrix and Her Majesty’s Revenue and Customs, in which the Government were using credit reference data and, it seems to me, tracing data to find people who were guilty of cohabiting. They were accusing those people of having a tax credit debt and it turned out they were not guilty of that at all. If mistakes like that are ricocheting around public sector debt collectors, the detriment could be much worse. For this power to work we need a shift in the way the Government collect debt. It needs to be allied with the best practices in the private sector, particularly—
Louise Haigh
Q Sorry, but what precisely could the Bill do to address that?
Alistair Chisholm: The Bill says that people who are sharing data should “have regard to” a statement of good practice, but we do not have that statement of good practice and “have regard to” does not seem to me to be very forceful. There are three particular things I think would help to change Government debt collection so they could use data sharing more safely. They could set affordable payments in the way the private sector does; the Government could introduce the standard financial statement that the banks, energy and water companies and the advice sector are going to be using from March next year. They could introduce fair dispute resolution; if the debt is reasonably disputed, stop collecting it until the complaint is investigated. Banks are not allowed to collect it then but public sector creditors routinely do it.
Finally, the big shift we have seen in commercial credit in recent years is the decision to place the legitimate interests of the consumer at the centre of debt collection activities, which means to help them rather than to have an unnecessary adversarial relationship. So, fair payments, fair disputes and being helpful could transform debt collection from being aggressive, adversarial and often wasteful to being helpful and to helping people to rehabilitate themselves.
Louise Haigh
Q Dr Fishenden, if we can move on to you in relation to part 5, specifically the measures on data sharing. Do the proposals reassure you that the Government have given sufficient consideration to privacy, data security and data ethics?
Dr Fishenden: The policy intent is clear and I suspect you will not hear much disagreement with that. The consultation did not find that either; people were broadly in agreement. The measures described in part 5 are fairly general and vague. There is a lot of reference to the codes of practice, which have still not have appeared.
In general, given that it is about seven years since the previous data sharing proposals were withdrawn for being too wide-ranging and vague and for work to be done on them to make them more specific and build in protections and controls, I am quite surprised that we are back with a Bill that seems aspirationally in the right place but that has none of the detail that allows us to check the sort of security, data protection and controls that will be needed.
There is not even any definition in the Bill of what data sharing means, which gives me a problem. Some people seem to assume it means people copying data around, and I guess that is implied in the bulk data provisions—it seems to imply movement of data between parties. Good cyber-security practice would be to leave the data with their original owner, who can gate access to those data or, as I described in my written submission, can confirm aspects of them.
A specific example could be applying for a blue badge. All that is needed to process that claim is to confirm with the DVLA that a person is a registered driver, that they have a legitimate driving licence and that they own the vehicle for which they are applying for the blue badge; to know from the DWP that they are registered disabled; and the local authority undertaking that process needs to check that person is a resident. There is not actually a flow of data going on there; it is merely a process whereby, to get a blue badge, you confirm the person is disabled, is a registered driver and is living within the local authority boundaries.
I find it quite surprising that the Bill does not have a definition of what data sharing is, either legally or technically. In the absence of the codes of practice, it is very hard to know what it actually means.
Louise Haigh
Q In your experience, is it unusual for the Government not to have published at least draft codes of practice alongside legislation of this nature?
Dr Fishenden: I would have assumed that they would be drafted in concert with the Bill, because to test the provisions in the Bill, you would need to run them back past the codes of practice to check that the two work together. I am a bit confused about why they have not appeared, because I cannot see how the Bill would have been drafted without them.
Rishi Sunak (Richmond (Yorks)) (Con)
Q I have a question for Mr Chisholm. I put on record my thanks to your organisation for the wonderful work that it does in my constituency—and in everyone else’s, I am sure—in helping some of the more vulnerable people in society. It is a fantastic organisation. We hear a lot about the big picture of how technology can help people and make their lives better, but you guys are at the coalface, helping vulnerable people. Will you explain how some of the measures in the Bill on data sharing are going to make your life easier and deliver tangible benefits to vulnerable people?
Alistair Chisholm: As I said before, there are definitely cases in which the Government or local authorities do not use their own data to help people when they could. For example, when somebody is paying their magistrate’s fine directly from their benefits, sometimes the benefits change, so the flow is disrupted and the payments stop.
We often see cases in which somebody then has a bailiff at their door and they are threatened with imprisonment when, in fact, they want to pay. The Government actually know that there has been a temporary interruption to their benefits, or that somebody is shifting from jobseeker’s allowance to employment and support allowance. If those data were joined up—obviously in a way that protected consumers as they need to be protected—the debt would continue to be paid, the problem would not be escalated, and the person would have a stable financial arrangement that enables them to meet their obligations. There are opportunities like that.
It is really important to say that it is now time for the Government to do what they have asked the private sector to do in the way they collect data. They need to adapt their systems so that payments are affordable and debts can be reasonably disputed, and so that people are helped.
Rishi Sunak
Q Beyond debt collection, are there other areas in which data sharing can be used to ensure that the right services or the right support is getting to people who need it?
Alistair Chisholm: In the public sector?
Rishi Sunak
Yes, when the Government are delivering public services. You may have something to say about energy, or perhaps other areas.
Alistair Chisholm: Absolutely, yes. The clause in the Bill under which energy companies and the DWP will share data to help people to access support that is there but that they do not always get is an excellent idea. I very much support that measure. People who are vulnerable are sometimes less able to manage those systems, so if you can join them up effectively, that is very helpful.
Nigel Huddleston (Mid Worcestershire) (Con)
Q My colleague has already elicited some comments from you, Mr Chisholm, about how you can see the most vulnerable benefiting from the Bill. Can you give some other examples of situations you have come across in which you could see the Bill helping individuals?
Alistair Chisholm: Are you talking about debt?
Nigel Huddleston
Debt first. We can perhaps move on to switching and other things.
Alistair Chisholm: On average, our clients have five debts. Having multiple contacts and competing demands for money from different creditors is very distressing. Government debt collecting in particular often goes down a very fixed furrow, once it has started. Having to deal with that is overwhelming, so a more sensible and joined-up approach to how people manage all that will be very valuable for people, as long as their proper rights are respected in the process.
Nigel Huddleston
Q What about other aspects of the Bill? In evidence sessions earlier in the week we focused a lot on switching, the universal service obligation and the ability to cancel contracts if you are not getting a good service. My experience is that for the people who come to my surgeries, who are often the same people who go to the CAB, those elements often come into play. Have you seen any other similar elements of the Bill that would be helpful or beneficial?
Alistair Chisholm: Yes. We are big fans of changing the switching process in the mobile phone industry so that it is aligned with how banks and energy companies do it. The poor consumer will not have to do a kind of “Dear John” telephone call to the organisation they are leaving. Instead, the organisation that they are moving to has to help them through that process. I think that that will be helpful for the way the market operates.
Quite often, you get the best deal only when you ring up and have your leaving phone call. In fact, those deals should be available to everybody. If the switching is moved to the lead company, I think that will help ensure competition and more fairness across the mobile phone market. It will just be easier. It will no longer be the consumer’s responsibility to liaise between two firms; they will be helped. We are very much in favour of that.
On the universal service obligation, we know that there are more than 1 million people who cannot access broadband—particularly in rural areas. Some of our clients have to pay thousands of pounds to access services. That is very difficult, and sometimes impossible, for people, so we are very much in favour of broadband becoming the universal service that it needs to be.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
Q I would like to ask Citizens Advice two questions. The first is about clauses 30 to 35, which relate to the warm home discount. There are already data-matching powers for those in receipt of a guaranteed element of pension credit, but obviously we are expanding that out to try to find anyone who is eligible. What difference will that make to your customers and what outcomes will it have? Can I possibly press you on some examples? You have been talking a lot about process, but it is important to get on the record what the outcomes of this expansion of the data-sharing power will be.
Alistair Chisholm: The warm home discount is money provided by energy companies to reduce the bills of people who are in financial difficulty or are on low incomes. When we talk to those firms about how people access those discounts, they say it is difficult for them to establish whether people are entitled to it, so people who should get the help do not get it. Sharing the data should smooth that.
Peter Tutton: Something like 10% of our clients would be within the old definition of fuel poverty: they spend more than 10% of their income on fuel. We have seen the number of people in gas and electricity arrears rise quite sharply from where it was in about 2010. The link with Government debt is interesting. The people we see with fuel debts are also likely to have things like council tax debts, and they are generally more likely to be people with disabilities. There is a group of vulnerabilities. People are struggling to make ends meet in difficult circumstances. They are on low incomes and under pressure from debts.
There are some questions about the warm home discount itself, and there was a recent consultation. Can it be extended to more companies? Can we look at the people who are eligible for it and extend the eligibility? The bits in this Bill about identifying fuel poverty could be helpful. If you think through the bit about the Government debt collection and put some principles in place to help financially vulnerable people, you start to get a policy package that drills down to the problem. We are quite supportive, if we can get back that sense of supporting vulnerable people and helping people to recover control of their finances. That is the key to all of it.
The Chair
May I ask for snappier questions and concise answers? Otherwise, we will not get everyone in.
Chris Skidmore
Q That leads nicely on to my second question, which is about the debt-collection power and sharing data. You stated in evidence that it
“will create improved opportunities for better treatment of people in vulnerable situations”.
Can we get some examples of how you think that will work?
Peter Tutton: Alistair said that CAB clients tend to have five debts if they come in for debt advice, and it is about the same for us. Certainly, we see people with multiple contacts and creditors. I was looking today at a client who said they get 25 calls a day about debt collection. That is an extreme case, but that sense of constant demands that you do not know what do with is common. The importance of that is that it builds stress.
About half the people we see say they have been treated by a GP or a hospital for debt-related health problems. If we can reduce that stress and simplify the approach so people get less contact from creditors, that will help. It is helpful for us as advisers if, rather than having to deal with different bits of Government, we can deal with one. It saves us money, and we can recycle that money to help more people.
Again, it all depends. If it is one big collection stick, rather than three little collection sticks, it is not going to make things better. If you make it one contact, that contact must be based on some good principles and practices. That is what will make the difference.
Thangam Debbonaire (Bristol West) (Lab)
Q I want to move us on to talk about nuisance calls and the direct marketing code in clause 77. First, do you think the proposals go far enough? Do you think that the nuisance calls section should be strengthened? Is there a justification for having an aggravated offence for targeting elderly and/or vulnerable people? Any thoughts on any of those from any of the three of you?
Peter Tutton: That is an interesting point about targeting people who are vulnerable; it is something to explore. We are quite keen on more action on nuisance calls. We would like to see a kind of code of practice; it would be a start. At the moment, the Information Commissioner’s Office guidance is not followed. When people give their details to a trader on the internet, and they say you want a loan or they are interested in a loan, that goes out into the ether and it is traded like currency. A third of our clients tell us that they are receiving an average of 10 nuisance calls for credit and other services a week—they are bombarded all the time. These are financially vulnerable people and they are being targeted, as you say.
As for the aggravating offence, this could be strengthened; the code of practice needs to address how that happens. There are a bunch of things you could do on nuisance calls. Some of the worst things are financial services—high-cost credit and things like that—where the Financial Conduct Authority could do something. It could just ban what it calls unsolicited real-time financial promotions.
So, yes, we think anything to look at that and strengthen that up is good. Make sure that if you put your details in as a consumer, you should know where they are going, so you cannot be contacted by anyone; there should be some boundaries to that. And there is the idea of some stronger controls on how and when direct marketing can be used. Currently, you sort of have to opt into not being called; maybe it should be an opt-out. There are some things we could do to strengthen the regime up.
Thangam Debbonaire
Dr Fishenden, have you got anything to add to that?
Dr Fishenden: I guess on the specific point it would be my concern that, without understanding what all the data sharing is—we have just heard that people get their data farmed and used, and then abused, and they get lots of spam calls; if we do not really understand how the data will be secured, and the public sector starts sharing it more widely, that very same information about a vulnerable household or a household in fuel poverty is gold dust to the payday loan companies and others, which would be very keen to access that same data.
My concern is the lack of the detail that would enable us to understand how we get the upside of enabling people in fuel poverty or whatever to get the help they can from the energy companies, without that same data —depending on what “data sharing” means—potentially fuelling all these other parties that are highly undesirable to intrude into those same people’s lives.
Thangam Debbonaire
Thank you. Anything else from Mr Chisholm?
Alistair Chisholm: I think I may have to ask some colleagues to help me with the aggravated offence question; I cannot answer that, because I do not know. One thing that I would say is that increasingly we have been working with the commercial sector around scams awareness. We run a scams awareness week with trading standards and lots of firms every week, and it would be great to have public sector debt collectors getting involved in that work, educating people. Also, that helps the people on the frontline, who are collecting those debts for Government, to understand the kind of problems that people are facing. There are kind of soft initiatives and it would be nice to see the Government participating more in that area.
The Chair
Thank you. We have got seven minutes and three colleagues to go. Claire Perry.
Claire Perry (Devizes) (Con)
Q Mindful of the concern that Dr Fishenden has raised about data protection and privacy, I just really wanted to press Mr Chisholm a little bit. Thank you for your submissions and what you described. You made it very clear that we are asking some people who are in the most vulnerable circumstances to deal with a multitude of problems. It is difficult enough managing one’s own financial ins and outs as somebody who does not face particular restrictions in life. Would you agree that if we can appropriately deal with the privacy issue, which I believe we can, clauses 30 to 35 and 40 to 47 are actually helping those who are in most need of our collective help?
Alistair Chisholm: I have not got the clauses in front of me, but I roughly know what you are referring to—
Claire Perry
Sorry, it is around information provision to electrical suppliers, where you very eloquently described that people can automatically get the warm home discount but they may have to go through several hoops, and also the issue around netting-off of Government debt collection, if you like.
Alistair Chisholm: I think that the sharing of DWP data with energy suppliers is sensible and will help more people. For Government debt collection sharing to give the benefits that it could, it is very important that the approach to debt collection is aligned with best practice. So we need both those things in place, but, definitely, where data are not shared well, that hurts people.
Peter Tutton: I agree entirely. The key to it is getting the good practice in place, and that will bring the benefits.
Claire Perry
But facilitating this sharing can only be helpful for those who are most in need of help.
Peter Tutton: Well, it could be harmful, as I say, if it ends up as one contact for a big load of Government debt all put together—that is a really aggressive contact—and a bigger debt means a more aggressive approach. That could be more harmful, but if we get the right debt collection principles in place, it can only help.
Kevin Brennan (Cardiff West) (Lab)
Q We are about to start line-by-line consideration of the Bill. If you were on the Committee and had a chance to put down an amendment to the Bill, what would it be?
Peter Tutton: In the bit about debt collection, I would like to see some of the principles of the sort Alistair talked about by which Government debt collection should work: helping people to affordable, sustainable repayments; making sure debt problems are not made worse; an emphasis on helping vulnerable households to recover control of their finances—that sense that there is a wider public benefit in dealing with debt. Debt costs over £8 billion a year in on-costs: health, lost productivity and so on.
The Chair
Please continue, witnesses. We are running out of time.
Dr Fishenden: I would like to see some precision around what is meant by data sharing. Some earlier drafts from about three years ago reflected much better cyber-security and privacy practice around defining what that meant and how we would make sure it was not slopping people’s personal data around, but just confirming specific pieces of data to enable someone to make a decision or undertake a process.
Alistair Chisholm: It is not enough to say on data sharing powers that the organisation should “have regard to” the code of good practice. It must be stronger than that. We need something in the Bill to make sure that the code of practice is not just a one-page set of high-level principles, but will make a difference. That means some conversations with collecting Departments that might have to be quite robust on occasions. Stronger protection around debt protection practices are needed.
Calum Kerr
Q Building on that question, if you are sending Mr Brennan emails, copy me in.
We have seen in this session a number of Members trying to drag out of you the positive benefits of data sharing. I hope we have all bought into the positive benefits, but if that is done in the wrong way, there may be a mess with unintended consequences which could be disastrous for individuals. Dr Fishenden, your exasperation with what is in the Bill is shared by other witnesses. We are faced with whether we can strengthen it in such a way that it is workable, or whether we should just oppose it, despite all the benefits. What is your view on whether it is saveable—clearly there is a desire for this—and can you help us to put in enough guarantees so that there will not be unintended consequences?
The Chair
Very quick answers please.
Peter Tutton: There is an opportunity here and we will be very happy to help and to work with all of you to make sure there is benefit from that opportunity.
Dr Fishenden: It is important not to lose the opportunity to do the right thing. My concern is the complete lack of detail and, seriously, how quickly that can be put in the Bill in both legal and technical terms. If we have sight of the codes of practice, there may be elements in them that could be in the Bill itself to help to narrow down and define the scope of what it is talking about and to get those safeguards embedded in primary legislation.
Alistair Chisholm: The way that people in financial difficulties are treated has been transformed in this country since 2008 and the pocket where it has not is the public sector, so please do not miss the opportunity to sort that out. Let us work on good principles. It really can be done.
The Chair
Thank you very much indeed, witnesses, for being so expert and so concise. It is much appreciated.
Examination of Witnesses
Lindsey Fussell and Tony Close gave evidence.
The Chair
Colleagues, we will now hear oral evidence from Ofcom. Welcome and thank you very much for joining us this morning. For this session we have until 12.30 pm. Could the witnesses please introduce themselves for the record?
Lindsey Fussell: I am Lindsey Fussell. I am director of the consumer group at Ofcom.
Tony Close: My name is Tony Close. I am the director of content standards, licensing and enforcement. I look after broadcasting at Ofcom.
Kevin Brennan
Q Hello. In relation to the new appeals process, which will bring Ofcom in line with other industry regulators, is Ofcom fully prepared?
Lindsey Fussell: Yes, absolutely. It is a measure that we have been seeking for some time and we are delighted to see it in the Bill. I have a few comments on why. As you say, the standard brings us in line with almost all other public authorities. Ofcom very much welcomes robust challenge to our proposals—it increases public and market confidence in us. We are fully confident that the new standard will enable that, while also enabling us to take forward the really important consumer measures in the Bill, such as auto-compensation and switching, which I know have the support of many people in Parliament as well as the public.
Kevin Brennan
Q On switching, the Bill improves powers to collect information. How do you envisage publishing information on telecoms, such as service quality, broadband speed and so on?
Lindsey Fussell: That is, again, a really important part of the Bill. At present, our information powers do not enable us to ask providers to give us information that they have not retained, or to give it in a particular format, so it is very hard for us to publish comparative data, which is what we know that consumers and the public really value. We have already announced in the digital communications review that we will publish our first quality of service report next March, which will contain a great deal of data comparing different providers and the quality of service they give. The powers in the Bill will give us the ability to expand that data over time and give the public more information to enable them to make informed choices.
Kevin Brennan
Q On nuisance calls, which is an issue that has been running for a long, long time, over many years there have been increases in fines and various other measures. How much of a real difference do you think the Bill will make? Could it go further in trying to tackle the issue?
Lindsey Fussell: As you say, that is an incredibly difficult issue and one that is evolving over time. In contrast to five years ago, we notice now that the complaints about nuisance calls—as you may know, Ofcom deals particularly with silent and abandoned calls—are increasingly less about large firms and more about much smaller companies. We frequently see numbers that are spoofed or unreliable. It is a different kind of problem that we are now tackling.
The powers in the Bill relate specifically to direct marketing calls, which are within the remit of the Information Commissioner’s Office. We very much welcome the measure to put its guidance on to a statutory footing and to make it easier to enforce against companies that do not comply.
Thangam Debbonaire
Q I want to turn to the BBC. How do you think we can ensure that the BBC’s distinctiveness and public service commitments are upheld in this new role?
Tony Close: That is a great question, and a tough one to start with. The first thing to make clear is that it is very much for the BBC and its new unitary board to set out its strategy in the first instance and explain to all of us how it is going to ensure that the BBC’s output is distinctive, creative and engaging. Ofcom clearly has a role holding the BBC to account. What we are not going to do is try to micromanage the BBC. We do not want to be making decisions about individual programmes, such as whether “Eastenders” is or is not distinctive, but of course we have a role looking at the output of the BBC as a whole to make sure it is fulfilling all its public service duties. I am not going to pretend that we have the answer right now. We are doing an enormous amount of preparatory work to be ready for 3 April in order to ensure that we will be able to hold the BBC to account for the distinctiveness of its output as a whole.
Thangam Debbonaire
Q Could you say a bit more about what safeguards are in place for that public service duty and role?
Tony Close: Currently the BBC is still regulated by the BBC Trust. There is a job for us to ensure that there is a framework in place by 3 April or shortly after, to ensure that the BBC is held properly to account. That has many component parts. I suspect that it has a set of metrics. There is an element where you would be looking for consumer feedback on how the BBC is delivering to consumers in their view—whether it is genuinely distinctive or considered to be distinctive by members of the public and whether the audience themselves believe that the BBC is delivering on its obligations and its public purposes.
The Minister for Digital and Culture (Matt Hancock)
Q We have had some debate, which you may or may not have followed, on the electronic communication code, and about whether the changes in the Bill, which are designed to reduce the cost of rolling out mobile infrastructure, should go further and mirror the rules around the water industry. I would be interested in your reflections on what the consequences would be, should we make that change.
Lindsey Fussell: Ofcom very much supports the Bill’s provisions on the electronic communications code, because we believe that they will assist with the faster roll-out of mobile infrastructure and its maintenance. We do not have particular expertise to offer on the precise provisions in the Bill, particularly on land valuation. What we are doing is working collaboratively with a very broad range of stakeholders to draw up a code of practice on the way that negotiations should work going forward.
Matt Hancock
Thank you; so you do not want to go further on the details, but you are working on implementation.
Lindsey Fussell: I am afraid I do not think I have anything helpful to offer on that.
Matt Hancock
Q Okay. The other area where we have had questions is on Ofcom appeals. It would be very interesting to hear your take on why it is necessary to make the changes to the appeals that are set out.
Lindsey Fussell: Yes, of course. As I said to a member of the Committee earlier, Ofcom absolutely welcomes its decisions being challenged. It is actually vital, for an independent regulator, that that happens, because it goes to the very heart of our credibility; but we believe that it is entirely appropriate for us to be held accountable to the same standards as almost every other public authority.
The need for robust challenge clearly needs to be balanced against the need for us to be able to take forward measures such as switching and auto-compensation in a way that is rapid and can meet consumer interests. Our concern with the current arrangements is that while Ofcom has a pretty good record on its success in appeals we are the most appealed-against regulator, and in particular our appeals come from the largest providers with, frankly, the deepest pockets. We want to have an appeal standard that absolutely enables any bad decisions or wrong decisions we take to be overturned, but also enables us to take forward the really important regulation and changes that consumers want, as quickly as possible.
Mark Menzies (Fylde) (Con)
Q All our constituents are victims of nuisance calls. Do you think the law as it currently stands is sufficient to protect them? What measures in the Bill do you think will offer enhanced protection, and when we are dealing with companies that are out to drive a coach and horses through the law, what measures do you think we can put in place to provide protection for customers? If I could lead you down a path, at the moment, if you want to lodge a complaint against a company you have to have the phone number and the website address. When I have asked nuisance call companies, “Can I have your phone number; can I have your website address?” guess what? They have neither of those things.
Lindsey Fussell: We absolutely recognise that nuisance calls remain a huge concern to consumers. We estimate that consumers in the UK will receive about 4 billion nuisance calls this year. If I sit, as I have, and listen to calls coming into our contact centre, I know how distressing and frightening some of them can be to consumers.
As I mentioned earlier, the provisions in the Bill relate to the powers of the Information Commissioner, relating particularly to direct marketing calls. That forms a substantial proportion of the concerns that I know consumers have, and it is great to see the Information Commissioner being given more power to enforce against companies that break the rules, including companies that either do not have consent, or have very aged consent, if I can put it that way, for those calls to be made.
Ofcom’s specific interest is in silent and abandoned calls, which can be especially frustrating and frightening for more vulnerable consumers, particularly. We believe that the best way—because of the nature of the companies, as you have been saying, that are now making the majority of the calls—is to encourage more network blocking of those calls before they reach the consumer. That is something that we are making good progress on with a number of companies. You may have seen recent announcements from Vodafone in this space.
We also encourage companies to roll out software—and BT, again, is doing so shortly—free of charge to consumers to give consumers more power to block calls themselves. It is a really difficult problem but we are absolutely not complacent about trying to tackle it.
Calum Kerr
Q Perhaps I can bring you on to the universal service obligation. While we are frustrated by the lack of ambition in terms of the speed offers, if designed correctly it need not hold back regions and countries that want to go further. As you design the scheme, could you perhaps reassure me that it will not hinder but help a Government, such as the Scottish Government, who want to aim for 30 megabits and not 10 megabits?
Lindsey Fussell: Absolutely. As you know, our research shows that the current level of 10 megabits per second is suitable for consumers who need to access at least a reasonable level of communication service. Ofcom is supportive of the fact that the level needs to be reviewed over time, and we would expect it to rise. On our specification, as you know we will be providing advice to the UK Government by the end of this year. We will absolutely look at both the nature of that specification and what 10 megabits could mean in different contexts, and also at how we would future-proof that specification so it is able to deliver faster speeds under a USO if required to in future.
Calum Kerr
Q I think there are mechanisms, for example voucher schemes—of which BDUK already has some experience—that could provide foundational funding that allows 30 megabits to be the target, rather than settling for 10 megabits. I hope that is something that will be made possible. You talk about a review period for speed. How often do you think the speed should be reviewed?
Lindsey Fussell: To be honest with you, I think it is probably a bit of a trap. The answer is that it is very difficult to tell. I suspect that, if we were all sat here a decade or even five years ago, we would not be talking in the way we are now. Setting a definitive review period will probably feel too short or too long, depending on how technology develops. The Government have placed the power in the Bill to direct us to carry out reviews, and we will obviously do so whenever asked.
Calum Kerr
The danger is that we leave it open-ended, we all get busy and it does not happen. Mr Streeter, may I ask one more question?
Calum Kerr
Q The very good document from the Minister and DCMS gives us a bit more information on the USO and talks about upload, download, latency and capacity. One of the other factors is cost. I get frequent complaints from constituents, as I am sure my colleagues do, that they do not receive a service that, as Ronseal would say, “Does what it says on the tin.” To what extent are you going to go to a granular level and look at the service, and also include cost as a key metric, so people are getting what they pay for or paying for what they get?
Lindsey Fussell: I understand. The Government have made public the letter that has been given to Ofcom and have specifically asked us to look at the cost of different technological solutions. That will clearly give a range of factors to weigh up when the Government decide how to implement the USO. Some of the issues you go to about how the USO will be enforced and how we will measure performance against it are implementation issues that we will have to consider once we know what type of USO we are implementing. It might be worth saying that, to the extent that we designate a universal service provider, either in one or in several areas, we would have the ability to enforce if they do not meet the commitments they signed up to and to provide the appropriate remedy.
Nigel Huddleston
Q I have a question for each of the witnesses. Starting with Mr Close, under the Bill, Ofcom will be given quite significant new oversight responsibilities over the BBC. Can you confirm what skills and attributes Ofcom currently has in terms of broadcasting, and are you confident, given this substantial increase in responsibilities, that you will have the skills and resources to do this job in the future?
Tony Close: There are two parts to my answer. I will begin with the specific provisions in the Bill and then talk about skills. The Bill removes some constraints that were placed in the Communications Act 2003 on our ability to regulate the BBC. We already regulate the BBC but we are subject to some constraints. At the moment, for example, we cannot consider the competitive impact of a significant change to the BBC’s website. The Bill removes those constraints so we can discharge the full range of functions that the charter and agreement would give Ofcom.
Are we currently sufficiently skilled to regulate the BBC to a high standard? Absolutely. We have been regulating broadcasting and making complex editorial judgments for the past 13 years, covering 2,000 separate television and radio broadcasters. Do we need more people and more skills to ensure that we do a great job from day one? Yes, and we are doing that at the moment by ensuring that we have the right number of people and the right skill mix.
Nigel Huddleston
Q Ms Fussell, you will be given powers in the Bill to acquire speed test information at premises level. Will you be using those powers? How will you be sharing that information? How may the customer benefit?
Lindsey Fussell: That is part of the new information powers that we were talking about earlier. We intend to publish that information, but we will obviously be doing so in a way that is fully consistent with data protection laws. We hope that it will be a huge benefit to consumers who, for example, are thinking of moving house or want to know what their existing property can achieve. At the moment, when people are given broadband speeds, they are often given speeds that relate to similar consumers in similar areas. This will enable them to have really specific information and, we hope, empower them to make a choice about which type of provider and service they are looking for.
Kevin Brennan
Q Yes. May I ask a couple of questions on automatic compensation? How do you envisage that working? Do you have experience of doing this sort of thing? I would like to hear your general comments, and I will then ask a specific question.
Lindsey Fussell: Yes, of course. We are delighted that the Bill clarifies Ofcom’s power to introduce auto-compensation. We think it is an incredibly important step to make sure that consumers get redress when they do not receive the quality of service they are expecting—we know from the consultation we did on the digital communications review that quality of service is the thing that customers feel most strongly about—and we also hope that it will incentivise providers to improve their service quality and enhance the attractiveness of joining them for the public. It goes hand in hand with the proposal we were talking about before on the quality of service report in terms of publishing and making available more comparative service information so consumers have an informed choice.
Kevin Brennan
Q On the basis that compensation delayed is compensation denied, would you support the compensation effectively being paid on the next bill that the customer receives rather than their having to wait for a bank transfer at the end of the financial year or something?
Lindsey Fussell: We have already published what we have called a call for input, which has closed, on our first thoughts on auto-compensation. We will be publishing a full consultation on it early next year. We have said already that our instinct is that the compensation should be financial. Clearly, we will need to test that in consultation.
Kevin Brennan
Q What is the alternative to financial?
Lindsey Fussell: I imagine you could think of other sorts of services or things that could be offered to consumers to try to put problems right. We are currently actively considering whether we should set maximum periods in which compensation should be paid. I think that goes to your point, and that is certainly something that we will explore in the consultation and our proposals.
Kevin Brennan
Q Taking it off the next bill would be a good idea if it were achievable. Finally, given that we are now at the stage of line-by-line consideration of the Bill, is there anything that you would suggest as an amendment to improve it?
Lindsey Fussell: As I have said, we are delighted that many of the measures that we have been pressing for for some years are included in the Bill, and we very much hope that it commands support.
Kevin Brennan
So there is nothing you would suggest.
Tony Close: May I add one point? We have been contacted recently by a number of stakeholders who are keen to see improvements in the provision of access services such as subtitles and audio description in the video on demand sector. Action on Hearing Loss has been in touch, and it is keen to see Ofcom given very similar powers to those it already has in relation to linear television to set challenging but proportionate targets for access services in a code for video on demand services. We would welcome such an amendment.
Claire Perry
It is not really a question. May I put on the record that the Government today announced a delay repay scheme to compensate automatically for 15-minute delays to railway journeys, so it is wonderful to see Ofcom supporting the moves that regulators of other industries are introducing?
The Chair
Thank you, Claire, for your out of order contribution. Thank you very much to our two expert witnesses from Ofcom. You have been very concise and clear and rattled through your answers expertly. Thank you. We now release you. We will have a three-minute comfort break.
Examination of Witnesses
Elizabeth Denham and Steve Wood gave evidence.
The Chair
Q We now welcome witnesses from the Information Commissioner’s Office. I know you would like to make a brief statement before we begin but perhaps first you could introduce yourselves for the record.
Elizabeth Denham: I am Elizabeth Denham, Information Commissioner for the UK, and with me is my colleague Steve Wood, the deputy commissioner. I am the newly appointed Information Commissioner—in fact this is my first appearance after my appointment. I started the same week that the Digital Economy Bill was introduced. Thank you very much for the invitation to come and speak to you today. The ICO is the UK’s independent regulator for data protection and freedom of information and for the regulation of direct marketing.
This is an important and sprawling Bill related to encouraging the digital economy and digital services. We support many aspects of it, including the permissive rather than mandatory requirements for data sharing. We also recognise and appreciate the lengthy consultation period that the Cabinet Office led on the data sharing provisions.
The remit of our office extends only to the data sharing provisions in part 5 and the direct marketing code in clause 7. I have sent some evidence to the Committee, but the main recommendations in our submission are to clarify the privacy safeguards and put them on the face of the Bill. That will build trust and important transparency for the public.
Our other main recommendation in the written evidence is to reference directly our data sharing code of practice, which was drafted in 2011, and to require other data sharing codes of practice to be subordinate to that data sharing. This will assist the practitioners in better understanding the framework and lead to more harmonisation and consistency.
We also think it is important for Parliament to review all aspects of data sharing, not just the clauses relating to fraud, after an appropriate time. It is also my intention, using the powers in the Data Protection Act 1998, to review and to report back to Parliament two to three years into this regime with due regard to bulk data sharing.
Kevin Brennan
Q Congratulations on your appointment. Would you support moves to introduce director-led accountability so that directors are held to account on nuisance calls rather than just the companies?
Elizabeth Denham: Yes, I would support extending liability and accountability to directors. Our office has issued fines that totalled about £4 million in the last year, but the problem is that we have been able to collect only a small proportion of those fines because companies go out of business and, as in a game of whack-a-mole, appear somewhere else. It is important for us to be able to hold directors to account for serious contraventions.
Kevin Brennan
So an amendment in the Bill to achieve that would be helpful.
Elizabeth Denham indicated assent.
Kevin Brennan
Q For the record, the witness nodded in reply to that question.
On age verification, attention has been drawn to the consequences of failing to think through plans, including the possibility that information on passports and driving licences could be misused when collected as part of an age verification system. Could you comment on that and are you aware of any evidence that might mitigate those risks in that part of the Bill?
Elizabeth Denham: I will ask my colleague to respond to that.
Steve Wood: Our concern about an age verification system is that the hard identifiers that could be collected, such as passports, might need to be secured because of the vulnerability of those pieces of data being linked to other pieces of data and used by the organisation that collects them. We hope that any solution would take a “privacy by design” approach, which very much minimises the amount of data that is taken and may use different ID management systems to verify the age of the individual, rather than a lot of data being collected. It is important that data minimisation is at the heart of any solution. It would be a concern for us if a wide range of solutions was put forward to collect those hard identifiers.
Rishi Sunak
Q We hear a lot about how technology can benefit people and that the Government need to harness technology to do just that. Indeed, some data sharing is already going on in the delivery of Government services. Can you describe how the measures in the Bill will provide greater legal certainty and clarity in that area because we want to make sure we are doing things in the right way? Your thoughts in that regard would be helpful.
Elizabeth Denham: This Bill is an enabler. It facilitates data sharing for the improvement of Government services. I think the public welcome that and they expect seamless Government services in some cases. The idea that all data must stay in ivory towers or silos does not make sense when building digital delivery services. That said, we all know that trust and transparency are critical to maintaining the public’s trust in data sharing.
The transparency that needs to be clear in the Bill is on two levels. First, at the point of data collection and in ways that are easy for citizens to access, they should understand the purpose of and how their data will be shared, and they should have the ability to challenge that.
Secondly, there needs to be another layer of safeguards and transparency scattered throughout some of the draft codes of practice, but not in the Bill. That is the transparency that comes from privacy impact assessments, from reviews by our office, and from Parliament looking at revised codes of practice. It is really important that we pay attention to both those levels. Civil society is going to pay attention to published privacy impact assessments; but right now there is no consistency across all the codes of practice for those kinds of safeguards. I believe that some improvements are needed to the Bill.
Thangam Debbonaire
Q I wanted to just go back to age verification, if you do not mind, Mr Wood. You made a good deal in your evidence and in your response to my colleague’s earlier question about the concerns that you have—and I get those. Can you push this a bit further and say what you would think was an adequate system of evidence providing for age verification? What would work?
Steve Wood: I will qualify the answer by saying we come at it from a data protection perspective, so our interest is making sure that the personal data of those individuals who would be going through that process is protected, rather than the wider policy issues relating to verification of access to that content; our the key concern is to make sure that the verification system does not lead to disclosure of information if it is not necessary. As tools like federated identity management have developed, it is often possible to use another service—another third party service—to verify the identity of the individual, which could be done using a variety of third party services that are out there. That means that the site owner that provides that pornography service would not need to collect and see all the details about the individual’s age and so on, but that that is provided by a secure, accredited third party service.
The Government’s Verify service has taken some good steps in looking at these different solutions about how identity management can now be developed using these third party services; so it is that sort of approach that we are looking to, rather than a very open-ended approach, as I said earlier, allowing a wide range of information. As to the level and standard of identity, I think that is a different question, but we are really focused on making sure the personal data collected is the bare minimum to make that requirement work.
Mark Menzies
Q All of us have constituents who are victims of nuisance calls. Many of these are vulnerable people, and elderly. What measures do you think we could add to the Bill to strengthen protection for such people?
Elizabeth Denham: I think a very good step in the Bill is to put our direct marketing code of practice on a statutory footing. I think that is really important. What I mentioned earlier about directors’ liability is another really critical step. The Government have incrementally taken steps over time, such as mandatory call identification, that have helped us in our enforcement. Also, lowering the threshold for the requirement as to harm has allowed us to proceed with enforcement actions and fines; but at the end of the day when it comes to list brokers and sharing the data, the source of the data is the problem. That is why I am very keen to see directors’ liability built into statute.
Mark Menzies
Q At the moment, for a customer to lodge an official complaint, they have to be able to identify the caller through a phone number or a website address. I know, because I have tried. They refuse to give that data. What enforcement steps can we introduce so these rogues and scam artists will reveal such information?
Elizabeth Denham: It is a serious problem. We have had more than 160,000 complaints in the last year from citizens about nuisance calls and nuisance texts. We have stepped up our enforcement. Some of the challenges come from the bad actors being outside our boundaries. Also, we are a member of various enforcement forums with memorandums of understanding that allow us to co-regulate and jointly investigate and enforce; but it is a difficult challenge and there are many tools that we need in our toolbox. I do not know whether my colleague has anything to add to that.
Steve Wood: The other area we have been interested in is to make sure that for all calls that are made for marketing purposes the line identification must be displayed, although as the commissioner says, when the operators are coming from abroad that poses additional challenges in terms of enforcing, and looking at the identity of those individuals.
Chris Skidmore
Q I have three questions. First, the commissioner’s submission mentions the benefits of justified, proportionate data sharing and how it could improve the delivery of public services for the public and improve policy decision making within Government. Will you expand on that point with reference to the Bill? Which data-sharing powers would be particularly useful when it comes to future policy making and helping vulnerable customers?
Steve Wood: We can see the benefits of data sharing across a wide range of areas including some mentioned in the Bill, such as fuel poverty. We recognise the public interest in those areas. Our interest in the public interest definitions of different areas where better data can join up Government is to ensure that data sharing is always proportionate.
As a regulator under the Freedom of Information Act 2000, we understand the concept of public interest because we are constantly balancing that in a number of different areas. It is about ensuring that the data are minimised to the extent that those proper public interest objectives can be delivered.
We very much recognise the range of benefits of joining up digital public services. That range of areas in the Bill includes: public services; fraud, error and debt; and research and statistics. Those are well-recognised areas. Our concern is to ensure that the personal data used in those situations meet the requirements of the Data Protection Act 1998.
Chris Skidmore
Q This has been touched on already; we have heard a lot about technology solutions—having a wide variety of open data—being the answer to the Government’s problems. Do you agree that, when it comes to the mechanism by which the data sharing takes place, it is essential to have legislation in place? That is a really important point, on which I would like to hear the commissioner’s personal views.
Elizabeth Denham: Are you are asking whether the data-sharing provisions in part 5 of the Bill are necessary to authorise data sharing for these kinds of purposes?
Chris Skidmore
Yes.
Elizabeth Denham: I am not convinced that it is a legal requirement. The Data Protection Act contains provisions for data sharing. I think that the intention of the Bill is to clarify for practitioners, and to facilitate and give comfort about the sharing of information to support good public interest purposes. I see this Bill, in terms of data-sharing provisions, sitting alongside the Data Protection Act and giving some clarity. The codes of practice certainly need to give clarity. But right now there is a recipe for confusion because they are not aligned with one another and they do not have regard to the hierarchy that the data-sharing code, under the Data Protection Act, would assist.
Chris Skidmore
Q I have a final question. We have touched, in previous evidence hearings, on the nature of consent and individual knowledge about data sharing. What are the challenges with using consent-based data-sharing models? Do you accept that there is a necessity for data sharing to be used for the benefit of particular vulnerable groups in society without the need for consent?
Elizabeth Denham: The provision in part 5—the kind of data sharing that is envisioned—is not a consent regime. In many cases, citizens do not have a choice. There is one provider and the data need to be shared for good public interest purposes. Consent is not a silver bullet.
If, as is the case here, you are not using consent as a basis for sharing information, the other obligations rise. The need for transparency, safeguards, parliamentary scrutiny and independent oversight are even more important when you are not relying on consent. Those other obligations need to be strengthened.
Louise Haigh
Q Apologies for my brief absence from the Committee. Ms Denham, do you believe that the proposals in part 5 comply with the EU’s general data protection regulation?
Elizabeth Denham: There may be some challenges between the provisions and the GDPR. Obviously the GDPR will come into effect in 2018 unless we leave Europe before that date. There are some new controls for individuals that are built into the GDPR. There would be a need to carefully review the provisions of this Bill against the GDPR to ensure that individuals could have the right to be forgotten, for example, so that they could ask for the deletion of certain types of data, as long as that was not integral to a service. That is one example.
Steve Wood: To build on those points, the GDPR will strengthen the rights of individuals, particularly in the area of transparency that the commissioner has mentioned already. Article 12 talks about the importance of clear and accessible information to individuals. This Bill will need to operate alongside the GDPR’s enhanced and strong requirements to make sure that the key concepts in that legislation are upheld. The other key concepts we take from European data protection more generally are the those of necessity and proportionality, which is where there will be some important areas to measure the intention of the Bill against the GDPR.
Louise Haigh
Q We have heard your concerns about the draft codes of practice, which I also find very concerning. Of course, we do not know because we have not seen any draft codes of practice. Would you advise Members to vote on Government powers of that nature without seeing such draft codes of practice? Who else should be consulted on such codes before they are made law?
Elizabeth Denham: We have seen some of the draft codes of practice, and we have been making comments, but I think it would be preferable for Parliament to review all the codes of practice so that they can see and discuss the entire framework before the passage of the Bill. The codes are an important part of the framework.
Kevin Brennan
Q To follow up on that, do you believe that we ought to see the draft codes of practice prior to consideration of these parts of the Bill in Committee?
Elizabeth Denham: That is my view, yes.
Louise Haigh
Q In your first speech as Information Commissioner you made much of the need for businesses to establish trust in relation to data sharing, with which I obviously completely agree. Do you think this Bill could have done more to put safeguards around data sharing in the commercial space?
Elizabeth Denham: Again, I think that trust and transparency go hand in hand. Part 5 is about Government data sharing and sharing with Government providers, so the focus there needs to be on transparency and trust. All Governments are really struggling with this issue, especially in the face of new technologies. How can you make transparency easy and understandable? We have just issued a privacy notice code of practice, which we introduced last Friday. What would help this Bill is if there was a reference to following our privacy notice code of practice, which again is across the public and the private sector and would lend more trust among the public.
Nigel Huddleston
Q The UK is one of the most advanced digital economies in the world, yet we heard from witnesses on Tuesday that, in terms of Government data sharing, we are well behind the curve, well behind other countries—that is partly because they are probably more focused on the opportunities. Does this Bill, in your experience, bring us more in line with the best practice you are seeing in other countries?
Elizabeth Denham: I think the approach that the UK is taking in this Bill is a responsible approach. My recommendations are to up the safeguards and improve the transparency. Breaking down the data sharing by type, function and purpose of data is a good way forward. There are some draconian data-sharing regimes in other parts of the world, which are concerning to data protection commissioners. I generally think that the approach here is right, but there could still be some strengthening of the Bill. That would go a long way to assuring more public trust and therefore more buy-in and participation in the digital economy and digital services.
Kevin Brennan
Q If the Bill were not amended in the ways you have suggested, where would that leave us in terms of privacy protection and data protection in the international league table?
Elizabeth Denham: We would not be first at the table in terms of privacy safeguards, and I think we have an opportunity for this Bill to be very strong in supporting the digital economy, digital services and data privacy. I very much encourage Parliament to look at the recommendations that we have made. If no amendments are made, yes, we are slipping behind. If you take a look at what Australia has done recently, they have put a provision in law that any re-identification of de-identified data has a sanction and a penalty next to it. I think that is an excellent idea, and it is another recommendation that we have made here. If no amendments are made, we will make this work from our perspective. We will be coming back to Parliament with a report on what is happening on the ground so that citizens can understand it.
The Chair
Thank you very much for some very clear evidence, Ms Denham and Mr Wood. We now release you.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Digital Economy Bill (Fourth sitting)
Tuesday 18th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 October 2016 - (18 Oct 2016)
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Chair
Colleagues, today we begin line-by-line consideration of the Bill. Before we start, I repeat that Members may, if they wish, remove their jackets during Committee meetings. Will everyone ensure that all electronic devices are turned off or switched to silent mode?
The selection list for today’s sitting is available in the room. It shows how selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issues. The Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate, and I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments.
Please note that decisions on amendments do not take place in the order in which the amendments are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list, and decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful.
We are still waiting for Mr Hancock, but we will continue. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on relevant amendments. [Interruption.] The Minister has arrived.
Ordered,
That the Order of the Committee of 11 October be amended as follows: in paragraph (1)(c), leave out the words “and 2.00 pm”.—(Matt Hancock.)
Kevin Brennan (Cardiff West) (Lab)
We have no objection to the change, although I hope the Minister is a bit more punctual in future and takes more note of what the programme motion says, since we are supposed to start at 9.25 am and he has just arrived at 9.27 am.
The Chair
Thank you. This is not a flying start, colleagues. I am sure we can up our game as we move on. There will be no meeting of the Committee this afternoon. The Committee will next meet on Thursday at 11.30 am.
Clause 1
Universal service broadband obligations
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I beg to move amendment 56, in clause 1, page 1, line 14, after “the” insert “upload and download”.
The Chair
With this it will be convenient to discuss amendment 83, in clause 1, page 1, line 15, after “services” insert “and mobile network coverage”.
Calum Kerr
I welcome the opportunity as a new boy in the Bill Committee process to go first. This is the first time I have spoken in this place with my jacket off.
We support the universal service obligation and think it is a positive move, but one of our concerns is the lack of detail on it. The document put out by the Government last week was welcome and provided more context. However, something that is continually missing when talking about speed is that speed is about not just download but upload. We are trying to make that more explicit. The amendment is a small word change, but it is required as we start to recognise what broadband and connectivity is all about. It is more than just the headline speed at which we can download at certain times of the day.
Louise Haigh (Sheffield, Heeley) (Lab)
I rise to support amendment 83, which stands in the name of my hon. Friend the Member for Cardiff West and I, and amendment 56, tabled by the hon. Member for Berwickshire, Roxburgh and Selkirk.
All members of the Committee agree that we must do everything we can to ensure that individuals have access to superfast and, soon, ultrafast broadband. It is not only important but, in an ever more connected age, an absolute necessity for both businesses and residences. That is why we support the Government’s tacit aim to designate broadband effectively as a utility in the same way that water and energy are classed as a must-have in the modern world.
We will speak later about our concerns about the universal service obligation, but broadly we believe that there is coalition of support for a much more ambitious USO. That is why we were pleased to hear that the USO can be amended in secondary legislation later when it becomes outdated. However, I fear that, by the time it is introduced, it will already be becoming seriously outdated and, indeed, by 2020, it may feel like a relic of a bygone age when superfast and ultrafast broadband, even in rural areas, will be readily accessible. That is the subject of our new clause, which we will consider shortly.
On amendment 56, it is absolutely right to specify upload and download in the Bill. As we have seen all too often, businesses and residences see a particular speed advertised with no correlation between what they can download and upload. For someone with a business and working from home, accessing online services and transferring files to them can take a lot of time if the upload speed is not up to scratch. That is an obvious cost to businesses. It is not merely an irritant, but a loss in pounds and pence, and in productivity to the UK economy.
There is no mention in the Bill of upload speeds in the USO. That leads to a broader problem of lack of ambition throughout the Bill. Factors such as distance from the telephone exchange and other considerations such as old household wiring can slow down speed. That is why the USO, although welcome, will seem extraordinarily dated in just half a decade, when the roll-out of the USO will have been completed and there will be little appetite for providers or the Government to return to those hard-to-reach places for some time.
On tackling upload and download speeds, we would have preferred the USO to be under the superfast designations from the beginning. An example of the impact of superfast roll-out on one small business demonstrates this perfectly. Within the first year of having superfast broadband, the business reported a 30% increase in sales. We should be ambitious for our small businesses. Instead, this USO potentially condemns them to distinctly average speeds for a decade.
Amendment 83 is a probing amendment to test the Government’s ambition, which certainly needs to be tested throughout the Bill. It is based on a simple principle. We are at the start of a digital revolution that will transform how we work and how we communicate and interact with one another. Access to water and electricity in the home bookmarked our evolution to a more civilised society, so the essentials of the modern era should be similarly guaranteed. The Bill does that in part for broadband and we strongly believe it should cement further ways to roll out universal or near universal coverage for mobile communication.
We broadly support the changes to clause 2 and the amendments to the electronic communications code. Assisting mobile network operators in some of the challenges facing them is obviously important. That includes access to land and knocking down some of the absurd hurdles they must jump through to make what most people would consider sensible adjustments to infrastructure to update existing technology with little visual impact.
The Bill contains changes to a highly complex piece of legislation, which the industry has been seeking to change for some time. Indeed, the Law Commission commented that the legislation is not one of Parliament’s finest efforts. We recognise that. It clearly is not. However, although simplification and amendments to the code are important, there can be little doubt that mobile network operators will receive a substantial boon. That is why this amendment is so important and it is puzzling that the Government did not include it.
Evidence to the Committee suggested that the Bill could reduce the cost of site rental for mobile network operators, which make up a substantial portion of their costs at 40%. With the operators receiving effectively all they have asked for—no one blames them with such a complex and restrictive code—it is clear that our sights must be set firmly on delivery and the Government should not set their ambitions too low. That is what our probing amendment covers and why it is important that, during the passage of the Bill, we receive at least some commitment to improved targets on mobile network coverage.
We are slightly dismayed that the industry will benefit from such a clearly beneficial piece of legislation and that the Government will impose few or no conditions on them beyond what has already been agreed. We are aware that the £5 billion investment and the statutory target were tied to changes to the code, but we are not convinced that the benefits for consumers are greater than the benefits that are being approved for mobile network operators and we would certainly welcome greater reassurance on that from the Minister.
Let us look quickly at the targets set out in the binding agreement in 2014, signed by the then Culture Secretary, the right hon. Member for Bromsgrove (Sajid Javid). They were: guaranteed voice and text coverage by each operator to 90% of the population and full coverage to 85% by 2017. Currently, only 46% of premises have access to 4G from all mobile network operators and a substantial 7% of the population—1.5 million homes nationwide—do not have basic voice or text coverage across the three networks.
The failed Mobile Infrastructure Project, supposed to reach the final notspots, closed in 2015-16. It had erected only 76 of 100 masts, leaving a substantial number of homes without the prospect of having complete voice and text coverage. Given that 71% of businesses rated mobile network access as “critical” or “very important” to their business we believe that mobile network coverage, as broadband is tacitly designated in this Bill, should also be considered a utility. That is what our probing amendment seeks to test.
Clearly, everyone in the country, if asked, would agree. Businesses that rely on mobile networks, local authorities and individuals that use them to communicate would welcome a right to have mobile network coverage within their place of work or at home. This is extremely achievable but the Opposition are concerned that institutional defensiveness from the major network operators is getting in the way of full or near universal coverage for consumers. More than 99% of residents in the UK have access to 2G or 3G of some kind and 90% have access to 4G of one kind. However, for all operators, the figure drops to just 46%.
The infrastructure is in place and it understandably infuriates people working in an office or at home when their colleagues can get network coverage and access to data services while they cannot. While we recognise the concerns around commercial incentive, surely it is right that, once the current phase of the roll-out is complete and significant gaps in full coverage across all mobile network providers still remain, we at least reconsider the case for national roaming and national infrastructure, as is commonplace on the continent.
We are a relatively small island and it should not be the case that commercial defensiveness makes the aspiration of near universal coverage far from a reality. That is why we will table another new clause relating to this part of the Bill to test it before the whole House. It will establish a review of the roll-out of mobile network coverage, which is a critical piece of infrastructure for businesses, residents, and emergency services. As yet, due to what appears to be institutional wrangling and commercial defensiveness, this coverage is not being extended to the entire population in a way they would expect.
As we know from evidence given to the Committee last week, currently more than 60% of communications towers globally are held in an entity separate from the networks that use them. The review will have to take another look at greater diversity in mobile infrastructure and national roaming in order to deliver a universal service. In countries such as the United States, the figure for independent infrastructure is more like 90%. In the United Kingdom, as the Committee knows, it is more likely that that infrastructure is erected on an economic case for the network and operated for the benefit of the network that makes the investment. That is fine up to a point, in that it undoubtedly encourages competition among network providers in areas where they can receive a substantial return, but it makes universal network coverage more difficult to achieve when there is 90% of coverage for 4G of some kind, but only 46% for all kinds.
Our review will also look at open data and how, by routinely publishing costs, location of masts, service quality and plans for roll-out, consumers, particularly in rural areas, but also in urban “nearly and notspots” can make better decisions about which network operator to use.
Throughout the Bill, Labour Members will look to the Government to turn the £l billion concession, however welcome, for the mobile industry into something approaching a near universal service for the country. We should be ambitious about the kind of mobile network coverage we can deliver and not shy away from the challenge.
The Minister for Digital and Culture (Matt Hancock)
It is a pleasure to get going on the Bill proper and to respond to the first amendments. It is undoubtedly true that reliable fast broadband is now seen as the norm and not the nice-to-have—that unites the whole Committee. We are committed to ensuring that everyone can enjoy the benefits of decent broadband connectivity. It was in our manifesto and it is one of the core purposes of the Bill.
Amendment 56 seeks to ensure that the guidance around the characteristics of the connection is in the Bill—for instance, that the USO can include both upload and download speeds. I entirely understand the intent and the clause as drafted is sufficiently flexible to allow for that. The statement of intent that the hon. Member for Berwickshire, Roxburgh and Selkirk referred to, which was shared with the Committee last week, outlines a broad range of factors that need to be considered in designing the USO, including the level of service. That includes not just download and upload speeds, but the appropriateness and level of other parameters such as latency and capacity—and potentially customer service.
Ofcom has been commissioned to provide detailed technical analysis and recommendations to support decision making on the design of the broadband USO. Allowing Ofcom to do that work and ensuring that it is specified in detail is better than putting that on the face of the Bill, because it will allow us precisely to future-proof the design of the USO in the way that the hon. Gentleman demands. The decisions on the scope of the USO, the technical specifications, including download and upload speeds, and any service standards need to be taken in the light of Ofcom’s advice, which is to be provided by the end of this year, before the Bill concludes all its stages.
Amendment 83 seeks to include mobile coverage within the scope of the guidance on the broadband USO. The hon. Member for Sheffield, Heeley made many good points and put them eloquently and powerfully. The position is that the universal service directive, which currently provides the regulatory framework for the broadband USO, is about the provision of a fixed internet connection of an appropriate speed to a fixed location. Depending on who is designated as the universal service provider or providers, and on the specification of the USO, there is scope for the USO connection to be provided using mobile technology. However, the directive does not require the USO to include mobile geographic coverage.
In any event, as the hon. Lady said, through the use of licence conditions we have delivered on a commitment to near universal mobile coverage. I would question, therefore, whether there is a case for a USO for mobile, because of those commitments. The licence obligations to which the hon. Lady correctly referred are part and parcel of a deal that included the reform to the electronic communications code—so everything that she asks for was covered in that deal. It is precisely because the two are linked that they are fair, both to the industry and, more importantly, to consumers. As she said, the mobile network operator roll-out plans provide for £5 billion of investment, as a result of that deal and commitment.
Christian Matheson (City of Chester) (Lab)
When we talk about notspots, we are not just talking about parts of the highlands of Scotland. Indeed, parts of rural Cheshire, just a few miles from Chester, are not covered. Does the Minister honestly think that the deal he is talking about is working well?
Matt Hancock
The deal is to be delivered by the end of 2017. We will hold the MNO’s feet to the fire, because it has a legal and contractual requirement to deliver on that by the end of next year. I know the area of the country that the hon. Member talks about very well—it is where I spent the first 18 years of my life. There are some parts where the mobile signal is no better now than it was back then. In Suffolk this weekend, I found large swathes of my own constituency to be without a mobile signal, so I feel the hon. Gentleman’s pain. That is why delivery on this commitment by the MNOs is so important. The deal as agreed, which is a legally binding commitment, will result in nearly 100% of UK premises receiving 3G/4G data coverage, and 98% coverage to the UK landmass by the end of 2017.
That includes the new emergency services contract, which is being delivered by EE. That has to have a huge spread over the geography of the UK, and the same infrastructure will be available to customers of that provider. The deal sufficiently provides for the demands that were eloquently put by Opposition Front Benchers and, more importantly, clause 10 will enhance Ofcom’s powers to enforce the licence conditions, which we all agree are sensible, against the MNOs.
Calum Kerr
We welcome anything that increases mobile coverage commitments. The Government have done a deal with mobile operators for increased coverage, but the people who will pay for that increased coverage are the local authorities, the Forestry Commission and the landowners—they will suddenly find their rents drop through the floor to nothing. The Government could have revisited the annual licence fees that they collect from the mobile operators and done a deal on that basis, rather than making someone else pay for the increased coverage.
Matt Hancock
The hon. Gentleman leaps ahead to the next clause, and no doubt we will have that debate, but I think it is entirely fair for landowners and those on whose land the infrastructure is provided to get a similar return on the value of the land to them, rather than on the value once the land has this infrastructure. That is the change that we will be making because, ultimately, we have put in place a deal to get better service for customers, to get more geographic coverage and to reduce the costs of rolling that out, which is the right deal for the country.
As the hon. Member for Sheffield, Heeley calls for exactly what is to be delivered and as there are other clauses in the Bill to ensure that that delivery happens, I hope that the hon. Member for Berwickshire, Roxburgh and Selkirk will withdraw his amendment.
Calum Kerr
I am willing to withdraw the amendment because the document that came out last week provides a level of clarity. There remains a concern that the Bill is light and passes off the detail, which is both an opportunity and disconcerting. This is an opportunity to do something transformational with broadband, but the Bill is not transformational in itself. It will come down to the detail. We were keen to see more specific clarification in the document, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Calum Kerr
I beg to move amendment 57, in clause 1, page 2, line 4, at end insert—
“(4A) In subsection (4) after “OFCOM” insert “, the devolved administrations in Scotland, Wales and Northern Ireland,”
The Chair
With this it will be convenient to discuss new clause 10—Procurement process—
“(1) The Secretary of State must ensure an open procurement process is held in respect of the allocation of the universal service order.
(2) The Secretary of State must appoint a body to undertake an alternative dispute resolution role to arbitrate in instances of disagreement over designation.”
Calum Kerr
We have discussed the USO and what it could mean, particularly in last week’s evidence sessions, but there is an opportunity to go further. If the USO is simply passed over to BT because it is willing to provide 10 megabits to everybody by 2020, I am afraid that 10 megabits will be the ceiling rather than the floor. We should be considering how we facilitate a USO that empowers communities and devolved Administrations to go further. The Scottish Government have made a commitment to reach 30 megabits over the course of the Parliament, by 2021, and a flexible USO—particularly a voucher scheme, rather than a monetary or contractual agreement with the likes of BT—could help them to deliver.
Through our amendment we seek to ensure proper consultation and the involvement of not only the Scottish Government but all the devolved Administrations. Previous dialogue has been largely tokenistic, so we need to set it out in the Bill and insist that there is proper consultation that empowers the regions of the UK to take the USO as a platform, as a floor of their ambition, rather than as a ceiling.
Louise Haigh
New clause 10 would require the Secretary of State to ensure that there is a completely open procurement process, and an alternative dispute resolution role to arbitrate in instances of disagreement over the designation.
We welcome the Minister’s clarification last Wednesday about the statement of intent in relation to the USO. However, we want to mention—I am sure it will not be the first time in this Committee—how rushed and unsatisfactory the publication of Bill documents has been. Some of the documents that should accompany the Bill are yet to be published. I know from talking to people in the industry that that is their concern as well.
I was pleased to note from the statement of intent that the Minister intends the USO to act as an effective complement to commercial, community and publicly-funded roll-outs of broadband, and that it will not displace any planned roll-out of higher speed broadband. There is an argument that there should be a combination of the USO and Broadband Delivery UK to fulfil the last 5%, given that the work of BDUK is still ongoing.
The industry has raised concerns that a USO could risk distorting the UK’s broadband market and potentially hamper the goal of universally available good quality broadband access, if it is not designed in the right way, with the industry and consumers in mind. I note what the Minister said earlier about Ofcom’s being better situated for future-proofing, and I agree. I will discuss that on clause 1 stand part if that is acceptable, Mr Streeter. It is important that there should be parliamentary scrutiny of Ofcom’s role in the consultation.
The USO should not displace any planned roll-out of higher speed broadband. I mentioned the industry’s concerns that it could distort the UK broadband market. If it is done badly, there is a risk that it will undermine commercial investment, in hard-to-reach areas where industry is able profitably to deliver good quality broadband at competitive prices, or by passing on to existing users any rising costs that come about as a result of the USO.
For example, TechUK has argued that the Government should strictly limit the USO to the most remote areas of the UK. Failure to limit the availability of a USO tightly means there is a risk that commercial investment will be diverted, and that there will be wasteful intervention. It is suggested that urban areas, and any rural areas where there is a prospect of market investment, should be explicitly excluded from the USO. It would be helpful to hear the Minister’s thoughts on that and on how Ofcom will take forward the consultation.
Furthermore, satellite connectivity should be considered in scope for the most remote households. It is already available to virtually all households in the UK, and it can be the most cost-effective route to providing superfast broadband. Essentially, we believe—and I hope that this is the Government’s intention—that the USO should be seen as a safety net to prevent social exclusion, facilitate access to online public services, and encourage social and economic development.
The question is whether we need a more transparent and competitive regime for that to happen. Smaller providers are currently put off, because they do not know whether BT currently has plans for, or is working in, any place at any given time. There are allegations from other players in the industry that when smaller providers move into areas where BT is not investing or working, it swoops in, purely to crowd out the competition.
The Government’s statement of intent cites thinkbroadband estimates that suggest about 4% of premises are unable to receive speeds above 10 megabits per second. That really should be open data available to the public and all service providers. We clearly need to know where the assets are, who can do the work and where the cabinets are. There should be a register that contains all that information and is available to make the market more competitive and efficient.
For the process to be trusted, transparent and fair, all the information should be in the open and part of the procurement process, allowing as many providers as possible to participate to ensure that the playing field is as level as possible. It was therefore also welcome that the Government’s statement of intent included consideration of different types of providers, such as regional providers and smaller ones using innovative technologies.
Clearly, it was less than desirable that the BDUK process ended up with only one contractor. We do not believe that we can lay the blame for that entirely on the design of the contracting process, but we think that much greater care needs to be given in the future to ensuring that a richer diversity of providers is catered for in the process.
We should also ensure that the Government are not effectively blackmailed by providers to protect their market position. The mess-up around the procurement process for the roll-out of the broadband framework in 2012 left BT as the only supplier, after Fujitsu pulled out. That was condemned by the Public Accounts Committee for failing to deliver meaningful competition or value for money.
It is also important that the Government consider different tenders for the different problems we are faced with in the last few per cent. For example, we could have one contractor for the rural areas and another for the inner-city areas, as they obviously present different challenges. We could do with some further clarity from the Minister on that.
The amendment is merely designed to be probing. Does the Minister genuinely envisage that anyone other than BT will implement the universal service obligation? How will the tender process be designed? Given the Government’s commitment to encouraging SMEs and community providers to tender, will the likes of Broadband for the Rural North be considered? If the Minister can provide some clarity on that either now or later in writing, I will not press the new clause to a vote.
Matt Hancock
I will try to respond to all the points as briefly as I can, because the hon. Lady in particular raised a huge number of pertinent points. The two Front Bench teams are very much on the same side on this matter, so I want to give her the reassurance I can, but as quickly as I can, given that she asked a huge number of very good questions.
First, amendment 57 is about ensuring that devolved Administrations are consulted. Section 65(4) of the Communications Act 2003 already imposes a requirement to consult with Ofcom and other such persons as the Secretary of State considers appropriate. Since the broadband USO is an extremely important consumer measure that will benefit all parts of the United Kingdom, I cannot conceive of a situation where the devolved Administrations would not be consulted as plans to introduce a broadband USO are put in place, so I do not think the amendment is necessary. We would expect wide and extensive consultation across a wide cross-section of stakeholders.
We will consult on proposals for secondary legislation once we have considered Ofcom’s report. The second consultation will cover the detail of the USO and provide an opportunity to comment on the design of the USO and how it is implemented. I hope that that takes into account the concerns of the hon. Member for Berwickshire, Roxburgh and Selkirk.
New clause 10 would require the Secretary of State to ensure that there is an open procurement process for the designation of universal service providers. Again, that is covered under section 66 of the 2003 Act, which enables Ofcom to set out the procedure for designation in regulations and requires that the procedure
“be efficient, objective and transparent; and…not to involve, or to tend to give rise to, any undue discrimination against any person”.
I think that addresses the concerns as directly set out in the new clause.
It was music to my ears to hear a Labour Front Bencher talk about the need for a competitive regime, which clearly puts her at odds with her leadership. I agree in principle that the USO is designed as a safety net. Some people want much greater broadband speeds and connectivity, and it is not unreasonable for people to pay if they want very high connectivity speeds, but we believe there is a public service in having a universal service so that everyone is given the opportunity to have decent connectivity on which to live their lives. As the hon. Lady said, that could involve communicating with the Government, which is increasingly done online, or engaging in communications around healthcare and basic banking, and 10 megabits per second allows for that.
The hon. Lady mentioned satellite technology. Satellite is in scope—in fact, all technologies are in scope. The legislation is purposely designed to be technology blind. What people care about is connectivity. The technology is for the implementation, the policy makers and the engineers. Citizens care about how good, reliable and quick their connectivity is.
The hon. Lady made one error and I want to bring her up to speed. It is not true that there is just one contract in BDUK. Its open competitions have now been won by BT, Gigaclear, Call Flow Solutions, Airband, UK Broadband and Cotswolds Broadband. There has been progress since the Public Accounts Committee report that she mentioned and a whole plethora of providers have now successfully bid into the BDUK contracts.
Louise Haigh
I am aware that in phase 2 other providers have been successful in tendering, but in phase 1, as the Minister is well aware, there were problems and Fujitsu pulled out, leaving BT as the only contractor. That is why our new clause goes further than the law currently enables Ofcom to go, by ensuring the appointment of a body to undertake an alternative dispute resolution role, so that we can learn the lessons from BDUK. I appreciate that the Minister may not be able to commit to that today, but will he at least take it away and consider it for the USO?
Matt Hancock
I think that those lessons were learned about three or four years ago, so I do not think that the new clause is needed. That is why, in the second phase of the BDUK contracts, we managed to succeed in getting six different providers to bid successfully, precisely because we learned the lessons from what I agree was an unsatisfactory outcome of the first contract. So the hon. Lady is right; it is just that I think that that work has been done and so it is not necessary to legislate on it.
The hon. Lady also made the point about open data on where cabinets have been put in place and part-fibre broadband or superfast broadband has been delivered. BT has given me a commitment that it will make those data openly available. I have yet to see them, but I look forward very much to their being made public very soon; I was given that commitment some weeks ago by BT and I am surprised that they are not yet public. I will take that up with BT immediately after this—I wonder whether it might have heard what I have just said.
Given those assurances both on consultation with the devolved Administrations and on delivery of a competitive regime, with distortions to competition taken into account by Ofcom, I hope that hon. Members will withdraw or not press the amendments.
Calum Kerr
I thank the Minister for his words and I take on board his comments, but I will not withdraw the amendment. The challenge is the degree to which consultation is effective and actually feeds into the process. I know from personal experience, having met Ofcom and spoken to the Scottish Government, that much of the engagement to date between the Scottish Government and Ofcom on areas such as the USO has been tokenistic. It needs to go much further.
I have myself facilitated a workshop with the Scottish Government, the Scottish Futures Trust and Ofcom. Sharon White has met Fergus Ewing, the Minister responsible for these matters in Scotland. I think that we have to be far more explicit in legislation, because that will ensure not just a tokenistic consultation but proper engagement in the process so that in areas where the Scottish Government have set a higher target—30 megabits, superfast, for 100% of the Scottish population—the USO is designed in a way that supports and helps that. If it is done in a UK-wide, pragmatic sense, that will not help, so I will press the amendment to a vote.
Question put, That the amendment be made.
Calum Kerr
I beg to move amendment 58, in clause 1, page 2, line 13, leave out “The Secretary of State may” and insert—
“Within 12 months of this Act coming into force, the Secretary of State shall”.
The Chair
With this, it will be convenient to discuss the following: amendment 59, in clause 1, page 2, line 16, at end insert—
‘(1A) The report shall consider the comparative costs of introducing the universal service order in rural and urban areas, and identify measures to ensure costs in rural areas are not disproportionately higher than in urban areas.”
Amendment 82, in clause 1, page 2, line 21, at end insert—
“72B Universal service order: annual report
(1) The Secretary of State must lay before each House of Parliament an annual report about the implementation of the universal service order for all areas pursuant to the provisions of this Act.
(2) The annual report must include information on—
(a) the number of premises that have been supplied with the minimum download speed as specified in the USO secondary legislation
(b) the number of premises that have been required to cover some of the cost of connection,
(c) of the premises in (b) the average cost of connection per premises covered by residents, disaggregated by local authority area,
(d) the number of premises that have chosen not to be connected via the universal service order after being provided with an estimate, and
(e) the amount of time on average it takes to provide an estimate and connect a premise, disaggregated by local authority area.
(3) The annual report must be laid before each House of Parliament as soon as practicable after 31 March each year.”
New clause 9—Review of broadband delivery UK—
‘(1) The Secretary of State shall commission an independent evaluation of the delivery of superfast broadband by Broadband Delivery UK.
(2) The evaluation under subsection (1) shall consider—
(a) The financial impact on customers of a single provider delivering superfast broadband;
(b) Value-for-money for the taxpayer, and
(c) Competition in the delivery of superfast broadband.
(3) The Secretary of State shall lay the report of the review before each House of Parliament by 1 July 2018.”
Calum Kerr
That Division was rather exciting; it woke everybody up and got them away from their iPhones and iPads.
Inevitably, the focus of this first part of the Bill is on the USO, trying to make it fit for purpose and ensuring that we get the outcome that I believe we all want: better connectivity all across the country.
Amendments 58 and 59 would put into the Bill something ensuring a proper evaluation of how this USO is implemented and how it is borne out. There is a real concern that, as I have heard, the USO could follow similar lines to the telephony USO. If we remember what the telephony USO is, people have the right to demand a phone line up to a certain cost; I think it is £3,400, but I stand to be corrected if that is wrong. Thereafter, they pay the difference.
If we really mean universal broadband, what we must not have is a scenario whereby, although there is a USO, people in rural areas still end up paying more for a lesser service, which is what we have today. I am sure that we have all had complaints from constituents that, “I pay the same amount per month as someone else in an urban area for an on-the-surface 10 meg service, but I get only 1.5 or 2 meg.”
Let us accept that that is the reality on the ground—that people pay different amounts for different levels of service—but let us also put something in the Bill that actually means that stock is taken and a review is conducted. It should seek to ensure that in the future such problems do not happen and that people in rural areas—in fact, any people with a poor broadband service—get a fair speed with a fair price and all the other measures that the Government are introducing, as a result of the USO.
I should say at this point that we also support amendment 82, which puts rather more meat on those bones that I have just outlined.
Louise Haigh
We have had quite an exciting start to the Committee. The Minister turned up late; one Government Member went astray; and we nearly had a Government rebellion from the new PPS in the voting. [Laughter.] I hope that we continue in this vein. I also hope that the Minister is sensitive with his brand new PPS; I hope that she is not up for the chop this early in their relationship.
I will speak to amendment 82 and new clause 9, which would place a requirement on the Secretary of State to lay an annual report before Parliament on progress of the USO and to commission an independent review of the progress of BDUK respectively. As we have said, we very much welcome the USO. It could be somewhat more ambitious and it should extend to mobile, but we believe that it is an important step in the right direction. The purpose of these amendments is for Parliament to be kept abreast of progress, both on the USO and on the continued roll-out by BDUK.
Clearly, there have been issues with the roll-out of BDUK, not least the fact that, as we have just discussed, BT was the sole beneficiary of the contract in phase 1. If we are to avoid a repeat of that, we need to ensure not only that the procurement process is right but that Parliament takes a proper oversight role in assessing the performance and whether it is on target.
For example, we heard on multiple occasions last week about the problems around the fact that business parks have not been connected to superfast broadband, let alone ultrafast broadband. Similarly, we have heard of issues around local authorities being threatened with legal action should they so much as discuss procurement with a supplier other than the official one.
MPs’ mailbags are full of correspondence on issues about Openreach and about broadband more generally, so it is only right that they should have full disclosure on progress on an annual basis.
The first phase of the procurement process for BDUK included a mandatory requirement for copper local loop access rather than fibre, which meant old and outdated technology was being used and paid for with taxpayers’ money, entrenching the problems with existing infrastructure and holding back the future-proofing of the network.
There was also a requirement in that procurement process for the use of open access networks, which are the slowest option available, as opposed to local access networks which are much faster. It is good to see Ofcom consulting on the design of the USO over the next couple of months, and I am sure that they will learn from these mistakes. It is vital that this process is as transparent as possible, to ensure the best structure and outcome for consumers across the country.
On Second Reading the Minister called on Members to promote the take-up of broadband in areas where BDUK is providing access to broadband, so that local communities could benefit from the gainshare. That is absolutely right, and I am confident that relevant Members will be doing just that, but what are the Government doing to promote this? Are they, for example, paying for advertising and promotional materials? Is the Minister confident that access is the same as capacity, and that there is sufficient capacity in the cabinets in those areas where BDUK has been rolled out to allow take-up?
A very compelling case was put forward on Second Reading by the hon. Member for North Swindon, who described the problems he had with his local council and the lack of availability for his constituents even after BT had ticked all the boxes in that area under the BDUK contract. It seems to us that common sense dictates that BDUK should be measured on take-up rather than simply access to broadband. This is so that areas can be assured of their return from the gainshare, and also so that we can be absolutely sure that residents are able to use the broadband in practice rather than having access to it only in theory.
It is also important that we have a review of the progress of BDUK to consider whether they should be given any further direction or powers in relation to accessing land or infrastructure, for example. The statement of intent published last week references the question of how often, and on what basis, a USO may need to be reviewed. Again, we would have liked to see that in the Bill. I hope we can have clarity from the Minister on that because, as we all know, the minimum speed and quality of access that we all require are travelling in one direction only and at an exponential rate. It is difficult to imagine that 10 megabits will still be considered acceptable in 2020, let alone 2025, given that superfast is now defined as 24 megabits. The European Commission is hoping to set a new target for broadband and mobile coverage, which will aim to ensure that all European households can get a minimum internet download speed of 100 megabits per second by 2025.
The existing digital agenda for Europe programme currently seeks to ensure that every home in the EU can access a 30 megabits-plus capable, next generation access, superfast broadband connection, with 50% subscribed to a 100 megabits-plus service by the year 2020. At present it is widely expected that BT’s commercial G.fast roll-out, which will commence from next summer, and Virgin Media’s ongoing cable network expansion should bring broadband speeds of around 100 to 300 megabits to most of the UK, around 60% to 70%.
Calum Kerr
The hon. Lady is making some excellent points. The EU, which has apparently been holding us back for so long, is now leaving us behind as they run off to 100 megabits by 2025 while we set our ambition at 10 megabits by 2020. That is an excellent point. It comes back to the critical importance of how this USO is designed. Simply allowing BT to continue with more of the same, stretching their copper assets further, is not going to hit the long-term vision that is required. That is what this Government need to do. They need to set a target for fibre. I hope that when the Minister speaks tomorrow morning at the broadband convention he will say more about that, because we need to show far more ambition.
Louise Haigh
I absolutely agree with the hon. Member for Berwickshire, Roxburgh and Selkirk. Several issues relating to our withdrawal from the European Union will affect not only the measures in the Bill—particularly on spectrum divergence—but the UK digital economy as a whole. I know that the industry is extremely concerned about the implications of Brexit.
BT has also promised to extend G.fast to most UK homes by 2025, but this is unlikely to push the overall coverage figure much beyond 60% to 70% as by then Virgin Media will have already been able to deliver into much of the same areas. That goes to the point made by the hon. Gentleman, because it leaves the final third who are still out of the loop. On top of that, 5G-based mobile broadband should also be able to deliver 100 megabits-plus, and that will play a role, although mobile performance is notoriously variable and delivers much slower speeds outside urban areas. Once again, the challenge will be to bring ultrafast speeds to the final third, which would probably require a repeat of the Broadband Delivery UK programme, albeit with G.fast instead of VDSL as the main technology, and another round of public funding. That is why we need those commitments to fibre and other technologies. The former Digital Economy Minister has already hinted at that.
Christian Matheson
It is a great pleasure to see you in the chair this morning, Mr Streeter. May I also say what a pleasure it is to see the Minister for Digital and Culture. I think it is the first time we have served together. He is of course a Cheshire man like me, and we are all very proud of him in Cheshire. Indeed, when I met headmaster Chris Ramsay of King’s school recently, he asked me to urge the right hon. Gentleman to come back and visit his alma mater. I encourage him to do so, though he might not want to do any political campaigning while he is there.
I rise in support of amendment 82 in the name of my hon. Friend the Member for Sheffield, Heeley. It is absolutely right that what is becoming a piece of essential national infrastructure, and one which is developing all the time, should come under the purview of Parliament. My view on the roll-out of broadband, which is not shared by all hon. Members, is that BT has done a very good job of getting a decent proportion of the country up to a decent standard fairly quickly, using existing infrastructure. However, as we have seen, the continued reliance on copper local links can hold back the development of that infrastructure. There has been very little scrutiny of that infrastructure development in Parliament. It is good to see my fellow members of the Select Committee on Culture, Media and Sport, the hon. Members for Mid Worcestershire and for Selby and Ainsty, in this Committee. Our Select Committee’s report was one of the few areas where Parliament has been able to scrutinise the development of broadband, and scrutinise we did, strictly and fairly, as I am sure the hon. Gentlemen would agree.
Calum Kerr
I feel somewhat left out because the hon. Gentleman does not know where I went to school, but never mind. He is making an excellent speech on this whole area of BT and its contract. I agree with him. It is very easy to kick BT, but it is delivering on its contract and what it has been asked to do. Does he agree with me, though, that as we set a 10 megabits objective, it is important also to consider the future, because if BT continues to sweat copper assets we are going to come unstuck at some point. Simply going for now and not thinking about tomorrow is too short-sighted and it is catching up with us already.
Christian Matheson
I absolutely agree with that suggestion. BT has used copper assets well to manage to get a large proportion of the country up to a decent standard quickly. The Minister made a good point in the evidence sessions when he challenged the BT director of strategy on the number of premises that were connected to fibre, by suggesting that in fact those premises were all connected not by fibre, but by copper loop to a box that was connected by fibre. The Minister was absolutely right to make that proposal. My hon. Friend the Member for Sheffield, Heeley made an extremely valuable point about the controversies that continue within the telecoms industry. It is not an industry that sits comfortably with itself; everyone seems to be at each other’s throats. There is competition, there is healthy competition and there are outright dog-eat-dog hostilities. I wonder whether they fight too much among themselves and take their eyes off the ball when it comes to serving the consumer. A proper, annual parliamentary process that can focus the attention of the industry, as well as of Ministers, and give Parliament the chance to consider how this important and critical piece of national infrastructure is rolling out would be extremely valuable. To quote the Minister, it would hold the industry’s feet to the fire annually.
The hon. Member for Berwickshire, Roxburgh and Selkirk is right: we should not be limiting our ambition. The amendment proposes an annual review to see how far we can take our ambition in the forthcoming period. I hope to see—as the hon. Gentleman suggests—a roll-out of fibre to premises as the baseline standard in coming years. The one concern I have about the industry, which the amendment touches on, is that we will be driving forward with higher capacity and capability standards across 80% of the country, but those areas that are currently notspots will remain notspots. I hope that will be covered by other parts of the Bill, and that the Minister will address that. This amendment, though, will focus the attention of the industry on delivery by requiring it to report annually to Parliament via Ministers and via Ofcom. We can see who is delivering and who is not, and why not. It is an excellent amendment, and I am pleased to support my hon. Friend.
Claire Perry (Devizes) (Con)
I sympathise with many of the things that the hon. Member for the City of Chester has said. I cannot promise that I will not visit during a political campaign, because it is a seat I would like to see returned to the fold, despite his good efforts.
While I understand the spirit in which amendment 82 and new clause 9 have been tabled, I reject their premise. We heard clearly in the evidence sessions what is wrong with the Government—and, indeed, one provider—trying to over-specify and push out a solution. I know from my own constituency that, although there has been decent progress, it has not gone far enough—I absolutely agree with the hon. Gentleman on that. There are specific communities—for instance Shalbourne, a beautiful village—where there are insoluble notspots. These houses seem unable to be connected to the exchange because they connect to a Hampshire exchange, not a Wiltshire one, so all the good work Wiltshire council has done putting in local taxpayers’ money and working with BT Openreach is of no benefit whatsoever to those constituents. In Worton, where we actually had the discussion with BT, there is a dividing line right down a street: some houses are connected and some are not. We all know that that is increasingly very bad for house prices and really does affect people’s mindset when they move into the constituency. In my area, the Lydeway business park, which includes a very fine farm shop and other small businesses, is desperate to get better broadband connectivity, but we cannot seem to get it.
We heard from TalkTalk and other witnesses that the job is not to specify what the solution should look like and have lots of arduous burdens on Government to report back, but to empower consumers to say, “Let’s go out and talk to Gigaclear.” Or we could look at what has been done in a part of Cumbria, represented by one of my hon. Friends, where communities have come together, worked with farmers to waive fees for crossing land and come up with a community-led solution.
Empowering consumers, as the Bill will do, would enable them to demand a legal right to a decent level of broadband connectivity. I accept that 10 megabits per second is an aspiration for many premises already—they do not get anything like it—and I completely accept the point that that may not be enough in future.
We also heard in the witness sessions that technology in terms of compressing more and more data and information down existing fibre or copper is improving all the time. It might actually be sufficient for some families. I have managed to upgrade with the cabinet in Upavon to about 15 down and 10 up. It is nowhere near enough when all the kids are home and they are on Netflix and other things but it is not bad. If I yell at them loudly enough to get off the wi-fi, I can actually get my constituency work done, albeit from home.
I contrast that with what it was like before when, if the hamsters pedalled fast enough, I might have been able to send one email an hour. It is a massive improvement to productivity in the Perry household.
Calum Kerr
I hope the hon. Lady would not yell at me to get off the wi-fi. She is making some good points but I would try to draw her back to the substance of the amendments. There is no focus on technology. We want to ensure that the USO is delivering for all our constituents. All we want is a review to monitor progress and ensure that the design is fit for purpose. It is not about technology so I urge the hon. Lady to think again.
Claire Perry
I accept the spirit of what the hon. Gentleman is saying, but I did sit until recently on the inter-ministerial Committee looking at how to upgrade the digital services right across the country.
It is clear that Ofcom is taking its responsibilities very seriously, both to report on the number of premises that are connected and to tighten up on some of the issues where broadband companies advertise the maximum speed a customer might ever get if connected rather than the average speed. Ofcom is a very good regulator under Ms White’s chairmanship and it is absolutely stepping up to the plate.
I am afraid that I cannot support the amendment or the new clause because they are stuck in the past, looking at how we push out a good solution rather than empowering consumers to pull through the best solution that works for them. That solution might look very different in my constituency of Devizes from how it might in Cheshire or the highlands of Scotland. We have made decent progress but it is not far enough. I applaud the Government for bringing forward both the USO as an underlying obligation and the flexibility to amend that as technology changes.
Thangam Debbonaire (Bristol West) (Lab)
I rise to support the amendments under discussion and thank my hon. Friend the Member for Sheffield, Heeley for an excellent speech and for leading the debate, particularly on amendment 82.
I want to ask this of the Committee. Do we want to be ambitious? For me, this is about ambition. Do we want an economy that has the nuts and bolts, the things we require, to make it fit for the 21st century and the challenges it is already throwing up? Do we want our tech and creative industries, such as those that operate in my constituency of Bristol West, to be able to perform their functions, or do we want them to move away?
Nigel Huddleston (Mid Worcestershire) (Con)
I hope the hon. Lady does not mean to talk down the UK digital success story of 12.4% of GDP. I am sure she is aware that that is the largest in the G20 and compares with a European average of just 5.7%. We need to keep the progress going but we already have huge achievements, have we not?
Thangam Debbonaire
Yes, of course, I agree but I do not want that to slow down. I am ambitious because of that record and want it to continue, if possible, at an exponential rate of growth. Having such a low level of ambition in the USO will, I think, hold back the success stories that the hon. Gentleman so rightly talks about and that I have in my constituency. The medical and university sectors and researchers throughout industry all say to me that the issue is both upload and download speeds, as well as ensuring that they can compete with their competitors in Europe and beyond. As my hon. Friend the Member for Sheffield, Heeley said, the European ambition is for 100 megabits per second—10 megabits is just a fraction of that.
Claire Perry
If the hon. Lady knows my beautiful constituency, she is always welcome to come and have a cup of coffee and admire it. The last time it was anything other than Conservative was 1921, so she is welcome to visit but not to campaign. Surely she, like me, welcomes Wiltshire Council’s commitment of taxpayers’ money to the programme and the fact that 91% of premises have now been passed by the BT programme. We are not there yet, but we have made enormous progress.
The Chair
Although the Committee is going really well and everyone is doing great, we are now straying slightly into Second Reading territory. Let us keep our comments focused on the amendments and new clause in hand and we will all get along swimmingly.
Thangam Debbonaire
Thank you, Mr Streeter. I do not have much else to say, but I say to the hon. Lady that I do indeed know her constituency well because one of my sisters was born in Devizes. She mentions 91% and Wiltshire Council’s excellent commitment, but what about the other 9%?
Before I sit down, I refer briefly to what Vodafone’s Paul Morris said in one of the oral evidence sessions last week. He said:
“I do not think that 10 megabits is enough for most small businesses”.––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 16, Q26.]
If it is not enough—if a telecoms provider acknowledges that it is not enough, and if tech companies in the creative industries and others in my constituency are telling me that it is not enough—I do not understand what would be so wrong with having an annual report to measure how we are doing. I thank you for allowing me the time to make that point, Mr Streeter, and I commend the amendment to the Committee.
Nigel Adams (Selby and Ainsty) (Con)
Before I make a brief remark, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests.
I fully support the spirit of the amendments and new clause, but I am not entirely sure whether the Committee should support it. Surely it is the Culture, Media and Sport Committee’s job to hold BDUK and the Department to account for their progress. I told you I would be brief, Mr Streeter.
Matt Hancock
We have had support of spirit throughout this sitting. The amendments and the new clause are all about reviews of and reports on progress. I have reviewed my broadband this weekend, and I can report that while I was looking at myself discussing the importance of broadband in East Anglia on a local TV programme, I was actually under my desk because my broadband went down. I know how frustrating it is when one’s broadband goes wrong. I am very grateful to the BT engineers who are working to fix it right now. That is my report.
The best comment was made by my hon. Friend the Member for Selby and Ainsty about the Select Committee. Reports and reviews are important, but the Select Committee is there to ensure that Parliament has its say. More than that, as Ofcom carries out its consultations, it will of course report on progress.
I wish to pick up on a few of the comments that were made. The hon. Member for City of Chester, which is a great city and the city of my birth—the Bill is all about connectivity and we have been making all sorts of connections in this sitting—made the argument very strongly for the importance of not only getting better connectivity, but describing it right. I will have no truck with people who say they are providing a fibre solution when, in fact, it is a part-fibre solution. Fibre-to-the-cabinet is not fibre and anybody who says so is taking people for fools. We should talk about fibre when we mean a full fibre connection that goes all the way from the fibre backbone into the premises. Anything short of that is merely part-fibre.
That point demonstrated some of the confusion from Opposition Front Benchers and shows why it is so important to get these things right, instead of just calling for a report when that is already going to happen. The hon. Member for Sheffield, Heeley called for use of G.fast, which is an important interim technology. However, she then said, “and therefore, it is important we have more fibre.” G.fast is not a fibre technology; it is a copper-based technology. While it is important and useful interim technology that will undoubtedly increase speeds, it is not full fibre.
Calum Kerr
The Minister is slightly taking liberties there. The reality is that G.fast is distance-constrained to about 300 to 400 metres, so fibre will have to be pushed much further. I am sure that the hon. Member for Sheffield, Heeley is aware of at. It comes ack to the same principles: we need more ambition and we need to push fibre further. Yes, G.fast will have a place, but it will not fix my or my colleagues’ rural challenges.
Matt Hancock
Exactly, absolutely right. We are seeing the long-feared Labour-SNP alliance in action. The hon. Gentleman is right that G.fast is a useful technology but it is not a full fibre technology and is, by physics, distance-constrained, although BT continues to do important work on driving as much delivery out of copper as possible.
There is one other point that it is important for the Committee to consider: there was a simultaneous call from the Opposition for the statement of intent to be included in the Bill and for there to be flexibility in the speed of the USO. These two things are inconsistent; it takes time to change primary legislation. It is incredibly important that we can revise the USO potentially—and hopefully—upwards. It is wrong to set a USO speed now for several years hence. I think we agree on that. We should not, therefore, put the speed on the face of the Bill.
The Scottish Government have said they want 30 megabits per second by 2021. We, of course, want the USO before then and we want the speed to reflect the reality of the time. Demands are increasing very quickly, so I would not want to put a figure on it for five years hence, as the Scottish Government have done. That is a mistake and it is far better to do it as we are planning in this Bill.
Louise Haigh
The Minister is slightly misinterpreting what I said, which is particularly cruel given that I have only been a week in the job. I did not say G.fast was equivalent to fibre. I said that BT would be pushing it out to 60% to 70% and that was why we need much more ambitious targets from the Government on fibre for that final third, in order to deliver coverage for the entire UK.
With regard to the statement of intent, I have said several times that we support its being in secondary legislation, but we want to see elements of it, including the design of the USO, the procurement process and review, to be in the Bill, to avoid being asked to vote blindly on details we do not yet have.
Matt Hancock
I am delighted to have that clarification. I am also glad that the hon. Lady welcomed the fact that Ofcom is doing the consultation, which is necessary before we can put those details in place. The way the provisions are structured in the Bill is the right way to proceed.
In ensuring that we get the best possible broadband connectivity, we must make sure that we have both a vision of the future with high-speed and superfast—and then ultrafast—connectivity, and flexibility to get there in the most cost-efficient way possible. That unites the Committee in purpose, and the Bill as it stands provides for it.
Finally, following the mention of the Labour Government by the Opposition, I will not rise to any partisan points other than to note that in 2003, the then Labour Government legislated to set a USO. They set the USO in stone in legislation and instead of including a review clause, they set it at 28 kilobits per second. Let that be a lesson to anyone who wants to put more on the face of the Bill. It is far better to ensure that we can constantly keep pace with technology, as the Bill does.
Calum Kerr
I am enjoying this; the debate is getting a little more spirited. I hope that some Government Committee members will vote the wrong way for their party and the right way for the people of this country and their connectivity. We are not advocating that a figure is put in the Bill. At no point have we suggested that. We have been advocating greater ambition and a desire to ensure that the USO is designed and rolled out to meet the demands of our constituents and the expectations of the country. Unless the Minister or anyone else can tell me that this place is particularly good at doing perfect legislation that always gets the desired outcome, it seems eminently sensible that we put in place a review process. On that basis, I am happy to withdraw the amendment and instead support amendment 82.
Louise Haigh
We have heard support for the spirit of the amendment and for the Select Committee to review the progress of the USO. The amendment certainly does not specify to which element of Parliament the report should go. We would be satisfied with progress being reported to the Select Committee. Government Committee members will be interested in, and their mailbags will be full of concerns on the progress of the USO, so they should have the ability to review that. Also, I was not old enough to vote in 2003, so I do not think I can be held responsible for decisions made then.
Calum Kerr
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 82, in clause 1, page 2, line 21, at end insert—
“72B Universal service order: annual report
(1) The Secretary of State must lay before each House of Parliament an annual report about the implementation of the universal service order for all areas pursuant to the provisions of this Act.
(2) The annual report must include information on—
(a) the number of premises that have been supplied with the minimum download speed as specified in the USO secondary legislation
(b) the number of premises that have been required to cover some of the cost of connection,
(c) of the premises in (b) the average cost of connection per premises covered by residents, disaggregated by local authority area,
(d) the number of premises that have chosen not to be connected via the universal service order after being provided with an estimate, and
(e) the amount of time on average it takes to provide an estimate and connect a premise, disaggregated by local authority area.
(3) The annual report must be laid before each House of Parliament as soon as practicable after 31 March each year.”—(Louise Haigh.)
Question put, That the amendment be made.
Louise Haigh
I know that we covered this issue on Second Reading, but I was not the shadow Minister at the time. This legislation is not a Bill for the digital economy. The tech sector has been waiting for some time for the Government’s digital strategy and vision for this crucial area of our economy; to say that it is disappointed with the lack of ambition and strategic direction in the Bill would be a gross understatement.
We heard a damning indictment from one witness last week. He described his business as a tech start-up in Canary Wharf, and said that the Bill would do absolutely nothing to help it. To call it the “Digital Economy Bill” is quite insulting given that it is actually a collection of disparate measures—a mixture of amendments from across a range of Departments vaguely tied together using the word “digital”. Over the next few sittings we will focus on where the Bill could be improved, and I am sure that on Report we will return to what the Bill requires if it is genuinely to aid, boost and improve the digital economy.
On clause 1, we need to do much more than produce a mere headline USO. If we are talking about access to digital services, what are we prepared to do to support that access? Does that support simply cover subsidies on infrastructure in more remote areas, or should it also cover education? If it is more than just enabling access, we need to make sure digital skills and knowledge are embedded in our education system as well as providing for the older generation.
Similarly, as we discussed earlier, we need to think beyond mere access and ask ourselves what sort of targets we want on usage. What goals follow the strategy of the USO? It is brilliant if everyone has 10 megabits per second, but how many people are able to use the internet? How many young people are studying IT or related classes? What percentage of the workforce are in technical-related roles? The fact is that not only is the USO unambiguous, but it is long overdue. As I said earlier, Labour left fully costed plans to deliver superfast by 2012.
In 50% of rural premises the infrastructure is simply not there to carry more than 10 megabits, and for one in five premises it will not carry more than 5 megabits. It was suggested to us by a couple of witnesses that the USO was simply in line with BT’s proposed business plan. The chief executive of BT confirmed this to us: they can implement the USO by 2020 without any further public money, with 24 megabits to 97% or 98% of the country, fixed broadband of 10 megabits to 99%, and the last 1% likely to be done by 4G or satellite. The question is, therefore, why this legislation is necessary. One witness explicitly said:
“I think you should be very worried when you hear large incumbents saying, “Set up a universal service obligation but don’t let it get too far ahead of what we’ve got in our business case.” That is not what business should be doing. Businesses will invest more if they are scared their customers will go elsewhere, not because they have been given a promise by Government”.––[Official Report, Digital Economy Bill Public Bill Committee, 11 October 2016; c. 10, Q14.]
If we are really to tackle the issues in our broadband market, the evidence we have seen suggests that the USO is—at best—nice to have, but at worst it is a serious market distortion. In fact, the Government should be considering much deeper issues such as the structure of the market, much-needed investment in infrastructure, the need for planning reform to enable the roll-out of 5G and the need to be much more imaginative around future licence auctions. For example, as we have heard time and again, there is the German model to license outwards-in so that those who are missed out on previous rounds are serviced first.
Furthermore, we have heard in one form or another that all roads lead back to Openreach, and the Bill really could have been an opportunity to reflect on that. Baroness Harding believed that
“competition will do the majority of this, and we should try our damnedest to make the private sector fund most of this through competition”.
She concluded that,
“the solution is to separate Openreach completely and put a universal service obligation on an independent Openreach”. ––[Official Report, Digital Economy Bill Public Bill Committee, 11 October 2016; c. 6, Q4.]
We heard in evidence that Openreach could and should be much more ambitious, deliver a better service and be in control of its own board, but evidence was given that, to achieve that, Openreach needs to be completely independent. It was argued that we have not been able to see how far a competitive commercial roll-out can go because we do not currently have a competitive commercial market, and we cannot have that market reform until, at the very least, we separate out Openreach.
One witness said:
“if we are going to be ambitious, to enable companies like ours to continue to grow, invest and innovate, we need a national solution, and a national solution will depend upon the national network owner, which is Openreach...That is why the structure of the industry does matter; the ability to get capital into the industry to invest in the kinds of future networks we need is critical”.––[Official Report, Digital Economy Bill Public Bill Committee, 11 October 2016; c. 19, Q31.]
Ofcom has been unambiguous in saying that network competition—having multiple network operators on the ground and available to consumers—is the best driver of investment incentives, of superfast broadband penetration and of consumer outcomes. We would like the Minister to set a clear timeframe today for the response to the Ofcom consultation on Openreach. The consultation closed two weeks ago and, as I understand it, Ofcom are now in private consultation with BT. The public and Parliament need to know when we can expect the Ofcom response and what the next steps in the process will be.
Christian Matheson
Does my hon. Friend agree that one of the problems with Openreach is that, because it does not have a customer-facing aspect, its customer service and consequently its reputation have been extremely poor?
Louise Haigh
That is certainly one of the issues. I personally have poor experience with Openreach and I am sure many members of the Committee and their constituents will have, too. Public satisfaction with Openreach customer service is incredibly low and needs urgent investigation. However, we need more detail on some areas that have not been put in the Bill, but which were included in the statement of intent, as mentioned earlier.
An example is the fact that connections will be subject to a cost threshold, above which consumers will still have the right to fast, reliable broadband, but may have to contribute to the cost of connection. That is not much of a surprise, as it happens with the USO for telephone lines. There, the cost threshold is £3,400. Is it possible for the Minister to provide any guesstimate about the threshold for the broadband USO? Once again, we are being asked to vote on legislation that does not include vital details that could make the entire proposal almost completely useless. If the threshold is set too low, the right will essentially be meaningless for the vast majority of consumers, who already miss out, are on unacceptably low broadband speeds and are forced to pay unacceptably high prices. Will the threshold have any form of parliamentary scrutiny, or is this really enabling legislation that will allow the Minister to get his head around the details after the fact?
As we have discussed, we do not believe that the headline figure of 10 megabits is sufficiently ambitious, and nor is a headline speed sufficient when considering the quality of broadband available to the population as a whole. That point was raised by several hon. Members on Second Reading, and by the hon. Member for Mid Worcestershire in evidence sittings. It is a source of great frustration in rural areas, in particular when customers are promised mobile coverage or broadband speed that are not delivered. The Bill does little to correct that. Yes, it provides for automatic compensation, but I am confident that customers would much rather have coverage—and reliability of coverage—than recompense.
The Minister did not answer questions about BDUK earlier, so I will put them again, if that is all right, Mr Streeter. Is the Minister confident that access is the same as capacity, and that there is sufficient capacity in the cabinets in areas where BDUK has been rolled out to allow take-up? Does he believe that BDUK should be measured on take-up rather than access to broadband? I should be grateful if the Minister also updated the Committee on conversations with the Advertising Standards Authority about its code, so that companies can advertise a certain speed only when a certain percentage of their customers in that area get that speed. The ASA and its committees have been looking at that issue for some time, but surely the Bill is the perfect opportunity to speed up the process and provide much needed certainty and lower prices for rural customers.
Finally, we welcome plans to deliver superfast broadband connection to sites with more than 100 homes from January. That was raised time and again on Second Reading. It is absurd not to have minimum levels of broadband in new homes when we would never consider not connecting water or electricity to any new home, regardless of the numbers on the site. As the Countryside Alliance pointed out, the figure of 100 is too urban-centric, as rural areas are moving towards small-scale developments. I hope that the Government will keep the commitment under review and ensure that the figure is reduced in future, if necessary.
We must absolutely not let the USO get in the way of investment in developing super and ultrafast capabilities across the whole UK. We heard evidence stressing the threat that communities that might be pleased with 10 megabits today will be furious about not having 1 gigabit in three or four, or potentially 10 years’ time. Indeed, providers such as Virgin, and even smaller ones, such as Gigaclear, are now building proper fibre to the premises, providing up to 1 gig in extremely rural areas; so I fear that the target will quickly become completely outdated, even given the flexibility built into secondary legislation.
Overall, the Opposition support the commitment, with all the caveats I have outlined, and I am happy to support clause 1 to stand part of the Bill.
Rishi Sunak (Richmond (Yorks)) (Con)
Ninety per cent. of UK households can access superfast broadband this year, and that number is set to improve in the next 12 months. However, many of the households that do not have access are in places such as my constituency in rural North Yorkshire, creating a digital divide between those who have access and those who do not. On behalf of my constituents, I welcome clause 1, which provides a safety net so that on reasonable request and at an affordable price they will have access to some measure of broadband connectivity.
Week in, week out, while I am doing my job, I see the benefits that that will bring, and the problems experienced today. Of course, economic development is important. My area is known for its tourism, but when I speak to the owners of holiday cottages or bed-and-breakfast accommodation, they tell me they must advertise across the world on the internet. When people come to visit the beautiful Yorkshire dales, when they have finished their day’s walking in the beauty and splendour of Swaledale, they want to come home and check their emails. It is important that my owners can provide that service.
I was at a school last weekend talking to a group of young pupils who are embracing a new course on coding. Obviously, we are not blessed with Silicon Valley yet in the Yorkshire dales, but they were accessing the resources of Code Academy online at school and wanted to continue that at home in the evening.
Beyond that, the internet keeps families together—not just grandparents who want to see their new grandchildren living abroad on Skype, but also a father to whom I spoke the other weekend who is unfortunately going through a difficult divorce. He told me that his children, with whom he was desperate to maintain a good relationship, were less keen to spend the weekend at his house because of his poor broadband connection.
The Government are moving to a “digital by default” approach to delivering public services, which is commendable, but it is important that everybody, especially farmers in rural areas, have the means to access those Government services.
For all those reasons—the tangible differences that the Bill will make to people’s lives—I welcome the Government’s delivering on their manifesto commitment to put in place the universal service obligation. The Government have the view that this should be an economy and society that works for everyone. Providing good digital connectivity to everybody is certainly part of making that aspiration a reality. On behalf of my constituents, I wholeheartedly welcome and support the measures in clause 1.
Calum Kerr
We also support clause 1. I will not repeat the points I made during the debate, but I want to bring a couple to the fore and ask the Minister one specific question, which I hope he will answer. We should not just be looking at closing the divide in the short term; we should be looking at a longer-term fix. We should consider what a minimum speed is today, but we should also be looking to what that might become in the future.
The hon. Member for Sheffield, Heeley pointed out that the EU target is 100 megabits per second by 2025. While we can aim for 10 megabits per second, if we do not set a horizon of where we want the target to go, we risk putting sticking plasters all over the country and getting solutions that will have no lifespan. We will all be back here in a few years’ time, saying, “I wish we’d listened to the hon. Member for Sheffield, Heeley who wanted an annual review.” We would know that this provision had not been delivered.
Let us try to avoid that scenario and ensure that as the USO goes through the process, what Ofcom designs not only looks at where we are today, but where we want to go in the future. When the Minister gives the main event speech tomorrow at the INCA event, which is advocating a strategy for gigabit Britain, he should set forward a truly ambitious vision of what the UK can offer in this space. Perhaps his response will provide me with some reassurance.
As we have looked at amendments, I have tried to ensure that not only have the Scottish Government and other Administrations been consulted, but they are part of the formulation of the USO. Consultation can be tokenistic or it can be fully engaged and evolved. We need to be fully involved in the design of this process, so that where we set an ambition, a target of 30 megabits per second, the USO supports it—for example, through foundational funding through a voucher scheme. Where any one of the regional councils want to do the same and set an ambitious higher target, the USO should support that, rather than offer a solution that forces them into a corner.
Will the Minister reassure me that the USO designed by his Government with Ofcom will support devolved Administrations and regions and provide foundational funding—not just 10 megabits, take it or leave it?
Nigel Huddleston
There is obviously a growing consensus and recognition of the importance to all our constituents of the universal service obligation. As always, the devil is in the detail. I understand that some of those details will be provided or revealed in secondary legislation. I do not buy some of the concerns expressed today about a possible lack of scrutiny in the progress of the USO. As a member of the Culture, Media and Sport Committee, alongside other members of this Committee, I am confident that we will continue to do that job robustly and effectively to raise issues and concerns.
I cannot imagine how many times we have heard issues related to broadband and mobile brought up in the Chamber, in Westminster Hall and elsewhere in this place, so we can scrutinise in multiple ways. We also have to be careful that we do not constrain our ambition by thinking of current technology and current speeds. It is important that we go with the flow and update our ambitions accordingly as technology develops.
Matt Hancock
We all agree that broadband is a modern necessity, and I am delighted at the Committee’s tone in supporting the goals we have set out to drive connectivity across the whole of Britain. The legal framework for introducing a USO seems to have been warmly received on both sides of the Committee. I will respond to the individual points that have been made.
First, on the ambition, thankfully we now have a Bill to introduce the framework for delivering the high level of connectivity that we need. Baroness Harding told us in our first evidence session that
“I think it is a great thing.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 10, Q15.]
We also heard the Bill described as an “incredibly important step”. As Pete Moorey from Which? said:
“There are critical things in the Bill that will start to bring the telecoms sector kicking and screaming into the 21st century.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 24, Q47.]
That is support for the importance and direction of the Bill.
On the specific point, Ofcom’s consultation on the market structure, which the hon. Member for Sheffield, Heeley mentioned, closed on 4 October and Ofcom will respond shortly. The timing is a matter for Ofcom, and it would be improper of me to pre-empt it. She is right that the threshold will be determined by the consultation, and it is wrong to try to pre-empt that consultation process. Instead, we should do things properly.
The hon. Lady will no doubt welcome an update on new homes. We have a new commitment that any development of more than 30 homes, rather than more than 100 homes, will have fibre connections and, as of 1 January, building regulations will require superfast connections in new buildings. The sensible suggestion from both sides of the House that new houses should be built with what is needed for the future has now been enacted.
Christian Matheson
I am pleased to hear that building regulations are changing. Will the Minister also have conversations with his colleagues in the Department for Communities and Local Government to change planning regulations so that newly built premises, properties and estates are ducted and cabled ready for connection?
Matt Hancock
I will look into that. I will be surprised if that does not happen already, but I will take it up.
Claire Perry
Will the Minister make representations that the threshold of 100 houses for the mandatory provision is perhaps a little high, certainly for those of us in rural constituencies?
Matt Hancock
I repeat what I have just said: the floor of 100 homes has come down to 30 homes for fibre connections, but all new buildings will be required to have access to a superfast connection from 1 January. Those points have been taken on board.
Calum Kerr
Will the Minister clarify, especially given his comments earlier about what fibre means, whether that is fibre to the premises or access to superfast over copper?
Matt Hancock
To channel the Prime Minister, fibre means fibre. If hon. Members want to know what fibre means, it means fibre.
On the point about measuring BT and BDUK on take-up not access, both BT and BDUK are measured on take-up as well as access. Both are important. In fact, the contracts have take-up embedded in them, because the clawback from higher take-up allows money to be spent on further roll-out. The contracts that are being rolled out at the moment are from that clawback. The hon. Lady is therefore absolutely right that both take-up and access are important, and in the county-by-county figures from BDUK we have both take-up and access.
I also strongly agree with the hon. Lady on advertising. The Advertising Standards Authority has consulted for some time on descriptions of both “up to” speeds and pricing arrangements, both of which can be wholly misleading. I very much hope that the ASA will come out with new rules shortly—it has been working on that for some time. However, advertising is policed on a non-statutory basis and I think it would be a significant step for us to legislate on that matter because we do not want political interference in the rules around advertising. That is a step that I do not want to take. I do want the ASA to come to its conclusions as soon as possible. I hope that that answers all the questions that were asked on that point.
Louise Haigh
I appreciate that the Minister may not want to pre-empt the Ofcom consultation, but will there be any parliamentary scrutiny of the proposals that Ofcom will bring forward, or will we leave it to Ofcom and accept what it brings forward in terms of design, cost threshold and everything else we have debated this morning?
Matt Hancock
Of course there will be parliamentary scrutiny, because the Bill provides for the USO details to be put in place via secondary legislation. There will be scrutiny then and, as my hon. Friend the Member for Selby and Ainsty pointed out, there will also be the opportunity for Select Committees to scrutinise in their usual way. I hope that without reading the rest of my speech, which is all about how important and wonderful broadband is, the Committee will accept what I have said as a full response.
Calum Kerr
Perhaps the Minister missed my request. Will he reassure me that the schemes put in place will be designed to support national commitments such as the Scottish Government’s 30 megabits and other regional commitments? The issue is all down to how the USO is designed. If it is simply put out as a 10 megabit service—take it or leave it—it will not help, whereas a regional, flexible model such as the voucher scheme that BDUK has done before could provide the foundational funding.
Matt Hancock
In short, although the precise design is subject to the Ofcom consultation, my view is that the potential in the Bill for the USO is more ambitious than the Scottish Government’s, because theirs is to be delivered later and has already specified a speed. Instead, we have proposals coming in sooner and with uprating built in from the start.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
General conditions: switching communications provider
Question proposed, That the clause stand part of the Bill.
Louise Haigh
The Opposition are happy to support the clause. As we know, there are currently extremely low levels of switching in the market, with 5.9 million mobile users having never switched owing to concerns with the process and 2.5 million people saying they have experienced a major difficulty such as the amount of time it took or loss of their number. Every year, more than a million people are either double-billed or lose service in attempts to switch.
I understand that Ofcom has been considering how to make switching work for over eight years, and I am informed that the decision on switching has been delayed because of previous appeals and the current appeal regime, which we will come on to later in the Bill.
The powers for Ofcom to introduce gainer provider-led switching are welcomed by Opposition Members, as the figures clearly show there is little appetite to switch mobile provider at present, despite the clear lack of trust in mobile service providers themselves. In the last year, almost half of consumers have not switched providers; of those who have switched, 46% of them did so more than a year ago.
As Members are aware, at the moment switching providers is beyond arduous. Individuals have to contact their own provider and then the provider they wish to switch to. They have to terminate their old contract and then activate their new contract. This creates additional costs, time and hassle, and means that consumers are not able to compare all the deals available to them easily.
These proposals are welcome, but do the Government intend gainer provider-led switching to cover both mobiles and bundles? Clearly, many mobile networks also operate in other areas, such as internet and television, so would it not make it even easier for consumers if they could switch all at once if a better offer was provided? We look forward to hearing the Minister’s comments on that.
It would also be helpful if the Minister could put on the record what discussions he has had with Ofcom and mobile providers about the range and depth of information that will be available. Clearly, the lack of open data in this market holds back switching, but as we discussed earlier it also holds back investment and competition. It is very welcome to hear that BT has offered that information, but we would be grateful to hear exactly what data it is making available. Data on internet availability—such as costs, product offerings, location of cabinets and masts, access method, service quality, service faults, and planned network upgrade and dates—would all be enormously beneficial if they were published as open data.
That would be a considerable step towards creating a more effective market. It would not only help with switching but would enable an operator, community group or local authority to decide whether to build a new network for an area if there were no other plans to do so.
Nevertheless, these measures are very welcome and we on the Labour Benches are pleased to support them.
Matt Hancock
Consumers should be able to benefit from choice and competition in the UK communications markets, and I am very grateful for the cross-party support for these measures.
The central case is that changing suppliers should be quick and easy, and can benefit all. However, the reality is that no matter how attractive a deal may look, or how dissatisfied a customer may be with their current service, the rigmarole or the perceived rigmarole involved in changing provider deters switching. This clause makes it explicit that Ofcom has powers to facilitate easier switching in the communications sector.
It will be for Ofcom to consult on and define which communication services will be subject to switching processes. Ofcom is consulting on triple play—so fixed line, broadband and pay TV switching—with a view to simplifying the processes to switch multiple services as well. The clause will help to cement Ofcom’s power and will put in place processes to instil in consumers the confidence to shop around. That is the purpose of the clause.
There are ongoing discussions with Ofcom about the range and depth of information that is provided. Of course, the measure complements the information powers given to Ofcom in part 6 of the Bill, which we will come on to. So, once consumers have better information to hand about the services on offer, they can then switch to the service that is most suitable for them with confidence and the minimum of fuss.
Ofcom has existing powers to set conditions on electronic communication service providers, and this clause makes it explicit that Ofcom may set general conditions to facilitate switching. Such conditions could require providers to comply with defined processes, such as gaining provider-led switching. This approach would mean that consumers would no longer need to contact their existing provider when they want to move, and of course the gaining provider has the incentive to make these things as easy as possible.
I hope that all these things will help to boost switching and therefore make this market more competitive.
I beg to move that the clause stand part of the Bill.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Automatic compensation for failure to meet performance standards
Calum Kerr
I beg to move amendment 60, in clause 3, page 2, line 35, at end insert—
“(db) require a communications provider to allow an end-user to terminate a contract on repeatedly failing to meet a specific standard or obligation;”.
The Chair
With this it will be convenient to discuss the following:
Amendment 84, in clause 3, page 2, line 35, after “obligation”, insert “within reasonable timescales”.
New clause 2—Ability of end-user to cancel telephone contract in event of lack of signal at residence—
“A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile telephone if, at any point during the contract term, the mobile telephone is consistently unable to obtain a signal when located at the end-user’s main residence.”.
Calum Kerr
The area of compensation is one that we have all probably been hearing about from our constituents for quite some time. Before speaking to the amendments, which are about mobile coverage, let me first welcome the important move in the Bill that not only puts compensation in place but makes it automatic. Telecoms and connectivity can feel like the dark arts to some of our constituents and it is important that whatever is put in place does not depend on their understanding the details of what they are entitled to. However, the point has already been made today that when people sign up for a broadband service, there should be far clearer, granular detail on what they should expect. We have wrestled today with what a USO should be; we have talked about download; we have talked about upload; the Minister rightly mentioned other areas such as latency and data limits; and of course cost comes into it.
In terms of compensation, it is important to recognise that broadband is different from telephony. Telephony is fairly binary—it is on or off. It works or it does not. There might be some interference, but it remains a fairly binary service. Broadband, however, is defined by many different characteristics.
As we look at a compensation regime, we need to look at the speed expectations. When someone signs up for a broadband service, they sign up for a service that is, by definition, contended. It is shared, which is why, as those who have ever been at home when the kids all get home from school, broadband speeds sometimes plummet. That is the reality of the service that is signed up for and that reality has to be accepted on a contended service—those who want a less contended service need to sign up for an appropriate service with BT or another provider—but there should still be levels of expectation. There should be a top-line download speed, an average speed and, in my view, a baseline speed, below which the service does not drop.
As we look at compensation, I would like to see some flexibility. Given the complete lack of information in the Bill—in keeping with the earlier clauses—there is the ability here for Ofcom to show flexibility and design an appropriate system. The telecoms providers all have huge challenges to face on their performance standards—the digital communications review called them out. BT was singled out, but it was not the only one. They all have a way to go in improving their service standards, so a compensation regime should be designed to incentivise them. We have to remember that this is about incentivising good performance, not about penalising bad performance, although the two obviously go side by side. We should design a scheme that is automatic and ensures people are compensated but that, most importantly allows people to get the service that they are promised and the providers are contracted for. That is important.
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey instigated work on the areas addressed in amendment 60 and new clause 2 some time ago. There are huge chunks of the country, not least the highlands but also the equally beautiful Scottish borders in my constituency, where there are notspots—in fact, it feels like there are more notspots than onspots most of the time, as I found on my summer tour. My hon. Friend brought forward proposals, which were put to the then Minister and Ofcom, to allow individuals who have signed up for a mobile service and then found that they cannot get proper service at home to be allowed out of their contract. Some providers—I think Vodafone was mentioned in the evidence session—have started to offer that. I hope that—hope is not a strategy, as we always used to say, but sometimes it is all we have—the Government will accept the sense of the amendment and new clause and put it in the legislation, to make it absolutely clear that, if I sign up for a mobile service and cannot use my device in my home, I am entitled to cancel that contract.
Louise Haigh
I rise to support the amendment in my name and the name of my hon. Friend the Member for Cardiff West. I also support the amendments tabled in the name of the hon. Member for Berwickshire, Roxburgh and Selkirk. I understand from the debate and the statement of intent that the baseline speed mentioned—10 megabits per second, as the Minister clarified—is the absolute minimum. The Opposition welcome the Government’s proposals to amend the requirements on automatic compensation, which will bring broadband services in line with other essential services such as energy and water. That recognition naturally extends to a form of automatic redress when things go wrong.
Calum Kerr
I am sorry to intervene so quickly, but this is an area where we need a bit of clarity. We have said that 10 megabits per second is a minimum, but as I understand it, it is a minimum maximum speed. It does not mean that under the USO, users will always get 10 megabits per second; it means that they sign up for a service where the maximum is 10 megabits per second. I think that is an important point to clarify.
Louise Haigh
We look forward to the Minister’s clarification.
More than 13 million households suffer from some form of broadband problem. It is about time that automatic compensation was introduced. As we know, seeking redress and compensation is often difficult for consumers, and brings little reward; many simply give up. Currently, users must lodge a formal complaint with their provider, then escalate that complaint to the ombudsman after eight weeks if they are not happy with the response. The onus certainly should not be on the customer to prove that they have lost service or that the service has not met the standard required. Where possible, automatic compensation should be made when a service provider becomes aware of a possible loss or reduction in service.
However, as has been mentioned, the legislation is not entirely clear on how the provision will be enforced, although we welcome the broad powers given to Ofcom. For example, if the fault is with the service provided to the retailer by Openreach, will the retailer pass on the compensation to the consumer who has been affected? How much will then reach the consumer? What will the level of compensation be? Which? has called for households to get £75 in compensation each time their broadband connection goes down, in line with compensation levels for power cuts. Will there be separate levels of compensation for broadband being slow or not working at all? Will the compensation cover planned network outages? Will the new regime come into effect on Royal Assent? Has Ofcom now completed all necessary consultation work?
Our amendment simply seeks to provide compensation within reasonable timescales. Consumers certainly would not want compensation payouts to drag on and on or broadband providers to drag their feet when there has been a clear outage and they are entitled to compensation. The automatic compensation model for the energy market is that it should be paid within 10 days of the customer claiming, or within 10 days of the end of the power cut if they are being paid automatically. That seems reasonable, but the Minister and Ofcom might have other ideas about what is reasonable.
Either way, we believe that it is important to set a clear timescale to ensure that consumers know exactly what they are entitled to, when they are entitled to it and how to go about claiming it if it is not forthcoming. We welcome the provisions and the recognition that consumers have a right to broadband and therefore a right to compensation if it goes wrong, but we would like assurances written into the Bill that compensation will be paid quickly.
The Chair
Order. We will adjourn in about two minutes, but let us hear from Mr Hendry before we continue on Thursday.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I commend my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk on his comments about the need for proper compensation, particularly for those promised services either explicitly or through advertising that has led them to believe that they will get those services. It is incumbent on us to do something about advertising that promises people broadband “up to” speeds that have no chance of being delivered, when they cannot even get reasonable speeds in their area. As a result, rural areas can suffer a double effect; they are over-promised and then drastically under-delivered.
I am wary of the time, so I will speak briefly in support of the new clause. Residents of Fort Augustus in my constituency went for three months without the mobile signal that they were contracted to receive, without any compensation, redress or ability to change to another provider during that time. This should be an easy aspect for the Government to sign up to. I hope that the Minister will follow on from his predecessor.
Business without Debate
Tuesday 18th October 2016
(8 years, 1 month ago)
Commons ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 October 2016 - (18 Oct 2016)
Digital Economy Bill (Fifth sitting)
Thursday 20th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 20 October 2016 - (20 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
The Minister has asked for and been granted the Chair’s permission to take his jacket off. If other right hon. or hon. Members also wish to take their jackets off, they have permission to do so.
The Minister for Digital and Culture (Matt Hancock)
I beg to move,
That the Order of the Committee of 11 October be amended as follows—
(1) In paragraph (1), after sub-paragraph (f) insert—
“(g) at 9.25 am on Tuesday 1 November;”.
(2) In paragraph (4), for “5.00 pm on Thursday 27 October” substitute “11.25 am on Tuesday 1 November”.
On Tuesday night, the House approved a motion to extend the Committee. This amendment will provide the additional time required thoroughly to scrutinise the Bill.
Louise Haigh (Sheffield, Heeley) (Lab)
I thank the Government for replacing the sitting that we lost on Tuesday because of the debate that they scheduled on the BBC motion. We do not oppose this amendment, but the Government have tabled more than 130 amendments to the Bill since we agreed the programme motion, in good faith, on the basis that the Bill has 84 clauses. It is now clear that the Bill was not ready to come to Committee.
Not only have the Government tabled more than 130 amendments but they have made significant announcements about who the regulator will be. We welcome the significant publication of the codes of practice that will accompany part 5, but we should have had them earlier in the process. It is the job of Her Majesty’s loyal Opposition to scrutinise the Bill and table amendments, and we will not accept any criticism if the Committee does not get through the whole Bill. The Government should be prepared to add time if we do not make that progress.
Matt Hancock
We have been very accommodating on the timings. Not only did we remove the Tuesday afternoon sitting at the request of the Labour party, but we added another sitting at the end. We cancelled the sitting last Thursday afternoon at the request of the Labour party, despite the fact that we wanted it to happen. In fact, the amount of scrutiny in Committee will be less than we originally proposed, at the request of the Labour party. We will not have any truck with that one.
Kevin Brennan (Cardiff West) (Lab)
How many amendments has the Minister tabled?
Matt Hancock
Amendments have been tabled by Members on both sides of the Committee. The argument that we should not table amendments in Committee is an argument for having Bills come out of the parliamentary process in exactly the same form as they go in. Even the Government would not make that case. The central point here is that we offered plenty of time, which was agreed on a cross-party basis, and the Labour party has asked to reduce that time. In considering whether there has been enough time in Committee, those who read the transcript in the weeks and months to come ought to recognise that the Government have been as accommodating as possible, but that we had to give way to the Labour party’s request for less time and scrutiny in Committee.
Claire Perry (Devizes) (Con)
We have a Minister who is engaging with the nuts and bolts of a Bill that was prepared long before he came to office. I, for one, am delighted that we have an active Minister who is determined to make this exceptionally important Bill as good as it can be. I do not accept this criticism. It is excellent that the Government are tabling these amendments and allowing time to consider them.
Kevin Brennan
I note that the Minister has not answered my question, and I am not sure that he even knows how many amendments he has tabled. Of course it is appropriate to table amendments, but it is not appropriate to introduce a Bill that is so unready that the Government have already tabled more than 130 amendments. That is not good practice, and he knows very well that it is not; I do not know why he is contesting that fact. We want to proceed with the business, but we put our point on the record. I hope that he and his officials take note.
Matt Hancock
People reading the transcript will notice that we have eaten up another five minutes discussing the process.
Matt Hancock
No. I want to get on to the scrutiny of the Bill, but I will take on board the Labour party’s point that it does not think amendments are a good idea. I think the whole point of the parliamentary process is to make amendments. With that, I hope that we can get on with the Bill.
Kevin Brennan
On a point of order, Mr Stringer. If the Minister thinks that that is the attitude he should adopt in Committee to the Opposition when they are making a legitimate point about how ready the Bill can be for scrutiny if he has to introduce more than 130 amendments, he has got a lot to learn about how this place works. I put it clearly on the record that we think it is vital that amendments to a Bill are discussed, but the purpose of Committee is mainly is to ensure that the Opposition have that opportunity.
The Chair
I have given the hon. Gentleman some latitude, but that was not a point of order or a matter for the Chair. May I remind right hon. and hon. Members that interventions should be brief and to the point?
Question put and agreed to.
Clause 3
Automatic compensation for failure to meet performance standards
Amendment proposed (18 October): 60, in clause 3, page 2, line 35, at end insert—
“(db) require a communications provider to allow an end-user to terminate a contract on repeatedly failing to meet a specific standard or obligation;”—(Calum Kerr.)
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 84, in clause 3, page 2, line 35, after “obligation”, add “within reasonable timescales” insert”.
New clause 2—Ability of end-user to cancel telephone contract in event of lack of signal at residence—
‘A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile telephone if, at any point during the contract term, the mobile telephones is consistently unable to obtain a signal when located at the end-user’s main residence.’
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I will not repeat the comments I made previously, but I want to focus again on new clause 2. I was explaining that consumers often face an impossible position. I gave an example from my constituency of something that happens around the UK. Indeed, uSwitch produced a report this morning that shows that across the UK nearly a third of consumers have either patchy or no signal inside their home, which is a real deficit in the product that they thought they were buying. Some of that will be down to there being no reasonable coverage in the area, and some of it will be down to other factors, but it is often down to a failure of the telecoms company that provides the service.
I will repeat the example that I gave from my constituency, because I think it is important. In Fort Augustus, my constituents had to do without their mobile telephones between January and May 2015, even though they had contracts, because the operator could not fix a problem. They were told that the only way to deal with that was to pay £200 to cancel the contract. That is flatly unacceptable. I have listened carefully to what has been said this morning; the Government stated clearly that they want to make the Bill as good as it can be, so let us make sure that we put in the new clause.
I first raised this issue with the UK Government in July 2015, and I was told at that time that there was merit in what I was saying. Ofcom accepted that, and said that it, too, felt that something should be done. The Minister’s predecessor, the right hon. Member for Wantage (Mr Vaizey), said in November 2015:
“We have a number of principles when we look at this market. One is that consumers should not be trapped in contracts in which they are not getting the coverage they expected to get. Ofcom is discussing with mobile providers the possibility of their offering redress, which would include allowing customers to leave a contract when service was unacceptable.”—[Official Report, 24 November 2015; Vol. 602, c. 1335.]
Let us please ensure that we do something about that, and put the new clause into the Bill.
Matt Hancock
The clause is all about making it easier for customers to claim compensation for service failures. This is all part of the fact that broadband is now a utility rather than a “nice to have”. Amendment 60 seeks to make it explicit that Ofcom can set general conditions to require communication providers to allow an end user to terminate a contract when a service repeatedly fails. New clause 2, which we have just been talking about, would specify that consumers can terminate a contract if mobile coverage is substandard at the main residence. There are already a number of options available to consumers who wish to cancel a contract due to poor coverage or connection, and we do not think that those additional options are necessary.
Before purchasing a contract, consumers can use Ofcom’s coverage checker, and if a contract is purchased online or over the phone, and the consumer finds that the coverage is a problem, they can cancel during the statutory cooling-off period—the first 14 days. Some companies offer extended periods, such as a 30-day network guarantee, during which customers can test the coverage and, should they be dissatisfied, cancel without penalty. Customers are entitled to leave a contract if they are mis-sold a service—if they are advised that they would get coverage in a certain location, but subsequently discover that they cannot.
Drew Hendry
I am listening carefully to the Minister. Those protections are important, and if somebody is mis-sold a product at the point of sale, a cooling-off period is valuable. However, the Minister is not addressing situations such as that in the Fort Augustus example that I gave. The people who got that contract were not able to get the service after the cooling-off period. That is happening across the UK.
Matt Hancock
It is reasonable that the period in which people can cancel be limited, because companies have to know, once they have entered into a contract, that it is valid. I think that the way that is done currently, through cooling-off periods, is appropriate. There is also a broadband speed code of practice, which is about the speed that people get. As of the end of September, seven providers have implemented the business broadband speeds code of practice, which allows business customers to exit a contract without penalty if download speeds are not at the guaranteed minimum.
Drew Hendry
I hear very clearly what the Minister says, but this is about people who have bought into mobile contracts and are not able to get coverage. Does the Minister think it is acceptable that somebody who is without a service for four months has to pay £200 to cancel their contract?
Matt Hancock
No, I do not, but I do think it is useful for the period in which contracts can be cancelled to be limited. The law currently provides for that.
Amendment 84 seeks to define the parameters of any general condition that Ofcom sets regarding compensation to customers. It is our intention that providers should offer prompt and proportionate compensation when their services do not meet agreed standards. It is right that any decision by Ofcom to set general conditions needs to be based on evidence drawn from its consultation process and applied proportionately. In June, Ofcom issued a call for input on the aim and scope of the automatic compensation scheme, and it will consult on the introduction of the regime in early 2017. We support Ofcom in that approach. I think that the way the clause is drafted is the right way to drive the policy, but until we have the benefit of Ofcom’s consultation, it would be wrong to constrain the parameters of a general compensation condition.
With that explanation, and given my point that there is already a time-limited period in which contracts can be cancelled, I hope that hon. Members will withdraw their amendments.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I am disappointed but not surprised that the Minister will not consider the change. There seems to be an unwillingness to amend the Bill other than by adopting one of the hundreds of Government amendments. I hoped that we might enter into a more constructive spirit.
We agree that the clause itself is a good move. As I said in my opening remarks, there is an opportunity to go to a high level of granularity—I contrasted the black-and-white, binary nature of telephony to the complex world of broadband—and I would like the Minister to assure us that the devolved Administrations will play a key role in that. Scotland is a disproportionately rural environment, and we must ensure that the rural voice is heard, although these issues are not unique to Scotland, or to my constituency, or that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. This must go to a granular level and incentivise good performance, rather than provide compensation, as is currently set out in the Bill. All that our constituents want is a good level of service, rather than some money back for poor service.
Matt Hancock
I hope I can give assurances that might prevent the hon. Gentleman from pressing his amendment to a vote.
Ofcom’s consultations will of course include the Scottish Government, as well as rural areas of the rest of the United Kingdom. My explanation for not wanting to legislate through the Bill for redresses already provided for in law is that it is generally good practice for a particular redress to be covered in law just once. We might otherwise end up with a problem of overlap, which can make it harder to claim redress. That is why I have set out where I think redress is already available. Although of course we want to ensure that people who cannot get coverage or do not get good enough broadband speeds through the contract that they have signed up to have the opportunity to come out of that contract, we should not double legislate.
Question put, That the amendment be made.
Matt Hancock
Clause 3 will make it easier for customers to claim compensation for service failures and, we hope, help improve customer satisfaction and drive the sector to deliver on its service commitments. The clause is about providing not only compensation but incentives that we hope will make such compensation unnecessary. The clause makes explicit Ofcom’s power to set general conditions on communications providers, requiring them to adhere to automatic compensation regimes as defined by Ofcom. It is part of Ofcom’s remit to protect the interests of end-users.
Telecommunications customers increasingly view their digital connectivity as essential, just as power and water are essential. The clause helps to deliver on those higher expectations. According to research by Ofcom, customers suffering from a loss of broadband service incur on average a direct financial cost of £18, spend an average of four hours trying to resolve the issue, and have to contact their provider an average of three times. Automatic compensation will mean that customers will receive standardised compensation for specific service failures, either without having to complain directly or through a streamlined process.
Ofcom has made a call for inputs and will be consulting with customers, customer groups, industry and all parties that want to enter the consultation, including devolved Governments. It will define which services and service quality issues will be eligible, how much the compensation will be, and the fault-identification and payment processes. The consultation process will ensure that the compensation scheme is fair and proportionate, mitigating the risk of additional costs being passed on to customers.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
The electronic communications code
Question proposed, That the clause stand part of the Bill.
Louise Haigh
Clause 4 contains changes to the highly complex electronic communications code, as we heard earlier in the debate. We recognise and support the amendments tabled in the Minister’s name, which seek to clarify the web of legal technicalities and ensure that it interconnects with the existing legal landscape; that the new code does not infringe on access to land where the person does not agree to that access being obstructed; and that subsisting agreements continue in place.
Our primary concern is to ensure that the significant savings that the clause will clearly create for the mobile industry are invested in their entirety into infrastructure and roll-out for the public benefit.
We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained as they are under the current ECC.
The assets of these small infrastructure providers, which are a valuable part of the market, are dependent on land. We would like a commitment from the Minister that further inevitable redrafts continue to carve out electrical communications apparatus from the definition of land. The benefit of independent infrastructure is the much higher capacity available for all networks to use on an open and non-discriminatory basis. Operators in this space filled more substantial towers, which send signals much further than an average mobile operator-owned mast. That is particularly important in rural areas, where more than half their investments have been made. More networks operating from better infrastructure enable transformational improvements in capacity.
The sector also unlocks significant new inward investment with a low cost of capital from the same funds that invest in UK energy, transport and utility assets. Clearly, significant investment is needed in the UK’s wireless infrastructure. Improving mobile connectivity needs substantial and sustained investment. New communication masts are needed in rural and suburban areas to improve coverage. In urban areas, to support the exponential growth in mobile data usage and provide ubiquitous high-speed connectivity, 5G networks will need hundreds of thousands of small cells connected with a dense network of fibre.
Analysis from Ernst & Young highlights that independently operated towers across Europe and North America host, on average, twice as many networks as vertically-owned towers. The UK is now lagging behind competitive telecoms markets around the world in respect of adopting the more efficient independent model; more than 60% of global and 80% of US masts are now operated independently of the networks that use them. Independent infrastructure can deliver investment in a way that maximises its productivity and enables the greatest level of connectivity.
Furthermore, we are aware that the industry has concerns about the clause given what is known as “stopping up”. That is the procedure that highway authorities use to decommission stretches of public highway. Under the new code, when streets are stopped up, the occupier of the land can give notice to quit and mobile operators would not then be able to cover the cost of relocation.
As I understand it, unlike the other reforms, this reform is intended to apply retrospectively, so we would be interested to hear the Minister’s thinking. More broadly on the clause, clearly the Minister and officials are attempting to make revisions to this enormously complex code, which obstructs or interferes with the means of access to this land.
There is a broader point. Despite the additional powers that the Bill provides to telcos over the landowners, in practice there absolutely must remain a solid working relationship between the two. As we heard in evidence last week, if good relationships are not continued, the industry might as well just go home for the next four to five years and forget about further expanding the network, such is the importance of good relationships and access to allow for upgrading and installing new infrastructure.
Industry evidence suggests that, on average, infrastructure facilities will need to be accessed every 12 days, so we must ensure that the legislation strikes the right balance between increasing access, which will help to upgrade the network, and maintaining a good relationship with the landowners who will help that roll-out.
The clause is intended to improve mobile coverage, so I will go back to something that the Minister said on Tuesday in Committee:
“That is why delivery on this commitment by the MNOs”—
that is, by the mobile network operators—
“is so important. The deal as agreed, which is a legally binding commitment, will result in nearly 100% of UK premises receiving 3G/4G data coverage, and 98% coverage to the UK landmass by the end of 2017.”—[Official Report, Digital Economy Public Bill Committee, 18 October 2016; c. 124.]
Those figures were not immediately familiar to me at the time. As I understand it, they were not in the legal agreement between the Government and the mobile network operators, which only requires guaranteed voice and text to each operator by 2017 to 90% and full coverage to 85% by 2017.
I believe that the Minister may have been referring to the new emergency service contract, which is being delivered by EE. That is exactly the point I was making: that is only one operator. Furthermore, is it not the case that currently only 46% of premises have access to 4G from all mobile network operators and that there remains a substantial 7%, or 1.5 million homes nationwide, that do not have basic voice or text coverage across the three networks?
The roll-out of this vital infrastructure by EE for the benefit of emergency services is obviously welcome and the coverage figures for the UK landmass are impressive. However, that does not constitute universal coverage, as it will be only for the benefit of EE customers, unless some kind of agreement that we are not aware of has been reached. Clearly, although that means that data coverage is reaching all corners of the UK, there is no parity of provision across the mobile network operators and that near-universal coverage, which is so needed, is still far from a reality.
New clause 20, to which we will return later, seeks to do something about that. It would empower the Secretary of State to commission a strategic review of mobile network coverage and to consider measures to enable universal coverage for residences across all telecommunications providers. That would enable the Government to take a second look at ways, including national roaming, genuinely to extend coverage across 3G and 4G to all network providers, because, as the Minister said in Committee on Tuesday, it is no good having full coverage with one provider if the others are not covered.
Calum Kerr
That was an excellent introduction from the Opposition spokesperson, highlighting a lot of the issues. I will try not to repeat them.
What I will do, however, is start by welcoming these overdue changes to the electronic communications code. We absolutely need to make it much easier for infrastructure to be rolled out—not just for masts; this also applies to the likes of Virgin, which is very concerned about wayleaves and access and how it can roll out wire networks. We very much welcome anything that will help increase coverage across the whole of the UK, and in particular across Scotland.
Matt Hancock
Clause 4 amends the Telecommunications Act 1984 and the Communications Act 2003 to give force to the new electronic communications code, which is in schedule 1 to the Bill. That includes repealing the existing code, which is currently set out in schedule 2 to the 1984 Act and schedule 3A to the 2003 Act. So in a sense the clause is short because it gives effect to a lot of detail set out elsewhere.
I will answer some of the questions. Of course we consult the Scottish Government on many of these matters, just as we consult local authorities all around England and the Welsh and Northern Ireland Governments. Communications are a reserved matter, but obviously how they are delivered in each jurisdiction is important.
Let me address the point about 5G and the importance of fibre. Fibre is the future. A very strong fibre backbone is very important for the roll-out of 5G; hon. Members on both sides of the Committee agree on that. However, that does mean that getting down the cost of sites is important. I agree with the hon. Member for Berwickshire, Roxburgh and Selkirk that this is not about single mobile phone providers having sites. Wireless infrastructure providers make up one third of the market. That is lower than in other countries, but it is important.
This comes down to the question of cost. It is wrong to argue that because some of these sites are hosted by the Forestry Commission and other parts of the public sector, we should not reduce the cost and make it easier to roll out infrastructure; you can’t have your cake and eat it. We want to make it easier to roll out infrastructure. That is why we think it is good that the costs come down. However, most of these deals will remain commercial deals. What we are putting in place is a lower backstop, which I think is the right approach.
On the points made about the MNO deal for coverage, the hon. Member for Sheffield, Heeley is precisely right in her analysis of what I said. The figures that I gave on Tuesday are for the expected national result of the individual contractual requirements. I agree with her, of course, that it is better to have all MNOs available in one place, but having one rather than none is the first and most important step.
Dealing with notspots is the most important stage; the next is dealing with partial notspots: areas of the country covered by some but not all providers. That is why there is a difference between particular contracts and the figures that I gave, although EE’s contract—partly because it has the emergency service contract, which will come into force at the end of next year—has the widest expected future coverage of all the MNOs. The hon. Lady is exactly right. I would just say that we must not let the best be the enemy of the good; let us keep the roll-out going.
On the point that the hon. Lady made about stocking up, we are engaging with stakeholders to consider the concerns, and we will ensure that there is no retrospective effect. On the distinction between land and apparatus, we think that there is one, and we want to ensure that the revised code delivers access to viable sites. That is fundamental to the legal framework underpinning the deployment of electronic communication apparatus, and it must be the case regardless of whether it is on land owned by the operator or any other market player.
There is clearly a delicate balance to be achieved when considering what must be left purely to commercial agreement and what should be regulated in the code. Restricting the scope of legislation too far is likely to be counterproductive to ensuring that viable land remains on the market. We believe that the revised code achieves that balance effectively. I hope that I have made the case effectively for the revised code, and I hope that it helps ensure that we can roll out wireless infrastructure more widely across Britain. I commend the clause to the Committee.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Schedule 1
The electronic communications code
Matt Hancock
I beg to move amendment 12, in schedule 1, page 82, line 29, leave out “and keep”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Matt Hancock
This is a series of Government amendments to improve the new code. Amendments 12 to 14 are minor drafting amendments to clarify that the new electronics communications code will allow already installed apparatus to be kept on land, and to ensure consistency of terminology in paragraph 3 of the code. The remaining amendments are to part 6 of the new code, which deals with the right to remove electronic communications apparatus from land and related rights.
Amendment 24 inserts a new paragraph 36(a) into the code to provide that an owner or occupier of neighbouring land has a right to remove apparatus from other land where it obstructs access. If apparatus is installed on land A, the owner or occupier of land B can require removal where it obstructs or interferes with access to their own land. Amendment 25 inserts another new paragraph into the code to provide that an owner or occupier of neighbouring land also benefits from the right to require an operator to disclose whether it owns the apparatus, as it is important for neighbours to know that.
Amendments 15, 18, 26 to 30 and 32 to 35 are consequential on amendment 24 and 25. Amendment 37 inserts new paragraphs 38(a) and (b) to provide that the right to require removal of apparatus applies not only to those with an interest in land but also to a person whose right to require removal of apparatus arises from statute or other legal basis. It is necessary to establish the procedures by which such parties can require the removal of the electronic communications apparatus.
Amendments 16, 23, 40, 41, 43 and 45 are consequential on amendment 37. Amendment 38 clarifies how a person with an interest in the land can, when there is no longer apparatus on that land, ask the court to restore the land to its original condition, and amendments 19, 20, 39, 40 and 44 are consequential on that.
Amendment 31 clarifies that a landowner or occupier can require the removal of apparatus only in accordance with the procedure set out in the code. Amendment 36 ensures that proceedings before a court to enforce removal cannot finally be determined until any application for new rights made by the operator has been concluded, and amendment 17 is consequential on that.
Paragraph 36 of the new code provides for conditions that must be met before a landowner has the right to require the removal of apparatus from their land, and amendment 21 clarifies paragraph 36(2). Amendment 22 clarifies that a person whose code agreement was not subject to part 5 can apply to remove electronic communications apparatus when the code rights have ceased to apply to them.
Amendment 12 agreed to.
Amendments made: 13, in schedule 1, page 82, line 30, at end insert—
(aa) to keep installed electronic communications apparatus which is on, under or over the land,”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Amendment 14, in schedule 1, page 83, line 2, leave out from “installation” to end of line 4 and insert
“of electronic communications apparatus on, under or over the land or elsewhere;
(ca) to carry out any works on the land for or in connection with the maintenance, adjustment, alteration, repair, upgrading or operation of electronic communications apparatus which is on, under or over the land or elsewhere,”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Amendment 15, in schedule 1, page 86, line 26, leave out
“The reference in sub-paragraph (2)”
and insert
“A reference in this code”.
This applies the extended meaning of “means of access to or from land” across the code. It is consequential on amendment 24.
Amendment 16, in schedule 1, page 95, line 2, after “36” insert
“or as mentioned in paragraph 38A(1)”.
This is consequential on amendment 37.
Amendment 17, in schedule 1, page 95, line 10, leave out “or” and insert “and”.
This is consequential on amendment 36.
Amendment 18, in schedule 1, page 102, line 1, leave out
“with an interest in land”.
This is consequential on amendment 37.
Amendment 19, in schedule 1, page 102, line 3, at end insert
“or the restoration of land,”.
This is consequential on amendment 38.
Amendment 20, in schedule 1, page 102, line 6, after “removal” insert
“of apparatus or restoration of land”.
This is consequential on amendment 38.
Amendment 21, in schedule 1, page 102, line 14, after “never” insert
“since the coming into force of this code”.
This provides for a condition for having a right to require removal of apparatus to be met if the only right there has been to keep the apparatus on the land was a right that came to an end under the code that Schedule 1 to the Bill replaces, or that ceased under that code to be binding on the landowner.
Amendment 22, in schedule 1, page 102, line 24, at end insert “, or
( ) where the right was granted by a lease to which Part of this code does not apply.”.
Part 5 of the code (termination of agreements creating code rights) does not apply to certain leases governed by landlord and tenant law. The amendment provides for the ending of code rights under such a lease and under Part 5 to be treated in the same way for the purposes of rights to require removal of apparatus.
Amendment 23, in schedule 1, page 103, line 17, at end insert—
‘( ) This paragraph does not affect rights to require the removal of apparatus under another enactment (see paragraph 38A).”.
This is consequential on amendment 37.
Amendment 24, in schedule 1, page 103, line 17, at end insert—
“When does a landowner or occupier of neighbouring land have the right to require removal of electronic communications apparatus?
36A (1) A landowner or occupier of any land (“neighbouring land”) has the right to require the removal of electronic communications apparatus on, under or over other land if both of the following conditions are met.
(2) The first condition is that the exercise by an operator in relation to the apparatus of a right mentioned in paragraph 13(1) interferes with or obstructs a means of access to or from the neighbouring land.
(3) The second condition is that the landowner or occupier of the neighbouring land is not bound by a code right within paragraph 3(f) entitling an operator to cause the interference or obstruction.
(4) A landowner of neighbouring land who is not the occupier of the land does not meet the second condition if—
(a) the land is occupied by a person who—
(i) conferred a code right (which is in force) entitling an operator to cause the interference or obstruction, or
(ii) is otherwise bound by such a right, and
(b) that code right was not conferred in breach of a covenant enforceable by the landowner.
(5) In the application of sub-paragraph (4)(b) to Scotland the reference to a covenant enforceable by the landowner is to be read as a reference to a contractual term which is so enforceable.”.
New paragraph 36A makes provision for a landowner or occupier of neighbouring land to have a right to require removal of apparatus that obstructs or interferes with a means of access to that land.
Amendment 25, in schedule 1, page 103, line 27, at end insert—
‘(1A) A landowner or occupier of neighbouring land may by notice require an operator to disclose whether—
(a) the operator owns electronic communications apparatus on, under or over land that forms (or, but for the apparatus, would form) a means of access to the neighbouring land, or uses such apparatus for the purposes of the operator’s network, or
(b) the operator has the benefit of a code right entitling the operator to keep electronic communications apparatus on, under or over land that forms (or, but for the apparatus, would form) a means of access to the neighbouring land.”.
This is consequential on amendment 24. Paragraph 37(1A) provides for a landowner or occupier of neighbouring land to have the rights in paragraph 37 to require an operator to disclose whether it owns apparatus or has code rights relevant to the neighbouring land.
Amendment 26, in schedule 1, page 103, line 33, after “(1)” insert “or (1A)”.
This is consequential on amendment 25.
Amendment 27, in schedule 1, page 103, line 34, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 28, in schedule 1, page 103, line 37, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 29, in schedule 1, page 103, line 38, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 30, in schedule 1, page 103, line 47, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 31, in schedule 1, page 104, line 2, leave out from beginning to “requiring” in line 9 and insert—
(1) The right of a landowner or occupier to require the removal of electronic communications apparatus on, under or over land, under paragraph 36 or 36A, is exercisable only in accordance with this paragraph.
(2) The landowner or occupier may give a notice to the operator whose apparatus it is”.
The amendment clarifies that a landowner or occupier can require removal of electronic communications apparatus only in accordance with the procedure set out in paragraph 38.
Amendment 32, in schedule 1, page 104, line 23, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 33, in schedule 1, page 104, line 33, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 34, in schedule 1, page 104, line 40, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 35, in schedule 1, page 104, line 41, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 36, in schedule 1, page 104, line 42, at end insert—
‘( ) On an application under sub-paragraph (6) or (7) the court may not make an order in relation to apparatus if an application under paragraph 19(3) has been made in relation to the apparatus and has not been determined.”.
This provides that the court cannot order removal of apparatus under Part 6 of the code if there is an outstanding application under paragraph 19 (to keep the apparatus installed) that has not been determined.
Amendment 37, in schedule 1, page 104, line 42, at end insert—
“How are other rights to require removal of apparatus enforced?
38A (1) The right of a person (a “third party”) under an enactment other than this code, or otherwise than under an enactment, to require the removal of electronic communications apparatus on, under or over land is exercisable only in accordance with this paragraph.
(2) The third party may give a notice to the operator whose apparatus it is, requiring the operator—
(a) to remove the apparatus, and
(b) to restore the land to its condition before the apparatus was placed on, under or over the land.
(3) The notice must—
(a) comply with paragraph 85 (notices given by persons other than operators), and
(b) specify the period within which the operator must complete the works.
(4) The period specified under sub-paragraph (3) must be a reasonable one.
(5) Within the period of 28 days beginning with the day on which notice under sub-paragraph (2) is given, the operator may give the third party notice (“counter-notice”)—
(a) stating that the third party is not entitled to require the removal of the apparatus, or
(b) specifying the steps which the operator proposes to take for the purpose of securing a right as against the third party to keep the apparatus on the land.
(6) If the operator does not give counter-notice within that period, the third party is entitled to enforce the removal of the apparatus.
(7) If the operator gives the third party counter-notice within that period, the third party may enforce the removal of the apparatus only in pursuance of an order of the court that the third party is entitled to enforce the removal of the apparatus.
(8) If the counter-notice specifies steps under paragraph (5)(b), the court may make an order under sub-paragraph (7) only if it is satisfied—
(a) that the operator is not intending to take those steps or is being unreasonably dilatory in taking them; or
(b) that taking those steps has not secured, or will not secure, for the operator as against the third party any right to keep the apparatus installed on, under or over the land or to re-install it if it is removed.
(9) Where the third party is entitled to enforce the removal of the apparatus, under sub-paragraph (6) or under an order under sub-paragraph (7), the third party may make an application to the court for—
(a) an order under paragraph 39(1) (order requiring operator to remove apparatus etc), or
(b) an order under paragraph 39(2) (order enabling third party to sell apparatus etc).
(10) If the court makes an order under paragraph 39(1), but the operator does not comply with the agreement imposed on the operator and the third party by virtue of paragraph 39(5), the third party may make an application to the court for an order under paragraph 39(2).
(11) An order made on an application under this paragraph need not include provision within paragraph 39(1)(b) or (2)(d) unless the court thinks it appropriate.
(12) Sub-paragraph (9) is without prejudice to any other method available to the third party for enforcing the removal of the apparatus.
How does paragraph 38A apply if a person is entitled to require apparatus to be altered in consequence of street works?
38B (1) This paragraph applies where the third party’s right in relation to which paragraph 38A applies is a right to require the alteration of the apparatus in consequence of the stopping up, closure, change or diversion of a street or road or the extinguishment or alteration of a public right of way.
(2) The removal of the apparatus in pursuance of paragraph 38A constitutes compliance with a requirement to make any other alteration.
(3) A counter-notice under paragraph 38A(5) may state (in addition to, or instead of, any of the matters mentioned in paragraph 38A(5)(b)) that the operator requires the third party to reimburse the operator in respect of any expenses incurred by the operator in or in connection with the making of any alteration in compliance with the requirements of the third party.
(4) An order made under paragraph 38A on an application by the third party in respect of a counter-notice containing a statement under sub-paragraph (3) must, unless the court otherwise thinks fit, require the third party to reimburse the operator in respect of the expenses referred to in the statement.
(5) Paragraph 39(2)(b) to (e) do not apply.
(6) In this paragraph—
“road” means a road in Scotland;
“street” means a street in England and Wales or Northern Ireland.”.
New paragraphs 38A and 38B provide for a right to require removal of electronic communications apparatus to be available to not only to a person with an interest in land (see paragraph 36(1)) but also to a “third party” whose right to require removal of apparatus arises pursuant to an enactment, or on some other legal basis.
Amendment 38, in schedule 1, page 104, line 42, at end insert—
“When can a separate application for restoration of land be made?
38C (1) This paragraph applies if—
(a) the condition of the land has been affected by the exercise of a code right, and
(b) restoration of the land to its condition before the code right was exercised does not involve the removal of electronic communications apparatus from any land.
(2) The occupier of the land, the owner of the freehold estate in the land or the lessee of the land (“the relevant person”) has the right to require the operator to restore the land if the relevant person is not for the time being bound by the code right.
This is subject to sub-paragraph (3).
(3) The relevant person does not have that right if—
(a) the land is occupied by a person who—
(i) conferred a code right (which is in force) entitling the operator to affect the condition of the land in the same way as the right mentioned in sub-paragraph (1), or
(ii) is otherwise bound by such a right, and
(b) that code right was not conferred in breach of a covenant enforceable by the relevant person.
(4) In the application of sub-paragraph (3)(b) to Scotland the reference to a covenant enforceable by the relevant person is to be read as a reference to a contractual term which is so enforceable.
(5) A person who has the right conferred by this paragraph may give a notice to the operator requiring the operator to restore the land to its condition before the code right was exercised.
(6) The notice must—
(a) comply with paragraph 85 (notices given by persons other than operators), and
(b) specify the period within which the operator must complete the works.
(7) The period specified under sub-paragraph (6) must be a reasonable one.
(8) Sub-paragraph (9) applies if, within the period of 28 days beginning with the day on which the notice was given, the landowner and the operator do not reach agreement on any of the following matters—
(a) that the operator will restore the land to its condition before the code right was exercised;
(b) the time at which or period within which the land will be restored.
(9) The landowner may make an application to the court for—
(a) an order under paragraph 39(1A) (order requiring operator to restore land), or
(b) an order under paragraph 39(2A) (order enabling landowner to recover cost of restoring land).
(10) If the court makes an order under paragraph 39(1A), but the operator does not comply with the agreement imposed on the operator and the landowner by virtue of paragraph 39(5), the landowner may make an application to the court for an order under paragraph 39(2A).
(11) In the application of sub-paragraph (2) to Scotland the reference to a person who is the owner of the freehold estate in the land is to be read as a reference to a person who is the owner of the land.”.
New paragraph 38C makes provision about restoration of land where restoration does not involve the removal of apparatus.
Amendment 39, in schedule 1, page 105, line 2, at end insert—
‘(1A) An order under this sub-paragraph is an order that the operator must, within the period specified in the order, restore the land to its condition before the code right was exercised.”.
This is consequential on amendment 38.
Amendment 40, in schedule 1, page 105, line 3, after “landowner” insert
“, occupier or third party”.
This is consequential on amendments 24 and 37.
Amendment 41, in schedule 1, page 105, line 15, after “landowner” insert
“, occupier or third party”,
This is consequential on amendments 24 and 37.
Amendment 42, in schedule 1, page 105, line 15, at end insert—
‘(1A) An order under this sub-paragraph is an order that the landowner may recover from the operator the costs of restoring the land to its condition before the code right was exercised.”.
This is consequential on amendment 38.
Amendment 43, in schedule 1, page 105, line 16, after “paragraph” insert
“on an application under paragraph 38”.
This is consequential on amendments 24 and 37.
Amendment 44, in schedule 1, page 105, line 24, after “(1)” insert “or (1A)”.
This is consequential on amendment 38.
Amendment 45, in schedule 1, page 105, line 25, after “landowner” insert
“, occupier or third party”.—(Matt Hancock.)
This is consequential on amendments 24 and 37.
Question proposed, That the schedule, as amended, be the First schedule to the Bill.
Matt Hancock
This schedule is the reformed electronic communications code, which is to be inserted into the Communications Act 2003. The debate we have just had on clause 4, which repeals the previous code, explains precisely why the new code is important. This is all about making sure that the law is up to date. The code was established by the 1984 Act and has not been substantively amended since then. The legal framework just has not kept pace with rapid changes. Our debate on clause 4 demonstrates why it is important to get this right.
The revised code forms part of a series of measures to improve this country’s communications infrastructure. We have worked closely with the devolved Administrations to make sure that the code will work effectively in all jurisdictions. The code has 17 parts, each dealing with the rights and responsibilities of site providers and operators, and I will quickly go through each part.
Part 1 is about the concepts in the code, including some of the definitions. Part 2 sets out how code rights are conferred and on whom they are binding. Part 3 sets out the automatic rights to assign code rights and addresses the upgrading and sharing of apparatus. Part 4 sets out the circumstances in which a court can impose an agreement where one cannot be reached between the parties—that is a crucial element of the code—including the procedures to be followed in such circumstances.
Parts 5 and 6 address how parties can bring an agreement to an end and how landowners can have apparatus removed. Parts 7 to 10 address the regime in place for land that requires distinct treatment due to its particular characteristics, such as transport land. Parts 11 and 12 provide rights for third parties to object to apparatus. Part 13 addresses the right to lop trees. Parts 14 and 15 make provision for compensation notices under the code. Part 16 provides for enforcement and dispute resolution, and it introduces the power for the Secretary of State to make regulations to transfer jurisdiction on code cases to the Upper Tribunal (Lands Chamber). Lastly, part 17 contains supplementary provisions, including on general interpretation, and addresses the definition of “land”.
The crucial reason for the changes is that part 2 is structured to underpin consensual agreements for code rights. As we discussed, consensual agreements are important, but, where agreement cannot be reached, part 4 means that a court has the power to impose code rights against a site provider in favour of an operator. The court can calculate the price an operator should pay a site provider for code rights.
Matt Hancock
I beg to move amendment 46, in schedule 2, page 138, line 17, leave out “under paragraph 2(1)” and insert—
“for the purposes of paragraph 2 or 3”.
This provides that the subsisting agreements covered by the transitional provisions in Schedule 2 include agreements under paragraph 3(1) of the existing code (agreement to confer a right to obstruct access) as well as paragraph 2(1).
The Chair
With this it will be convenient to discuss Government amendments 47 to 54 and Government amendment 1.
Matt Hancock
This is a group of technical amendments. Amendments 46 to 54 are to schedule 2, which contains transitional arrangements for moving from the existing code to the new code introduced by the Bill. The amendments will clarify and simplify the transitional provisions in the schedule. Amendment 1 is a drafting change to make clear that the power in clause 5 to make transitional provision in connection with the new electronic communications code includes the power to make saving provision.
Amendment 46 agreed to.
The Chair
With the leave of the Committee, I propose that we combine the questions on Government amendments 47 to 54 as a single question.
Amendments made: 47, in schedule 2, page 138, line 28, at end insert—
‘(2) A person who is bound by a right by virtue of paragraph 2(4) of the existing code in consequence of a subsisting agreement is, after the new code comes into force, treated as bound pursuant to Part 2 of the new code.’
This provides that a person who was bound by a right pursuant to a subsisting agreement (see paragraph 2(4) of the existing code) continues to be treated as bound by that agreement, under the provisions of Part 2 of the new code (see paragraph 10 of the new code).
Amendment 48, in schedule 2, page 138, line 31, after “are” insert “— (a)”
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 49, in schedule 2, page 138, line 31, leave out “the agreement” and insert—
“an agreement for the purposes of paragraph 2 of the existing code”
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 50, in schedule 2, page 138, line 33, at end insert—
‘(b) in relation to land to which an agreement for the purposes of paragraph 3 of the existing code relates, a right to do the things mentioned in that paragraph.’
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 51, in schedule 2, page 139, line 11, leave out sub-paragraph (1) and insert—
‘5A (1) This paragraph applies in relation to a subsisting agreement, in place of paragraph 28(2) to (4) of the new code.
(2) Part 5 of the new code (termination and modification of agreements) does not apply to a subsisting agreement that is a lease of land in England and Wales, if—
(a) it is a lease to which Part 2 of the Landlord and Tenant Act 1954 applies, and
(b) there is no agreement under section 38A of that Act (agreements to exclude provisions of Part 2) in relation the tenancy.
(3) Part 5 of the new code does not apply to a subsisting agreement that is a lease of land in England and Wales, if—
(a) the primary purpose of the lease is not to grant code rights (the rights referred to in paragraph 3 of this Schedule), and
(b) there is an agreement under section 38A of the 1954 Act in relation the tenancy.
(4) Part 5 of the new code does not apply to a subsisting agreement that is a lease of land in Northern Ireland, if it is a lease to which the Business Tenancies (Northern Ireland) Order 1996 (SI 1996/725 (NI 5)) applies.
6 (1) Subject to paragraph 5A, Part 5 of the new code applies to a subsisting agreement with the following modifications.’
The amendment provides for the interaction of landlord and tenant law and Part 5 of the new code (termination and modification of agreements) in the case of subsisting agreements (see paragraph 1(4) of Schedule 2).
Amendment 52, in schedule 2, page 140, line 17, leave out
“the following provisions of this paragraph” and insert “sub-paragraph (3)”
This is consequential on amendment 53.
Amendment 53, in schedule 2, page 140, line 21, leave out sub-paragraphs (4) to (10)
This relates to applications under paragraph 5(1) of the existing code (power of court to dispense with need for required agreement). The effect of the amendment is that, if an application has been made to the court before the new code comes into force, the procedures under the existing code apply, but any resultant order takes effect as an order made under the new code.
Amendment 54, in schedule 2, page 142, line 7, leave out paragraphs 19 to 22 and insert—
‘19A (1) This paragraph applies where before the repeal of the existing code comes into force a person has given notice under paragraph 21(2) of that code requiring the removal of apparatus.
(2) The repeal does not affect the operation of paragraph 21 in relation to anything done or that may be done under that paragraph following the giving of the notice.
(3) For the purposes of applying that paragraph after the repeal comes into force, steps specified in a counter-notice under sub-paragraph (4)(b) of that paragraph as steps which the operator proposes to take under the existing code are to be read as including any corresponding steps that the operator could take under the new code or by virtue of this Schedule.’—(Matt Hancock.)
The amendment replaces transitional provisions for requiring the removal of apparatus. It provides for paragraph 21 of the existing code to continue to apply if a notice under that paragraph has been given, but treats an operator seeking rights to keep the apparatus installed as seeking rights also under the new code or transitional provisions.
Schedule 2, as amended, agreed to.
Schedule 3
The electronic communications code: consequential amendments
Question proposed, That the schedule be the Third schedule to the Bill.
The Chair
With this it will be convenient to discuss Government new schedule 1—Electronic communications code: consequential amendments.
Matt Hancock
Schedule 3 contains consequential amendments that accompany the electronic communications code found in schedule 1. They amend existing legislation to ensure that implementation aligns and is consistent with other existing legislation. Since the introduction of the Bill, a number of additional necessary consequential amendments have been identified. New schedule 1 substitutes a new, revised and more comprehensive schedule, which contains an expanded list of necessary consequential amendments. I will therefore move new schedule 1 at the appropriate point in our proceedings.
Schedule 3 disagreed to.
Clause 5
Power to make transitional provision in connection with the code
Amendment made: 1, in clause 5, page 3, line 23, leave out “or transitory” and insert “, transitory or saving”—(Matt Hancock.)
The amendment adds power to make saving provision in connection with the coming into force of the new electronic communications code.
Clause 5, as amended, ordered to stand part of the Bill.
Clauses 6 and 7 ordered to stand part of the Bill.
Clause 8
Regulation of dynamic spectrum access services
Matt Hancock
I beg to move amendment 2, in clause 8, page 8, line 16, leave out “imposed” and insert “specified”.
This amendment reflects the fact that a notification under new section 53E of the Wireless Telegraphy Act 2006 will specify a penalty rather than imposing it.
Matt Hancock
Amendments 2 to 6 are all technical amendments, to enable Ofcom to register dynamic spectrum access service providers and to set out what Ofcom can do where there is a contravention of the restrictions or conditions of registration.
Amendment 2 agreed to.
Amendments made: 3, in clause 8, page 8, line 19, at end insert—
‘( ) The amount of any other penalty specified under this section is to be such amount, not exceeding 10% of the relevant amount of gross revenue, as OFCOM think—
(a) appropriate, and
(b) proportionate to the contravention in respect of which it is imposed.”
This amendment ensures that the penalty based on the relevant amount of gross revenue applies only where the daily default penalty specified under new section 53F(4) of the Wireless Telegraphy Act 2006 does not apply.
Amendment 4, in clause 8, page 9, line 21, leave out subsection (1).
This amendment is consequential on amendment 3.
Amendment 5, in clause 8, page 9, line 25, leave out “this section” and insert “section 53F”.
This amendment is consequential on amendments 3 and 4.
Amendment 6, in clause 8, page 12, line 21, after “penalty” insert “specified”.—(Matt Hancock.)
This amendment brings new section 53L(5) of the Wireless Telegraphy Act 2006 into line with new section 53F(5) of that Act.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
As the Committee is aware, spectrum which covers the electromagnetic frequency range from 3 kHz to 3,000 GHz is a central ingredient of all forms of wireless technology. The Opposition agree that making better use of spectrum is obviously essential to facilitate the development of the UK’s digital communications infrastructure. This is a national asset and it is important that the Government are constantly reviewing the way in which we can make better use of spectrum, particularly white space, which are used parts of the allocated spectrum.
It is also clearly important for Ofcom to have the power to police—for want of a better word—spectrum and it is important that, for instance, mobile network operators are achieving the coverage set out in their licence. We therefore support the specification of financial penalties if coverage requirements are not satisfied.
However, we would like reassurance on two issues: first, that amendment 2 does not water down the penalties that Ofcom can impose. The explanatory notes are not entirely clear and at present it seems as if, rather than allowing Ofcom to impose a penalty if coverage requirements are not satisfied, it simply must have regard to a potential penalty. We would welcome clarity from the Minister on that point.
My second, wider point is that, in the aftermath of Britain’s exit from the European Union, it is important that we continue to maintain influence in the allocations and regulation of spectrum. As the Minister will know, at present the EU member states harmonise spectrum access conditions EU-wide to ensure an efficient use of radio spectrum. In cases where there are conflicts between different usages of spectrum, they establish policy priorities. This is especially important with new and emerging technology, where the EU will ensure that fair allocation and reallocation of frequencies is harmonised across the European Union. In the aftermath of our exit from the EU, we must continue to communicate effectively with our European partners, as a pan-European strategy will still be in our interest. Will the Minister ensure that he continues to work closely with those partners, particularly as our loss of influence is unlikely to be compensated by our involvement in international forums?
Matt Hancock
I am very grateful for the Opposition’s support of the reforms to the way that spectrum is allocated. Spectrum is a finite asset and it is incredibly important that our digital communications, and especially wireless communications, increase so that we make best use of it. It is very good to see cross-party recognition of the importance of that management and that Ofcom play an excellent role in adjudicating on this.
I shall take the hon. Lady’s second specific question on the EU first. Of course we will continue discussions with neighbours about allocations. Ultimately, there are many spectrum frequencies that are dealt with on a global basis—for instance, those that are used in aviation. It is therefore important that we have international discussions, both in the EU and around the rest of the world. I can assure the hon. Lady that those discussions and that collaboration will continue. Indeed, some of it is going on as we speak.
On the hon. Lady’s first point about watering down the penalties, the way in which this is structured does not require a penalty, in case there are reasons not to have one, but allows for penalties. I think that gives Ofcom the necessary wiggle room, should it need it.
Question put and agreed to.
Clause 8, as amended, accordingly ordered to stand part of the Bill.
Clause 9
Statement of strategic priorities
Question proposed, That the clause stand part of the Bill.
Louise Haigh
We are grateful for the Minister’s reassurances in response to our concerns about clause 8. However, given those concerns, we think it is important that the statement of strategic priorities is updated in the aftermath of Britain’s exit from the EU and that consultation should begin right away. The statement of strategic priorities becomes much less clear after Brexit, when the Government will be required to take on significantly more of the burden and have much greater regard for the international element of spectrum access, as we will not be able to rely on European policy.
Clearly, Brexit will significantly alter the policy priorities of the Government in the operation of spectrum. We know that Ofcom is an international thought leader in this area, which may aid the Government. However, we believe that the statement must be amended to avoid any confusion and that that should be done in full consultation with industry.
Matt Hancock
The hon. Lady is dead right that we have to ensure that the strategic priorities take into account our exit from the European Union. Of course, some parts of spectrum that have very short distances can be set domestically, not least because there is a physical boundary of a minimum 26 miles between the UK and any other country. There are longer frequencies that have a bigger range, where minimising interference is important. Some are used on a global basis, in which case global agreement is required.
The issue has to be taken into account, and we will take on board the hon. Lady’s suggestion about ensuring that we have a statement of Government priorities post-Brexit that is appropriate to the UK outside the EU needing to engage with the EU, as well as with the rest of the world, and that domestic priorities are set where possible.
Calum Kerr
Spectrum licensing is our most effective tool for ensuring we get the coverage model we want. The form of the code will help, but it is through licensing that we will drive the level of coverage we want. Will the Minister confirm that the Government will leave nothing off the table in that? One option might be taking back spectrum where appropriate—for example, in rural areas that cannot be covered, as has happened in the US.
Matt Hancock
Of course, the management of spectrum needs to be as efficient as possible. The new dynamic spectrum management in clause 8, which we just agreed to, will help to deal with white space—spectrum that is not used but could be. New technology allows that to be used far more efficiently. I am delighted that we got unanimous support for clause 8. On clause 9 and setting out a set of strategic priorities, I am sure that the hon. Gentleman’s comments will be taken on board.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Penalties for contravention of wireless telegraphy licences
Matt Hancock
I beg to move amendment 7, in clause 10, page 16, line 7, at end insert—
‘( ) In Schedule 8 to that Act (decisions not subject to appeal), at the end of paragraph 44 insert “for a relevant multiplex contravention”.
This allows an appeal to the Competition Appeal Tribunal against a penalty imposed by OFCOM under section 42 of the Wireless Telegraphy Act 2006 for a breach of a wireless telegraphy licence, except where the breach relates only to broadcast content (in which case, as at present, an appeal to the Tribunal will not be possible).
Matt Hancock
Amendment 7 provides Ofcom with powers to impose a financial penalty for contravention of a wireless telegraphy licence condition. It will allow an appeal to be made to the Competition Appeal Tribunal against a decision by Ofcom to impose a penalty under section 42 of the Wireless Telegraphy Act 2006 except, as is currently the case, where the penalty is imposed for contravention of a condition relating to broadcast content.
Amendment 7 agreed to.
Clause 10, as amended, ordered to stand part of the Bill.
Clauses 11 to 13 ordered to stand part of the Bill.
Clause 14
Time limits for prosecutions under Wireless Telegraphy Act 2006
Matt Hancock
I beg to move amendment 8, in clause 14, page 17, line 10, leave out “and (8)”.
This is consequential on amendment 11.
Matt Hancock
The amendments will amend the Wireless Telegraphy Act 2006 to extend the time limit for bringing prosecutions for some summary offences—for example, those relating to unauthorised use of wireless telegraphy equipment. Amendment 10 makes provision about when proceedings in Scotland are deemed to have commenced for the purposes of the extended time limits. Amendments 8, 9 and 11 make minor changes to clarify the drafting.
Calum Kerr
Some of the amendments specifically relate to the law in a way that goes back to my earlier point. Will the Minister confirm whether the Scottish Administration have been consulted on this issue, given that it is clearly a devolved matter?
Matt Hancock
Yes—although I have had no discussions with them at a ministerial level about the amendments, I understand that discussions have taken place between officials. The effect of the amendments will be to make the law work better, so I hope they will have cross-party support.
Amendment 8 agreed to.
Amendments made: Government amendment 9, in clause 14, page 17, line 18, leave out “Subsections (3A) and (3B)” and insert
“Section 41(7) and subsection (3B) above”.
Subsection (3C), inserted in section 107 of the Wireless Telegraphy Act 2006 by the clause, lists enactments displaced by the time limits mentioned in subsections (3A) and (3B). Subsection (3A) merely refers to section 41(7), and the amendment substitutes a direct reference to that provision for the reference to subsection (3A).
Government amendment 10, in clause 14, page 17, line 26, at end insert—
“(3D) In relation to proceedings in Scotland, subsection (3) of section 136 of the Criminal Procedure (Scotland) Act 1995 (date when proceedings deemed to be commenced for the purposes of that section) applies also for the purposes of section 41(7) and subsection (3B) above.”.
The amendment adds provision about when proceedings in Scotland are deemed to be commenced for the purposes of the time limits in section 41(7) and new subsection (3B) of section 107 of the Wireless Telegraphy Act 2006.
Government amendment 11, in clause 14, page 17, line 31, at end insert—
“() for subsection (8) substitute—
“(8) For further provision about prosecutions see section 107.””.—(Matt Hancock.)
Existing section 41(8) of the Wireless Telegraphy Act 2006 applies to section 41(7) and is superseded by section 107(3C) inserted by the clause (see amendment 9). Amendment 10 also inserts provision applying to section 41(7) into section 107. Amendment 11 therefore substitutes a subsection referring the reader to section 107.
Clause 14, as amended, ordered to stand part of the Bill.
Clause 15
Internet pornography: requirement to prevent access by persons under the age of 18
Claire Perry
I beg to move amendment 65, in clause 15, page 18, line 15, at end insert—
“(d) how persons can make a report to the age-verification regulator about pornographic material available on the internet on a commercial basis that is not complying with subsection (1).”.
This amendment places a requirement on the age-verification regulator to provide guidance as to how persons can report non-compliant pornography websites to the age-verification regulator.
I am extremely glad to have tabled a series of amendments to the vital provisions in part 3 of the Bill. As I said on Second Reading, we have come such a long way, and the enormous cross-party consensus to make the internet safer for young people has been crucial to that. We have seen some very effective sponsorship and responses from the previous Minister and his Department under the leadership of the last Prime Minister. Without his championship of this issue, we would not be where we are today.
My intention in tabling the amendments was to make provisions that are already good somewhat better, in the spirit of trying to encourage the Government to think hard about the line-by-line drafting. It has been made clear to me in meetings with organisations such as the British Board of Film Classification that there are ways to enhance the role of a regulator. I am delighted that the BBFC has been given the role, because it is truly a trusted brand; it is innovative and it does brilliant work to define age-rating boundaries. I have listened carefully to it.
What I am looking for is a clearer understanding of how the Government envisage the process of regulating websites and apps that provide access to material defined as pornographic in the UK. In his evidence session last week, David Austin referred to
“stages 1 to 3 of the regulation.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 39, Q84.]
I would be interested to hear the Minister’s explanation of how those different stages might work and to understand better how the enforcement element will work in practice—perhaps we will touch on that today but return to it in a later sitting.
I was struck by evidence given by those who do not support the changes; they feel that the issue is important but they argue that we should not be bringing in the new rules because we will not be able to make them stick. I must also mention my gratitude to the many organisations that have provided information and support on part 3 of the Bill. In particular, I note the contributions of Christian Action Research and Education, the Digital Policy Alliance, the National Society for the Prevention of Cruelty to Children and the Centre for Gender Equal Media.
My first amendment is to clause 15, which sets out the extremely welcome requirement that age verification should be introduced by websites and apps that are making commercial pornography available in the UK. Amendment 65 would add a new paragraph to clause 15(3) to strengthen enforcement by allowing the public and industry to provide intelligence to the regulator about the sites that do not have age verification.
I have always been struck by what we do not know about the internet. We all know that there is a massive proliferation of sites. I do accept what is said about much of the pornographic traffic concentrating around particular sites, but it grows like a Hydra every day. One of the BBFC’s most effective acts has been to allow effectively self-regulation and allow people to report and comment on a particular posting, which is, if you like, a sort of self-rating scheme. That would be extremely valuable. Clearly, the regulator cannot be expected to scrutinise the entire world of sites. Allowing members of the public and industry to notify the regulator that information is there that should be regulated would be helpful.
I note that the Digital Policy Alliance recommended in one of its parliamentary briefings back in April that this power should be available. It would be an excellent way to ensure that the public can feel involved in protecting their children. One of the messages I have heard over the past few years is how much families feel disempowered in the process of keeping their children safe. Of course, people accept the notion of parental responsibility and of course schools have become involved in this process, but we have made it uniquely difficult for families effectively to keep their children safe on a digital platform.
We have other rules and regulations around broadcast and written media that make it much easier for families wanting to be involved in that process. The amendment, allowing the BBFC to provide notice that these referrals can be made, would be very helpful. I note that David Austin of the BBFC said last week that he does intend to take referrals from the public.
Will the Minister please confirm that it is also the Government’s intention to promote the involvement of the whole community in championing online targeted child protection, and how this referral mechanism can be guaranteed? I hope he will consider this small change to the Bill.
Matt Hancock
Our intention is to establish a new regulatory framework and new regulatory powers tackling the viewing of adult content by minors. I pay tribute to the work of my hon. Friend over many years in getting us to this point. It has already ensured that there is voluntary activity, and that there are now legislative proposals is in many ways largely thanks to her campaigning. I am delighted that we have reached this point.
I am also delighted that, as we heard last week, the British Board of Film Classification will be designated as the age verification regulator. That is undoubtedly the best body in the land to do that job. It has the capability, as we heard at the evidence session. It will be responsible for identifying and notifying infringing sites. That will enable payment providers and other ancillary services to withdraw services from those providers that do not comply as soon as possible. Proceeding in that way will allow us to work quickly and effectively with all parts of the industry to ensure that they are fully engaged—indeed, that engagement has already started. We need to ensure the system is robust but fair and the providers of pornographic material are encouraged to be compliant by the processes in place.
I have every confidence, as I think we all should, in the BBFC’s ability to deliver on this. We heard from David Austin, the chief executive, in evidence that he is already working on this. He said that the BBFC would create something, and that it has done so with mobile operators. I think that its commitment to enable members of the public and organisations such as the NSPCC to report a particular website is the best way forward. That is a sensible approach for the regulator to take.
We should take a proportionate approach to the regulator’s role and allow the BBFC to do the job at which it is expert. We have required the regulator to issue guidance in circumstances where it allows the subjects of regulation to understand how the regime applies to them, but I think that going further and requiring this level of specification is not necessary, given the BBFC’s commitment and the uncontroversial nature of the need. That will give us flexibility as well as a clear commitment to make this happen. I hope that given that explanation, my hon. Friend will withdraw her amendment.
Claire Perry
I am pleased to hear that the Minister shares the view that the BBFC should be given a permissive regime to do some of the things it does well, rather than the Government specifying too much. With that assurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Louise Haigh
I beg to move amendment 85, in clause 15, page 18, line 20, leave out subsection (5)(a).
The Chair
With this it will be convenient to discuss the following:
Amendment 87, in clause 15, page 18, line 25, leave out subsection 6.
New clause 7—On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate—
“On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate
Section 368E of the Communication Act 2003 (harmful material) is amended as follows—
(a) in subsection (5)—
(i) after subsection (a) insert—
“(aa) a video work in respect of which the video works authority has issued an 18 classification certificate, and that it is reasonable to assume from its nature was produced solely or principally for the purposes of sexual arousal,”;
(ii) after subsection (b) insert—
“(ba) material that was included in a video work to which paragraph (aa) applies, if it is reasonable to assume from the nature of the material—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that its inclusion was among the reasons why the certificate was an 18 certificate,
“(bb) any other material if it is reasonable to assume from its nature—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that any classification certificate issued for a video work including it would be an 18 certificate.”
(b) in subsection (7) after “section” insert—
““18 certificate” means a classification certificate which—
(a) contains, pursuant to section 7(2)(b) of the Video Recordings Act 1984, a statement that the video work is suitable for viewing only by persons who have attained the age of 18 and that no video recording containing that work is to be supplied to any person who has not attained that age, and
(b) does not contain the statement mentioned in section 7(2)(c) of that Act that no video recording containing the video work is to be supplied other than in a licensed sex shop;””
This new clause requires the extension of measures for UK-based video on-demand programming to protect children from 18 material as well as R18 material.
Louise Haigh
The amendments all explicitly include on-demand programme services in the age verification measures proposed by the Government. Given the rise in the use of mobile devices and tablets in the past decade, the case for appropriate online pornography enforcement has increased. We commend the Government’s intention in the proposals. I also put on the record our thanks and congratulations to the hon. Member for Devizes, who has campaigned on this issue for many years along with many other hon. Members, not least my hon. Friend the Member for Bristol West.
The ultimate goal is to seek parity of protection for children between the online and offline worlds, but how that is done in practice is fraught with issues. I hope that we can improve the proposals before us. Teens have an emerging right to independent communication with friends and family, and we recognise and respect that. We must not fall back on outdated means of protection such as blanket parental permissions. We need to empower and protect young people in ways that make sense to them and that they can and will use.
As the Committee knows, the effects of online pornography on unhealthy attitudes to sex and relationships are only just starting to be explored, but the research indicates a troubling trend. The NSPCC study of more than 1,000 young people aged 11 to 18 found that over half the sample had been exposed to online pornography, and nearly all of that group—94%—had seen it by age 14. Just over half the boys believed that the pornography that they had seen was realistic, and a number of girls said that they worried about how it would make boys see girls and the possible impact on attitudes to sex and relationships. One respondent said:
“Because you don’t get taught how to go on the internet and keep yourself safe, there are loads of tricks to get you to give away or to go on a bad website.”
Crucially, in research by Barnardo’s, four fifths of teenagers agreed that it was too easy for young people to see pornography online by accident.
Adult products and spaces, including gambling shops, sex shops and nightclubs, are restricted in the offline sphere. Contents such as film and television, advertising and pornography are all also limited, with penalties ranging from fines to custodial sentences available to discharged proprietors who do not comply. It is a transparent, accountable process overseen by regulators and licence operators such as Ofcom, the BBFC and the Gambling Commission to ensure that children are protected from age-inappropriate content and experiences.
Labour is happy to support the Government’s efforts to introduce age verification, but we must ensure that enforcement is strong enough. Our amendment speaks to that broad aim of the Opposition, which I know is supported by Government Back Benchers, given the other amendments tabled today. However, the measure cannot be seen as a silver bullet, which is why tacking this manifesto commitment on to a Digital Economy Bill is inadequate. First, slotting it into a Bill on the digital economy gives the impression, however unintentional, that the measure is designed to deal only with commercial providers of pornography, those who exploit data or benefit from advertising or subscription services—those who are, in short, part of the digital economy, rather than all providers of pornography online.
Although we are aware that most pornography providers operate on a commercial basis, many do not. Peer-to-peer networks and Usenet groups, however difficult to police, would presumably not be in the scope of the Bill. That is on top of pornography available through apps that are commercial enterprises, such as Twitter and Tumblr, or free webpages, such as WordPress, where the provision of pornography is incidental or provides no income to the overall business, or is not used for commercial purposes at all. Under clause 15 as it stands, it is by no means clear that all pornography available on the internet will be subject to age verification requirements.
Allow me to remind the Minister what the Conservative party manifesto said on the matter in 2015. It stated that
“we will stop children’s exposure to harmful sexualised content online, by requiring age verification for access to all sites containing pornographic material”.
There is no prevarication or equivocation there, and I commend the wording in the manifesto. Unfortunately, between that time and the legislation being drawing up, a rogue adjective has been added to the commitment, which seemed perfectly clear in the manifesto. One could easily argue that if a site such as Tumblr does not make pornography available on a commercial basis, then it is exempt, which would leave that manifesto commitment in some difficulty. Can we therefore have a commitment from the Minister that the regulator will be able to go after all sites containing pornographic material and not just those operating on a commercial basis, however broadly we may want to define “commercial”? The word seems at best unnecessary, and at worst a breach of the manifesto commitment.
Slotting age verification into the Bill gives Members nothing like the scope needed to tackle the effect of under-age viewing of pornography, which is surely the intention behind its implementation, because the measure is not enough to protect children. For a start, the regulator should also be responsible for ensuring that services undertake self-audits and collect mandatory reports in relation to child abuse images, online grooming and malicious communication involving children. To ensure that services are working to consistent principles and to best support the collection and utilisation of data, the regulator should also be responsible for developing a definition of child abuse.
We need to improve reporting online. Children and young people are ill served by the currently inadequate and unreliable reporting systems when they experience online abuse. Reporting groups need to be standardised, visible, responsive and act rapidly to address issues. Every reporting group must be designed in ways children say they can and will use. The NSPCC found that 26% of children and young people who used the report button saw no action whatever taken in response to their complaint; and of those who did get a response, 16% were dissatisfied with it. The Government should include independent mediation and monitoring of responses to complaints.
Clearly, we need compulsory sex education in our schools. Compulsory age-appropriate lessons about healthy relationships and sex are vital to keeping children safe on and offline. We know that children are exposed to pornography, sometimes in an extreme or violent form. Alongside regulation to limit access to these materials, building resilience and instilling an early understanding of healthy relationships can help to mitigate the impact of that exposure.
On that point, we are incredibly keen to ensure that legislation is as clear as possible and that any potential loopholes are closed. One such loophole is clause 15(5)(a), which for reasons that are unclear excludes on-demand programme services. Explicitly excluding any on-demand programme service available on the internet in the Bill—although we are aware that they are regulated by Ofcom—risks on-demand programme services being subject to a much looser age verification requirement than the Bill would enforce on other pornography providers. We do not believe that the legislation intends to create two standards of age verification requirements for online content, regardless of whether it is separately regulated. The amendment is intended to close that loophole.
Claire Perry
I will speak to amendments 85 and 87. I raised a question with David Austin last week about the regulation of video on demand. He confirmed that the intention of the Bill as it stands is to maintain the regulation of UK video on demand with Ofcom under the Communications Act 2003. That seems totally reasonable to me because Ofcom has done a good job. I think the issue is that the framework only requires age verification for R18 material.
I am not trying to give everyone a lesson—by the way, this is why we are so grateful to the BBFC; it gives very clear definitions of the material—but R18 is effectively hardcore porn. It contains restricted scenes that we would all consider to be pornography. Since 2010, the 18-certificate guidelines permit the depiction of explicit sex in exceptional justifying circumstances, so it is perfectly feasible for children to view 18-rated content that we would all consider to be pornographic. I fully agree with the sentiment behind amendments 85 and 87 to provide a level playing field for all online media, but we must ensure that all R18 and 18 content accessed through video-on-demand services is included in the provisions. However, removing clauses 15(5)(a) and 16(6) would cause a fair amount of confusion, as video-on-demand services would be regulated by Ofcom for the majority of the time but for age verification matters would be regulated by the BBFC and Ofcom, which raises the question of who has precedence and how enforcement would work.
I have therefore tabled new clause 7, which would meet the same objective in a slightly different way by amending the current regulatory framework for video on demand to ensure that children are protected from 18-rated as well as R18-rated on-demand material. The relevant section of the Communications Act 2003, section 368E, was amended by the Audiovisual Media Services Regulations 2014 to specify that R18 material should be subject to age verification to protect children. It is not a big step to require 18-rated pornographic material, which is the subject of much of this part of the Bill, to be included within the scope of that section. That would effectively create a legal level playing field. It would remove the issue of parity and precedence and would give us parity on the fundamental issue of the protection of children.
I agree with much of what the hon. Member for Sheffield, Heeley said. Ofcom’s latest figures on children and the media show that 51% of 12 to 15-year-olds watched on-demand services in 2015. The viewing of paid for on-demand content has gone up and accounts for 20% of viewing time for young people aged 16 to 24. They can view content rated 18 or R18 that would be prohibited for some of them if they were to purchase it in the offline world. With new clause 7, I recommend that the Government should try to ensure parity between the online and offline worlds. This Bill is a brilliant way to ensure that there is parity in the way that pornographic content is accessed.
Kevin Brennan
On the point that my hon. Friend the Member for Sheffield, Heeley made about the wording of the clause and how it talks about material that is made available “on a commercial basis”, does the hon. Member for Devizes have any concerns that that might be a definitional problem that could create a loophole?
Claire Perry
The hon. Gentleman raises a challenge. The explanatory notes make it clear that the Government intend to capture both commercial and freely provided material, which gets to the root of his concern. If someone is benefiting from the viewing of such material, the Government intend to capture that within the definition. I commend both the Minister and his Department for asking the BBFC to take on the role of regulator, because I have a high level of faith in its ability to do just that.
Kevin Brennan
I take the hon. Lady’s point that the Government have said that they would like to capture such material, but my hon. Friend the Member for Sheffield, Heeley said that they might not capture everything. We tabled a probing amendment to take out the words “on a commercial basis” to test that, but it was ruled out of scope because the Bill is about the digital economy. So it has to be material that is made available on a commercial basis only, otherwise it is out of the scope of the Bill.
Claire Perry
The hon. Gentleman is splitting hairs. The Government have issued clear guidance that the definition of “commercial” includes free content. There are very few altruistic providers of this material. Free content tends to be provided as a taster for commercial sites.
Claire Perry
Well, I accept that is true of streaming and on-demand, which is why this provision is important. It would capture material that is rated 18, not just restricted-18, and put it on a level playing field with restricted-18 material. The on-demand video content that the hon. Member for Sheffield, Heeley mentioned would be covered by the changes. I am interested to hear the Minister’s response to my proposed new clause 7, which would support parity of both content and regulator.
Ordered, That the debate be now adjourned.—(Graham Stuart.)
Digital Economy Bill (Sixth sitting)
Thursday 20th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 20 October 2016 - (20 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 87, in clause 15, page 18, line 25, leave out subsection 6.
New clause 7—On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate—
“Section 368E of the Communication Act 2003 (harmful material) is amended as follows—
(a) in subsection (5)—
(i) after subsection (a) insert—
“(aa) a video work in respect of which the video works authority has issued an 18 classification certificate, and that it is reasonable to assume from its nature was produced solely or principally for the purposes of sexual arousal,”;
(ii) after subsection (b) insert—
“(ba) material that was included in a video work to which paragraph (aa) applies, if it is reasonable to assume from the nature of the material—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that its inclusion was among the reasons why the certificate was an 18 certificate,
“(bb) any other material if it is reasonable to assume from its nature—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that any classification certificate issued for a video work including it would be an 18 certificate.”
(b) in subsection (7) after “section” insert—
““18 certificate” means a classification certificate which—
(a) contains, pursuant to section 7(2)(b) of the Video Recordings Act 1984, a statement that the video work is suitable for viewing only by persons who have attained the age of 18 and that no video recording containing that work is to be supplied to any person who has not attained that age, and
(b) does not contain the statement mentioned in section 7(2)(c) of that Act that no video recording containing the video work is to be supplied other than in a licensed sex shop;””
This new clause requires the extension of measures for UK-based video on-demand programming to protect children from 18 material as well as R18 material.
Thangam Debbonaire (Bristol West) (Lab)
First, I thank my hon. Friend the Member for Sheffield, Heeley for making such a clear and cogent argument for why the Bill needs further amendment. As I think she said—I am sure that she will correct me if I am wrong—we want to ensure that the Government stick to their manifesto commitment to protect children from all forms of online pornography. That will take consistency and a depth of modesty about the extent of our various levels of knowledge about how the internet works.
The hon. Member for Devizes made a good speech, and I am grateful to her for making the argument about on-demand films, as my hon. Friend the Member for Sheffield, Heeley also did, but the hon. Lady said—please correct me if I am wrong—that there were not many providers of free online pornography. I must respectfully disagree. Given the existence of peer-to-peer sharing and other forms of availability—my hon. Friend mentioned Tumblr and other social media websites—I am afraid that it is incredibly easy, as my nephews and nieces have confirmed, sadly, for a young person to access free online pornographic content in ways that most of us here might not even understand.
Claire Perry (Devizes) (Con)
I am happy to clarify. My focus was on the Government’s intention to capture free and commercial pornography. The hon. Lady is absolutely right that there is a plethora of free stuff out there, and she is right to focus on the harm that it causes.
Thangam Debbonaire
I thank the hon. Lady for that clarification. I understand from an intervention made by my hon. Friend the Member for Cardiff West that the reason why we were not allowed to remove the words “on a commercial basis” was that they were deemed out of scope. As I understand it, the word “economy”, if we stick to the letter of it, includes transactions for which there is no financial payment. There are transactions involved, and the word “digital” is in the title of the Bill, so I think it unfortunate that the amendment was not agreed to. Taking out the words “on a commercial basis” would have done a great deal to make consistent across all platforms and all forms of pornographic content available online the restrictions that we are placing on commercial ones.
I support the amendments proposed by my hon. Friend to the wording of clause 15(5)(a) and (6), for reasons that have already been given, and I want to add to the arguments. Hon. Friends and Members may have read the evidence from Girlguiding. As a former Guide, I pay tribute to the movement for the excellent work that it has done. It has contributed a profound and well-evidenced understanding of what young women are saying about online pornography. I will pick out a couple of statistics, because they make arguments to which I will refer in interventions on later clauses. That will make my speeches less long.
In the 2016 girls’ attitudes survey, half of the girls said that sexism is worse online than offline. In the 2014 survey, 66%, or two thirds, of young women said that they often or sometimes see or experience sexism online. It is a place where young women routinely experience sexism, and part of that sexism is the ubiquity of pornography. In 2015, the survey found that 60% of girls aged 11 to 21 see boys their age—admittedly, some of those are over the age of 18, but they are still the girls’ peers—viewing pornography on mobile devices or tablets. In contrast, only 27% of girls say that they see girls their age viewing pornography. The majority of those young women say from their experience that children can access too much content online and that it should be for adults only. In the survey, we see a certain degree of concord among young women in the Girlguiding movement, Opposition Members and the Government manifesto, which pledged, as my hon. Friend said, to exclude children from all forms of online pornography.
The 2015 Girlguiding survey also found that those young women felt that pornography was encouraging sexist stereotyping and harmful views, and that the proliferation of pornography is having a negative effect on women in society more generally. Those young women are the next generation of adults.
I have worked with young men who have already abused their partners. In my former job working with domestic violence perpetrators, I worked with young men of all ages; for the men my age, their pornography had come from the top shelf of a newsagent, but the younger men knew about forms of pornography that those of us of a certain age had no understanding of whatever. They were using pornography in ways that directly contribute to the abuse of women and girls, including pornography that is filmed abuse. I shall come back to that point later, but we need to recognise that young men are getting their messages about what sex and intimacy are from online pornography. If we do not protect them from online pornography under the age of 18, we are basically saying that there are no holds barred.
The hon. Member for Devizes and my hon. Friend the Member for Sheffield, Heeley mentioned loopholes. When we leave loopholes, it creates a colander or sieve for regulation. Yes, the internet is evolving and, yes, we in this Committee Room probably do not know every single way in which it already provides pornography, and certainly not how it will in future, but that is a good reason to provide a strong regulatory framework when we have the chance. We have that chance now, and we should take it. If it remains the case that removing the words “on a commercial basis” is deemed outside our scope, which I find very sad—I think it is a missed opportunity, and I hope the House can return to it at some point and regulate the free content—we must definitely ensure that we are putting everything else that we possibly can on a level playing field. That means that the regulation of video on demand has to be consistent and that we have to close any other loophole we can spot over the next few days.
I hope Opposition amendments will make the Government think about the manifesto commitment they rightly made—I am happy to put on the record that I support it—and take the opportunity to stick to it. Young women want that; young men need it, because my experience of working with young men who have abused their partners and ex-partners is that they felt that they were getting those messages from pornography; and we as a society cannot afford to ignore this problem any longer. We have a chance to do something about it, so let us take that opportunity.
The Minister for Digital and Culture (Matt Hancock)
It is great to hear that outbreak of support for the Conservative party manifesto.
Thangam Debbonaire
I must have it clearly on the record that I supported that commitment only: not the whole Conservative manifesto, just the bit that says “We want to protect all children from all online pornography.”
Matt Hancock
I am sure our powers of persuasion will extend that support in the future. The outbreak of support for our manifesto is welcome; this is an incredibly important area, and I am proud to lead the Front-Bench effort to deal with underage people’s access to adult material by introducing age verification. I want to respond in detail to the points made, because it is important we get this right.
Before I come to the specific amendments, I will deal with commercial providers. The measures in the Bill will apply equally to all commercial providers, whether their material is paid for directly or appears on free sites that operate on a different business model. “Commercial” has quite a broad meaning, as my hon. Friend the Member for Devizes said. If a provider makes money from a site in any way, whether or not it makes a profit, it can be caught by the legislation. That is the right distinction, because it targets those who make money and are indifferent to the harm their activities may cause to children.
Matt Hancock
If the hon. Lady will hold on, I want to explain this in full, rather than in part, before I give way. The age verification regulator must publish guidance on the circumstances in which it will regard a site or app as commercial. It will be for the regulator to judge whether a site is commercial, and there is no definition that states which website platforms are covered. Crucially, the regulator will also be able to take a view if specific social media and other types of sites are ancillary service providers—a person who appears to be facilitating or enabling the making available of pornographic material by non-compliant persons. I think that the capturing of others as ancillary service providers is an important part of making sure that we fully deliver our manifesto commitment, as I believe this Bill does.
Louise Haigh
We are aware that “commercial” is not limited to sites that require payment. It includes online advertising and other business models, as the Minister has said. However, it is unclear how the regulator will be able to enforce these measures given that the only enforcement available to them is notifying other payment service providers and ancillary services.
Matt Hancock
No doubt we will come on to enforcement. A number of clauses and amendments are on enforcement. The point is that other social media sites can be classified by the regulator as ancillary service providers for facilitating or enabling the making of available pornographic material. Our view is that enforcement through disrupting business models is more powerful because you are undermining the business model of the provider. However, I do not want to get too distracted, in an out of order way, into enforcement which is rightly dealt with in later clauses.
Louise Haigh
If the Bill is clearly designed to enable the regulator to focus on social media sites and other ancillary service providers, why was that term “on a commercial basis” included in these sections?
Matt Hancock
The principle is that there is a distinction between those who are making money by targeting and are indifferent to potential harm and those whose services facilitate the provision of porn to those who are under age. I think it is a reasonable distinction. We are trying to deal with the mass of the problem. By its nature, it is very difficult to get to 100%. I think that leaving the Bill in this way, with flexibility for the regulator to act, has a big advantage over being overly prescriptive in primary legislation and too specific about the way in which the regulator acts, not least because disrupting the business model is the goal of trying to provide enforcement.
Claire Perry
I support the Minister’s point about over-prescription, but perhaps he could help me by talking about a particular case. Let us take Tumblr hosting a stream of content which is 18. Who would the regulator target if it issued an enforcement notice? Would it be the content provider, or would it be the social media platform that is hosting that content?
Matt Hancock
In that case, the platform—I do not want to get into individual platforms, but I am happy to take my hon. Friend’s example—would likely be an ancillary service provider and therefore captured. This is a very important distinction. There is a difference between somebody who is actively putting up adult material and choosing not to have age verification, and a platform where others put up adult material, where it is not necessarily impossible but much harder to have a control over the material. There is an important distinction here. If we try to pretend that everybody putting material onto a platform, for example, the one that my hon. Friend mentions, should be treated the same way as a porn-providing website, we will be led into very dangerous territory and it makes it harder to police this rather than easier. That is my argument.
On the specific amendments, I understand entirely where the argument on demand is coming from. I want to give an assurance which I hope will mean that these clauses will not be pushed to the vote. On-demand audio-visual media services under UK jurisdiction are excluded from part 3 of the Bill because they are regulated by Ofcom under part 4A of the Communications Act 2003. As my hon. Friend the Member for Devizes said, other on-demand services that are not currently regulated in the UK will be caught by the Bill regime.
Thangam Debbonaire
Forgive me, but the Minister just gave a lot of information, and I want to clarify something. Whichever regulator is doing it, will the effect of the legislation as he would like to see it put R18 films and 18-rated films on on-demand services at the same level of age verification? I am not clear on that point.
Matt Hancock
The aim is that even though the regulator may be different in those two cases, the result would be the same. I can give the hon. Lady that assurance. The Bill will do that without having double regulation. As we discussed earlier with regard to a different part of the Bill, having double regulation in the same area can lead to confusion and worse outcomes, rather than clarity and better outcomes.
A service that falls within part 4A of the Communications Act 2003—that is to say, one that is outwith the proposals —must not contain any specially restricted material, unless that material is made available in a manner that secures that persons under the age of 18 will not normally see or hear it. Specially restricted material includes R18 material and other material that might seriously impair the physical, mental or moral development of persons under the age of 18. Our intention is that such other material should include material that the BBFC would describe as 18 sex works. I think that answers precisely the point that the hon. Lady was making.
Kevin Brennan (Cardiff West) (Lab)
This is a genuine inquiry: did the Minister consider not having double regulation but awarding regulatory oversight of all this to a single regime, possibly the BBFC, thereby taking it away from Ofcom? If he considered that idea, why did he reject it?
Matt Hancock
Partly because the regulation of areas currently covered by Ofcom is considered to be working well, so I did not want to throw that regime up in the air. I did want to deal with the additions and make provisions additional to the existing regime.
Kevin Brennan
The Minister’s response prompts the question: if that is the case, why did he not give the responsibility to Ofcom?
Matt Hancock
Because I think the BBFC is best at making the very nuanced distinctions between different types of material and their regulation that are required. The way it has landed, with the two regulators sitting side by side, but with the aim that the result of the regulation is the same, is the better way of doing it.
Christian Matheson (City of Chester) (Lab)
May I seek clarification from the Minister? Is there scope for a mechanism whereby the two regulatory authorities can pass items between each other if one is better suited to judge an item that has been referred to the other?
Matt Hancock
There is clarity in the Bill about what is under the jurisdiction of one regulator and what is under the jurisdiction of the other. I will, though, take that away and seek to give an assurance that the two regulators will work together to ensure that that boundary is dealt with adequately. There is flexibility in the Bill to ensure that that can happen. I cannot speak for Ofcom or the BBFC, but it would seem to me to be perfectly reasonable and obvious that the boundary has to work properly. I would not like to over-specify that in the Bill because of the nature of changes in technology. The distinction between broadcast and on-demand services is changing as technology develops, and it is better to leave it structured as it is. I am sure that both regulators will have heard the hon. Gentleman’s important point that the boundary between the two needs to be dealt with appropriately and that they need to talk to each other.
Nigel Huddleston (Mid Worcestershire) (Con)
Is the Minister reassured, as I am, by the fact that in the evidence sessions there was enthusiastic support from the BBFC for embracing the role, as well as very clear guidance that it had the competence to do so? We have not necessarily heard that from anybody else. The support and enthusiasm for taking on that role is very telling.
Matt Hancock
My hon. Friend has just given the final paragraph of my speech. With those assurances and the broad support from the BBFC and its enthusiasm to tackle the need for age verification in that way, I hope that the hon. Member for Sheffield, Heeley will withdraw the amendment.
Louise Haigh
Quite a lot of clarification is needed, and I hope it will come during the Bill’s passage. I do not think that the distinction between Ofcom and the BBFC is clear in this part of the Bill or in later clauses on enforcement. However, given that it states elsewhere in the Bill that the proposal is subject to further parliamentary scrutiny, and as the BBFC has not yet officially been given the regulator role—as far as I am aware—I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Claire Perry
I beg to move amendment 66, in clause 15, page 18, line 24, at end insert
“or an internet service provider.”.
This amendment and amendment 67 ensure that the requirement to implement age verification does not fall on ISPs but commercial sites or applications offering pornographic material; and defines internet service providers.
The Chair
With this it will be convenient to discuss the following:
Amendment 90, in clause 22, page 23, line 29, leave out
“or ancillary service provider”
and insert
“, ancillary service provider, or internet service provider.”.
Amendment 77, in clause 22, page 24, line 23, at end insert “or
(c) an internet service provider.”.
This amendment and amendment 78 ensure that the definition of an ancillary service provider would include ISPs; and defines internet service providers.
Amendment 91, in clause 22, page 24, line 23, at end insert—
“(6A) In this section an “ancillary service provider” includes, but is not limited to, domain name registrars, social media platforms, internet service providers, and search engines.”.
Amendment 67, in clause 25, page 26, line 2, at end insert—
““internet service provider” has the same meaning as in section 124N of the Communications Act 2003 (interpretation);”.
See the explanatory statement for amendment 66.
New clause 8—Duty to provide a service that excludes adult-only content—
“(1) This section applies to internet service providers who supply an internet access service to subscribers.
(2) For the purposes of subsection (1), “subscribers” includes—
(a) domestic subscribers;
(b) schools; and
(c) organisations that allow a person to use an internet access service in a public place.
For the purposes of the conditions in subsections (3) and (4), if the subscriber is a school or organisation a responsible person within the school or organisation shall be regarded as the subscriber.
(3) A provider to whom subsection (1) applies must provide to subscribers an internet access service which excludes adult-only content unless all of the conditions listed in subsection (4) have been fulfilled.
(4) The conditions are—
(a) the subscriber “opts in” to subscribe to a service that includes online adult-only content;
(b) the subscriber is aged 18 or over; and
(c) the provider of the service has an age verification scheme which meets the standards set out by OFCOM in subsection (4) and which has been used to confirm that the subscriber is aged 18 or over before a user is able to access adult-only content.
(5) It shall be the duty of OFCOM, to set, and from time to time to review and revise, standards for the—
(a) filtering of adult content in line with the standards set out in Section 319 of the Communications Act 2003;
(b) age verification policies to be used under subsection (4) before an user is able to access adult content; and
(c) filtering of content by age or subject category by providers of internet access services.
(6) The standards set out by OFCOM under subsection (5) must be contained in one of more codes.
(7) Before setting standards under subsection (5), OFCOM must publish, in such a manner as they think fit, a draft of the proposed code containing those standards.
(8) After publishing the draft code and before setting the standards, OFCOM must consult relevant persons and organisations.
(9) It shall be the duty of OFCOM to establish procedures for the handling and resolution of complaints in a timely manner about the observance of standards set under subsection (5), including complaints about incorrect filtering of content.
(10) OFCOM may designate any body corporate to carry out its duties under this section in whole or in part.
(11) OFCOM may not designate a body under subsection (10) unless, as respects that designation, they are satisfied that the body—
(a) is a fit and proper body to be designated;
(b) has consented to being designated;
(c) has access to financial resources that are adequate to ensure the effective performance of its functions under this section; and
(d) is sufficiently independent of providers of internet access services.
(12) It shall be a defence to any claims, whether civil or criminal, for a provider to whom subsection (1) applies to prove that at the relevant time they were—
(a) following the standards and code set out in subsection (5),; and
(b) acting in good faith.
(13) Nothing in this section prevents any providers to whom subsection (1) applies from providing additional levels of filtering of content.
(14) In this section—
“adult-only content” means material that contains offensive and harmful material from which persons under the age of 18 are protected;
“age verification scheme” is a scheme to establish the age of the subscriber;
“internet access service” and “internet service provider” have the same meaning as in section 124N of the Communications Act 2003 (interpretation);
“material from which persons under the age of 18 are protected” means material specified in the OFCOM standards under section 2;
“OFCOM” has the same meaning as in Part 1 of the Communications Act 2003;
“offensive and harmful material” has the same meaning as in section 3 of the Communications Act 2003 (general duties of OFCOM); and
“subscriber” means a person who receives the service under an agreement between the person and the provider of the service.”.
This new clause places a statutory requirement on internet service providers to limit access to adult content by persons under 18. It would give Ofcom a role in determining the age verification scheme and how material should be filtered. It would ensure that ISPs were able to continue providing family friendly filtering once the net neutrality rules come into force in December 2016.
New clause 11—Power to make regulations about blocking injunctions preventing access to locations on the internet—
“(1) The Secretary of State may by regulations make provision about the granting by a court of a blocking injunction in respect of a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that is contravening, or has contravened, section 15(1) of this Act.
(2) “Blocking injunction” means an injunction that requires an internet service provider to prevent its service being used to gain access to a location on the internet.
(3) Regulations introduced under subsection (1) above may, in particular—
(a) make provision about the type of locations against which a blocking injunction should be granted;
(b) make provision about the circumstances in which an application can be made for a blocking injunction;
(c) outline the type of circumstances in which the court will grant a blocking injunction;
(d) specify the type of evidence, and other factors, which the court must take into account in determining whether or not to grant a blocking injunction;
(e) make provision about the notice, and type of notice, including the form and means, by which a person must receive notice of an application for a blocking injunction made against them; and
(f) make provision about any other such matters as the Secretary of State considers are necessary in relation to the granting of a blocking injunction by the court.
(4) Regulations under this subsection must be made by statutory instrument.
(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(6) In this Part— “Internet service provider” has the same meaning as in section 16 of the Digital Economy Act 2010. In the application of this Part to Scotland “injunction” means interdict.”.
This new Clause empowers the Secretary of State to introduce regulations in relation to the granting of a backstop blocking injunction by a court. The injunction would require an internet service provider to prevent access to a site or sites which do not comply with the age-verification requirements. This would only be used where the other enforcement powers (principally fines) had not been effective in ensuring that sites put in place effective age-verification.
Claire Perry
I welcome the Minister’s previous comments, which gave me some real assurances on the parity of content and regulator. I also reassure him of how popular he will be when the Bill finally passes—the Centre for Gender Equal Media said that, in its most recent survey, 86% of people support a legal requirement on companies to prevent children’s access to pornography. We are moving in the right direction.
Amendment 66 seeks to pick through slightly more carefully who is responsible and is captured by the Bill’s language. There are four internet service providers in the UK through which the majority of broadband internet traffic travels, and they have come a long way. Five years ago, they accepted none of our proposals, be it single click protection for all devices in the home or the implementation of a filtering system that required selection—we could not select whether or not the filters were on. They have gone from that to the position now whereby, in some cases, we have ISPs that provide their services with the filters already on as default—something that we were told was absolutely unimaginable. With that regime, the level of complaints is very low and the level of satisfaction is very high.
Amendment 67 is consequential on amendment 66 and both seek to clarify the scope of who exactly would be covered under the wording of clause 15(1), which states:
“A person must not make pornographic material available on the internet on a commercial basis to persons in the United Kingdom except in a way that secures that, at any given time, the material is not normally accessible by persons under the age of 18.”
The Government have made it quite clear in the consultation, and the Minister clarified in his previous remarks, that the proposals apply to companies running websites aimed specifically at providing pornographic content for commercial gain, and that they want those who profit from such material being made available online to act in a legal, socially responsible way. It could be argued that ISPs both profit from the material being made available online and also make pornographic material available online, even though they are not the original source of the material. We also heard from the Minister that he is minded to consider social media platforms in that same category. In my view, the regulator must also publish guidance under clause 15(3) about
“circumstances in which the regulator will treat an internet site or other means of accessing the internet as operated or provided on a commercial basis”.
It is my concern that that could also be read as applying to ISPs. The amendments are intended to clarify that. In fact, I can quote from an article from July, which said:
“Internet access providers are likely to feel left in an uncertain position at the moment as, while the Bill does not reference them in this context, the definition of ‘makes pornographic material available’ could be argued as incorporating companies which provide connectivity to servers used for the making available of pornographic material”,
and piping that material into the home.
Paragraph 22 of the explanatory notes makes reference to “commercial providers of pornography”, and that obviously appears to place the onus of this suite of measures firmly on the content providers, but an optimal approach would be to improve the drafting to make the legislative attempt clear. I know we will have further discussions about the role of ISPs, but ISPs have done what we have asked them to do in introducing family friendly filters.
Kevin Brennan
I am trying to understand why the hon. Lady believes that ISPs should not have this responsibility.
Claire Perry
Because various other aspects of the Bill capture ISPs. My concern is that the Bill focuses on the commercial content providers where they are. The amendment is intended to probe the Government about how they are thinking about ISPs vis-à-vis commercial content providers in the drafting of the clause.
Louise Haigh
Our amendments are designed to enable the regulator to ask the internet service provider to block offending sites. This goes back to the point we made earlier on the differences between sites operated “on a commercial basis” and social media sites and ancillary sites. The proposals as they stand do not give the regulator sufficient powers to enforce the mechanisms proposed in the Bill.
Broadening the definition of “ancillary service provider” specifically to include internet service providers would require the regulator to notify them of non-compliant sites. That will put ISPs in the same bracket as payment service providers, which will be required to withdraw their services if other measures have been exhausted. In the case of ISPs, they would be required to block offending sites.
The amendments would create a simple backstop power where enforcement through the Government’s proposals had not achieved its intended objective and commercial providers had not withdrawn their services, either because the fine does not act as a deterrent or because, due to their international status, they do not need to comply. If pornography providers continued to provide content without age verification restrictions, the regulator would then have the power to require ISPs to take down the content.
We believe that, without amendment, the proposals will not achieve the Bill’s aim, as non-compliant pornographers would not be absolutely assured of payment services being blocked. First, the proposals do not send anywhere near a strong enough signal to the porn industry that the Government are serious about the proposals and their enforcement. Giving the regulator the power but not the stick suggests that we are not all that bothered about whether sites comply. Secondly, we can have no reassurance that sites will be shut down within any kind of timeframe if there is non-compliance. As drafted in the explanatory notes, “on an ongoing basis” could mean yearly, biannually or monthly, but it makes a mockery of the proposals if sites could be non-compliant for two years or more before payment services may or may not act. That does not provide much of an incentive to the industry to act.
Throughout the evidence sessions we heard that there are significant difficulties with the workability of this entire part of the Bill. For instance, many sites will hide their contact details, and a substantial number will simply not respond to financial penalties. Indeed, an ability already exists in law for ISPs to be compelled to block images that portray, for example, child sex abuse. There is also an ability to block in the case of copyright infringement. It therefore seems eminently reasonable that in the event of non-compliance, the regulator has a clear backstop power. We believe that even just legislating for such a power will help speed up enforcement. If providers know that they cannot simply circumvent the law by refusing to comply with notices, they will comply more efficiently. That will surely help the age verifier to pass the real-world test, which is integral to the Bill’s objectives.
Thangam Debbonaire
I am a little puzzled as to what the hon. Member for Devizes has against requiring ISPs to block porn sites. As my hon. Friend the Member for Sheffield, Heeley said, they are already required to block other sites. If we require ISPs to block sites that offend copyright laws, I really do not understand the problem with requiring them to block sites that provide pornography to children.
Claire Perry
On a point of order, Mr Stringer. Perhaps this shows my ignorance of doing Committees from the Back Benches, but I intended to go on in my speech to discuss new clause 8, which I have tabled and which defines more clearly what I expect internet service providers to do. Would it be in order for me to deliver those remarks, or have I lost my opportunity?
The Chair
Let me be clear: we are considering amendment 66 to clause 15, amendments 90, 77, 91 and 67, and new clauses 8 and 11. Members can speak more than once in Committee if they wish to. The hon. Lady has the right to discuss her new clause.
Claire Perry
May I please rise again, then? Apologies to the Committee—[Interruption.] I am so sorry; the hon. Member for Bristol West was speaking.
Thangam Debbonaire
I defer to the hon. Lady. She mentioned something she is going to say in due course; I look forward to hearing it. Nevertheless, I stand by my comments. We need to be clear about whether we are going to fail to require ISPs to do something that we already require them to do for copyright infringement and other forms of pornography involving children. I fail to see what the problem is. Having a blocking injunction available to the regulator would give them another tool to achieve the aim that we have all agreed we subscribe to, which is being able to block pornography from being seen by children and young people.
Claire Perry
Mr Stringer, I assume that, like me, you sometimes have the feeling that you have sat down before you have finished what you are saying. I apologise to the Committee. I am rarely short of words, but in this case I was.
I want to respond to the point made by the hon. Member for Bristol West and clarify exactly what we have asked and should be asking internet service providers to do. In doing so, I shall refer to the new EU net neutrality regulations, which, despite the Brexit vote, are due to come into force in December. They cause many of us concerns about the regime that our British internet service providers have put in place, which I believe leads the world—or, at least, the democratic free world; other countries are more draconian—in helping families to make these choices. We do not want all that good work to be unravelled.
Our current regime falls foul of the regime that the European Union is promoting, and unless the Government make a decision or at least give us some indication relatively quickly that they will not listen to that, we may have an issue in that all the progress that we have made may run out by December 2016. I would be grateful if the Minister told us what the Government are doing to get the new legislation on the statute book in line with the schedule set out by his colleague Baroness Shields last December.
We have an effective voluntarily filtering arrangement. I believe—I think that this point is in the scope of ancillary service providers—that we intend to capture internet service providers as part of the general suite of those responsible for implementing over-18 verification, but I want the Government to make crystal clear that they are aware of the responsibilities of internet service providers and intend for the regulator to include them in the basket of those that they will investigate and regulate.
The big missing link in all this has been getting content providers that provide material deemed to be pornographic to do anything with that material. The difference is that content providers of, say, gambling sites have always been required to have age-verification machinery sitting on their sites.
The hon. Member for Bristol West is quite right that we want ISPs to be captured under this regulatory regime, but I am keen to hear from the Minister that all the work that we have done with ISPs that have voluntarily done the socially and morally responsible thing and brought forward family-friendly filters will not be undone by December 2016, when the EU net neutrality regulations are intended to come into place.
Matt Hancock
Quite a lot of points have been raised, and I seek to address them all. Clause 22 is an important provision containing the powers at the heart of the new regime to enable the age-verification regulator to notify payment service providers and ancillary service providers that a person using their services is providing pornographic material in contravention of clause 15 or making prohibited material available on the internet to persons in the UK.
Amendments 66, 67, 77, 78, 90 and 91 would provide that the requirement to implement age verification does not fall on ISPs and further clarify that ISPs are to be considered ancillary service providers. Amendment 91 would clarify that as well as ISPs, domain name registrars, social media platforms and search engines are all to be considered ancillary service providers for the purposes of clause 22, which makes provision for the meaning of “ancillary service provider”.
This is a fast-moving area, and the BBFC, in its role as regulator, will be able to publish guidelines for the circumstances in which it will treat services provided in the course of business as either enabling or facilitating, as we discussed earlier. Although it will be for the regulator to consider on a case-by-case basis who is an ancillary service provider, it would be surprising if ISPs were not designated as ancillary service providers.
New clause 8 would impose a duty on internet service providers to provide a service that excludes adult-only content unless certain conditions are met. As I understand it, that measure is intended to protect the position of parental filters under net neutrality. However, it is our clear position that parental filters, where they can be turned off by the end user—that is, where they are a matter of user choice—are allowed under the EU regulation. We believe that the current arrangements are working well. They are based on a self-regulatory partnership and they are allowed under the forthcoming EU open internet access regulations.
Claire Perry
I think I understand the Minister to be saying that in cases where companies have introduced filters that are on by default, the fact that the users can choose to turn those filters off in the home means that they would not be captured by the net neutrality rules. Is that correct?
Matt Hancock
That is exactly what I am saying. On that basis, with the Government’s position having been put clearly on the record, I hope that my hon. Friend will not press new clause 8 to a vote.
New clause 11 would empower the Secretary of State to introduce regulations in relation to backstop blocking injunctions. We have looked carefully at the option of blocking by ISPs and have talked to a lot of stakeholders about it. We take the problem seriously, and we think our measures will make a real difference. We are yet to be persuaded that blocking infringing sites would be proportionate, because it would not be consistent with how other harmful or illegal content is dealt with. There is also a question of practicality: porn companies would be able to circumvent blocking relatively quickly by changing URLs, and there is an additional risk that a significant number of sites that contain legal content would be blocked. We would need to be convinced that the benefits of ISP blocking would not be outweighed by the risks.
Louise Haigh
I am a little confused about how the Minister envisages the provisions being enforced against the free sites we discussed in the previous group of amendments without that additional power, which indeed has been requested by the regulator that the Government have designated.
Matt Hancock
As the regulator said, the proposals here mark a huge step forward in tackling the problem. We have to make a balanced judgment: there is a balance to be struck between the extra powers to block and the need to ensure that they are proportionate. The powers are not a silver bullet; sites that were actively trying to avoid the Bill’s other enforcement measures would also be able to actively avoid these measures. It is questionable how much additional enforcement power they would bring, given those downsides.
Thangam Debbonaire
I must press the Minister to consider that children’s charities have told us that this is one of the most important amendments to the Bill. The Minister says that porn sites could simply move their URLs, but that is not a reason not to take a stand by giving the regulator the power that it has asked for and that children’s charities have particularly asked for.
Matt Hancock
Children’s charities and the regulator have asked for action to solve the problem of needing age verification. That is what the Bill delivers. The question of how to enforce that is incredibly important; there are different considerations to be made, and I think the Bill has ended up with the correct balance.
Louise Haigh
The BBFC witness explicitly said last week that
“we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q91.]
The BBFC says that notification of payment providers or ancillary services providers and fines may not be sufficient. I appreciate that porn sites might well use different URLs to evade it, but why has the Minister explicitly removed ISP blocking as a further backstop power? We are not talking about blocking too many sites; we have been very clear that it is intended as a backstop power when other measures fail.
Matt Hancock
David Austin of the BBFC said:
“We see this Bill as a significant step forward in terms of child protection.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 42, Q94.]
We think, on balance, that the regulator will have enough powers—for example, through the provisions on ancillary service providers—to take effective action against non-compliant sites. For that reason, I think this is the appropriate balance and I ask my hon. Friend the Member for Devizes to withdraw her amendment.
Claire Perry
I think that we are running through two definitions of ISPs: one relating to ancillary service providers and the other to enforcement and blocking. If we include ISPs in the definition of ancillary service providers, we want to make sure that they are captured, either explicitly or as a service provider. Is the Minister saying that he is comfortable with the enforcement regime without blocking? Would it require further legislation for blocking to be carried out if the regulator felt it was an appropriate measure? Are we ruling that out in this legislation?
The Chair
Order. The hon. Lady is making a speech. If the Minister wants to intervene, he may.
Claire Perry
I apologise. I would like to conclude my speech by inviting the Minister to respond.
Matt Hancock
I thank my hon. Friend for giving way. I would like to provide a point of clarity on the speech she has made. Treatment of an ASP will not lead to blocking. I think that is the answer to her question.
Claire Perry
I thank the Minister for that intervention. We will return to this subject in a series of amendments around clause 20. I want to thank the Minister for clarifying some of the murkiness around definitions in the Bill. I want to ask him and his team, though, to consider what his colleague had said, which goes back to the net neutrality point.
I accept what the Minister says about the spirit being absolutely clear, that our current filtering regime will not be captured, but Baroness Shields did say that we needed to legislate to make our filters regime legal. I did not hear from the Minister that that legislation is something that the Department is preparing or planning to introduce.
Louise Haigh
We very much share the hon. Lady’s concerns that the legislation has explicitly excluded the ability of internet service providers to block. We simply cannot understand why the Government have ruled out that final backstop power. We appreciate it is not perfect but it would give the regulator that final power. We will return to new clause 11 at the end of the Bill and be pushing it to a vote when we come to it.
Claire Perry
I thank the hon. Lady for making her intentions clear. I am prepared to withdraw or not push my new clause to a vote on the basis of what the Minister said, but I would love to get his assurances—perhaps he will write to me—to be crystal clear on the fact that he believes the Government do not have to legislate in order to push back on the net neutrality regime.
Kevin Brennan
Before the hon. Lady sits down, she did mention the view of Baroness Shields that there should be new legislation. Notwithstanding our remarks about the number of Government amendments, does the hon. Lady believe this Bill could be a useful vehicle to achieve that?
Claire Perry
Given the Brexit vote, I would be inclined to accept a letter from the Minister suggesting that we will absolutely resist any attempt to make EU net neutrality apply to what is a very fine, though not perfect, voluntary regime. On that basis, I accept the Minister’s assurances that that is what he intends to do. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 ordered to stand part of the Bill.
Clause 16 ordered to stand part of the Bill.
Clause 17
The age-verification regulator: designation and funding
Question proposed, That the clause stand part of the Bill.
Louise Haigh
In this and related clauses, we seek to strengthen the proposals that the Government have put forward. We have said that the regulation needs to be beefed up to require internet service providers to be notified about non-compliance. We would like to see an injunction power to take down any content which a court is satisfied is in breach of the age-verification legislation, as soon as possible, at the start of the four-tier regulation process the Government have identified in their amendments and letters published to the Committee last week.
That would require a regulator with sufficient enforcement expertise and the ability to apply that injunction and push enforcement at an early stage. As we are aware, however, the BBFC heads of agreement with the Government do not cover enforcement. Indeed, they made perfectly clear that they would not be prepared to enforce the legislation in clauses 20 and 21 as they stand, which is part 4 of that enforcement process, giving the power to issue fines. The BBFC is going to conduct phases 1, 2 and 3 of the notification requirements, presumably before handing over to a regulator with sufficient enforcement expertise, but that has not been made clear so far.
While we welcome the role of the BBFC and the expertise it clearly brings on classification, we question whether it is unnecessarily convoluted to require a separate regulator to take any enforcement action, which will effectively have been begun by the BBFC and which so far has not been mentioned in the legislation. This goes back to the point my hon. Friend the Member for Cardiff West made earlier about the two separate regimes for on-demand programme services.
As I understand it, although it is not clear, the BBFC will be taking on stage 3 of the regulation, meaning it will be involved in the first stage of enforcement—in notification. That is fine, but it will then have to hand over the second stage of enforcement to another regulator—presumably Ofcom. The enforcement process is already incredibly weak and this two-tiered approach involving two separate regulators risks further delays in enforcement against non-compliant providers who are to protect or take down material that is in breach of the law. In evidence to the Committee, the BBFC said:
“Our role is focused much more on notification. We think we can use the notification process and get some quite significant results.”—[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q83.]
We do not doubt it, but confusion will arise when the BFFC identifies a clearly non-compliant site that is brazenly flouting the law, and it does not have power to enforce quickly but will have to hand it over.
We would also like to hear when the Government are planning to announce the regulator for the second stage and how they intend to work with the BBFC. As far as I can see, this will require further amendments to the Bill. If it is Ofcom, it would have been helpful to have heard its views on what further enforcement powers it would like to see in the Bill, rather than being asked to fill in after the Bill has passed through Parliament. There is a clear danger that the enforcement regulator could be asked to take over enforcement of age verification, which it thinks requires more teeth to be effective.
We therefore have very serious concerns about the process by which clause 17 will be have effect. Although we will not vote against the clause, we want to make it very clear that we would have preferred to have seen an official announcement about who will carry out the enforcement provisions in the Bill before being asked to vote on it.
Matt Hancock
The debate on clause stand part is about the set-up of the regulatory structure and making sure that we get designation and funding right. It is our intention that the new regulatory powers and the new regulator or co-regulators will deliver on this. As the hon. Lady says, the BBFC has signed up to be designated as the age verification regulator responding for identifying and notifying. This will enable the payment providers and other ancillary services to start to withdraw services to sites that do not comply as soon as possible.
Louise Haigh
In what kind of timeframe does the Minister envisage the payment service providers acting from notification from the BBFC?
Matt Hancock
We intend formally to designate the BBFC as regulator in autumn 2017 and expect to be in a position to commence the provisions requiring age verification within 12 months of Royal Assent.
Louise Haigh
That was not quite my question. How long does the Minister anticipate that ancillary service providers or payment service providers will take to act on receiving notification from the BBFC that a site is non-compliant?
Matt Hancock
I would expect that to happen immediately. The question of the designation of the backstop enforcement regulator does not stop or preclude the BBFC from getting going on this. As we have heard, it is already working to put in place its own internal systems. As I have just said to the Committee, we have a new commitment that we expect to commence the provisions in terms of getting the system up and running within 12 months of Royal Assent; after that, if the BBFC has designated that there is a problem, I would expect action to be immediate, because I expect the BBFC to ensure through good relations that systems are in place.
I see enforcement very much as a back-up to good behaviour. As we have seen with the taking down of child pornography and material related to terrorism, many providers and platforms respond rapidly when such material is identified. It will be far better if the system works without having to resort to enforcement. We will set out in due course who is best placed to be the regulator for enforcement, but the system is new, and the approach provides the level of flexibility that we need to get it right. I have every confidence in the BBFC’s ability and enthusiasm to deliver on these aims, so I commend the clause to the Committee.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clauses 18 and 19 ordered to stand part of the Bill.
Clause 20
Enforcement of sections 15 and 19
Claire Perry
I beg to move amendment 68, in clause 20, page 21, line 5, at beginning insert
“If the person in contravention of section 15(1) is resident in the United Kingdom,”.
This amendment and amendments 69, 70, 71, 72, 73 and 74 place a requirement on the age-verification regulator to impose fines where a UK person has contravened clause 15(1) unless the contravention has ceased; or to issue an enforcement notice to person outside of the UK who has contravened clause 15(1).
The Chair
With this it will be convenient to discuss the following:
Amendment 69, in clause 20, page 21, line 5, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Amendment 70, in clause 20, page 21, line 7, after “15(1)”, insert “, unless subsection (5) applies”.
See the explanatory statement for amendment 68.
Amendment 71, in clause 20, page 21, line 10, at beginning insert
“If the person in contravention of section 15(1) is not resident in the United Kingdom,”.
See the explanatory statement for amendment 68.
Amendment 72, in clause 20, page 21, line 10, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Amendment 73, in clause 20, page 21, line 16, leave out subsection (4).
See the explanatory statement for amendment 68.
Amendment 74, in clause 20, page 21, line 42, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Claire Perry
This is a series of consequential and investigatory amendments intended to probe the Minister’s thinking about what the regulator can actually do. At the moment, enforcement operates through a series of financial penalties, which we can discuss further when we debate clause 21, or of enforcement notices. We heard clearly last week from David Austin that the challenge is that almost none of the content-producing sites that we are discussing are based in the UK; in fact, I think he said that all the top 50 sites that the regulator will rightly target are based overseas.
The challenge is how the Government intend to carry out enforcement. I know that the BBFC’s current enforcement role is not carried out through its own designated powers; it is carried out through various other agencies, and the Bill makes further provision for financial penalties. I tabled the amendments to press the Minister on the point that it would be clearer to specify that where a site, or the company that owns a site, is based in the UK, a financial penalty can and will be applied.
For overseas sites, enforcing a financial penalty, if one can even get to grips with what the financial accounts look like, may be difficult, hence the enforcement notice and then a series of other potential backstop actions; I know that the Minister is aware that I do not feel that we have exhausted the debate on blocking. I am trying to probe the Government on whether there is a way to use the Bill to reflect the reality that content providers are unlikely to be based primarily in the UK, and that perhaps a different approach is needed for those based offshore.
Louise Haigh
We completely support the hon. Lady’s amendments, which propose a sensible toughening up of the requirements of the age verification regulator. We particularly welcome the measures to require the regulator to issue enforcement notices to people outside the UK if they do not comply. That is an attempt to close a large hole in the current proposals. How will the BBFC tackle providers outside the UK?
At the evidence session last week, David Austin said that
“you are quite right that there will still be gaps in the regime, I imagine, after we have been through the notification process, no matter how much we can achieve that way, so the power to fine is essentially the only real power the regulator will have, whoever the regulator is for stage 4”;
we are not yet certain.
He continued:
“For UK-based websites and apps, that is fine, but it would be extremely challenging for”
the BBFC, Ofcom or whoever the regulator is for stage 4
“to pursue foreign-based websites or apps through a foreign jurisdiction to uphold a UK law. So we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q91.]
That is precisely why we will return to the amendment on ISP blocking, because if we are to pursue foreign-based providers, the ability to block will be integral to that strategy.
Thangam Debbonaire
My hon. Friend is making a series of excellent points which I hope the Minister can answer. We keep discovering that there are gaps, inconsistencies and potential confusion in the Bill. She has referred to the witnesses who gave evidence last week. Does she agree that it is really important that we focus carefully on the gaps that children’s charities such as the NSPCC have identified?
Louise Haigh
Obviously, I completely agree with my hon. Friend. We appreciate that the Government have consulted extensively with partners and representatives of all the relevant stakeholders, but it is not clear to us why they have not allowed ISPs that ultimate backstop power to block. For that reason, and to meet the objective of tackling providers outside the UK, we support amendments tabled by the hon. Lady the Member for Devizes.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I rise to support the amendments. It will not surprise the Committee to learn that I seek clarity about the impact on Scots law. It comes back to the same point: a lot of the issues that are being wrestled with in this place apply in a different legal jurisdiction. Perhaps the Minister could address that.
Christian Matheson
I should like to add to the comments made by hon. Friends. My concern is that if there are too many gaps and loopholes in the legislation, that may, perversely, put greater pressures on the enforcement authorities, because they will have to seek out so many different mouse-holes down which some of the content providers may run and disappear. I am slightly concerned and ask the Minister to consider the danger of an unintended consequence, because if it is not possible to stamp out content immediately, vital resources and focus will be diverted.
Louise Haigh
Does my hon. Friend also agree that with too many loopholes in the legislation, the more responsible providers of content will include age verification measures but users who want to avoid those tools will be pushed on to perhaps more extreme or violent pornography and perhaps even in to the deep web?
Christian Matheson
Yes. I raised this with the gentleman from the British Board of Film Classification, I believe, and I questioned his assertion about the top 50 websites. He said that the process would not stop there but proceed to the next 50, but if those 50 content providers are constantly moving all over the place, it will be rather like a game of whack-a-mole. Unless we have a sufficiently large mallet to give the mole a whack early on—[Interruption.] This is a serious business, and if I am sounding a bit jocular, that is not meant to take away from the serious issue. If we do not have the tools to address those who are deliberately not complying, and those who do not wish to comply with the regulations that we are putting in place to protect our children, I fear that we will be chasing after them too much.
My hon. Friend the Member for Sheffield, Heeley is right that there will also be the danger that investigative authorities use too many of their resources to go after this, when there are other things they need to go after as well. We need to put the tools at the disposal of the investigative and enforcement authorities, to give them the opportunity to make as clean an attack as possible on the providers that are not complying with the desire of this House.
Thangam Debbonaire
I will return to the evidence on this point to make clear why I support what the hon. Member for Devizes is trying to do. In his evidence last week, the NSPCC’s Alan Wardle—I think I have got that right—said quite clearly:
“I think that is why the enforcement part is so important…so that people know that if they do not put these mechanisms in place there will be fines and enforcement notices, the flow of money will be stopped and, crucially, there is that backstop power to block if they do not operate as we think they should in this country. The enforcement mechanisms are really important to ensure that the BBFC can do their job properly and people are not just slipping from one place to the next.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 47, Q108.]
So what my hon. Friend the Member for Sheffield, Heeley has just said is summed up very well by the NSPCC in its official evidence, and I hope that the Minister will have an answer for the NSPCC as well as for this Committee.
Matt Hancock
I am thankful for the opportunity to respond. I will actually respond to the points made about these amendments, which were tabled by my hon. Friend the Member for Devizes, rather than the reiteration of the blocking debate, which we have had and will no doubt have again on further clauses.
First, clause 17 clearly makes provision for the Secretary of State to designate more than one person as a regulator. Secondly—a crucial point—the complexity in regulation is deciding who is satisfying the rules and who is not, and that is for the BBFC to determine, whereas issuing fines is essentially a matter of execution and could be fulfilled by a variety of bodies. We will come forward with more detail on that in due course.
I think the whack-a-mole analogy inadvertently made the point, which is that when we are trying to deal with a problem on the internet, where people can move about, we can deal with the mainstream of the problem, which comes from reliable providers of adult material, who are already engaged and want to ensure they comply with the law. In future, once this measure becomes law, refusing to put age verification on adult material will be illegal, so we will be dealing with illegal activity. That will mean that the vast majority of people will comply with the law, and we heard that very clearly in the evidence session. The question then is how to deal with non-compliance and on the internet we know that that is very difficult. The proposals are to deal with non-compliance by disrupting business models and by imposing financial penalties.
I understand what my hon. Friend is trying to do. She is trying to strengthen the imposition of financial controls. Inadvertently, however, her amendments would reduce the regulator’s discretion by obliging the it to apply sanctions when they are available, and they would remove the power to apply financial penalties to non-UK residents.
We want to be able to fine non-UK residents—difficult as that is—and there are international mechanisms for doing so. They do not necessarily reach every country in the world, but they reach a large number of countries. For instance, Visa and other payment providers are already engaged in making sure that we will be able to follow this illegal activity across borders.
Therefore, while I entirely understand where my hon. Friend is coming from, the amendments would inadvertently have the effect of removing the ability to apply an enforcement notice to a UK resident, although I am certain that that is not what she intended. So I resist the amendment but I give her the commitment that we have drafted the clause in such a way as to make it as easy as possible for the enforcement regulator to be able to take the financial route to enforcement.
On the point made by the hon. Member for Berwickshire, Roxburgh and Selkirk, the provisions do extend to Scotland, with necessary modifications to Scottish law. I am sure that he, like me, will have seen clause 17(5) and clause 20(11)(b), which refer to modifications needed to be consistent with Scottish law. On the basis of that information, I hope that my hon. Friend will withdraw the amendment.
Claire Perry
I thank the Minister for that clarification and for the mention of support. The intention was to help to provide a practical solution rather than cut off aims. He has persuaded me that I do not need to press the amendment to a vote. Although I take the point about shared regulation, I would ask him to consider in setting up the BBFC as the primary regulator that it is working reasonably well in the video-on-demand world, but this may be having them stray into a new sphere of expertise in terms of finding, identifying and sending out enforcement notices or penalties, particularly for foreign-based companies. I think the whack-a-mole analogy is entirely consistent—they will shut their doors and reopen in another jurisdiction almost overnight. Given the anonymity principles, it is sometimes almost impossible to know where they actually are. If the Minister is assuring us that everyone is aware of the problem, he believes the powers allow the regulator to be flexible, and it is something that his Department will consider, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Louise Haigh
I beg to move amendment 86, in clause 20, page 21, line 40, leave out paragraph (b) and insert—
“(b) “during the initial determination period fix the date for ending the contravention of section 15(1) as the initial enforcement date.”.
The Chair
With this it will be convenient to discuss the following:
Amendment 88, in clause 20, page 21, line 40, at end insert—
“(c) after the initial determination period fix a period of one week for ending the contravention of section 15(1)”.
Amendment 89, in clause 20, page 22, line 13, at end insert—
‘(14) In this section, “initial determination period” means a period of 12 months from the date of the passing of this Act to the initial enforcement date.”.
Louise Haigh
This group of amendments goes even further—they have the straightforward intention of continuing the process of strengthening the powers and, crucially, of speeding up the enforcement period, to help the Government achieve their manifesto commitment. The Bill would give the regulator the power to set a lengthy, if not indefinite, period for ending the contravention of section 15. The amendment would speed up the enforcement, requiring the regulator to issue an enforcement period of one week. Given that we do not anticipate that the BBFC will be the official regulator or have these powers for another 12 months on Royal Assent, we do not anticipate that a one-week enforcement period would be too onerous on content providers.
The group should be seen in tandem with our other amendments providing a backstop power requiring ISPs to block a site, and would send a clear message to content providers that the Government would treat any contravention of section 15 with the utmost seriousness and that continuing to provide content without age verification for a prolonged period of time would not be tolerated. We believe that, if the enforcement powers under clauses 20 and 21 are toughened up, the message will spread throughout the industry and it will make it clear that age verification is not an optional extra, but a central requirement in the effort to tackle what under-18s can see.
Matt Hancock
I am sympathetic to the purpose of this group of amendments. We think that decisions on when and how to enforce should be left to the regulator, but I see the point of trying to put a week into the Bill. However, it is overly prescriptive to do so in primary legislation. Our aim is for a proportionate regime, where the regulator can prioritise and deal with problems in a way that is aligned with its goals of protection, rather than having to fulfil legal requirements that might lead to unintended consequences.
Louise Haigh
Can the Minister give us any example where a one-week enforcement period would not be doable?
Matt Hancock
No, but I cannot—and she cannot—foresee all the circumstances that the regulator will have to deal with. It is far better to have a regulator with flexibility to respond and clear aims and intentions, rather than it having to fulfil an arbitrary timescale because that is in primary legislation.
Louise Haigh
Can the Minister confirm whether the legislation enables the regulator to set a time limit for enforcement?
Matt Hancock
Yes, it will allow the regulator that flexibility. I would rather have that flexibility at the level of the regulator than in primary legislation. I think that is a reasonable approach. The regulator will then be able to act in the way that it is clear from this debate is intended. I hope that on that basis, the amendment may be withdrawn.
Louise Haigh
It is useful to have on the record the Minister’s agreement that one week is a suitable enforcement period. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Calum Kerr
I beg to move amendment 62, in clause 20, page 22, line 13, at end insert—
“(14) Within 12 months of this Act coming into force, the Secretary of State shall commission a review of the effectiveness of the enforcement of sections 15 and 19 and shall lay the report of the review before each House of Parliament.”
The Chair
With this it will be convenient to discuss amendment 81, in clause 82, page 80, line 18, at end insert—
“(4A) Part 3 will come into force at the end of the period of one year beginning on the day on which the Act is passed.”
This amendment ensures that Part 3 will be implemented by ensuring the Part comes into effect a year to the day the Act is passed, rather than on the day the Secretary of State determines through regulations.
Calum Kerr
It took me a while to get out of my seat: I was astonished that we actually got some agreement there. Perhaps we have a new spirit of progress as we near the end of the day.
Calum Kerr
I doubt it too, but never mind. It is better to be an optimist, especially on the Opposition Benches.
Calum Kerr
No comment. Had we made more progress, amendment 62 might not have been necessary, but as I feared, we have not. I am confident that we all agree on the merit of the intent of this part of the Bill. We all want to protect young children from accessing inappropriate pornographic material. I do not want any of my children doing so, and I know how much they use electronic devices. My youngest, Robert, is only seven, and he is phenomenally tech savvy. It would not be that difficult in this world to stray, even with some of the blocking systems that are in place.
A lot of the problems that we have here are to do with international sites. I am dismayed at the Government’s unwillingness to move and not even so much as listen to Opposition Members, the regulator or charities, who all insist that ISP blocking is the kind of extra measure that we should put in place. Given that broader context and the Minister’s conviction, which I believe is sincere, that he has a package of measures that will work, in light of our concerns and those of many others, a review should be put in place. I know that in the past the answer to anything involving a review has been, “That’s what the Select Committee process is for; they will have a review,” but we should not leave something as important as protecting young children to a Select Committee. The Government should take responsibility rather than abdicate it to a Select Committee. The Government should put ISP blocking in the Bill, show that they treat the issue seriously and have a review to ensure that we get the outcome that we all want: a safer environment for our children on the internet.
Louise Haigh
Given that the Government have been so intransigent on the sensible suggestions for how their proposals could be strengthened, certainly on the issue of internet service provider blocking, I completely agree with the hon. Gentleman. The Minister keeps saying that he does not want to be too prescriptive, but we argue that the phrase “on a commercial basis” is too prescriptive and limits the powers of the age-verification regulator. Given the broad support for additional powers, we want the age-verification regulator and any other regulator involved in enforcement to come back to the House and tell us what additional powers they need to make this work. There are significant loopholes in the Bill and it could have serious unintended consequences for our young people. We completely support the SNP amendment.
Matt Hancock
I entirely understand the enthusiasm for commencement, and I have given the commitment that we would expect it within 12 months of Royal Assent. I hope that that deals with the demand for a timing of commencement to be put on the face of the Bill. Unfortunately, that renders the SNP amendment slightly impractical, because it would require a review within 12 months of Royal Assent, but if the Act commences only 12 months after Royal Assent, a review at that point might not show as much progress as we would hope.
Calum Kerr
I like the way the Minister is engaging. Is he telling me that he likes the idea, but it is just that we have worded it slightly wrongly? If that is the case, I would happily move the review 12 months on, if that is what he is suggesting.
Matt Hancock
Unfortunately, the hon. Gentleman has lost his opportunity for that because the deadline for tabling amendments has passed. We should have an enduring assessment of the effectiveness of the Bill and an ongoing review of how effective the policy is. Select Committees have an important role to play in doing that. I resist the amendment on the grounds that it is impractical, because of the timings I have discussed, and because it is far better that such matters are reviewed constantly, rather than just on a one-off.
Thangam Debbonaire
In my experience, ongoing reviews tend to mean never. If you do not have a deadline or target, that gives you the scope just to say, “We are doing it and will carry on doing it for some time,” without there ever being a point at which you say, “Here’s a review.” An annual review is such an easy thing to which to commit; why not do it?
The Chair
Order. I remind the hon. Lady that I am not going to do anything with regard to the Bill. She should return to using normal parliamentary speech.
Matt Hancock
We thought you might be the regulator for part 4, Mr Stringer.
I suppose this is the difference between the two sides of the House: for the Opposition, an ongoing review means never; for the Government, an ongoing review means always.
Calum Kerr
My background is in telecoms, latterly as a global consultant coaching front-line leaders. People always said to me, “Oh yeah, we always have reviews,” but unless there is a cadence on it and it is put down in black and white, it is not done properly. They would not do it in the business world, and Opposition Members would not do it; perhaps Government Members are a bit more blasé than we are.
Matt Hancock
That tells us all we need to know about consultants. There we are. I commit that we will keep the effectiveness of the legislation under review. I know that that will happen anyway because I know that my hon. Friend the Member for Devizes is not going to let this one go.
Christian Matheson
How might the Minister review the ongoing review to ensure that progress is being made?
Matt Hancock
We will have a continuous review of the ongoing review. With that, I urge the hon. Gentleman to withdraw the amendment.
Question put, That the amendment be made.
Louise Haigh
I will not test the Committee’s patience further by going over arguments that we have already had, but there is one further area of clause 20 that we wish to touch on—the lack of an appeals process in the legislation. The Minister may expect the regulator to build that appeals process in: it would be helpful to have some clarity from him on that.
As I understand it, the BBFC will use analytics to identify sites that should have age verification. Analytics are not foolproof, so obviously an appeals mechanism will be needed for websites incorrectly prevented from operating. Previous such systems have wrongly filtered out websites such as breast cancer charities or forums for gay and transgender people. That is incredibly important: let us put ourselves in the shoes of a young gay man or woman, growing up in a religious household perhaps, who does not know where to turn to ask the questions that would plague any teenager coming to terms with their sexuality and who seeks refuge and solace in internet forums with other people going through the same issues. As risky as the internet can be, it can also be an incredibly empowering, transformative space that can literally save lives in such situations. Such lifelines must absolutely not be filtered out by ASPs or made subject to age verification; the Bill should include a mechanism that allows for correction when they have been mistakenly identified.
We also need clarification on who will develop the analytics, the data they will be based on and whether it will be done in consultation with the tech industry. We can only assume that this is an oversight that will be corrected when working out how the regulator is to proceed.
Claire Perry
The hon. Lady raises an important point about access to information about sex education, sexuality, abortion and all sorts of things that are incredibly valuable. She is right to draw attention to safe forums. I reassure her that many of the same issues came up with respect to the question of voluntary filtering and, despite what some of those giving evidence said, the incidence of false blocking of such valuable sites is incredibly low. The BBFC as regulator is really good: it is not in the business of defining based on imagery, and it has fairly detailed algorithms. I share her concern, but I want to offer some comfort.
Louise Haigh
I am grateful. I heard the BBFC or the Open Rights Group say that the incidence was very low, but it would do no harm to build an appeals process into the legislation to ensure that where sites that should not be blocked or require age verification have fallen through the cracks, that can be resolved at the behest of the regulator.
Matt Hancock
The hon. Lady is absolutely correct that there needs to be an appeals process. That process is provided for in clause 17(4):
“The Secretary of State must not make a designation under this section unless satisfied that arrangements will be maintained by the age-verification regulator for appeals”.
I agree with everything else she said. It is worth remarking on the recent announcement that gay and bisexual men will now be pardoned over abolished sexual offences—that is not in the Bill, so that remark was completely out of order, but I still think it was worth making. Appeals are important; I hope she is satisfied that they are provided for.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21 ordered to stand part of the Bill.
Clause 22
Age-verification regulator’s power to give notice of contravention to payment service providers and ancillary service providers
Claire Perry
I beg to move amendment 75, in clause 22, page 23, line 28, at end insert; “and
(c) the person has been the subject of a enforcement notice under section 20(2) and the contravention has not ceased.”
The Chair
With this it will be convenient to discuss the following:
Amendment 76, in clause 22, page 23, line 29, leave out “may” and insert “must”
This amendment places a requirement on the age-verification regulator to give notice to payment or ancillary service providers that a person has contravened clause 15(1) or is making prohibited material available on the internet to persons in the United Kingdom.
Amendment 79, in clause 22, page 24, line 24, leave out “may” and insert “must”
This amendment places a requirement on the age-verification regulator to issue guidance about the services that it determines are enabling or facilitating the making available of pornographic or prohibited content.
New clause 6—
“Requirement to cease services to non-complying persons
‘(1) Where the age-verification regulator has given notice to a payment-services provider or ancillary service provider under section 22(1), the payment-services provider or ancillary service provider must cease the service provided to the person making pornographic material available in the United Kingdom.
(2) A payment-services provider or ancillary service provider who fails to comply with a requirement imposed by subsection (1) commits an offence, subject to subsection (3).
(3) No offence is committed under subsection (2) if the payment-services provider or ancillary service provider took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with.
(4) A payment-services provider or ancillary service provider guilty of an offence under subsection (2) is liable, on summary conviction, to a fine.
(5) In this section “payment-services provider” and “ancillary service provider” have the same meaning as in section 22.”
This new clause requires payment and ancillary services to block payments or cease services made to pornography websites that do not offer age-verification if they have received a notice of non-compliance under section 22(1). This provision would only apply to websites outside of the UK. This would enhance the enforcement mechanisms that are available under the Bill.
New clause 18—Approval of Age-verification providers—
‘(1) Age-verification providers must be approved by the age-verification regulator.
(2) In this section an “age-verification provider” means a person who appears to the age-verification regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.
(3) The age-verification regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.
(4) The code will include provisions to ensure that age-verification providers—
(a) perform a Data Protection Impact Assessment and make this publicly available,
(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,
(c) minimise the processing of personal information to that which is necessary for the purposes of age-verification,
(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet,
(e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,
(f) do not create security risks for third parties or adversely impact security systems or cyber security,
(g) comply with a set standard of accuracy in verifying the age of users.
(5) Age-verification Providers must comply with the code of practice.
(6) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the Code, that term is unenforceable.”
Claire Perry
We promised to return to the topic of enforcement and blocking, and we have reached it today. That is very good; it suggests that our progress on the Bill is excellent.
The purpose of these amendments and new clause 6 is to clarify and strengthen the enforcement process. We have already discussed fruitfully how clause 20 will be used, particularly for sites based overseas, and I was reassured by what the Minister said, but I want to turn to the “what ifs”. What happens if the regulator acts, has clarity about whether they are imposing a fine or an enforcement notice, and nothing actually happens—none of the sanctions in the current regime leads to a website imposing age verifications? I welcome what the Bill says about involving a direct relationship between not just the regulator and the platform or the website, but the payment providers. As the Minister said, cutting off the business model—the cash flow—is a very effective way of making enforcement happen.
I have a series of questions relating to the process. First, it is not clear when the regulator will inform providers that such a contravention is happening. Some questions were asked about how long it will be and what the time period will be, but when does the regulator actually issue a notice? Amendment 75 states that the regulator has a power to issue a notice under clause 22 when an enforcement notice has been issued and the contravention has not yet ceased. I think websites ought to be given the opportunity to respond to the regulator’s intervention before the payment providers and ancillary services are involved. That process should be very clear. It is the same if we have an issue with service provision at home: we know what our rights are, what period of time we have to complain and what happens when that period expires.
Secondly, as I read the Bill—I am in no way setting myself up as somebody who understands every aspect of the legal jargon—there appears to be no requirement for the regulator to inform the payment providers and ancillary services of a contravention. It may just be implicit, but amendment 66 would make it mandatory for the regulator to inform the payment providers and ancillary services if there were a contravention. I would be interested to hear the Minister’s views on that.
Thangam Debbonaire
I am pleased that we have returned to enforcement and compliance, and I hope we are going to spend more time on blocking. The hon. Lady’s amendment uses the term “ancillary service provider”, to which she referred earlier. I would be very grateful if she spent some time spelling out in a bit more detail what an ancillary service provider is. Does it include ISPs? I think she alluded to that earlier, but I am not sure. Can she help clear up the confusion with some detail, please?
Claire Perry
I apologise if I have caused any confusion. I will let the Minister specify exactly what he thinks. In tabling these amendments, I wanted to ensure that as wide a group of people and companies as possible is involved in doing something we all think is very valuable—implementing these age verification mechanisms. As I read the Bill as drafted, it does not contain a clear distinction between ISPs and ancillary service providers; they are included in the same bucket. I want to clarify that I think that both ISPs and ancillary service providers—in my mind, ancillary service providers are the platforms that we discussed by name earlier—have a duty and a legal responsibility to ensure that the age-verification mechanisms are in place.
Thangam Debbonaire
The hon. Lady will have to forgive me. We are going to hear from the Minister shortly, but I would like to know if, in her amendment, ancillary service providers definitely include internet service providers. I know it is a difference of just one word, but I would be grateful for her clarification.
Christian Matheson
I share some of the hon. Lady’s uncertainty—I was going to say confusion, but it is not—about the terminology. Would the definition include, for example, telecoms providers over whose networks the services are provided?
Claire Perry
I am perhaps going to let the Minister spell that out exactly. The hon. Gentleman raises a very important point: we all know now that access to internet services is often done entirely over a mobile network. I can again give some comfort on this issue. The BBFC, which is an excellent choice, has worked for many years with the mobile service providers—a witness gave evidence to this effect—so they already offer a blocking service based on the BBFC’s definition of 18-plus and 18-minus material. It is essentially an opt-in service. Someone has to say that they are under 18 and checks are carried out. The providers already offer the service, and it seems to work reasonably effectively.
I apologise for inadvertently misleading the Committee —perhaps it reflects some of the confusion in the wording—and I want to be very clear about who we are trying to capture with the amendments. We would all support the idea of spreading the net as widely as possible in ensuring the right behaviour, but it is important to make clear that ISPs are to be expected and legally mandated to carry out the same checks.
Another point I wanted to make with amendment 79 was to ask the regulator to issue guidance on the sort of businesses that will be considered to be ancillary services. The reason for putting that in the Bill is that, as we debated extensively in earlier sittings, the world changes. We had very good debates about why 10 megabits per second might not be appropriate in a couple of years’ time and why the USO as originally construed was laughably small. We all try to do the right thing, but of course the world changes. The reference by the hon. Member for City of Chester to Whac-A-Mole was interesting. What will the consequences be of implementing the Bill? We are a very substantial revenue stream for many websites, and new service models might arise. Someone might be scrutinising the letter of the law and thinking, “We are not captured by this, so we are not captured by these regulations.” Asking for the regulator to issue guidance on the types of businesses that will be considered to be ancillary services could future-proof some of the Bill.
Thangam Debbonaire
I am grateful for the hon. Lady again allowing me to intervene. I apologise for interrupting her sentence; that was not my intention. I am pleased to see her amendments. This discussion is helping me and perhaps all of us to come to some form of understanding. I have a little metaphor in mind. If a cinema was allowing children to see pornography, we would hold the ticket seller responsible, as well as the organisation running the cinema, but not the bus driver who drove the bus the child took to get to the cinema. Does that metaphor help?
Claire Perry
It depends whether the bus driver was paid for by the cinema. That is the point. Businesses pop up. There might be a bespoke Odeon cinema. My point is that we need to ensure that the regulator has as much flexibility as possible to respond to changing definitions. The current definition of an ancillary service provider is quite clear, although I would like the Minister to clarify it, but my amendment would try to future-proof the definition.
Thangam Debbonaire
In raising the issue of whether the bus driver was paid for by the cinema, the hon. Lady has helped me to hit on something else. Are we not considering the role of search engines in this matter and whether they are driving things or complicit? I do not know the answer to that question. She has raised a helpful analogy in response to my analogy.
Claire Perry
How long has the Committee got to hear about search engines? The hon. Lady raises a fascinating point. It was through a very strong cross-party effort and with the leadership of the former Prime Minister that we got the search engines to do some compelling things. Let me give her an example. It was clear that search engines in Europe were happy to allow terms to be typed in that could only lead to sexual images of child abuse being returned. I had the important but unenviable job, as the Prime Minister’s special adviser on the issue, of sitting down with the parents of April Jones, the little girl murdered in Wales, and trying to explain to them why, when their daughter’s killer typed in “naked little girls in glasses”, they received an image. It took many levels of conversation, including a personal conversation between me and the head of Google Europe, saying, “How do you as a parent feel about this? I don’t care about you saying ‘We serve up everything at all times’; I don’t care that the search terms themselves are not illegal. What I care about is your duty. You have a duty to do no evil, and in my view, you are breaching that.”
This is why I am so proud of what the Government have done. With all that effort and by recruiting Baroness Shields, who has been a worthy addition, we got the internet service providers not only to not return illegal imagery but, with the help of experts, not to return anything at all to a whole series of search terms that were found to be used by paedophiles in particular. I am sure that the hon. Lady will have seen that the Government then went further. It all comes down to what is legal. Your porn is my Saturday night viewing. [Laughter.] Theoretically.
Thangam Debbonaire
I urge the hon. Lady to consider re-wording what she just said, for my sake and for hers.
Claire Perry
I may have come up with a Daily Mirror headline. My point is that the whole debate about pornographic material has always ended in the cul-de-sac of freedom of speech. That is why we worked with internet service providers, saying, “Let parents choose. Let’s use the BBFC guidelines. They have years of experience defining this stuff based on algorithms.” It is not for the hon. Lady or me to decide what people should not be viewing; we quite properly have an independent agency that says, “This is appropriate; this is not.”
However, the hon. Lady has eloquently raised the point that for too long, we have treated the internet as a separate form of media. We accept in cinemas, whether or not the bus driver is working for them, that if a film is R18, we are pretty negligent if we take our kids to see it, but we are helped to see that. We do not let our kids wander into the cinema and watch the R18 stuff with nobody stopping them along the way, but for too long, that has been the situation with the internet. The hon. Lady has raised a good point about search engines. I can assure her that the world has changed significantly, certainly in the UK, although other jurisdictions may not have been so influenced.
Nigel Huddleston
I should probably declare that prior to becoming an MP, I worked at Google. Does my hon. Friend agree that this is where it becomes complex? A search engine, to use another analogy, is a bit like a library. The books are still on the shelves, but the search engine is like the library index: it can be removed and changed, but the content is still there. That is why we need to do much more than just removing things from the search engine: the content is still there, and people can find alternative ways to get to it. We must do much more.
Claire Perry
I defer to my hon. Friend’s knowledge. Of course we all agree that certain instances of countries taking things down are utterly abhorrent; I am thinking of information about human rights in China, or about female driving movements in Saudi Arabia. We do not want to be in the business of over-specifying what search engines can deliver. We have not even touched on Tor, the dark web or the US State Department-sponsored attempts to circumvent the public internet and set up some rather difficult places to access, which have increasingly been used for trafficking illegal material.
Thangam Debbonaire
We need to keep hold of the search engine issue for a moment, because search engines are part of the process. To restate the bus driver analogy, a search engine is also like a sign saying to adults, and children, “You can go here to see pornography”.
Claire Perry
I think we will let the Minister talk about that. Again, think about the practical series of keystrokes. Let us take gambling for a moment. It is quite a good analogy, because we mandated in the Gambling Act 2005 that there should be age verification. The search engine host provides access to a site, and users must go through an age verification mechanism. Age verification is incumbent on the site, and the service provider is legally responsible. I shall let the Minister discuss search engines in his speech.
Louise Haigh
I rise to speak to new clause 18, which stands in my name and that of my hon. Friend the Member for Cardiff West. I also support the amendments tabled by the hon. Member for Devizes. The Government’s proposals really do rely on an awful amount of good will among all the stakeholders involved in the legislation. It makes sense to create a backstop power for the regulator to require payment services to act should they not do so in the first instance.
New clause 18 comes from a slightly different perspective. It would oblige the age-verification regulator to ensure that all age verification providers—the companies that put the tools on websites to ensure compliance—are approved by the regulator; to perform a data protection impact assessment that they make publicly available; and to perform an array of other duties as well.
The new clause is designed to address some of the concerns about the practicality of age-verification checks, ensuring that only minimal data are required, and kept secure; that individuals’ privacies and liberties are protected; and that there is absolutely no possibility of data being commercialised by pornographer. We raise the latter as a potential risk because the proposals were drafted with the input of the pornography industry. That is understandable, but the industry would have a significant amount to gain from obtaining personal data from customers that might not currently be collected.
As we said earlier, we have full confidence in the BBFC as regulator, but, as with the proposals in part 5 of the Bill, it is vital that some basic principles—although certainly not the minutiae—are put on the face of the Bill. We are certainly not asking anything that is unreasonable of the regulator or the age-verification providers. The principles of privacy, anonymity and proportionality should all underpin the age-verification tool, but as far as I am aware they have not featured in any draft guidance, codes of practice, or documents accompanying the Bill.
The Information Commissioner agrees. The Information Commissioner’s Office’s response to the Department for Culture, Media and Sport’s consultation on age verification for pornography raised the concern
“that any solution implemented must be compliant with the requirements of the DPA and PECR”—
the Data Protection Act 1998, and the Privacy and Electronic Communications (EC Directive) Regulations 2003 that sit alongside it. It continues:
“The concept of ‘privacy by design’ would seem particularly relevant in the context of age verification—that is, designing a system that appropriately respects individuals’ privacy whilst achieving the stated aim… In practical terms, this would mean only collecting and recording the minimum data required in the circumstances, having assessed what that minimum was. It would also mean ensuring that the purposes for which any data is used are carefully and restrictively defined, and that any activities keep to those restricted purposes…In the context of preventing children from accessing online commercial pornography, there is a clear attribute which needs to be proven in each case—that is, whether an individual’s age is above the required threshold. Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information (such as actual date of birth).”
The Commissioner made it clear that she would have
“significant concerns about any method of age verification that requires the collection and retention of documents such as a copy of passports, driving licences or other documents (of those above the age threshold) which are vulnerable to misuse and/or attractive to disreputable third parties. The collection and retention of such information multiplies the information risk for those individuals, whether the data is stored in one central database or in a number of smaller databases operated by different organisations in the sector.”
I understand that the Adult Provider Network exhibited some of the potential tools that could be used to fulfil that requirement. From the summary I read of that event, none of them seem particularly satisfactory. My favourite was put forward by a provider called Yoti, and the summary I read describes the process for using it as follows:
“install the Yoti App…use the app to take a selfie to determine that you are a human being…use the app to take a picture of Government ID documents”—
passport or driving licence, I imagine—
“the app sends both documents to Yoti…Yoti (the third party) now send both pictures to a fourth party; it was unclear whether personal data (e.g. passport details) is stripped before sending to the fourth party…Fourth party tells Yoti if the images (selfie, govt ID) match…Yoti caches various personal data about user”
to confirm that they are over 18. The user can then visit the porn site—whatever porn site they would like to visit at that time—and then the
“porn site posts a QR-like code on screen…user loads Yoti app…user has to take selfie (again) to prove that it is (still) them…not a kid using the phone…user scans the on-screen QR-code, is told: ‘this site wants to know if you are >18yo, do you approve?’…User accepts…Yoti app backchannel informs porn site…that user >18yo”
and then the user can see the pornography.
I do not know whether any Committee members watch online pornography; I gather that the figure is more than 50% of the general population, and I am not convinced that hon. Members are more abstinent than that. I ask Members to consider whether they would like to go through a process as absurd as the one suggested.
Louise Haigh
The hon. Lady has got ahead of the potential Daily Mail headline when the freedom of information request comes in for her Google search history.
I am not convinced that anybody would want to go through a process as the one I have just described, or even one significantly less convoluted. I suggest that instead they would seek entertainment on a site that did not impose such hurdles. The BBFC in its evidence made the telling point that the majority of the viewing population get their content from the top 50 sites, so it is very easy to target those—we see that entrenched in clause 23. The problem with that, as my hon. Friend the Member for City of Chester pointed out, is that targeting those sites may push viewers to the next 50 sites, and so on. We therefore need to ensure that the process is as straightforward and as minimal as possible.
Christian Matheson
My concern about users being pushed to the next 50 sites is that those sites are much less regulated, and I hazard a guess that they are much more likely to be at the extreme end of the spectrum.
Louise Haigh
That is exactly my concern. I imagine that the top 50 providers are not as hardcore, are less extreme and may not include such violent images; as we move on to the next 50 or the 50, there is a danger of images becoming more extreme.
The solution must not result in the wholesale tracking or monitoring of individuals’ lawful online activities or the collection of data with a view to unlawful profiling of individuals. I am not convinced that the BBFC is properly resourced to undertake the significant additional workload, nor am I convinced that the practicalities of the software that have so far been exhibited, or their implications, have been properly worked out.
Christian Matheson
My hon. Friend is generous in giving way. She is absolutely right about resourcing. I am no technical expert, but does she agree that such a database may be a prime target for hackers unless it is properly resourced and defended?
Louise Haigh
That is absolutely right, and I will come to that point. We heard evidence from the BFFC that it intended potentially to use age-verified mobile telephony to ensure that sites are properly age verified, but I am afraid that that approach is also flawed. First, there is the obvious issue that there is nothing to stop an underage child using the information attached to that phone—be it the phone number or the owner’s name—to log on and falsely verify. Equally, there are enormous privacy issues with the use of mobile-verified software to log on.
The BBFC said clearly that it was interested not in identity but merely in the age of the individual attempting to access online pornography, but as we all know, our smartphones contain a wealth of information that can essentially be used to create a virtual clone. They are loaded with our internet conversations, financial data, health records, and in many cases the location of our children. There is a record of calls made and received, text messages, photos, contact lists, calendar entries and internet browsing history—the hon. Member for Devizes may want to take note of that—and they allow access to email accounts, banking institutions and websites such as Amazon, Facebook, Twitter and Netflix. Many people instruct their phones to remember passwords for those apps so they can quickly be opened, which means that they are available to anyone who gets into the phone.
All that information is incredibly valuable—it has been said that data are the new oil—and I imagine that most people would not want it to be obtained, stored, sold or commercialised by online pornography sites. The risks of creating databases that potentially contain people’s names, locations, credit card details—you name it—alongside their pornographic preferences should be quite clear to anyone in the room and at the forefront of people’s minds given the recent Ashley Madison hack. I am not condoning anyone using that website to look for extramarital affairs, nor am I privileging the preferences or privacy of people who wish to view online pornography over the clearly vastly more important issue of child protection. However, one consequence of that hack was the suicide of at least three individuals, and we should proceed with extreme caution before creating any process that would result in the storing of data that could be leaked, hacked or commercialised and would otherwise be completely private and legitimate.
That is the reasoning behind our reasonable and straightforward amendment, which would place a series of duties on the age-verification regulator to ensure that adequate privacy safeguards were provided, any data obtained or stored were not for commercial use, and security was given due consideration. The unintended consequences of the Government’s proposals will not end merely at the blocking of preferences, privacy or security issues, but will include pushing users on to illegal or at the very least non-compliant sites. We are walking a thin tightrope between making age verification so light-touch as to be too easily bypassed by increasingly tech-savvy under-18s and making it far too complicated and intrusive and therefore pushing viewers on to either sites that do not use age verification but still offer legitimate content or completely illegal sites that stray into much more damaging realms. These provisions clearly require a lot more consultation with the industry, and I am confident that the BBFC will do just that, but the Opposition would feel a lot more confident and assured if the regulator was required to adhere to these basic principles, which we should all hold dear: privacy, proportionality and safety.
Claire Perry
The hon. Lady rightly gets to the great concern that somehow, in doing something good, an awful lot of concern can be created, and I am sympathetic to her points. I remind her that it is not as if these sites do not know who is visiting them anyway. One of the great conundrums on the internet is that every single keystroke we take is tracked and registered. Indeed, that is why shopping follows us around the internet after we have clicked on a particular site. Unless people are very clever with their private browsing history, the same is the case for commercial providers.
Louise Haigh
I absolutely support the Government’s intention here. We just want to ensure it is done in the right way and balances both sides of the argument. I think it is absolutely right that internet service providers are offering this filter, but does the hon. Lady share my concern that very few families take it up and very many families turn it off?
Claire Perry
There are Ofcom data. One of the requirements we asked for was for Ofcom to monitor. Take-up improved, and, as I said, some internet service providers now have an automatic “on” system, whereby a person has to intervene to take the filters off. I am told that only about 30% of families choose to do so. Here is the savvy thing: we all know that people live in households with multiple ages and multiple requirements on the internet, so many ISPs now offer a service that enables people to disable the filters for a period and automatically reinstate them the following day. They do not have to do anything if they want the filters to be in place, but they might want to access over-18 content as an adult.
I want to discuss some of the other issues that have come up in this conversation, in the process of finally speaking about these amendments. Is it in order to do so, Mr Stringer?
The Chair
It is if it is covered by the amendments and new clauses 6 and 18, but I cannot tell until you start speaking.
Claire Perry
Then I will carry on, because it definitely is. I think I misspoke at the beginning when I talked about new clause 7. I was actually referring to new clause 6; it was just my note-taking.
I was trying ensure that we put in place series of protections, including enforcement notices that are acted upon, financial penalties that make a difference and the ability to stop income streams moving from the payment providers to the various content providers. I want to press the Minister on the question of blocking, because it comes back to the issue of why anyone would care. If somebody does not respond to an enforcement notice—if, for example, the fine is not sufficient to make them stop —how can it be that we are not considering blocking? Of course, we do that for other sites. I know it is not applicable to every form of illegal content, but I am very struck by copyright infringement, which generates take-down notices very swiftly, and upon which the entire provision of internet service providers and ancillary services act. I would be really interested to hear from the Minister why blocking has been rejected so far. Could it be put in place as a backstop power? I worry that, without it, all of this amazing progress will not have teeth.
Matt Hancock
It is sometimes said that Parliament skates over matters and does not get under the skin of things, but in the discussion we have just had Committee members displayed a great deal of analysis, experience and wisdom, and our debate on the Bill has been enriched by it. I am very grateful to hon. Members on both sides of the Committee who made very good contributions to help us get this right.
Exactly as the hon. Lady the Member for Sheffield, Heeley said, getting this right involves walking a tightrope between making sure that there is adequate enforcement and appropriate access for those for whom it is legally perfectly reasonable to access adult content. We must get that balance right. With that mind, we have drafted the clauses, particularly clause 22, to allow the regulator to operate with some freedom, because we also need to make sure that, over time, this remains a good system and is not overly prescriptive. It was ironic that in a speech about privacy, the hon. Lady started to speculate about which MPs enjoyed watching porn. I am definitely not going to do that.
The truth is that age verification technology is developing all the time. Online personal identity techniques are developing all the time, and indeed, the British Government are one of the leading lights in developing identity-verification software that also minimises the data needs for that verification and does not rely on especially large state databases to do that, and therefore does it in a relatively libertarian way, if I can put it that way. Providing for verification of identity or of age, because age without named identity is what is really being sought here, but is difficult to achieve, is an incredibly important issue. A huge amount of resource is going into that globally to get it right, and it ties closely to cyber security and the data protection requirements of any data.
The UK Data Protection Act has a broad consensus behind it and follows the simple principle that within an institution data can be shared, but data must not be shared between institutions. The institution that holds the data is responsible for their safekeeping and significant fines may be imposed for their inadvertent loss. The forthcoming General Data Protection Regulation increases those fines. Rather than reinventing data protection law for the purposes of age verification in this one case, it is better to rest on the long-established case law of data protection on which the Information Commissioner is the lead.
We had a very informed debate on the role of search engines. The regulator will be able to consider whether a search engine is an ancillary service provider. Although we do not specify it, I would expect ISPs to be regarded as ancillary service providers, but that will be for the regulator.
On the name of payment providers who are already engaged, rather than enforced engagement, we already have engagement from Visa, MasterCard, UK Cards Association and the Electronic Money Association, and clearly there a lot more organisations that can and should be engaged.
Kevin Brennan
It is interesting that the Minister feels able to say that he would expect ISPs to be regarded as an ancillary service provider, but he did not use the same terminology when talking about search engines. To press him on that, would he expect search engines in some cases, or may be in all cases, to be considered as ancillary service providers?
Matt Hancock
I do not draw any distinction between the two, but the decision is for the regulator. The legislation provides that they could be, and it depends on the circumstances whether they would be. Of course, obviously, they play different roles.
Kevin Brennan
Just to clarify, I think the right hon. Gentleman is saying that in making no distinction, he would be able to apply the word “expect” to search engines as well as to ISPs. That is what I was probing him to find out.
Matt Hancock
I am choosing not to use that word because I want to leave it to the regulator, rather than leaving an implication that it should move one way or the other. The regulator should define what is an ASP according to the legislation.
Kevin Brennan
The Minister is therefore making a distinction between the two. In one case he clearly has an expectation that it will happen, and in the other case he does not. The Committee will be interested to know why he is making that distinction, which he denies he is making, because it is important to our understanding the reluctance in the Bill to involve search engines in some of these regulations.
Matt Hancock
They should be treated the same in that the same provisions in the Bill should be applied to each, but each performs a different role and ISPs are inevitably more closely connected to the provision of content because the content goes through an ISP, whereas a search engine may or may not be the route through which content is found. For implementation, it is clear that that is for the regulator to decide within the provisions set out in the Bill.
Thangam Debbonaire
I refer the Minister to the point made by the hon. Member for Devizes, who mentioned the murder of April Jones and the fact that her killer was able to type certain words into a search engine that I cannot bear to repeat. Search engines have the power to change their algorithm—we know they do.
Matt Hancock
The point that my hon. Friend the Member for Devizes was making is that, owing to her work, the search engines made precisely those sorts of changes on a voluntary basis. At the request of the Government and others, they now undertake millions of changes to their algorithms and millions of take-downs for both child porn and terrorist-related purposes. That system is working well, and it does not need to be underpinned by regulation.
There is then a wider question. I am straying to the limits of order to discuss this, but my hon. Friend very effectively argued that the principle that the internet should provide the freedom that it provides within the framework of a regulated structure. We agree with that, and we are providing for some of that regulated structure in this Bill. There is a first amendment-type argument, if we are thinking about it in an American way, that the internet is free and laissez-faire and that we should not regulate it. There are people who say, for instance, that we should not recreate national jurisdictional boundaries on the internet and that we should not regulate it, that it should be completely free. We reject that argument, which is why we are prepared to introduce legal requirements on age verification for the provision of information over the internet in the UK jurisdiction. We reject the argument because, at a principled level, the freedoms that we enjoy are freedoms that do not harm others, which applies offline just as much as it applies online. Because the internet is relatively new, we are still in the early days of applying such a principle to the internet. That is a much bigger debate than in clause 22, and therefore I should not go into further detail.
Thangam Debbonaire
I believe that the Minister has just answered the question of my hon. Friend the Member for Cardiff West on whether a search engine is an ancillary service provider. The Minister acknowledges that search engines, as well as ISPs, should be considered as such.
Matt Hancock
All I did was set out the principles behind the Government’s response to the amendments to clause 22. The Committee must know those principles in order to understand the direction that we are taking on regulation.
I will move on to some of the other points that were made. I will respond to new clause 18 and amendment 79.
Claire Perry
I thank the Minister for that response. I would have liked to hear him say a little bit more about how the payment service providers are involved in the game and whether we are relying on them to do the right thing because they are large corporate companies, or whether, as new clause 6 proposed, there was an opportunity to strengthen the wording of the Bill.
Matt Hancock
I apologise; there were so many interesting points made that I did not get to that one.
The provision of pornography without an age verification in the UK will become illegal under this Bill. There is a vast panoply of financial regulation requiring that financial organisations do not engage with organisations that commit illegal activities, and it is through that well-embedded, international set of regulations that we intend to ensure that payment service providers do not engage with those who do not follow what is set out in the Bill. Rather than inventing a whole new system, we are essentially piggybacking on a very well-established financial control system.
Claire Perry
That is a very reassuring reply and I thank the Minister for it. We have had a very good debate. I know that his officials will be listening and thinking hard about what has been said, and I do not think it would serve the Committee any purpose to press my amendments or my new clause to a vote.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
It was interesting to hear the Minister refer to financial regulations. I was not present on Second Reading because I was not then in the position that I occupy now, but having read that debate I do not believe that there was any such reference. So we would like some clarity on who will be the regulator of the payment service providers and what work has already been done with the Financial Conduct Authority—I assume it will be with the FCA in this circumstance—to ensure that it will be regulating those providers, to make sure that they act with speed and due diligence on receiving notification from the age verification regulator under clause 15.
It is disappointing that the Government do not consider new clause 18 necessary to amend the Bill. I appreciate that the BBFC has been given powers to establish a code of practice, but given the very serious consequences that could result from that not being done correctly, some basic principles need to be embedded into the process, based on the issues that I raised earlier in our discussion.
I will just add that we will return to this issue on Report.
Matt Hancock
We have been engaging directly with payment service providers, although—no doubt as and when necessary—engagement with financial authorities will be made. Payment service providers can withdraw services from illegal activity under their existing terms and conditions, so the provision is already there for the measures to take effect.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Exercise of functions by the age-verification regulator
Claire Perry
I beg to move amendment 80, in clause 23, page 25, line 1, at end insert—
‘(3) The age-verification regulator must consult with any persons it considers appropriate, about the option to restrict the use of its powers to large pornography websites only.’
This amendment requires the age-verification regulator to consult on whether, in the exercising of its function, it should restrict its powers to large pornography websites only.
The Chair
With this it will be convenient to discuss new clause 12—Code of practice by age verification regulator—
‘(1) The age verification regulator must issue a code of practice giving practical guidance as to the requirements of any provision under this Part of the Act.
(2) The following persons must, in exercising their functions under this Part and in the design and delivery of their products and services, adhere to the code of practice, and ensure that the safety and wellbeing of children is paramount—
(a) relevant persons;
(b) internet service providers;
(c) ancillary service providers;
(d) payment-service providers; and
(e) any such other persons to whom the code of practice applies.
(3) Any code of practice issued by the age verification regulator under subsection (1) above must include standards in relation to the following—
(a) how content is managed on a service, including the control of access to online content that is inappropriate for children, and the support provided by the service for child safety protection tools and solutions;
(b) the assistance available for parents to limit their child’s exposure to potentially inappropriate content and contact;
(c) how the persons specified in subsection (2) above shall deal with abuse and misuse, including the provision of clear and simple processes for the reporting and moderation of content or conduct which may be illegal, harmful, offensive or inappropriate, and for the review of such reports;
(d) the action which must be taken in response to child sexual abuse content or illegal contact, including but not limited to, the co-operation with the appropriate law enforcement authorities;
(e) the action to be taken by the persons specified in subsection (2) above to comply with existing data protection and advertising rules and privacy rights that address the specific needs and requirements of children; and
(f) the provision of appropriate information, and the undertaking of relevant activities, to raise awareness of the safer use of connected devices and online services in order to safeguard children, and to promote their health and wellbeing.
(4) The age verification regulator may from time to time revise and re-issue the code of practice.
(5) Before issuing or reissuing the code of practice the age verification regulator must consult—
(a) the Relevant Minister;
(b) the Information Commissioner;
(c) the Scottish Ministers;
(d) the Welsh Ministers;
(e) the Northern Ireland Executive Committee;
(f) the persons specified in subsection (2) above;
(g) children;
(h) organisations and agencies working for and on behalf of children; and
(i) such other persons as the age verification regulator considers appropriate.
(6) As soon as is reasonably practicable after issuing or reissuing the code of practice the age verification regulator must lay a copy of it before—
(a) Parliament,
(b) the Scottish Parliament,
(c) the National Assembly for Wales, and
(d) the Northern Ireland Assembly.
(7) The age verification regulator must—
(a) publish any code of practice issued under subsection (1) above; and
(b) when it revises such a code, publish—
(i) a notice to that effect, and
(ii) a copy of the revised code; and
(c) when it withdraws such a code, publish a notice to that effect.
(8) The Secretary of State may by regulations make consequential provision in connection with the effective enforcement of the minimum standards in subsection (3).
(9) Regulations under subsection (8)—
(a) must be made by statutory instrument;
(b) may amend, repeal, revoke or otherwise modify the application of this Act;
(c) may make different provision for different purposes;
(d) may include incidental, supplementary, consequential, transitional, transitory or saving provision.
(10) A statutory instrument containing regulations under subsection (8) (whether alone or with other provisions) which amend, repeal or modify the application of primary legislation may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(11) In this Part—
“ancillary service provider” has the meaning given by section 22(6);
“child” means an individual who is less than 18 years old.
“Information Commissioner” has the meaning given by section 18 of the Freedom of Information Act 2000
“Internet service provider” has the same meaning as in section 16 of the Digital Economy Act 2010.
“Northern Ireland Executive Committee” has the meaning given by section 20 of the Northern Ireland Act 1998
“payment-service providers” has the meaning given by section 22(5) “relevant Minister” has the meaning given by section 47(1)
“relevant persons” has the meaning given by section 19(3)
“Scottish Ministers” has the meaning given by section 44(2) of the Scotland Act 1998
“Welsh Ministers” has the meaning given by section 45 of the Government of Wales Act 2006.’
This new Clause gives the power to the age verification regulator to introduce a code of practice for internet content providers. The code of practice would be based on existing industry and regulatory minimum standards (such as the BBFC classification system) and require providers to ensure that the safety and wellbeing of children is paramount in the design and delivery of their products and services.
Claire Perry
I promise this will be the last time I speak today. I am afraid I have had a slight change of heart. I tabled this amendment around many points that have been raised today on the difficulty of focusing the BBFC’s efforts on the fact that much of this traffic is not simply going to the larger websites. As we have heard, many other free sites are providing information. However, in reading my amendment, I have decided that it is almost a vote of no confidence in the BBFC’s ability to be flexible and I would therefore like to withdraw it.
Louise Haigh
New clause 12 would give the power to the age verification regulator to introduce another code of practice—the Opposition are very fond of them—for internet content providers. [Interruption.] And reviews, we are very fond of reviews.
We have made it clear throughout that we want enforcement to be as tough as possible and for all loopholes to be closed, but we also want to ensure that children are as safe in the online world as they are offline. There absolutely needs to be that parity of protection. That is one reason why we are disappointed, as I mentioned, that these measures came forward in a Digital Economy Bill, where it was incredibly difficult to look at the issues of child protection online in a thoroughly comprehensive way.
The new clause proposes that the regulator should work with industry to create a statutory code of practice, based on BBFC guidelines for rating films and the principles of the ICT Coalition for Children Online. The code would establish a set of minimum standards that would apply consistently to social networks, internet service providers, mobile telecommunication companies and other communication providers that provide the space and content where children interact online.
This is not intended to be an aggressive, regulatory process. We envisage that it will be the beginning of a much broader debate and conversation between regulators and content providers about just how we keep our children safe on the web. This debate will encompass not only ideas such as panic buttons, but education about the online world, which must run in parallel for any process to be effective.
A statutory code would work with providers to lay out how content is managed on a service and ensure that clear and transparent processes are in place to make it easy both for children and parents to report problematic content. It would also set out what providers should do to develop effective safeguarding policies—a process that the National Society for the Prevention of Cruelty to Children has supported.
As I said, this will clearly be a staged process. We envisage that in order to be effective, the development of a code of practice must involve industry, child protection organisations such as the NSPCC and, crucially, the children and families who use online services. But this code of practice would be based on existing industry and regulatory minimum standards and would require providers to ensure that the safety and wellbeing of children is paramount in the design and delivery of their products and services. The new clause would also empower the Secretary of State to make regulations to ensure effective enforcement of the minimum standards in the code of practice.
The online world can be an enormously positive force for good for our children and young people. It makes available a scale of information unimaginable before the internet existed and there is compelling evidence that that constant processing of information will lead to the most informed generation of children the world has known, but it needs to be made safe to realise that potential. The new clause would give assurance to Opposition Members that we will enable that to happen.
Matt Hancock
I am grateful to my hon. Friend the Member for Devizes for saying that she will not press her amendment and for what she said about the BBFC. Anybody reading the transcript of this debate will see the universal support for the BBFC and its work.
On the point about statutory guidance, through the UK Council for Child Internet Safety we have made guidance available to providers of social media and interactive services to encourage businesses to think about safety by design and help make platforms safer for children and young people under the age of 18. The amendment would make something similar into statutory guidance. I see where the hon. Lady is coming from, but the scale and scope of the internet makes this an unprecedented challenge. Some of the biggest sites have over 2 billion visits per year and UK audiences make up a very large proportion of those. It would be very difficult to have statutory guidance that would be policeable in any complete way. Rather than statutory guidance that could not be dealt with properly, it is better to have non-statutory guidance that we encourage people to follow.
Louise Haigh
On that point, does the Minister share my concern about the levels of discontent among those children who are trying to report online through social media? Some 26% received absolutely no response at all and of those that did receive a response, only 16% were satisfied. What more can we do to strengthen that?
Matt Hancock
I do recognise that. My point is that making non-statutory guidance statutory will not help in that space, but there is clearly much more to do. I hope that, with that assurance, my hon. Friend the Member for Devizes will withdraw the amendment.
Claire Perry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
This is a very curious clause, which renders much of the well-informed—as the Minister said—and useful discussion that we have had today about enforcement, targeting smaller providers and restricting access across the web, completely and utterly redundant. If the clause as I read it goes forward unamended, it will provide the regulator with the ability to target only the largest providers of online pornography, perhaps even limiting its ability to target only them.
As we have discussed at length, this is an incredibly difficult area to police, which I appreciate. It is obviously going to be far easier to tackle the 50 largest providers, not least because I assume many of them are already providing some level of age verification and are probably more at the responsible end of online pornography content providers. I would remind the Committee of the Conservative party’s manifesto, which said:
“we will stop children’s exposure to harmful sexualised content online, by requiring age verification for access to all sites containing pornographic material”.
That does not make any reference to commercial providers or whether the provider has a large or small turnover, is on WordPress, Tumblr, Twitter, Facebook or Snapchat. Today’s debate has very much suggested that the role of the regulator will be to focus on those sites that are operated on a commercial basis. Given the Minister’s reluctance to implement internet service provider blocking, I do not believe that the manifesto commitment will be achieved.
Kevin Brennan
My hon. Friend is making a very interesting point. The clause refers to
“a large number of persons”
and
“a large amount of turnover”.
“A large number of persons” might be 1,000; it might be 1 million. Has there been any indication from the Government of what they mean by that?
Louise Haigh
As far as I am aware, we have had no indication from the Government at all. It would be very interesting to hear the Minister’s comments on that and on why the clause exists at all.
The Minister has been saying at length that he does not want to be too prescriptive to the regulator, but he is putting into primary legislation that the BBFC will be able to target, first and foremost, the larger providers and those that are more easy to target. I would imagine that a regulator in any regulatory system would go after the bigger and less problematic providers before those that are more difficult to tackle—no reasonable person would expect anything different. I find this confusing: why should the provision be in primary legislation, given the Minister’s overtures about not being too prescriptive and giving sufficient flexibility?
Matt Hancock
I hope I can provide some assurances to the perfectly reasonable questions from the hon. Lady. The clause is not an attempt to wriggle out of our manifesto commitment. We will deliver our manifesto commitment in full, and the Bill does that.
The clause provides discretion for the regulator to exercise its functions in a targeted way. It is needed so that the regulator does not break its statutory duties if it goes after the big providers first. As it set out in evidence, the regulator wants to go for the big providers first, and then move on to the smaller and then move on to the next. I want to allow for that to happen, so we need a clause such as this.
Thangam Debbonaire
If I am not mistaken, the Minister just said “in a targeted way”. I fail to understand how phrases such as “a large number” or “a large amount” are in any way targeted.
Matt Hancock
The clause gives discretion to the regulator. If the regulator went after the big porn sites first, it would not have the vires to distinguish and go after those who do the most harm earliest. It is important that it has the ability to make the legislation work in practice.
Kevin Brennan
That sounds pretty thin. It is almost like saying that the police would be acting in an ultra vires manner if they did not go after murderers ahead of shoplifters in terms of devoting their resources to their duties. Is that really the reason why this provision is in the Bill? If it is, it is a novel innovation by the Minister that is not often seen in legislation setting up a service.
Matt Hancock
As I have just mentioned in the discussion on the previous clause, some of the biggest sites on the internet have more than 2 billion visits a year. As the hon. Member for Sheffield, Heeley said, many sites are involved. Allowing discretion for a targeted approach is important. The clause also allows the regulator to
“carry out, commission or support…research…for the purposes of exercising, or considering whether to exercise”
the powers. That is important, too, because we want the regulator to have the power to conduct research to inform its views. Both those things are important parts of the execution of age verification.
Louise Haigh
The Minister said just now that the clause will stop the BBFC—we are to assume that it will become the age verification regulator—from being in breach of its statutory duties if it goes after the largest pornography providers first. Putting aside the analogy that my hon. Friend the Member for Cardiff West made, which was absolutely right, is it not the case that the age verification regulator does not have many statutory duties? That was the whole purpose behind the amendments of the hon. Member for Devizes. The regulator is required only to—well, it is not required to; it may—give notice to any payment services or ancillary service provider. I fail to see how targeting any content provider first, last or in any other way would put the regulator in breach of any requirement under the Bill.
Matt Hancock
I want to make it clear that it can target in order to work as effectively and as soon as it can. I am slightly surprised to find Opposition Members against that principle.
Claire Perry
Part of my reason for withdrawing my amendment was that I was encouraged by the word “principally” on line 35 of this page. It is not a restriction; the regulator certainly has the power under the clause to go after it. My issue is that there is a worry, although not with this regulator, that success will be defined by the number of websites or the number of enforcement notices issued. It is not about the number of websites; it is about the number of eyeballs going to them, so it is absolutely right that the regulator focuses on larger sites first. The wording of the Bill allows the regulator discretion to go after any site.
Matt Hancock
On the basis that I agree with that explanation also, I commend the clause to the Committee.
Question put, That the clause stand part of the Bill.
Matt Hancock
I will speak to the clause, just in case we have an unexpected hiccup. Clause 24 sets out requirements to apply where the regulator wishes to seek information or send a notice of infringement to an infringing website, payment services provider or ancillary service provider. The designation is to do so by post or email. We will work with the BBFC in its new role to ensure that the system is effective. Due to the nature of the sector, of course there will be times when notices are not seen or purposefully ignored. In the case of unco-operative non-compliant sites, the clause will allow us to disrupt their business regardless through the withdrawal of supporting services by payment and ancillary providers. I commend the clause to the Committee.
Clause 24 accordingly ordered to stand part of the Bill.
Clause 25 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Digital Economy Bill (Seventh sitting)
Tuesday 25th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 25 October 2016 - (25 Oct 2016)
Kevin Brennan (Cardiff West) (Lab)
I beg to move amendment 92, in clause 26, page 26, line 18, leave out
“, or will expose the owner of the copyright to the risk of loss.”
This amendment and amendment 93 is a probing amendment to explore the impact of Clause 26 on account holders.
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in clause 26, page 26, line 35, leave out
“, or expose the owner of the rights to the risk of loss.”
See amendment 92.
New clause 3—Power to provide for a code of practice related to copyright infringement—
“(1) The Secretary of State may by regulations make provision for a search engine to be required to adopt a code of practice concerning copyright infringement that complies with criteria specified in the regulations.
(2) The regulations may provide that if a search engine fails to adopt such a code of practice, any code of practice that is approved for the purposes of that search engine by the Secretary of State, or by a person designated by the Secretary of State, has effect as a code of practice adopted by the search engine.
(3) The Secretary of State may by regulations make provision—
(a) for the investigation and determination of disputes about a search engine’s compliance with its code of practice,
(b) for the appointment of a regulator to review and report to the Secretary of State on—
(i) the codes of practice adopted by search engines, and
(ii) compliance with the codes of practice;
(c) for the consequences of a failure by a specified search engine to adopt or comply with a code of practice including financial penalties or other sanctions.
(4) Regulations made under this section—
(a) may make provision that applies only in respect of search engines of a particular description, or only in respect of activities of a particular description;
(b) may make incidental, supplementary or consequential provision;
(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”
This would amend the Bill to present an opportunity for the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites. There is an absence of a specific provision in the Bill to achieve this.
New clause 33—Pre-loaded IPTV boxes—
“(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In section 107(1)(d)(ii) after “offers” insert “, advertises”.
(3) After section 107(1)(d)(iv) insert—
(v) installs, maintains or replaces, or
(ii) otherwise promotes by means of commercial communications, or”
(4) In section 107(1)(e) after “article” insert “, device, product or component”.
(5) In section 107(1)(e) after “work” insert “or which is, and which he knows or has reason to believe is, primarily designed, produced, adapted or otherwise used in a manner described in this section whether alone or in conjunction with another article, device, product, component, or service supplied by or with the knowledge of the same person for the purpose of enabling or facilitating the infringement of copyright”.”
This new clause allows the Government to fulfil its commitment in the IPO’s Enforcement Strategy to ensure that UK business and rights holders have the necessary legal means to protect their IP. It brings in language to cover the supply of IPTV boxes clearly being marketed or sold for the purpose of enabling or facilitating copyright infringement, recognising that many devices may not, themselves, infringe copyright, but are supplied in conjunction with information which enables users to infringe copyright.
Kevin Brennan
Good morning, Mr Streeter. We now move to part 4 of the Bill. May I say first that it is a pleasure to serve under your chairmanship? I thank you and Mr Stringer for all the work that you have done so far in helping us to get through and scrutinise the Bill.
New clause 33 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. Although she is not in her place at the moment, I am sure that the rest of the Committee would want to join me in congratulating her on her efforts so far as a first-time Front Bencher. I only hope that I can come close to matching her assiduous scrutiny of—[Hon. Members: “Here she is!”] Right on cue, she makes an entrance so that I can complete my compliments for her efforts so far on our behalf and on behalf of the whole Committee in scrutinising the Bill.
New clause 3 is in the name of the hon. Member for Selby and Ainsty, but we have added our names to it because we think it a very good one. I hope that we can have a substantial debate about it this morning, because there are some real issues that we need to discuss.
This is quite a chunky clause. Amendments 92 and 93 are probing amendments. We just want to explore with the Minister the meaning of clause 26 and to clarify its implications. I should say at the outset that Opposition Members support the principle that there should not be any distinction between physical and digital copyright infringement, and therefore support the proposal in the clause to equalise the penalties for that kind of infringement.
For the benefit of the Committee, I point out that the penalty for digital copyright infringement will be increased, to equalise it with that for the physical world, from a maximum of two years’ imprisonment to a maximum of 10 years. That makes sense if we are to support the principle of there being no distinction between the two, although in supporting that principle we want to ensure that the penalty is used appropriately. Obviously, we want to hear about that from the Minister in his response.
It could be said that elsewhere in the Bill, because of its unevenness, is the implication that there is some kind of binary between the digital and the non-digital world. That, of course, is not true when we get into the real world. My hon. Friend the Member for Sheffield, Heeley, in her excellent scrutiny of the Bill from the Front Bench, has argued that we should have had a properly thought through digital future Bill, given all the issues in play, and that that would have done away with the false division that tends to exist between the digital economy and the general economy.
Instead, we have a bit of a Christmas tree Bill, on which the Government are hanging various vaguely related issues. That is what is in front of us, so that is what we must scrutinise, but the levelling of the law on copyright infringement is, I think, a partial acknowledgement of the point about the false division between the digital and the non-digital worlds. However, in increasing the penalty as the clause proposes, we must be sure that we do not leave a window cracked open for unscrupulous operators to be able to intimidate and take advantage of consumers, whom I do not believe the Government intend to target in the clause. I do not think that the Minister intends to target consumers, but he will tell us that in his response.
The issue is largely a matter of wording. Whenever we scrutinise legislation, however, we have to make sure that no aspect of the law is left unclear by muddled phrasing, so it would be helpful to the Committee—this is the purpose of our probing amendments—if the Minister explained the distinction made in clause 26 between
“the owner of the copyright”,
in line 18 and
“the owner of the right”
in line 35. What do the Government intend by the distinction?
Christian Matheson (City of Chester) (Lab)
Now we’re listening, Mr Streeter. Does my hon. Friend know what that represents in terms of sales?
Kevin Brennan
I shall stick strictly to the amendment, but I think it is mainly in relation to live performances, rather than through physical or online sales.
The impact of copyright infringement is very difficult to quantify precisely because not every copy of a music track that is illegally shared necessarily represents a lost sale. Nonetheless, the scale of illegal downloading and streaming of music remains significant and it continues to undermine the economic health of the UK’s music industry. The Ofcom Media Tracker survey, average retail prices and academic evidence taken together all suggest that the losses from piracy to the UK recorded music industry are between £150 million and £300 million a year. That is a significant loss of value to the UK economy and legitimate music-related businesses.
Christian Matheson
Do not many of the search engines make their money by prioritising businesses and organisations that have chosen to advertise with them? It is therefore easily within their power to change their algorithms at will to meet the requirements that my hon. Friend suggests.
Kevin Brennan
My hon. Friend is absolutely right: it is within search engines’ ability to change the algorithms. I had always thought that the problem might eventually solve itself, because when advertising is placed next to the results of an online search, the companies whose products and services are being advertised appear next to websites that are run in the shadows, often by criminal networks. Surely reputable businesses with statements of corporate social responsibility would not want their advertisements to appear next to a search that turned up an illegal website run by some gangsters somewhere in Russia. However, it turns out that search engines do not solely or even principally make their money from advertising; it is data that are valuable to them. As one of my hon. Friends said earlier, data are the new oil. It is the data acquired on individuals through search engine practices that are so valuable and that enable companies to put product placement in their advertising and search engines to tailor searches to individual consumers online. Embarrassingly, that fact once resulted in a Conservative Member criticising a quote of mine on the Labour party website because the advertising content that appeared next to it was to do with dating a certain type of person. The Member in question subsequently found out that the advert had been placed there not because the Labour party was short of money but because that advert was tailored to his personal search activities. Members should beware when making such criticisms.
My hon. Friend the Member for City of Chester is absolutely right that it is perfectly within search engines’ power to solve this problem. Some efforts have been made by Google, and they worked for a short time, but a search engine search for widely available music by some of the most popular artists in the UK will still return a lot of illegal results. The hon. Member for Selby and Ainsty may wish to cover that point in his remarks, so I will not go into further detail, but BPI research certainly indicates that.
The voluntary approach is not working. We have seen this movie before; we have downloaded it many times, and it always has the same inconclusive ending. New clause 3 would provide it with an ending to match one of the best last lines in the movies, which is “Shut up and deal.” Any offers from Government Members? It is from Billy Wilder’s great film “The Apartment”; Shirley MacLaine says it. The new clause would enable the Government to say to the search engines, “Shut up and deal,” because there is no incentive for search engines to do so at the moment. We are being helpful to the Minister, as is his colleague. We are trying to put a bit of lead in his pencil, and he should welcome this cross-party effort to ensure that progress is made.
One further point: I have a sneaky feeling that the Minister actually agrees with the new clause, although he will not agree with it today, and will want to make this change to the Bill but to do so in the House of Lords. If my prediction is wrong, I will take it back in due course. The only thing that I would say is that it does not do this House’s reputation any good when Governments behave that way. I accept completely that all Governments do it: they know that they want to make a concession on a Bill, but they decide to do it in the House of Lords rather than the Commons. Ultimately, although we hear all the talk about the House of Lords being such a wonderful revising Chamber, the Government should accept once or twice that hon. Members, including those of their own party, come up with amendments that are perfectly sensible and should be incorporated into a Bill. It would help the reputation of this House if the Government were prepared to behave in that manner.
One fundamental aim of the e-commerce directive was to identify clearly which practices fall within and outside safe harbour defences. Part of the legislation— article 16, to be specific—encourages member states and the Commission to draw up a code of conduct at community or national level. However, no such code of conduct has ever been drawn up due to resistance by the search engines. They should not be allowed to avoid parts of legislation at the expense of UK creative industries just because they find it inconvenient. The new clause would end the wasting of Ministers’ time in chairing meetings that go nowhere, the repetitive process of rights holders producing proposals and the practice of search engines consistently refusing to comply to combat piracy, thus ensuring that the digital economy continues to benefit both the UK creative industries and the British public.
New clause 33 is the last amendment in the group. Last month, the Government released their annual intellectual property crime report. Some of the trends are quite startling: they reported 33% more illegal TV programming downloads in March to May 2015 than in the same period in 2013—a rise from 12 million to 16 million. The report highlights as a major concern the proliferation of internet protocol TV, or IPTV as it is known, which offers viewers increasingly easy access to pirated digital content. Technological changes have led to exponential growth in this new form of piracy. Android-based IPTV boxes are being loaded with software linking thousands of streams of infringing entertainment, movie and sport content. The boxes are sold on mainstream marketplaces such as Amazon and eBay, and through Facebook.
The Copyright, Designs and Patents Act 1988 has yet to be updated to reflect the new technology. It offers no effective remedies to copyright owners, who at present can rely only on laws that are not particularly tailored to copyright infringement. The new clause would help prosecute those who pre-load and distribute such devices and make it easier to work with online marketplaces to remove listings by wholesalers of such products.
Nigel Adams (Selby and Ainsty) (Con)
I rise to speak to new clause 3. It is a pleasure to follow the hon. Gentleman, who knows an immense deal about this area, having been a huge recipient of earnings from rights over the past few years. I am not entirely sure whether all that income was derived from him buying presents for his family, but it is great to see that we genuinely do have talented musicians in this place.
The new clause would create a power that allowed the Secretary of State to consider introducing a code of practice between search engines and rights holders on copyright infringement, which we have heard about. This power could be used only in the absence of a voluntary code between the two parties; it would not automatically create new legislation. Instead, as has been said, it acts as a backstop power if all other attempts to get an agreement between the producers of creative content and those who facilitate access to infringing material fail.
According to the latest estimates from the Department for Culture, Media and Sport, the UK creative industries amount to £87.4 billion in gross value added, and have an export value of £19.8 billion. These are incredibly large sums. Industries such as the music sector contribute immensely to those figures. Last year, five of the top 10 biggest selling artists in the world were British. One in six albums sold globally is from a UK artist. Those are staggering figures, and they demonstrate the appetite for UK music content here and abroad. According to “Measuring Music”, a report developed by UK Music, the industry body, the sector grew by 17% over the past four years and is worth £4.1 billion to the UK economy; it generates exports of £2.2 billion.
Although the UK creative industries are much in demand, copyright infringement remains a significant challenge. It not only has negative economic consequences for our businesses and industries by driving consumers to illegal markets, but seriously undermines the respect for, and value placed on, the creativity and effort that go into producing content—music and films in particular. According to the latest Kantar Media copyright infringement tracker, commissioned by the Intellectual Property Office, 78 million music tracks were accessed illegally between March and May 2016. The same research indicated that 20% of internet users participated in some form of illegal music activity online during that short period. These are very worrying figures, and they remind us that despite the growth in access to legal streaming sites, such as Spotify for music and Netflix for films, piracy remains a significant problem that needs to be tackled.
If we are to ensure a prospering commercial market for UK music that benefits rights holders and creators, it is essential that the main method of discovering music and artists directs consumers to legitimate sources. Search engines are one of the key means by which consumers discover music and artists. However, the prevalence of search results linking to infringing content, particularly on the first few pages of a generated search result, as we heard from the hon. Member for Cardiff West, indicates that more needs to be done. Furthermore, search engines incorporate auto-complete functions that can provide access to terms associated with the discovery of illegal content even before an internet user has finished typing their search terms.
For example, I am sure that you, Mr Streeter, are aware of the artist James Arthur, who was at No. 1 with “Say You Won’t Let Go” until he was knocked off the top spot, as I am sure you are aware, by Little Mix, which caused great excitement in the Adams household. When searching on Google, all I need to do is type in “James Arthur say y”, and I am given an option of clicking “James Arthur ‘Say You Won't Let Go’ download”. This takes me to a series of search results, and the only legitimate link allowing me to access that track legally is at the bottom of the page. It is not acceptable that search engines allow such ease of access to infringing content.
Some searches involve wading through several pages of results before getting to the first legal site. That is clearly wrong. The effectiveness of Google making changes to its algorithms—an infringement solution that that particular search engine advocates—remains to be seen. In reply to a written parliamentary question that I tabled on 2 September, the Government admitted on 26 September that it is “not possible to say exactly how” an algorithm change “equates to changes in infringement”. In response to a separate question, they said that it was “not…possible to analyse the…effectiveness” of measures to decrease auto-complete suggestions that provide access to stream ripping and other illegal converter technologies via search results.
In the 12 months up to September 2015, the British Phonographic Industry—the representative body for the recorded music industry, which does much vital work in the pursuit of anti-piracy measures—submitted almost 66.5 million infringing URLs to search engines for removal from search results. The ability of search engines to link to legitimate websites should be straightforward. For example, pro-music.org identifies legal online services. The site identifies that the UK has over 50 legitimate music websites—28 download, 19 subscription and 14 supported through ad services.
Creating a legitimate marketplace increases industry’s capacity for growth and supports overall economic wellbeing. Consumers also stand to benefit from higher-quality search results, clear signposting to legal content, and reduced exposure to malware, viruses, and other types of deceptive advertising. Studies demonstrate that these risks to internet security are sadly prevalent on infringing sites.
Dealing with copyright infringement requires co-operation; the problem can be addressed through positive initiatives. We have seen success in website blocking and, as we have heard from the hon. Member for Cardiff West, from the “Get it Right from a Genuine Site” campaign. UK Music developed an app, aimed at young people, called Music Inc. in partnership with Aardman Animation and the IPO. It raises awareness by simulating the mechanics of the music industry and showing the impact of copyright infringement on business decision making. The app has attracted over 600,000 users since its launch. We have also seen positive results from activities by advertisers and payment providers, and from the work of the police intellectual property crime unit to take advertising and payment services away from illegal sites.
Recognising the challenges, the Government have facilitated a round-table process so that rights holders, industry bodies such as the BPI, and representatives from search engines can discuss the problems of copyright infringement. This process has yet to result in agreement on how infringing content should be tackled. Rights holders are trying to negotiate a voluntary code of practice. We must take this opportunity to ensure that that happens. A code of practice for search engines would result in the reduced prominence of known infringing websites in search results, through demotion and delisting. Search engines already use such practices with regard to a range of illegal activities. The demotion of illegitimate websites would be attractive, in that verified artist websites would benefit in the same way that licensed retail stores do. This is because they will be promoted in the rankings at the expense of infringing sites.
Nigel Huddleston (Mid Worcestershire) (Con)
Is my hon. Friend aware that rankings are vital? For some search terms, up to 90% of clicks can come from the top three results. Certainly more than 90% of people do not look past page 1, so being at the top is vital to clicks and activity.
Nigel Adams
My hon. Friend speaks with great knowledge on the subject. That is absolutely vital. Consumers searching are not necessarily aware of which sites are legal and which sites are not, so being in the top few search results is crucial. Much more needs to be done to ensure that genuine sites are recognised when people use search engines.
A code of practice should recognise that its scope includes legitimate artists’ websites where appropriate. The Bill presents an opportunity for the Government to fulfil their manifesto commitment to reduce copyright infringement and ensure that search engines do not link to the worst offending sites. At this stage, there is no specific provision in the Bill to achieve that. Although it is not my intention to push the new clause to a vote, I am keen to hear the Minister’s response, and his ideas about how to ensure that its intentions are delivered.
The Chair
It may help the Committee to know that we will not reach votes on new clauses today; that will come at the end of our proceedings, in case anyone is getting terribly excited.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I am sure that the Minister will be glad to hear that I will not be quite as thorough, because everything has been covered already. He was looking somewhat exasperated. I do not know what he was googling; “How to make this Bill go quicker”, perhaps.
Christian Matheson
Does the hon. Gentleman not agree that one way to make the Bill go quicker would have been for the Minister not to have tabled so many Government amendments?
Calum Kerr
That is an excellent point. I think that the ambition is to make the amendment paper longer than the Bill. If the Bill is a Christmas tree, the baubles must be hollow, with a little note inside saying “IOU a lot more detail, or an apology.” It has made my first Bill Committee an interesting experience.
Of course we support clause 26 and the spirit behind it. It is important that copyright be protected. Our creative industries in these isles are a huge success story, and they should be fully supported. The hon. Member for Cardiff West gave a thorough and excellent overview of the issues; I know that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) was delighted to hear that he was on the Bill Committee, as the subject is close to his heart. I would hazard a guess that he has made more than £10.60 from his past efforts. Before I come to the substance of what the hon. Member for Selby and Ainsty said, I put on record my appreciation and admiration for his contribution last Friday. That day showed the worst and best of democracy in this place, and he was part of the best.
On the new clauses, I have been sitting here messaging my staff asking, “Why didn’t we add my name to these?”. We need to learn how things operate a bit better. We fully support the amendments. New clause 3 is an essential addition. As the hon. Member for Cardiff West said, I am sure that the Government will add something at some point, because that is a logical step to take. As has been outlined in some detail, there are millions of sites flagged to the search engines by the relevant bodies. It is not as though they have to go and find them themselves; it is the process by which the search engines do or do not take the sites down that needs to be brought into sharp focus. Clearly, there are efforts at a voluntary approach, but this is the perfect opportunity to put into legislation something that might drive the right outcome and behaviour without the need for follow-through. Past experience supports that idea. We must see some movement in that area.
We support new clause 33 on IPTV boxes. It is necessary to move with the times. This Christmas tree of a Bill has a lot of aspects to do with the broader digital economy, but people will continue to innovate and find new ways of delivering content, and IPTV is one example. Someone in this place recommended an IPTV box to me for my London flat because it is quite a cheap way of accessing content, but I did not follow that advice because I would not want to access any illegal content. These boxes come pre-loaded, and there should be no pretence about it: they are designed to give people a way of avoiding paying for content that they know they should pay for. There is no excuse for that. New clauses 33 and 3 are essential additions to the Bill, and we are delighted to support them both.
Rishi Sunak (Richmond (Yorks)) (Con)
New clause 3 is about protecting content owners from copyright infringement. Most of the discussion we have heard today has centred on online platforms and their particular abuse of music content. However, has the Minister considered the connected issue of the newspaper industry? Historically, newspapers used revenue from advertising to help support their news-gathering operation, and to provide a vital service, especially in regional and local communities—I am sure that Members on both sides of the Committee will have experienced that service in their constituencies. Today, there is a concern that some online platforms are benefiting from such news-gathering, but are not always paying for it in the most appropriate way. That raises questions about the sustainability of the newspaper industry and the vital service it provides. Has the Minister considered the connected issue of newspapers? Will he share any thoughts with the Committee?
Thangam Debbonaire (Bristol West) (Lab)
I rise to speak in support of these amendments and new clauses, and to add a bit of colour and flavour to some of the arguments that have already been made. We often talk about rights holders, but we need to be aware that behind those rights holders are individual artists, musicians and technical people. It is not just about my hon. Friend the Member for Cardiff West; it is about the technical people involved in any recording, film or e-book. Many people are involved in those processes, and every time we deny their right to be paid, we are denying them the right to continue working in the way that we would want them to work.
Which of us here has not skipped gaily around the Palace of Westminster, at least in our imagination, with a song in our heart or a tune in our head? Maybe that is just me. Most of us have a favourite film, and we have music at special family occasions. A poem will be read at a funeral and a song will be danced to at a wedding, and all the people involved in producing them need to be paid properly for their work.
There should not be this wild west of a shopping mall where people can access whatever they want for free, without proper provision for reimbursing those involved. Unfortunately, search engines in particular, but also other providers, are allowing that illegal shopping mall to exist, and so artists, writers and others involved in the creative industries are not getting their proper deserts. That is important.
The hon. Member for Selby and Ainsty and my hon. Friend the Member for Cardiff West both mentioned economic value. I emphasise that according to the Government’s own website, the creative industries are contributing £9.6 million an hour to the UK economy. Since we sat down to work, the creative industries have contributed £9.6 million. UK music alone contributes £4.1 billion each year, which is something to think about. The creative industries are growing at twice the rate of the UK economy, at 8.9%, and we want them to continue to grow. We do not want to deny them part of their income—admittedly the minority, but it is still significant.
We tabled these amendments because we need to harmonise copyright and ensure that licensing laws work across the online and offline world. We want to help Conservative Members to fulfil their commitment in the Tory party manifesto, and new clause 3 would help
“the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites.”
We seem to have a degree of cross-party unity on the value of that measure. I look forward to hearing what the Minister has to say, because there is otherwise an absence of a specific provision in the Bill to achieve this.
I want us to make sure that the good examples, such as Get it Right from a Genuine Site, are taken up and followed, to avoid the unfortunate misdemeanours of others, such as search engines that can remain nameless—we can all guess who they are and others may have already mentioned them. It is not okay for search engines to drive—wittingly or unwittingly, but they should reasonably have known—towards illegal sites.
Consumers do not want musicians, film makers and others to be robbed of their just deserts. Mostly, we want to be able to be sure that when musicians have made a piece of music we love, they get properly paid for it. It is incumbent on search engines and others to make sure that that happens, and to use the power we know they have to create their algorithms to work properly in this respect. We would not tolerate a shopping mall in which signs and property space were given to illegal shops selling illegal goods. This is the equivalent.
I am absolutely convinced that the Minister would want to honour the commitment in the Tory party manifesto to rectify that. On Second Reading, the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale) said,
“there may well be a case for including a legal provision encouraging providers to establish a voluntary code.”
He also said:
“we cannot allow Google and other search providers to go on allowing people access to illegal sites.” —[Official Report, 13 September 2007; Vol. 614, c. 785.]
I am convinced that the Minister will want to take up the mantle he has been thrown by the former Secretary of State and I urge him to do so.
The Minister for Digital and Culture (Matt Hancock)
What a pleasure it is finally to stand to respond to the long interventions and speeches from Labour Members. It is a joy to hear that at least some of them understand and believe in property rights. Conservative Members certainly do.
The discussion has turned into a debate not only on amendments 92 and 93 and new clauses 3 and 33 but essentially on clause stand part. I therefore hope that Committee members will understand if I explain the whole clause in my response.
Kevin Brennan
The Minister is seeking to chair the Committee now as well as being the Minister.
Matt Hancock
It is a team effort.
The amendments are to clause 26, which increases the maximum sentence for online copyright infringement from two to 10 years, which is equal to the sentence for physical copyright infringement. The case for this has been made powerfully by Government and Opposition Members and it is an important change. Whether online or offline or a combination of the two, copyright infringement is IP theft and it is right that the maximum sentence is the same.
This sends a clear message that copyright infringement of either kind will not be tolerated and affirms that creators who produce the content that we all enjoy are valued. Furthermore, enforcement agencies will now have proportionate sanctions to tackle this serious criminality, whether offline or online.
We recognise that the maximum sentence of 10 years, even if only for the most serious cases, must be carefully targeted. Consequently, clause 26 also makes changes to the existing offence of online copyright infringement to make it clearer when that offence is committed and who should be considered liable. The amendments speak to some of those points.
The concept of prejudicial effect in the existing legislation will be replaced with a requirement that the infringer intends to make a monetary gain for themselves or knows or has reason to believe their actions will expose the rights holder to a loss or risk of loss in money. I will come to the debate around definition of that in more detail.
The point of this clarification is to act as a safeguard to ensure that the increased maximum penalty is applied only to serious criminals who deserve it and will not apply to those who share material accidently or without knowledge of the consequences.
Turning to the points made by the hon. Member for Cardiff West, or at least the ones that were pertinent—
Kevin Brennan
On a point of order, Mr Streeter. Am I right in saying that as the Chair of the Committee, had I made any points that were not pertinent, you would have ruled me out of order?
The Chair
I can certainly confirm that you were in order all the way through your comprehensive speech.
Matt Hancock
Undoubtedly in order and sometimes very broad ranging. A person who accidentally shares a single file without the appropriate licence, particularly when the copyright owner cannot demonstrate any loss or risk of loss, is not expected to be caught by this offence. I hope that gives the hon. Gentleman assurance on that point. However, of course, criminal infringement will be dealt with on a case-by-case basis and a court must be satisfied beyond reasonable doubt that all elements of the offence have been made out.
Kevin Brennan
We are getting to the crux of the matter: the words the Minister uses are very important. All joking and jibing aside, which he enjoys, there is a serious reason for laying these matters firmly on the record in Committee—that is our serious purpose here and our constitutional role. He said, “is not expected to be caught by this offence”. I fear that that is not really strong enough in response to my points. We need to understand whether it is possible for individual consumers to be captured by it. If so, the Minister should tell the Committee.
Matt Hancock
As I said, it is for the courts to decide about criminal infringement on a case-by-case basis, but I am making clear that that is unlikely and not the expected outcome in the case of a person who accidentally shares a single file without the appropriate licence. The reason I do not go further and make it absolute is to ensure that the court can make a fair judgment on this, rather than be bound. I want to go further, because there is another important point here about the impact of this on activities that are currently lawful. We do not expect things that are currently lawful to be caught by this change. This is a change in the scope of the sentence rather than in the definition of the offence. I want to make that very clear.
On the second point that the hon. Member for Cardiff West made about the legal distinction between “owners of copyright” and “owners of the rights”, “owners of copyright” relates to the offence of communicating to the public, whereas “owners of the rights” relates to the performer’s right of making available. This is a legal distinction: they are two separate offences but there is no substantive difference in the meaning of the two. The reason has to do with the legal drafting of the offence rather than the lay understanding of the meaning of the two.
The hon. Gentleman also raised the issue of trolls. I want to be clear that while we understand that some people may receive threatening letters from so-called trolls, we are not aware of any successful court case by these so-called trolls in this area. We do not endorse such aggressive tactics and we understand that this tactic is not widespread, but we will keep it under review.
Going more broadly into the debate that we have just enjoyed, since 2002, when the maximum custodial sentence for copyright infringement was changed, this has clearly been wrong. I am glad that there is all-party agreement on the change to 10 years, but in addition to increasing the maximum sentence, we have recast the relevant offences to include an additional element to the offences, which must be proved before an offence is made out, namely that the infringer intends to make a monetary gain for themselves or another person, or knows or has reason to believe that their actions will cause loss to the rights holder or a risk of loss in money. Amendments 92 and 93 would remove this additional element, but there are several reasons why it should be retained. We should remember that serious incidents of online copyright infringement or infringement of a performer’s making available right already fall within the scope of criminal law, as I mentioned.
It is right that the courts should be able to apply serious sanctions where they are warranted and apply the equivalent sanction to that available for physical copyright infringement, but it is our view that it is important to include the words, “risk of loss” to capture cases where the loss has not yet materialised. We believe that these same scenarios would fall within the current drafting of the offences, which relies on the prejudicial effect, but we have tightened the notion of prejudicial effect following consultation, to be more precise and targeted in the wording being examined today. I hope that satisfies the understandable request by the hon. Member for Cardiff West for clarity to be put on the record as to the intent of clause 26.
I now wish to turn to new clause 3 on search engines. We had a serious debate on the impact of search engines. We come from a position of being strong believers in the protection of property rights, and we want to ensure that the UK retains one of the best IP regimes in the world. Without content, there is no IP to protect, so I pay tribute to the BPI’s work: to support take-downs and to make the eloquent case for stronger IP protection. I also pay tribute to Get it Right from a Genuine Site, which does important work in making sure that culturally it is unreasonable—and seen as unreasonable—to take IP without paying for it.
I turn to my hon. Friend the Member for Richmond (Yorks) who made an important point on newspaper articles that appear in search engines. We support fair remuneration and we encourage content providers and online platforms to work together on this. This is an issue that has been raised with me directly, and it is pertinent to the debate. We want to encourage investment in new content, and we support returns for investigative journalism and other kinds of journalism, and I hope we come to a resolution on fair remuneration between content providers and online platforms, in the first instance. However, my hon. Friend’s intervention is noted.
In relation to clause 3, as the Committee knows from the discussion, the Minister for Intellectual Property, Baroness Neville-Rolfe, has been working closely with search engines and representatives of the creative industries. We are fulfilling our manifesto commitment to ensure that there is a fair return, and the group is currently considering a voluntary code of practice. I agree with the thrust of the arguments made by my hon. Friend the Member for Selby and Ainsty, who put the case strongly. Our intention is for the voluntary negotiations and the voluntary code of practice to come to a successful fruition, and the people involved in those negotiations will doubtless have heard the argument and understood the strength of feeling on this Committee. Given this ongoing work and the existing remedies for removing or blocking infringement content, I hope that hon. Members will agree that now is not the right time for a broad reserve power.
Kevin Brennan
Surely now, when we have a legislative vehicle in front of us that could not have been better designed for this very purpose, is exactly the right time. Committee members would have a right to be annoyed if, in making this broad assertion that now is not the right time, the Minister were subsequently to concede on this point at a later stage in the Bill’s progress, in another place and in an unelected House. Will he tell us truthfully what the Government’s intentions are on this point?
Matt Hancock
I care about the substance of getting this Bill through right. There are, of course, important parts of parliamentary process both here and in the other place. Given that the round-table discussions are ongoing, including a meeting next week, now is not the right time for the broad reserve power.
New clause 33 seeks to expand the criminal liability to include the supply of IPTV boxes for criminal infringement. As hon. Members will understand from the tone of my remarks, as a strong believer in property right protection, I understand the concern. The hon. Member for Cardiff West referred to the Copyright, Designs and Patents Act 1988 and the fact that the Minister for Intellectual Property had committed to making sure that we looked at this, and we have done so. This activity is already covered by criminal law under the Fraud Act 2006 and the Serious Crime Act 2015. The City of London police force is investigating cases. It seized over 500 set-top boxes earlier this year and arrested a man for fraud and IP offences.
There is a danger in the digital world of legislating for a specific technology as opposed to legislating for the offence in a technology-neutral way. I strongly prefer the latter. As the law is already in existence in the two Acts that I mentioned, the best thing to do is to prosecute under the existing Acts, rather than try to chase a particular technology, which may well be out of date. Our strategy for tackling IP crime includes a specific commitment to developing an understanding of the challenges posed by IPTV. We now need an approach that tackles the problem, rather than just current IPTV set top-box technology, which will no doubt be superseded in due course by future technologies. The existing criminal offences provide a legislative framework that is broad enough to protect our creative industries. However, I will of course keep this area under review.
I hope Members have been reassured of the work we are doing to make sure we apply the existing criminal law and make sure that intellectual property is protected. I concur with all the remarks made by Committee members about the importance of the creative industries, the importance of supporting content providers and the importance of intellectual property. I hope that with these explanations, the hon. Member for Cardiff West will feel able to withdraw the amendment.
The Chair
Before I call Mr Brennan, it may help the Committee to know that it is not my intention to allow a wider debate on clause 26. We have had a good old canter around the course.
Kevin Brennan
Thank you, Mr Streeter, for letting us know your decision—not influenced at all, I am sure, by the efforts of the Minister to chair the Committee as well as leading for the Government. I will take into account in my response that you are including clause stand part in this part of our debate.
I made it clear at the outset that amendments 92 and 93 were probing amendments and I am very grateful for Minister’s explanation of the meaning and intention of the wording. As I have made clear, it is not our intention to push the amendments to a Division, but I think we need to cogitate a little further before Report and the latter stages of the Bill and perform a more careful exegesis of what the Minister said when he used the phrase “not expected”.
Matt Hancock
I can go yet further on that. The reason this is rightly done on a case-by-case basis is that we are talking about an existing offence. It is important to remember that. We are not making something illegitimate which is currently legitimate; we are adding to what is required to make out an offence. We are not making something that is currently legitimate now illegitimate. That is why it is reasonable to proceed on that basis, with the language that I used.
Kevin Brennan
I am grateful for the further clarification and for the Minister engaging in the discussion. We will think further about what he has said. I think it has been a very helpful exploration of the issue. I am not sure that he is right when he receives advice that the trolling issue is not widespread, which was the phrase he used. Obviously we can dig into that a bit further as we progress with scrutinising the Bill, but I welcome the fact that he said he would keep that under review. This is a very real issue and the fact that there may not be many prosecutions around it is often related to the fact that such activity is not necessarily illegal—the point I made in my contribution. Nevertheless, it can bring great distress to vulnerable individuals. We all know that the issue of vulnerable individuals being targeted by unscrupulous individuals, organisations and networks online is growing.
Matt Hancock
The challenge, though, is to ensure that reasonable protection of intellectual property is not ruled out by stopping any such speculative activity. There is a genuine policy challenge in how to support the protection of intellectual property. We are not aware of any successful legal cases by the trolls. People should therefore be reassured.
Kevin Brennan
Quite the opposite, actually. The fact that there have not been any successful legal cases indicates that people are being very successfully scammed out of money because they are too afraid to resist the trolls who come to them saying, “You have infringed copyright.” The fact that there have not been legal cases should be a cause for concern, not complacency. The Minister might like to give that further consideration.
As we have made clear, our intention with the amendments is absolutely to support the protection of those whose intellectual property has been infringed. That is our aim, but as ever there is a balance to be struck. We want to ensure that the most vulnerable in society are not easily targeted by unscrupulous people using the fact that members of serious criminal networks engaged in copyright infringement can go to prison for 10 years under clause 26 to frighten them. Those vulnerable people may not always completely understand the law around intellectual property when they are online, and they could get a notice that could scare them into parting with some of their money. Such cases are a real problem across society in general, and this is just one area of these activities. We should be aware of the problem and be concerned about it. We should not be complacent.
As I have outlined, it is extremely unlikely that any such cases will come to court, because the people claiming that copyright infringement may have taken place are not interested in taking anyone to court. They are only interested in sending out enough notices to get a small number of people to respond and hand over their cash.
It is the same as when scammers send out millions of text messages and phone calls saying that a relative is stranded in some other country and asking for money to be sent immediately. They may say, “We have a wonderful investment that you should participate in,” or, “You as an elderly person should put your money into something, because then you can provide for your children and grandchildren. It’s a sure thing.” All those sorts of activities have become much more prevalent because of the internet, and this issue around copyright infringement is just one area of that. That is the point we are making.
I urge the Minister to go away with his officials, to think a bit more about this issue and to consider how we might be able to reduce the possibility of it becoming an even bigger problem in the future, with the 10-year sentence being used to frighten people even more than they are already being frightened by these scammers and so-called trolls.
Obviously we will not be voting on new clause 3 at this point, because that always happens at the end of Committee proceedings, as you rightly reminded us, Mr Streeter. The hon. Member for Selby and Ainsty made it clear that it is not his intention to divide the Committee on his new clause when we reach that stage, but I say to the Minister that saying simply that it is not the right time for such a measure is not good enough as a response to the range of serious issues raised by Members of all parties.
Thangam Debbonaire
I wish to ask the Minister whether he will give us some idea of the criteria by which he will assess when the right time is. I have no way of knowing for sure when that will be without an understanding of his reasoning and the reasons there might be for changing his mind in future.
Kevin Brennan
Obviously I cannot speak for the Minister, but he is free to say something after I have sat down. He is free to intervene now if he wants to clarify that point for my hon. Friend. It would be helpful if he did so, because I think this is exactly the right time for the measure. That is the purpose of new clause 3 and the thinking behind it. The talks have been going nowhere. As I have said, we have seen the movie several times before, and we know how it ends.
Christian Matheson
My hon. Friend makes a good point: talks are going nowhere. Would an indication from the Minister that there is an intention to bring the proposals forward into legislation perhaps aid those talks in going somewhere?
Kevin Brennan
In a nutshell, that is the reason for new clause 3, and I am sure that was exactly the thinking of the hon. Member for Selby and Ainsty when he tabled it.
It might help if the Minister indicated when he expects the talks to conclude. He says he hopes there will be a positive outcome to them and that this is not the right time for new clause 3. He likes to talk softly; if new clause 3 were incorporated into the Bill, he could carry a big stick while talking softly about this matter. If he is not prepared to amend the Bill, perhaps he could tell the Committee when he believes the talks should conclude, as that would help to focus minds a bit. Perhaps he could put it on record that he is not happy to allow the talks to drift on and on inconclusively, as they have for many years.
We are not satisfied with the Minister’s response on new clause 3, and I repeat that it is my belief that at some point during the progress of the Bill the Government will concede on that point. It would be a terrible shame if they did not concede to the hon. Member for Selby and Ainsty—one of their own elected Members here in the Commons, who has tabled a sensible amendment—but did so in another place, giving the credit, yet again, to the unelected House for being a wonderful House in revising legislation. There is plenty of expertise right here in the Committee and in this House, among elected Members who know about the subject and know that this is the right thing to do. I urge the Minister to change his mind about new clause 3, if not now, perhaps on Report, when we will no doubt return to the issue.
Finally, I hope it is helpful to you, Mr Streeter, to be aware that it is not my intention to divide the Committee on new clause 33. As for the Minister’s response, I think I referred to the shortcomings of the current offence. I did not say we did not think that people could currently be prosecuted, under the Fraud Act 2006 or the Serious Crime Act 2015; in fact, I specifically mentioned those Acts—it might have been while the Minister was searching for something online. I also mentioned why the Acts were inadequate, and the Minister did not respond. First, they require a great deal of expertise in the area on the part of the police, which is not necessarily a resource that is sufficient to meet the growing size of the problem. Secondly, by amending the Copyright, Designs and Patents Act 1988, my new clause would have not just allowed but compelled trading standards to get involved and would have allowed the body to take action.
It would be useful to hear from the Minister why he does not think it a good idea that trading standards should be brought into play in that way, rather than simply relying on a police force that is under pressure and has many things to investigate—an ever-growing problem. Is it the Government’s position that is it wrong that trading standards would be the right body to involve? It would be extremely useful if the Minister felt able to clarify that. He said that he would keep the matter under review. I welcome that, and I hope he will be able to tell us more about the issue at a later stage, but if he told us at this stage why trading standards is not the right body to involve, that would be helpful.
We have had a fairly comprehensive debate. I do not think I need to add much on clause stand part, apart from that the latest data, published by the IPO, demonstrate the need for Government action. The research found that 15% of internet users—6.7 million people—still access copyright-infringing content, so it is absolutely right that the Government should act. I hope that the Minister feels able to add a bit more, in light of what I have said.
Matt Hancock
Very briefly, I mentioned that one of the meetings in the negotiations with search engines is next week. We expect the meetings to conclude over the next few weeks, and that is why the timing is appropriate.
Kevin Brennan
Perhaps I am speaking against what I said earlier, but if the Government do not give way on that point and the talks conclude unsatisfactorily before Christmas, while the Bill is still before Parliament, will they consider amending the Bill at a later stage?
Matt Hancock
I do not want to get into answering conditionals that are dependent on some future action. I have made the case for why now is not the right time and I have given the hon. Gentleman the timeframe over which discussions are taking place.
The hon. Gentleman made the case against new clause 33 very well. These are criminal activities, and it is the police’s role to police them. There are increased resources for the police in this area and I look forward to their taking it on. Our principle is not to legislate for specific offences based on an individual technology when offences already exist that can be used to prosecute the illegal activity.
For instance, many IP TV boxes are sold without any software on them; some have it inbuilt and some do not, and the ones that do not can be used for legitimate and illegitimate purposes. It is far better to have an in principle criminal measure on the statute book and to prosecute with that. Everybody can see the united strength of purpose to ensure that such IP theft does not go unpunished.
Calum Kerr
I thank the Minister for his explanation. I know that he and the Government are not fans of amendments that would oblige them to do a report to see how they are doing in the area. However, is there a way of looking at it on an ongoing basis, so that progress can be monitored and we can see how many prosecutions are actually occurring under the current legislation?
Matt Hancock
That would be an excellent idea, if the Culture, Media and Sport Committee chose to take it up. That is what Select Committees are for; I know the hon. Gentleman does not like them, but I think they are excellent at scrutinising the Government and everything that is going on. With that response, I ask the hon. Member for Cardiff West to withdraw his amendment.
Kevin Brennan
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 ordered to stand part of the Bill.
Clause 27
Registered designs: infringement: marking product with internet link
Question proposed, That the clause stand part of the Bill.
Kevin Brennan
I hope that we can dispose of clause 27 more briefly than clause 26; I am sure we will, because it does not contain such controversial matters. By including an internet link in the ways in which a designer can indicate to consumers that their design is registered, clause 27 will remove the excuse that a potential or actual infringer did not know that a design had been registered. Like clause 26, it will do away with the false binary in law between online and offline by offering a digital means of checking design right protection. As I understand it, in addition to or instead of including the design registration number on the product itself or on the product packaging, the designer may include details of or a specific link to a website, with the important caveat that that website must be available at no cost to the visitor and must clearly associate the product with the number of the design. That ought to make it easier for designers to update and communicate design registration and other information about the rights associated with products without constantly having to change their packaging or their products. That will, in turn, make registering design cheaper for the designer.
Matt Hancock
First, that was an extremely good and unusually succinct description of the clause. The hon. Gentleman asked about costs; we think that it will reduce costs to business. In terms of the current problems, physically changing the required registration details on products imposes a cost. For instance, some businesses produce labels that must be applied to every single product. Such costs are unnecessary if a single label or web address can be built into the design and the update can then be done digitally rather than physically. It is, after all, illegal to claim that a product is registered when it is not. Therefore, the changes are required by law, and it is far cheaper for everybody if they are made on a website that is referenced on the physical product, rather than on labels, or sometimes labels stuck over labels. I am glad that there is cross-party understanding of and agreement on the clause, and I commend it to the Committee.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Copyright etc where broadcast retransmitted by cable
Nigel Adams
I beg to move amendment 63, in clause 28, page 27, line 31, leave out subsections (3) to (5).
This amendment, together with Amendment 64, are probing amendments to identify a timeframe for the repeal of section 73 of the Copyright, Design and Patents Act 1988 as it is not clear when the repeal will come into force. The amendments would mean that repeal of section 73 of the CPDA would come into force as soon as the Bill receives Royal Assent.
The Chair
With this it will be convenient to discuss the following: amendment 189, in clause 28, page 27, line 36, at end insert—
‘(6) The Secretary of State shall—
(a) produce a report on the implication of the repeal of section 73 of the Copyright, Designs and Patent Act 1988, and
(b) undertake a comprehensive consultation on the future of television content distribution and public service broadcasters.”
Amendment 64, in clause 82, page 80, line 2, at end insert—
“(a) section 28;”
This amendment, together with Amendment 63, are probing amendments to identify a timeframe for the repeal of section 73 of the Copyright, Design and Patents Act 1988 as it is not clear when the repeal will come into force. The amendments would mean that repeal of section 73 of the CPDA would come into force as soon as the Bill receives Royal Assent.
Amendment 94, in clause 82, page 80, line 14, at end insert—
“(h) section 28.”
This amendment would mean that repeal of section 73 of the Copyright Designs and Patents Act of 1988 would come into force two months after the Royal Assent of the Bill.
Nigel Adams
These are probing amendments to clauses 82 and 28 in order to establish a timeframe for enacting the provisions in clause 28, which repeals section 73 of the Copyright, Designs and Patents Act 1988. I warmly welcome those provisions, but from the clause as it stands, it is not quite clear when we can expect this important measure to come into force. The amendments would mean, instead, that repeal of section 73 of the 1988 Act would come into force as soon as Royal Assent is granted. That would involve consequential amendments to clause 28 to delete subsections (3) to (5), as Royal Assent would remove the need for them. Otherwise, in the Bill as drafted and as stipulated in clause 82, clause 28 would come into force on whatever day the Secretary of State appoints in regulations made by statutory instrument, which could mean further delay.
As I pointed out on Second Reading, online service providers such as TVCatchup use section 73 to make money from public service broadcaster channels by re-transmitting their content while selling their own advertising around it. That undermines the public service broadcasters’ own online streaming services and on-demand catch-up services, affecting the audience, advertising and sponsorship revenue of commercial PSBs. Furthermore, none of that money is being paid to the public service broadcasters, the underlying talents and the rights holders, and none is flowing back into original UK content production.
I have an important film studio in my constituency, so I take this issue very seriously. We want to see more great productions, such as “Victoria”, which was filmed largely at Church Fenton in my patch. The UK television sector is at the heart of the UK creative industries. It is a vibrant and dynamic sector, providing outstanding world-class content that is the envy of the world. Such programmes are also hugely popular internationally, and the UK is the second-largest exporter of TV in the world as a result. It is therefore vital that we do all we can to help protect investment in the programmes that viewers around the world love. For those reasons, it is important that the provisions in clause 28 to repeal section 73 of the 1988 Act are enacted as soon as possible.
The PSBs first wrote to the Intellectual Property Office asking for a repeal of section 73 eight years ago; since then they have spent a lot of time and money in litigation. Meanwhile, TVCatchup has made millions on the back of the PSB content. The only reliable way to stop that exploitation and ensure that people who make and own the programmes that viewers love gain a return on their investment is to repeal section 73. The public service broadcasters have been in litigation with TVCatchup for many years, and until section 73 is repealed those parasitic websites will be able to profit from the PSB content without any of the payment going back to the public service broadcasters.
Section 73 also allows cable platforms to profit from PSBs that invest in content, which means that the PSBs are effectively subsidising global cable giants. It prevents the commercial PSBs from negotiating with cable platforms for their PSB channels. In a normal situation, they would be able to negotiate freely, as they do for their digital channels such as ITV2 and E4, but section 73 currently prevents that.
Cable platforms make money out of PSB content while still benefiting from a regulatory regime designed for a different era, under which no payments go back to the PSB or any other holders of rights to the content.
Christian Matheson
The hon. Gentleman talks about a different era. Does he think that it was right to introduce section 73 at the time, because it allowed cable platforms to develop, but that things have moved on quite a bit since then?
Nigel Adams
The hon. Gentleman is yet again spot on. It clearly is of its time. The idea was to try to help a nascent cable industry, and the legislation has done that; we have a healthy TV industry across all broadcast platforms, including cable and satellite. That legislation has done its job.
On pay TV platforms, such as Virgin and Sky, up to 50% of some of our most valuable content, such as drama, is viewed via subscription personal video recorder, from which the pay TV platforms derive substantial benefit. That undermines the commercial PSBs’ ability to secure a return from advertising, because much of their advertising is skipped, and materially reduces as critical opportunities to generate secondary revenue—for instance, from on-demand services or box sets—because libraries of valuable drama content can be built up for free on the PVR. I therefore urge the Government to ensure that repeal of section 73 is delivered at the earliest opportunity. That would mean that those who wish to re-transmit or otherwise use PSB services in the future will have to negotiate to do so, which seems only fair. They should be able to negotiate within the must-offer regime in the Communications Act 2003. That would enable those who create the content to make a return on their investment and continue to make the programmes that viewers love, which are the envy of the world.
There has been extensive consultation on the issue so there is no need for further delay. I will therefore be very grateful if my right hon. Friend the Minister can provide more detail on the timeframe for the repeal of section 73 of the 1988 Act, as included in clause 28.
Kevin Brennan
I rise to speak to our amendments 189 and 94. I note the well-informed and cogent points made by the hon. Member for Selby and Ainsty, and I understand why the Government want to repeal section 73 of the Copyright, Designs and Patents Act 1988, as he laid out. Clearly apps such as TVCatchup cannot be allowed to profit from public service broadcasting content without making any sort of contribution to its creation, either by paying for it or in some other way; without agreeing some kind of licence for its use; and without abiding by public service broadcasting standards for its distribution. It is entirely logical to repeal the section and we support the intention to prevent TVCatchup from doing what it does, but the Government need to explain the knock-on effects on the market.
Calum Kerr
The SNP also supports and welcomes the repeal of the section 73 of the 1988 Act. I agree with supporting original drama, but I wonder about how Virgin in particular is affected, because Virgin is also rolling out broadband and helping the Government in their other targets. Perhaps the Minister can assure us that that has been considered and that pricing will not prohibit meeting other Government objectives.
Kevin Brennan
I am sure the Minister has heard what the hon. Gentleman said and will want to address it in his response. The hon. Gentleman is quite right to point out that Virgin in particular will be affected.
The Government’s reform is well meaning, but they need to explain how it will not put further pressure on the public service broadcasting compact. They need to answer questions about their long-term plans for television distribution and how this part of the Bill affects that. Public service broadcasters exist for a reason, as an intervention in the market and as part of public policy. We need to ensure that they do not accidentally drift out of existence or into insignificance, and we need to know the Government’s intentions.
In their response to the consultation on the repeal of section 73, the Government said that they do not expect or want to see charges from public service broadcasters to cable operators for their main channel content. If that is so, I ask the Minister in a genuine spirit of inquiry whether there is an argument for the Government to make it clear in legislation that they do not want to see such charges, because at least some of the public service broadcasters do not share that view. None of us believes that a dispute between a major public service broadcaster such as ITV and a major TV platform such as Virgin is in the viewer’s interest.
The amendments are intended to explore whether the Government are sure that they are not risking those viewers ultimately having to pay more than they should for what should be a free public service broadcast. What is the Government’s view on the risk that those viewers could lose that service, at least for a period of time, if a major dispute of that kind arose as a result of the repeal?
Digital Economy Bill (Eighth sitting)
Tuesday 25th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 25 October 2016 - (25 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 189, in clause 28, page 27, line 36, at end insert—
‘(6) The Secretary of State shall—
(a) produce a report on the implication of the repeal of section 73 of the Copyright, Designs and Patent Act 1988, and
(b) undertake a comprehensive consultation on the future of television content distribution and public service broadcasters.”
Amendment 64, in clause 82, page 80, line 2, at end insert—
“(a) section 28;”
This amendment, together with Amendment 63, are probing amendments to identify a timeframe for the repeal of section 73 of the Copyright, Design and Patents Act 1988 as it is not clear when the repeal will come into force. The amendments would mean that repeal of section 73 of the CPDA would come into force as soon as the Bill receives Royal Assent.
Amendment 94, in clause 82, page 80, line 14, at end insert—
“(h) section 28.”
This amendment would mean that repeal of section 73 of the Copyright Designs and Patents Act of 1988 would come into force two months after the Royal Assent of the Bill.
Kevin Brennan (Cardiff West) (Lab)
I thank the Minister for his warm acclamation of support for my continuing. As he will be aware, any huffing and puffing may influence how long I speak, but perhaps not in the way he hopes. It is a great pleasure to see you back chairing our proceedings this afternoon, Mr Streeter, having done so ably this morning without needing to heed any of the unsolicited advice from the Minister on how to chair a Committee. You did an absolutely superb job, and everyone on the Committee thanks you for that.
When stumps were pulled this morning, we were discussing amendment 189. To remind the Committee, that amendment calls on the Secretary of State to
“produce a report on the implication of the repeal of section 73 of the Copyright, Designs and Patent Act 1988, and…undertake a comprehensive consultation on the future of television content distribution and public service broadcasters.”
We feel that the repeal of section 73 has big potential implications, and we need to know what the Government’s strategic thinking amounts to on those issues. I was talking about how things were 30 years ago with public service broadcasters. They were reserved access to valuable spectrum and given prominence on that spectrum. That created a valuable and well-funded monopoly, whether that was advertising revenue for ITV or money from the licence fee for the BBC. We were going to discuss how every aspect of that original deal is undergoing rapid change, and that is why our amendment is important.
Spectrum is more valuable than ever. In 2015, Ofcom acknowledged that if the spectrum that public service broadcasters use was priced commercially, it would be out of reach for PSBs. Then again, other distribution methods are evolving rapidly. It is perfectly possible to imagine a day when spectrum is not used for direct TV broadcast at all, and that day might not be as far in the future as we might think.
We know that the prominence of public service broadcasters is coming under enormous pressure. Recent moves by Sky have made it very hard to find live TV or public service broadcast content at all, and that is potentially a serious assault on the public service broadcasting compact. Prominence enables scale, and scale has been the commercial and policy basis of our public service broadcasters from the start. It makes them economic and makes the notion of public service broadcasters tangible, so that they are not just widely available, but widely watched. We will return to that topic in our consideration of the next group of amendments, but it is relevant to any report that might be produced through the amendment.
Public service broadcasters are no longer the cash cow monopolies that they arguably once were. We have been in a multi-channel world for a long time, but on-demand viewing is accelerating that change even further. Public service broadcasters are not just competing for viewers with commercial channels, but with different offers from such organisations as Netflix, Amazon and YouTube and from other options, such as gaming. Netflix now outspends the BBC on original content development. It is a significant player in the original content market.
To be clear, I am not necessarily echoing what the Prime Minister said in her speech to the Conservative party conference. She seemed to be trying to channel Sam Cooke by saying, “Change is coming”, many times during her speech, but plenty already has changed, and the pace of that change is accelerating. The Government need to face up to this, and that is why we are suggesting that they should hold a proper review of the interconnected issues of distribution, carriage, content creation, prominence and funding before developing and pursuing a clear and fair strategy for television distribution in general, and public service broadcasting distribution specifically. That is what this amendment seeks to achieve. Without that proper vision for how our public sector service broadcasters will operate in a fast-changing, multi-distribution, multi-channel, globalising world, we worry that not only will they not thrive as public service broadcasters, but that ultimately they may not survive. As I said earlier, we should not allow that to happen, and we certainly should not allow it to happen by accident.
The Minister must make it clear that he wants public service broadcasters to survive. I believe that he does, but he also has to make the Government’s strategy clear in the light of this rapidly changing, complex world. It is to be hoped that he can partly do that in response to the amendments, as well as laying out his views on our suggestion of producing a comprehensive report on the subject.
We are also discussing amendment 94, which is a probing amendment that is intended to tease out a timeline for the repeal of section 73. It relates a little to the amendment that the hon. Member for Selby and Ainsty moved earlier in that it has a similar purpose. We just want to find out what the Government’s thinking is. Our amendment differs from his in that it states that the repeal should come into effect two months after Royal Assent, whereas his amendment states that it should come in immediately after Royal Assent. We will not press amendment 94 to a vote, but we want to hear the Minister’s thoughts and plans in relation to it.
Nigel Adams (Selby and Ainsty) (Con)
The hon. Gentleman may well cover this in his further remarks, but I would be delighted to hear his view on why there should be a two-month delay after Royal Assent.
Kevin Brennan
The hon. Gentleman is right to probe me on that. The truth of the matter is that there is a convenient clause to which we could add our amendments, which starts things two months after Royal Assent. As I said, amendment 94 is a probing amendment and I am sure the Minister will tell us all the reasons why it is technically defective. I will not push it to a vote so I am prepared to hear that, but we want to use it as a method of finding out the Government’s position.
Section 73 was originally introduced to encourage the roll-out of cable and to help a fledgling platform compete against terrestrial television by ensuring that cable platforms had access to public service broadcasting content. The Government have agreed that this policy objective was met some time ago, and in July reported that they were
“satisfied that the objective of ensuring that PSB services (as well as other TV services) are available throughout the UK has been met, and therefore section 73 is no longer required to achieve that objective.”
Subsection (3) states:
“The Secretary of State may by regulations make transitional, transitory or saving provision in connection with the coming into force of this section.”
Inasmuch as this generally means that the state will repeal section 73 when it sees fit, there are concerns among some public service broadcasters about understanding more clearly the Government’s intentions in relation to the timetable for that repeal. It would not be such a pressing issue were section 73 merely a harmless hangover and simply moribund. However, as we have heard, it is more than a legal anachronism. It is a loophole through which taxpayers’ money is effectively funnelled into private businesses.
As we have heard, section 73 allows companies, such as TVCatchup and FilmOn, to live stream the content of public service broadcasters and other channels online without permission. In other words, the money the public pay through their licence fee pays for content that is then, in effect, given away for free to companies other than public service broadcasters. Those companies then monetise that public service broadcasting content by placing their own advertising around it.
Public service broadcasters are granted public funding and the other advantages we have talked about on the understanding that, in exchange, they are obliged to air content that works for the public’s benefit, rather than solely for the benefit of commercial interests. Section 73, in effect, allows TVCatchup and FilmOn to benefit from that same public funding, but those companies are clearly not held to the same standards. That amounts not only to the taxpayer unwittingly subsidising those businesses, it effectively directs funds away from PSBs and impacts on their ability to generate legitimate commercial revenues and to reinvest in the wider creative economy. Those live-streaming sites increase public service broadcaster reliance on public money and can fuel a vicious cycle of under-funding.
There is cross-party agreement that that is wrong and has to be put right, which is what the Government are seeking to do, but why do we have to rely on the Secretary of State to
“make transitional, transitory or saving provisions”
for repealing section 73? Is it not the case that broadcasters and the public deserve a more explicit timeframe, for the reasons I have laid out, so that this does not persist for any more time than is absolutely necessary? Not only is that fair, but it would provide more certainty for public service broadcasters and ensure that their investment in UK content is protected. Amendments 63 and 64, which the hon. Member for Selby and Ainsty tabled, would mean the repeal of section 73 immediately after Royal Assent, which offers one way forward. Our probing amendments offer another alternative if the Government need more time.
Public service broadcasters first wrote to the Intellectual Property Office to ask for the repeal of section 73 in 2008. In the meantime, TVCatchup has obviously made millions on the back of PSB content and the European Commission has launched infraction proceedings against the UK Government, on the basis that section 73 denies public service broadcasters their intellectual property rights for their content, which is guaranteed under the 2001 copyright directive. It would also be helpful to know from the Minister how he believes that infraction proceeding plays into our discussion on the amendment, the repeal of section 73, and what role it has to play if the Bill indeed repeals section 73. In short, will the Minister explain why he is not offering a clear timetable for repeal in the Bill?
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I feel that I should thank you for your chairmanship, Mr Streeter; I feel a bit left out, given that the Opposition spokesperson did it. Thank you so much for your chairmanship. It is nice to see a smile at the top table.
I will add a couple of brief points. I am surprised the hon. Member for Cardiff West earned only £10.60. I thought he displayed some creativity. I have never heard so many song lyrics or titles; I do not know if he is on commission for that. Hopefully, journalists across the country are googling—that is appropriate, given what we are discussing today—for what content he has earned £10.60, so that number may go up.
The Minister for Digital and Culture (Matt Hancock)
Other search engines are available.
Calum Kerr
Indeed—I thank the Minister. There is an interesting point here about the importance of parity across channels. The Scottish National party is clear in supporting the repeal of section 73. The hon. Member for Cardiff West made a point about the many different ways in which people can access content, which he articulated well, and the importance of being consciously competent across all areas when making legislative change. I am interested in hearing the Minister’s remarks on that.
We noted earlier the concerns specifically in relation to Virgin as a large cable company, but I want to put on the record very clearly that we absolutely support the Government in repealing section 73. As these models change and people access content in different ways, the ability for them to earn revenue from the content they produce becomes all the more important, because they cannot necessarily rely on its being consumed in a way that ensures that advertising revenues naturally flow. I emphasise that we support this, we welcome the Government’s bringing it forward but we would like a bit more clarity from the Minister around the broader picture.
Matt Hancock
I am delighted to respond to these points. I take this opportunity to commend the Opposition Front Benchers and, in particular, the hon. Member for Sheffield, Heeley, for how she proved, earlier in Committee, how it is possible to put points with great clarity and precision, such that on Thursday we rose early—somehow that seems unlikely today.
Matt Hancock
No. The Government are committed to repealing section 73 of the Copyright, Designs and Patents Act 1988, following public consultation which ended this year and concluded that section 73 is no longer relevant. Amendments 63, 64 and 94 seek to ensure that the repeal will be brought into force rapidly following Royal Assent and amendment 189 would provide for the Government to produce a report on the implications and a consultation on the future of television content distribution and public service broadcasters. I should say that after today’s Committee session I think that my hon. Friend the Member for Selby and Ainsty will be known as “the IP king”. He has been the most ardent defender of intellectual property and its protection and he made very strong arguments.
On the case for a report and a consultation, Opposition Front Benchers asked the Government to face up to the challenges of new technology and its impact on public sector broadcasting and more broadly, and it is absolutely true that there is a huge impact of technology, both in distribution methods and in software, in terms of how we are watching content. Indeed, I understand that in China more films are watched on a hand-held than on a fixed device, and the trend is in the same direction here. This is clearly a very big issue and I am glad that all members of the Committee are alive to it.
I would say, though, that in response to amendment 189, we did just hold a public consultation precisely on the balance of payments between television platforms and the public sector broadcasters which considered the regulatory framework. It considered these questions and came forward with the proposal to repeal section 73. So I gently say to Opposition Front Benchers that, although I can see the point of the amendment, the report that they seek and the consultation that they are asking for by way of what I accept is a probing amendment is what we delivered through that consultation earlier in the year. The changes that we are seeking to make in legislation are a conclusion of exactly the sort of consultation that they have been looking for. The consultation was published on 5 July. I am glad that its conclusions have cross-party support.
We strongly support public service broadcasting in the UK. We believe that it has a long, vital and sustainable future and we will ensure that it does. I cannot give a clearer commitment to public service broadcasting. Even through these changes in technology, the evidence on viewer habits shows that public service broadcasting remains valued and valuable, and we support it.
I turn to some of the detailed questions. I was asked about the TPS regulatory regime. That was also considered as part of the consultation. We decided that different regulatory regimes are still appropriate, given the differing technical requirements of different TV platforms. There is a big change: an amalgamation of different delivery platforms for broadcasting from the old cable, terrestrial and satellite, and increasingly things are moving to broadband and fibre.
Following our discussion last week, I note that today TalkTalk has announced a full roll-out of full fibre to the whole of York, so there is progress in the full fibre drive that we are looking for in this country. However, there remain different technologies, so we think that it is still appropriate to have different regulatory regimes for them, although clearly the interoperability between them is important. I hope that that explanation addresses the point.
Kevin Brennan
Does the Minister have any concerns, or did the review reveal any concerns, about the point that I made about the opaqueness of the kind of deal now done under the TPS regime? That makes it impossible to judge whether it is truly fairer to public service broadcasters.
Matt Hancock
I will come to that and answer it alongside the question about the impact of removing section 73 where there are must-offer obligations. In truth, there are a huge number of commercial deals between the public service broadcasters and those that carry the PSB content to a wider distribution network. Whether it is through the TPS regime or the regime that we are discussing, many PSB broadcasters have contractual arrangements for their non-PSB content. That happens perfectly reasonably, whether it is through that regulatory regime or through a non-PSB deal delivered using non-satellite transmission.
We do not expect PSB content to be withdrawn because of the existence of contractual arrangements for PSB content replacing section 73. Indeed, there are contractual arrangements for lots of non-PSB content, so I do not see why those contracts cannot be entered into, but the issue does lead to the question whether there should be a transitional regime to ensure that there is no interregnum.
In the event of a PSB and a platform failing to agree terms for the carriage of a service, it is for Ofcom to consider whether the proposal of the PSB was compliant with the must-offer obligations in its licence. Were Ofcom to conclude that it was not, it would expect the PSB to submit a revised offer to the platform. Until now, Ofcom has not had to intervene, because no disputes have arisen presenting any real risk of refusal to supply by PSBs or to carry by platform operators.
The timing question was raised by my hon. Friend the Member for Selby and Ainsty and by the Opposition. The consultation report included an assessment of the implications of repealing section 73, and there was recognition of the potential impacts on the underlying rights market, meaning that the Government have decided that a further technical consultation should be run by the Intellectual Property Office.
I assure the Committee that the Government have every intention of bringing into force the repeal of section 73 rapidly; we plan to do it before the start of summer recess 2017. Repealing section 73 immediately could impact rights that have previously been exempt from remuneration in relation to the underlying copyright content in cable retransmissions, such as those held by scriptwriters or musicians whose intellectual property forms part of the relevant broadcast content. Our approach is to ensure an orderly transition.
Some respondents to the original consultation said that there could be disputes between the cable platform and the underlying rights holders when trying to agree terms and that a transitional period may be helpful. The Intellectual Property Office is currently running a brief technical consultation, as has been mentioned, to examine the extent of those issues and to assess whether any transitional measures are required.
I do not want to prejudice the outcome of the consultation, but in terms of whether a transitional period would be required, the IPO’s consultation seeks views on options ranging from no transitional period to a transitional period of up to two years following Royal Assent. Even if the full transitional period is decided on as a result of that consultation, and assuming that the Bill receives Royal Assent in spring 2017, we expect the repeal of section 73 to come fully into force by spring 2019 at the latest.
Kevin Brennan
The Minister talked about bringing the repeal into force rapidly before the summer recess in 2017, and then issued further caveats and talked about 2019. Will he clarify that for the Committee?
Matt Hancock
Yes. We will bring the repeal into force before the start of the summer recess in 2017. There may then be a transitional period, depending on the current IPO consultation, but the maximum transitional period, should there be one, will be two years. I added two years on to the summer recess of 2017 to get to what the Government call spring 2019—it will probably be the warmer end of spring.
Nigel Adams
Will the Minister give some indication of the potential timescale of the IPO’s technical consultation?
Matt Hancock
It is a four-week consultation and it started yesterday, so it has three weeks and six days to run, if my maths are right.
Kevin Brennan
I am grateful to the Minister for clarifying that timetable as he envisages it. In addition to that, during the course of my remarks I talked about the possibility of a dispute arising between a public service broadcaster and a platform following the repeal of section 73. What is the Minister’s view on how that sort of dispute could be resolved without consumers being affected?
Matt Hancock
That could easily be resolved by a contractual agreement, as the two parties in such cases have in many other examples. For example, Channel 4 has a PSB element and non-PSB channels. The non-PSB channels are not covered by section 73, so the PSB element of Channel 4’s broadcasting will be in a similar position to its non-PSB element in future. Since those contractual arrangements exist between the parties covered by section 73, I see no reason why they cannot pretty quickly put in place similar contractual arrangements, not least because the decision to repeal section 73 was taken some months ago and the companies have had some time to prepare.
The final point raised was about the impact of the repeal on Virgin Media’s broadband roll-out. I see absolutely no link between the two. I am delighted that Virgin Media is looking at a broader, full-fibre roll-out, in the same way that TalkTalk has announced further progress today. Nobody at Virgin Media has raised this link with me, and given that Virgin Media is owned by one of the most well-capitalised companies in the world, I cannot see any crossover between the two—and I think it is disingenuous to suggest there is. With that, I hope hon. Members will withdraw the amendments so we can proceed.
Kevin Brennan
As I made clear, it is not our intention to put our amendments to a vote at this stage. The debate was extremely interesting, important and useful, despite the Minister’s seeming resentment of having debates that go into the detail of the Bill and despite his remarks about rising early. He should be careful about making such remarks, given that he was late for the first sitting of the Committee.
There is an important issue at stake here: in our proceedings, the Government get their way because they have a majority, but the Opposition have their say. That is the constitutional principle on which we are all here and it is the role that we play. The Minister’s continual grumpiness about that is not helping his cause. I thought it was a useful debate that has revealed and drawn out more clearly some of the Government’s thinking on the timetabling of the repeal of section 73. We are not going to put our amendments to a vote at this stage, but these are matters we might revisit later.
Nigel Adams
I very much enjoyed all the contributions, which were incredibly complete, informed and eloquent.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
With this it will be convenient to discuss the following:
New clause 14—Digital broadcasting and protection of listed sporting events—
‘Within 12 months of this Act coming into force, the Secretary of State shall commission an evaluation of the impact of developments in digital broadcasting on the protection of listed sporting events for public service broadcasters, and shall lay the report of the evaluation before each House of Parliament.’
New clause 17—PSB prominence—
‘(1) The Communications Act 2003 is amended as follows.
(2) At the end of section 310(1) add “that satisfy the qualification criteria to be set by OFCOM in the code.”
(3) In section 310(2) leave out “OFCOM consider appropriate” and insert “required by OFCOM”.
(4) In section 310(4)(a) after “programmes” insert “, including on-demand programme services,”.
(5) In section 310(5)(a) after “service” insert “, including on-demand programme service,”.
(6) In section 310(8)(a) after “services” insert “, including on-demand programme services,”.
(7) In section 310(8)(b) after “services” insert “, including on-demand programme services.’
This new clause would modernise the PSB prominence regime – as recommended by Ofcom in its 2015 PSB Review. Provisions in the Communications Act 2003 currently only apply to traditional public service TV channels on traditional TV channel menus (‘EPGs’). This proposal would extend the law to on-demand services such as catch-up TV and to the connected TV on-demand menus where such services are found.
Kevin Brennan
We are dealing with this group in a slightly novel way. I will discuss new clauses 14 and 17 and then move on to my clause stand part remarks.
New clause 14 calls on the Government to produce a report exploring the options available for future-proofing the at-risk listed events regime, which helps ensure that sporting events such as the Olympic games remain universally and freely available. The listed events regime has been enormously successful and is popular with the public, but it is undoubtedly currently at risk and could become obsolete unless the Government take action to make sure that that does not occur.
I ask the Minister to consider revising the qualifying criteria to deliver a listed events regime fit for the digital era, which we are discussing in this Bill. Since the 1980s, successive Governments have sought to ensure that TV coverage of certain major sports events remains available to everybody, irrespective of their ability to pay. The UK has an A list, which is designed to preserve live coverage of certain major events on free-to-air television—for example, the Olympic games, the football World Cup, the Grand National and the rugby World Cup final. There is also a B list that does the same for TV highlights—for example, the Six Nations rugby tournament and the Commonwealth games.
The listed events regime helps ensure that events such as the Olympics, the recent European football championships—in which Wales reached the semi-final—and Wimbledon all reach the widest possible audience, delivering enjoyment to millions, inspiring the next generation to get active, creating role models and helping make sport aspirational. In total, 45 million people in the UK watched Rio 2016 and the Euros this summer and more than 10 million people watched Laura Trott and Jason Kenny on BBC television both secure gold medals on the same day at Rio 2016.
The listed events regime strikes a balance between ensuring the public can gain free access to major events and the understandable desire of pay TV operators and sports federations to try and maximise their commercial revenues. Importantly, the regime does not prevent pay TV from acquiring TV rights to listed events; it simply ensures that qualifying services can acquire the free-to-air rights on fair and reasonable terms.
Under the current rules, the benefits of the listed events regime are restricted by statute to channels that are first, free, and secondly, received by at least 95% of the UK population. Those criteria are becoming increasingly outdated as the number of homes giving up their TVs for other media devices begins to rise; the 95% criterion will probably not be met by any TV channel at some stage in the course of this Parliament. It would be interesting to know whether the Minister recognises that that is the case and whether Ministers are thinking about it.
As a result, regulators would have no clear legal basis for discriminating between channels, which would likely lead to listed events being ultimately far less widely available and watched. That shows quite clearly that the qualifying criteria need updating, and there are options for doing that. We are trying to explore those options with our new clause in Committee this afternoon—performing our proper constitutional role, much to the resentment of the Minister.
The BBC prefers the option in which the 95% reception criterion could be updated and replaced with a measure testing whether the channel is widely watched. That would require a qualifying service to have reached at least 90% of the public in the last calendar year. That would ensure that the public continued to have access to these sporting events on channels that are easy for audiences to find and that we know they actually watch in large numbers; that is obviously the intention of the current regime. That measure would be a proxy for factors including free-to-air continuous availability, popularity and audience awareness. The proposed test would be consistent with the spirit of the regime and aligned with wider public benefits such as offering moments of national celebration and inspiring physical activity, as well as being simple to implement and more stable than the current reception test.
Furthermore, such a test would be open to any service that was free at the point of use, committed to maximising access and not tied to any one distribution platform, so it would be more able to incorporate broadband streaming, for example, as counting towards the reach of a service as and when the infrastructure allowed. That would prevent the regime from being manipulated by organisations whose purpose was to maximise the attractiveness and availability of pay TV services by providing nominally free coverage on channels that may meet an availability threshold but of which there is very low awareness.
There are alternatives. It has been suggested that the qualifying criteria might be interpreted differently—I am talking about adding broadband availability towards the 95%. However, some feel that that may involve major risks. The combined coverage of the UK’s commercial digital terrestrial TV multiplex and broadband may well allow services distributed via those means to qualify, yet their geographic coverage would exclude large rural areas. That would particularly be an issue—I say this as a Member representing a constituency in Wales; I am sure that the hon. Member for Berwickshire, Roxburgh and Selkirk, who speaks on behalf of the Scottish National party, will be aware of this—in the nations, where there is often greater difficulty with coverage in large rural areas, but it also applies to parts of rural England and, indeed, Northern Ireland.
Furthermore, broadband will not be able consistently to deliver a guaranteed quality of live streaming to mass audiences for some time to come. The BBC, in particular, feels that including broadband in the criteria implementation would be hard to measure and to implement.
The report proposed in our new clause would be an opportunity to fully explore concerns and the different options available for modernising the listed events regime. As I said, those events are very much valued by, and seem very much to be of benefit to, the public. Four in five people say that listed events are important to society. One in four said that the BBC’s 2012 Olympic coverage inspired them to take part in sport. Wide exposure of free-to-air sport can inspire, create role models and make sport aspirational. Indeed, it can bring the country, and the nations within the UK, together. Public service broadcasters likewise understand the importance of listed events and are committed to making sport freely available to all. Even though public service broadcasters are responsible for only 5% of sports output in the UK, they are responsible for 60% of sports viewing. That is something we would not wish to lose as a country, almost by accident, because of the technological changes that we have been discussing.
The UK has a mixed ecology that balances the public’s free access to major events with the potential for pay TV operators and sports federations to generate commercial revenues. The threat to listed events may radically tilt that balance. Rather than risk the abolition of listed events by the back door, Parliament and the Government should urgently consider revising the qualifying criteria to deliver a regime fit for the digital era. With this amendment, the Digital Economy Bill could be the vehicle to ensure that this happens. I shall be extremely interested in what the Minister has to say about this, and in the Government’s view of this important and much cherished feature of our sports broadcasting ecology. The Minister can feel free to dilate at length when he responds.
New clause 17 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. It proposes modernising the public service broadcasting prominence regime, as recommended by Ofcom, by extending the law to on-demand services and the menus, where they are found. Since PSB prominence was legislated for in the Communications Act 2003, many gaps have emerged. The Act was designed in a markedly different TV landscape, even 13 years ago. It was four years before the introduction of the BBC iPlayer, for example. It was eight years before the digital TV switchover took place, and seven years before the introduction of the iPad. It created public service broadcasting prominence principles for broadcast TV sets, but not for connected TV sets, public service broadcaster channels, or PSB catch-up services, such as BBC iPlayer.
The regime has not kept up well, even with the multichannel world. For example, as I am sure hon. Members with young children will be aware, CBeebies and CBBC are behind 12 US cartoon network channels in the channel listings of the UK’s leading pay platform, Sky. As someone who was brought up on public service children’s television broadcasting—God knows what I would have been like if I had not been—and as a parent, I think that that is a shame, and that the Government should have a view on it.
Kevin Brennan
I am not going to respond; I shall focus on my remarks. My hon. Friend may wish to regale us later with his favourite children’s TV programmes or public service broadcasters.
PSBs now face a far bigger transition to online delivery of TV programmes, and the regulatory regime lags far behind, so we should not miss any opportunity presented by the Bill to do something about this ever-changing situation. A growing number of existing and future services are being left out of scope, from BBC iPlayer to the now online-only youth service BBC 3, and from the new BBC iPlayer Kids, offering access to the best BBC kids’ content, to the upcoming iPlay, which will be a front door to the best British children’s content from any provider. Equally out of scope in the current regime are growing numbers of major gateways to accessing public service broadcaster content. The number of connected television sets in the UK is expected to nearly triple over the course of this Parliament, from 11 million to 29 million.
Calum Kerr
Oh, the curse of a word of praise from the Minister! I thank him none the less.
I support these two excellent new clauses tabled by Labour Members. I was delighted to hear the Minister say in response to the debate on the last clause, “We strongly support public service broadcasting.” Hot on the heels of that, the Opposition have provided him with an opportunity to put his money where his mouth is and show that he truly does. I think—at least, I hope—that we all support public service broadcasting, but there has been a lot of chat in this place about the PSB funding settlement and about it not encroaching on competition. Let us push beyond that to consider how to support public service broadcasters. Let us find a way to ensure that they maintain their place in an adapting world.
I will touch briefly on both clauses. New clause 14, on the review of listed events, is close to my heart. I note that the football World cup is one of them; I do not know whether we can table an amendment to ensure that Scotland has a chance of getting there—
Calum Kerr
I thought so. At least when we eventually get there, we will not expect to win it, unlike others.
Calum Kerr
“We’re on the march with Ally’s Army. We’re going to win the World cup.”
Calum Kerr
I will keep to the subject with a bit of brevity and levity.
I support the Labour move to review this whole area to ensure that we have a set of listed events that is fit for purpose and, more importantly, to ensure that the protection will continue. Likewise, we fully support new clause 17 on prominence. The Committee has spent a lot of time talking about the changing digital landscape. There is no doubt that if we do not introduce measures to protect listings, the public service broadcasters will disappear, slide down the pecking order and be harder to find. We will then be on the slow road to an argument that says that public service broadcasting is not as popular as it once was, but the reality will be that it is just difficult to find.
I conclude by thanking the Labour party for beating me to it with both amendments, to which I should have added my name and which I fully endorse.
Graham Jones
It is a pleasure to serve under your chairmanship for the first time, Mr Streeter. My hon. Friend the Member for Cardiff West encouraged me to talk about children’s programmes—I was thinking about “Play Away”—and I apologise for not being here earlier. I was observing a NATO training exercise as part of the armed forces parliamentary scheme.
I rise to talk about retransmission charges, and I will do so briefly because I am conscious of the time. We obviously have a listening Minister who is deeply concerned about these matters, and I hope he will go away and give due consideration to some of the points that have been raised, perhaps coming back with some thoughts of his own and some changes that could improve the Bill. On retransmission charges, repealing section 73 of the Copyright, Designs and Patents Act 1988—the intellectual property rights element—is important and welcome. It will put Virgin on an equal footing with the public service broadcasters in the marketplace of buying and selling channels.
I will return to that second issue and the financial impact in a moment, but I will first highlight an anomaly. Unless there has been a change in the last few days, the Bill does not include satellite channels, which fall under the Communications Act 2003. The Sky platform is exempt from the Bill and will not be liable for retransmission charges, which seems to be a market anomaly—I stand to be corrected by the Minister. We should have a level playing field for everyone. Sky benefits significantly not only from the five public service broadcast channels but from some of the other channels—my hon. Friend the Member for Cardiff West has just mentioned S4C and Alba, among others—and the radio stations. Sky has a huge commercial advantage in not paying for receiving something that is very complementary to its platform. We are applying a principle to Virgin, and the Bill should treat Sky equally.
We demand a lot from public service broadcasters, particularly the BBC, for which we pay a licence fee, and it is only right that the BBC should be able to recover some of that money for the licence fee payer in the commercial marketplace, rather than the service being literally given away to some platform providers. There is obviously a commercial benefit to the Sky platform or, for that matter, any satellite platform that automatically has to deliver PSBs under the 2003 Act. There ought to be something that provides clarity and a level playing field, because without it, Sky has another advantage among the many it already has.
Graham Jones
Okay. If the Minister has any proposals, can he provide some clarity? There does not appear to be any and there are many people out there raising questions about this.
The guidance seems to suggest there will be no material change to the relationship between Virgin and public sector broadcasters, despite the repeal of section 73 of the 1988 Act, so I look to the Minister for some advice on where we are with that. The Government expect the relationship to be neutral, with no cost transfer. Will the Minister clarify that and confirm that he is not giving with one hand and taking away with another, but is in fact allowing public service broadcasters, such as the BBC licence fee payer, to receive payments for programmes produced by the BBC and the other public service broadcasters?
I want to pick up on the comments made by my hon. Friend the Member for Cardiff West about new clause 17 and perhaps add my own thoughts. The Government have taken their eye off the electronic programme guide. I would ask them to cast their eye back over it, as my hon. Friend suggested. Eleven clicks to S4C is just ridiculous, but we all see now—when people are reminded and it is pointed out to them, they say, “Oh yes, that is true.” Sky has put the electronic programme guide on the second tier, where there is Sky Box Office, Sky products and Sky everything else. We are seeing a diminution of the electronic programme guide and Ofcom unable to act in the public interest.
This is important because we are talking about a huge commercial space and, very quietly, Sky has clearly adapted that space for the benefit of the Sky platform. Other people are going to come along and we will see that contested. Companies such as Netflix in particular, which wants to enter the market in an assertive manner, want a big presence and are willing to spend a lot of money. Only in the last week, we have seen the amount of money that it has been suggested that Amazon is spending on Jeremy Clarkson’s latest foray into high-speed petrol-head motoring. Is it £160 million? There is a considerable amount of money in the marketplace from these other organisations and broadcast providers, and we are going to start to see the electronic programme guide being contested. In fact, it is already being contested, as Sky has already snatched the front page of the EPG on its platform.
I raise the following points with the Minister: Ofcom currently seems to be behind the curve on this issue and the guidance needs to be updated. We do not want to see public service broadcasters relegated in any way, shape or form. We do not want to see the design or architecture of the EPG manipulated so that maybe the BBC is number one but somehow Netflix catches people’s eye more prominently, with small letters for the first five and big graphics for some of the more commercial providers, such as Amazon. It is not just about having slots one to five; Ofcom should be mindful of the actual graphic presentation.
We do not want to see adverts creeping into the EPG either, so Ofcom needs to be absolutely clear in the regulations and guidelines about the type of space that the EPG is. The Government should be mindful not only of platform providers such as Sky, but of TV manufacturers, which will come over the hill and see the space. Someone will turn on their television and, after “LG—Life’s Good”, the first thing they will see is Netflix in the top corner, before they even click on an EPG. Technology is moving fast and the presentation of available services must have some framework and clearer guidance from Ofcom, because it is important that we do not end up in a world where public service broadcasters are relegated several clicks away from primacy—ITV needs the commercial return and Channel 4 also has a commercial element and needs the returns on advertising. That scenario should not be allowed, as it would affect the broadcasters as a business, along with their funding model and audience figures and therefore their advertisers and advertising revenue. We absolutely must be clear about what the graphical interface and its parameters should be—no adverts—and also about which broader platforms might seek to enter the market, such as TV manufacturers.
I welcome new clause 17. The Government have a lot of work to do on EPG guidance, because this legislation will go down for the next 10 years and in that time we will see incredible technological advancements, with companies wanting to capture that prime retail space. It is incumbent on the Government to step in, not just to make the situation better and more consistent for the viewer but to protect the public service broadcasters, as not only the licence fee payer but the advertiser on the commercial channels is affected. We have a national interest, therefore, in protecting that space. It is important that the Government revisit the EPG guidelines.
I am interested in hearing the Minister’s comments on my questions, particularly his clarification regarding Sky and the 2003 Act—I cannot find anything on that in the documentation—and also some reassurance on the EPG.
Matt Hancock
Terrific! I am delighted to respond. As we know, clause 28 will repeal section 73 of the Copyright, Designs and Patent Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services, and any work in the broadcast, that is retransmitted by cable is not infringed when the broadcast is receivable in the area of the retransmission. In effect, that means that cable TV platforms are not required to provide copyright fees in relation to core public service broadcasting channels. The provision was brought in at the onset of the cable industry in the UK to provide for the industry to compete with terrestrial by providing PSB content. However, that was a long time ago and technology, as everyone has noticed, has moved on a long way.
Last year we consulted on the repeal of section 73, and I am glad that there is cross-party agreement on it. The conclusion that the Government reached, and which has been agreed to by the Committee, is that the section is no longer relevant. There are a wide variety of platforms that ensure that virtually everyone in the UK is able to receive public service broadcasts and, following the completion of the digital switchover in 2012, digital TV services are now available to more than 99% of customers, whether through terrestrial, satellite, cable or fibre platforms. The cable market has moved from a large number of local providers in the 1980s, when section 73 was introduced, to one big one, and it has also gone up massively in scale, from hundreds of thousands to more than 4 million subscribers.
We are satisfied that the objective of ensuring that PSB services are available throughout the UK has been met. Therefore, section 73 is no longer required. Moreover, as my hon. Friend the Member for Selby and Ainsty pointed out earlier, this also closes a loophole, because live streaming services based on the internet are broadcasting TV programmes and relying on section 73 to exploit PSB content by retransmitting channels and selling advertising around the service without any of the benefit flowing to the PSBs. I think we all agree that is wrong, so I am glad there is cross-party support for the change.
Let me respond to some of the questions that were put, looking first at new clause 14. I am a strong believer in the listed events system. Major events such as the Olympic games and the FA cup final draw huge audiences. The listed events regime has worked well. The status of these events, as listed events, boosts them and their broadcast to the nation brings us together. I am delighted that the SNP supports the listed events regime as well. I fear I am going to have to resist the SNP’s suggestion that we should use the listed events regime to ensure that Scotland is always in the World cup finals, in the same way that we cannot legislate for the tide never to come in or the sun never to set, but it is very important and it is close to people’s hearts.
The right to broadcast listed events must be offered to qualifying channels, defined as those that are received without payment by at least 95% of the UK population. Ofcom is responsible for publishing the list of channels that satisfy those criteria. We have no evidence to suggest that recent developments, with more online viewing, will put the BBC or other PSBs at immediate risk of failing to meet these qualifying criteria. I know that concern has been raised, but I have discussed it with the BBC and Ofcom, I have gone into the details, and I am not convinced there is a risk in the near term at all.
Kevin Brennan
I did say that, because of the criteria’s increasingly outdated nature, the 95% threshold will probably not be met by any TV channel at some stage during this Parliament. Is the Minister telling the Committee that that is categorically wrong?
Matt Hancock
Yes; I disagree with that analysis. Were that to become the problem, then we would need to act, because we support the listed events regime. However, we do not agree with the analysis that the hon. Gentleman has put forward, not only because of the measurement on the existing, most restrictive definition of the 95%, but because the definition of qualifying channels are those that are received without payment. There are many ways to receive a channel without payment, including online, so viewers moving from terrestrial TV to online does not necessarily—and in my view does not—remove them from that 95%.
Kevin Brennan
The Minister has made the point, and I thank him for making it categorically: he believes that that will not happen during this Parliament. However, he also said that if it were to happen, the Government would have to act. Is that not the very reason why he should support the new clause? It would give legislative backing to the Government to produce a report to examine what ought to be done in those circumstances.
Matt Hancock
No, because I do not think that is going to happen. The hon. Gentleman also raised the question of what we should do if the legislative underpinning of the regime were to collapse. He came up with a specific proposal. I think that the proposal is itself flawed because it was to switch the measure from channels received without payment to those that are viewed, and that changes its nature significantly: from channels that are received, so can be viewed by somebody, to those channels that are viewed, which would be far more restrictive in terms of the channels that could then provide listed events. It is not a surprise to me that it is incumbents who want to make that argument because they are the ones that are watched, as opposed to those that can be watched.
Kevin Brennan
The Minister alluded at the end to the fact that we are not making that proposal in our new clause. We were rehearsing that argument during discussion of the new clause. Obviously he does not agree with it, but it is important to put on the record that that particular proposal is not in the new clause. It asks for a report.
Matt Hancock
I am grateful for that clarification. We will obviously keep the matter under review. It is important that the listed events scheme continues to operate. I could not be clearer in our assessment of the definition of qualifying channels based on the existing statute. A specific review within 12 months of the legislation’s coming into force is in my view not necessary, but we will keep the situation under close review.
New clause 17 would amend the public service broadcaster prominence review. The hon. Member for Hyndburn made a powerful and eloquent speech with some incredibly good points in it. The new clause would extend the prominence provisions to on-demand services such as catch-up TV and connected TV on-demand menus. The matter was considered in the balance of payments consultation. We have very strong support for S4C and some of the other channels mentioned in the debate, but our conclusion was that we have not seen compelling evidence of harm to PSBs to date, so we decided not to extend the EPG prominence regime at this stage.
In a way, the debate has brought out the challenges in this area. The hon. Gentleman started talking about the description of the graphical representation on an EPG, and the discussion can easily get into acute micromanagement of an EPG when the increasing integration of TV and internet services makes that more rather than less redundant. I therefore caution against an attempt at extreme micromanagement of the interface.
Graham Jones
The Minister flags up a cautionary point, but I again ask him a question I asked earlier: if he had a graphical interface with tiny letters that fulfilled its obligations, but at the bottom it said, “Amazon” and “Netflix”—it effectively had some commercial advertising —would he be happy to see that? Would that satisfy his current position? Alternatively, would he reflect and think, “That is not quite right”?
Matt Hancock
The hon. Gentleman is a great man who is worried about my happiness, but this is not about my happiness; it is about what is best for public service broadcasting and the PSB compact. My response is that it is for Ofcom to issue guidance on ensuring that the EPG works. It is better done that way, so that it can be proportionate, flexible as technology changes over time and not micromanaging things. The guidelines do that and pull that off. That is why when we considered the proposal as part of the consultation, we decided not to go there.
Graham Jones
I welcome the opportunity to engage in the issue, but when the Minister looks at Sky taking over the splash screen and relegating the EPG to the second tier—obviously Ofcom cannot act in that case, or it would have done already—is he happy?
Matt Hancock
Again, my happiness is secondary really, but my problem with the proposition being put forward is that trying to define sub-menus and user interfaces in regulation, especially statutory regulation, is incredibly hard. The technological landscape is shifting quickly. It is best left to the Ofcom guidance to answer such questions. We looked into the matter in some detail in the consultation, so I hope that the hon. Gentleman will withdraw his support for the new clause.
Kevin Brennan
The Minister is saying that it is up to Ofcom to decide, but is not the point that what we are trying to do here is exactly what Ofcom is proposing?
Matt Hancock
No, because it is for Ofcom to issue guidance on linear EPGs. Ofcom is required as a duty to make the system work. Rather than going further down this route, having considered it, we do not want to be over-prescriptive, given the technological changes that are happening. With that, I hope that hon. Members will withdraw their amendment and then vote that clause 28 stand part of the Bill.
The Chair
We will, of course, be voting on any new clauses not today but later in our proceedings. Does Mr Brennan have any remarks to make?
Kevin Brennan
Yes, briefly. As you say, Mr Streeter, we will come to the new clauses later in the Bill. I do not think that it will necessarily be our intention at this point—we will cogitate further—to push them to a vote, but there are issues here to which we might want to refer on Report. One of my colleagues has pointed out that the Minister did not answer a question about Sky. Rather than making another speech, does he want to intervene during my brief remarks?
Matt Hancock
As I said in the discussion of the previous set of amendments, Sky is subject to a different regulatory regime. There are conditional access charges for satellite within that regime, which must be fair, reasonable and non-discriminatory for all channels. We considered that as part of the balance of payments consultation and came to the conclusion that it did not need to be changed, because of the requirement set out in the DPS code.
Kevin Brennan
I am grateful to the Minister for saving us time with that helpful intervention.
Graham Jones
This is an opportunity to ask my hon. Friend a question. There seems to be some doubt about the relationship between Sky’s retransmission charges and public service broadcasters. Does he know whether Sky pays for public service broadcasters? I understand that Sky pays for ITV commercial channels, but as I understand it, it does not pay anything for public service broadcasting.
Kevin Brennan
We discussed this issue, and the nature of that regime, earlier today. My observation was that the situation was extremely opaque, which is why we proposed earlier amendments to the Bill to suggest that the whole area should be reviewed—for that very reason. My hon. Friend makes an extremely pertinent point. It will be worth reading his remarks, and those made earlier today by Government and Opposition Committee members, on that point.
When we discussed new clause 14, which deals with listed sporting events, I worried that there is a degree of complacency in the Government. People will have heard what the Minister said about the issue, and we will be interested to hear what others have to say about his response. We should lay down a marker to say that we do not think that the Government are really listening or hearing what we are saying about this subject, and they are not sufficiently attuned to the dangers to listed sporting events. I know that the Minister is a keen and successful sportsman in his jockeying activities, on which I congratulate him. I am sure that he would want to see—
Kevin Brennan
He is a flat racing jockey—and, from what I have seen, a very good one—but he should be concerned about the possible future of events such as the Grand National, which, as he rightly said, bring the country together and are meaningful and important cultural events as well as sporting ones.
On new clause 17 and PSB prominence, again, the Minister says that he has not seen compelling evidence of harm, but I think that we supplied him with plenty of compelling evidence of the potential for harm, which is what the Bill is about. It should be about the digital future, as we have said. I take his point about extreme micromanagement—that is valid—but we are not talking about that; we are talking about setting clear parameters to ensure that public service broadcasting prominence remains across all platforms. Although we are unlikely to press the new clause to a vote later, we reserve the right to return to these issues.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
The Chair
We are catapulted into part 5 of the Bill.
Clause 29
Disclosure of information to improve public service delivery
Louise Haigh (Sheffield, Heeley) (Lab)
I beg to move amendment 98, in clause 29, page 28, line 25, leave out “had regard to” and insert “complied with”.
This amendment provides stronger compliance with the code of practice on the disclosure of information.
The Chair
With this it will be convenient to discuss the following:
Amendment 100, in clause 30, page 29, line 33, leave out “had regard to” and insert “complied with”.
This amendment provides stronger compliance with the code of practice on the disclosure of information.
Amendment 99, in clause 32, page 30, line 13, at end insert—
‘(1A) In determining whether to make regulations under section 29, 30 or 31 the appropriate national authority must ensure that—
(a) the sharing of information authorised by the regulations is minimised to what is strictly necessary,
(b) the conduct authorised by the regulations to achieve the “specified objective” is proportionate to what is sought to be achieved by that conduct,
(c) a Privacy Impact Assessment compliant with the relevant code of practice of the Information Commissioner’s Office has taken place and been made publicly available,
(d) the proposed measures have been subject to public consultation for a minimum of 12 weeks, and responses have been given conscientious consideration.
(1B) As soon as is reasonably practicable after the end of three years beginning with the day on which the regulations come into force, the relevant Minister must review its operation for the purposes of deciding whether these should be amended or repealed.
(1C) Before carrying out the review the relevant Minister must publish the criteria by reference to which that determination will be made.
(1D) In carrying out the review the relevant Minister must consult—
(a) the Information Commissioner, and
(b) open the review to public consultation for a minimum of 12 weeks, and demonstrate that responses have been given conscientious consideration.”
This amendment seeks to reduce the risk of successful legal challenges. Challenges are often made on grounds of privacy and this would amend that to increase privacy safeguards.
Amendment 96, in clause 32, page 30, line 33, at end insert—
‘(3A) A particular person identified in personal information disclosed under sections 29, 30 or 31 is able to request to a specified person under subsection 29(1) that the personal information is modified and corrected if necessary.”
Amendment 95, in clause 32, page 30, line 34, leave out
“(including a body corporate)”
and insert
“, a group of persons, a private company or a publicly traded company irrespective of their size and revenue, but”.
Amendment 105, in clause 35, page 32, line 31, leave out “have regard to” and insert “comply with”.
Louise Haigh
I am very grateful to my hon. Friend the Member for Cardiff West for giving me some much-needed time off. I do not wish to disappoint the Minister by not being as brief as we were earlier, but I am not sorry, because part 5 really does require some further scrutiny. I think the Government know that it was not ready for Committee, not least because they have tabled several dozen amendments to it, but also because the codes of practice were not in good enough shape last week, according to the Information Commissioner, but were published just a few days later—some civil servants were clearly working overtime in the intervening period.
Clause 29 allows specified persons to share data for a specified objective. All national authorities will be enabled to lay regulations through secondary legislation for exactly what those data-sharing arrangements will be and what they will be for. In doing so, this clause lays out that they will be required to ensure the secure handling of information and to have regard to the codes of practice. Our amendments seek to strengthen this and to ensure that anyone involved in the sharing of data under these new powers is in full compliance with the codes of practice that were published last week.
I want to be very clear here: the Opposition do not oppose the Government’s sharing data among themselves to improve policy making and public services, but we must get this absolutely right and we are still a long way away from that, given the state of the current proposals. This is a key point: the public support the sharing of data to better enable the Government to provide services and to better enable the public to make use of those services, but public trust is fragile and has been rocked in recent years by varying degrees of incompetence in managing those data. Before Government Members point out that previous Labour Administrations were just as guilty, I should say that I fully accept that. This is not a political but rather an administrative point, which is why such proposals need to proceed with the utmost caution.
The Information Commissioner produced a very instructive report on this very point, which is extremely important to this part of the Bill, because it demonstrates the circumstances in which the public are happy for their data to be shared. The commonly recurring themes of what the public want regarding data could not be clearer: they want control over their data; they want to know what organisations are doing with those data; and they want to understand the different purposes and benefits of sharing their data. In that context, 63% of people agreed that they had lost control over the way in which their data are being used. This demonstrates that if there is to be sharing of data, which we support, there must be very clearly defined safeguards based on consent and transparency.
This part of the Bill gives considerable powers to Government to share data, but there are essentially no safeguards built in to ensure privacy, data protection, proportionality and a whole host of other principles that should sit alongside data sharing. It is vital that these reforms go ahead and we are completely in favour of effective data sharing across Government to achieve public sector efficiencies, value for money, improved public sector services, take-up of benefits for the most vulnerable, such as the warm home discount or free school meals, and, most importantly, an improved experience for those who use public services.
The Minister for Digital and Culture claimed in an evidence session that the safeguards are in the Bill, but that is simply not the case. I would be grateful if the Parliamentary Secretary, Cabinet Office outlined what safeguards he thinks there are. As I, a relatively amateur observer, as well as those who are much more expert in the matter read it, the safeguards are to be added at a later date, written up by the Government and consulted on with people whom the Government deem fit to consult. Furthermore, there is absolutely nothing the public sector does that is not covered by the clause. I would be grateful, therefore, if the Minister gave give us a single example that that—I quote from the clause—for the purposes of
“the improvement of the well-being of individuals or households”,
or of improving
“the contribution made by them to society”,
would not deliver.
Calum Kerr
It is good to see the shadow Minister back in her place. She is making an excellent start to this section of the debate, pulling out many of the key issues. I am afraid that the ministerial team might not like the scrutiny that the process is supposed to provide—and essentially does. The point about transparency is critical and there is a confidential submission that points out that transparency does not prevent people from doing anything; it simply requires them to be accountable for what they do. We have recently seen the case of HMRC outsourcing to Concentrix the ability to collect tax credits. Data from another source were used, and we all know the damage that can be done when that is not done well.
Louise Haigh
I am grateful for that intervention. I am very aware of the Concentrix case and will come on to it shortly.
On the inclusion of non-public sector authorities and the Government’s intention to strictly define the circumstances and purposes under which data sharing with such organisations will be allowed, their statement of intent was clear. However, only one paragraph in the 101-page draft code mentions non-public sector organisations. That paragraph says that an assessment should be made of any conflicts of interest that the non-public authority may have but it does not give any examples of what those conflicts of interest might look like, so perhaps the Minister will elaborate on that when he responds. It states that a data-sharing agreement should identify whether any unintended risks are involved in disclosing data to the organisation—the risk regarding Concentrix was just highlighted—but the code of practice does not list any examples or set out how specified persons might go about ascertaining those. It also states that non-public authorities can only participate in a data-sharing agreement once their sponsoring public authority has assessed their systems and procedures to be appropriate for the secure handling of data, but it does not give any sense of what conditions they will be measured against or how officials should assess them.
That is not the kind of reassurance that was provided in the Government’s consultation response. Given that these are draft codes, I hope the Minister will take what I have said away and improve them, not least because of the recent scandal relating to the US multinational company, Concentrix, which was contracted by HMRC to investigate tax credit error and fraud. Concentrix sent letters to individuals—mostly working single mothers across the country receiving tax credits—in what was essentially a large-scale phishing exercise. Not only did it get things catastrophically wrong by cancelling benefits that it should not have cancelled and leaving working mothers destitute over many weeks and months in some cases, but it performed serious data breaches in sending multiple letters to the wrong individuals and disclosing personal information.
We have made it very clear that the Bill could have done with considerably more work before it was brought before the House. I understand that the civil servant who wrote part 5 has now left, or is in the verge of leaving, the employ of the civil service, so there is even more reason for us to work cross party and with expert organisations on improving the proposals.
As I have said, public trust in Government handling of data is not strong. Unfortunately, the public have not been given any reason to put their concerns to rest. The recent National Audit Office report, “Protecting information across government”, revealed the prevalence of weak controls on the protection and management of personal information in Government. Any continuation of the existing poor information management identified by the NAO, or the further weakening of cyber-security and data protection implied by part 5, is likely to have negative economic and social impacts.
As the Information Commissioner’s Office commented:
“It is important that any provisions that may increase data sharing inspire confidence in those who will be affected. Our research shows that the public are concerned about who their data is shared with and reflects concerns that they have lost control over how their information is used. Even apparently well-meaning sharing of data such as GP patient records for research purposes can arouse strong opinions.”
This is an important time to strengthen cyber-security and the minimisation and protection of data, which is why it is so important to get this part of the Bill right. A huge prize is on offer, but this has the potential of going the way of the care.data scandal. Frankly, it is astonishing that neither Ministers nor civil servants have learnt their lessons from that very regrettable episode, because there was absolutely nothing wrong with the principle of care.data either; it attempted to achieve exactly the kind of aims as the Bill’s reforms.
The idea was to create a database of medical records showing how individuals have been cared for across the GP and hospital sectors. Researchers believed that the information would be vital in helping them to develop new treatments as well as assessing the performance of NHS services. The records would be pseudo-anonymised, meaning that the identifiable data would be taken out. Indeed, they would just contain the patient’s age range, gender and the area they lived in. However, researchers could apply for the safeguards to be lifted in exceptional circumstances, such as during an epidemic. That would have needed the Health Secretary’s permission.
The concept had the backing of almost the entire medical community, many charities and some of the most influential patient groups. The UK’s leading doctors told us how access to so many NHS records would help them to understand the causes of disease, quickly spot the side effects of new drugs and detect outbreaks of infectious diseases.
The problem with care.data was that the advantages and the principles upon which the data would be shared were simply not communicated by the Government or by NHS England, and so it attracted the criticism of bodies as disparate as the British Medical Association, the privacy campaign group Big Brother Watch and the Association of Medical Research Charities. Such was the botched handling of the publicity surrounding care.data that, by April 2014, the launch was aborted. However, it emerged the following June that nearly 1 million people who had opted out of the database were still having their confidential medical data shared with third parties, because the Health and Social Care Information Centre had not processed their requests.
A review by the National Data Guardian, Dame Fiona Caldicott, found that care.data had caused the NHS to lose the trust of patients, and recommended a rethink. That prompted the then Life Sciences Minister, the hon. Member for Mid Norfolk (George Freeman), to announce that the scheme was being scrapped altogether, even though £7.5 million had already been spent on constructing a database, printing leaflets, setting up a patient information helpline and researching public attitudes to data sharing.
The Caldicott review established a set of Caldicott principles, with the primary one being that the public as well as the professionals should be involved in data-sharing arrangements. Dame Fiona Caldicott proposed a simple model that gives people the option to opt out of any of their information being used for purposes beyond care. She said:
“We made it slightly more complicated by saying it was worth putting to the public the choice of having two separate groups of information to opt out of – [those being] research and information used for running the health service. If you put all of the possible uses of data currently in the system together and asked people to opt in or out of that, it’s actually asking them to make a choice about a very big collection of information. [People] may want to have the possibility of saying, ‘Yes, I’d like my data to be used for the possibility of research, but I don’t want it to be used for running the health service’.”
She also made it very clear that the benefits of data sharing and what it means need to be communicated clearly to the public, as there is a lot of confusion around how the data are shared.
Absolutely nothing has changed since that disaster and the subsequent review, so it is concerning not to see those basic principles included in the Bill. I am interested to hear the Minister’s response to those principles laid out by the National Data Guardian. The public need to be able to trust organisations that handle their data and they need to retain control over those data. Both those things are essential to build confidence and encourage participation in the digital economy. The principles have been debated over the past several years at the European level, and we should be told here and now—today—whether the Government intend to implement the EU’s General Data Protection Regulation. If they are, why is the Bill not compliant with it?
The new EU GDPR and the law enforcement directive were adopted in May and will take effect from May 2018. The GDPR includes stronger provisions on: processing only the minimum data needed; consent; requirements on clear privacy notices; explicit requirements for data protection by design and by default; and on carrying out data protection impact assessments.
Although the Government’s arrangements for exiting the European Union have yet to be decided, it seems likely that the GDPR will take effect before the UK leaves, so the Government will have to introduce national level derogations prior to its implementation. If that is the case, there will have to be a thorough consideration of the impact of the new legal framework on all aspects of the Bill affecting data sharing, including implementation arrangements. Indeed, as the Information Commissioner said when giving evidence to the Committee two weeks ago:
“There may be some challenges between the provisions and the GDPR… There would ?be a need to carefully review the provisions of this Bill against the GDPR to ensure that individuals could have the right to be forgotten, for example, so that they could ask for the deletion of certain types of data, as long as that was not integral to a service.”––[Official Report, Digital Economy Public Bill Committee, 13 October 2016; c. 112-13, Q256.]
The GDPR states that data are lawfully processed only if consent has been given by the individual, which is completely lacking in this section of the Bill. It also gives data subjects that right to withdraw consent at any time:
“It shall be as easy to withdraw as to give consent.”
Controllers must inform data subjects of the right to withdraw before consent is given. Once consent is withdrawn, data subjects have the right to have their personal data erased or no longer used for processing.
The Chair
Order. May I gently assist the hon. Lady by saying that I am not sure she has referred to her amendments much yet? She is making an excellent clause stand part speech. This will certainly now be the clause stand part debate, but it might help the Committee if she came on to her amendments as soon as possible.
Louise Haigh
Of course. Thank you very much, Mr Streeter.
Our amendments would ensure that the codes of practice, which have been vastly improved over the past week, are statutory. It is important that the principles and safeguards outlined so far are included and are statutory. That is what I have been alluding to so far in my speech. It seems pointless for civil servants to have put all this work into the codes for them merely to be regarded, rather than statutorily complied with. The codes must be improved further, and we hope that Ministers and officials will work with the industry and organisations to do just that, but we want to see them referenced properly in the legislation and properly complied with. Anything less means that the powers enabled in the clause dwarf any safeguards or checks included in the codes.
Amendment 99, in my name and that of my hon. Friend the Member for Cardiff West, would help to build trust in the Government’s data-sharing provisions—trust that has been rocked over a number of years. That trust is absolutely essential if this extension of the Government’s data-sharing powers is to be effective. It is worth noting again that the draft regulations allow a significant extension of data-sharing powers with a significant number of Departments. That extension is rightly set within defined and strict criteria, but some of the definitions contained within those criteria are at best vague.
Subsection (8) of clause 29 allows for the sharing of data if it is of defined “benefit” to the individual or households. Subsection (9) allows for the sharing of data if it
“has as its purpose the improvement of the well-being of individuals or households.”
While the extension is ostensibly for tightly defined reasons, those reasons are in fact so broad that they could refer to anything at all.
We again come back to the point about public trust. The public want to know why their data are being shared and that it is strictly necessary. Amendment 99 would help build that trust by ensuring that, under clauses 29, 30 and 31,
“the sharing of information authorised by the regulations is minimised to what is strictly necessary…the conduct authorised by the regulations to achieve the “specified objective” is proportionate…”
and that
“a Privacy Impact Assessment…has taken place”.
The amendment would require the Minister to establish a review that consults the Information Commissioner and the public on the effectiveness of the measures. The amendment would require the Minister, after a three-year period, to review the operation of these provisions to decide whether they should be amended or repealed.
A similar measure is included in the Bill in the provisions relating to data sharing for the purposes of the collection of public debt, so it is puzzling that it is not included in this part, too, as these provisions are so much broader and just as risky, if not riskier. Individuals are right to be anxious about their sensitive data being shared. The amendment would allow for the public to be reassured that their data are being handled within the strictest confines.
Amendment 96 would give individuals a right to access and correct their own data. Empowering citizens to have access to and control over their own personal data and how they are used would clearly help improve data quality. Citizens could see, correct and maintain their own records. Data need to work for people and society. Citizens need to be actively engaged in how their data are secured, accessed and used. Again, that needs to be put on the face of the Bill.
Part 5 does not make clear how proposals to data share comply with the Government policy of citizens’ data being under their own control, as set out in paragraph 3 of the UK Government’s technology code of practice. Indeed, the proposals appear to weaken citizens’ control over their personal data in order for public bodies and other organisations to share their data. Weakening controls on the protection of their data is likely to undermine trust in the Government and make citizens less willing to share their data, challenging the move towards digital government and eroding the data insights needed to better inform policy making and related statistical analysis. That type of organisation-centred, rather than citizen-centred, approach characterised the failure of the top-down imposition of care.data in the NHS. That is why we tabled these amendments.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
It is an honour to serve under your chairmanship, Mr Streeter, and to be standing here making my Committee debut. The hon. Member for Sheffield, Heeley is obviously new to the business as well, and I hope to follow her example. She has been gracious and proportionate in holding the Government to account. I hope we can have a full and frank exchange—hopefully, a rapid one—as we move through part 5.
The Government share information every day. Like every organisation, we rely on information to deliver the support and services that everybody relies on. These proposals will not do anything radical. They are simple measures designed to provide legal clarity in uncontroversial areas. The hon. Lady said that the Bill’s objectives are too broad, but I am afraid I disagree. We have made available draft regulations that set out three clear objectives, which are constrained and meet the criteria. I believe it is possible to strike a balance between the regulations and the evidence to set out specific objectives on identifying individuals and households that have multiple disadvantages, improving fuel poverty schemes and helping citizens retune their televisions when the broadcasting frequency is changed in a couple of years’ time.
The hon. Lady mentioned some specific examples. I want to turn to the fuel poverty schemes. When we look at those several years down the line, I genuinely believe that we will be proud to have sat here and legislated in a Committee that introduced data-sharing measures that enable, for instance, a significant number of vulnerable people to benefit from the warm home discount scheme. At the moment, about 15% of warm home discount scheme recipients are classed as fuel poor, according to the Government’s definition. By utilising Government-held data on property characteristics to benefit the recipients, we estimate that that figure could be at least tripled. That could mean that an additional 750,000 fuel poor households receive a £140 rebate off their electricity bill each year.
We know that some vulnerable households miss out on the warm home discount because they need to apply and they either do not know the scheme exists or, for one reason or another, are unable to complete an application. Our proposed changes could result in the majority of the 2.1 million recipients receiving the rebate automatically. It will come straight off their energy bills without the need to apply. That is simply an extension of the data-sharing measures that already exist in the Pensions Act 2014 for pension credit. It is evolution, not revolution.
That example clearly sets out how we will require data to be shared among Government organisations and for there to be a flag to suppliers of eligible customers. In that instance, we will require the suppliers to use data only to support customers. Each objective will require a business case setting out the purpose and participants, which will be approved by Ministers and subject to parliamentary scrutiny.
I note that we are debating clause 29 stand part as well as the amendments, so after talking generally about part 5, let me move on to the clause. I believe that these powers do not erode citizens’ privacy rights. They will operate within the existing data protection framework. The new powers explicitly provide that information cannot be disclosed if it contravenes the Data Protection Act 1998 or part 1 of the Regulation of Investigatory Powers Act 2000. Further, they are carefully constrained to allow information to be shared only for specified purposes and in accordance with the 1998 Act’s privacy principles.
The new codes of practice, which the hon. Lady mentioned—I have been assured that they are on the parliamentary website—have been developed to provide guidance to officials in sharing information under the new powers in respect to public service delivery, fraud and debt, civil registration, research and statistics. The codes are consistent with the Information Commissioner’s data sharing code of practice. Transparency and fairness are at the heart of the guidance. Privacy impact assessments will need to be published, and privacy notices issued, to ensure that citizens’ data are held transparently. I was delighted that the Information Commissioner wrote to the Committee on 19 October saying:
“Transparency is key to building people’s trust and confidence in the government’s use of their data. I am pleased to see that further safeguards such as references in some of the codes to the mandatory implementation and publication of privacy impact assessments (PIAs), and reference to my privacy notices code of practice, have been highlighted in the Bill’s codes of practice.”
Louise Haigh
The Information Commissioner also said that she wanted the privacy impact notices to be included in the Bill, and the codes to be explicitly subordinate to her code on data-sharing practices. Will the Minister confirm that those codes are indeed subordinate? Will he also explain why the codes are not included in the Bill if they are so central to the process?
Chris Skidmore
I will come to the second point later. On the Information Commissioner’s desire to include privacy impact assessments, it is clear to me from her letter that she is now content with the situation as it stands:
“I am content that the codes all now reference and better align with the guidance on sharing personal data set out in our statutory code and include effective safeguards to protect people’s information.”
Louise Haigh
The Information Commissioner was referring to the codes being improved since she gave evidence to the Committee. Later in that letter, which I think the Minister has in his hand, she goes on to say that she stands by the other evidence, both the oral evidence that she gave the Committee and her written evidence, which included her view that privacy impact notices should be in the Bill.
Chris Skidmore
The Information Commissioner also mentions that, on privacy impact assessments and with reference to her privacy notices code of practice:
“This will build in transparency at two levels:—”
in the current situation—
“greater accountability through the publication of PIAs and timely and clear information for individuals so they can understand what is going to happen to their data.”
The Government remain committed to working with the Information Commissioner’s Office. When it came to the evidence sessions, I was aware of the fact that we had a long process discussion around the codes of practice and when their publication dates were due. It was very important for me, as a Minister, to ensure that we had the confidence of the ICO going forward and that we could publish those draft codes. We will continue those conversations.
When looking at putting the codes or privacy impact assessments in the Bill, it comes back to the key point of being able to continue that conversation when it comes to a transformational technology that we may not even know exists at the moment and that may radically change our ability to look at how we data share. At the moment we are looking at specified portals through which we will data share for the benefit of the most vulnerable in society, but there may be a new technology that allows the Government to expand our scope. If that new technology comes into being and we write the codes and privacy impact assessments into the Bill, we will have the chilling effect of ossifying the practice; it will impact on our ability to adapt and to be able to look at new technology, to move fast and to realise the opportunities that we may have to data share for the benefit of the most vulnerable in society.
Louise Haigh
I completely agree that we should not tie ourselves down in the Bill, particularly to technology. It came through loud and clear from the evidence sessions that part 5 seems to tie us to a very outdated approach to data sharing. It does not talk about data access; we heard that an awful lot in the evidence sessions. The Bill goes against the Minister’s own guidance on that. We should look not at bulk sharing, which takes us back to when we had filing cabinets or were sending across spreadsheets and databases on USB sticks, but at using application programming interfaces and canonical datasets, on which the Cabinet Office is leading the way. I would appreciate it if the Minister commented on that.
Chris Skidmore
The hon. Lady highlights the argument I am trying to make, which is that the data-sharing measures in the Bill are proportionate, constrained and there to ensure that we can bring public confidence with us, which she mentioned. That is why we have highlighted specific portals through which we will be able to share Government information across Departments. In future, there will be secondary legislation powers to review and expand that, but there will be a whole process for which we need scrutiny.
That is why the Bill is so important: by highlighting how we can help those most in need and how, when it comes to data and consent, some people are in circumstances, by virtue of being in deprived communities or particularly vulnerable, of not knowing that they can benefit from their data being shared. It is the Government’s responsibility to act in this particular area to ensure that data are shared for the benefit of the most vulnerable. That is why the Bill is designed as it is. We have the secondary regulations in place, limited as they are at the moment, going through impact assessments and everything that we need to ensure that we have a proportionate response to sharing data.
I fully appreciate what the hon. Lady said but I hope that she will accept that the Government have pulled out all the stops to ensure that we can take public confidence with us. That is why, for instance, under clause 33, new criminal sanctions have been developed to protect information shared under the new powers in respect of public service delivery, fraud, debt and research, so those convicted of offences could face a maximum penalty of up to two years imprisonment for illegal data sharing, a heavy fine or both.
No statutory restrictions that currently exist on sharing of data, such as in the Adoption and Children Act 2002, will be affected by these data measures. When it comes to audits, which the hon. Lady mentioned, data-sharing agreements entered into under the power will set out a governance structure of how audits will take place. This structure will oversee the arrangement and what participating bodies are required to do under data sharing. The Information Commissioner’s Office also has a general power to conduct audits, including compulsory audits of Departments and organisations to check that they are complying with the law in relation to the handling of personal information. All bodies are required to comply with the ICO’s request for assistance so that it can determine whether data have been processed lawfully in data-sharing arrangements. The ICO can pursue criminal proceedings where necessary.
Louise Haigh
Will the Minister confirm that every Department that undergoes a data-sharing arrangement will complete a full audit of all data-sharing arrangements in that Department? Will that be available under the Freedom of Information Act?
Chris Skidmore
On the individual point of audit, I will have to write to the hon. Lady. I will further consider her amendments and speak about them when we discuss three-year reviews. I want to ensure that bodies sharing information under the public service delivery power, for instance, strictly observe and follow codes of practice. Although I welcome the intention of the amendments, I think they are unnecessary. The Bill sets out the key conditions for disclosing and using information, including what can be shared by whom and for what purposes. We followed the common approach taken by the Government to set out details of how data are shared in the code of practice.
I want to return to the hon. Lady’s question of whether we use “have regard to” or “comply with”. The wording, “have regard to” already follows common practice in legislation, as illustrated in section 25 of the Immigration Act 2016 and section 77 of the Children and Families Act 2014. As the power covers a range of public authorities and devolved territories we want the flexibility that I mentioned about how the powers are to be operated, so that we can learn what works and adapt the code as necessary. To put it into the Bill, as I mentioned, would hamper that ability to adapt for future purposes. If bodies fail to adhere to the code, the Minister will make regulations that remove their ability to share information under that power, as is indicated, indeed, in part 11 of the code of practice, which states:
“Government departments will expect public authorities wishing to participate in a data sharing arrangement to agree to adhere to the code before data is shared. Failure to have regard to the Code may result in your public authority or organisation being removed from the relevant regulations and losing the ability to disclose, receive and use information under the powers”.
Amendment 106 requires the Minister to run a public consultation for a minimum of 12 weeks before issuing or reissuing a code of practice. The code of practice is essentially a technical document that sets out procedures and best practice with guidance produced by the ICO and Her Majesty’s Government. Clause 35 requires the Minister to consult the Information Commissioner and other persons, as the Minister thinks appropriate. I think that that strikes a good balance. Indeed, as I mentioned, we have been working closely with the ICO to ensure that there is confidence in the codes and the Information Commissioner states:
“I am pleased to report that significant progress has been made since my evidence session and I am content that my main concerns about the codes have now been addressed”.
I think it is very important to put that on record.
Calum Kerr
I welcome the Minister to his place. He comes across, to me, as rather bullish now, despite the damning evidence we heard over a very condensed couple of days. Does he think that he has cracked it now, that these codes of practice are all fit for purpose and that we should be sufficiently reassured?
Chris Skidmore
The codes of practice remain in draft form and obviously we are in Committee having a discussion around the nature of what is in the codes of practice. We had criticisms last week of, “Where are the codes of practice?” We were still in the process of a conversation about the codes of practice with the Information Commissioner’s Office to ensure that the Information Commissioner was content. If she is content with the codes of practice as they currently stand, I am not one to go against the ICO. I am not saying that that is a form of complacency, although maybe the hon. Gentleman is, but I trust the ICO’s decision and am confident in its ability to deliver on the codes as they currently stand.
Calum Kerr
I thank the Minister for that mildly reassuring answer that the codes of practice are a work in progress. We welcome that, but in the spirit of helping improve them, I hope that he will consider some of the feedback from Big Brother Watch, which I thought gave the Committee excellent advice. Although Big Brother Watch recognises that the draft codes published by the UK Statistics Authority on research and statistics are detailed and comprehensive, it says that the draft codes published by the Cabinet Office and the Home Office are the polar opposite, offering very little detail or clarity.
Chris Skidmore
The codes are quite extensive in terms of being able to provide the material information that is there. They have gone through an extensive process. Although we had evidence from certain critical witnesses drawn by Opposition Members, there was also significant support for data-sharing measures and the ability to have flexibility through the codes.
As for considering how to go forward, the codes are now published—the hon. Gentleman can read them for himself—and the ICO is now content with the codes. That is a great position from which the Government intend to move forward. In terms of whether the codes are comprehensive, it is set out that the Government have a duty to consult the ICO and territorial Ministers. That is important, and we are following a process and a journey over which the Bill has been developed for a number of years. We are content that we are on track.
I welcome the intention of amendment 99 that only the minimum and necessary information is shared under the power to achieve the objective. The principles are set out in the Data Protection Act 1998. The public service delivery power will need to operate in compliance with the 1998 Act. The principle of data minimisation is also strongly embedded in the code of practice, to which specified persons who use the power must have regard.
In addition, the public service delivery power is intended to act as a more conventional gateway to allow public authorities to share information without the need for central oversight by Whitehall. It is important to reflect on that. Rather than having the dead hand of Whitehall overlooking a measure that should allow for local flexibility and local freedom, we expect a large number of local authorities to use the power to deliver their troubled families programmes. A central monitoring power could impose significant resourcing burdens, which we felt were unnecessary given the intended positive outcomes for citizens. On that basis, we feel that the amendment is unnecessary.
Amendment 95 intends to modify the definition of “personal information”. The definition in the Bill is consistent with section 39 of the Statistics and Registration Service Act 2007, which relates to the confidentiality of personal information. It has been drafted with that consistency in mind. The amendment proposes a definition that includes a vague group of persons. We believe it unsuitable because of its vagueness, and it risks causing confusion.
Amendment 96 requires that data subjects be allowed to request and correct as necessary personal information relating to them that is disclosed under the public service delivery powers. The amendment is unnecessary because the data subject already has those rights under the Data Protection Act 1998. In addition, the impact of such an amendment on public authorities would be significant. An assessment would need to be made of how many requests could be made to public authorities, and of the resulting resourcing requirements in terms of staff and any supporting technical infrastructure. Work would also need to be carried out to ensure that we can verify the identity of individuals requesting access to data and assess the risk of corrections and modifications to data held being made for the purposes of committing fraud.
I understand the intention of the amendments, and I hope that the hon. Member for Sheffield, Heeley will understand that the Government believe that progress has been made, as well as provision for ensuring that the sharing of data is proportionate. The regard for individuals’ privacy is central to the Bill and is set out in the code of practice, and the Government have put in place measures to work with the ICO and other civil society groups on that. I urge her to withdraw the amendment.
Graham Jones
I want to make a small point about part 5, chapter 1, clause 29. There is one small glaring omission that the Government ought to look at and which has been raised by my local authorities. In Hyndburn, we have what the Minister will understand as a two-tier authority. We have a district council and a shire council as opposed to, in metropolitan areas, a unitary council. The Minister is probably wondering where this is going: when light is thrown on an example, some of the problems begin to be seen.
My shire authority wanted to increase the uptake of free school meals but a lot of the data on constituents in the borough of Rossendale and the borough of Hyndburn, which I represent, are held by the local district authority. That includes data on council tax benefit, housing benefit and numerous other small interventions carried out by the district council. A unitary council does not have that problem. It can share data and resolve such problems. It can identify people and send out public information to potential recipients—beneficiaries—of free school meals, who trigger the pupil premium.
I will give an example of how that problem is inflated. We currently have free school meals for everyone aged between four and seven, so parents see no reason to come forward and register their children for the meals, which then does not trigger the pupil premium. In a unitary authority, relevant information in other council departments would be readily available, but in my two-tier authority, the chief executive of Lancashire county council says to me, “We want to increase the uptake of free school meals, particularly for four to seven-year-olds, because we want to trigger the pupil premium, but we can’t find potential recipients. We have some data on people who may use some of our services and may be entitled and some people who we could disseminate public information to, but there is a whole tranche of people we can’t see—we are blind to them, they are just not on our radar. There is no scope for us to see who they are.” That is because, of course, it is Hyndburn borough council and Rossendale borough council that have an interface with those people—they come into their offices regarding a plethora of issues—and those people may well benefit from free school meals. In this case, however, they will not benefit if their children are aged between four and seven so, again, they are not likely to see the connection.
My upper-tier authority, Lancashire county council, cannot access the relevant information that my local authority, Hyndburn borough council has, but a unitary authority does not face that issue. That is not fair or reasonable. It is not conducive to public policy. It is not reaching the target audiences that the Government themselves want to reach. This Government brought in the pupil premium and they want to push that policy, yet the absence of data sharing between upper and lower-tier authorities prevents Government policy from being pursued and creates an unfair situation.
So I left my chief executive’s office at Lancashire county council and travelled the distance to meet the chief executive of my local district council, who fully understood the problem, and we were able, in some way, to get that public information out to the relevant people. There was no direct contact, however, and those issues are problematic when they should not be. I believe that the Government should look at the clause, and look at that inequity. It is not right. It is not good for the delivery of public policy. Clearly, it creates barriers to reaching some people while others can be reached. The Government ought to come back with something that exempts local authorities, because without a shadow of a doubt there should be parity between unitary authorities and two-tier shire and upper county council districts.
I hope the Government come back and create that level playing field—that parity of opportunity—for the Government to be able to pursue their own policies through local government mechanisms without this barrier impinging on those very same Government policies, which are probably not reaching the people they ought to reach because of this inequity and this element that is missing from the Bill.
I ask the Minister to take a deep look at this issue, to create parity and to bring forward something that will bring my two local authorities together and not create a barrier between the two, and certainly not create this iniquitous situation whereby unitary authorities are able to deliver these public services but my two chief executives cannot deliver them to the very people who ought to be receiving them.
Chris Skidmore
To respond to the hon. Gentleman on his specific point, we will update the lists of bodies able to share information of the public service delivery power, and the PSD power allows for new objectives to be added by regulations if they meet the conditions specified in primary legislation. So the issue of the pupil premium, which he mentioned, may be one of the many worthy purposes for which new objectives could be created.
I would like also to draw the hon. Gentleman’s attention to the disclosure of information in the draft regulations, which I hope will reassure him. Paragraphs 21 and 22 of schedule 1 to the Bill refer to the organisations that will be sharing data, or that will be permitted to do so once they have applied to do so, including the county councils of England, the district councils in England and even the council of the Isles of Scilly. We recognise that there is that local government fracture that he mentioned and we hope that when it comes to data-sharing measures we will be able to heal that.
Louise Haigh
It was disappointing not to hear the Minister mention the General Data Protection Regulation and explain why this legislation has not been written in compliance with it, or my points about non-public sector authorities. I hope that he can return to those issues later in his remarks.
On the point about the Information Commissioner, in her evidence she supported statutory codes of practice. She also recommended that Parliament should review all aspects of data-sharing, and not just the clauses relating to fraud, after an appropriate time, which is what informed our amendment.
As our amendment says, we would also like the codes to make it clear that good cyber-security practice should not be about data sharing and that it should be about leaving the data with their original owner. I hope that the Minister will return to those issues when he comments on later stages of the Bill.
With that in mind, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 ordered to stand part of the Bill.
Clause 30
Disclosure of information to gas and electricity suppliers
Chris Skidmore
I beg to move Government amendment 108, in clause 30, page 29, line 21, at end insert “, or
() the making of grants (by any person) under section 15 of the Social Security Act 1990 in accordance with regulations under that section made by the Scottish Ministers or the Welsh Ministers.”
This amendment enables information to be disclosed by a specified person to a licensed gas or electricity supplier for the purposes of a scheme in Scotland or Wales for the payments of grants to improve energy efficiency under section 15 of the Social Security Act 1990.
This clause enables the person specified in regulations to disclose information to gas and electricity suppliers. The disclosure must be for the purpose of reducing energy costs, or improving energy efficiency or the health or financial wellbeing of those living in fuel poverty, and it must be disclosed for use in connection with one of the fuel poverty support schemes listed in the clause.
The schemes referenced are the warm home discount scheme and the energy company obligation. Although the territorial extent of both these schemes is GB-wide, fuel poverty itself is a devolved matter. Officials in the devolved Administrations, including Labour-run Wales, have asked for Scottish and Welsh fuel poverty schemes to be included in the provisions of the clause. That is because there are grant schemes that fall under section 15 of the Social Security Act 1990 that address fuel poverty in Scotland and Wales. Those schemes would also benefit from the ability to share information between public authorities, and with gas and electricity suppliers, for the provision of assistance to fuel-poor households. The schemes are Nest and Arbed in Wales, and Scotland’s home energy efficiency programme. They help to reduce energy costs, or to improve energy efficiency or the health and financial wellbeing of people living in fuel poverty. The same safeguards will be in place as for all data disclosed under the clause—that is, data can only be disclosed by persons specified in regulations and for the specific purposes identified in the clause. All persons involved in a data-share must have regard to the code of practice.
The inclusion of these grant schemes will strengthen the ability to deliver better targeted, cost-effective fuel poverty schemes in Wales and Scotland.
Amendment 108 agreed to.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
May I welcome the Minister to his position? It was remiss of me not to do so earlier; he is the model of a patient Minister and very polite with it, too.
As with clause 29, we very much support the objective behind the proposals in clause 30—to identify the individuals most in need of warm home funding and any other grant or benefit that will alleviate fuel poverty. As we heard from Citizens Advice, energy firms have found it difficult to establish whether people are entitled to funding, so people who should get the help do not get it. Sharing the data should smooth that process. We know that fuel poverty is a significant contributor to debt. StepChange said that about 10% of its clients would be within the old definition of fuel poverty—they spend more than 10% of their income on fuel—and it has seen the number of people in gas and electricity arrears rise sharply from where things were in 2010.
However, there are concerns about disclosing personal data to gas and electricity suppliers, again with no detail on what personal information might be disclosed or how. There is none of the legal or technical detail essential to ensure data security, the ethical use of data and the necessary trust framework essential to protect the rights, privacy and security of citizens. The same problems plague the rest of part 5, not least that the general data protection regulation explicitly bans the use of data to monitor the behaviour of people in a way that could be seen as profiling, so we would appreciate the Minister’s comments on that point.
As we have seen, the warm home discount can work well, but it must be set within strict safeguards. The initial legislation was introduced to allow data sharing to be carried out, and we know that the Department of Energy and Climate Change was extremely careful with the idea, and concerned about public perceptions about trust and private sector companies’ use of data. There was a great deal of anxiety about the public view when the proposal was put as a theoretical proposition. The public are not convinced about the sharing of data with private companies—let alone between Departments—and particularly with private providers such as energy companies who have a potential commercial stake in the data.
That is why the warm home scheme currently works through data from the DWP and energy suppliers going to a third party, which crunches the data to identify the matches. The energy suppliers are then sent onward a list of their eligible customers and the data are deleted from the third party’s computers. The data are not held on any computers; that provides an appropriate safeguard for all individuals concerned. That is critical to alleviating concerns about the sharing of personal information.
At present, therefore, companies with no public accountability learn nothing of any commercial value to their activities, which is a crucial point. The sharing of data cannot be done if there is a company with a potential conflict of interest. However, clause 30 allows for the disclosure of information to gas and electricity suppliers to help people living in fuel poverty and within other tightly defined criteria. Although the clause is clear that data may be used only for the purposes intended, unease will remain about why, in this instance, the Government have allowed personal information to be shared with electricity suppliers rather than with a third-party trusted provider.
There will be a serious concern that electricity and gas suppliers are being passed information whose content could present a potential conflict of interest. Nobody is suggesting that the electricity or gas suppliers would do anything in breach of their obligations, but the risk is certainly there. That was the basis behind the creation of a third-party supplier in relation to the warm home scheme.
We therefore welcome the creation of an offence for passing on any of this information and we welcome the maximum sentence of two years. It provides a clear steer from Government on the sensitivity of the data, yet clearly we would prefer that the disclosure would not happen directly at all.
Chris Skidmore
Clause 31 will enable specified public authorities to share information with gas and electricity suppliers or other persons specified in regulations. The disclosure must be for the purpose of reducing energy costs, or improving energy efficiency or the health or financial well-being of people living in fuel poverty, and it must be disclosed for use in connection with an energy supplier obligation scheme. The energy supplier obligation schemes referenced are the warm home discount scheme and the energy company obligation.
The warm home discount scheme provides a £140 energy bill rebate to certain vulnerable households during the winter months, helping those households to heat their homes. Some pensioner households already receive the rebate automatically, but that is possible only if the Government are able to inform the energy supplier, through a data match, which of their customers should receive it. It is important to recognise that that is not a new process. Rebates have been provided automatically to pensioner households in that way since 2011, and the process is considered to be working well. Not only has it helped to ensure that those entitled to support receive it, but it has significantly lower administrative costs—evidence suggests automatic payments cost under £1 per customer to deliver, compared to costs of up to £30 per customer for the non-automated method.
The hon. Member for Sheffield, Heeley mentioned the issue of trust and whether energy suppliers can be trusted with those data. She asked for an assurance from the Government on the continuity of the current scheme and whether similar security measures would be put in place. I can give her that reassurance. The sharing arrangements with third parties will remain exactly the same. Under current data-sharing arrangements for the warm home discount, suppliers are given a simple “yes”, “no” or “unknown” answer as to whether their customers were in receipt of state pension credit and so eligible for the core group rebate under the scheme. We would simply look to expand those disaggregated data. If wider data-sharing arrangements are put in place for fuel poverty schemes, we would expect only Government data to be shared with suppliers under those arrangements, which would have a similar yes or no answer as to whether the customer was eligible for support. The existing warm home discount core group of pensioners already receive automatic support through data sharing. It is a popular scheme and serves as proof that this model works and is safe.
The warm home discount scheme and the energy company obligation represent around £1 billion of investment per year. Although substantial, that is still a finite resource that needs to be targeted as effectively as possible on those who need it most. The data sharing enabled by this clause will significantly strengthen the ability to deliver better targeted, cost-effective fuel poverty support to households who need it the most.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31 ordered to stand part of the Bill.
Clause 32
Further provisions about disclosures under section 29, 30 or 31
Chris Skidmore
I beg to move amendment 109, in clause 32, page 30, line 18, at end insert—
“(ba) for the prevention or detection of crime or the prevention of anti-social behaviour,”
This amendment and amendment 112 create a further exception to the bar on using information disclosed under Chapter 1 of Part 5 of the Bill for a purpose other than that for which it was disclosed. The amendments allow use for the prevention or detection of crime or the prevention of anti-social behaviour.
The Chair
With this it will be convenient to discuss Government amendments 110 to 117, 120 to 128, 131 to 139 and 154 to 158.
Chris Skidmore
These Government amendments concern sanctions for unlawful disclosure and the disclosure and use of data to prevent and detect crime or prevent antisocial behaviour. A person receiving personal information under the public service delivery, debt, fraud and research powers cannot disclose that personal information unless it is for one of the exceptional reasons listed in the Bill, such as preventing loss of life or for national security. Technical amendments will ensure that it is clear that the list of exceptional reasons includes the prevention or detection of crime, or the prevention of antisocial behaviour.
The Bill provides that any person who contravenes the prohibition on further disclosure is guilty of an offence, which carries a penalty of imprisonment, a fine, or both. The introduction of criminal sanctions shows how seriously we take our responsibility to protect personal information, and we consider that it represents a key safeguard to accompany the new powers. It is imperative that individuals handling personal information under the powers take great care in handling that information.
We do not think that mistakes when handling personal data are acceptable, but we do not want to criminalise honest mistakes. The current drafting is slightly overzealous, so amendments 117, 128, 139 and 158 ensure that criminal liability arises only where there has been intent to disclose information. In circumstances involving disclosures made in error, we consider that other sanctions would be more appropriate, such as those set out in the Data Protection Act 1998 or internal disciplinary action.
The remaining amendments are minor technical amendments to ensure that information received under the powers can be shared to assist legal proceedings or criminal investigations outside the United Kingdom where necessary, while maintaining consistency across our clauses and aligning with other similar provisions in other legislation.
Louise Haigh
These Government amendments are technical and seem absolutely fine, apart from the provision to prevent antisocial behaviour. It is not clear to me why the disclosure would be necessary for the purposes of antisocial behaviour as defined under Anti-social Behaviour, Crime and Policing Act 2014. Can the Minister provide a clearer explanation of why any data that are ostensibly there to be shared for the purposes of alleviating fuel poverty and managing public sector debts would be used to prevent antisocial behaviour? Does that point to the concern I expressed earlier about the provisions leading to a broader scope for the use of information?
Chris Skidmore
The exemption has been included to ensure that if information received under the powers points to possible antisocial behaviour, it can be shared. That is intended to avoid any risk that by failing to refer explicitly to antisocial behaviour we cause ambiguity about whether certain information on antisocial behaviour can be shared. That ambiguity would have a chilling effect on multi-agency responses to antisocial behaviour, thereby undermining one of the key purposes of the 2014 Act.
Louise Haigh
Can the Minister give an example of how data relating to fuel poverty shared between a Government agency and a gas and electricity company could possibly relate to antisocial behaviour?
Chris Skidmore
We are talking about public service delivery powers, which do not just cover the warm home discount, attractive though that is. I know that all members of the Committee will be grateful, when this legislation goes through, to go back to their constituents and talk about being on this Bill Committee and how they delivered savings for millions of pensioners, but there are other key aspects of the Bill in relation to the troubled families programme and those living in communities blighted by antisocial behaviour. Data sharing around those programmes could create data matches that point to antisocial behaviour taking place or flag that up. We have a public duty to ensure that we have that power so that we can protect those vulnerable people whose lives are blighted in communities affected by particular types of antisocial behaviour.
Amendment 109 agreed to.
Amendments made: 110, in clause 32, page 30, line 19, leave out
“(whether or not in the United Kingdom)”.
This amendment removes the provision stating that a criminal investigation for the purposes of clause 32(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 111, in clause 32, page 30, line 21, leave out
“and whether or not in the United Kingdom”.
This amendment removes the provision stating that legal proceedings for the purposes of clause 32(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 112, in clause 32, page 30, line 28, at end insert—
“( ) In subsection (2)(ba) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”—(Chris Skidmore.)
See the explanatory statement for amendment 109.
Clause 32, as amended, ordered to stand part of the Bill.
Clause 33
Confidentiality of personal information
Louise Haigh
I beg to move amendment 101, in clause 33, page 31, line 19, leave out “or permitted”.
The Chair
With this it will be convenient to discuss the following:
Amendment 102, in clause 33, page 31, line 25, leave out “made” and insert “necessary”.
This amendment and amendments 103 and 104 seek to place a stricter requirement to reduce the risk of non-compliance with data protection.
Amendment 103, in clause 33, page 31, line 27, leave out “made” and insert “necessary”.
See the explanatory statement for amendment 102.
Amendment 104, in clause 33, page 31, line 30, leave out “made” and insert “necessary”.
See the explanatory statement for amendment 103.
Louise Haigh
The amendments would restrict the onward disclosure of data. As we know, the public value their data, and the amendments would place a higher test on onward disclosure.
It is important that data disclosures of information as sensitive as we have been discussing are appropriately considered; they must not simply be nodded through. Introducing a principle of necessity would mean that organisations have to make a case, rather than merely tick a box. Crucially, that would help to make the Bill more consistent with existing data protection. As the Information Commissioner’s data sharing code of practice clearly states:
“You should employ ‘need to know’ principles, meaning that other organisations should only have access to your data if they need it, and that only relevant staff within those organisations should have access to the data. This should also address any necessary restrictions on onward sharing of data with third parties.”
The ICO’s data sharing code of practice could not be any clearer. It is designed to protect an individual’s data and to prevent any onward disclosure to the organisations that have access to those data.
The Data Protection Act is also framed in terms of necessity. The ICO’s code of practice states:
“The processing is necessary because of a legal obligation that applies to you (except an obligation imposed by a contract)…The processing is necessary to protect the individual’s “vital interests”. This condition only applies in cases of life or death, such as where an individual’s medical history is disclosed to a hospital’s A&E department treating them after a serious road accident…The processing is necessary for administering justice, or for exercising statutory, governmental, or other public functions.”
The amendments, which would insert the word “necessary”, ask a simple question: why are the exemptions in the Data Protection Act set aside when there is disclosure of confidential personal data for certain public interest purposes? That is already clearly well established. For example, in the context of policing, section 29(3) of the Data Protection Act states that:
“Personal data are exempt from the non-disclosure provisions in any case in which”
the disclosure is for any of the purposes of a criminal investigation, and failure to disclose
“would be likely to prejudice”
that investigation. One element of the application of that exemption from the non-disclosure provisions has the effect of excluding the lawfulness of the disclosure. It therefore protects the disclosing body from action for breach of confidence.
To disclose under the Data Protection Act, there has to be prejudice to an investigation before a disclosure of personal data can occur. Clause 33(2)(e) refers to disclosures
“made for the purposes of a criminal investigation”,
with no test of prejudice. The advantage of the amendments is that they would bring in the word “necessary”. That minor shift would at least ensure that the disclosure of personal data is proportionate.
Similarly, section 35(2) of the Data Protection Act permits disclosure of personal data for legal proceedings without risk of the disclosing party being subject to an action for breach of confidence if the disclosure of personal data
“is necessary… for the purpose of, or in connection with, any legal proceeding”.
In contrast, clause 33(2)(f) does not include the word “necessary” and reduces the threshold of disclosure to one that could facilitate speculative disclosures that could not be made under the Data Protection Act. We would be grateful if the Minister explained why the necessity is removed and why the DPA provisions are not sufficient when personal data are disclosed, but only when it is necessary in connection with any legal proceedings. The amendments would align disclosure with the provisions of the DPA.
The changes to clause 33(2)(h)(i) to (iv) are proposed to make it clear why the DPA is insufficient. Schedule 2(4) permits disclosure of personal data if it
“is necessary in order to protect the vital interests of the data subject.”
Schedule 2(5)(b) allows disclosure that is necessary
“for the exercise of any functions conferred on any person by or under any enactment”.
Can the Minister describe what disclosures of personal data do not fall within those two provisions? The amendments insert the word “necessary” and simply align the disclosure with the Data Protection Act.
Chris Skidmore
Amendment 101 looks at tightening the restrictions around the onward disclosure of personal information in clause 33. Its effect would be to restrict the onward disclosure by public authorities to only those purposes required by existing legislation, rather than those permitted by existing legislation. Amendments 102, 103 and 104 would restrict the ability of public authorities to onwardly disclose personal information under this power for matters of great importance to all of us. The Government believe the amendments would have the effect of restricting our ability to share information for matters such as saving lives, investigating criminal activities and safeguarding vulnerable adults and children, unless it can be determined “necessary”.
Unfortunately, amendment 101 would considerably reduce the scope of public authorities to share data under that power. We are looking to provide legal clarity. Many existing legislative gateways for information sharing by public authorities tend to be permissive, rather than mandatory. Given that the purpose of the power is to provide legal clarity around data sharing to better target public services, the Government believe the amendment would, at best, introduce a degree of uncertainty as to whether a proposed data share is legal and, at worst, place a bar on existing permissive information sharing gateways for a range of important purposes.
Amendments 102, 103 and 104 could, in practice, inhibit public authorities from disclosing information, or delay them from disclosing it until they were content it was “necessary” to do so. The consequence of the amendments would therefore be to create an uncertainty where we are trying to provide legal clarity.
I welcome the intention behind the amendments—to ensure that personal information is disclosed—yet we believe they would create uncertainty. Furthermore, they are unnecessary as the powers are to be used in a way that is consistent with the DPA, and tough penalties under the new criminal offence will help ensure public officials handle the information lawfully. I invite the hon. Lady to withdraw the amendment.
Louise Haigh
I am concerned about why the Minister thinks the amendments will provide confusion; they will actually bring the clause into alignment with the Data Protection Act 1998—currently, large swathes of the Bill are not. Personal information is not defined as in the Data Protection Act, and nor are other clauses in this part. With your leave, Mr Streeter, I will test the will of the Committee.
Question put, That the amendment be made.
Chris Skidmore
I beg to move amendment 118, in clause 35, page 32, line 30, at end insert—
“( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”
This amendment requires a code of practice issued under clause 35 by the relevant Minister and relating to the disclosure of information under clause 29, 30 or 31 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.
The Chair
With this it will be convenient to discuss Government amendments 119, 129, 140, 161 and 188.
Chris Skidmore
These are minor and technical amendments to clauses on the code of practice and statements of principles that will be issued under part 5 of the Bill. The amendments will require that the code of practice be consistent with the data sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998, ensuring greater clarity for practitioners and increased transparency for citizens about the relationship between the provisions in the Bill and the DPA. The amendments have been tabled with our conversations with the ICO in mind; we have the Information Commissioner’s confidence that the codes are right. I commend the amendments to the Committee.
Amendment 118 agreed to.
Louise Haigh
I beg to move amendment 106, in clause 35, page 32, line 42, at end insert—
“(ea) the public for a minimum of 12 weeks, and the relevant Minister, must demonstrate that responses have been given conscientious consideration, and”.
The amendment relates simply to the fact that the Opposition would like a full public consultation on the draft codes of practice. A much better version has been put before the Committee, and I understand that it is now on the parliamentary website, but we would like a proper consultation period, not just a consultation with whomever the Government see fit to consult.
Chris Skidmore
Amendment 106 would introduce a requirement for the Minister to publicly consult for a minimum of 12 weeks before issuing or reissuing the code of practice under clause 35.
Many details of the code of practice are drawn from the ICO data sharing code of practice. Others were drawn from two years of open policy making with civil society and other groups. We have just discussed a Government amendment intended to ensure that our codes will be consistent with the ICO’s data sharing code of practice. On that basis, we see no need for a compulsory public consultation before issuing the code, and even less need to make it a requirement in respect of any reissue. Some future changes to the code may be minor. We do not see a need to run a public consultation in those instances—indeed, to do so would be disproportionate in a great number of such cases.
Clause 35 requires that the Minister consult the Information Commissioner and other persons as the Minister thinks appropriate. Those other persons will include civil society groups and experts from the data and technology areas. We will run a full public consultation when a significant revision is expected, such as before the EU data protection regulation comes into effect, which I believe will be in May 2018. The clause as drafted provides the flexibility required. On that basis, the amendment is unnecessary and I invite the hon. Lady to withdraw it.
Louise Haigh
I am pleased to hear that the Government intend to consult on major revisions, and I hope that the draft codes, although much improved, will improve further in Committee, particularly in the areas outlined earlier relating to non-public authorities. As the Government have not listened to many of the recommendations made in their own consultation earlier this year, perhaps it is a futile amendment. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
I will just lay some further concerns about the draft codes. Clause 35 requires specified authorities and specified persons to have regard to the code of practice. We have conducted our own mini-consultation. One member of the Government’s own open policy group described the codes of practice as “discursive and poorly constructed”, another as “empty waffle”. Agreement was widespread that they still require significant legal and technical improvements, and that safeguards should be included in the Bill itself.
Part 5’s provisions for personal data sharing enable officials to decide unilaterally when they may access and share citizens’ personal data without consent and for purposes other than that for which it was provided. It raises serious concerns about how the UK will be able to host any EU citizens’ personal data post-Brexit. If UK officials are able to access and use their data without consent, it is highly unlikely that the EU will regard that as approaching anything like “adequacy” with respect to the general data protection regulation.
It is an incredibly worrying aspect of the Bill and the accompanying codes of practice that nowhere do they refer to the EU’s GDPR, which will not come into effect until 2018, as the Minister said, although the Information Commissioner’s Office has stated that organisations must comply with the GDPR if they wish to continue to do business across the EU or with EU citizens’ data. Although we are referring to Government agencies and Departments, there is every likelihood that they will process EU citizens’ data.
Where consent is to be overridden by officials, the approach is not well defined. There is no consideration of or support for alternative approaches, such as empowering citizens to be helped by letting them nominate someone other than officials to act on their behalf, rather than officials doing so. There is inadequate attention to transparency and accountability. We have many lessons to learn from the Estonian Government, as we heard in evidence sessions.
Furthermore, the personal data-sharing code perpetuates errors from the two-year consultation. For example, when the code refers to application programming interfaces, it incorrectly implies that they are a new thing. They are not, with modern web APIs generally recognised as having been in existence since around 2002—hardly state of the art. The code also displays no apparent awareness of, for example, zero knowledge proof, a method by which one party can prove to another that a given statement is true without conveying any information apart from the fact that the statement is true.
For that reason, both technical and legal safeguards must be within the Bill, not the lengthy and vaguely drafted codes of practice relating to personal data. Quite simply, none of the codes contains the safeguards alluded to earlier in the consultation and Bill process. In the interests of time, I simply say to the Minister that we will revisit concerns about the codes of practice. We have serious concerns about the lack of transparency still built into the codes of practice, let alone on the face of the Bill, and we would like some updated technological references in those codes.
Question put and agreed to.
Clause 35, as amended, accordingly ordered to stand part of the Bill.
Clauses 36 and 37 ordered to stand part of the Bill.
Clause 38
Disclosure of information by civil registration officials
Louise Haigh
I beg to move amendment 97, in clause 38, page 36, line 15, at end insert—
‘(2A) An authority or civil registration official requiring the information must specify the reasons for requiring the information to be disclosed.
(2AA) Information disclosed under this section shall not be shared with any other public or private body beyond those specified in subsection (1).”
The Chair
With this it will be convenient to discuss amendment 107, in clause 38, page 36, line 12, leave out from “that” to end of subsection and insert—
“(a) the authority or civil registration official to whom it is disclosed (the “recipient”) requires the information to enable the recipient to exercise one or more of the recipient’s functions and,
(b) the data subjects whose information is being disclosed have given valid consent under data protection legislation.”
This amendment would remove bulk sharing while allowing certificates to be shared to support electronic government services.
Louise Haigh
These provisions, more than any others in relation to civil registration officials, have surprised and confused those involved in the data-sharing proposals and the open data policy-making process, as they were never mentioned in the more than two years of discussion about data sharing in that open policy-making group. In the Government’s consultation response, they said that
“a large number of individual respondents and representatives from civil society stated strong opposition to the proposed power providing the ability for the bulk sharing of data, believing that the power would effectively create an identity database and enable personal data to be shared between public authorities even where there is no public benefit to do so.”
The amendments would address exactly that.
The publicly stated policy intent of the clause is to allow a citizen interacting with the Department to allow that Department to confirm their civil registration information electronically. That could undeniably enable better informed decision making, allocation of resources and service delivery, and would support the modernisation of public services. However, as drafted, the legislation also allows the entire civil registration database to be copied over to arbitrary locations for arbitrary purposes. That is not the same thing as a citizen allowing access when using digital services.
There are further concerns about the clause’s lack of compliance with the Data Protection Act 1998. Civil registration documents will be shared in bulk to improve service delivery where there is a clear and compelling need, according to the Bill. However, “clear and compelling” remains a lower test than the Data Protection Act’s “necessary and proportionate”, and is likely to be challenged. The use of bulk data runs counter to the Centre for the Protection of National Infrastructure guidance, which warns of the risks associated with bulk data, particularly from hostile foreign intelligence services.
The example given by Government that would require the sharing of civil registration data is around child reference numbers, which become national insurance numbers. National insurance numbers used to be attached to child benefit. It worked on the assumption that every parent would claim child benefit for their child and, when that child reached 15 and a half years of age, their national insurance number would be dispatched.
When the Government changed their policy on child benefit and effectively restricted it to parents who earned less than £50,000 per year, that created a potential problem for the assigning of national insurance numbers. The proposals will presumably address the problem by using birth-certificate data to inform who should be issued with NI numbers and when. That seems a perfectly reasonable and sensible method to correct an unintended consequence of the changes to child benefit policy, but can the Minister give us any other examples of when and why such bulk data sharing would ever be necessary or proportionate? The example I have just run through is incredibly specific and I hope that it would not be and is not repeated across Government.
The Chair
I sense that the Government Whip is trying to catch my eye.
Ordered, That the debate be now adjourned.—(Graham Stuart.)
Digital Economy Bill (Ninth sitting)
Thursday 27th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 October 2016 - (27 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Chair
If hon. Members wish to take off their jackets, they have the Chair’s permission to do so.
Clause 38
Disclosure of information by civil registration officials
Amendment proposed (25 October): 107, in clause 38, page 36, line 12, leave out from “that” to end of subsection and insert—
“(a) the authority or civil registration official to whom it is disclosed (the “recipient”) requires the information to enable the recipient to exercise one or more of the recipient’s functions and,
(b) the data subjects whose information is being disclosed have given valid consent under data protection legislation.”.—(Louise Haigh.)
This amendment would remove bulk sharing while allowing certificates to be shared to support electronic government services.
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing amendment 97, in clause 38, page 36, line 15, at end insert—
‘(2A) An authority or civil registration official requiring the information must specify the reasons for requiring the information to be disclosed.
(2AA) Information disclosed under this section shall not be shared with any other public or private body beyond those specified in subsection (1).”
Graham Jones (Hyndburn) (Lab)
It has been a couple of days since we last met, but my hon. Friend the Member for Sheffield, Heeley made a very important point in her speech regarding where we should look for best practice. The UK is one of the Digital 5, and she brought up Estonia as a country that, when we consider big data, we should reflect on. In dealing with the Bill, we are casting our eye around to see how we can manage big data, personal information, between public bodies. She made the valid point that a fundamental question seems to run throughout the Bill and the clause: does the individual own the information or does the state own it? Because the Government have taken the view, unlike what happens in Estonia, that the state owns the information, we have a series of such clauses. We are primarily trying to find a way to balance the rights of the individual, while the state retains ownership of the information in any form, but, particularly as we move forward, in digital form; that is what I am concerned about.
Let me explain what is done in Estonia and why the Bill in years to come will probably need to be usurped by a new Bill. Estonia has transferred the ownership of data from the state to the individual. When the individual owns the data, there is no need for these complex fudges to try to find a way in which people’s privacy and the integrity of data can be respected, while ownership remains with an umbrella organisation.
The criticism that I make to the Government, and my hon. Friend’s point, is that a fundamental rethink or reset will have to occur at some point because of what is missing from the Bill and the clause. It talks about public bodies, but the Government do not address in this or any other clause the fact that private corporations hold enormous amounts of personal data on people and the ownership of that lies with them, not with the individual. That is why the point that she made was so pertinent. The ownership of data should lie with the individual. As a country, as a nation, we should be looking to transfer that ownership. That is why we cannot address what happens in the private sector. Absent from the Bill are any clauses or even subsections tackling data and information in the private sector. It is solely about the public sector and trying to square off those conundrums and contradictions.
The Government have missed an opportunity to empower people and to be on the side of the individual, the ordinary person, who feels disempowered by all this. They are on the side of big government and, by absence, of big corporations, which in my view is a fundamentally flawed position. That question was asked in Estonia, and it is why it reversed the answer: ownership should lie with the individual.
I can see the Parliamentary Secretary, Cabinet Office, chatting to the Minister for Digital and Culture, and he will probably provide an answer that talks about a destination, saying that if someone gets on a bus, they only get off at the end destination. We all know that when someone gets on a bus, there are many stops before the destination on the front of the bus. They do not have to go all the way. I presume the Minister will explain why the clause is correct from the Government’s point of view and why my argument is flawed. He will say, “If you are going to empower the individual with data, you would need a national identification card system, as in Estonia. The empowerment of the individual must correlate with a national ID card scheme.”
The Minister will make that argument, but that is like getting on a bus and only being able to get off at the final destination, with a national ID card scheme. No one is saying that. There are many bus stops we can get off at before the end. The issue is not binary, with the place we get on the bus and the place we get off. The destination is not necessarily ID cards. The principle that these are the individuals’ own data should be at the heart of the Bill, and the clause does not represent that. The absence of any mention of the private sector is alarming.
Moving on, I want to touch briefly on another aspect that is missing from the Bill and should be considered. This is the Digital Economy Bill, but it is all about the public sector. There is an absence of any reference to the private sector per se. This part of the Bill deals with the digital economy and the provision of public services. Returning to the Estonia example and empowering the individual, people in Estonia can set up a business or company in three or four minutes online. Where is the pro-business element of the Bill? It is certainly not this clause, which relates to data and information in relation to the state and public bodies. Why can individuals here not set up businesses in four minutes? Why is it not a pro-business Bill? Why does it not talk about business? Nothing in the Bill talks about being pro-business.
The clause is simply about public bodies holding big data, and in that respect, it lives in the past, not the future. I urge the Government to think about the fundamental principles and to not make the argument that the amendments would lead to an ID card system, although Estonia does have ID cards. I would have ID cards tomorrow—it is well known across the patch that I would not be on the list of soggy, wet liberals—but that does not mean that the principle that the individual owns data would lead to ID cards. It does not. I ask the Minister, with all due respect, not to suggest that I am making that argument, because I am not.
The Bill is not pro-business and is fundamentally flawed. The clause is simply about trying to manage all the conflicts and contradictions from yesterday’s age. It does not deal with the future. The Government have fallen short. I emphasise the word “economy” in the Bill’s title—it is not about public services, but the economy. I put that word up in bright lights. Where does the Bill talk about the economy? We are talking about public bodies and public authorities.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
That was an impressive Second Reading speech. I am here to speak to amendment 97 and 107.
Chris Skidmore
Not necessarily; that has not been called yet. The amendments have been tabled in the name of the hon. Member for Sheffield, Heeley. She finished her speech on Tuesday, and I put on record my thanks for her impressive scrutiny of the Bill, which she has done almost single-handedly. I note that she made a weighty speech about Concentrix yesterday, so I do not know how she finds the time to sleep. I am sure that it will be noted in the Lords that we have gone through a full process of scrutiny in Committee.
The Government will ensure that citizens can access future Government digital services effectively and securely, while removing the current reliance on paper certificates. That will provide more flexibility and modernise how services are delivered.
Amendment 97 would require registration officials and public authorities requesting information to specify reasons for requiring disclosure. In considering a request to share information under those powers, a registration official would first need to be satisfied that the recipient requires the information to enable them to exercise one or more of their functions.
In her speech on Tuesday, the hon. Lady raised some issues about the Data Protection Act 1998 and said that the Government should set out clearly that it is being honoured, particularly for registration. The hon. Member for Hyndburn talked about fundamental principles, and I can confirm that the Bill’s fundamental principle is its compliance with the Data Protection Act. Data should not be disclosed if to do so would be incompatible with that Act, the Human Rights Act 1998 or part 1 of the Regulation of Investigatory Powers Act 2000.
The Data Protection Act is Magna Carta of the data world, and we want to ensure that all parts of the Bill comply with it. When disclosing information, only minimal information will be provided, in accordance with the requirements of the data recipient.
Louise Haigh (Sheffield, Heeley) (Lab)
I am grateful to the Minister for his kind and polite words. If that is the case, why does the Bill contain the words “clear and compelling”, rather than “necessary and proportionate”, which is the term associated with the Data Protection Act?
Chris Skidmore
I have taken legal advice about that issue, which the hon. Lady raised in her previous speech, and I have been told that those words do not in any way, shape or form challenge or change the interpretation of and compliance with the Data Protection Act. We will be happy to look again at the wording and reflect on it if that gives her confidence that we are absolutely committed to ensuring that the Data Protection Act runs through the core of the Bill. Registration officials are required to be aware of the reasons for the request, so the intention behind the amendment is already achieved by the clause.
Amendment 97 seeks to prevent the onward disclosure of information by the data recipient to any other public or private body beyond the specified public authorities listed in proposed new section 19AB(1) of the Registration Service Act 1953. Disclosures under the power will be restricted to the specified public authorities listed in proposed new section 19AB(1). In addition, personal data will be shared only in accordance with the power and in adherence to the Data Protection Act, by which the recipients will also be bound. As an additional safeguard, under the code of practice, data-sharing agreements can place restrictions on onward disclosures of data, which will be adopted where appropriate.
Amendment 107 would retain the requirement for a civil registration official to be satisfied that the information was required by a recipient to fulfil one of more of their functions before disclosing data. It seeks to add a requirement that an individual must have given valid consent under data protection legislation before any disclosure of their personal data. The data protection legislation referred to is believed to be the Data Protection Act, to which these clauses are already subject. They already state that personal data must be processed fairly. In practice, it will sometimes be necessary to share information in the public interest, where it is impractical or inappropriate to seek or rely on the consent of the individual concerned, but that is already permitted under the Data Protection Act, which we are determined to ensure remains in force.
In the hon. Lady’s speech on Tuesday, she talked about the uses of bulk data and asked me to give examples of where the powers will be used and where they are already used. The powers will allow registration officials to disclose birth data to other local authorities. Currently, a registrar is unable to notify another local authority if a birth takes place in their district but the child’s parents reside in another. Being able to disclose data across district boundaries will assist healthcare, school and wider local authority planning. Being able to share bulk information will ensure that children are known to the local authorities in which they reside and that action can be taken to address any needs of the child or parent.
Another example relates to blue badge fraud. It is estimated that about 2.1% of blue badge fraud relates to use of a blue badge following the death of the individual to whom it belonged. The new powers will allow data to be shared with the local authorities to help reduce that fraud.
Louise Haigh
The Minister gives an important example—blue badge fraud—in which data are accessed rather than shared. The local authority will have an access point into Department for Work and Pensions data to determine whether someone is disabled, but there is absolutely no need for bulk data sharing across local authorities. That is the kind of example that we should follow in the rest of the public sector.
Chris Skidmore
The hon. Lady mentions legal portals through which data can be shared. The key point is that although we have specific examples of data being accessed or shared, every new data-sharing arrangement has to be established within a very specified remit. A great example of a data-sharing arrangement for registrars that is already happening is the Tell Us Once service, in which birth and death registration information is shared across local and central Government. That system has been developed by Government, is envied by the private sector and clearly demonstrates the benefit of sharing civil registration information for both citizens and Government, but the problem is that it is very limited.
We cannot move forward by having endless tiny data-sharing agreements; we need to be able to create a wider platform. For instance, to share death data, individual local authorities have to forge individual relationships. We need to ensure that that is far broader, so that local authorities and Departments can work together to help to prevent unwarranted and unwanted mail from being sent to the family of a deceased person, which can often cause a great deal of distress.
This is evolution, not revolution. We are following the Data Protection Act 1998 and the codes of practice, which the Committee will discuss, will be reviewed every year. We can now share data effectively on a bulk level but without using personal details apart from for the benefit of those it will serve: children, local authorities, planning numbers. This is absolutely the right thing to be doing.
Disclosure will take place without consent only where that is consistent with Data Protection Act rules on fair disclosure. At all times, data can be shared only with specified public authorities as defined in section 19AB of the Registration Service Act 1953. The code of practice makes it very clear that if there are any data breaches or any of those authorities do not follow the code—we will discuss the code when we consider debt measures—they can be removed from that list. With that explanation, I hope the hon. Member for Sheffield, Heeley will agree that the necessary measures are already included in the clause and will withdraw her amendment.
Louise Haigh
My hon. Friend the Member for Hyndburn made important points about the absence from the Bill of clauses dealing with the private sector. In the evidence session, we heard from the chief executive of a tech start-up in Canary Wharf who made it very clear that nothing in the Bill would help his business or others operating in the digital economy. We will certainly return to that theme. I draw my hon. Friend’s attention to new clause 31, which the Committee will consider on Tuesday morning and which will require a review of data ownership across the public and private sectors.
I am grateful that the Minister has confirmed that the Government will consider a rewording of “clear and compelling”, because I think it could lead to some confusion regarding the compliance of part 5 with the Data Protection Act. It is great to hear him praise the Tell Us Once scheme, which was set up by the shadow Secretary of State for Culture, Media and Sport, my hon. Friend the Member for West Bromwich East (Mr Watson)—I will pass on the Minister’s congratulations to him.
The Minister referred to a platform; will he confirm whether he is referring to a central database of citizens’ civil registration information? That is a key concern. I am also glad to hear that sharing information without consent will take place only in explicitly defined circumstances, but I am still not clear why chapter 2 of part 5 will not—as our amendment 97 would—require civil registration officials to disclose why they are sharing information, as all the other chapters in part 5 require data-sharing arrangements or specified persons to do. If the Minister can explain that to me in an intervention, I will happily withdraw the amendment.
Chris Skidmore
I used the word “platform” as part of a process argument about being able to look at data in the round, rather than to suggest that there would be any centralised data collection. That is certainly not the case. For public confidence, measures in the codes of practice set out clearly that when it comes to the data-sharing measures, once data have been used for the required purpose, they are then destroyed. They are not kept on any register for any historical purpose.
Turning to the hon. Lady’s second point—
The Chair
Minister, this is an intervention. I call Louise Haigh—you may intervene again, Minister.
Louise Haigh
My question stands: why is there not a requirement in this chapter of this part for the reasons for disclosure, as there is in all the other chapters? I would be grateful if the Minister intervened regarding that point.
Chris Skidmore
The registration codes of practice clearly set out that the purposes will need to be defined and that a business case will need to be made. None of that can take place until we ensure that there is a specified public function defined on the face of legislation, particularly when it comes to the code of practice that registrars will have to follow and which will be reviewed yearly. I believe that measures are in place to ensure that any data-sharing is done through a due process that is incredibly tight, restrictive and respectful of the use of individuals’ data.
Louise Haigh
I am afraid I am still not satisfied with why that requirement is not on the face of the Bill as it is in other chapters, so I will press amendment 97 to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 97, in clause 38, page 36, line 15, at end insert—
‘(2A) An authority or civil registration official requiring the information must specify the reasons for requiring the information to be disclosed.
(2AA) Information disclosed under this section shall not be shared with any other public or private body beyond those specified in subsection (1).”—(Louise Haigh.)
Question put, That the amendment be made.
Chris Skidmore
The clause amends the Registration Service Act 1953 to introduce new flexible data-sharing powers that allow registration officials to share data from birth, death, marriage and civil partnership records with public authorities for the purpose of fulfilling their functions. That will provide more flexibility and modernise how Government services are delivered.
Being able to share registration data will bring many benefits, for example, in combating housing tenancy fraud. The National Fraud Authority estimates that housing tenancy fraud—for example, a tenant dies and someone else continues to live in the property when they have no right to—costs local authorities around £845 million each year. Being able to provide death data to local authorities will assist in reducing that kind of fraud. The sharing of data will provide benefits for the public in a number of different ways, including the removal of barriers when accessing Government services. It will pave the way for citizens to access Government services more conveniently, efficiently and securely, for example by removing the current reliance on paper certificates to access services.
Data will continue to be protected in accordance with data protection principles, and a number of safeguards will be put in place. Registration officials will be able to share data with only specified public authorities, as defined in new section 19AB—which also includes a power for the Minister to make regulations to add, modify or remove a reference to a public body, thereby providing reassurance that the data will only be disclosed in a targeted way to the Departments listed. As set out in paragraph 58 of the code of practice, the Registrar General has a responsibility to review the code annually, which will involve the national panel for registration. As an additional safeguard, such regulations will be made under the affirmative procedure, requiring the approval of both Houses.
All data sharing will be underpinned by a statutory code of practice, as set out in section 19AC. As I have said, when revising the code the Registrar General will have an obligation to consult the Minister, the Information Commissioner and other relevant parties. The code of practice will act as a safeguard by explaining how discretionary data-sharing powers should be used. The code will require data-sharing agreements to be drawn up, which will includes safeguards on things such as how data will be used and stored and for how long they are to be retained, and forbidding data to be cross-linked in any way.
Question put and agreed to.
Clause 38, as amended, accordingly ordered to stand part of the Bill.
Clause 39
Consequential provision
Question proposed, That the clause stand part of the Bill.
Louise Haigh
Several questions relating to the clause remain unanswered because we were cantering through on Tuesday afternoon. Will the Minister confirm, and give examples of, what the powers in this part of the Bill will exclude? Will he give some guidance on how officials are meant to determine where the line is for what is and is not included? Will there be more guidance issued for non-public sector authorities that will come under the legislation? Will he assure us that the codes, in their next iteration, will provide further guidance on how officials should deal with conflicts of interest when sharing data, how they should identify any unintended risks from disclosing data to organisations, and how sponsoring public authorities should assess whether their systems and procedures are appropriate for the secure handling of data? I would also be grateful if the Minister confirmed what lessons have been learned from the recent National Audit Office report that found more than 9,000 data incidents in the past year alone, and how the Government are improving their data processes to address those issues.
Will the Minister assure us that nothing in the Bill will undermine patient confidentiality? I am aware that the British Medical Association has written to him but has not had a response. The BMA is unclear about whether the scope of the Bill includes the disclosure of personal health and social care information, which would significantly weaken existing protections for confidential data. Will the well established rules that already protect such confidential information continue to apply, and will he assure us that these powers will not override common law in this vital area?
Finally, on a significant area that has not yet been addressed, do the Government intend to implement the EU’s general data protection regulation? If they do, why is the Bill not compliant with it?
Chris Skidmore
On the European directive, which is to be introduced in May 2018, the codes will be revised and will reflect that. That is why the flexibility we have from the codes not being written into the Bill is so important—so that we can deal with instances in which there will be change in the future. They will be updated to reflect that change in May 2018.
Civil registration officers—public servants who want to share data for the benefit of the public—are not trying to do anything that would compromise those whom they serve. In the code of practice, paragraph 47 states that privacy impact assessments will be put in place to ensure that there will be compliance with data protection obligations and that they meet individual expectations of privacy. All Departments entering into data-sharing arrangements under the powers must comply with privacy impact assessments and publish the findings. We want to ensure transparency so that members of the public understand why it is necessary for those data to be shared.
An application to share data is not simply a permissive path by which new data-sharing arrangements can be established without going through due process and regard. In the fairness and transparency section of the data code of practice, there are many questions that must be addressed in order to establish the data-sharing arrangements. They are clearly laid out.
Louise Haigh
The Minister says that civil registration officials will be required to publish their findings. What exactly will they be required to publish, under either the code or the measures in the clause?
Chris Skidmore
Paragraphs 47 and 49 of the civil registration data-sharing code of practice clearly state:
“All government departments entering into data sharing arrangements under these powers must conduct a Privacy Impact Assessment and to publish its findings. The Information Commissioner’s Conducting Privacy Impact Assessments code of practice provides guidance on a range of issues in respect of these assessments, including the benefits of conducting privacy impact assessments and practical guidance on the process required to carry one out…Registration officials entering into new data sharing arrangements should refer to the following guidance issued by the Information Commissioner on Privacy Impact Assessments which includes screening questions…to determine whether a Privacy Impact Assessment is required.”
On health care data, the Government are considering Dame Fiona Caldicott’s recommendations. The consultation closed on 7 September, and I confirm that the Bill’s powers will not be used in relation to health and care data before we have completed that process.
Louise Haigh
The Bill explicitly says that health and social care information should be excluded, but there are concerns that it is drafted so widely that it could be used for that, and I think that the Minister has just confirmed it. He is saying that it is wide enough that should the Government decide on the basis of Dame Fiona’s review that they want to share health and social care information, the Bill will enable it. Is that the case?
Chris Skidmore
The Government will respond to the National Data Guardian’s review. It will not have an impact on the Bill at this stage. The Department of Health recently concluded a public consultation and is considering how to implement her recommendations. As it will take time to make the changes and demonstrate that the public have confidence in them, it would be inappropriate for the Government to seek new information sharing powers in respect of health and care data at this time. I note that we will come to health and care data when we debate a later group of amendments on research, and I hope to provide more information when we do.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40
Disclosure of information to reduce debt owed to the public sector
Louise Haigh
I beg to move amendment 190, in clause 40, page 39, line 21, leave out “have regard, in particular, to” and insert “must comply with”.
The Chair
With this it will be convenient to discuss the following: amendment 191, in clause 44, page 42, line 8, leave out “have regard to” and insert “comply with”.
Amendment 192, in clause 52, page 49, line 8, leave out “have regard to” and insert “comply with”.
Amendment 193, in clause 60, page 55, line 20, leave out “have regard to” and insert “comply with”.
Amendment 194, in clause 67, page 66, line 15, leave out “have regard to” and insert “comply with”.
Amendment 198, in clause 82, page 80, line 18, at end insert
“and only after the codes of practice required under sections 35, 44, 52 and 60 have been approved by a resolution of each House of Parliament.”
New clause 35—Public register of data disclosures—
‘(1) No disclosure by a public authority under Part 5 shall be lawful unless detailed by an entry in a public register.
(2) Any entry made in a public register under subsection (1) shall be disclosed to another person only for the purposes set out in this Part.
(3) Each entry in the register must contain, or include information on—
(a) the uniform resource locator of the entry,
(b) the purpose of the disclosure,
(c) the specific data to be disclosed,
(d) the data controllers and data processors involved in the sharing of the data,
(e) any exchange of letters between the data controllers on the disclosure,
(f) any other information deemed relevant.
(4) In this section, “uniform resource locator” means a standardised naming convention for entries made in a public register.
Louise Haigh
These are further amendments tabled by my hon. Friend the Member for Cardiff West and me to make the codes of practice, on which officials have obviously worked so hard and which were developed in consultation with the Information Commissioner, legally binding. With your permission, Mr Stringer, I will come to specific issues about the data-sharing measures and fraud during debate on clause stand part.
I appreciate what the Minister said about sanctions being enforced on those authorities that do not have regard to the code of practice, but it says on the front page of the code:
“The contents of this Code are not legally binding”;
it merely
“recommends good practice to follow when exercising the powers set out in the Bill.”
That is not really a strong enough message to send to officials and all those involved in data-sharing arrangements. I would be interested to hear examples from the Minister of when it would be considered reasonable not to follow the code, as I assume that that is why he does not want to build it into primary legislation. I know that he will tell me that his real reason is that he wants to future-proof the codes. That is all well and good, but the Bill is already outdated. One witness wrote to us in evidence:
“Part 5 seems to imply an approach to ‘data sharing’ modelled on the era of filing cabinets and photocopiers when—quite literally—the only way to make data available to others was to send them a duplicate physical copy. Modern technology has already rendered the need for such literal ‘data sharing’ obsolete: data can now be used without copying it to others and without compromising security and privacy.”
Furthermore, data sharing is not defined, either legally or technically, in the Bill or in the codes of practice. Does data sharing mean data duplication—copying and distribution—or does it mean data access, or alternatives such as attribute exchange or claim confirmation? These are all quite different things, with their own very distinct risk profiles, and in the absence of any definition, the term “data sharing” is ambiguous at best and potentially damaging in terms of citizens’ trust, cyber-security and data protection. Let me give an example: there is a significant difference between, and different security risk associated with, distributing personal information to third parties, granting them controlled and audited one-time access for the purpose of a specific transaction, or simply confirming that a person is in debt or is or is not eligible for a particular benefit, without revealing any of their detailed personal data.
What is more, there is no reference in the clause to identity and how officials, citizens, or organisations, or even devices and sensors, will be able to prove who they are and their entitlement to access specific personal data. Without this, it is impossible to share data securely, since it will not be possible to know with whom data are being shared and whether they are an appropriate person or organisation to have access to those data. Security audits, of who has accessed which data, when and why, require a trusted identity framework to ensure that details of who has been granted access to data are accurately recorded. Presumably, it will also be mandatory to implement good practice security measures, such as protecting monitoring, preventing in real time inappropriate attempts at data access, and flagging such attempts, to enable immediate mitigating action to be taken.
As I said on Tuesday, all these details are moot, as are the codes of practice and indeed the Information Commissioner Office’s excellent code of practice, if the existence and detail of data sharing is not known about to be challenged; hence the need for a register, as set out in new clause 35. That is why we have tabled our amendments and we would like the Minister to give serious consideration to the inclusion of these important principles and safeguards in the Bill. We are not talking about detailed regulations, we are certainly not talking about holding back technological advances, and we are not talking about the “dead hand of Whitehall”, as the Minister said on Tuesday. We are talking about vital principles that should be in primary legislation, alongside any new powers to share information. The most important of those principles is transparency, which is exactly what new clause 35 speaks to. It would require public authorities to enter in a public register all data disclosures across Government.
The Minister did not know the detail of the audits that are mentioned in the codes of practice. We really need more detail on those audits, as it may well satisfy us in our request for this register. Will all data-sharing agreements be kept in a single place in each Department, updated as data are shared and disclosed across Government, with Government agencies and with non-public sector organisations? Will these additional agencies keep similar audits and—crucially—will those audits be publicly available? Also, will the audits include the purpose of the disclosure, the specific data to be disclosed, how the data were transferred, how the data are stored and for how long, how the data are deleted at the end of that time frame, what data controllers and processors are involved in the sharing of that data, and any other restrictions on the use of further disclosure of that data?
If we have, in a single place, data-sharing amendments, as this amendment would establish, the public can see and trust how their data are being used and for what purpose. They can understand why they are getting a letter from Concentrix about Her Majesty’s Revenue and Customs, or why they have been targeted for a warm home scheme, and—crucially—they can correct or add to any information on themselves that is wrongly held.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Does the hon. Lady agree that, if there is an opportunity to access a proactive notification service that indicates to the member of public that their data are being used and for what purpose, that should be included in any future consideration of this matter?
Louise Haigh
I completely agree, and I believe that the gov.uk Notify service would be an excellent means by which to go about that. I hope that the Minister will consider it.
Graham Jones
My hon. Friend is making a valid point, which I referenced in my point about getting on the bus and the destination. She is suggesting that individuals have rights to own their information; there is a register that they could accept. This is the journey that we have to make. It is about empowering the individual. My hon. Friend is making a powerful point. I am pleased that the Opposition are making this point, because it needs to be made. The future will be about individual ownership of information. I hope that my hon. Friend prosecutes the argument as well as she can.
Louise Haigh
The point is vital and it is the point that was made earlier in our proceedings. Unless we get this right at this stage, it will become a scandal that the Government will then have to deal with and it will hold back progress on sharing data, as we saw with the care.data scandal. We do not want to see the Government embroiled in another scandal like that and we hope that they heed our warnings in order to avoid one in the future.
The objective behind the register is that it could be considered an amnesty for all existing data-sharing projects, with the disclosure assisting understanding of the problem and improving public trust. Let us not kid ourselves that the Bill covers the only data sharing that happens across Government. In a recent interview with Computer Weekly, the new director of the Government Digital Service, Kevin Cunnington, said:
“The real work is going on in”
places such as “Leeds and Manchester”—I would disagree with him on that point for a start, because we are not fans of Leeds in Sheffield—
“as well as London. We need to be part of that. The example I use is where DWP now runs a whole set of disability benefits. It would be incredibly helpful if DWP had selected and consensual access to some of”—
those people’s—
“medical data. Right now, NHS Digital and DWP are having that conversation in Leeds and we’re not in the conversation. Why wouldn’t GDS be in a conversation like that? If we’re going to be, we’ve got to be in Leeds—we can’t do that from here.”
We know that that conversation is happening between the DWP and the NHS—despite assurances that sharing of health and social care information is not happening across Government—only because a random official mentioned it in a random interview, so I ask this question again: does the Minister have an audit of data-sharing agreements and arrangements across Government, or is it the case, as I fear it is, that not only do the public not know which data are shared across Government, for what purpose and how they are stored, but Ministers do not know either?
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
The hon. Lady is making an excellent point. What this cuts back to is the underlying theme of transparency. Rather than the Government acting in a paternal way—“We’ll do what is best for the citizens”—they should be transparent and make it clear to citizens why and where data are being used.
Louise Haigh
That is exactly the kind of attitude that underpins these elements of the Bill: “Trust us. We’ll sort it out. Give us your data. No problem. We’re going to share them freely and fairly.” The Government may well do. The problem is that the public do not have that trust in them. As I said on Tuesday, this is not a party political point. The previous Labour Government were not up to scratch in handling data either. This is not a party political attack at all. It is a genuine attempt to get these proposals in the best shape possible, to aid Government digitisation and deliver efficient public services.
Just as the Government give taxpayers a summary of how their tax money has been spent so they should give citizens information on how they have used data on them. If there is transparency through a register, there can be an informed conversation about whether a data disclosure will solve the problems that it claims to. There has been data sharing to prevent fraud for decades and a complete absence of audited and accurate results from that work. Arguing that current data sharing has not prevented fraud and so there should be more data sharing equates to doing the same thing over and again and expecting a different result.
The amendment is vital to restore and build on public trust in the Government handling of data. It is not in my nature to call on my constituents to trust this Government, but if they enacted the amendment, I absolutely would. I would be able to tell my constituents in good faith that they were right to trust their data to this or any future Government, because they and the data community could see exactly how and why their data were being used and exert some control over it. If the Government do not heed this lesson now, I am afraid that they will learn the hard way when things go the way of care.data or worse, as they inevitably will.
Chris Skidmore
I thank the hon. Lady for her speech, and I appreciate the caution with which she approaches the subject. We have been determined that our definition of data sharing should be in the ICO’s code of practice, and we have adopted that definition in our own draft code. We will comply with ICO’s best practice, which of course means keeping careful records of all data-sharing agreements. We already keep registers of data sharing by Department, and they are FOI-able. We need to take public confidence with us. We will not allow data to be shared with a public authority that does not have appropriate systems in place.
To reassure those whom the hon. Lady seeks to assure that their data can be shared without any compromise to individual security, I will take a journey through the data sharing code of practice. When we come to establish some of the fraud elements, it will be an incremental process. Debt and fraud data-sharing pilots will be set up, and the UK Government are establishing a review group to oversee UK-wide and England-only data sharing under the fraud and debt powers. The review will be responsible for collating the evidence that will inform the Minister’s review of the operations powers as required under the Bill after three years. Devolved Administrations will establish their own Government structure for the oversight of data-sharing arrangements within their respective devolved territories.
Following that, a request to initiate a pilot under the debt and fraud powers must be sent to the appropriate review groups in the territory, accompanied by a business case. The business case must detail its operational period, the nature of the fraud and debt recovery being addressed, the purpose of the data share and how its effectiveness will be measured. Absolutely rock-solid requirements need to be put in place. For instance, the public service delivery debt and fraud powers require a number of documents to be produced as part of the case for a pilot.
Those documents will be a business case for the data-sharing arrangement, which can be collated by all the organisations involved; data-sharing agreements; and a security plan. Furthermore, as part of any formal data-sharing agreements with public authorities that grant access to information, security plans should include storage arrangements to ensure that information is stored in a robust, proportionate and rigorously tested manner and assurances that only people who have a genuine business need—
Graham Jones
The Minister is making an argument to which I would extend my previous comments. He is arguing that there will be security because we will have a data repository—it will inevitably be a single data repository—with secure firewalls around it. However, the architectural principle for which he is arguing is that all data will be kept in one place. From a security perspective, that is the most dangerous way to store data. To return to why Estonia leads the world, there is a distribution—
The Chair
Order. That is an intervention. I am quite happy if the hon. Gentleman wants to catch my eye, but interventions should be short. I have been very lenient with that one.
Chris Skidmore
To return to the security angle, we must have assurances that only people with a genuine business need to see the personal information involved in a data-sharing arrangement will have access to it; confirmation of who will notify in the event of any security breach; and procedures in place to investigate the cause of any security breach. Paragraph 104 of the code suggests:
“You should ensure that data no longer required is destroyed promptly and rendered irrecoverable. The same will apply to data derived or produced from the original data, except where section 33 of the DPA applies (in relation to data processed for research purposes).”
At all times, we want to ensure that public confidence is taken forward with the pilots. They will be put in place only once all the boxes have been ticked. Paragraph 108 of the code states:
“You should make it easy for citizens to access data sharing arrangements and provide information so that the general public can understand what information is being shared and for what purposes. You should communicate key findings or the benefits to citizens derived from data sharing arrangements to the general public to support a better public dialogue on the use of public data.”
Security is not discretionary. Amendment 190 would not reinforce that requirement. It is not a question of compliance with systems in place. Instead, there must be adequate systems in place and Ministers must have regard to those systems to ensure they meet the essential security specifications that the Government demand.
Amendments 191 to 194 concern the codes of practice and present a similar discussion to the one we had about using “have regard to” or “compliance to”. The powers cover a range of public authorities in devolved areas, and we want to ensure flexibility in how powers will be operated, so that we can learn from what works and adapt the code as necessary. If bodies fail to adhere to the code, the Minister will make regulations to remove their ability to share information under the power as set out in paragraph 11 of the code of practice.
As I mentioned, the requirement to have regard to the code of practice does not mean that officials have discretion to disregard the code at will. They will be expected to follow the code or they will lose their ability to share data. There could be exceptional reasons why it is reasonable to depart from the requirements of the code. To fix a rigid straitjacket creates a system of bureaucracy where officials must follow processes that run contrary to logic. This is standard drafting language adopted for the above reasons in the Immigration Act 2016, the Children and Families Act 2014 and the Protection of Freedoms Act 2012, to name a few recent pieces of legislation.
Louise Haigh
It is welcome to hear how detailed and extensive these audits will be. If they are subject to the Freedom of Information Act 2000, will the Minister consider proactively publishing them anyway, so that we can be assured that they are all kept in one place and that data sharing happens only in accordance with data-sharing arrangements that are in the public domain?
Chris Skidmore
When we set up new data-sharing arrangements, we must remember that the ICO and the devolved Administrations must be consulted and that the powers must go before Parliament again. We will have further scrutiny when considering the regulations under the affirmative procedure for secondary legislation.
Louise Haigh
Given that the arrangements have to go through all the obstacles that the Minister has just outlined, I do not understand why not then include them in a central register, so that they are all in one place. We could then be confident that not just those cases in the Bill but all data sharing across the Government is made public and people can have confidence in how and why their data are being used and shared.
Chris Skidmore
The hon. Lady refers to new clause 35, so I would now like to address that and take her points on board. This is about informing the public about what information is being shared by public authorities and for what reason.
The Bill’s provisions already include a number of commitments to transparency and proportionality, which I have already discussed in disclosing information by public authorities. There is a consistent requirement to uphold the Data Protection Act, including its privacy principles that govern the secure, fair and transparent processing of information.
We require the publishing of privacy impact assessments and privacy notices as set out in paragraph 82 of the code of practice. The research power requires the UK Statistics Authority, as the accrediting body, to maintain and publish a register of all persons and organisations it has accredited, and they can be removed under clause 61(5), which mandates that a withdrawal of accreditation will take place if there has been a failure to have regard to the code of practice.
The requirements of the new clause would inevitably create a new set of administrative burdens, which in turn would carry significant cost implications. It is not clear how the uniform resource locator referred to would be agreed upon, or what assessment has been made of the administrative changes that may be required across the public sector. The requirement might have an unintended consequence. For example, it is possible that including information on the specific data to be disclosed would raise difficult questions about whether the public register would interfere with the duty of confidentiality or breach the provisions of the Data Protection Act. Some of the new powers—in particular, the research provisions—would involve the sharing of non-identifying information, so it is not clear how citizens would understand from a register which datasets contain information relating to them or any particular group of reasons.
The key purpose of the new powers is to simplify the legal landscape to enable public authorities to do their job more effectively and deliver better outcomes for the citizen. The new clause, however well intentioned—I respect the hon. Lady’s point—risks working against that purpose and I therefore invite her to withdraw it.
Louise Haigh
The Opposition drafted the amendments and I accept that they may not be perfect, but the principle behind the idea of a data register is impossible to argue with. If the Minister claims that these audits will be done thoroughly and that they will be subject to the Freedom of Information Act anyway, I see no reason why they should not be proactively published, so that the public and Opposition Members can have full confidence that everything in the codes of practice, which are not statutory, is being properly adhered to.
Christian Matheson (City of Chester) (Lab)
Does my hon. Friend concur that a proactive publication might be a lot more cost-effective than chasing after hundreds or, indeed, thousands of FOI requests?
Louise Haigh
Absolutely. This is where the Government often miss a trick: the interrelationship between FOI and open data could drive significant efficiencies across the Government and provide citizens and the data community with valuable data, including data that are valuable to the digital economy. I appreciate that our amendment might not be perfectly drafted, but I hope that the Minister will give serious consideration to the proactive publication of these audits and of all data-sharing arrangements across the Government.
Drew Hendry
There are existing mechanisms across Europe whereby information can be given to the public proactively. Does the hon. Lady agree that the public should not have to go through the process of making an FOI request—they should not have to go through all that hassle—to get the information that pertains to them and their lives?
Louise Haigh
Exactly. The data belong to them; that is exactly right. They should not have to jump over legalistic hurdles to find out how and why the Government are using data that should belong to them, and the Bill completely turns the view that they should not have to do so on its head. I take the Minister’s point about the amendment not being properly drafted. We will go away and redraft it and we will absolutely return to this issue on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
As I have already set out, the Opposition broadly support the objectives outlined in the clause, but, as we have said on several occasions, those objectives must be set within strict safeguards to enable the better management of services.
Indeed, the open data policy process, which has been referenced several times, was a practical and commendable way in which to establish key principles for data to be handled, and to seek the views of industry experts. It is just a shame that it was completely ignored.
Polls show that the public consistently approve of the better use of data across Departments to help to improve customer service; nobody could really dispute that. However, our concerns are not related to the broader principle but to the practicality of these measures.
As we heard in the evidence we received, if these new powers are used appropriately in the management of debt, they could help put a stop to aggressive, unco-ordinated approaches from Government agencies to debt. There is little doubt that debt collection for central Government Departments leaves a lot to be desired. Vulnerable citizens facing multiple hardships are being pursued in a way that is to the detriment of the overall policy of reducing debt.
Citizens Advice said in its evidence to the Committee that there has been a big growth in demand for help with debt, as policies such as the bedroom tax and complex tax credit arrangements are pushing people, through no fault of their own, into debt. The Government’s haphazard approach often compounds matters and creates perverse outcomes, whereby thousands of individuals who are claiming exactly what they should be claiming are targeted in profiling exercises, which amount to nothing short of a mass Government-sponsored phishing exercise. Such an exercise has no place in necessary Government efforts to reduce error.
Shocking research by the charity StepChange has found that these aggressive debt collection methods have resulted in Government Departments having the dubious accolade of being second, behind bailiffs and ahead of mobile phone companies, in the list of those organisations that are considered most likely to treat debtors unfairly.
Again, there is little doubt that the Government’s move to help Departments to better share necessary information on debt could help reduce the unco-ordinated approach that currently harms debtors. However, there are two problems. First, as we have heard, the Government’s debt collection process is flawed and suffers from a lack of trust; and, secondly, the clause will furnish the Government with an extension of their power in matching data, yet this year alone the Government have demonstrated an abysmal failure to match their powers to their responsibility to the users of their services. That leaves public trust hanging by a thread.
Chris Skidmore
Good debt management is a key part of achieving the Government’s fiscal policy objectives. Clause 40 provides a permissive power that will enable information to be shared for the purposes of identifying, collecting, or taking administrative or legal action as a result of debt owed to the Government. With more than £24 billion of debt owed to the Government, the problem is clearly significant.
Public authorities need to work together more intelligently to ensure that more efficient management of debt occurs. We believe that the new power will assist in achieving that. By enabling the efficient sharing of information to allow appropriate bodies to draw on a wider source of relevant data, informed decisions can be made about a customer’s circumstances and their ability to pay. Sharing information across organisational boundaries will help the Government to understand the scale of the issues individuals are facing, and where vulnerable customers are identified, they can be given appropriate support and advice.
Citizens Advice stated:
“This new power is an opportunity to advance the fairness and professionalisation agenda in government debt collection…Sharing data between debt collecting departments will create improved opportunities for better treatment of people in vulnerable situations, and must be matched with fairer and more effective dispute resolution processes.”
The Government agree with that and have worked with non-fee paying debt advice agencies to develop fairness principles to accompany the power, which are included in annex A of the code of practice.
It is important to dwell on the principles that organisations will adhere to, which state:
“Pilots operating under the new data sharing power should aim to use relevant data to help to differentiate between: A customer who cannot pay their debt because of vulnerability or hardship…; A customer who is in a position to pay their debts but who may need additional support; and A customer who has the means to pay their debt, but chooses not to pay - so public authorities, and private bodies acting on their behalf, can assess which interventions could best be used to recover the debt”,
and that:
“Pilots must be conscious of the impact debt collection practices have on vulnerable customers and customers in hardship”.
The principles go on to cover:
“Using relevant sources of data and information to make informed decisions about a customer's individual circumstances and their ability to pay.”
That process could include:
“An assessment of income versus expenditure to create a tailored and affordable repayment plan based on in work and out of work considerations, including the ability to take irregular income into account; and consideration of the need for breathing space to seek advice, or forbearance, in cases of vulnerability and hardship…Where a vulnerable customer is identified, they should be given appropriate support and advice, which may include signposting to non-fee paying debt advice agencies.”
Louise Haigh
I would be grateful if the Minister confirmed that those pilots and the powers enabled in the Bill will apply only to individuals already identified as being in debt, and that they will not seek to profile individuals who may or may not be in debt.
Chris Skidmore
Yes, I can confirm that. Moving forward, I reassure the Committee that we will continue to work closely with Citizens Advice and StepChange to look at fairness in Government debt management processes. Only HMRC and DWP have full reciprocal debt data-sharing gateways in place, under the Welfare Reform Act 2012. This power will help level the playing field for specified public authorities by providing a straightforward power to share data for clearly outlined purposes. Current data-sharing arrangements are time-consuming and complex to set up, and significantly limit the ability of public authorities to share debt data. This power will help facilitate better cross-Government collaboration that will help drive innovation to improve debt management. The clause will provide a clear power for specified public authorities to share data for those purposes, and will remove the existing complications and ambiguities over what can and cannot be shared and by whom.
Christian Matheson
The Minister may have just clarified the point I was seeking to tease out of him. The problems that my hon. Friend the Member for Sheffield, Heeley described show that, far from helping people with debt, the agencies acting on behalf of the Government have created debt that did not exist previously by misusing Government data. The Minister may have just assured us that that will not be the case. If the Minister is really concerned about reducing Government debt, perhaps the Government should have not chopped in half the number of HMRC tax inspectors and instead gone after the people who owe the Government tax.
Question put and agreed to.
Clause 40 accordingly ordered to stand part of the Bill.
Clause 41
Further provisions about power in section 40
Amendments made: 120, in clause 41, page 40, line 5, at end insert—
“(ba) for the prevention or detection of crime or the prevention of anti-social behaviour,”
This amendment and amendment 123 create a further exception to the bar on using information disclosed under Chapter 3 of Part 5 of the Bill for a purpose other than that for which it was disclosed. The amendments allow use for the prevention or detection of crime or the prevention of anti-social behaviour.
Amendment 121, in clause 41, page 40, line 6, leave out
“(whether or not in the United Kingdom)”.
This amendment removes the provision stating that a criminal investigation for the purposes of clause 41(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 122, in clause 41, page 40, line 8, leave out
“and whether or not in the United Kingdom”.
This amendment removes the provision stating that legal proceedings for the purposes of clause 41 may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 123, in clause 41, page 40, line 11, at end insert—
‘( ) In subsection (2)(ba) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”—(Chris Skidmore.)
See the explanatory statement for amendment 120.
Clause 41, as amended, ordered to stand part of the Bill.
Clause 42
Confidentiality of personal information
Amendments made: 124, in clause 42, page 41, line 4, at end insert—
“(da) for the prevention or detection of crime or the prevention of anti-social behaviour,”
This amendment and amendment 127 create a further exception to the bar on the further disclosure of information disclosed under Chapter 3 of Part 5 of the Bill, allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.
Amendment 125, in clause 42, page 41, line 5, leave out
“(whether or not in the United Kingdom)”.
This amendment removes the provision stating that a criminal investigation for the purposes of clause 42(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 126, in clause 42, page 41, line 8, leave out
“and whether or not in the United Kingdom”.
This amendment removes the provision stating that legal proceedings for the purposes of clause 42(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 127, in clause 42, page 41, line 12, at end insert—
‘( ) In subsection (2)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”
See the explanatory statement for amendment 124.
Amendment 128, in clause 42, page 41, line 13, leave out subsections (3) and (4) insert—
‘( ) A person commits an offence if—
(a) the person discloses personal information in contravention of subsection (1), and
(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.” —(Chris Skidmore.)
This amendment applies to the disclosure of personal information in contravention of subsection (1) of clause 42. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.
Clause 42, as amended, ordered to stand part of the Bill.
Clause 43 ordered to stand part of the Bill.
Clause 44
Code of practice
Amendment made: 129, in clause 44, page 42, line 7, at end insert—
‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”—(Chris Skidmore.)
This amendment requires a code of practice issued under clause 44 by the relevant Minister and relating to the disclosure of information under clause 40 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
In evidence, Citizens Advice told us that an estimated £1 in every £5 of debt in this country is debt to the Government. It found that its clients can suffer detriment when public bodies have overly aggressive, unco-ordinated and inconsistent approaches to debt collection. There is also fairly substantial evidence that central Government debt collection lags behind the high standards expected of other creditors, including water companies, council tax collection departments, banks and private debt collectors.
I ask the Minister to consider extending the common standard financial statement to set affordable payments, as the energy, water, banking and commercial debt collection sectors do. That is demonstrated by research from StepChange, which found that in terms of debt collection, those facing severe financial difficulty were likely to rate the DWP and local authorities only just behind bailiffs as those most likely to treat them unfairly.
Chris Skidmore
The Government have started work to look into the common financial statement and standard financial statement alongside non-fee-paying debt advice agencies. That work is in its infancy, but the evidence will help us to decide whether the CFS/SFS could have benefits for Government. Until that work is completed, the Government cannot commit fully to adopt the CFS/SFS.
Louise Haigh
Will the Minister give a timeframe for when that work will be completed and when we will have a statement from the Government?
Chris Skidmore
It is not possible for me to give a timeframe in a Bill Committee discussing clause stand part. I suggest that I write to the hon. Lady, setting out those details in due course.
Government debt is clearly different from private sector debt. It is not contractual. The Government provide a wide range of services to citizens, such as the NHS and education system, and targeted support for those who meet the eligibility requirements to receive benefits. In return, citizens are required to pay taxes and repay any benefit in tax credit overpayments or fines that have been imposed for criminal activity. That revenue helps to fund vital services. The Government aim to ensure that customers are treated fairly. We encourage customers to engage early, so that they can agree on an affordable and sustainable repayment plan that takes individual circumstances into account. We understand that if poor debt collection practice occurs, that can cause distress.
The clause requires in particular that the code of practice must be issued by the Minister. It sets out more detail about how the power will operate and the disclosure and use of data. All specified public authorities and other bodies disclosing or using information under the power must have regard to the code of practice, which sets out in detail best practice of how the data-sharing power should be used. That includes what data should be shared, how data will be protected, issues around privacy and confidentiality and, significantly, the set of fairness principles that I talked about, which must be considered when exercising the power in clause 40. With that in mind, and the fact I have discussed extensively how the codes of practice will help protect the most vulnerable in society, I hope the clause will stand part of the Bill.
Louise Haigh
I am grateful to the Minister for the commitment to write to me. It would be welcome if he could write to all members of the Committee. That shows how committed he is to improving the detail of the clause.
Question put and agreed to.
Clause 44, as amended, accordingly ordered to stand part of the Bill.
Clause 45
Duty to review operation of Chapter
Chris Skidmore
I rise to speak to amendment 130, in clause 45, page 43, line 10, at end insert—
‘( ) The relevant Minister may only make regulations under subsection (5)—
(a) in a case where the regulations include provision relating to Scotland, with the consent of the Scottish Ministers;
(b) in a case where the regulations include provision relating to Wales, with the consent of the Welsh Ministers;
(c) in a case where the regulations include provision relating to Northern Ireland, with the consent of the Department of Finance in Northern Ireland.”
This amendment requires the relevant Minister to obtain the consent of the Scottish Minsters, Welsh Ministers or Department of Finance before making regulations which, following a review under clause 45, amend or repeal Chapter 3 of Part 5 and make provision relating to Scotland, Wales or Northern Ireland respectively.
Chris Skidmore
It is envisaged that information-sharing powers will enable sharing arrangements to be set, but they may take place solely within a devolved territory or involving data relating to devolved matters. The amendments intend to require the consent of Scottish Ministers, Welsh Ministers and the Department of Finance in Northern Ireland before making any regulations to amend or repeal the provisions that relate to those territories. Regrettably, we have found technical flaws with the amendments, so we will reconsider this issue and return to it at a later stage.
Louise Haigh
I would be grateful if the Minister confirmed what technical issues there are with the amendments.
Chris Skidmore
There are a number of technical issues in these amendments, and we are determined to consult thoroughly with the devolved Administrations and the relevant offices. We will do so in due course. We will return to that later in the Bill.
Kevin Brennan (Cardiff West) (Lab)
It is unusual for the Government to introduce amendments and then find technical problems with them. That is obviously what has happened and it is very unfortunate. Given that we were expecting to debate the amendments at this point, can the Minister give us an indication of when he will bring back non-defective amendments—or whether, indeed, he intends to bring any further amendments in this area?
Chris Skidmore
When it comes to the point of process that the hon. Gentleman mentions, we intend to return to this further into the Bill. The particular issue that arose with the amendments as currently drafted is that the need for consent needs to apply correctly only to devolved matters. We found that the amendments do not reflect that, which is why we wish to withdraw them today.
Kevin Brennan
It would be helpful if that were to happen during the Commons stage of the Bill, rather than in the Lords, so that this House has an opportunity, at least on Report, to consider this aspect.
Chris Skidmore
I note the hon. Gentleman’s concerns and will reflect on them. I cannot give any further information at this moment. We hope to ensure that the amendments, when later drafted, will reflect the Government’s desire to listen carefully to all devolved nations and ensure that this applies across the UK.
The Chair
The amendment is not moved.
Clause 45 ordered to stand part of the Bill.
Clauses 46 to 48 ordered to stand part of the Bill.
Clause 49
Further provisions about power in section 48
Amendments made: 131, in clause 49, page 46, line 43, at end insert—
“(ba) for the prevention or detection of crime or the prevention of anti-social behaviour,”
This amendment and amendment 134 create a further exception to the bar on using information disclosed under Chapter 4 of Part 5 of the Bill for a purpose other than that for which it was disclosed. The amendments allows use for the prevention or detection of crime or the prevention of anti-social behaviour.
Amendment 132, in clause 49, page 46, line 44, leave out “(whether or not in the United Kingdom)”
This amendment removes the provision stating that a criminal investigation for the purposes of clause 49(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 133, in clause 49, page 46, line 46, leave out “and whether or not in the United Kingdom”
This amendment removes the provision stating that legal proceedings for the purposes of clause 49(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 134, in clause 49, page 47, line 6, at end insert—
‘( ) In subsection (2)(ba) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”—(Chris Skidmore.)
See the explanatory statement for amendment 131.
Clause 49, as amended, ordered to stand part of the Bill.
Clause 50
Confidentiality of personal information
Amendments made: 135, in clause 50, page 47, line 44, at end insert—
“(da) for the prevention or detection of crime or the prevention of anti-social behaviour,”
This amendment and amendment 138 create a further exception to the bar on the further disclosure of information disclosed under Chapter 4 of Part 5 of the Bill, allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.
Amendment 136, in clause 50, page 48, line 1, leave out “(whether or not in the United Kingdom)”
This amendment removes the provision stating that a criminal investigation for the purposes of clause 50(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 137, in clause 50, page 48, line 4, leave out “and whether or not in the United Kingdom”
This amendment removes the provision stating that legal proceedings for the purposes of clause 50(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 138, in clause 50, page 48, line 11, at end insert—
‘( ) In subsection (2)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”
See the explanatory statement for amendment 135.
Amendment 139, in clause 50, page 48, line 12, leave out subsections (3) and (4) insert—
‘( ) A person commits an offence if—
(a) the person discloses personal information in contravention of subsection (1), and
(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.”—(Chris Skidmore.)
This amendment applies to the disclosure of personal information in contravention of subsection (1) of clause 50. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.—
Clause 50, as amended, ordered to stand part of the Bill.
Clause 51 ordered to stand part of the Bill.
Clause 52
Information disclosed by the Revenue and Customs
Amendment made: 140, in clause 52, page 49, line 7, at end insert—
‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”—(Chris Skidmore.)
This amendment requires a code of practice issued under clause 52 by the relevant Minister and relating to the disclosure of information under clause 48 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.
Clause 52, as amended, ordered to stand part of the Bill.
Clauses 53 to 55 ordered to stand part of the Bill.
Clause 56
Disclosure of information for research purposes
Chris Skidmore
I beg to move amendment 142, in clause 56, page 52, line 23, at end insert—
‘(3A) For the purposes of the first condition the information may be processed by—
(a) the public authority,
(b) a person other than the public authority, or
(c) both the public authority and a person other than the public authority,
(subject to the following provisions of this Part).
(3B) Personal information may be disclosed for the purpose of processing it for disclosure under subsection (1)—
(a) by a public authority to a person involved in processing the information for that purpose;
(b) by one such person to another such person.”
This amendment and amendments 143, 144, 146 to 149, 151 to 153, 159, 160 and 162 to 166 relate to the processing of information for disclosure under clause 56 so as to remove identifying features. They make it clear that a person other than the public authority which is the source of the information may be involved in processing that information.
The Chair
With this it will be convenient to discuss Government amendments 143 to 153, 159, 160 and 162 to 170.
Chris Skidmore
The amendments apply to the research power. Together they provide clarity on the conditions that must be met when information provided by public authorities for research purposes is processed, as set out in clause 56. They also require public authorities to obtain accreditation to process personal information with that power, and they provide further clarity on the exclusion of health and adult social care information in clauses 56 and 63.
Personal information must not be disclosed to researchers under the power unless it is first processed in a way that protects the privacy of all data subjects. Those involved in the processing of information must be accredited as part of the conditions under this power. Processing may be carried out by the public authority that holds the data concerned, a different public authority, or specialist persons or organisations outside the public sector, including those providing secure access facilities and other functions, those commonly referred to as trusted third parties, or a combination of the two.
These amendments have been tabled to ensure that the position is reflected accurately in clause 56 and to ensure that it is clear that each accredited processor can disclose information to other accredited processors as required. In addition, they clarify that a person involved in the processing of information other than the public authority holding the information can disclose the de-identified information to researchers.
As drafted, the Bill does not require public authorities to be accredited or to process data for disclosure to researchers. On reflection, the Government recognise the importance of ensuring that all bodies involved in processing information are subject to the same level of accountability and scrutiny. The amendments will enable the UK Statistics Authority, as the accrediting body, to enforce a consistent approach to best practice for handling information.
Finally, it is important that the exclusion of health and adult social care data is defined in a way that is accurate and transparent. As drafted, the research clauses could be interpreted as excluding from the power public authorities that are primarily health and adult social care providers, but which provide some health-related services. That could mean that, contrary to the intention of the Bill, public authorities, including local authorities that provide a range of services, are at risk of being barred from sharing data relating to their functions because they provide some health and social care-related services.
The amendments will clarify that public authorities whose sole function is to provide health and/or adult social care services will be excluded from the power. They also clarify that public authorities that provide health and/or adult social care services as part of a range of services can share information, including health and adult social care data.
Louise Haigh
I very much welcome the amendments. Has the Minister considered the Information Commissioner’s recommendation to have an additional offence for re-identifying anonymised personal information, as in the Australian model? I otherwise support the amendments.
Chris Skidmore
We are obviously working closely with the Information Commissioner. We will consider all her recommendations in due course, but I cannot comment on that at this moment in time.
Amendment 142 agreed to.
Digital Economy Bill (Tenth sitting)
Thursday 27th October 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 October 2016 - (27 Oct 2016)
Louise Haigh (Sheffield, Heeley) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. There is little need to dwell on this chapter of the Bill because of the safeguards that, as we have heard, are already in place and are well tried and tested. I was greatly encouraged that the Royal Statistical Society said in our evidence session that there needs to be a clear and well understood framework for the sharing of such information, as proposed in this part of the Bill. As we have said at length, we support that.
Most importantly for this debate, the Office for National Statistics operates transparently and publishes guidance on what data it uses and when, and on the public value that is derived from the data and information supplied to it for the purposes of producing official statistics and statistical research. The ONS’s information charter sets out how it carries out its responsibility for handling personal information, and the ONS’s respondent charters for business surveys and household and individual surveys set out the standards that respondents can expect.
The code of practice for official statistics has statutory underpinning in the Statistics and Registration Service Act 2007. Statisticians are obliged to adhere to its ethical requirements, including its principles of integrity, confidentiality and the use of administrative sources for statistical purposes. The Royal Statistical Society said that consideration could usefully be given to whether a new framework for the national statistician to access identifiable data held across the Government and beyond should require a supplementary code of conduct, to extend further public confidence. I would be grateful to the Minister if he confirmed whether he has responded to that and what steps he intends to take on that point.
Finally, the national statistician recently established the national statistician’s data ethics advisory committee, which provides ethical consideration of proposals to access, share and use data. The majority of the committee are independent and lay members from outside the Government, and it operates transparently with all papers and minutes published. It provides independent scrutiny of data shares and reports to the national statistician, who then reports to the UK Statistics Authority board. That model could easily be transposed to better protect data across the Government, as described in other chapters in the Bill.
We are happy to support the measures given the excellent and long-standing safeguards that are already in place, and we hope that, in time, the codes and other requirements in other parts of the Bill follow suit.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
The clause will create a clear, permissive power for public authorities to disclose information that they hold for the purpose of research in the public interest. It will ensure that any personal information is processed before it is disclosed and that a person’s identity is not specified in the information, so that a person’s identity cannot be deduced from that information. It will establish a set of conditions to ensure that any processing of personal information is undertaken in a way that protects the privacy of individuals.
To maintain a truly innovative and competitive economy and to ensure that decisions taken on a range of economic and social issues are informed by the best possible evidence base, it is essential that we maximise the use of rich and varied sources of administrative information that is held across public data.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I am not sure whether the Minister is aware, but Scottish universities share all their research on the internet for the public to read, ensuring world-class Scottish research can help the world. Do the Government agree that such rules should apply to all publications resulting from the research and statistics chapters of the Bill?
Chris Skidmore
I think that it is up to each university to have a policy on what research should be published and when. There is a particular situation in Scotland, but other universities may decide that their research may be used for purposes that remain confidential. Publication is up to the universities and academic bodies to decide.
Calum Kerr
The Minister is absolutely right—perhaps I rushed my question. I was trying to emphasise the point that, when data are shared, will he match that transparency, so that citizens can see what public benefit has been drawn from the use of their data?
Chris Skidmore
I shall come in a moment to the UK Statistics Authority’s position on the use of national statistics; it would benefit enormously from these measures. The potential benefits from increased access to information extend far beyond the research community. It is generally accepted that increased research and development leads to improved productivity and therefore increased economic growth. Information is increasingly a key raw material.
The research community has for some time been prevented from making better use of information held by the public sector, due to a complex legal landscape that has evolved over time. As a result, public authorities are often uncertain about their powers to share information, leading to delays, in some cases lasting years. In the meantime, projects become obsolete or are abandoned.
The Administrative Data Taskforce warned in its 2012 report that the UK was lagging behind other countries in its approach to this issue. It called for a generic legal power to allow public authorities to provide information for research purposes. As well as providing that power, which will remove the uncertainty that has frustrated the research community, the clause will provide a set of conditions that must be complied with if personal information is to be shared.
The conditions can be summarised as the sharing and use only of information that has been de-identified to industry standards to remove information that would identify, or is reasonably likely to identify, an individual, and the requirements that those who process information that identifies a person take reasonable steps to minimise accidental disclosure and prevent deliberate disclosure of such information, that all those who process personal information or receive or use processed personal information are subject to an accreditation process overseen by the UKSA, whether they are researchers, technicians or those who provide secure environments for linking and accessing data, that research for the purposes of which the information is disclosed is accredited and that all those involved in the exercise of the power adhere to a code of practice that is produced and maintained by the UKSA.
The UKSA is the designated accredited body with a duty to maintain and publish registers of all those accredited for any purpose under the power. That includes all those who may be involved in preparing personal information for disclosure to researchers and the research project itself. The results or outcomes of the research project must be publicly available, to demonstrate that the research is for the public good. The UKSA has a duty to maintain and publish the criteria for accreditation, and all activity under the power will be subject to a code of practice issued by the UKSA. I hope that answers the hon. Gentleman’s concerns.
Turning to the willingness for this to happen, the clause represents an important step forward for research in the UK. It will allow greater opportunities to produce high-quality research, which, in the words of the Economic and Social Research Council, can place
“the UK at the forefront of the international scientific landscape.”
It will allow greater opportunities to improve our understanding of our economy and society.
I would like to put on record the comments of Sir Andrew Dilnot, the chair of the UKSA:
“The Digital Economy Bill, currently before the House of Commons Public Bill Committee, represents a unique opportunity to deliver the transformation of UK statistics. The existing legal framework governing access to data for official statistics is complex and time-consuming. The proposals in the Bill, by making use of data already held across Government and beyond, would deliver better access to administrative data and for the purposes of statistics and research, delivering significant efficiencies and savings for individuals, households and businesses. Decision-makers need accurate and timely data to make informed decisions, in particular about the allocation of public resource. This Bill will deliver better statistics and statistical research that help Britain make better decisions.”
Question put and agreed to.
Clause 56, as amended, accordingly ordered to stand part of the Bill.
Clause 57
Provisions supplementary to section 56
Amendments made: 150, in clause 57, page 53, line 24, at end insert—
‘( ) In its application to a public authority with functions relating to the provision of health services or adult social care, section 56 does not authorise the disclosure of information held by the authority in connection with such functions.”
This amendment and amendments 168 to 170 ensure that Chapter 5 of Part 5 applies to a public authority with functions relating to the provision of health services or adult social care and other functions, but that in such a case the powers to disclose in the Chapter only apply to information held in connection with the other functions.
Amendment 151, in clause 57, page 53, line 28, leave out “56” and insert “56(1)”.—(Chris Skidmore.)
See the explanatory statement for amendment 142.
Clause 57, as amended, ordered to stand part of the Bill.
Clause 58
Bar on further disclosure of personal information
Amendments made: 152, in clause 58, page 53, line 38, leave out “56(9)” and insert “56(3B)”.
See the explanatory statement for amendment 142.
Amendment 153, in clause 58, page 54, line 2, at end insert “(including section56(3B))”.
See the explanatory statement for amendment 142.
Amendment 154, in clause 58, page 54, line 6, at end insert—
“(da) which is made for the prevention or detection of crime or the prevention of anti-social behaviour,”.
This amendment and amendment 157 create a further exception to the bar on the further disclosure of information which is disclosed under clause 56 (so that it can be processed for disclosure under that section), allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.
Amendment 155, in clause 58, page 54, line 7, leave out
“(whether or not in the United Kingdom)”.
This amendment removes the provision stating that a criminal investigation for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.
Amendment 156, in clause 58, page 54, line 10, leave out
“and whether or not in the United Kingdom”.
This amendment removes the provision stating that legal proceedings for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.
Amendment 157, in clause 58, page 54, line 11, at end insert—
‘( ) In subsection (3)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”
See the explanatory statement for amendment 154.
Amendment 158, in clause 58, page 54, line 21, leave out subsections (5) and (6) insert—
‘( ) A person commits an offence if—
(a) the person discloses personal information in contravention of subsection (2), and
(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.
This amendment applies to the disclosure of personal information in contravention of subsection (2) of clause 58. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.
Amendment 159, in clause 58, page 54, line 39, leave out “56(9)” and insert “56(3B)”. —(Chris Skidmore.)
See the explanatory statement for amendment 142.
Clause 58, as amended, ordered to stand part of the Bill.
Clause 59
Information disclosed by the Revenue and Customs
Amendment made: 160, in clause 59, page 54, line 43, leave out “56(9)” and insert “56(3B)”.—(Chris Skidmore.)
See the explanatory statement for amendment 142.
Clause 59, as amended, ordered to stand part of the Bill.
Clause 60
Code of practice
Amendments made: 161, in clause 60, page 55, line 19, at end insert—
‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”.
This amendment requires a code of practice issued under clause 60 by the relevant Minister and relating to the disclosure of information under clause 56 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.
Amendment 162, in clause 60, page 55, line 24, leave out “56” and insert “56(1)” —(Chris Skidmore.)
See the explanatory statement for amendment 142.
Clause 60, as amended, ordered to stand part of the Bill.
Clause 61
Accreditation for the purposes of this Chapter
Amendments made: 163, in clause 61, page 56, line 7, leave out “56” and insert
“subsection (1) of section 56”.
See the explanatory statement for amendment 142.
Amendment 164, in clause 61, page 56, line 9, leave out “section” and insert “subsection”.
See the explanatory statement for amendment 142.
Amendment 165, in clause 61, page 56, line 11, leave out “section” and insert “subsection”.
See the explanatory statement for amendment 142.
Amendment 166, in clause 61, page 56, line 23, leave out “56” and insert “56(1)”.
See the explanatory statement for amendment 142.
Amendment 167, in clause 61, page 56, line 38, at end insert—
‘(6A) The Statistics Board—
(a) may from time to time revise conditions or grounds published under this section, and
(b) if it does so, must publish the conditions or grounds as revised.
(6B) Subsection (6) applies in relation to the publication of conditions or grounds under subsection (6A) as it applies in relation to the publication of conditions or grounds under subsection (2).”—(Chris Skidmore.)
This amendment enables the Statistics Board to revise the conditions and grounds it establishes for the accreditation and withdrawal of accreditation of people and research for the purposes of information sharing under Chapter 5 of Part 5 of the Bill.
Clause 61, as amended, ordered to stand part of the Bill.
Clause 62 ordered to stand part of the Bill.
Clause 63
Interpretation of this Chapter
Amendments made: 168, in clause 63, page 57, line 18, leave out subsection (2) and insert—
‘(2) A person is not a public authority for the purposes of this Chapter if the person—
(a) only has functions relating to the provision of health services,
(b) only has functions relating to the provision of adult social care, or
(c) only has functions within paragraph (a) and paragraph (b).
(2A) The following are to be disregarded in determining whether subsection (2) applies to a person—
(a) any power (however expressed) to do things which are incidental to the carrying out of another function of that person;
(b) any function which the person exercises or may exercise on behalf of another person.”.
See the explanatory statement for amendment 150.
Amendment 169, in clause 63, page 57, line 21, leave out “subsection (2)(a)” and insert “this Chapter”.
See the explanatory statement for amendment 150.
Amendment 170, in clause 63, page 57, line 30, leave out “subsection (2)(b)” and insert “this Chapter”.—(Chris Skidmore.)
See the explanatory statement for amendment 150.
Clause 63, as amended, ordered to stand part of the Bill.
Clause 64
Disclosure of non-identifying information by HMRC
Question proposed, That the clause stand part of the Bill.
Louise Haigh
Very briefly, I would be grateful to the Minister if he confirmed why a separate, further clause is necessary on disclosure of non-identifying information by HMRC. The safeguards in the rest of the Bill are sufficient.
Chris Skidmore
As the holder of some of the most useful datasets in the public sector, HMRC has an interest in sharing data more extensively where it does not compromise taxpayer confidentiality. The clause relates to the current legal constraints for HMRC on the disclosure of non-identifying information, allowing the UK tax authority to share information for purposes in the public interest. It deals with information that does not reveal a person’s identity: either general information that is never related to a taxpayer or information aggregated to such a degree that it does not reveal anything particular to a person.
Chris Skidmore
I beg to move amendment 171, in clause 67, page 60, line 37, at end insert—
“() a subsidiary undertaking of the Bank of England within the meaning of the Companies Acts (see sections 1161 and 1162 of the Companies Act 2006),”
This amendment means that the provisions in new section 45B of the Statistics and Registration Service Act 2007 about access to information by the Statistics Board will apply to subsidiaries of the Bank of England as well as to the Bank itself.
Chris Skidmore
These are minor and technical amendments to various definitions in proposed new sections 45B and 45C of the Statistics and Registration Service Act 2007. Sections 45B and 45C give the UK Statistics Authority a right of access to information required for its functions held by Crown bodies and public authorities respectively. Under section 45B, if a Crown body declines to provide information requested by the UK Statistics Authority, the authority may decide to lay the related correspondence before the relevant legislature, including the relevant devolved legislature for the devolved Crown bodies. Under section 45C, before issuing a notice to a devolved public authority that is not a Crown body, the UK Statistics Authority must seek consent from the relevant devolved Administrations.
Amendments 173 and 176 amend the definition of the phrase “Wales public authority” in sections 45B and 45C to refer to a new definition of “Wales public authority” being created by the Wales Bill, which is currently going through the House of Lords. They ensure that sections 45B and 45C are updated with a new definition of “Wales public authority” and will operate consistently with other definitions.
Amendments 172 and 175 amend the definition of “Scottish public authority” in sections 45B and 45C to capture public authorities with mixed functions or no reserve functions within the meaning of the Scotland Act 1998. Amendment 172, which amends section 45B, also refers expressly to a public authority that is part of the Scottish Administration, clarifying that these are Crown bodies to be dealt with under section 45B.
Section 45B states that Crown bodies include
“the Bank of England (including…the Prudential Regulation Authority)…the Financial Conduct Authority…and…the Payment Systems Regulator”.
Amendment 171 clarifies that the reference in section 45B to the Bank of England also includes any of its subsidiaries. That means that section 45B can also cover bodies such as the asset purchase facility fund, which the Bank of England set up in 2009. Amendment 171 also means that any subsidiaries that the Bank sets up in future will be treated in the same way under section 45B as the Bank itself.
Amendment 174 reflects the fact that the Prudential Regulation Authority is currently a subsidiary of the Bank of England formed under section 2A of the Financial Services and Markets Act 2000. This position will change when section 12 of the Bank of England and Financial Services Act 2016 comes into force. Section 12 changes how the PRA is formed and gives the Bank of England functions as the PRA. Amendment 174 therefore ensures section 45B applies during the transitional period before section 12 of the 2016 Act comes into force. It treats the wording in brackets in the relevant part of section 45B as not applying until section 12 comes into force. Until then, the PRA, as a subsidiary of the Bank, will be covered by amendment 171.
Amendment 171 agreed to.
Amendments made: 172, in clause 67, page 61, leave out lines 39 to 43 and insert “the public authority—
() is a part of the Scottish Administration, or
() is a Scottish public authority with mixed functions or no reserved functions (within the meaning of the Scotland Act 1998).”
This amendment modifies the requirement for a request for information under new section 45B of the Statistics and Registration Service Act 2007 and any response to be laid before the Scottish Parliament so that it applies to a request to public authority which is a part of the Scottish Administration or a Scottish public authority with mixed or no reserved functions.
Amendment 173, in clause 67, page 61, line 45, leave out from beginning to end of line 3 on page 62 and insert
“the public authority is a Wales public authority as defined by section 157A of the Government of Wales Act 2006.”
This amendment modifies the requirement for a request for information under new section 45B of the Statistics and Registration Service Act 2007 and any response to be laid before the National Assembly for Wales so that it applies to a request to a Wales public authority.
Amendment 174, in clause 67, page 62, line 13, at end insert—
‘( ) Until the coming into force of section 12 of the Bank of England and Financial Services Act 2016 subsection (1)(b) has effect as if the words in brackets were omitted.”
This amendment makes provision about the reference in new section 45B(1)(b) to the Bank of England in the exercise of its functions as the Prudential Regulation Authority in the period before the coming into force of section 12 of the Bank of England and Financial Services Act 2016. Until that section comes into force the Authority will remain a subsidiary of the Bank and so will be covered by the reference in amendment 171.
Amendment 175, in clause 67, page 62, line 41, leave out from “authority” to end of line 3 on page 63 and insert
“which is a Scottish public authority with mixed functions or no reserved functions (within the meaning of the Scotland Act 1998).”
This amendment modifies the requirement to obtain the consent of the Scottish Ministers before giving a notice under new section 45C of the Statistics and Registration Service Act 2007 so that it applies to a notice given to a Scottish public authority with mixed or no reserved functions.
Amendment 176, in clause 67, page 63, line 5, leave out from “authority” to end of line 10 and insert
“which is a Wales public authority as defined by section 157A of the Government of Wales Act 2006.”
This amendment modifies the requirement to obtain the consent of the Welsh Ministers before giving a notice under new section 45C of the Statistics and Registration Service Act 2007 so that it applies to a notice given to a Wales public authority.
Amendment 188, in clause 67, page 65, line 3, at end insert—
‘( ) The statement must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).” —(Chris Skidmore.)
This amendment requires a statement issued under section 45E of the Statistics and Registration Service Act 2007 by the Statistics Board and relating to the exercise of its functions under sections 45B, 45C and 45D of that Act to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.
Question proposed, That the clause, as amended, stand part of the Bill.
Louise Haigh
As the Minister has just outlined, clause 67 differentiates access to information held by Crown bodies and a power to require disclosures by other public authorities. In essence, it enables the statistical authorities to request information from Crown bodies and to demand it from other public authorities. I would be grateful if the Minister confirmed why there is that distinction. He may well be aware that the Royal Statistical Society and the ONS would like the Bill to be amended to include the power to require disclosure from Crown bodies in exactly the same way as from public authorities. What consideration has been given to that? Why are the same requirements not on both types of public authorities?
Chris Skidmore
The clause gives certainty and teeth to data supplied to the UK Statistics Authority. Official statistics are not an optional extra. If they are incomplete, decisions made by the Government and Parliament that rely on those statistics could be misinformed, late and lose impact. UKSA must have the data equipment necessary to produce the numbers that decision makers need to make the best decisions in the interests of the country.
Existing legislation provides precedents for requiring businesses and households to provide information for producing aggregate statistics about the economy and society. For instance, the Statistics of Trade Act 1947 requires businesses to report the data required for the production of UK economic statistics. For the past 100 years, the Census Act 1920 has required every household to provide information once every 10 years so that we can understand our population and society. To put that in context, censuses are long established but expensive. The 2011 census cost us almost £500 million. Census data are the statistical spine of decision making, including the allocation of public funds.
Allowing UKSA access to administrative data the Government already hold is more efficient. We should not be asking people in business questions when we already know the answers from other sources. Under the Statistics and Registration Service Act 2007, UKSA must seek legislation every time it needs access to Government datasets where there is no existing data-sharing gateway. That mechanism is limited and only removes barriers that existed before the 2007 Act, and will become increasingly redundant over time.
The clause realises the expectation that, where UKSA needs access to datasets to produce statistics, it should be given that access. Section 45B requires Crown bodies, in particular central Government Departments, to provide data when UKSA asks for them, or, where necessary, have their refusal put before Parliament. Why treat Crown bodies differently from public authorities? That way of working, set out in sections 45B and 45C, ensures consistency between how a Crown body interacts with another on the one hand, and how a Crown body interacts with a non-Crown body on the other.
Sections 45C and 45D allow UKSA to require data from public authorities and large businesses. In practice, UKSA will focus on businesses that hold data likely to support to UKSA’s data needs, reducing the existing burden of surveys on businesses and individuals. UKSA must be sure that the data it relies on will continue to be provided, to ensure the integrity of the statistics it produces and the integrity of decisions based on those statistics.
Section 45F makes it clear that public authorities and businesses must comply with the notice they receive from UKSA under sections 45C or 45D, which draws on existing precedents for enforcement seen for the census and business surveys. Section 45E also requires UKSA to publicly consult on a statement of principles and procedures it will apply when operating these new powers. UKSA will lay that before Parliament and the devolved legislatures.
Louise Haigh
Section 45B lays out that UKSA must
“specify the date by which or the period within which the public authority must respond to the request.”
What kind of period are we are talking about? What kind of period does the Minister consider reasonable in which a public authority must respond to a request from UKSA?
Chris Skidmore
I will write to the hon. Lady on that particular point with further information. I am more than happy to do that. She correctly noted that timeframes are set out, which highlights the transparency arrangements already set down in the Bill. That has been well thought through, and we are determined to ensure that we work closely with UKSA going forward. UKSA will publicly consult on a new code of practice to support public authorities in consulting it on planned changes to data systems to protect the accuracy and integrity of its statistical outputs. Again, that will be laid before Parliament and the devolved legislatures.
We have spoken previously about codes of practice. Illustrative first drafts of the statement and the code have been made publicly available, including to members of the Committee, and they continue to be developed ahead of a full public consultation in a few months’ time. We are determined to ensure that the research and statistics communities are given the tools to enable them to do their jobs efficiently and effectively going into the 21st century. We want to ensure that the UK is a leader in developing statistics and research.
Question put and agreed to.
Clause 67, as amended, accordingly ordered to stand part of the Bill.
Clause 68 ordered to stand part of the Bill.
Clause 69
OFCOM reports on infrastructure etc
Question proposed, That the clause stand part of the Bill.
Louise Haigh
I welcome the other Minister back to his place, and I look forward to the lengthy correspondence that the Cabinet Office Minister and I will be having. The Minister for Digital and Culture and I also had lengthy correspondence when he was at the Cabinet Office, and I look forward to that continuing.
Will the Minister lay out what the clause seeks to achieve? What reports would Ofcom publish under this power that it currently cannot? Would this extend to requesting and publishing information that was referenced in an earlier debate—right at the beginning on part 1—potentially in relation to existing broadband and communications infrastructure and to where Openreach and other providers are rolling out broadband in order to ensure a more effective market? The Opposition welcome all attempts by regulators and Government to make as much data open as possible, so we very much welcome the powers in the clause.
The Minister for Digital and Culture (Matt Hancock)
Clause 69 allows Ofcom to prepare and publish reports on underlying data at times it considers appropriate as opposed to at specified times, as is currently the case. The short answer to the hon. Lady’s question is yes. Before the end of the year, Ofcom will publish a “Connected Nations” report, for example, which typically goes into detail about the connectivity of the infrastructure, but there are restrictions at the moment on when these can be published. We think it is better to allow Ofcom to prepare and publish reports at times that it considers appropriate.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Clauses 70 and 71 ordered to stand part of the Bill.
Clause 72
Provision of information to OFCOM
Matt Hancock
I beg to move amendment 177, in clause 72, page 70, line 15, after “135”, insert “of the Communications Act 2003”.
This amendment makes it clear that the Act amended by clause 72 is the Communications Act 2003.
The amendment corrects a minor error to clause 72. We omitted the words
“of the Communications Act 2003”.
I consider this to be a pretty technical amendment.
Amendment 177 agreed to.
Clause 72, as amended, ordered to stand part of the Bill.
Clause 73
Information required from communications providers
Question proposed, That the clause stand part of the Bill.
Louise Haigh
I would like to put on the record again that this Bill was clearly not ready for Committee. We have just seen another example of an amendment that was completely uncalled for. In the last part, amendments had to be withdrawn that were incorrect. I hope that the proposals are properly examined in the Lords and that this is not a recurring theme throughout future legislation that this Government introduce. It is very disappointing to see the lack of preparation for this Bill.
Claire Perry (Devizes) (Con)
The hon. Lady is doing a marvellous job for her Front-Bench team, but having sat through several Bill Committees, I assure her that this situation is not particularly unusual. What is important is getting the Bill absolutely right and making sure that we use this opportunity to scrutinise it. We should proceed in the spirit of us all wanting the best thing and stop taking pops at the drafting team.
Louise Haigh
I am assured by my hon. Friend the Member for Cardiff West that this was not common practice under the last Labour Government, and I am horrified to hear that it has been common practice over the past couple of years.
Matt Hancock
Amendment 177, which was agreed on a cross-party basis, corrects what was in fact a printing error. I hope that the hon. Lady will withdraw her rather pernickety point. I am glad that the Committee has had the opportunity to correct the problem.
Louise Haigh
It is good to hear that it was the 177th amendment that the Government have had to table to this Bill.
Let us move on to clause 73. The Minister will be pleased to hear that we welcome the clause, which has clearly been drafted with consumers at its heart. The clause provides Ofcom with powers to require information that will enable and empower consumers to switch, thereby creating a much more efficient and open market with fewer barriers to entry.
Ofcom does not currently have powers to require communications providers to provide information on quality of service, such as how they are doing on customer service, complaints, fault repairs or the speed of installation, and it does not have the power to specify how it would want that information to be provided. We welcome these new powers, which will make it much easier for Ofcom to publish this important comparative information that will help consumers.
I would be grateful if the Minister expanded on the points raised in relation to clause 69. He said that BT is about to be forthcoming with information on its existing infrastructure and on the roll-out of broadband. Can he confirm whether that information has been provided? If not, when does he expect it to be provided?
Subsection (5) of proposed new section 137A of the Communications Act 2003 states that the power conferred on Ofcom
“is to be exercised by a demand, contained in a notice served on the communications provider”.
Prior to that, a draft notice will stipulate a reasonable notice period. Can the Minister give us some examples of what he would consider to be a reasonable notice period for a particular dataset? Will that be in negotiation with a provider, or will it be set by Ofcom? What will be the consequence for communications providers that refuse to comply? Finally, how quickly would he like to see Ofcom publish the publishable data after receiving them from a communications provider?
We are happy to support clause 73 stand part.
Matt Hancock
Clause 73 paves the way for greater access to information to help consumers make more informed decisions. The hon. Lady has set out exactly why that is needed. The clause will also enable Ofcom to require providers to collect, retain or generate data for these purposes and to ensure that consumers are easily able to access information that is most relevant to their decision. The power will enable Ofcom to require information in machine-readable formats, for example, so that third parties can mash it and provide it in a usable, meaningful and accessible way for the consumer, thereby helping things such as comparison websites, which we strongly support.
On the hon. Lady’s specific questions, the data will form part of Ofcom’s data publication before the end of the year. She asked about a reasonable notice period, which will be for negotiation with providers. It is for Ofcom to decide when it is appropriate to make a publication, and it will endeavour to do so as soon as possible. On the consequences for providers that do not supply the data, these are highly regulated markets in which Ofcom has significant powers, some of which we are enhancing elsewhere in the Bill, so there will be very serious consequences for a provider that does not abide by a requirement from Ofcom to publish. I hope that answers the questions.
Question put and agreed to.
Clause 73 accordingly ordered to stand part of the Bill.
Clause 74
Appeals from decisions of OFCOM and others: standard of review
Question proposed, That the clause stand part of the Bill.
Louise Haigh
The clause will reform the appeals process against Ofcom decisions, speeding up the process and ensuring that consumers’ interests are better prioritised. The Communications Act 2003 states clearly that Ofcom’s principal duty is to further the interests of citizens and consumers, but clearly there are issues with how the current appeals process works.
The current process is that Ofcom makes a decision following full consultation with the industry and the public; under the Competition Appeal Tribunal rules, an affected body can then appeal against the decision. Ofcom has six weeks to lodge its defence, and a month later substantive appeals are considered in a court case management conference, at which procedural and substantive points are raised. Third parties can then intervene, after which the appellant can lodge a reply. About a month before the hearing, the parties can lodge skeleton arguments. The hearing then takes place, and judgment is usually reserved. That judgment can take anything from weeks to up to a year. Parties then have about three weeks to decide whether they want to go to the Court of Appeal.
Not only is that process incredibly cumbersome, but it allows for considerable new evidence and new parties to the appeal, of which Ofcom had no knowledge at the consultation phase, to be brought forward mid-process. Under the new system, both the process of gathering evidence, including for the cross-examination of witnesses and experts, and the general treatment of that evidence are designed to be slimmed down. The system will still allow for an appeal, of course—that is only right for the sake of justice—but it will ensure that the appeals process does not unduly benefit those who can afford to litigate. It is alleged that it is currently those with the deepest pockets who bring forward the greatest number of appeals; indeed, most appellants have far deeper pockets than Ofcom has to defend itself with.
I have heard the concerns of some within the industry about the changes, as I am sure the Minister has. Although we are in favour of the Government’s proposals, I would appreciate the Minister’s response to some of those concerns. In a submission to the Committee, a group of the largest communications providers has claimed that the current appeals regime works well for consumers and has delivered consumer benefits to the tune of hundreds of millions of pounds.
Calum Kerr
I understand the rationale behind trying to split up the powers that Ofcom has been given and make the process slimmer, but it is quite an achievement to get BT, Sky, Virgin Media, Vodafone and O2 in agreement. I share the hon. Lady’s concern and look forward to the Minister’s response, which I hope will help to allay it.
Louise Haigh
I agree, and although I support the Government’s objective, it is of concern that such a wide range of communications providers—the biggest investors in communications infrastructure in the UK—are so vehemently opposed to the changes. This is exactly what the Committee stage of any Bill is designed for: to test out arguments and make sure that the right thing is being done. Will the Minister confirm what impact assessment of the proposals has been made, and what benefit he anticipates the changes will bring to consumers?
The submission that I mentioned claims that if the proposed regime had been in place, the mobile call termination case in 2007 would have led to a £265 million loss to consumers over the two-year period from 2010 to 2012. It states that
“in each of the cases cited, the Tribunal’s decision was that Ofcom’s decision had not gone far enough in consumers’ favour. The quantifiable financial impact of these appeals totalled a net benefit to consumers of around £350-400m.”
It says that the merits review
“enabled these errors to be corrected, the finding of the Government’s 2013 research was that on a JR”—
judicial review—
“standard, each of these decisions would have stood unadjusted.”
No one is saying that Ofcom will get things right 100% of the time—clearly, it will not. The new appeals process is not saying that either, but it will substantially raise the bar for appeals by allowing only regulated bodies to contest how a decision was made. Is the Minister confident that the decisions cited in the evidence from BT and the other providers would still be corrected under the new regime? The providers claim that they would not.
We have heard mixed messages about whether the proposals will bring the communications regulator in line with other utilities regulators. Ofcom told us in evidence that they would do just that, but is it not the case that the price control decisions of both Ofgem and Ofwat are subject to merits review by the Competition and Markets Authority? Will the Minister confirm why that is the case for other industries but not for communications?
On SMEs, techUK is particularly concerned that the higher bar of judicial review will have a disproportionate impact on smaller providers, which brought 17% of appeals between 2010 and 2015. I would be grateful if the Minister assured us that his Department has fully considered the impact these changes will have on SMEs, and particularly on new entrants to the market.
I understand that there will always be winners and losers in any regulatory change. The Minister will no doubt enjoy basking under the adoring gaze of TalkTalk and Three, but he will have to live with the fact that he is in BT’s and Virgin’s bad books for now. What is also clear is that for most people this appeals regime is far from well understood, as the industry claims. In fact, they would find it very difficult to understand why changes that could benefit them are being held up, sometimes for years on end, and why big communications providers are spending millions of pounds on litigation when they should be ploughing that money into helping their customers.
That is no basis on which to continue an appeals regime that leads to excessive litigation and smothers changes that may help—indeed, in some cases, may transform—consumers’ relationships with their communications providers. Clearly, during the exercise of that duty, Ofcom will be required to intervene and make a ruling, which sometimes the industry may not like.
If the broad contention on this side is that Ofcom should be given further powers to ensure that the industry acts in the best interests of consumers, there is little point in allowing an appeals process to continue that is so lengthy that it can render any changes useless. One particularly compelling example given in the evidence session was about the need for far greater switching for consumers. The chief executive of Three remarked that we are at the bottom of the class in terms of switching, and that despite nearly a decade of campaigning little has been done to get rid of provider-led switching. That was because when Ofcom tried to legislate on it, to enable consumers to switch, one of the major mobile providers was able to litigate and push the matter into the long grass, from where it has not emerged until today.
With all that in mind, and pending answers to the questions that I have put to the Minister, we are happy to support the clause.
Matt Hancock
That was an excellent assessment of the pros, cons and challenges around the proposed changes to appeals. Much of the analysis and thinking that the hon. Lady has just set out is what we went through in coming to the same conclusion that it is sensible to change the appeals process.
I will set out some of the detail of the changes and then I will answer the specific questions that were put. The clause alters the standard review applied by the Competition Appeal Tribunal when deciding appeals brought under the Competitions Act 2003 against decisions made by Ofcom. This is in order to make the appeals process more efficient. The changes will not apply to appeals against decisions made by Ofcom using powers under the Competition Act 1998 or the Enterprise Act 2002.
Currently, appeals can be brought and decided on the merits of a case, and this exceeds and effectively gold-plates article 4 of the EU framework directive that requires that the merits of a case are taken into account in any appeal. The result of this over-implementation is an unnecessarily intensive and burdensome standard of review that can result, as the hon. Lady set out, in very lengthy and costly appeals litigation, which can hinder timely and effective regulation, and risks Ofcom taking an overly risk-averse approach to regulating the sector properly.
Christian Matheson (City of Chester) (Lab)
Would it also not give Ofcom much more credibility in the eyes of the organisations that it regulates, because they would realise that they had much less ability to overturn its decisions?
Matt Hancock
That is right. We heard the evidence from Three and TalkTalk, who are in favour of this change. That is no surprise, as they are essentially the insurgents in the infrastructure market, and the incumbents were less keen on this change. We also heard from Which? and Citizens Advice, which explained that it is no surprise that large companies want to keep the status quo.
It is not my job to bask in the reflected glory of the appreciation from Three or TalkTalk, nor is it to have undue concern, rather than due concern, for the complaints of those who disagree with this change.
Calum Kerr
The briefing we received recognises the Government’s line on the current approach but disagrees with the contention. It actually puts forward a form of words that it believes, if inserted, would not risk any issue with the relevant European directive. Have the Government considered that? I am happy to forward that form of words if the Minister does not know what I am referring to; it is in the latest briefing.
Matt Hancock
Again, I am happy to look at any detailed representation, but we have had significant and extensive discussions about this, including with techUK and others. On the SME point that techUK specifically raised, that was covered in the impact assessment that the hon. Member for Sheffield, Heeley asked about. It was published on 12 May; on page 15 it sets out the concern that, if we had a separate system for SMEs, we would end up with a yet more complicated process, as opposed to a simpler one, which I think would be an overall benefit.
Louise Haigh
I completely accept that we should not have separate regulatory systems for SMEs and larger providers. Will the Minister confirm that the new judicial review process will not unduly hinder SMEs, in contrast to the current “on the merits” appeal process?
Matt Hancock
I have looked at that specific point and I am satisfied that the new process does not, because a judicial review can take into account those sorts of concerns but is a more efficient process of appeal.
On the point raised by the hon. Member for Berwickshire, Roxburgh and Selkirk, I should say that we have considered using the language of the directive but we do not believe that it materially changes our approach. I said I would get back to the hon. Gentleman; I was a bit quicker than even I expected.
On that basis, I hope that the use of the well-tried and well-tested judicial review will prove a more efficient regulatory basis in future.
Louise Haigh
The Minister has not addressed a couple of points: the potential loss to consumers that the industry claims the new system will create and the cases that would not have been brought under the existing system; and the mixed messages we have heard about whether the Bill brings Ofcom into line with other utilities regulators.
Matt Hancock
On the first point, I am convinced that this change will act in the benefit of consumers, because we will have a quicker regulatory approach. The big incumbents will not be able to hold up a regulatory decision through aggressive use of the appeals process. Instead, we will have a more efficient appeals process. I am convinced that this will improve the situation for consumers.
Of course, it is possible to pick out individual cases that may have gone the other way or may not have been able to be considered under the new approach. First, it is not possible to know whether that is the case without testing them. Secondly, looking at individual cases out of context does not allow us to step back and look at the effective operation of the system as a whole. I am sure the hon. Lady agrees with that approach.
Louise Haigh
But is it not the point that those decisions were made by Ofcom and were incorrect, according to the tribunal? They were not made with consumers’ best interests at heart and they would not have been appealed under the new system because the method by which they arrived at those decisions was correct. Is there any scope in the proposals to allow certain examples, such as those put forward by the industry, to be given a merits-based review, as with price control reviews by Ofgem?
Matt Hancock
The cases that the hon. Lady and the industry cited have been assessed, and we believe that judgment under a JR system would have gone the same way as under the old system—but quicker. I hope that deals with that concern. JR is used in a large number of other areas. Of course there are specific other cases in which it is not, but it is a strong basis of appeal that is regularly used in public sector decisions. If material error is present, it can then be addressed by judicial review. I hope I have answered the hon. Lady’s questions.
Question put and agreed to.
Clause 74 accordingly ordered to stand part of the Bill.
Clause 75
Functions of OFCOM in relation to the BBC
Question proposed, That the clause stand part of the Bill.
Louise Haigh
We do not wish to oppose Ofcom’s new role in regulating the BBC, for which clause 75 provides—as the Minister knows, we supported the BBC charter agreement last week in the House—but we have some concerns, which are shared by the BBC, about how Ofcom’s new role will work out in practice.
Distinctiveness is an absolutely vital characteristic of the BBC and its services. It is one of the things that justifies its public funding. The BBC should deliver its public purposes and mission, and it should serve all audiences, through distinctive services. Critically, distinctiveness should be judged at the level of services, rather than programmes. That does not mean that the BBC should focus on “market failure” programming or never make a programme that the commercial sector might make. Instead, the test should be that every BBC programme aspires to be the very best in its genre. Overall, the range of programmes in the BBC services should be distinguishable from its commercial competitors. There is a concern that Ofcom could be too prescriptive in the standards it expects of the BBC. For example, it might focus on quotas, such as the number of religious or news hours, rather than a substantive, qualitative assessment, and rather than a standard, such as high-quality journalism.
Evidence shows that BBC services are distinctive and have become more so in recent years. Audiences agree: more than 80% of the people responding to the Government’s charter review consultation said that the BBC serves audiences well, almost three quarters said that BBC services are distinctive and about two thirds said that they think it has a positive impact on the market.
The definition of distinctiveness in the agreement and the framework for measuring it are therefore critically important. The section of the charter agreement that relates to the new powers that will go to Ofcom requires Ofcom to set prescriptive and extensive regulatory requirements, which must be contained in an operating licence for BBC services. Ofcom must have a presumption against removing any of the current requirements on the BBC—there are about 140 quotas in the BBC’s existing service licences—and seek to increase the requirements overall by both increasing existing requirements and adding new ones.
Ofcom has been given detailed guidance about what aspects of distinctiveness it must consider for the BBC’s TV, radio and online services. That follows an old-fashioned approach to content regulation based on prescribing inputs, rather than securing audience outcomes, such as quality and impact. The BBC is concerned that it will introduce a prescriptive and inflexible regulatory framework that could restrict the BBC’s editorial independence and creativity.
Clarity about the definition of distinctiveness would be welcome. It should be applied to services, not individual programmes. The extensive content quotas in clause 2 of the charter should be a response to a failure to be distinctive, not the starting point.
Christian Matheson
Does my hon. Friend share my concern that, when the Government came up with the idea of distinctiveness, they themselves were not absolutely clear what it meant? Frankly, we are still at the stage at which the Government might say, “We don’t know what it is, but we might recognise it when we see it.”
Louise Haigh
That is a very great concern. There is a serious risk of confusion about how the new regulatory regime is going to work for both Ofcom and the BBC. To be frank, I do not think quotas are appropriate in this respect. I have got nothing against quotas—I was selected on an all-women shortlist, which aim to increase the number of women in the parliamentary Labour party.
Louise Haigh
The Minister is absolutely correct that I would have won it on an open shortlist. It is very kind of him to say that.
But quotas in this respect restrict creativity and innovation, which are prerequisites of distinctiveness. Ofcom, as an independent regulator, should have the freedom to determine how best to regulate the BBC to secure policy goals. I would be grateful if the Minister confirmed what consideration has been given to the impact this will have on the quality programming we have come to expect from the BBC.
Finally, there is a concern that Ofcom may prejudice value for money over public interest. It would significantly reassure the BBC and the public, and would provide a greater degree of certainty over how Ofcom will behave in its enhanced regulatory role, if the same principles applied to the BBC charter—that there must be parity between public interest and value for money—were applied to Ofcom as well.
Matt Hancock
I am glad we have cross-party support for the clause, as we do for the BBC charter. It is incredibly helpful to the BBC’s role that it knows that the basis on which it operates and is regulated is supported on a cross-party basis.
It is very important—I will read this clearly on to the record—that distinctiveness as set out in the framework agreement is about BBC output and services as a whole, not specific programmes. Ofcom has the capability to make judgments about the overall distinctiveness of BBC output and services as a whole. That is the basis on which we expect it to operate under this legislation.
The hon. Lady asked whether there should be guidance underneath that. As she set out, there is existing guidance, and the public are very happy in large part with the result of that. I reject the idea that we cannot have any detail underneath the basis that distinctiveness should be decided on BBC output and services as a whole. At the moment, as she set out, there is detail, and it works well.
This is essentially an incremental approach. The BBC already faces this guidance and operates successfully. The clause is not prescriptive in that regard. Ofcom needs to operate in a reasonable way and exercise its judgment to ensure that we get the much-loved BBC operating as well as it can, as it has in the past and as it should in the future.
Question put and agreed to.
Clause 75 accordingly ordered to stand part of the Bill.
Clause 76
TV licence fee concessions by reference to age
Matt Hancock
I beg to move amendment 178, in clause 76, page 74, line 24, at end insert—
‘( ) In subsection (4)(a) after “concession” insert “provided for by the regulations”.”
Section 365A(4) inserted by clause 76(6) gives the BBC power, where they determine that a TV licence fee concession is to apply, to provide how entitlement to the concession may be established. This amendment makes a consequential amendment to the Secretary of State’s power to make similar provision.
Matt Hancock
Clause 76 will transfer policy responsibility for the concession that provides for free TV licences for those aged over 75 to the BBC. These technical amendments clarify the relationship between the Secretary of State’s power to set concessions and the BBC’s power to set concessions for those aged 65 and over. The amendments provide clarity, making it clear that the power of the BBC from June 2020 to determine age-related concessions for people over 65 extends to any such concession as previously provided for by the Secretary of State, with the exception of the current residential care concession. That was always the intended effect of the clause, and the amendments merely provide greater clarity in the drafting and remove any ambiguity.
Amendment 178 agreed to.
Amendments made: 179, in clause 76, page 74, line 26, after “section” insert “or section 365A”
This extends the definition of “concession” given in section 365(5) of the Communications Act 2003 to section 365A inserted by clause 76(6).
Amendment 180, in clause 76, page 74, leave out lines 28 and 29 and insert—
‘(5A) Regulations under this section may not provide for a concession that requires the person to whom the TV licence is issued, or another person, to be of or above a specified age, unless—
(a) the age specified is below 65, and
(b) the requirement is not satisfied if the person concerned is 65 or over at the end of the month in which the licence is issued.
(5B) Subsection (5A) does not apply to—
(a) the concession provided for by regulation 3(d) of and Schedule 4 to the Communications (Television Licensing) Regulations 2004 (S.I. 2004/692) (accommodation for residential care), or
(b) a concession in substantially the same form.”
This amendment allows the Secretary of State to continue the existing concession in relation to accommodation for residential care, including its age-related element, after May 2020, but after that date any other age-related concession would be a decision for the BBC (see amendment 181).
Amendment 181, in clause 76, page 74, line 33, leave out from “apply” to end of line 39 and insert—
‘(1A) Any concession under this section must include a requirement that the person to whom the TV licence is issued, or another person, is of or above a specified age, which must be 65 or higher, at or before the end of the month in which the licence is issued.
(1B) A determination under this section—
(a) may in particular provide for a concession to apply, subject to subsection (1A), in circumstances where a concession has ceased to have effect by virtue of section 365(5A), but
(b) may not provide for a concession to apply in the same circumstances as a concession within section 365(5B).” —(Matt Hancock.)
This amends the power of the BBC from June 2020 to determine age-related concessions for people over 65, to make clear that it extends to any such concessions previously provided for by the Secretary of State, with the exception of the current residential care concession (see amendment 180).
Question proposed, That the clause, as amended, stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 38—Responsibility for policy and funding of TV licence fee concessions—
After section 365(5) of the Communications Act 2003 insert—
“(5A) It shall be the responsibility of the Secretary of State to—
(a) specify the conditions under which concessions are entitled, and
(b) provide the BBC with necessary funding to cover the cost of concessions,
and this responsibility shall not be delegated to any other body.”
This new clause seeks to enshrine in statute that it should be the responsibility of the Government to set the entitlement for any concessions and to cover the cost of such concession. This new clause will ensure the entitlement and cost of over-75s TV licences remain with the Government. It would need to be agreed with Clause 76 not standing part of the Bill.
Louise Haigh
I rise to address new clause 38, which is in my name and that of my hon. Friend the Member for Cardiff West. I am sorry to say that this is where any cross-party consensus on the Bill ends. We absolutely do not support clause 76 or any of the amendments to it. Not only the Opposition, but the more than 4 million over-75s in this country who currently make use of this benefit oppose the clause. The benefit was promised to them in last year’s Conservative manifesto, a manifesto that, frankly, many of them will have voted for in good faith. Now, just 16 months into the Parliament, the Government are abandoning that pledge on the pretence that it should now be for the BBC to decide. Well, it will not only be Opposition Members, but millions of over-75s, and indeed future over-75s, who see right through that underhand tactic.
Just to concentrate the Committee’s mind, I did a bit of research at 11 o’clock last night, when I was still in my office writing my speeches for today. Given that more than 89% of over 75-year-olds make use of the free TV licence introduced by the previous Labour Government, in the Minister’s West Suffolk constituency there will be 8,863 over-75s who potentially stand to lose out because of the Government’s tactics—that is one of the highest numbers in the entire country. I do not have good news for the Parliamentary Secretary, Cabinet Office either: 7,121 over-75s in his constituency will be very unhappy with this measure.
An awful lot of disgruntled over-75s will be coming the Ministers’ way in future surgeries. There will be quite a queue at their constituency offices. I would not rule out the pensioners having a copy of the Conservative manifesto in hand, because that manifesto contained a pretty unequivocal promise:
“We will maintain all the current pensioner benefits including Winter Fuel Payments, free bus passes, free prescriptions and TV licences for the next Parliament”.
In fact, the header above that list of pensioner benefits said:
“We will guarantee your financial security”.
Those benefits were all introduced by the previous Labour Government.
Kevin Brennan (Cardiff West) (Lab)
Does the manifesto mention anywhere that the Government might transfer their responsibility for any of those benefits to an unelected body?
Louise Haigh
No, that is exactly my point. Whether or not the BBC gains responsibility for this provision is moot. The BBC is an unaccountable organisation when it comes to setting welfare policy. This represents the start of a slippery slope. Where does it end once the Government start asking other bodies to make decisions on who gets benefits? This is yet another broken promise—one promise has already been broken in part 3—so we are not doing very well. I am sure the powerful older voter lobby will not take this lying down.
Nigel Huddleston (Mid Worcestershire) (Con)
Does the hon. Lady accept that this measure was not imposed on the BBC? The deal was negotiated with the BBC in exchange for other things, including opening up revenue opportunities such as by closing the iPlayer loophole.
Louise Haigh
It is interesting that the hon. Gentleman makes that point, because I was just about to say that I am sure the Government will argue that the BBC has been rewarded handsomely in the charter renewal process and that the BBC will decide its funding policy for over-75s within that context.
From 2018, the BBC is being asked to shoulder £200 million of the annual cost of free TV licences, and it will assume the full £745 million annual bill from 2020—that amounts to more than a fifth of the entire BBC budget. It is more than enough to fund Radio 4 ten times over, and it is almost enough to fund the entire budget of BBC 1. The BBC has been asked to take control of setting the entitlement for over-75 licences because the Government know that they cannot afford it at its current rate. We accept that the BBC has asked for responsibility for this policy, but that is because the cost of the policy was enforced on it through negotiations. It is outrageous that the BBC is being asked to fund it at all.
Kevin Brennan
It is interesting that my hon. Friend used the term “negotiations” and the Minister repeated it from a sedentary position. There is a difference between negotiations between equals and being negotiated with by someone holding a loaded gun to one’s head.
Louise Haigh
That is absolutely right. The Opposition made clear in the debate on the BBC charter our utter condemnation of the underhand, aggressive, bully-boy way in which the Government “negotiated”. It was not a negotiation. As a former trade union rep, I recognise a negotiation when I see one, and the way the Government handled the previous licence-fee settlement was nothing of the sort. That led us to the position we are currently in. The BBC should never have been given the responsibility for delivering on a Conservative party manifesto pledge. It should have felt able to reject even the suggestion that it take on the cost of free TV licences for the over-75s.
Nigel Huddleston
Is the hon. Lady suggesting that the BBC is not capable of effective negotiations? Its senior executives include Labour’s former Secretary of State for Culture, Media and Sport.
Louise Haigh
The point is that, as my hon. Friend the Member for Cardiff West said, the BBC was essentially in negotiations with a gun to its head. It was not a free and fair negotiation. The individual to which the hon. Gentleman just referred does not sit on the BBC board, and I do not believe he was involved in the negotiations with the Government.
The fact that we have reached this point—that the BBC was in essence forced to agree to become an arm of the Department for Work and Pensions—says a lot about the overbearing, menacing way the Government treated an organisation that they should cherish, and the cavalier disregard they have shown to the over-75s to whom they made a promise last year. Call me old fashioned, but I believe that promises should be kept. Behaviour like the Government’s brings disrepute on all Members from all parties. It makes people think that it is exactly what politicians do: we promise things in elections that we have absolutely no intention of delivering. It is a problem for all Members, whether Government or Opposition.
Despite public outcry, the Government have still not ruled out further stick-ups of the type that have got us into the position we are in now. They have refused to establish a transparent process to set the licence fees of the future. The Opposition do not consider it a done deal. With new clause 38, we are seeking to guarantee free TV licences to over-75s. That would give the responsibility for the policy and the funding of TV licences back to the Government, where it belongs. There would be no more wriggling out of a decision that should be laid firmly at the Minister’s door.
If the Conservatives want to rid themselves of the cost of the free TV licence, they should have the courage to say that they are doing it. They should have put it in their manifesto and campaigned on it; they should not have created a non-ministerial branch office of the DWP in the BBC to do their dirty work for them. That is why if our new clause was accepted we would be calling for the scrapping of clause 76 in its entirety.
The new clause is very clear: it should be for the Secretary of State for Work and Pensions to specify the conditions under which people are entitled to concessions, and to provide the BBC with the necessary funding to cover the cost of those concessions. That is how it was set up under the previous Labour Government, and it is under those conditions that it should continue. The responsibility should not be delegated to any body other than the Government themselves. They should not be allowed to get away with delegating the responsibility and effectively forcing the BBC to take the rap.
This is a point of principle for the Opposition. We cannot accept a policy that takes the responsibility for even a tiny part of our social security system and gives it to an organisation with no direct accountability to the electorate. Unaccountable organisations do not have to face the consequences of their decisions, especially given the announcement we have heard today from the chief executive of Her Majesty’s Revenue and Customs. Even HMRC does not want to see private sector involvement in decisions on tax credits. A non-ministerial body has said that the private sector should not be involved in who does or does not receive tax credits, or any other type of benefit. That is exactly the argument we are making.
Private sector organisations are the wrong bodies to be involved in deciding who gets benefits, not only because they are incentivised by profit but because they are unaccountable. They do not have to stand for election based on those decisions, and therefore they should not be allowed to make them. It is the equivalent of outsourcing children’s services to Virgin and, in the process, asking them to pick up the tab for child benefit and requiring them to decide who gets it. Our social security system is far too precious for BBC executives, however noble their intentions or professional their considerations, to decide who is and who is not entitled to a benefit of any description. Labour introduced the free TV licence for the over-75s. It cannot be a BBC executive, unaccountable to the public and unaccountable to all our constituents, who calls time on it.
If the amendment falls, it will be high time that the Government were honest about what they were doing and honest with the voters. If they are not, Labour will do everything in its power to make it clear to those millions of over-75s exactly what is happening: their TV licence entitlement will be reduced or taken away not by the BBC, but by the Government who knowingly and cynically engineered the change.
Calum Kerr
What a fantastic presentation of a new clause, which I absolutely agree with.
Having looked into this whole area, I find it staggering. The BBC is faced with the prospect of huge cuts, but I am concerned that it is suddenly being passed the responsibility for setting policy. The Bill shows that the Government like to outsource as much as possible, because they outsourced most of the content to Ofcom in the early stages. However, the proposal relating to free TV licences for the over-75s is an absolute abdication of responsibility. We have all been invited to enough Age Concern events to know how isolated elderly people feel and how important television is for them. This is fundamentally welfare policy.
Kevin Brennan
On the point about isolation, does the hon. Gentleman agree that what the Government are effectively doing is equivalent to devolving concessionary fares to private bus companies and then letting them decide whether older people should have concessionary fares?
Calum Kerr
Absolutely. I see we are on a bus theme, which must be because the hon. Member for Hyndburn has returned to his place.
We must consider the risks inherent in this shift. With its budget potentially squeezed in future, the BBC is the one faced with choosing a priority. The BBC will have to decide whether someone should get a free TV licence. Fundamentally, that is welfare policy. I hope the Government are listening and will reconsider. The new clause is well worded and I fully endorse it on behalf of the Scottish National party.
Christian Matheson
I support the new clause and congratulate my hon. Friend the Member for Sheffield, Heeley on an outstanding contribution among numerous outstanding contributions during the Committee’s considerations.
The hon. Member for Berwickshire, Roxburgh and Selkirk is absolutely right that the proposal is an outsourcing of responsibility, but there is more to it than that. The Government are not only putting a further financial squeeze on the BBC, but when, as may be inevitable, the allocation of TV licences to the over-75s has to be reviewed, they will apparently have a clean pair of hands. It will be, “Not us, guv—it was the BBC what did it”, when that may well have been the intention all along. It is, again, outsourcing of responsibility and an attempt to evade responsibility, put on the financial squeeze, take a step back and say, “It’s nothing to do with us. It’s that bad BBC. Because that bad BBC is so bad, we shall cut them even more to punish them for how they have treated pensioners.”
My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly), who does not serve on this Committee, described the events of June and July 2015 when the so-called negotiation took place as a drive-by shooting when we were in the Culture, Media and Sport Committee. Hon. Members have today talked about negotiations with a gun to the head; a drive-by shooting is an appropriate description of what happened.
The BBC board was taken by surprise by the motives of the then Chancellor of the Exchequer, the right hon. Member for Tatton (Mr Osborne), and the then Secretary of State for Culture, Media and Sport. The Select Committee asked the chairwoman of the BBC Trust whether she and her fellow trust members had considered resigning in protest at what was happening; she declined to answer. I am sure that there were discussions.
Kevin Brennan
Is there not a further cynicism to this? The Government did that in the full knowledge that the policy had what the Treasury often calls “future reach”, as the number of over-75s is likely to go up. Even given that the Government are partially compensating the BBC for this, they know full well that the policy will become more expensive.
Christian Matheson
That is an extremely good point, and it reads back to the point that I made earlier: when there has to be a review of the cost of the policy, and perhaps a reduction in the availability of free TV licences, Ministers—perhaps they will be shadow Ministers by that time—[Interruption.] We fight on to win. Conservative Members will be able to point to the BBC and say, “It was the BBC what done it”, in order to evade all responsibility. But they will not evade responsibility, because this will not be forgotten, if they get away with doing it. There is a much better alternative: the excellent new clause proposed by my hon. Friend the Member for Sheffield, Heeley.
Louise Haigh
I am appalled by what is, as my hon. Friend is clearly laying out, a naked attempt to evade responsibility. Does he share my concern that this is the beginning of a slippery slope? Where exactly does this end? Once the principle that the Government are attempting to put in the Bill is in legislation, to whom else can they outsource responsibility for their social security policies?
Christian Matheson
My hon. Friend makes a good point. I am cautious about straying too far from the point under discussion, but she says that this is the beginning of a slippery slope. It is not, because the Government have form in this area. I look to you, Mr Streeter, for a little bit of latitude here.
There are, for example, massive cuts to local government funding; the Government have taken huge amounts of money away from local authorities, expect them to come up with cuts and reductions in services, and then say, “It is nothing to do with us; blame your local authority.” There is one point on which I would disagree with my hon. Friend the Member for Sheffield, Heeley: this is not the beginning of a slippery slope; it is a continuation of form. The Government have been rumbled, and they know it.
Graham Jones (Hyndburn) (Lab)
The amendment is important. It defines the Opposition against the Government. We value the BBC, but there is always a criticism, and the Government are reaffirming people’s view that the Government do not really trust the BBC. If they can do anything to undermine the BBC, they will, instead of supporting it. During the passage of the charter, there has been to-ing and fro-ing, and criticism of the BBC, using the stick of distinctiveness and other sticks, such as the five-year break clause.
The Government always say that they are there to stand up for the BBC and give it the freedoms that it wants, but this is not a freedom, of course; it is a shackle. As my hon. Friend the Member for Cardiff West said, the Government are trying to outsource responsibility. They will not do it on bus passes; they will not say, “We’ll make the bus companies make the decision on free bus passes”, but they will make the BBC accountable for the over-75s’ free TV licences. I do not think that the Government can escape that responsibility, or the accusation that they are continually chipping away at the BBC.
Let us talk about the issue in numbers. By 2020, when the BBC has to pay fully, the figure will be £700 million. That is a considerable amount of money for the BBC to find at a time when the Government have chipped away at BBC budgets through a bit of slicing here and another bit of slicing there, and even with a cap on the licence fee.
Kevin Brennan
Is it not correct that at that point the people at the BBC will be faced with a decision, which is to do what is in their nature—to make programmes, to produce content and so on—or to continue an aspect of what is, after all, social policy? Will they not always have to look at what their core activity is: programme making and their distinctive role in the broadcasting universe?
Graham Jones
Absolutely. My hon. Friend makes the point perfectly. There is no need to add too much to that, other than to say that if we want to talk about the Government’s view of the BBC and this chipping away, which our new clause is designed to prevent, it is the outsourcing of programme making again to 100% programme making that will now be made out in the private sector and not in-house. Again, it is part of the package of making the BBC less viable, so that we arrive at a day when a tough decision might have to be made because the BBC as it exists now has been completely undermined. The policy is not to put it on a firmer footing. This £700 million is a huge part of that chipping away at the BBC.
Calum Kerr
In reality, the Government by all means could have had a financial settlement that reflects the same outcome, but the fact is they have passed the policy. Why pass the policy other than to abdicate responsibility?
Graham Jones
The hon. Gentleman anticipates what I was moving on to, which is that the policy is also about passing responsibility. The Government want to shape the decision and take the credit where there is an upside, and to dump it on the BBC where there is a downside. That is what this is about—so the BBC is left with it.
Suppose the Government wanted to offer further icing on the cake and have over-70s get the free TV licence. The Government would take the credit for that, but any difficult decisions, such as only over-80s getting the free licence and the 75-year-olds losing out, will of course be the BBC’s fault. We can see exactly what is happening and the duplicity of the argument. The Government are setting the BBC up with a dilemma: it will take the stick for any downsides, but for any upsides the Government will be up there on the podium, all backslapping each other, saying, “Great social policy!”
There is no escaping that, and I do not think that the general public are fooled—they can see. It would make perfect sense for the Minister to accept new clause 38, because the public see what the Government are doing with that shift of responsibility for the over-75s. The public will not be fooled by the shift; they can see precisely what Ministers are trying to achieve. The public, too, will be concerned and asking how it affects them, the ordinary person. Will the BBC, faced with further cuts, have to say, “Well, we’re sorry, it’s only over-80s who will get it”? Decisions and responsibilities are outsourced to the BBC, and the licence fee payer, in particular those coming up to that age, will be wondering, “Hang on, I’m going to get the worst of both worlds—either a Tory Government or the BBC cutting my licence fee.” I do not think that the public will be too happy. They will not not see through this—sorry about the double negative.
Louise Haigh
My hon. Friend is right. This predates the Minister’s time in post, so I very much hope that he takes the opportunity to go back on his predecessor’s decision. The Government thought they were being very clever with this move to outsource and put the duty on the BBC, but as my hon. Friend says, everyone will see right through this. Nobody will blame the BBC. The responsibility will lie clearly with the Government, and I hope that they are listening and will act on his points.
Graham Jones
We trust that the Government will listen to the public and see that they are on the wrong side of the argument, but perhaps we will find out in a few minutes that they do not recognise that.
Kevin Brennan
I do not think the 5,503 people in my constituency who will be affected are fools, but does my hon. Friend agree that any Member who votes for the change must think that the people in their constituency who will be affected by it are fools? To take an example at random, the hon. Member for Devizes has 6,478 constituents who will be affected.
Graham Jones
My hon. Friend makes a good point. I have glanced over the figures, and it seems that more people will be affected in the constituencies of Government Members. Perhaps those Members should be mindful of their constituents who will have real concerns about the proposal. They will not be fooled by the idea that the Government are taking a genuine and reasonable approach in giving the BBC responsibility for TV licences for over-75s.
If the Government have to take with one hand—and I do not agree with that—they could at least have made an attempt to give back with the other hand. Other than some minor giveaways to the BBC, they have made no attempt to correct even the fiscal element of the change, never mind the moral, ethical, social and public policy elements. The Government say in their explanatory notes that the BBC cannot expect to get any retransmission fees from Virgin, which is covered by the Bill, or Sky, which is not. There will therefore be no material change in the relationship between platform providers and content providers such as the BBC, which are forced to provide their content on those platforms. The Government could at least have corrected the fiscal element of the change by doing something about that commercial relationship, but instead they decided to take £700 million from the BBC. They already have a track record of slicing BBC funding for pet projects such as local TV or broadband.
The public will not be fooled. Thousands of constituents of Government Members will see the change and wonder why their Member of Parliament has taken this decision. Those in receipt of an over-75 TV licence, or coming up to that point, will think it is a deterioration in public policy. They will think, “This is not in my interests. I don’t agree with it. Why has my Member of Parliament voted against the new clause?” Government Members should think long and hard about the new clause, because I am sure their constituents will not approve of them voting against it.
Mark Menzies (Fylde) (Con)
I did not intend to speak to new clause 38, but the power of the arguments made by Opposition Members has led me to rise to my feet. As a vice-chairman of the all-party BBC group and a fan and defender of the BBC, I cannot let some of the comments that have been made go unanswered.
If the situation were as simple as costs being transferred from the Government to the licence fee payer so that older people lost out, I would be the first to join Opposition Members in the fight against it, but that is not what the Government are proposing. We have to look at the change in its totality. For example, there is no proposal to end the over-75s’ free TV licence. It is clear that the Government wish that to continue. It was part of the negotiations and agreements that the BBC agreed to as part of the overall package. It was quite happy to accept responsibility for the over-75s’ licence fee funding.
Louise Haigh
It is interesting to hear that the hon. Gentleman thinks that the Government have ended top-slicing. What is his opinion of the contestable fund that should have gone back to the BBC? There was an underspend in the top-slicing he mentioned. We have had no commitment from the Minister, so that will be a one-time-only thing, and we do not know that it will continue after the three-year period.
The Chair
Order. I am keen that we focus on the new clause and on clause 76 stand part, and not allow ourselves to get into a wider discussion about the future of the world and the BBC as we know it.
Mark Menzies
The other reason that I oppose new clause 38 is that the BBC, under the settlement, has a clear commitment to original content. Conservative Members should be reassured, as should older people listening and reading about the debate and the Government’s measure. The money does not come from a money tree and would have to be found from somewhere, and it would be found from taxpayers, many of whom are over 65. Elderly people themselves would have to find money to go towards paying for over-75s’ free TV licences. That money is now coming out of the licence fee, so taxpayers’ money is now available to go into other things. It is important that we do not forget our elderly constituents and that the Government in their totality do everything they can to ensure that the money that is freed up from being spent on the over-75s’ free TV licence goes to older people.
Graham Jones
I am grateful to my hon. neighbour for giving way. I respect the fact that he has in the past been a passionate spokesperson for the BBC, and I hope that he continues to be. He argues that it is the Government’s policy not to change the current arrangements for over-75s’ free TV licences. One therefore has to ask: why is it the BBC’s responsibility if it is the Government’s policy?
Mark Menzies
I take compliments wherever they come from and I am certainly happy to take them from the hon. Gentleman. The key question for me is: are we, in one form or another, providing free TV licences for over-75s? Yes, we are. Is the BBC, under the current settlement, out of pocket? No, it is not because the licence fee is being increased and top-slicing is ending. The BBC is committing to continue to invest record sums of money in facilities such as BBC Salford, which has been truly transformational up in the north-west. If money were not an issue in the public sector, I would be saying, “Absolutely, let’s continue to find more money for the BBC to provide TV licences to an even larger group of people.”
Kevin Brennan
The hon. Gentleman is making a stout and reasoned defence of the Government’s position and many aspects of the settlement with the BBC. I accept that, but can he say truthfully that he believes that it is the right move to transfer responsibility for this policy from the Government to the BBC?
Mark Menzies
I think it was part of the overall negotiation. Look at the package that was agreed, which included the end of top-slicing—a considerable liability that the BBC itself felt was an unfair burden on it under the previous settlement—and responsibility for broader licence fee management. Looking at it like that, I think it is a fair settlement during a difficult financial period.
It is easy to castigate the Government’s move on measures such as this, but look at it against the backdrop I have outlined. There is more money for the BBC and also an agreement from the BBC. This was not objected to or protested against by the BBC management. They are not raising this as an unfair charge, in a way that at times the previous BBC management cited the issue of broadband top-slicing as unfair. The Government noticed that was unfair, acted upon it and removed it.
Graham Jones
The hon. Gentleman is making a passionate defence and trying to justify the Government’s position. I applaud him for trying to make the best of what is a bad job. He talks about fairness and says that it is the 65-year-old licence fee payer who will subsidise the 75-year-old. There are twice as many over-75 TV licence holders in Beverley and Holderness as in Hyndburn. Where is the fairness in pensioners in Hyndburn subsidising pensioners in Beverley and Holderness, where there are twice as many free TV licences?
Mark Menzies
If you will forgive me, Mr Streeter, I will not get into the debate of whether Beverley and Holderness or Hyndburn should be the ultimate beneficiaries, because that is ultimately about Lancashire and Yorkshire—a subject I will stay well away from.
I conclude by saying I appreciate the efforts of the Opposition in raising this point, but we have to appreciate that, at the end of this settlement, the BBC will have more resources going into it.
Mark Menzies
I hope the hon. Lady will forgive me; I have given way to her several times. The BBC will have more resources as a result of this. The over-75 licence fee will become the responsibility of the BBC, but the indications from the Government are clear: we are committed to free licences for the over-75s, as we promised in our manifesto.
Matt Hancock
It was going so well and we were having such a rational debate until that sudden outburst. Let me respond to the points that were made. I am proud to support clause 76, which safeguards the TV licence and delivers on our manifesto commitment to maintain free TV licences in this Parliament. Until that speech right at the end, we heard an awful lot of bluster but saw little light, so I will remind the Committee of a few facts.
First, transferring the responsibility for the free TV licences to the BBC as part of the funding settlement was agreed with the BBC and is what it says on the tin: it is part of a funding settlement. The question of who pays is part of the funding of the BBC. In July last year, Tony Hall, the Director General of the BBC, said:
"I think we have a deal here which is a strong deal for the BBC. It gives us financial stability."
I suggest that anybody who votes against clause 76 votes against financial stability of the BBC and is ultimately voting to put the free TV licence at risk. I will be saying to all 8,853 of my constituents who get a free TV licence that we are safeguarding the free TV licence.
In the run-up to the 2015 general election, during which we committed to protecting the TV licence in this Parliament, who was it that wanted to do away with it? Who was it? A certain Mr Ed Balls, who is now more famous for being on the TV than for talking about TV policy. When he was questioned about whether the universal free TV licence should stay, while he was saying that the universal winter fuel payments should not, he said:
“I think you have to be pragmatic”
about the TV licence. It was the Labour party that put the free TV licence at risk and we are proud that we supported it in our manifesto.
The director-general did not stop there. He also said:
“The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC.”
Unfortunately for those who seek to cause a fuss about this, their view on funding seems to go against the view of the director-general of the BBC.
Matt Hancock
I will give way if the hon. Gentleman can explain why he disagrees with the director-general of the BBC.
Kevin Brennan
The Minister does not understand parliamentary procedure. That is not a reason to give way. He should give way to allow me to ask him a question, to avoid my having to make a speech. My question—a straightforward question, which does not require anything but a straightforward answer—is on what principle he thinks that this is the right move.
Matt Hancock
On the principle that the BBC is responsible for the funding of the BBC according to the licence fee negotiations agreed with the Government. This is a funding decision, and funding issues are for the BBC.
I have given the Opposition a couple of quotations from the head of the BBC about why he agrees with the policy. Let me give them another quotation:
“The Labour party welcomes the fact that the charter provides the BBC with the funding and security it needs as it prepares to enter its second century of broadcasting.”—[Official Report, 18 October 2016; Vol. 615, c. 699.]
Not my words, but those of the boss of the hon. Member for Sheffield, Heeley, the shadow Secretary of State for Culture, Media and Sport, the hon. Member for West Bromwich East (Mr Watson). Well, I agree with her boss—he was absolutely right.
Matt Hancock
Of course I will give way—if the hon. Lady can explain why she disagrees with her boss.
Louise Haigh
I made it clear that we support the BBC charter, but my boss—as the Minister calls him—and I also made it clear that we do not support this element of it.
I have two more quotations to put to the Minister. In the Lords debate on the charter two weeks ago, the assessment of the former BBC director-general, John Birt, was that
“the impact…will be—over the span of a decade—to take almost exactly 25% out of the real resources available to the BBC for its core services. A massive reduction in programming is therefore simply unavoidable.”—[Official Report, House of Lords, 12 October 2016; Vol. 774, c. 1950.]
The former chairman of the BBC Trust, Chris Patten, then said:
“I agree with what the noble Lord, Lord Birt, said about the licence fee settlement—not just the finance on the table but the way it was done. It was a scandal to do it like that”.—[Official Report, House of Lords, 12 October 2016; Vol. 774, c. 1954.]
The Opposition absolutely agree.
Matt Hancock
That is not related to clause 76. What is related to the clause is the fact that the BBC agrees it has the funding it needs, as I set out and as agreed by the shadow Secretary of State for Culture, Media and Sport.
My next point is about why we are transferring the power and why it would be wrong to adopt new clause 38, which would undermine the BBC’s funding settlement. The reason is that the BBC asked for it. It is incumbent on those who propose new clause 38 and oppose clause 76 to explain why they disagree with the BBC, with this strong settlement and with all those who say that we have provided a good funding settlement for the BBC. Instead of pressing the new clause, I suggest that the hon. Lady should support clause 76, to put the BBC’s funding on a sustainable footing for years to come.
Louise Haigh
The hon. Member for Fylde said that he opposed our new clause on two grounds, of which the first was that the BBC provides free TV licences. It does, but we have absolutely no guarantee that it will continue to do so.
The Minister is correct that the BBC asked for this, but as I referred to earlier, the BBC asked for the policy on who should and should not get a free TV licence because the funding was forced on it. It asked for that funding because it wants to reduce the number of people who get free TV licences in the future—it as much as said that to us. We do not want the BBC to have that policy; nor do we want it to have the funding settlement. It is a principle that we fundamentally oppose, so we intend to test the will of the Committee.
The Chair
We will come to the new clause later in our proceedings, but right now the question is that clause 76, as amended, stand part of the Bill.
Question put and agreed to.
Clause 76, as amended, ordered to stand part of the Bill.
Clause 77
Direct marketing code
Louise Haigh
I beg to move amendment 195, in clause 77, page 75, line 22, leave out “direct marketing” and insert
“any form of marketing, including direct marketing, or customer engagement”.
The Chair
With this it will be convenient to discuss the following:
Amendment 196, in clause 77, page 75, line 27, leave out “direct marketing” and insert “marketing and customer engagement”.
Amendment 197, in clause 77, page 75, line 40, leave out subsection (4) and insert—
‘(4) In this section—
“customer engagement” means the interactions initiated between a business and an individual or group of individuals for marketing and other business purposes;
“direct marketing” means the processing and use of personal information for marketing purposes;
“marketing” means the business processes through which goods and services are moved from being concepts to things that customers and potential customers want.”
New clause 34—Power of Information Commissioner to take action on unsolicited communications—
‘(1) The Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I.2003/2426) are amended as follows.
(2) In Regulation 31(1), between “sections 55A to 55E” and “of the Data Protection Act 1998” insert “and section 61”.
(3) In Schedule 1, after paragraph 8B insert—
8C In subsections (1) and (3) of section 61—
(a) for “an offence under this Act” there shall be substituted “a contravention of the Privacy and Electronic Communications (EC Directive) Regulations 2000”;
(b) for “guilty of that offence” there shall be substituted “liable for that contravention”; and
(c) for “proceeded against and published accordingly” there shall be substituted “served with a notice, proceeded against of punished accordingly”.’
This new clause seeks to allow the Information Commissioner’s Office to take action against company directors for breaches not only of the Data Protection Act 1998, but of the 2003 EU regulations on unsolicited communications.
Louise Haigh
Thousands of individuals are plagued by nuisance calls every day. I will turn to that in my remarks on clause stand part, but I shall speak to the amendments and new clause first. We welcome the inclusion in the Bill of a direct marketing code. If it works effectively, it will contain practical guidance and promote good practice in direct marketing activities. It will help to guide the experiences of companies and individuals, but direct marketing, as we know, is fairly narrowly defined and refers to the direct selling of products and services to the public. It is covered under the Data Protection Act 1998 and the privacy and electronic communications regulations. The rules cover not only commercial organisations but not-for-profit organisations such as charities and political parties. The rules for direct marketing are very clear and are becoming —absolutely rightly—increasingly tougher.
There are two types of nuisance call: live marketing calls—unwanted marketing calls from a real person—or automated marketing calls, which are pre-recorded marketing messages that are played when someone answers the phone. They are covered by a raft of legislation and regulation attempting to clamp down on that type of behaviour. Our amendments attempt to broaden the definition of the new direct marketing codes, so the law will cover not only direct consumer marketing but consumer engagement.
Direct marketing uses personal data and demographic insights relating to residence and the habits of people previously to market to people individually and directly. Consumer engagement is much broader and involves the use of personal data to engage with customers for a broad set of business processes, which include, but are not restricted to, direct marketing. TV advertising, for example, is not considered to be direct marketing, but TV advertising campaigns can be designed with information derived from consumer data and used to target broad groups of consumers based on data derived from individuals.
In our view, the direct marketing code, which we very much welcome, and the Information Commissioner’s guidance in this field should cover this broader use of individuals’ data. As we have said throughout, we want data to be used responsibly, and this simple amendment would extend the code to apply to all uses of data in consumer marketing, and not just the kind that is used to directly target people.
Matt Hancock
What a welcome return to sense from the Opposition. The amendments tabled to clause 77 relate to the definition of direct marketing, which, as defined in the Data Protection Act, is
“the communication (by whatever means) of any advertising or marketing material which is directed to particular individuals.”
The definition captures any advertising or marketing material, not just commercial marketing, which is a point that the hon. Lady made, as well as all promotional material, including material promoting the aims of not-for-profit organisations. It also covers any messages that include some marketing elements, even if that is not the main purpose of the message.
The privacy and electronic communications regulations put direct marketing by electronic means into the scope of the definition, thus making it applicable to telephone calls, both live and automated, faxes, emails, text messages and other forms of electronic communication. It is essential that the definition of direct marketing in the PECR remains aligned with the definition in the Data Protection Act, so that the Information Commissioner’s Office’s powers of enforcement for nuisance calls to remain effective and enforceable in law.
New clause 34 is intended to amend the PECR, to extend to company directors and other officers liability for breaches when those officers have allowed breaches to occur or when breaches have happened because of something they have failed to do. In that way, the Information Commissioner could impose fines on company officers rather than just on companies as at present. The proposal relates to nuisance calls made by organisations. They are a blight on society, causing significant distress to elderly and vulnerable people in particular.
The Chair
It may be helpful for the Minister to know that, because of a miscommunication between Mr Kerr and myself, Mr Kerr will speak to new clause 34 when the Minister sits down, so the Minister may want to save his comments until later. Please continue.
Matt Hancock
I hope that I will still agree with new clause 34 then; I think I will, because I am so enthusiastic about it.
Matt Hancock
I thank the hon. Gentleman.
I hope that, having answered the hon. Lady’s questions in relation to amendments that I think are intended to probe and in anticipation of our coming on to new clause 34, she will be able to withdraw her amendment.
Calum Kerr
I am sorry for the miscommunication; it was my fault. Actually, having read the newspapers at the weekend, I think that the Minister may be in agreement on extending the penalties in relation to nuisance callers to company directors; I certainly read a number of quotes about the importance of doing that. What I am unclear about—perhaps he will enlighten me—is whether he intends to accept our new clause or whether he has another vehicle by which he intends to make this change. I would be grateful to him if he intervened, because there is no point in my—
Matt Hancock
We agree with moving liability on to individuals rather than on to companies, because sometimes those companies will be closed down, bought up and restarted under a different name very quickly. We propose to do that by tabling a Government amendment.
Calum Kerr
I thank the Minister for that intervention. I had thought that I might have done his homework for him already with new clause 34. Perhaps he might consider embracing the cross-party consensual nature that might return after the BBC fun and games—except on tobacco ads, which certainly go too far.
Matt Hancock
Before I was stopped by Mr Streeter, I was going to say precisely that—namely that I have just announced that we intend to introduce such measures. We need to consult on the exact details of those measures, which is why I do not propose to accept the new clause, but we intend to put into place something of similar substance.
Calum Kerr
Excellent. I thank the Minister for that and given that comment, rather than outlining the full case for why I think accepting new clause 34 is a good idea, I will embrace the positivity and happily sit down, without pressing my new clause, knowing that the Government will introduce a similar measure.
Louise Haigh
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Graham Jones
I have a couple of points that I would like the Government to consider on clause stand part and why there is a deficiency, not only in the Bill but in all the other regulations, guidance and advice that support it.
My first point is simply that people the length and breadth of this country are sick and fed up of direct marketing. They are sick and fed up of the back of their doors having a mound of unwanted mail that they have to dispose of, which has come from companies that they have no interest in. I have a high number of empty properties—2,500—in my area, and in some cases this goes beyond being a nuisance and an aggravation, and becomes a fire hazard. We have mounds of direct mail behind the door, and it is never-ending and never stops.
People receive not only physical mail but email. Businesses the length and breadth of Britain—I have made the point that this is not a business-friendly Bill and it should be, as it is a Digital Economy Bill—are sick and fed up of their email boxes being stuffed full of unwanted emails, which are costing them a fortune as they have to put someone on them to go through them. It has got to stop. We have to act as a Parliament, and the Government have got to sit up and take notice. How much is this costing British businesses? How much is it aggravating UK citizens?
These companies seem to get away with it. There is a free-for-all at the minute. There is no way anyone can tell me that a mound of mail does not come through my letterbox weekly or there is not a long sequence of unwanted emails in my inbox, and no one can tell me that companies in my constituency and every other constituency do not face huge costs.
Kevin Brennan
My hon. Friend is right about that wider point, even though the clause deals particularly with calls. I do not know about him, but I am fed up of receiving calls even in my parliamentary office—I know that other hon. Members have had this—from energy companies, which continually seek to talk to me about energy bills. Does he agree that if the problem is getting to the heart of Parliament, it really is getting out of hand?
Graham Jones
My hon. Friend is absolutely right. As busy MPs, the last thing we want is to deal with that. I will come to clause 77, which is about marketing calls—all these things are interlinked. As he says, we get a mound of marketing calls, as do businesses. They are piling up, and they are unwanted.
I appeal to the Government to consider introducing mandatory pro formas in all these fields—marketing calls, but also email, direct mail and conventional snail mail. On a letter, I want to see the name and address of the people who sent it, so that I can tick the box saying “no more mail” and stick it back in that red box. I want to know how they have got my information, too. On digital communications, I want to see a pro forma on the bottom that says, “No more. I don’t want to receive any more. How did you get my details, and which company are you?” I want straightforward pro formas on the bottom of all those things. On marketing calls, I want those who are calling to have to explain explicitly who they are and where they got the data from and ask, “Do you wish to proceed with the call?” That would be very helpful. Having pro formas on all that marketing would empower individuals. This is about taking back control and empowering the UK citizen against some of these things, and simple pro formas would go a long way to helping that.
I ask the Government to consider introducing some amelioration or making some concession on this issue on Report. The British people would be eternally grateful to the Minister. He would become legendary in this place. His career path would be stratospheric. He would have helped so many people on a daily basis that he would be remembered forever as the Minister who resolved the issue of direct marketing calls. He has an opportunity to do that. A pro forma would suffice.
I come to a second issue: the exposés that, sadly, all too frequently appear on our television screens, on Channel 4 or “Panorama”. Every now and again, we hear scandals about marketing companies that act on behalf of charities and raise money through telemarketing. Those scandals often reveal undesirable elements and policies in those companies that go against the grain of what it is to be a British citizen. Those marketing calls must be dealt with, and clause 77 fails to deal with—
The Chair
Order. It may help the hon. Gentleman to know that clause 77 is not intended to deal with the kinds of TV issues that he is concerned about. It is concerned with telephone calls, texts and emails.
Graham Jones
Yes. The Minister must look at marketing calls from companies seeking money on behalf of charities. Those scandals must go on no longer. I ask him to address that matter. He could take several measures that do not cause distress but identify the skimming off of huge amounts by those companies, which target easy pickings from the old, the vulnerable and people with dementia. That is unacceptable. Those marketing scandals must not continue.
Mark Menzies
If I may briefly comment with regard to the direct marketing code of practice, I first welcome wholeheartedly the Minister’s desire to accept the terms of new clause 34, proposed by the hon. Member for Berwickshire, Roxburgh and Selkirk. This is a blight for all our constituents, regardless of which side of the House we sit on.
Matt Hancock
The hon. Member for Hyndburn made an impassioned plea. I recognise the long-standing interest of my hon. Friend the Member for Fylde in this issue and the work he has done.
Matt Hancock
There is a real Lancashire alliance to ensure people do not get pestered. The clause will place a statutory duty on the Information Commissioner to publish a direct marketing code of practice. I am sure that the Information Commissioner will have heard the plea for a pro forma, which could appear in such statutory guidance.
We all know, from being sent emails that we are not interested in, how powerful it is almost always to have an “unsubscribe” link at the bottom; we can get rid of a lot of junk by clicking that. Nuisance calls continue to blight people’s lives, particularly the vulnerable, who rely on their phones as a main point of contact. So far in 2016, the Information Commissioner’s Office has issued fines totalling £1.5 million to companies behind nuisance marketing. Those firms were responsible for 70 million calls and more than half a million spam text messages. That should give the Committee a feel of the scale of the problem.
We think that the new code will support a reduction in the number of unwanted direct marketing calls by making it easier for the Information Commissioner to take effective action against organisations in breach of the direct marketing code under the Data Protection Act and the privacy and electronic communications regulations. In response to the specific question whether this applies also to snail mail, the answer is yes. The mail preference service to which individuals can subscribe to prevent direct marketing mail already exists but is also covered by the statutory code of practice.
Graham Jones
Does the Minister agree that it would bring not only function but pleasure to have a return mailing address on the front, so that we could take no more and shove this mail back in the red box?
Matt Hancock
I am sure the Information Commissioner will have heard the hon. Gentleman’s plea. There is such logic and force behind it that I am sure it will be taken into account.
Kevin Brennan
We very much support the concession that the Minister made following the evidence session and the amendments tabled. Does he think that anything more could be done where the origin of these calls is overseas, as with very many of them?
Matt Hancock
I propose after consultation to bring in measures to ensure that the liability is on the individual. That will significantly strengthen the hand of the regulator here, alongside the code of practice, but I am open to working with the hon. Gentleman and others to see what else we can do for calls that originate from overseas. I entirely understand the problem. Ultimately, we are trying to stop as much spamming as possible, while allowing people to communicate and use modern means of communication.
Calum Kerr
Last week I had a call from a director from Ofcom, who had just returned from south-east Asia, discussing nuisance calls. As the Government go around the world setting up their new trade agreements, perhaps they might consider this one of the clauses they build in around nuisance calls.
Matt Hancock
That is an interesting suggestion. Of course, this will apply to overseas companies; it is just that, as we have discussed in other parts of the Bill, that is harder to enforce against.
Finally, there was discussion about charities making nuisance calls. Charities, and agents on their behalf, were covered in the Charities (Protection and Social Investment) Act 2016, which introduced a new regulator specifically for charities in this space. With those explanations, I urge that the clause stand part of the Bill.
Question put and agreed to.
Clause 77 accordingly ordered to stand part of the Bill.
Clauses 78 to 81 ordered to stand part of the Bill.
Clause 82
Commencement
Matt Hancock
I beg to move amendment 182, in clause 82, page 80, line 3, at end insert—
“() section (Power to apply settlement finality regime to payment institutions);”
This provides for new clause NC29 to come into force on royal assent. By convention regulations made under the section inserted by that clause would not be made so as to come into force earlier than two months after royal assent.
The Chair
With this it will be convenient to discuss the following:
Government amendment 184.
Government new clause 29—Power to apply settlement finality regime to payment institutions.
Government new clause 30—Bank of England oversight of payment systems.
Government new schedule 2—Bank of England oversight of payment systems.
Government amendment 187.
Matt Hancock
We are committed to creating a more competitive financial services sector. Like many other parts of the Bill, this one covers the private sector. Greater competition in financial services creates better outcomes for consumers and lowers the cost and broadens the range of services available. These measures pave the way for a broader access to payment systems, driving competition in them.
New clause 29 allows the Treasury to extend the benefits of the existing settlement finality regime to non-bank firms that provide payment services, such as Worldpay, through statutory instrument. The existing regulations provide that payments initiated in these systems by banks cannot be unwound if a bank becomes insolvent while it has an unsettled transaction in the system. This is important for the integrity of payment systems, but currently does not extend to payments initiated by non-bank payment institutions, which are a growing part of the financial services system. Extending coverage to transactions initiated by non-bank payment institutions will therefore enable those institutions to obtain direct access to payment systems.
New clause 30 and new schedule 2 amend the Banking Act 2009 so that the Treasury can formally recognise a non-bank payment system for regulatory oversight by the Bank of England. Currently, the Bank of England may only supervise interbank payment systems. Without this change, if a non-bank system were to grow rapidly, the Treasury and the Bank of England would have limited tools to address any financial stability risks stemming from a non-bank system in a timely manner. This is required now, as a systemically important non-bank system is made more likely by broadening access to payment systems, as it creates the conditions that make non-bank systems more likely to grow.
Together, the two measures enable broader access to payment systems. The impact assessments for both are with the Regulatory Policy Committee and we expect them to be non-qualifying on the grounds that they are pro-competition, support financial stability and have a low regulatory burden.
Amendment 182 agreed to.
Matt Hancock
I beg to move amendment 183, in clause 82, page 80, line 14, leave out “section” and insert “sections (Suspension of radio licences for inciting crime or disorder) and”.
This provides for new clause NC28 to come into force 2 months after Royal Assent.
The Chair
With this it will be convenient to discuss the following:
Government new clause 27—Digital additional services: seriously harmful extrinsic material.
Government new clause 28—Suspension of radio licences for inciting crime or disorder.
Matt Hancock
We take very seriously the responsibility to ensure that the broadcasting regulatory framework is as robust as possible. As part of the cross-Government strategy to ensure we are doing all we can to counter the pernicious impact of extremism and extremist narratives, we and Ofcom have carefully assessed whether consumers are fully protected from the most harmful content on TV and radio. That work identified potential anomalies in the current broadcasting legislation, which the amendment and new clauses seek to address.
Ofcom requires broadcasters to hold a licence to broadcast on TV or radio in the UK. The licence regime has developed over time and in response to technological developments. Different licence regimes apply depending on the way in which broadcast content is received.
New clause 27 relates to a subset of Ofcom licences known as digital television additional services licences—in effect, a catch-all for the range of services that do not fall under the more usual licences required to broadcast directly via satellite and cable or the digital television platform. There are two DTAS licenses, or portal channels, which provide viewers using connected or smart TVs on the freeview platform with access to internet-streamed television channels by first going through the electronic program guide.
A potential anomaly we want to address arises because one of the portal channels has begun contracting with internet-streamed channel providers based outside the European economic area, which could potentially give rise to a situation where that internet-streamed channel includes seriously harmful content without Ofcom or any other regulator having recourse to act. I want to absolutely clear that there is no suggestion that any of the current DTAS licensees would purposefully provide access to seriously harmful content, but I am sure the Committee will agree that having that happen inadvertently, and finding regulators are unable to act, is not a position we would like to be in. The amendment puts it beyond doubt that Ofcom is able to set conditions to act.
New clause 28 concerns radio. At present, there is a limitation in Ofcom’s ability quickly to deal with the exceptional circumstance of a terrestrial radio station, whether analogue or digital, repeatedly broadcasting harmful material that incites listeners to crime or disorder. We are acting to prevent such an outcome.
Amendment 183 agreed to.
Amendment made: 184, in clause 82, page 80, line 14, at end insert—
“() section (Bank of England oversight of payment systems) and Schedule (Bank of England oversight of payment systems).”—(Matt Hancock.)
The amendment provides for the new clause and Schedule about the Bank of England’s oversight of payment systems (NC30 and NS2) to come into force 2 months after Royal Assent.
Clause 82, as amended, ordered to stand part of the Bill.
Clause 83
Extent
Matt Hancock
I beg to move amendment 185, in clause 83, page 80, line 31, at end insert—
‘( ) Section (Qualifications in information technology: payment of tuition fees) extends to England and Wales only.”
This amendment is consequential on NC26.
The Chair
With this it will be convenient to discuss the following:
Government new clause 26—Qualifications in information technology: payment of tuition fees.
Government amendment 186.
Matt Hancock
This is one of the clauses I am most excited about. We are committed to public investment in skills and learning to ensure everyone has the chance to master the basic skills required to get on in life and work. We are very clear that, in addition to numeracy and literacy, that now includes digital. Our workplaces and homes are increasingly integrated with digital technologies, so we are clear that a sound grasp of basic digital skills is as important as numeracy and literacy.
Too many adults are unable effectively to use the digital technologies that allow them to keep in touch with friends and family, find the cheapest offers for goods and services, search for jobs online and work effectively and productively in those jobs. All too often, the digitally excluded come from the least advantaged parts of our society—the less well paid, the older and the more geographically remote. We are committed to making society work for everyone, and we take the issue of digital exclusion very seriously. That is why we intend, in this amendment, to create a duty on the Secretary of State for Education to ensure that, where specified, digital skills qualifications are made available by providers and that they are free of charge to people aged 19 and over who need them and do not already have the relevant qualification.
This duty will measure the duties for maths and English provision for adults. The justification is clear: people who can effectively use digital technology pay less for goods and services, save time on routine tasks, can more easily connect with society and can attract a wage premium in the labour market. We want to enhance social mobility and give everyone the opportunity to acquire the skills they need to succeed in the modern workplace.
Louise Haigh
We very much welcome the new clause and are pleased that, once again, the Government have heeded the Opposition’s advice. We said clearly at the beginning of the process that, in regard to the digital skills that are needed to support and improve the digital economy, the Bill was lacking. I want to put on record the fantastic work already going on across the UK in supporting adults to learn digital skills, not least by organisations such as the Tinder Foundation and community organisations—I will abuse my position now and reference organisations such as the Heeley Development Trust and Heeley City Farm in my constituency, which through community work already skill up adults in digital skills. We very much support the clause and look forward to the Government taking our advice more in the future.
Amendment 183 agreed to.
Clause 83, as amended, ordered to stand part of the Bill.
Clause 84 ordered to stand part of the Bill.
New Clause 26
Qualifications in information technology: payment of tuition fees
‘(1) The Apprenticeships, Skills, Children and Learning Act 2009 is amended as follows.
(2) In section 88(1) (qualifications for persons aged 19 or over: payment of tuition fees), for “1(a) or (b)” substitute “1(a), (b) or (ba)”.
(3) In paragraph 1 of Schedule 5 (qualifications for persons aged 19 or over), after paragraph (b) insert—
(ba) a specified qualification in making use of information technology;”.
(4) After paragraph 5 of that Schedule insert—
“Power to specify qualification in information technology
5A The level of attainment demonstrated by a specified qualification in making use of information technology must be the level which, in the opinion of the Secretary of State, is the minimum required in that respect by persons aged 19 or over in order to be able to operate effectively in day-to-day life.”’—(Matt Hancock.)
This clause creates an obligation on the Secretary of State to ensure that courses of study for qualifications in information technology are free of charge for persons in England aged 19 or over. The qualifications will be specified in regulations under Schedule 5 to the Apprenticeships, Skills, Children and Learning Act 2009.
Brought up, read the First and Second time, and added to the Bill.
New Clause 27
Digital additional services: seriously harmful extrinsic material
After section 24 of the Broadcasting Act 1996 (digital additional services) insert—
“24A Duty to prevent access to seriously harmful extrinsic material
(1) In carrying out their functions, OFCOM must do all that they consider appropriate to prevent digital additional services from enabling members of the public to access seriously harmful extrinsic material.
(2) “Seriously harmful extrinsic material”, in relation to a digital additional service, means material that—
(a) is not included in the service, and
(b) appears to OFCOM—
(i) to have the potential to cause serious harm, or
(ii) to be likely to encourage or incite the commission of crime or lead to disorder.”’ —(Matt Hancock.)
This new clause would require OFCOM to seek to prevent digital television additional services enabling access to seriously harmful content that does not form part of the service, for instance by linking to content streamed from the internet. OFCOM could do this by imposing licence conditions in relation to such services.
Brought up, read the First and Second time, and added to the Bill.
New Clause 28
Suspension of radio licences for inciting crime or disorder
‘(1) In Chapter 2 of Part 3 of the Broadcasting Act 1990 (sound broadcasting services), for section 111B (power to suspend licence to provide satellite service) substitute—
“111B Suspension of licences for inciting crime or disorder
(1) OFCOM must serve a notice under subsection (2) on the holder of a licence granted under this Chapter if they are satisfied that—
(a) the licence holder has included in the licensed service one or more programmes containing material likely to encourage or incite the commission of crime or to lead to disorder,
(b) in doing so the licence holder has failed to comply with a condition included in the licence in compliance with section 263 of the Communications Act 2003, and
(c) the failure would justify the revocation of the licence.
(2) A notice under this subsection must—
(a) state that OFCOM are satisfied as mentioned in subsection (1),
(b) specify the respects in which, in their opinion, the licence holder has failed to comply with the condition mentioned there,
(c) state that OFCOM may revoke the licence after the end of the period of 21 days beginning with the day on which the notice is served on the licence holder, and
(d) inform the licence holder of the right to make representations to OFCOM in that period about the matters that appear to OFCOM to provide grounds for revoking the licence.
(3) The effect of a notice under subsection (2) is to suspend the licence from the time when the notice is served on the licence holder until either—
(a) the revocation of the licence takes effect, or
(b) OFCOM decide not to revoke the licence.
(4) If, after considering any representations made to them by the licence holder in the 21 day period mentioned in subsection (2)(c), OFCOM are satisfied that it is necessary in the public interest to revoke the licence, they must serve on the licence holder a notice revoking the licence.
(5) The revocation of a licence by a notice under subsection (4) takes effect from whatever time is specified in the notice.
(6) That time must not be earlier than the end of the period of 28 days beginning with the day on which the notice under subsection (4) is served on the licence holder.
(7) Section 111 does not apply to the revocation of a licence under this section.”
(2) In section 62(10) of the Broadcasting Act 1996 (application of sections 109 and 111 of the 1990 Act to digital sound programme services) for the words from “section 109” to “1990 Act” substitute “sections 109, 111 and 111B of the 1990 Act (enforcement)”.
(3) In section 250(3) of the Communications Act 2003 (application of sections 109 to 111A of the 1990 Act to radio licensable content services) for “111A” substitute “111B”.’—(Matt Hancock.)
This new Clause gives OFCOM power to suspend immediately, and subsequently revoke, the licence of any licensed radio service if material is included that is likely to encourage or incite crime or lead to disorder. It replaces a power applying only to satellite and cable services.
Brought up, read the First and Second time, and added to the Bill.
New Clause 29
Power to apply settlement finality regime to payment institutions
In Part 24 of the Financial Services and Markets Act 2000 (insolvency) after section 379 insert—
‘Settlement Finality
“379A Power to apply settlement finality regime to payment institutions
(1) The Treasury may by regulations made by statutory instrument provide for the application to payment institutions, as participants in payment or securities settlement systems, of provision in subordinate legislation—
(a) modifying the law of insolvency or related law in relation to such systems, or
(b) relating to the securing of rights and obligations.
(2) “Payment institution” means—
(a) an authorised payment institution or small payment institution within the meaning of the Payment Services Regulations 2009 (S.I. 2009/209), or
(b) a person whose head office, registered office or place of residence, as the case may be, is outside the United Kingdom and whose functions correspond to those of an institution within paragraph (a).
(3) “Payment or securities settlement system” means arrangements between a number of participants for or in connection with the clearing or execution of instructions by participants relating to any of the following—
(a) the placing of money at the disposal of a recipient;
(b) the assumption or discharge of a payment obligation;
(c) the transfer of the title to, or an interest in, securities.
(4) “Subordinate legislation” has the same meaning as in the Interpretation Act 1978.
(5) Regulations under this section may—
(a) make consequential, supplemental or transitional provision;
(b) amend subordinate legislation.
(6) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”’—(Matt Hancock.)
The inserted section enables the Treasury to apply a settlement finality regime to payment institutions. The current settlement finality regime for payment systems and securities settlement systems is in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I 1999/2979).
Brought up, read the First and Second time, and added to the Bill.
New Clause 30
Bank of England oversight of payment systems
“Schedule (Bank of England oversight of payment systems) extends Part 5 of the Banking Act 2009 (Bank of England oversight of inter-bank payment systems) to other payment systems; and makes consequential provision.”—(Matt Hancock.)
The new clause introduces new Schedule NS2 which extends the Bank of England’s oversight of payment systems, by removing the current restriction that limits the Bank’s oversight to systems for payments between financial institutions.
Brought up, read the First and Second time, and added to the Bill.
New Clause 1
Strategic review of sharing telecommunications infrastructure
‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a strategic review of the sharing of telecommunications infrastructure and shall lay the report of the review before each House of Parliament.
(2) The review under subsection (1) shall consider measures to maximise the sharing of telecommunications infrastructure by telecommunications service providers.’—(Calum Kerr.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 20—Strategic review of mobile network coverage—
‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a strategic review of mobile network coverage and shall lay the report of the review before each House of Parliament.
(2) The review under subsection (1) shall consider measures to ensure universal mobile network coverage for residences and businesses across all telecommunications providers.
(3) The review under subsection (1) shall also consider measures to ensure savings made by telecommunication providers under sections (4), (5) and (6) of this Act are reinvested into expanding network coverage.’
Calum Kerr
We seem to have raced through this final section, for which I commend all right hon. and hon. Members. We do not need the gift of foresight to know that the Minister will tell me, “We do not do reviews in this Government. We expect someone else to do them for us.” Let me briefly explain why I support new clause 1, which I will not press to a vote, and I will then touch on new clause 20.
We heard an excellent articulation in the evidence sessions of the value of third-party infrastructure as an effective means of maximising communication roll-out across the country. Today, about a third of the UK’s 27,000 masts are independently operated, and that contrasts with about 60% of masts globally. In EU countries, it is 80%. Independent analysis has shown that independently operated towers across Europe and North America host at least twice as many masts as when those towers are operated by the mobile companies themselves. As we map a new digital future—we are all excited to see what the new Minister does with his digital strategy for the country—we should be conscious of the fact that we will need a lot more masts. We know that he knows that. Technology such as 5G is higher frequency and covers shorter distances. Unless we want our country to resemble the back of a hedgehog, we need to look at effective ways of minimising the number of masts while maximising the coverage we need.
With the approach in the new clause, we are looking to encourage the Government to be consciously competent and to come forward with a model or measures that will enhance the further deployment of shared infrastructure, so that as we deploy 5G and embrace the technology of the future, we minimise the impact on our environment.
New clause 20 is certainly a different take on this area. It is well meaning but not quite right, to be honest. I do not think the idea of a universal service applies in the same way for mobile as it does for wired. It is probably something we will evolve to as the worlds of wired and wireless networks intertwine and overlap going forward. I would be happy to support the new clause, but I would welcome some more discussion.
I hope the Government and the new Minister and team recognise that third-party infrastructure will be central to driving the coverage model in rural and urban areas as we look to put a lot more masts out there to deliver the potential speeds and capability of the technology in the future. If the Minister will not give me a review, perhaps he will at least throw me a bone or two that things are beyond, “Hopefully the Select Committee will do a review.” The Select Committee has only so much bandwidth to do it.
Matt Hancock
I can do better than merely asking the Select Committee, although I do think that Select Committees do important reports and should not be denigrated. Ofcom has also been given a statutory duty to provide a report to the Secretary of State every three years on the state of the UK’s communications infrastructure, including the extent to which UK networks share infrastructure. That is precisely what the new clause asks for as a one-off. I assure the hon. Gentleman that the reports will happen regularly. The next three-yearly report is due in 2017, which is the same time that new clause 1 specifies for its review.
Moving on to new clause 20, we recognise the importance of improving mobile coverage. I support the intention behind it, but I do not think a statutory review is necessary at this time. We already have building blocks in place to deliver extensive mobile connectivity, and it is happening. The changes that we have debated today will give Ofcom the ability to provide data to ensure that we know how effective mobile connectivity is. We have legally binding licence obligations to ensure that each mobile operator provides voice coverage to at least 90% of the UK land mass. Taken together, 98% of the UK will have a mobile signal by the end of 2017, according to the agreements.
Louise Haigh
Does the Minister envisage, then, that Ofcom will gather data to produce reports on the extent of mobile coverage against the Government targets set with mobile network operators?
Matt Hancock
I do expect that. I can confirm my expectation that that is what Ofcom will do.
Louise Haigh
How often does the Minister expect Ofcom to produce those reports?
Matt Hancock
We just changed the rules so that instead of being restricted to producing such reports three times a year, Ofcom can do so whenever it thinks it appropriate. That will provide for Ofcom to be able to do so as much as possible, but I committed earlier today to having a connected nations report before the end of this year. I hope that that provides for what the hon. Lady seeks in new clause 20 and that the hon. Members will not press their new clauses.
Calum Kerr
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Digital Economy Bill (Eleventh sitting)
Tuesday 1st November 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 1 November 2016 - (1 Nov 2016)
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
Thangam Debbonaire (Bristol West) (Lab)
I beg to move, That the clause be read a Second time.
As I have made clear in earlier contributions, I welcome the Government’s intention to protect children from the harmful effects of pornography. However, the Bill does not deal with other harmful effects. Not only can pornography be a potential source of harm to adult viewers and a way of promoting the very worst forms of gender inequality and stereotyping—both issues were discussed in a recent House of Lords debate, which I will not address—but the process of producing pornography can itself be harmful to the people involved, because of trafficking, deception, coercion and violence. New clause 5 seeks to deal with that.
The high frequency of violent scenes in pornography, in particular violence directed against women, has been well reported, although I have evidence if the Minister would like it. Testimonies from and research about people who have experienced the porn industry reveal that in many cases such scenes involve genuine violence, and that coercion is involved. There are serious questions to be asked about the level of coercion involved in pornography and what is being done to address it.
Online pornography is the easiest way for people to make, distribute, share and consume pornography, for free and commercially; I tabled the new clause because I would like to hear from the Minister what the Government are doing about the safety of people involved in the production of porn. People watching pornography would not want unwittingly to watch acts of rape, violence or coercion, but I am not convinced that there is anything like an adequate framework to prevent that.
The new clause is intended to probe. If this country is to lead the way in ending modern slavery and preventing exploitation, as the Prime Minister has pledged, we need to do everything we can to prevent pornographic material produced through coercion, trafficking or violence from being made in or distributed from the UK. The new clause would make it an offence to make available in the UK online pornography that involves people who have been exploited. Words to explain that are included.
There are strong links between pornography, trafficking and prostitution, as part of a complex system of exploitation within and fuelled by the global sex industry. Organised crime groups, individual traffickers and pimps exploit people to make money, and online pornography presents them with an easy opportunity to make more money by exploiting a person who is already under their control. Someone who has been trafficked or is providing sexual services might also be filmed or photographed. The development of technology has made filming and uploading material to the internet extremely easy, and production of porn is no longer limited to large commercial enterprises.
Areas of the world known to have significant problems with human trafficking, including eastern Europe, Russia and the Philippines, are also known to have growing porn industries. Professor Donna Hughes has written extensively about trends in human trafficking:
“Brothel owners, pimps, and pornography producers place orders with traffickers for the number of women they need.”
That has also been identified in the UK. A report by the POPPY Project as long ago as 2004 noted that some of the trafficked women it was caring for had been photographed or filmed naked by their traffickers, including while abuse of them was taking place.
Exploitation in internet pornography, however, is much wider than trafficking, which is why proposed new subsection (3) of the new clause sets out a broader definition of exploitative conduct. Coercion, drug use and violence, as well as poor labour conditions and low pay, have been well documented in the commercial porn industry. Evidence and first-hand testimonies from former porn industry insiders reveals that women are forced and coerced to participate in sexual acts that are often violent. They are constantly pressured for ever more extreme performances.
Many young women enter pornography as a result of coercion and deception about the realities. The young women are often extremely vulnerable. Many of them have experienced childhood sexual abuse, been in foster care or lived in poverty. Professor Hughes writes:
“Most women entering the pornography industry don’t know what they will be subjected to...they need money and are looking for opportunities. The agents, directors and producers take extreme advantage of these often naive young women. Their first experience making commercial pornography is often brutal and traumatic.”
One former porn performer from the US has said:
“When I was first introduced to my agent I told him I had no limits and would do it all. But I had NO idea what I was saying. I didn’t know about all the hardcore sex acts I would be forced to do.”
She also describes how she was threatened with being sued for large sums of money when she tried to pull out of performing in a scene, and speaks of being physically beaten on and off screen. She used alcohol and a range of prescription drugs to help her cope. Coercion in the industry goes beyond just pressuring or manipulating people to sign a contract; that is just the beginning. Coercion extends to forcing women to perform physically abusive scenes repeatedly.
Finally, I turn to the legal context. Dr Max Waltman, a researcher who has analysed the laws on pornography—including online pornography—in Sweden, Canada and the USA, as well as the political contexts in those countries, writes that
“testimonial evidence on violence, coercion, and trauma during pornography production revealed in public hearings repeatedly mirror both quantitative and qualitative data on these subjects in the lives of prostituted women around the world”.
That evidence cannot simply be discarded as unrepresentative or “anecdotal”.
Through the internet, pornographic material produced involving coercion, violence and even trafficking is accessible throughout the UK. While the viewers, distributors and host websites may not be directly involved in the coercion or violence, they are complicit in it by watching, paying for or receiving revenue by promoting the material. Viewers of pornography are not likely to be able to take action to find out the origins of the material, but promoters are. They have a responsibility to check the sources of the material they distribute. We hold supermarkets and clothes shops responsible for the conditions in their supply chains, so why not pornographers?
The clause recognises that it might not always be possible for a distributor to find out all the details of the production of material, so criminal responsibility is limited to cases where the distributor
“knows or ought to know”
that the material involved exploited persons. Nevertheless, I believe that such a clause would contribute to a greater awareness of the need to investigate the origins of pornographic material.
Section 54 of the Modern Slavery Act 2015 requires large companies to report on trafficking and forced labour in their supply chains. I would like the Minister to say whether or not that measure also applies to pornography; recent analysis found only patchy compliance with supply chain obligations. However, as I have already said, coercion in pornography extends beyond trafficking and forced labour, which is why I have tabled this new clause.
Finally, I turn again to the legal framework. Dr Waltman analysed the implications of the Swedish “sex buyer law”—the law that criminalised the demand side of prostitution while decriminalising the supply side—for the laws governing the production of pornography. He points out that, under Swedish law, the person paying for the sex act does not have to be the person having sex; it could be the producer of online pornography, paying people to have sex. Using this measure could mean that producing pornography with exploited persons was already illegal. Dr Waltman is exploring that possibility further and he has written about
“what the political obstacles are to challenge the production of pornography with real persons in Sweden. How come…the legislature did not recognize that the procuring provisions should apply to pornography production?”
Was the resistance to such an application based on law, or ideological perceptions?
I cannot answer those questions about the “sex buyer law” in Sweden, but I can pose related questions today about our own laws as they relate to online pornography, given that it is in the scope of the Bill. We already have a partial version of the Swedish “sex buyer law” in force in this country. Since April 2010, section 53A of the Sexual Offences Act 2003, as inserted by section 14 of the Policing and Crime Act 2009, passed by a Labour Government, has created a new offence of paying for the sexual services of a prostitute who has been subjected to force. This legislation set down a clear line that paying for sex with someone who had been trafficked or coerced was never acceptable, and it now needs to apply to pornography.
This probing new clause is designed to find out various things. For instance, will the Government consider using existing legislation to outlaw the distribution of internet pornography involving a prostitute who has been subjected to force or to widen the scope of the legislation by replacing the word “prostitute” with “person”? That would make it clearer that nobody should pay for sex with anyone who is trafficked, whether or not they define themselves as “a prostitute” and whether or not the sex takes place within a prostitution setting or in pornography. The dividing lines for people who are coerced, trafficked and harmed in the sex industry are not felt as clearly as our laws imply they are.
I may as well place on the record that I am also in favour of a “sex buyer law” in this country, but discussion of that issue is for another debate.
Finally, I would like to hear from the Minister answers to the following questions. First, what are the Government doing to hold the makers and distributors of internet pornography to account for coercion and violence committed in the course of pornography production, from which those makers and distributors are profiting? Will the Government consider the matter of abuse, coercion and trafficking in pornography, and how to safeguard people from harm? Will they consider what regulatory or legal framework would be adequate to ensure that consumers of pornography can be sure that they are not viewing rape or sexual assault, or sexual acts taking place under or as a result of the threat of violence or actual violence?
Will the Government ask their advisers to look into the potential for our existing legislation to be amended—or for new legislation—to prevent trafficking, coercion, violence and abuse in the making of pornography? Will they also consider all of these questions, keeping in mind that it is entirely possible that there is no regulatory or legal framework that could adequately protect people from violence, abuse, coercion and trafficking in online or offline pornography or in prostitution, and that we may one day have to consider that there needs to be stronger legislation against both? Although the new clause is intended only to probe, I end by urging the Minister to consider the issue seriously because it matters too much. The way we treat the most vulnerable in society is a measure of how we are as a nation.
The Minister for Digital and Culture (Matt Hancock)
I want to respond to a powerful and impassioned speech by the hon. Member for Bristol West and set out why, while agreeing with much of the substance of what she says, we think that many of the issues are covered by existing legislation and why we think that enforcement is the biggest part of the challenge, as she pointed out. There are also some technical deficiencies with the proposed clause. I will deal with all those issues in the context of strongly supporting the thrust of her argument and the desire to protect vulnerable women.
New clause 5 seeks to make it a criminal offence to
“make available on the internet pornographic material on a commercial basis to persons in the United Kingdom if they know or ought to know that the production of the pornographic material involved exploited persons.”
The language is similar to that used in other parts of the Bill, but it covers quite different ground in terms of the substance. I do not want to see people exploited in this way; the question is about what is provided for through existing law and how the new clause would affect that.
The offence is targeted at persons “making available” material that may have involved exploitation, rather than the exploitation itself. We are committed to ensuring that people are not subject to exploitation; this is a technical difference in respect of the way that the law applies. Tackling exploitation is the existing basis of the work of, for example, the National Crime Agency’s child exploitation online protection command and the violence against women and girls strategy as well as the Modern Slavery Act 2015. Making sure that we implement the 2015 Act—recent legislation—and enforce it is a critical part of the work of the Home Office at the moment.
Thangam Debbonaire
I am grateful to the Minister for reassuring me that the 2015 Act could cover what I am talking about. My concern relates to whether that is actually happening. Could the Minister expand further on that point?
Matt Hancock
Of course. The expansion of enforcement in respect of the 2015 Act is an important part of the work of the Home Office at the moment. The Minister who took that legislation through Parliament is now the Secretary of State at the Department for Culture, Media and Sport, so Ministers at that Department have a good understanding of not just the legislation, but the need for enforcement.
Existing legislation, including the Criminal Justice and Immigration Act 2008, clearly makes it an offence to be in possession of “an extreme pornographic image”—which includes images depicting non-consensual sex—and to possess and distribute indecent images of children. In addition, the independent Internet Watch Foundation works to identify and remove child sexual abuse, which we discussed earlier in Committee, as well as criminally obscene content hosted anywhere in the world. We are able to take down criminally obscene content, and the approach has started to work effectively. The organisation works closely with Government, at national and local levels, and policing agencies to support investigations and prosecutions.
There are a couple of technical reasons why the new clause is deficient. First, the scope of the offence is unclear; there is no definition as to what constitutes pornographic material. It is not made clear whether the definition at clause 16 of the Bill is to be used. Similarly, it is not clear what is meant by “make available” on the internet: would that capture internet service providers who host the material or just the individual who actually uploaded it to a specific website?
Secondly, the proposed classification of the offence is summary only and the corresponding maximum penalty of six months’ imprisonment, a level 5 fine or both, is incongruous for an offence dealing with this kind of conduct. Other sentences for offences in this area are much more serious. For example, the proposed maximum is much lower than for other offences relating to coercive conduct, such as trafficking for sexual exploitation, which carries a maximum of life imprisonment, and the possession of extreme pornographic images, which carries a maximum of three years’ imprisonment, an unlimited fine or both.
I am also concerned that the offence as drafted could be difficult to prosecute. In practice, it is difficult to show that a person making material available online actually knew, or should have known, that an individual featured had been exploited. There may be no link, or a very tenuous link, between these individuals and those engaged in the exploitation itself. Lastly, there are also potential territorial difficulties involved in prosecuting this offence. In the absence of any express provision to the contrary, it is presumed that any criminal offence is subject to the jurisdiction only when it is perpetrated in the UK. This is an issue that we have dealt with elsewhere in the Bill.
I applaud the hon. Lady’s intentions and have given assurances about the ongoing work in prosecuting other offences. I invite her to withdraw the motion.
Thangam Debbonaire
I thank the Minister for his responses. My understanding is that the implementation of the Modern Slavery Act does not cover this area of work so I will be following that up with the Minister and his colleagues. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 13
Offence to use digital ticket purchasing software to purchase excessive number of tickets
‘(1) A person commits an offence if he or she utilizes digital ticket purchasing software to purchase tickets over and above the number permitted in the condition of sale.
(2) A person commits an offence if he or she knowingly resells or offers to resell a ticket that the person knows, or could reasonably suspect, was obtained using digital ticket purchasing software and was acting in the course of a business.
(3) For the purposes of subsection (2) a person shall be treated as acting in the course of a business if he or she does anything as a result of which he makes a profit or aims to make a profit.
(4) A person guilty of an offence under this section shall be liable on summary conviction to—
(a) imprisonment for a period not exceeding 51 weeks,
(b) a fine not exceeding level 5 on the standard scale, or
(c) both.
(5) In this section—
(a) “digital ticket purchasing software” means any machine, device, computer programme or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets.
(b) “retail ticket purchasing platform” shall mean a retail ticket purchasing website, application, phone system, or other technology platform used to sell tickets.”
(6) Subsections (1) and (2) shall apply in respect of anything done whether in the United Kingdom or elsewhere.’—(Nigel Adams.)
This new clause creates an offence to use digital ticket purchasing software to purchase tickets for an event over and above the number permitted in the condition of sale. It also creates an offence to knowingly resell tickets using such software.
Brought up, and read the First time.
Nigel Adams (Selby and Ainsty) (Con)
I beg to move, That the clause be read a Second time.
The new clause would make it an offence to use digital ticket purchasing software to purchase tickets for an event in excess of the number allowed by the retail ticket purchasing platform. It also creates an offence to knowingly resell tickets bought using such software. This is not a silver bullet. Ticket touting is a huge problem and touts use a variety of methods to obtain tickets. There is also the issue of regulation of secondary resellers. However, the new clause would address one problematic aspect: it would help to get a higher proportion of tickets into the hands of genuine fans on their first attempt.
I have told colleagues repeatedly in this place about my recent experience of trying to purchase tickets for a Green Day concert; I dread to think what a credibility hit I have caused fans by referencing the fact that I am a huge Green Day fan. The experience really did upset me. The primary ticketing website I was using, See Tickets, had been the victim of a computerised attack by organised touts using botnets. That meant that I and other fans lost out, but the tickets were available minutes later at grossly inflated prices on other sites.
The practice occurs every day on an industrial scale in all types of sporting and cultural events. Whenever tickets to popular events go on sale, they are snapped up by professional ticket touts and prices become prohibitive for many genuine fans, often hampering the ability of the artist to fill their venues.
Christian Matheson (City of Chester) (Lab)
I rise briefly to support the new clause and to pay tribute to my good friend and fellow Select Committee member, the hon. Member for Selby and Ainsty, who has form on campaigning in this area. He is known as a music fan, and the new clause is the culmination of a long campaign on behalf of music fans everywhere.
Moreover, I do not believe that the hon. Gentleman will damage the credibility of Green Day, because he has a track record of supporting live music—this is certainly nothing like David Cameron suggesting that he was a Smiths fan and having Johnny Marr tweeting him to back off. While I am on the subject, I remind the Committee that I was at the last concert of The Smiths, which was in Brixton Academy, probably in December 1986 or ’87.
In those days, ticket touts were blokes in long macs shouting, “Any spare tickets?”, which was a problem, but manageable. The hon. Member for Selby and Ainsty has been outlining industrial-scale, mechanical touting, which is way beyond my experience of those days 20, 30 or even 40 years ago. The problem absolutely needs to be addressed and the new clause does so. I am pleased to support it and, if the Minister is planning to accept it in principle, I suggest that he could do worse than recognise the work of the hon. Gentleman, give him the credit for the new clause, along with my hon. Friends on the Front Bench, and the chance he so richly deserves to make a mark.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I could not possibly be as glowing about the hon. Member for Selby and Ainsty as the hon. Member for City of Chester has been. There is a love-in across the Benches this morning.
I, too, rise briefly to support the new clause. To paraphrase a well-known quote by Eric Hoffer, the American moral philosopher, every good idea begins as a movement, becomes a business and eventually degenerates into a racket. That is what we have here. Online sales and fan-to-fan ticket sites are fantastic at enabling people to get access to the music events they want to go to, but because of the evolution of technology, software and bots, we now have a distorted market, about which we absolutely need to do something.
I want the hon. Member for Selby and Ainsty to be able to go to see his favourite band, Green Day—as he was mentioning them, it occurred to me that one of their songs, and the name of their 2004 album, seemed appropriate for a gentleman who might yet end up in the White House. I must also add that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) suggests that MP4 tickets are very easy to get hold of—he is determined that they are stopped from selling below ticket value.
I commend the hon. Member for Selby and Ainsty on his new clause and I am happy to support it.
Louise Haigh (Sheffield, Heeley) (Lab)
I rise briefly to support the new clause. My hon. Friend the Member for Cardiff West and I were proud to put our names to it. I commend the hon. Member for Selby and Ainsty for bravely revealing his devotion to Green Day. I stand in solidarity with him—I, too, am a big fan.
This issue has been a problem for too long for fans of musicians of all descriptions. It prices people out of access to their favourite bands and acts and thereby entrenches a class barrier to culture, which cannot be allowed to continue. For as long as there have been ticketed events, there have been people making money out of the fact that demand for live sports or music outstrips supply. As my hon. Friend the Member for City of Chester pointed out, the development of technology has escalated the problem. Punters simply do not stand a chance against digital ticket purchasing software. The new clause would kick away one of the legs that ticket touts rely on.
The current legislation contained in the Consumer Rights Act 2015 is extremely patchy. It can compel ticket resale sites to publish information such as seat number and face value, but it is not enforced sufficiently and tickets are routinely sold at a high mark-up. Unless Parliament gets tough now, resale sites will continue brazenly to flout the law. It is high time that Parliament closed the legal loophole. That is what the industry, musicians and fans are calling for. I take the opportunity to thank my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who has been calling for this change for some time. We wholeheartedly support new clause 13.
Matt Hancock
I recognise the strength of feeling across the Committee on this matter. I will certainly do the bidding of the hon. Member for City of Chester and pay tribute to the work of my hon. Friend the Member for Selby and Ainsty, who is a long-standing supporter of live music and has made his case. Last week, he introduced me to Josh Franceschi in the House of Commons, who was able to make his plea very directly.
I match my hon. Friend’s Green Day ticketing problem and raise him my Paul Simon ticket problem. I had a similar experience when buying tickets to see Paul Simon next week at the Royal Albert Hall, to which I am looking forward enormously. I had to pay an eye-watering amount for the tickets—much higher than the face value.
Claire Perry (Devizes) (Con)
If even the Minister cannot obtain tickets, given the strings he can pull, what hope is there for the ordinary punter?
Matt Hancock
I stress that I bought my tickets to see Paul Simon completely off my own bat, as a fan. My wife and I are enormously looking forward to going. I am prepared to pay the very high price because it will be such an amazing concert, but it would be far better if I could pay the face value or something close to it. I went online immediately the tickets were released and a huge number had gone already. Secondary ticketing sites were the only way that I could get the tickets. Like my hon. Friend the Member for Selby and Ainsty, I was bent over my laptop pressing the button trying to get the tickets as quickly as possible. I only say that to explain to the Committee that I feel the pain of all those who end up having to pay far more than face value because of automated bots.
The Committee will know that we asked Professor Michael Waterson to review secondary ticketing. His very good independent report makes a number of points relevant to the new clause. The offences set out in the Computer Misuse Act 1990 have broad application and the Waterson review concludes that unauthorised use of a computerised ticketing system to avoid ticket volume constraints may give rise to breaches of that Act. Such breaches need to be reported, investigated and case law then established.
Having said that, I recognise the very clear sense in the debate that there remains a problem to be solved. I reiterate the words of the Secretary of State, who said last week that
“the advice has always been that the Computer Misuse Act applied. I want to look carefully at that and see how best we can get to a robust position on this matter”.
She proposed to convene a meeting of all interested parties. If we can get it scheduled, we will have that meeting within a month; if not, I commit to holding it before Christmas.
Kevin Brennan (Cardiff West) (Lab)
It is welcome to have a deadline, but would it not be better if that meeting took place before Report, so that the Commons has an opportunity to consider the points made at it?
Matt Hancock
We will seek to have it before the Bill reaches Report, but I will commit to having it before Christmas. Consideration of the Bill will still be ongoing after Christmas in the other place. At the same time, we need to work on making sure that, should we make progress in this area, we get the details and technicalities right and consult appropriately.
There are some technical deficiencies in the new clause. I ask my hon. Friend the Member for Selby and Ainsty to withdraw it, with that clear commitment to making progress in this area while there is still an opportunity—should that be the outcome—to amend this Bill.
A series of non-legislative work is also needed to tackle the problem. As my hon. Friend says, this is not a panacea. Today, we are announcing the new national cyber-security policy and that includes support, through the National Cyber Security Centre, for further action. The centre is in touch with ticketing organisations to enable this and I suggest that we also invite them to attend the meeting to see what progress can be made.
With those assurances, I ask my hon. Friend to withdraw the motion and I look forward to working with him and others to see what we can do to tackle this problem.
Nigel Adams
I am grateful to the Minister for his response. It was remiss of me not to mention the tremendous work of the hon. Member for Washington and Sunderland West, who chairs the all-party group on secondary ticketing. She does an amazing amount of work on this subject. In fact, I spent a day with her tramping up and down in the middle of 50-odd touts outside Wembley. I know how passionate she is about this issue and I appreciate her support.
My right hon. Friend the Minister has made a brilliant case for action on this problem. I am not at all surprised that he is a Paul Simon fan. At some stage, I will invite the Minister to a rock show. I love Paul Simon as well and I am sure the Minister will have paid several hundreds of pounds to go and see him. It seems outrageous, but the Minister will have a good time. “Catch him while you can” springs to mind.
I would be grateful to know when the Waterson review is likely to appear. The industry has been waiting for this for some time. It is a great piece of work, but I do not think it goes far enough on industrial ticket touting and bots. Can the Minister put on the record when the industry is likely to see the Government’s response to this review?
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
“The sound of silence.”
Nigel Adams
Indeed, there is a sound of silence on this particular review response.
I am delighted that the Minister has committed to following up the Secretary of State’s pledge to hold a meeting before Christmas. With something as technical as this, it is crucial to get all the players round the table: primary, secondary ticketing sites, representatives of both the fans and artists and, dare I say it, the Minister could probably do with me there as well.
Matt Hancock
On the response to the Waterson report, it will be published in due course. The question is whether it is best to hold back publication until after the work I have just committed to is done, to incorporate fully the views of the fans, artists, the ticket-selling industry and, potentially, even my hon. Friend.
Nigel Adams
It would be a sensible move. Perhaps it is not a bad idea to have this round-table and take soundings from the industry before the Government respond to the review; I do not think that the Waterson review goes quite far enough in tackling bots, although there is plenty of good work in there for the Government to consider.
I am happy to withdraw my new clause at this stage, following the Minister’s clear commitment to solve the problem. I am hopeful that the issue will be resolved at some stage during the passage of the Bill. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
The Chair
I have done a quick count. I think there are nine new clauses and two new schedules left. I remind hon. Members that we have an hour and 20 minutes before we have to finish.
New Clause 15
Storage of uploaded works
“(1) The Electronic Commerce (EC Directive) Regulations 2002 is amended as follows.
(2) After Regulation 19 (a)(ii) insert—
“(iii) does not play an active role in the storage of information including by optimising the presentation of the uploaded works or promoting them.”.”—(Kevin Brennan.)
This new clause clarifies circumstances when a digital service is deemed an active provider of copyright protected content.
Brought up, and read the First time.
Kevin Brennan
I beg to move, That the clause be read a Second time.
I hope that the Minister enjoys his concert next week; I am sure he will be feelin’ groovy. I rise to speak to new clause 15, which is a probing new clause to clarify when a digital service is deemed to be an active provider of copyright-protected content. Taking on board what you have said, Mr Stringer, I will truncate my remarks.
The Electronic Commerce (EC Directive) Regulations 2002, which put into law the EU’s e-commerce directive 2000, include certain exemptions from liability for online services, including copyright-protected works. The fundamental concern from the music industry is that the hosting defence provided by regulation 19 of the 2002 regulations acts as a safe harbour and allows some services, including user-uploaded services such as YouTube, to circumvent the normal rules of licensing.
Those services can use copyright-protected content—a song by Paul Simon or Green Day, for example—to build businesses without fairly remunerating rights holders. In recent years, the music industry has argued that the online content market has developed in such a way that there is now a value gap between rights holders, such as artists, record companies and publishers and so on, and the digital services themselves, such as YouTube.
As evidence of that, the recent report by UK Music, “Measuring Music 2016”, highlighted that user-uploaded service YouTube, the most widely used global streaming platform, increased its payments to music rights holders by 11% in 2015, despite consumption on the service growing by 132%. That is the value gap in a nutshell. Further industry analysis indicates that video streams increased by 88% year on year, but generated only a 0.4% increase in revenues. Nine of the top 10 most watched videos on YouTube are official music videos by artists such as Adele, Psy, Taylor Swift and Justin Bieber.
The inequality ensuing from that safe harbour is not only between those who produce music and those who promote it online; the provisions in new clause 15 have benefits for other sectors that seek to achieve a level playing field in online markets, too. The current legal ambiguity and imbalance has created a distortion in the digital market itself, with services such as YouTube benefiting from those exemptions while other services, such as Apple Music and Spotify, do not. The reality is that many people principally use YouTube to play music. It is nonsense to suppose it is not an active provider of copyright-protected content as those other services are.
There was, and continues to be, a justification for exemptions in some areas for passive hosts, but those must reflect the balance between the rights of rights holders and users. The industry is concerned that existing provisions are not sufficiently defined and as a result are open to deliberate manipulation. New clause 15, which stands in my name and that of my hon. Friend the Member for Sheffield, Heeley, aims to clarify the legislative framework, so that creators and rights holders can secure a fair and proper value for the use of their work by online services in a fair and properly functioning market.
Will the Minister clarify some issues? Many of the matters raised by new clause 15 are being considered by European institutions at this very moment. On 14 September, the day after Second Reading, the European Commission published a draft directive on copyright that seeks to address many of these points. That is a welcome development, and the Minister will probably to refer to it in his response. After the recent referendum put us on the path towards Brexit, many issues have been raised in relation to these proposals. It is highly conceivable that we will be Brexiting at the same time as Europe begins to adopt copyright rules for a digital age.
I would like to ask the Minister a few questions. First, will he assure us that the UK Government remain committed to engaging constructively with the European Union on matters relating to the draft copyright directive, and that they will put the interests of the creative industries at the heart of their representations? Secondly, will he support the positive measures in the draft directive that address the value gap between rights holders—particularly the music industry—and digital services?
Thirdly, and more generally, once article 50 is triggered, how do the UK Government intend to implement legislation agreed in Europe before we Brexit? Finally, what commitments is the Minister prepared to make today to reassure UK creators and rights holders that they will not miss out on any positive measures contained in the draft directive as a result of leaving the European Union?
Nigel Adams
I rise briefly to speak to the new clause tabled by the hon. Member for Cardiff West. I understand that it seeks to clarify a rule that already exists. As has been mentioned previously, I chair the all-party parliamentary group on music. Earlier in the year, we held a dinner with representatives from the industry and services such as Spotify and Apple Music. The intention of the dinner was better to understand the growing music-streaming market and what measures are needed to help it flourish further for the benefit of creators, fans and those services. I was taken by the agreement across the room about the existence of a value gap between rights holders and some digital services, and the need to ensure fairness in the way music rights are valued and negotiated.
The Government’s response to the EU’s digital platforms consultation, published at the beginning of the year, stated:
“Clarification of terms used in the Directive would, we believe, help to address these concerns.”
I hope the Minister and the Government remain committed to that view and the intention behind the new clause to clarify existing law.
Matt Hancock
As we have debated, the Bill sends a clear message about copyright infringement, not least because we are increasing the penalty for online copyright infringement from two to 10 years. Of course, I know about the concern in the music industry and elsewhere that online intermediaries need to do more to share revenues fairly with creators. That is what this new clause seeks to tackle, and I agree with that concern.
The hon. Member for Cardiff West mentioned the interaction of the Bill with EU law. The change proposed by the new clause is already the position in European Court of Justice case law, and we support that position in the UK. That provides some clarification to the existing position.
Let me answer the specific questions. First, we are heavily engaged in the digital single market negotiations and the discussions ongoing in Europe. While we are a member of the EU, we will continue to do that. The issue of the value gap, which the hon. Gentleman mentioned, is important, and the development of ECJ case law in that direction has been helpful.
That brings me to Brexit because, as the e-commerce directive is EU single-market legislation, we will have to consider what the best future system will be as we exit the European Union. We will have to consider how the e-commerce regulations as a whole should work in the future. That will be part of the debate about leaving the European Union. For the time being, ECJ case law supports the intentions in the new clause, and I would be wary about making piecemeal changes to the regime. I acknowledge the need, through the Brexit negotiations and the process of setting domestic law where there is currently European law, to take into account the important considerations that have been raised.
Kevin Brennan
The new clause was a probing amendment, and I thank the Minister for his response. It is important to have the Government’s response on the record.
We debate this issue in the context of the UK music industry’s growth: over a four-year period, it has grown by 17%. During that same period, there has been a massive shift from consumers owning music towards the streaming of music. The value of subscription streaming services has jumped from £168 million in 2014 to £251 million in 2015. So there is a model, if you like, in the market, which can produce value for the industry, but it is being undermined by the value gap that is created by the different treatment of these different types of services.
I accept that the Minister has put on the record the Government’s current position and said that there will be a positive engagement with this issue. On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 16
E-book lending
‘In section 43(2) of the Digital Economy Act 2010, leave out from “limited time” to “and loan.”’
This new clause aims to extend public lending rights to remote offsite e-book lending.—(Kevin Brennan.)
Brought up, and read the First time.
Kevin Brennan
I beg to move that the new clause be read a Second time.
This new clause would enable the consideration of public lending right for remote e-lending from libraries. That would be achieved by amending section 43(2) of the Digital Economy Act 2010, which sets remote loans outside the definition of lending under public lending right.
I do not know whether the Minister, like me, is a bit of a dinosaur and prefers his books to come in physical form—I am currently reading Bruce Springsteen’s autobiography, which I recommend, as well as Ed Balls’s book on politics, which is also very good. However, in this Digital Economy Bill we should acknowledge the increasing role of e-books and their impact on the income of authors. The spirit of the Bill is that we should better reflect how technology has changed our economy, so it is important that we go further in some places to acknowledge where technological change has outpaced legislation in relation to the arts.
Our approach here should be informed by the fact that we have the Digital Economy Act 2010. At the time that it was passed, some opportunities were missed. We should keep that in mind as we discuss this Bill and make sure that we do not allow those opportunities to pass by again as the Bill completes its stages in the House of Commons and afterwards in the other place.
The Digital Economy Act 2010 made some progress but it failed to forecast how our relationship with books would change. In particular, the 2010 Act touched on the subject of e-books, but its wording ignored the main way libraries would end up lending e-books: remotely, over an internet connection. Of course, remote lending is a natural continuation of the function of e-books. One of the main benefits of e-books is that they escape physical constraints such as location and storage.
However, under current legislation, authors receive no payment when a public library loans their book remotely, which is different from any other form of book loan. Last year, 2.3 million remote loans were made, but they were not counted at all towards authors’ payments because the 2010 Act allowed only for on-site loans of e-books, of which there was a negligible number—who will go to a library when they can borrow the book remotely? That is the whole point of e-books. There is no reason in principle why the distinction should exist; that is what the philosophy of this Bill is supposed to be. Nevertheless, as a result, the public lending right—a right for authors established in 1979—has not been honoured, due to the failure of the 2010 Act to keep up with technological change.
I hope that we can take the opportunity today to avoid repeating that mistake. The Society of Authors, the Association of Illustrators, and the Authors’ Licensing and Collecting Society all support the new clause. Public lending right is designed to balance the social need for free public access to books against an author’s right to be remunerated for the use of their work. Indeed, public lending right provides a significant and much-valued part of many authors’ incomes, particularly those authors whose books are sold mainly to libraries and those whose books are no longer in print.
The recent opinion of the Advocate General, relating to a case on rental and lending in respect of copyright works that is currently before the Court of Justice of the European Union, asserted that the lending of electronic books is the modern equivalent of the lending of printed books. I am aware that the Government expressed a desire to reflect this technological change in their March 2013 response to the independent review of e-lending in public libraries in England, but for some reason—perhaps the Minister can tell us why—they have neglected to take the opportunity presented by this Bill to put the matter right.
Furthermore, figures from March this year show that 343 libraries in the UK have been shut down in the past six years, with another 111 closures planned for 2016, which will result in the loss of almost 8,000 jobs. So it is particularly nonsensical not to apply PLR to remote e-book lending, given that it is becoming increasingly hard to visit a physical library. PLR is a legal right and a keystone of a society in which authors receive reward for their considerable cultural contribution. While we can all benefit from technological change and new ways of accessing creative works, it is important that the obligation to remunerate authors fairly is acknowledged and honoured.
Having acknowledged this loophole and the difficulties it causes, it is vital that the Bill addresses the issue, so that right-holders are treated equitably. Will the Minister take action on this issue and accept the new clause—and if not, why?
Matt Hancock
I wholeheartedly support the hon. Member for Cardiff West in his analysis of the increasing range of digital services at libraries across the country and the importance of those digital services to the communities they serve. I also agree with what he said about the increasing range of e-books and the importance of e-book lending. I am touched by his care for our delivering on the Conservative party manifesto and can tell him that we will deliver on this one too.
Libraries are increasingly providing remote e-book lending, so readers have the opportunity to borrow physical and audio books. Over the last year, 2 million e-book loans were made, which shows how important this is. We have been carefully looking at options for how to implement the manifesto commitment and appropriately compensate authors for remote e-lending, including by extending the PLR to e-books. In doing so, we have engaged with representatives of authors, libraries, agents, publishers and booksellers as well as the Public Lending Right Office. The collaborative input is very valuable and helps to ensure that we achieve an outcome that will be supported by all.
Like the hon. Member for Cardiff West, I am a mixed book reader. I am reading “Down and Out in London and Paris”—a well-thumbed hard copy. I am reading “King Lear” on an e-book, although I would say it is more studying than reading, because it is quite hard work. I bought a Kindle book at the weekend. I fully appreciate all types of books: hard copy and soft, hardback and soft.
The hon. Gentleman will understand how keen we are to implement our manifesto commitment. However, we want to take the time to get it right. Furthermore, we need to ensure that the measure is compatible with the copyright directive while we remain within the European Union. In doing so, we are also paying close attention to a relevant court case, again in the European Court of Justice, where we expect a ruling later this year that will have a bearing on how any clause to bring this into place would be drafted.
For those reasons, we are taking our time to get this right. With that explanation, I hope the hon. Member will withdraw his new clause.
Kevin Brennan
I will, but I do not think that there is any real need for the Minister not to commit carrying the measure out in the Bill. It simply extends what is already available. If someone borrowed an e-book by turning up at a library, the author would receive their public lending right, but if they did so remotely through the same library service, the author would not. Clearly that is an unacceptable injustice and anomaly.
The Minister has said that the Government need to take their time. It was March 2013 when they said in their response to the independent review that they intended to reflect that technology change. Three years and eight months later, we have a Bill in Committee in the House of Commons and still the Government say they need to take their time to get it right. This Bill is the right time to get it right. I hope the Minister will reflect further on the raft of amendments to this defective Bill that will be introduced in the House of Lords if we do not put this right in the House of Commons. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 19
Personal data breaches
‘(1) The Data Protection Act 1998 is amended as follows.
(2) After section 24 insert—
“24A Personal data breaches: notification to the Commissioner
(1) In this section, section 24B and section 24C, “personal data breach” means unauthorised or unlawful processing of personal data or accidental loss or destruction of, or damage to, personal data.
(2) Subject to subsections (3), (4)(c) and (4)(d), if a personal data breach occurs, the data controller in respect of the personal data concerned in that breach shall, without undue delay, notify the breach to the Commissioner.
(3) The notification referred to in subsection (2) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.
(4) The Secretary of State may by regulations—
(a) prescribe matters which a notification under subsection (2) must contain;
(b) prescribe the period within which, following detection of a personal data breach, a notification under subsection (2) must be given;
(c) provide that subsection (2) shall not apply to certain data controllers;
(d) provide that subsection (2) shall not apply to personal data breaches of a particular description or descriptions.
24B Personal data breaches: notification to the data subject
‘(1) Subject to subsections (2), (3), (4), (6)(b) and (6)(c), if a personal data breach is likely to adversely affect the personal data or privacy of a data subject, the data controller in respect of the personal data concerned in that breach shall also, without undue delay, notify the breach to the data subject concerned, insofar as it is reasonably practicable to do so.
(2) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.
(3) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from section 7(1).
(4) The notification referred to in subsection (1) is not required if the data controller has demonstrated, to the satisfaction of the Commissioner—
(a) that the data controller has implemented appropriate measures which render the data unintelligible to any person who is not authorised to access it, and
(b) that those measures were applied to the data concerned in that personal data breach.
(5) If the data controller has not notified the data subject in compliance with subsection (1), the Commissioner may, having considered the likely adverse effects of the personal data breach, require the data controller to do so.
(6) The Secretary of State may by regulations—
(a) prescribe matters which a notification under subsection (1) must contain;
(b) provide that subsection (1) shall not apply to certain data controllers;
(c) provide that subsection (1) shall not apply to personal data breaches of a particular description or descriptions.
24C Personal data breaches: audit
‘(1) Data controllers shall maintain an inventory of personal data breaches comprising—
(a) the facts surrounding the breach,
(b) the effects of that breach, and
(c) remedial action taken
which shall be sufficient to enable the Commissioner to verify compliance with the provisions of sections 24A and 24B. The inventory shall only include information necessary for this purpose.
(2) The Commissioner may audit the compliance of data controllers with the provisions of sections 24A, 24B and 24C(1).
(3) In section 40 (Enforcement notices)—
(a) in subsection (1)—
(i) after “data protection principles,” insert “or section 24A, 24B or 24C”;
(ii) for “principle or principles” substitute “principle, principles, section or sections”;
(b) in subsection 6(a) after “principles” insert “or the section or sections”.
(4) In section 41 (Cancellation of enforcement notice”)—
(a) in subsection (1) after “principles” insert “or the section or sections”;
(b) in subsection (2) after “principles” insert “or the section or sections”.
(5) In section 41A (Assessment notices)—
(a) in subsection (1) after “data protection principles” insert “or section 24A, 24B or 24C”;
(b) in subsection (10)(b) after “data protection principles” insert “or section 24A, 24B or 24C”.
(6) In section 41C (Code of practice about assessment notices)—
(a) in subsection (4)(a) after “principles” insert “and sections 24A, 24B and 24C”;
(b) in subsection (4)(b) after “principles” insert “or sections”.
(7) In section 43 (Information notices)—
(a) in subsection 43(1)—
(i) after “data protection principles” insert “or section 24A, 24B or 24C”;
(ii) after “the principles” insert “or those sections”;
(b) in subsection 43(2)(b) after “principles” insert “or section 24A, 24B or 24C”.
(8) In section 55A (Power of Commissioner to impose monetary penalty)—
(a) after subsection (1) insert—
“(1A) The Commissioner may also serve a data controller with a monetary penalty notice if the Commissioner is satisfied that there has been a serious contravention of section 24A, 24B or 24C by the data controller.”;
(b) in subsection (3A) after “subsection (1)” insert “or (1A)”;
(c) in subsection (4) omit “determined by the Commissioner and”;
(d) in subsection (5)—
(i) after “The amount” insert “specified in a monetary penalty notice served under subsection (1) shall be”;
(ii) after “Commissioner” insert “and”;
(e) after subsection (5) insert—
“(5A) The amount specified in a monetary penalty notice served under subsection (1A) shall be £1,000.
(5B) The Secretary of State may by regulations amend subsection (5A) to change the amount specified therein.”
(9) In section 55B (Monetary penalty notices: procedural rights)—
(a) in subsection (3)(a) omit “and”;
(b) after subsection (3)(a) insert—
(aa) specify the provision of this Act of which the Commissioner is satisfied there has been a serious contravention, and”;
(c) after subsection (3) insert—
“(3A) A data controller may discharge liability for a monetary penalty in respect of a contravention of section 24A, 24B or 24C if he pays to the Commissioner the amount of £800 before the time within which the data controller may make representations to the Commissioner has expired.
(3B) A notice of intent served in respect of a contravention of section 24A, 24B or 24C must include a statement informing the data controller of the opportunity to discharge liability for the monetary penalty.
(3C) The Secretary of State may by regulations amend subsection (3A) to change the amount specified therein, save that the amount specified in subsection (3A) must be less than the amount specified in section 55A(5A).”;
(d) in subsection (5) after “served” insert “under section 55A(1)”;
(e) after subsection (5) insert—
“(5A) A person on whom a monetary penalty notice is served under section 55A(1A) may appeal to the Tribunal against the issue of the monetary penalty notice.”
(10) In section 55C(2)(b) (Guidance about monetary penalty notices) at the end insert “specified in a monetary penalty notice served under section 55A(1)”.
(12) In section 67 (Orders, regulations and rules)—
(a) in subsection (4)—
(i) after “order” insert “or regulations”;
(ii) after “section 22(1),” insert “section 24A(4)(c) or (d), 24B(6)(b) or(c),”;
(b) in subsection (5)—
(i) after subsection (c) insert “(ca) regulations under section 24A(4)(a) or (b) or section 24B(6)(a),”;
(ii) for “(ca) regulations under section 55A(5) or (7) or 55B(3)(b),” substitute “(cb) regulations under section 55A(5), (5B) or (7) or 55B(3)(b) or (3C),”.
(13) In section 71 (Index of defined expressions) after “personal data |section 1(1)” insert “personal data breach |section 24A(1)”.
(14) In paragraph 1 of Schedule 9—
(a) after paragraph 1(1)(a) insert—
“(aa) that a data controller has contravened or is contravening any provision of section 24A, 24B or 24C, or”;
(b) in paragraph 1(1B) after “principles” insert “or section 24A, 24B or 24C”;
(c) in paragraph (3)(d)(ii) after “principles” insert “or section 24A, 24B or 24C”;
(d) in paragraph (3)(f) after “principles” insert “or section 24A, 24B or 24C.””
This new clause seeks to create a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of a breach of personal data security. The proposed obligation is similar to that imposed on electronic communication service providers by the Privacy and Electronic Communications (EC Directive) Regulations 2003.—(Louise Haigh.)
Brought up, and read the First time.
Louise Haigh
I beg to move, That the clause be read a Second time.
New clause 19 would provide a general obligation on companies to report personal data breaches. This crucial amendment gets to the heart of the regulatory system around cyber-security. Cyber-security is one of the greatest challenges we face as a country. Despite the Government’s multi-million pound strategy and their further welcome announcement today, we do not believe they have faced up to the challenge yet. Some 90% of large UK firms were attacked in 2014. That is an astonishing figure, and yet only 28% of those businesses reported their cyber-attack to the police. As the Minister knows, national crime statistics rose for the first time in 20 years last year, because scams and cybercrime are now included.
Throughout discussion of the Bill, we have made it clear that we feel it does nothing to address the real challenges facing the digital economy. The Bill should have equipped the sector for the digital future—a future as replete with challenges as with opportunities. None of those challenges could be greater than cyber-security. That security says to consumers and individuals that, in this coming century, when data will be the lifeblood and the exchange of personal data the currency, nothing is more critical to ensure that that runs smoothly than their trust.
This multi-billion-pound sector, which now amounts to 11% of our GDP, is utterly reliant on the mutual trust fostered between consumers and producers, which is why the new clause is so critical. It would establish for the first time a duty on all companies to report any breach of cyber-security. The legislation as it stands is simply inadequate. The Data Protection Acts deal extensively with the protection of personal data, but there is no legal obligation on companies to report data breaches. The privacy and electronic communications regulations include an obligation to report data breaches, but that only applies to telecommunications companies and internet service providers and, at that stage, only requires companies to consider information customers.
Clearly, however, it is not only communications providers that hold sensitive data about people that carry the potential to be commodified. Insurance companies have had their data stolen, to be sold to claims management companies; banks are hacked, as J.P. Morgan was in 2014; and TK Maxx suffered the largest retail hack to date with the loss of credit and debit card information. Yet none of those examples had a duty to report to their customers to ensure that further harm was not done with their information.
The net impact of the lack in existing legislation is that the vast majority of attacks go unreported, and people are left in the dark when their personal data have been hacked, leaked, stolen or sold. If we are to talk meaningfully about data ownership, we cannot allow that to continue. We welcome yesterday’s announcement that the Government will be implementing the general data protection regulation. As the Minister knows, the GDPR provides for a general obligation on all companies to report breaches to regulators and customers. Will he make it clear how he expects to fulfil that obligation and whether he is willing to accept the new clause?
Fundamentally, we are keen that the UK’s digital economy is not seen as a soft touch on cybercrime. That is why the new clause would impose a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of breaches of personal data security. We believe that that would be a major step forward, and we look forward to the Minister’s comments.
Matt Hancock
I hope that we can deal with this new clause fairly quickly. I strongly support the hon. Lady’s assertion that cyber-security is vital, and I appreciate her welcome for the national cyber-security strategy that the Chancellor of the Exchequer set out today. People say that there are two types of company: those that have had a cyber-attack and know about it; and those that have had one and do not know about it. It is vital that cyber-security is a priority for all companies that use the internet.
As the hon. Lady said, we have announced that the general data protection regulation will apply in the UK from May 2018. That new regime will introduce tough measures on breach notification, making it a requirement for all data controllers and processors to report data breaches to the Information Commissioner if they are likely to result in a risk to the rights and freedoms of individuals. Breaches must also be notified to the individuals affected where there is a high risk to their rights and freedoms. Under the GDPR, the sanctions available will be worth up to 4% of total global annual turnover, or €20 million, so it will be strongly in the interests of organisations to comply with the requirements.
I suggest that the bringing into UK law of the GDPR is the appropriate place to make the change that the hon. Lady suggests in her new clause. I therefore ask her to withdraw the motion.
Louise Haigh
If the Government intend to implement regulations in May 2018, I am not convinced why they cannot amend this legislation now.
Matt Hancock
The implementation of GDPR is a much bigger piece of work than simply this change. It is better to bring the whole thing in properly and in good order, rather than piecemeal.
Louise Haigh
It is highly unsatisfactory that, for the next 18 months, companies receiving cyber-attacks will still not be reporting them to customers that have had their data stolen, hacked or lost, but it is welcome that the Government will be implementing the general data protection regulation. The Opposition will continue to scrutinise the implementation of their cyber-security strategy, so, with the Minister’s assurances, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Louise Haigh
I beg to move, That the clause be read a Second Time.
The new clause is a very simple amendment, one that I hope the Committee will agree is long overdue. The Communications Act 2003 ensured that access services—subtitles, audio description or sign language—are available on TV that is watched at a prescribed time and channel.
The way in which we watch and consume television has changed considerably since 2003; it is worth remembering that once the Communications Act 2003 reached Royal Assent, it would be a full five years before BBC iPlayer launched online. Similar on-demand services launched in the same year. Although subtitling is at or near 100% across the public service broadcasters, 76% of the UK’s 90 on-demand providers still offer no subtitles at all—despite the fact that, according to Ofcom’s figures, some 18% of the UK population use them.
The principles behind the Communications Act 2003 recognise that those with sensory loss should not be denied access to the information and services that many of us take for granted. Obviously, that principle still applies, yet, because of changes to technology, those with sensory loss cannot keep up.
In July 2013, the then Minister for the Digital Economy acknowledged this paradox, saying:
“If it is clear that progress isn’t being made in three years’ time…we will consider legislation.”
We say that time is up. That is why the Opposition have helpfully brought forward a new clause to remind the Government of their commitment. The clause would merely update the existing regulatory regime that has worked so well for linear TV and apply it to on-demand.
There is no reason to believe that a burden will be imposed. The current code has a sliding scale for access services provision so that new and smaller broadcasters are either exempt or have gradually increasing targets. No linear broadcasters are ever required to spend more than 1% of their relevant turnover on access services. The new clause would be subject to public consultation. It is eminently reasonable and long overdue. It is clearly time the Government acted to reflect the digital world in which we live and allowed those with sensory loss to play a full and active part in it.
Matt Hancock
The creation of a digitally inclusive society is a crucial commitment for this Government. If somebody is not able to enjoy and exploit the benefits and convenience afforded to able bodied people, it is for us to better understand why and to work with interested parties to identify and implement a remedy.
The current statutory targets for subtitling, signing and audio description—collectively known by domestic TV channels as “access services”—cover 83 channels, over 90% of the audience share for broadcast TV. Over the years, the provision of access services has increased. Most notably, the number of service providers reporting subtitles grew from seven channels in 2013 to 22 in 2015. However, there is still clearly room for improvement.
We have become a society that wants to watch TV at a time and place convenient for us. As with much of the Bill, changes in technology outgrow the underpinning regulatory framework. It is not unreasonable to expect that content should have subtitles when it is made available at a time and place that are convenient for the viewer—even more so if access services were present at the scheduled broadcast time.
Ofcom currently possesses the power to encourage the 116 on-demand services providers in the UK to provide these services, but it does not have the power to require them. We have been considering what can be done—as the hon. Lady might imagine, given the previous commitment. We have been engaged in discussion with Ofcom to determine how we can address the shortcoming so that an increase in the provision of access services for video on demand can be achieved. We will continue that engagement with Ofcom. It made its position clear in evidence to the Committee, having previously argued that the law as it stood was what was needed.
I urge the hon. Lady to withdraw the new clause. It would require a code of practice that would be too prescriptive and would get into the micromanagement that we talked about earlier in our consideration of the Bill. Also, I would want the clause to specify that it is for Ofcom, not the Secretary of State, to make such a code.
Louise Haigh
I would be grateful if the Minister gave us a firm timeframe for this work with Ofcom; this is yet another area that could easily have been addressed in the Bill. He is saying, “Work is ongoing. We might come back to it later.” There are so many areas of the Bill that could have been addressed by ongoing work. It all shows yet again that the Bill should have been delayed and brought forward when it was fit for Committee and ready to tackle all the issues.
Matt Hancock
The hon. Lady is clearly wrong about that, for two reasons. First, I do not want to delay the other measures in the Bill; she seems to want to delay a whole series of things that will improve mobile roll-out and broadband roll-out and will put age verification in place, and I think that would be a mistake.
Secondly, in the Committee’s consideration of the Bill, we have had opportunities for further debate that have not been taken up. That shows that there has been full and proper scrutiny of the whole Bill. In this case, after the publication of the Bill, Ofcom said that it thought there was a need for the change in the law. We should take that seriously, consult Ofcom and consider exactly what needs to happen.
Louise Haigh
I repeat that in July 2013, the Minister’s predecessor said:
“If it is clear that progress isn’t being made in three years’ time…we will consider legislation.”
The Government have had more than three years to do this. It is not that Ofcom came forward after the Bill was published. The Bill presented a perfect opportunity, so will he commit to the exact timeframe for giving Ofcom the powers?
Matt Hancock
Ofcom previously said that it had all the necessary powers, but its position has changed. When the regulator changes position, it is reasonable to take that into account and to consult on ensuring that we can get the powers into place.
I make no bones about it: the support for access services for video on demand has not been in place before. We made big strides in the previous Parliament. We are committed to doing more to ensure that the support is more widely available. Instead of the tone of delay that is coming from those on the Opposition Benches, we should have a tone of support. That is what I propose, so I ask the hon. Lady to withdraw the new clause.
Louise Haigh
It is completely outrageous to suggest that we are the ones arguing for delay.
Louise Haigh
The Minister’s predecessor said more than three years ago that the Government would legislate. I say to the Minister that he will legislate in haste and repent at his leisure. He may live to repent in terms of some of the measures that have been brought forward and some that have been missed in the Bill. I will seek assurances from Ofcom, seeing as the Minister has not been able to provide them, and we may return to the issue on Report, but for now I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 24
Employers in the digital economy
“Where a business provides a digital service in which they act as an intermediary between labour suppliers and consumers where that service retains significant control over the service providers the labour suppliers shall be defined as employees of that business, as defined in section 230 of the Employment Rights Act 1996.”—(Louise Haigh.)
Brought up, and read the First time.
Louise Haigh
The digital economy is the fastest growing area of the UK economy. We are very proud that, as a proportion of GDP, it is the largest in the G20. It employs more than 1.3 million workers, of whom a significant proportion—many more will not be categorised in that figure—are employed in the so-called gig economy. As we heard following the Uber ruling on Friday, many of those people do not enjoy very basic workers’ rights. The London employment tribunal found that Uber was a transportation business and that the drivers who work through the app do work for Uber. The judgment against Uber was hailed as a landmark by the union that brought the claim, GMB, and rightly so. I am a proud member of that union.
Friday’s landmark ruling should have ripple effects across the entire digital economy. At its best, the disruptive force of technology is reframing our relationship with each other and the world around us, whether that is farmers using millimetre-accurate GPS to guide their crops or technical experts in safety-critical industries using live data to monitor the manufacturing process. While the digital economy is heralding an unprecedented opportunity for many, the reality can be very different for the more than a million workers employed within the industry. Too often they will find themselves overworked, underpaid and exploited by bosses they never meet, and who do not even fulfil their basic duties as an employer.
Uber is the totemic example. Their “workers”—who pay Uber commission for every taxi ride completed—are not guaranteed breaks, holiday pay or even the minimum wage. Astonishingly, Uber did everything they could to argue to the tribunal that these people were not employees or workers. The judgement states that
“Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be and (b) operating in part through a company discharging the regulated responsibilities of a PHV [private hire vehicle] operator, but ( c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services…and (d) resorting in its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism.”
We could not agree more, and it is a bitter irony that a force that is making this era one of the most inter-connected in history has left many workers more isolated than ever before. The Government—who have promised to look out for those that are “just managing”—seem to have been blindsided by the challenges faced by the most enterprising of workers in our economy. There are few workers who would better match that description of “just managing” than the taxi drivers who work upwards of 60, 70 and 80 hours per week and still struggle to pay their bills.
The new clause goes further than the Uber ruling; it would require drivers and other workers to be treated as employees of digital intermediaries. In so doing, their rights to sick pay and holiday pay would be protected as well as the right to paid breaks and the right to the bare minimum wage. When companies such as Uber inevitably try to wriggle out of their responsibilities by appealing against this recent decision, they will have nowhere to go.
We hope that the Government will step into the breach and move to enshrine the rights of workers employed in this emerging sector in law. This decision applies solely to Uber, but the principle should surely hold across the economy. It could affect many tens of thousands of people. So far, the Government’s only announcement has been a two-sentence press release issued on a Friday afternoon referring to a review that has no end in sight. If that is all that the Government can muster, it is hard to believe that they have grasped the scale of the challenge. This will be creating considerable insecurity for both the businesses operating in the digital economy and the workers involved.
I hope that the Minister is acutely aware of both the urgency and the importance of new clause 21 and why it was wholly inadequate for there to be no mention of workers and their protections in the Digital Economy Bill. Hopefully, the Minister will go away and consider measures that will fill the legal vacuum now created, and provide reassurance to the burgeoning digital workforce who, by virtue of a technological sleight of hand, are denied the rights that many of us take for granted. That is clearly an injustice of the first order.
Matt Hancock
The hon. Lady asks for us to act, and then sets out the way in which we are acting. That demonstrates that this important area is being considered by the Government.
Technology is indeed changing employment patterns, and the system must keep up with it. Clearly, employers must take their employment law responsibilities seriously and they cannot simply opt out of them. This means making sure that workers are paid properly and enjoy the employment rights to which they are entitled. As a very strong supporter of the living wage and the national living wage, which we introduced, I am a great proponent of ensuring that the labour market operates fairly. Part of that fairness is making sure that it is also flexible. That needs to be considered too, alongside the rights.
Christian Matheson
Will the Minister tell us which trade unions are actively involved in the review?
Matt Hancock
I have no doubt that Matthew Taylor will get in contact with lots of trade unions. It is a good idea to take a cross-party approach. The review will last for about six months and among other things it will consider security, pay and rights, skills and progression, and specifically the appropriate balance of rights and responsibilities of new business models and whether the definitions of employment status need to be updated to reflect new forms of working such as on-demand platforms. It will tackle some of those issues. With that explanation, I hope that the hon. Lady will see that we are taking a sensible, reasonable approach and will withdraw her new clause.
Louise Haigh
The Opposition have been nothing but reasonable in Committee. The Minister refers to righteous anger; for those taxi workers in London, Sheffield and across the country who are working and not guaranteed paid breaks or the minimum wage, it is not righteous anger but justifiable anger on their behalf. We are arguing not against all flexibility but for those basic rights to be enshrined in law. They should never be compromised for anyone’s convenience.
We are pleased finally to see a timeframe and have a commitment that the review will report back in six months. We will keep a close eye on the review and hope that it will take note of today’s debate. With that, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 31
Review of information disclosure and data ownership
‘(1) The Secretary of State must commission an independent review of information disclosure and data ownership under Chapter 1 of Part 5 of this Act.
(2) In conducting the review, the designated independent reviewer must consult—
(a) specialists in data sharing,
(b) people and organisations who campaign for the rights of citizens to privacy and control regarding their personal information, and
(c) any other persons and organisations the review considers appropriate.
(3) The Secretary of State must lay a report of the review before each House of Parliament within six months of this Act coming into force.
(4) The Secretary of State may not make an order under section 82(4) bringing the provisions of Chapter 1 of Part 5 of this Act into force until each House of Parliament has passed a resolution approving the findings of the review mentioned in subsection (3).’.—(Louise Haigh.)
Brought up, and read the First time.
Louise Haigh
I beg to move, That the clause be read a Second time.
A great deal of our lengthy debate on part 5 has focused on data ownership and control. The Government have stated elsewhere that their policy is that citizens should own and control their own data, but sadly the Bill takes us backwards in that regard by adopting a completely paternalistic approach to data sharing, with a “Government knows best” attitude. We are blindly to assume that our data are being kept, shared and used appropriately while we are kept in the dark about how they are being used and for what purpose.
As the former Prime Minister famously said, “Sunlight is the best disinfectant,” and as I have previously argued, a register for all data-sharing arrangements is necessary—in fact, essential—to ensure trust in the Government’s data sharing. Quite simply, we cannot have trust when there is no transparency, and that is true for Governments of any colour. The new clause would require the Government to commission an independent review of information and data ownership under chapter 1 of part 5, which would seek to establish the direction in which the Government’s stated policy intent for individuals to have control over their data is heading.
The Minister has given us all kinds of assurances that the codes of practice will sufficiently embed the principles, which have been debated at length, but as they are not statutory, there must be some form of mechanism to ensure that the spirit of the codes and the intention he stated in our debates are adhered to. Following the announcement that the Government will implement the general data protection regulation, the codes and the legislation are already out of date. I understand the role of Select Committees in this House, but the proposals made in the Bill are about incredibly detailed practices relating to the day-to-day operation of the civil service that are unlikely to be unearthed through a Select Committee report without a whistleblower or any kind of proactive publication, as suggested in our new clause on the new register.
The use of administrative data has been discussed at length, but it is not to be confused with the use of big data—a wholly different beast that has not been tackled in the Bill. That is another missed opportunity. A committee has been established in the Cabinet Office to consider the ethics of big data. That is absolutely necessary, but, again, it should have been conducted as an independent review, rather than something led by Government. My fear is that we are lagging well behind other Administrations with respect to how we treat data, and in the embedding of consent and control into our data regimes. We run a serious risk of sleepwalking into a major scandal.
Before I was elected I worked in the City of London, for Aviva. There I was put on a project looking at the type of things that we could do with big data. Aviva is a gold star insurer so it certainly was not indulging in unethical behaviour, but the kind of data that, if allowed, actuaries would like to test is simply not known—it would horrify the average consumer. There are many providers in the market for data, and many ways beyond our imagination in which our data could be commodified. It would take only a “Dispatches” exposé, or a scandal in The Mail on Sunday, and the Government would be forced to react; then, as all Governments do, they would over-react.
The Bill provides an excellent opportunity to look at the issues in the cold light of day, rather than the heat of reaction. I strongly urge the Ministers to take that opportunity and accept the new clause.
The Parliamentary Secretary, Cabinet Office (Chris Skidmore)
There are several problems with the new clause. First, it would delay the delivery of significant public benefits; secondly, it seeks more consultation on measures where there has already been a long and broad-ranging consultation effort over many years; thirdly, it is asking for even more Parliamentary time, when the scheme, future pilots and data-sharing measures are already subject to significant and continued Parliamentary scrutiny.
We believe that the proposed review and subsequent delay would prevent us from delivering significant public benefits, such as extending the warm home discount, which had the support of the Committee last week. If implementation of warm home discount reform were delayed by one year because of the time needed to carry out the review and then to establish the necessary data-sharing arrangements, the Government would potentially help about 750,000 fewer fuel-poor homes in 2018-19. Further, there would be a delay to our ability to implement the benefits of more effectively targeting the £640 million-a-year energy company obligation.
The measure is not short on consultation. That process started in April 2014 and has involved civil society groups, experts and practitioners. There was a public consultation. The draft clauses were published in February 2016. There has been lots of discussion and the Government have listened. That is why information can be shared only for specific objectives, which can be added to only if they satisfy the public benefit test. It is why we have new unlawful disclosure offences, and a code of practice that has been welcomed by the Information Commissioner. The proposed review would require the Government to consult the very people we have already consulted in developing the public service delivery power.
The Bill is also not short on parliamentary oversight. There must be agreement by Parliament to new objectives for sharing data, new public authorities—a list will be drawn up—and the code of practice. The code of practice clearly sets out the process for public bodies to maintain public confidence, with privacy and impact assessments and by ensuring that all data-sharing arrangements are public. That is clearly set out in paragraphs 74 to 78 in part 5. The further scrutiny sought in the new clause is unnecessary duplication. The purpose of scrutiny by Parliament is to decide whether the powers should be taken, so no purpose would be served by having another review before the powers are commenced. For that reason I ask the hon. Lady to withdraw the amendment.
Louise Haigh
The Minister is dead right. We would like some more consultation on the review, not least because nearly all of the Government’s consultees are unhappy with the proposals in the Bill.
I hope that we have thrashed out many of the part 5 issues and that the Government will act and amend the provisions in the other place. If that does not happen, we shall return to the matter on Report. I beg to ask leave with withdraw the motion.
Clause, by leave, withdrawn.
New Clause 32
OFCOM power to enforce structural separation of BT Openreach
‘After section 49C of the Communications Act 2003 insert—
“(49D) OFCOM has the power to enforce the structural separation of BT Openreach, should OFCOM consider this necessary.”’—(Calum Kerr.)
Brought up, and read the First time.
Calum Kerr
I beg to move, That the clause be read a Second time.
I will outline the rationale and seek reassurances as to how the Government intend to deal with this matter. We propose that the Bill be amended to ensure that Ofcom has the strongest legal basis to deliver all the options highlighted in its digital communications review. Ofcom is consulting at the moment on how it could introduce legal separation for Openreach within the BT group, but structural separation remains an option.
Drew Hendry
Does my hon. Friend agree that the current structure is insufficient to provide an incentive to effectively invest in the network that is required? Ofcom has itself said that the existing ownership allows it to discriminate against competitors.
Calum Kerr
I thank my hon. Friend for his comments. At the crux of the debate as to where we go in terms of connectivity is BT, which has a case to answer regarding its investment. Ofcom has a case to answer on being technology agnostic. We have to be bolder and push more ambitiously for fibre. The Minister has told us “fibre means fibre”, so we look forward to seeing progress. Sometimes I think the Government have consumed too much fibre.
It is essential that Ofcom is confident it can enforce separation of Openreach should it conclude it is necessary. It is important to understand the position today. Ofcom considers that it does have the power under the EU framework directive to impose structural separation. The problem with that approach is that Brexit means Brexit. Should Ofcom decide that separation is the right approach, would it take its case to the EU Commission at the time of Brexit? That would be fraught with difficulty, not least as BT might appeal and we would have a long drawn-out process.
It is also worth noting that the telecoms framework under which Ofcom regulates the UK is EU legislation. We need to consider that BT has stated publicly that it believes there is no mechanism for structural separation even within the EU. We are trying to flush out some of the Government’s thinking. The new clause is designed to avoid the potential uncertainty and paralysis should Ofcom want to go down this route. Even if Ofcom does not use this power, having it there will have the added benefit of strengthening its hand in negotiation and enforcement as we all try to improve UK infrastructure.
The SNP’s position is that the digital communications review is following the right lines. Structural separation at this stage is the right approach, but we need to ensure that the final option is available. Given the change in relation to the EU, I would welcome the Government’s comments on how they propose to ensure that is an option.
Matt Hancock
We have made it clear that the UK needs a competitive and effective market in telecoms, and I have made it clear that fibre is the future. Fibre means fibre. The amendment seeks to ensure Ofcom has the power to impose structural separation on BT Openreach if Ofcom considers it necessary. There is already a process available to Ofcom to pursue structural separation should it be considered necessary. The Committee knows that Ofcom is currently considering how Openreach should be structured. We have made it clear that Ofcom should take whatever action it considers necessary and that structural separation remains an option.
Of course, in a rapidly moving sector such as communications, circumstances can change. We regularly review whether Ofcom has the right powers. We will need to do that in the context of our exit from the European Union, but at present Ofcom has the appropriate powers that it needs and it will continue to have them. With that explanation, I hope the hon. Gentleman will withdraw the amendment.
Calum Kerr
I thank the Minister for his comments, but the position in relation to having the powers is a weak answer. If there were a separation, we would enter into uncertainty without explicit powers. I will not press the motion to a vote, but I encourage the Government, as the picture on the EU evolves, to be clearer, and if they think it necessary to introduce something specific, so that we have a measure available.
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 36
Bill caps for all mobile phone contracts
‘(1) A telecommunications service provider supplying a contract relating to a hand-held mobile telephone must, at the time of entering into such a contract, allow the end-user the opportunity to place a financial cap on the monthly bill under that contract.
(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—
(a) requested the monthly cap be put in place and agreed the amount of that cap, or
(b) decided, on a durable medium, not to put a monthly cap in place.
(3) The end-user should bear no cost for the supply of any service above the cap if the provider has—
(a) failed to impose a cap agreed under subsection (2)(a),
(b) introduce, or amend, a cap following the end-user’s instructions under subsection (2)(b), or
(c) removed the cap without the end-user’s instructions or has removed it without obtaining the consumer’s express consent on a durable medium under subsection (2).’—(Louise Haigh.)
Brought up, and read the First time.
Louise Haigh
I beg to move, That the clause be read a Second time.
This new clause would mean that mobile phone service providers must give all consumers the opportunity to put a financial cap on their monthly mobile phone bill and that a mobile phone service cannot be provided until the service provider has put in place a cap of the agreed amount, if the consumer has made an express request. The new clause would be welcomed by many who have found that, when they receive an email or check their bank balance at the end of the month, their monthly mobile phone bill has come in much higher than expected.
The reason for the new clause is clear: mobile phone tariffs are complex, particularly on data. Few of us understand how much data we need for an average month, and consumers of all kinds can find that they use much more data than expected. Citizens Advice has provided me with an example that reveals the problem. One man changed his shift patterns and started using his phone to watch films during the night. His network sent a text message to tell him that he had gone over his monthly allowance, but he did not think too much about it until he received a bill for more than £2,000 at the end of the month. His service was subsequently cut off. Research suggests that as many as one in five consumers finds it difficult to keep track of how much they spend on data. The average unexpectedly high bill is usually double the cost of the original monthly fee.
Citizens Advice has received more than 60,000 inquiries about telephone and broadband debt, with its in-depth specialists dealing with nearly 27,000 individual mobile phone debt cases. Mobile phones have become a staple of our everyday life, and a voluntary cap would help consumers, particularly those who can ill afford an occasional doubling of their bill. Consumers support the measure, with more than 77% welcoming the idea.
This is not the first time that the proposal has been considered. In 2012, Ofcom considered introducing regulations but could not overcome the objections of providers, who argued that it would be too costly. Since then, two mobile phone providers have led the way and proved that it can be done. With the Bill’s new provisions on Ofcom appeals, I hope the Government will now consider our new clause.
Matt Hancock
The new clause seeks to place a mandatory obligation on mobile phone service providers to agree a financial cap on monthly bills with the customer at the time of entering into the contract, or to secure an agreement from the customer that they do not wish to have a financial cap. Consumers can avoid bill shocks in a number of different ways, so this additional measure is not necessary.
Before purchasing a mobile contract, consumers can already calculate their normal usage based on their last couple of bills. Once a consumer has established their monthly usage, Ofcom-accredited comparison websites are available to them. In fact, the Bill makes further progress on switching. Mobile phone providers are also taking steps to protect their customers from bill shock. As the hon. Lady says, many providers alert customers when they are close to reaching usage allowance limits and offer apps that enable consumers to monitor that usage.
Drew Hendry
I hear what the Minister is saying, and he is right that mobile phone operators have put measures in place, but none of them actually caps the amount paid so that people can avoid the situation where, for example, a child runs up exorbitant bills by overriding those limits.
Matt Hancock
I do not think that is true. There are examples of contracts that have caps or prepayment. Such contracts exist and they would not be complemented by the new clause, which is about ensuring that information and agreement are available at the start of a contract. The new clause proposes that such an agreement is available or that the person explicitly chooses not to have a cap, which in substance is the same position as now—it would just change what is in the vast quantities of small print at the bottom of these contracts.
Louise Haigh
The provisions in the new clause will not be a negative process, as the Minister has just outlined; they will require people to request a cap, rather than to agree that a cap is not put in place. Does the Minister honestly believe that enough information is provided when customers negotiate a contract with a telecoms provider about how much data are going to cost and how much additional data—over the agreed limit—will cost? Does the law currently guard against the example I provided of the gentleman who was watching films, completely oblivious to the fact that he was running up a bill of hundreds of pounds?
Matt Hancock
I think that that information has to be provided. Further, it is Ofcom’s job to ensure that that sort of information is provided in a reasonable way, and it has the capability to do that.
Can we guard against anybody using a mobile phone in a way completely different to their own intention at the point of signing the contract, having not taken into account the impact of that behaviour on the price? It is very hard to do that. I also do not see how the new clause would do that. It would simply change the way that a contract is written in the first place, giving the same options of either a capped or non-capped contract. It still provides for the two, so I do not think it would make a substantive difference.
That is not to deny that there is not always a challenge here to make sure that people get the best possible information, and crucially that switching is available and, as is provided for, that if somebody enters into a contract and wants to change that contract shortly after entering into it, they have the ability to do so. One provider now gives new customers the ability to put on a block on outgoing calls after they have reached their allowance, which they can turn on and off via their account, for example. There are dynamic ways of dealing with this within contracts, and I think that is probably the best way to do it, rather than with primary legislation.
Having said all of that, I of course recognise that this is an important and challenging area, but I hope that with that explanation the hon. Members will withdraw the new clause.
Louise Haigh
The Minister has not given us a good enough reason for why consumers should not have the ability to put a financial cap on their monthly bills. He has laid out some voluntary mechanisms that various communications providers have implemented, which is all well and good for their customers, but I am sure he will accept that that is a very haphazard way to deal with this issue.
Matt Hancock
The proposal in the new clause is itself a voluntary proposal, because it provides for the agreement from a customer should they not wish to see a financial cap. In substance, that is exactly what the new clause provides for.
Louise Haigh
It is voluntary for the consumer but not for the telecoms provider. The Minister, in his typical, patronising way, is trying to put this differently from how the Opposition is putting it.
Drew Hendry
Does the hon. Lady agree that it is just common sense to allow the consumer the choice to avoid high bills?
Louise Haigh
Absolutely. I do not think the Minister has made a case at all for not allowing this to happen, or why mobile phone companies should object to people voluntarily placing a financial cap on their bills to avoid the kind of excessive bills that can be, and are, run up by even the most tech-savvy of people. We will divide the Committee on the new clause, because we have not been provided with sufficient explanation as to why it should not go forward.
Question put, That the clause be read a Second time.
Louise Haigh
I beg to move, That the clause be read a second time. We have reached our final new clause, which was tabled in frustration at the amount of time I spend on trains every week and how shockingly poor the quality and consistency of wi-fi is, even when one has paid for the privilege of accessing it, in addition to not inconsiderable rail fares. To make things worse, the Sheffield to London line has appalling mobile network coverage; I can make a call on about 15% of the journey, just when we are in the stations. That is why our new clause on the mobile strategic review is absolutely necessary to ensure that network coverage is extended across the UK and to keep those mobile network operators on target. We need decent quality wi-fi on all our public transport and in all our public spaces. We now have a record high of 1.65 billion rail passenger journeys every year. Without decent network and internet coverage, they are essentially unproductive journeys that could be used to boost our economy. Indeed, many of our cities outside London lose out on investment precisely because the connecting transport has such poor mobile and internet coverage.
I have spoken to several London-based tech companies that have chosen to invest in cities other than Sheffield, because they would essentially lose the time travelling from London through being unable to work. You would be forgiven for thinking that this was deepest, darkest Peru rather than one of the biggest cities in the UK, just two hours’ train journey from London; but I was in Peru earlier this year and they have free wi-fi on their buses and in public spaces. In fact, of the top 10 most wi-fi-friendly cities in the world, the UK does not even feature. From Taipei to Florence and Tel Aviv to Hong Kong, the rest of the world is far ahead of us on access to free public wi-fi, which is boosting their tourism industries and domestic industries. There is benefit to be had for the train operating companies as well. In some US states, people recognise that they can deliver passenger-oriented services as part of wider, often safety-related, communications projects that they need to undertake, and harvest passengers’ use of social media as a valuable data source for plugging gaps in their travel information services, as well as for monitoring reactions to network performance and being able to take remedial steps.
I am sure that the Minister is going to tell the Committee about the Government’s superconnected cities programme, which got off to a shaky start—though they are to be congratulated on the progress that has already been made in delivering free wi-fi to trains and buses across Leeds, Bradford, Edinburgh, Newport, Cardiff, Greater Manchester, York and Oxford. As ever, though, we will push the Government and the Minister to be more ambitious and achieve everything they are capable of achieving, investing in the digital infrastructure that we need to ensure that our digital economy can continue to thrive across the whole country. Alongside roads and rail, it is the Government’s job to ensure that our country is fully equipped with the digital infrastructure necessary for the digital revolution. As has been said many times, I am afraid that this Bill, unamended, does not cut it.
Our proposal would not require a single penny of public money. It would simply chip into the tens of millions of pounds of profit that the train companies make off the back of publicly-funded infrastructure. It would simply put into franchise agreements a requirement for all trains to provide free wi-fi and we have been very flexible and reasonable about the level at which that should be provided. Ultimately, we need to see free wi-fi on all our public transport. Sheffield’s longer bus journeys already offer free wi-fi, while York and Newcastle have opened up their public spaces. It will mean that people and businesses can be more productive and we can all spend less on our data packages.
Drew Hendry
In a progressive spirit, we join in the support for this measure. As someone who travels regularly, having taken my position in this House, on some of the train services, I note that the difference between the contract that the Scottish Government have organised through the franchise with ScotRail with intercity wi-fi, and what is available here is quite stark. In fact, all new electrical multiple units of 318s, 320s, 334s and 380s in Scotland come with wi-fi and power sockets. I urge the Minister to consider including that and to ensure that customers in England and Wales get the same sort of service as those in Scotland.
Matt Hancock
It is highly appropriate to end this sitting with the new clause because the intent behind it has cross-party support from both parts of the Opposition represented here. Government Members not only recognise, but are enthusiastic and passionate about getting better wi-fi on trains. My hon. Friend the Member for Devizes, as a Transport Minister and more specifically a Rail Minister, was instrumental in getting Britain to where we are with wi-fi on trains. It is something all MPs understand as we travel around the country. Our frustration is shared by the great British travelling public and the demands for better and faster free wi-fi on trains will continue until they are sated.
Requiring free wi-fi on trains has been undertaken through new franchises and implemented also in existing franchises. The obligation to provide free wi-fi is now secured in 10 of the 15 franchises and we forecast that more than 90% of passenger journeys will have access to wi-fi by the end of 2018 and almost 100% by 2020. There have been further programmes, such as the superconnected cities programme. The hon. Member for Sheffield, Heeley says she wants to press us to achieve all we can, and we accept the challenge.
For all new franchises, the current specifications will require a minimum of 1 megabit per second per passenger, which allows for web browsing, basic email and social media activity. Crucially, this is set to increase by 25% every year with a focus on ensuring that it is reliable and consistent because dropped calls or frequent breaks in ability to access wi-fi are seriously frustrating.
There are even stronger bids in some competitions. For example, the East Anglia franchise, which I use a lot, will provide up to 100 megabits per second to the train by 2019, then 500 megabits per second by 2021 and 1 gigabit per second by the end of 2021 on key intercity routes, not least the Norwich in 90 and Ipswich in 60 plans. That is totally brilliant and I pay tribute to my hon. Friend the Member for Devizes for making it happen.
Wi-fi was previously dependent on mobile coverage that trains went through, but train operators have started to innovate and have done deals with mobile operators to make sure they have enough 4G coverage down the track. Chiltern is an example. It agreed a deal with EE to provide 100% coverage from London to Birmingham. This is happening. Specifying a particular technology in legislation is likely to provide more problems than solutions. Our changes in driving wi-fi through contracts with operators is more likely to be successful in getting more connectivity faster. That is the approach I propose.
In a moment, I will ask the hon. Member for Sheffield, Heeley to withdraw the motion, but first I want to pay tribute to all the people who have helped to make this Committee happen, including the Opposition. We have had cheerful and sometimes forthright debates, but in the best spirit of improving the digital economy for all the citizens we serve. I pay tribute particularly to the hon. Member for Sheffield, Heeley who, in her first performance in her new position, has shown the rest of us how to do it. She has been charming and brilliant. I can only say, thank goodness for Jeremy Corbyn.
I thank you, Mr Stringer, and Mr Streeter for chairing the Committee so effectively and efficiently, and for ensuring that I made fewer mistakes than I otherwise would. I thank the Clerk and the staff of the Public Bill Office, who have helped enormously to keep us on the straight and narrow. I thank the Doorkeepers for holding the doors open long enough for my Whip to ensure that we had all our people here when necessary. I thank the Hansard reporters for no doubt capturing us accurately, in sometimes quite complicated language. I thank the police, my officials in DCMS—in particular the Bill team—and also those from across Government, because the Bill has measures in it from many different Departments. There has been great cross-Government collaboration and I put on record my thanks to my policy officials, the Bill team and my private office team. I thank all those who have given oral or written evidence to the Committee, which has improved our ability to scrutinise the Bill. With that, I hope that the hon. Member for Sheffield, Heeley will withdraw this final new clause and we can report to the House a well-scrutinised Bill.
Louise Haigh
It is very welcome to hear that all new franchise agreements—the Minister is nodding—will contain a requirement for wi-fi. I am happy to withdraw the motion.
Before I do, I add my thanks to you, Mr Stringer, and to Mr Streeter. You have both kept us in order and guided us through, particularly me in my first time on the Front Bench in a Bill Committee. I was put in this job two days before the Committee proceedings began, when I had not yet read the Bill. To say that this was being thrown in at the deep end is something of an understatement. I add particular thanks to the Clerk, who has been incredibly helpful in getting our last-minute amendments together, to the Hansard writers, to the police and Doorkeepers, and of course to all the civil servants who have been in and out of here through a revolving door as we have cantered through the various clauses. I also thank all my hon. Friends who have contributed, SNP Committee members and Government Committee members. I thank both Whips who have kept us to time—we are going to get there eventually.
It has been unsettling to agree with the Minister on so many things but I have been very relieved to find that he still manages to infuriate me. I believe we have stress-tested the Bill pretty roundly. We have found it wanting in several areas and I am confident that it will receive amendments in the other place. I am disappointed to see it emerge relatively unscathed from Committee, but I am confident that it will return from the other place in better shape. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Schedule 1
Electronic communications code: consequential amendments
“Part 1
General provision
Interpretation
1 In this Part—
“the commencement date” means the day on which Schedule 3A to the Communications Act 2003 comes into force;
“enactment” includes—
(a) an enactment comprised in subordinate legislation within the meaning of the Interpretation Act 1978,
(b) an enactment comprised in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,
(c) an enactment comprised in, or in an instrument made under, an Act of the Scottish Parliament, and
(d) an enactment comprised in, or in an instrument made under, Northern Ireland legislation;
“the existing code” means Schedule 2 to the Telecommunications Act 1984;
“the new code” means Schedule 3A to the Communications Act 2003.
References to the code or provisions of the code
2 (1) In any enactment passed or made before the commencement date, unless the context requires otherwise—
(a) a reference to the existing code is to be read as a reference to the new code;
(b) a reference to a provision of the existing code listed in column 1 of the table is to be read as a reference to the provision of the new code in the corresponding entry in column 2.
(2) This paragraph does not affect the amendments made by Part 2 of this Schedule or the power to make amendments by regulations under section 6.
(3) This paragraph does not affect section 17(2) of the Interpretation Act 1978 (effect of repeal and re-enactment) in relation to any reference to a provision of the existing code not listed in the table.
Table
Existing code | New code |
Paragraph 9 | Part 8 |
Paragraph 21 | Part 6 |
Paragraph 23 | Part 10 |
Paragraph 29 | Paragraph 17 |
References to a conduit system
3 In any enactment passed or made before the commencement date, unless the context requires otherwise—
(a) a reference to a conduit system, where it is defined by reference to the existing code, is to be read as a reference to an infrastructure system as defined by paragraph 7(1) of the new code, and;
(b) a reference to provision of such a system is to be read in accordance with paragraph 7(2) of the new code (reference to provision includes establishing or maintaining).
Part 2
Amendments of particular enactments
Landlord and Tenant Act 1954 (c. 56)
4 In section 43 of the Landlord and Tenant Act 1954 (tenancies to which provisions on security of tenure for business etc tenants do not apply) after subsection (3) insert—
“(4) This Part does not apply to a tenancy—
(a) the primary purpose of which is to grant code rights within the meaning of Schedule 3A to the Communications Act 2003 (the electronic communications code), and
(b) which is granted after that Schedule comes into force.””
Opencast Coal Act 1958 (c. 69)
5 (1) Section 45 of the Opencast Coal Act 1958 (provisions as to telegraphic lines) is amended as follows.
(2) In subsection (2) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In section (4) for “Paragraph 1(2) of the electronic communications code” substitute “Paragraph 103(2) of the electronic communications code”.
Land Drainage (Scotland) Act 1958 (c. 24)
6 In section 17 of the Land Drainage Act (Scotland) Act 1958 (application of paragraph 23 of the code) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Pipe-lines Act 1962 (c. 58)
7 In section 40(2) of the Pipe-lines Act 1962 (avoidance of interference with lines) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Harbours Act 1964 (c. 40)
8 In section 53 of the Harbours Act 1964 (application of paragraph 23 of the code) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Fair Trading Act 1973 (c. 41)
9 In section 137(3)(f) of the Fair Trading Act 1973 (general interpretation: services covered) for “paragraph 29 of Schedule 2 to the Telecommunications Act 1984” substitute “paragraph 17 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Highways Act 1980 (c. 66)
10 The Highways Act 1980 is amended as follows.
11 In section 177(12) (restriction of construction over highways: application of paragraph 23 of code) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
12 (1) Section 334 (savings relating to electronic communications apparatus) is amended as follows.
(2) In subsection (8) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (9) for “the said paragraph 23” substitute “Part 10 of the electronic communications code”.
(4) In subsection (11)—
(a) for “Sub-paragraph (8) of paragraph 23” substitute “Paragraph 68”;
(b) for “that paragraph” substitute “Part 10 of the code”.
(5) In subsection (12) for “1(2)” “substitute “103(2)”.
(6) In subsection (13) for “Paragraph 21 of the electronic communications code (restriction on removal of electronic communications apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of electronic communications apparatus)”.
Roads (Scotland) Act 1984 (c. 54)
13 The Roads (Scotland) Act 1984 is amended as follows.
14 (1) Section 50 (planting of trees etc by roads authority) is amended as follows.
(2) In subsection (3) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (4)—
(a) for “sub-paragraph (8) of paragraph 23” substitute “Paragraph 68”
(b) for “that paragraph” substitute “Part 10 of the code”.
15 (1) Section 75 (bridges over and tunnels under navigable waterways) is amended as follows.
(2) In subsection (9) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (10)—
(a) for “sub-paragraph (8) of paragraph 23” substitute “paragraph 68”
(b) for “that paragraph” substitute “Part 10 of the code”.
16 (1) Section 132 (saving for operators of telecommunications code systems) is amended as follows.
(2) In the heading for “telecommunications code systems” substitute “electronic communications code networks”.
(3) In subsection (4) for “paragraph 1(2) of the electronic communications code” substitute “paragraph 103(2) of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(4) In subsection (5) for “Paragraph 21 of the electronic communications code (restriction on removal of electronic communications apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of electronic communications apparatus)”.
Housing Act 1985 (c. 68)
17 Section 298 of the Housing Act 1985 (telecommunications apparatus) is amended as follows.
18 For the heading substitute “Electronic communications apparatus”.
19 In subsection (2) for “paragraph 21 of the electronic communications code” substitute “Part 6 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
20 In subsection (3) for “paragraph 23” substitute “Part 10”.
Food and Environment Protection Act 1985 (c. 48)
21 The Food and Environment Protection Act 1985 is amended as follows.
22 In section 8A (electronic communications apparatus: operations in tidal waters etc) for the words from “paragraph 11” to “1984” substitute “Part 9 of Schedule 3A of the Communications Act 2003 (the electronic communications code)”.
23 In section 9(8) (defence to operating without licence under Part 2)—
(a) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A of the Communications Act 2003 (the electronic communications code)”;
(b) omit the words from “In this subsection” to the end.
Airports Act 1986 (c. 31)
24 The Airports Act 1986 is amended as follows.
25 (1) Section 62 (electronic communications apparatus) is amended as follows.
(2) In subsection (1) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A of the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (4) for “Paragraph 23” substitute “Part 10”.
(4) In subsection (5)—
(a) for “Sub-paragraph (8) of paragraph 23” substitute “Paragraph 68”;
(b) for “that paragraph” substitute “Part 10 of the code”.
(5) In subsection (6) for “1(2)” substitute “103(2)”
(6) In subsection (7) for “Paragraph 21 of the electronic communications code (restriction on removal of apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of apparatus)”.
Landlord and Tenant Act 1987 (c. 31)
26 In section 4(2) of the Landlord and Tenant Act 1987 (disposals which are not relevant disposals for purposes of tenants’ right of first refusal) after paragraph (da) insert—
“(db) the conferral of a code right under Schedule 3A to the Communications Act 2003 (the electronic communications code);”.
Road Traffic (Driver Licensing and Information Systems) Act 1989 (c. 22)
27 In paragraph 4 of Schedule 4 to the Road Traffic (Driver Licensing and Information Systems) Act 1989 (application of paragraph 23 of code to licence holders) for “Paragraph 23 of Schedule 2 to the Telecommunications Act 1984” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Electricity Act 1989 (c. 29)
28 In paragraph 1(6) of Schedule 16 to the Electricity Act 1989 (application of paragraph 23) for “Paragraph 23 of Schedule 2 to the Telecommunications Act 1984” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Town and Country Planning Act 1990 (c. 8)
29 (1) Section 256 of the Town and Country Planning Act 1990 (electronic communications apparatus: orders by the Secretary of State) is amended as follows.
(2) In subsection (5) for “Paragraph 1(2) of the electronic communications code” substitute “Paragraph 103(2) of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (6) for “Paragraph 21 of the electronic communications code (restriction on removal of electronic communications apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of electronic communications apparatus)”.
Water Industry Act 1991 (c. 56)
30 In paragraph 4 of Schedule 13 to the Water Industry Act 1991—
(a) for “paragraph 23” substitute “Part 10”;
(b) for “Schedule 2 to the Telecommunications Act 1984” substitute “Schedule 3A to the Communications Act 2003”;
(c) in the heading, for “telecommunication systems” substitute “electronic communications networks”.
Water Resources Act 1991 (c. 57)
31 In Schedule 22 to the Water Resources Act 1991 (protection of particular undertakings)—
(a) in paragraph 5 for “Paragraph 23 of Schedule 2 to the Telecommunications Act 1984” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”;
(b) for the italic heading before paragraph 5 substitute “Protection for electronic communications networks”.
Electricity (Northern Ireland) Order 1992 (S.I. 1992/231)
32 In paragraph 3(2) of Schedule 4 to the Electricity (Northern Ireland) Order 1992 (application of paragraph 23) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Cardiff Bay Barrage Act 1993 (c. 42)
33 In paragraph 16 of Schedule 2 to the Cardiff Bay Barrage Act 1993 (application of paragraph 23) for “Paragraph 23 of Schedule 2 to the Telecommunications Act 1984” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Roads (Northern Ireland) Order 1993 (S.I. 1993/3160)
34 (1) Schedule 9 to the Roads (Northern Ireland) Order 1993 (saving provisions) is amended as follows.
(2) In paragraph 2(2) for “Paragraph 1(2) of the electronic communications code” substitute “Paragraph 103(2) of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In paragraph 2(3) for “Paragraph 21 of the electronic communications code (restrictions on removal of apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of apparatus)”.
(4) In paragraph 3 for “Paragraph 23” substitute “Part 10”.
Airports (Northern Ireland) Order 1994 (S.I. 1994/426)
35 (1) Article 12 of the Airports (Northern Ireland) Order 1994 (provisions as to electronic communications apparatus) is amended as follows.
(2) In paragraph (1) for “Paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In paragraph (3A) for “Paragraph 23” substitute “Part 10”.
(4) In paragraph (4)—
(a) for “Sub-paragraph (8) of paragraph 23” substitute “Paragraph 68”;
(b) for “that paragraph” substitute “Part 10 of the code”.
(5) In paragraph (5) for “1(2)” substitute “103(2)”.
(6) In paragraph (6) for “Paragraph 21 of the electronic communications code (restriction on removal of apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of apparatus)”.
(7) Omit paragraph (7).
Landlord and Tenant (Covenants) Act 1995 (c. 30)
36 In section 5 of the Landlord and Tenant (Covenants) Act 1995 (tenant released from covenants on assignment of tenancy), after subsection (4) insert—
(5) This section is subject to paragraph 15(4) of Schedule 3A to the Communications Act 2003 (which places conditions on the release of an operator from liability under an agreement granting code rights under the electronic communications code).”
Gas Act 1995 (c. 45)
37 In paragraph 2(7) of Schedule 4 to the Gas Act 1995 (application of paragraph 23 to public gas transporters) for “Paragraph 23 of Schedule 2 to the Telecommunications Act 1984” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Channel Tunnel Rail Link Act 1996 (c. 61)
38 (1) Part 4 of Schedule 15 to the Channel Tunnel Rail Link Act 1996 (protection of telecommunications operators) is amended as follows.
(2) For the heading substitute “Protection of electronic communications code operators”.
(3) In paragraph 2(1) for “Paragraph 21 of the electronic communications code” substitute “Part 6 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(4) In paragraph 2(2) for “Paragraph 23” substitute “Part 10”.
(5) In paragraph 3 for “paragraph 9” substitute “Part 8”.
(6) In paragraph 4(1) for “paragraph 23” substitute “Part 10”.
Gas (Northern Ireland) Order 1996 (S.I. 1996/275)
39 (1) Schedule 3 to the Gas (Northern Ireland) Order 1996 (other powers etc of licence holders) is amended as follows.
(2) In paragraph 1(1) omit the following definitions—
(a) “public telecommunications operator”;
(b) “telecommunication apparatus” and “electronic communications network”;
(c) “telecommunications code”.
(3) In paragraph 3(2) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
Business Tenancies (Northern Ireland) Order 1996 (SI 1996/725 (NI 5))
40 In Article 4(1) of the Business Tenancies (Northern Ireland) Order 1996 (tenancies to which the Order does not apply) after paragraph (k) insert—
“(l) a tenancy the primary purpose of which is to grant code rights within the meaning of Schedule 3A to the Communications Act 2003 (the electronic communications code), where the tenancy is granted after that Schedule comes into force.”
Town and Country Planning (Scotland) Act 1997 (c. 8)
41 (1) Section 212 of the Town and Country Planning (Scotland) Act 1997 (electronic communications apparatus) is amended as follows.
(2) In subsection (7) for “Paragraph 1(2) of the electronic communications code” substitute “Paragraph 103(2) of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In subsection (8) for “Paragraph 21 of the electronic communications code (restriction on removal of electronic communications apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of apparatus)”.
Enterprise Act 2002 (c. 40)
42 The Enterprise Act 2002 is amended as follows.
43 In section 128(5) (mergers: references to supply of services) for the words from “(within” to the end substitute “(within the meaning of paragraph 17 of Schedule 3A to the Communications Act 2003 (the electronic communications code)) for sharing the use of electronic communications apparatus.”
44 In section 234(5) (enforcement of consumer legislation: references to supply of services) for the words from “(within” to the end substitute “(within the meaning of paragraph 17 of Schedule 3A to the Communications Act 2003 (the electronic communications code)) for sharing the use of electronic communications apparatus.”
Communications Act 2003 (c. 21)
45 The Communications Act 2003 is amended as follows.
46 (1) Section 394 (service of notifications and other documents) is amended as follows.
(2) In subsection (2) omit paragraph (d).
(3) After subsection (10) insert—
(11) In its application to Schedule 3A this section is subject to paragraph 87 of that Schedule.”
47 (1) Section 402 (power of Secretary of State to make orders and regulations) is amended as follows.
(2) In subsection (2) after paragraph (a) insert—
“(aa) regulations under paragraph 91 of Schedule 3A which amend, repeal or modify the application of primary legislation,”.
(3) After subsection (2) insert—
(2A) A statutory instrument containing (whether alone or with other provisions) regulations under paragraph 91 of Schedule 3A which amend, repeal or modify the application of primary legislation, may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
(4) After subsection (3) insert—
(4) In this section “primary legislation” means—
(a) an Act of Parliament,
(b) a Measure or Act of the National Assembly for Wales,
(c) an Act of the Scottish Parliament, or
(d) Northern Ireland legislation.”
48 Schedule 3 is repealed.
Land Reform (Scotland) Act 2003 (asp 2)
49 (1) Schedule 1 to the Land Reform (Scotland) Act 2003 (path orders) is amended as follows.
(2) In paragraph 12 for “Paragraph 1(2) of the electronic communications code” substitute “Paragraph 103(2) of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) In paragraph 13 for “Paragraph 21 of that code (restriction on removal of apparatus)” substitute “Part 6 of the electronic communications code (rights to require removal of apparatus)”.
Housing and Regeneration Act 2008 (c. 17)
50 The Housing and Regeneration Act 2008 is amended as follows.
51 In section 2(3) (objects of the Homes and Communities Agency: interpretation) in paragraph (a) of the definition of “infrastructure” for “telecommunications” substitute “electronic communications”.
52 In section 57(1) (interpretation of Part 1) omit the definition of “conduit system” and insert in the appropriate place—
““infrastructure system” has the meaning given by paragraph 7(1) of Schedule 3A to the Communications Act 2003 (the electronic communications code), and a reference to providing such a system is to be read in accordance with paragraph 7(2) of the code (reference to provision includes establishing or maintaining),”.
53 In the table in section 58 (index of defined expressions in Part 1) omit the entry for “conduit system (and providing such a system)” and insert in the appropriate place—
“Infrastructure system (and providing such a system) | Section 57(1)”. |
Crossrail Act 2008 (c. 18)
54 (1) Part 4 of Schedule 17 to the Crossrail Act 2008 (protective provisions) is amended as follows.
(2) In paragraph 1(2) for the definition of “electronic communications code” substitute—
““electronic communications code” means the code set out in Schedule 3A to the Communications Act 2003;”.
(3) In paragraph 2(1) for “paragraph 23” substitute “Part 10”.
(4) In paragraph 2(2) for “Paragraphs 21 and 23” substitute “Parts 6 and 10”.
(5) In paragraph 3 for “paragraph 9” substitute “Part 8”.
(6) In paragraph 4(1) for “paragraph 23” substitute “Part 10”.
Marine (Scotland) Act 2010 (asp 5)
55 The Marine (Scotland) Act 2010 is amended as follows.
56 In section 36(1) (electronic communications apparatus) for the words from “paragraph 11” to “apparatus)” substitute “Part 9 of Schedule 3A to the Communications Act 2003 (the electronic communications code) (works in connection with electronic communications apparatus).
57 (1) Section 41 (defence to offences: electronic communications: emergency works) is amended as follows.
(2) In subsection (1) for “paragraph 23 of the electronic communications code” substitute “Part 10 of Schedule 3A to the Communications Act 2003 (the electronic communications code)”.
(3) Omit subsection (2).”—(Matt Hancock.)
The new Schedule replaces Schedule 3 to the Bill and contains the amendments in that Schedule with other amendments consequential on the replacement of the electronic communications code.
Brought up, read the First and Second time, and added to the Bill.
New Schedule 2
Bank of England oversight of payment systems
“Part 1
Extension of Bank of England oversight of payment systems
1 The Banking Act 2009 is amended as follows.
2 In the heading to Part 5 (inter-bank payment systems) omit “Inter-bank”.
3 In section 181 (overview) for “payments between financial institutions” substitute “transferring money”.
4 (1) Section 182 (interpretation: “inter-bank payment system”) is amended as follows.
(2) In subsection (1)—
(a) omit “inter-bank”;
(b) omit the words from “between financial institutions” to the end.
(3) After subsection (1) insert—
“(1A) But “payment system” does not include any arrangements for the physical movement of cash.”
(4) Omit subsections (2) and (3).
(5) In subsection (5) for “an inter-bank” substitute “a”.
(6) In the heading omit “inter-bank”.
5 In section 183 (interpretation: other expressions), in paragraph (a) for “an inter-bank” substitute “a”.
6 (1) Section 184 (recognition order) is amended as follows.
(2) In subsection (1) for “an inter-bank” substitute “a”.
(3) In subsection (2) omit “inter-bank”.
(4) In subsection (3) for “an inter-bank” substitute “a payment”.
7 In section 185 (recognition criteria), in subsection (1) for “an inter-bank” substitute “a”.
8 In section 186A (amendment of recognition order), in subsections (2)(b) and (4), omit “inter-bank”.
9 In section 187 (de-recognition), in subsections (2), (3)(b) and (5), omit “inter-bank”.
10 In section 188 (principles), in subsection (1) omit “inter-bank”.
11 In section 189 (codes of practice) omit “inter-bank”.
12 In section 190 (system rules), in subsection (1) omit “inter-bank”.
13 In section 191 (directions), in subsection (1) omit “inter-bank”.
14 In section 192 (role of FCA and PRA), in subsections (2)(a) and (b) and (3), omit “inter-bank”.
15 In section 193 (inspection), in subsections (1) and (2), omit “inter-bank”.
16 In section 194 (inspection: warrant), in subsection (1)(a) omit “inter-bank”.
17 In section 195 (independent report), in subsection (1) omit “inter-bank”.
18 In section 196 (compliance failure) omit “inter-bank”.
19 In section 197 (publication), in subsection (1) omit “inter-bank”.
20 In section 198 (penalty), in subsection (1) omit “inter-bank”.
21 In section 199 (closure), in subsection (2) omit “inter-bank”.
22 In section 200 (management disqualification), in subsections (1) and (2), omit “inter-bank”.
23 In section 201 (warning), in subsection (1) for “an inter-bank” substitute “a”.
24 In section 202A (injunctions), in subsections (2)(a) and (3)(a), omit “inter-bank”.
25 In section 203 (fees), in subsection (1) omit “inter-bank”.
26 In section 204 (information), in subsections (1A), (2) and (4)(c), omit “inter-bank”.
27 In section 205 (pretending to be recognised), in subsection (1) omit “inter-bank”.
28 In section 206A (services forming part of recognised inter-bank payment system), in subsections (1), (2) and (7)(a) and in the heading, omit “inter-bank”.
29 In section 259 (statutory instruments), in the Table in subsection (3)—
(a) in the heading for the entries in Part 5, omit “Inter-bank”;
(b) in the entry for section 206A, in the second column omit “inter-bank”.
30 In section 261 (index of defined terms), in the Table—
(a) omit the entry for “Inter-bank payment system”;
(b) at the appropriate place insert—
“Payment system | 182” |
Part 2
Consequential amendments
Financial Services Act 2012
31 The Financial Services Act 2012 is amended as follows.
32 (1) Section 68 (cases in which Treasury may arrange independent enquiries) is amended as follows.
(2) In subsection (3), in paragraphs (a) and (b)(ii), omit “inter-bank”.
(3) In subsection (5), in the definition of “recognised inter-bank payment system”—
(a) omit the first “inter-bank”;
(b) for “an inter-bank” substitute “a”.
33 In section 85 (relevant functions in relation to complaints scheme), in subsection (3)(a) omit “inter-bank”.
34 In section 110 (payment to Treasury of penalties received by Bank of England), in subsection (5)(d) omit “inter-bank”.
Financial Services (Banking Reform) Act 2013
35 The Financial Services (Banking Reform) Act 2013 is amended as follows.
36 In section 45 (procedure), in subsection (1)(a) omit “inter-bank”.
37 In section 46 (amendment of designation order), in subsection (2)(a) omit “inter-bank”.
38 In section 47 (revocation of designation orders), in subsection (3)(a) omit “inter-bank”.
39 In section 98 (duty of regulators to ensure co-ordinated exercise of functions), in subsection (5)(b) omit “inter-bank”.
40 In section 110 (interpretation), in subsection (1), in the definition of “recognised inter-bank payment system”—
(a) omit the first “inter-bank”;
(b) for “an inter-bank” substitute “a”.
41 In section 112 (interpretation: infrastructure companies), in subsections (2)(a), (4)(b) and (5), omit “inter-bank”.
42 In section 113 (interpretation: other expressions), in subsection (1)—
(a) in the definition of “operator” omit “inter-bank”;
(b) in the definition of “recognised inter-bank payment system”—
(i) omit the first “inter-bank”;
(ii) for “an inter-bank” substitute “a”;
(c) in the definition of “the relevant system”, in paragraphs (a) and (c), omit “inter-bank”.
43 In section 115 (objective of FMI administration), in subsection (1) omit “inter-bank”.
44 In section 120 (power to direct FMI administrator), in subsection (8) omit “inter-bank”.
45 In section 127 (interpretation of Part 6), in subsection (1), in the definition of “operator” and in the definition of “recognised inter-bank payment system”, omit “inter-bank”.”—(Matt Hancock.)
This is the Schedule introduced by new clause NC30.
Brought up, read the First and Second time, and added to the Bill.
Title
Amendments made: 186, in title, line 8, after “functions;” insert
“to make provision about qualifications in information technology;”.
This amendment is consequential on new clause NC26.
Amendment 187, in title, line 8, after “functions;” insert
“to make provision about payment systems and securities settlement systems;”.—(Matt Hancock.)
The amendment is consequential on new clauses NC29 and NC30 and new Schedule NS2.
Bill, as amended, to be reported.
Digital Economy Bill
Monday 28th November 2016
(8 years ago)
Commons ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 28 November 2016 - (28 Nov 2016)
18:47 - The House divided: - Ayes: 181 / Noes: 278 - Question accordingly negatived.
19:02 - The House divided: - Ayes: 221 / Noes: 277 - Question accordingly negatived.
21:00 - The House divided: - Ayes: 220 / Noes: 267 - Question accordingly negatived.
The Minister for Digital and Culture (Matt Hancock)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss Government new clause 29—On-demand programme services: specially restricted material.
New clause 1—Power to require the blocking of access to pornographic material by internet service providers—
“(1) Where the age-verification regulator determines that a person has made pornographic material available on a commercial basis on the internet to persons in the United Kingdom—
(a) in contravention of section 15(1), and
(b) the person has been the subject of a financial penalty or enforcement notice under section 20 and the contravention has not ceased,
the age-verification regulator may issue a notice to internet service providers requiring them to prevent access to the pornographic material that is provided by the non-complying person.
(2) A notice under subsection (1) must—
(a) identify the non-complying person in such manner as the age verification regulator considers appropriate;
(b) provide such further particulars as the age-verification regulator considers appropriate.
(3) When the age-verification regulator gives notice under this section, it must inform the non-complying person, by notice, that it has done so.
(4) An internet service provider who fails to comply with a requirement imposed by subsection (1) commits an offence, subject to subsection (5).
(5) No offence is committed under subsection (4) if the internet service provider took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with.
(6) An internet service provider guilty of an offence under subsection (4) is liable, on summary conviction, to a fine.
(7) In this section “internet service provider” has the same meaning as in section 124N of the Communications Act 2003 (interpretation).”
This new clause gives a power to the age-verification regulator to require internet service providers to block pornography websites that do not offer age-verification.
New clause 3—Safety responsibilities of social media sites—
“(1) This section applies to a person who operates an internet site for commercial purposes which requires a user to create a personal account to fully access the internet site.
(2) A person under subsection (1) must—
(a) undertake and publish an online safety impact assessment in respect of their account holders,
(b) inform the police if they become aware of any threat on its internet site to physically harm an individual,
(c) remove any posts made on its internet site that are deemed to be violent or that could incite violence.”
New clause 10—Internet pornography: requirement to teach age requirement and risks as part of sex education—
“After section 403(1A)(b) of the Education Act 1996, add—
“(c) they learn about the risks and dangers of internet pornography, and the legal age requirement to access internet pornography under Part 3 of the Digital Economy Act 2017.””
This new clause would mean that the Secretary of State would have to include in guidance to maintained schools that pupils learn as part of sex education the risks and dangers of internet pornography and the legal age requirement to access it, as provided for under Part 3.
New clause 13—Code of practice for commercial social media platform providers on online abuse—
“(1) The relevant Minister must issue a code of practice about the responsibilities of commercial social media platform providers in dealing with online abuse.
(2) The code of practice must include guidance on—
(a) how a commercial social media platform providers shall respond to cases of a person being victim of online abuse on its internet site;
(b) quality service standards expected of the commercial social media platform providers in determining, assessing, and responding to cases of online abuse; and
(c) the setting and enforcement of privacy settings of persons aged 17 or under, where deemed appropriate.
(3) A commercial social media platform providers must comply with the code of practice.
(4) The relevant Minister may from time to time revise and re-issue the code of practice.
(5) As soon as is reasonably practicable after issuing or reissuing the code of practice the relevant Minister must lay, or arrange for the laying of, a copy of it before—
(a) Parliament,
(b) the Scottish Parliament,
(c) the National Assembly for Wales, and
(d) the Northern Ireland Assembly.
(6) In this section “commercial social media platform providers” means a person who operates an internet site on a commercial basis on which people can interact.”
New clause 32—Approval of Age-verification providers—
“(1) Age-verification providers must be approved by the age-verification regulator.
(2) In this section an “age-verification provider” means a person who appears to the age-verification regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.
(3) The age-verification regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.
(4) The code will include provisions to ensure that age-verification providers—
(a) perform a Data Protection Impact Assessment and make this publicly available,
(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,
(c) minimise the processing of personal information to that which is necessary for the purposes of age-verification,
(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet,
(e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,
(f) do not create security risks for third parties or adversely impact security systems or cyber security,
(g) comply with a set standard of accuracy in verifying the age of users.
(5) Age-verification Providers must comply with the code of practice.
(6) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the Code, that term is unenforceable.”
Amendment 27, in clause 15, page 18, line 7, after “material” insert “or adult material”.
This amendment and amendments 28, 29, 30, 31, 32, 33 and 34 would require all providers of internet content which is not suitable for children to put in place a robust age-verification system. In the offline world, children are not allowed to view material which the BBFC has classified to be only suitable for adults. This amendment ensures that these restrictions apply equally to the online world.
Amendment 28, page 18, line 11, after “material” insert “or adult material”.
See explanatory statement for amendment 27.
Amendment 29, page 18, line 18, after “material” insert “or adult material”.
See explanatory statement for amendment 27.
Amendment 30, page 18, line 24, after “material” insert “or adult material”.
See explanatory statement for amendment 27.
Amendment 2, page 18, line 36, at end insert—
“(7) The Secretary of State must make regulations to ensure that the definition of specially restricted material in section 368E(5) of the Communications Act 2003 is amended to reflect the definitions in this Part.”
The amendment requires the making of regulations to ensure that there is a parity of protection for children using different online media. The regulations would amend the definition of specially restricted material for UK based video on demand programming and extend it to 18 material as well as R18 material.
Amendment 31, in clause 16, page 19, line 17, at end insert—
“16 (1A) In this Part “adult material” means any of the following—
(a) a video work in respect of which the video works authority has issued an 18 certificate;
(b) any other material if it is reasonable to assume from its nature that any classification certificate issued for a video work including it would be an 18 certificate; and
(c) any other material if it is reasonable to assume that the video works authority would determine that a video work including it was not suitable for a classification certificate to be issued in respect of it.”
See explanatory statement for amendment 27.
Government amendments 35 and 36.
Amendment 32, in clause 19, page 21, line 9, after “material” insert “or adult material”.
See explanatory statement for amendment 27.
Amendment 1, in clause 20, page 22, line 26, at end insert—
“(13) Where a person is—
(a) based in a country outside the United Kingdom, and
(b) refusing to comply with the requirements of the age-verification regulator, the age-verification regulator shall notify Ofcom that the relevant person is refusing to comply with its requirements.
(14) Following a notification made under subsection (13), Ofcom shall direct internet service providers in the United Kingdom to block public access to the material made available by the person on the internet.
(15) An internet service provider that fails to comply with subsection (14) within a reasonable period would be subject to financial penalties imposed by the age-verification regulator under section 21.”
Amendment 33, in clause 22, page 24, line 33, after first “material” insert “, adult material,”.
See explanatory statement for amendment 27.
Government amendment 37.
Amendment 34, in clause 23, page 25, line 5, after first “material” insert “, adult material,”.
See explanatory statement for amendment 27.
Government amendments 38 to 42.
New clause 7—Bill limits for all mobile phone contracts—
“(1) A telecommunications service provider supplying a contract relating to a hand-held mobile telephone must, at the time of entering into such a contract, allow the end-user the opportunity to place a financial cap on the monthly bill under that contract.
(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—
(a) requested the monthly cap be put in place and agreed the amount of that cap, or
(b) decided, on a durable medium, not to put a monthly cap in place.
(3) The end-user should bear no cost for the supply of any service above the cap if the provider has—
(a) failed to impose a cap agreed under subsection (2)(a);
(b) introduce, or amend, a cap following the end-user’s instructions under subsection (2)(b); or
(c) removed the cap without the end-user’s instructions or has removed it without obtaining the consumer’s express consent on a durable medium under subsection (2).”
New clause 14—Impact assessment of macro not-spot roaming—
“(1) Within three months of this Act coming into force, the Secretary of State must commission an impact assessment of enabling a system of macro not-spot roaming in the UK, and shall lay the report of the impact assessment before each House of Parliament.
(2) In this section “macro not-spot roaming” means the ability for hand-held mobile telephone users based in relatively large areas of non or partial broadband coverage to access coverage from networks other than their own.”
This new clause calls for an impact assessment of macro not-spot roaming in the UK, in line with the recommendations of the British Infrastructure Group report on mobile coverage.
New clause 20—Ability of end-user to cancel telephone contract in event of lack of signal at residence—
“A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile telephone if, at any point during the contract term, the mobile telephones is consistently unable to obtain a signal when located at the end-user’s main residence.”
New clause 21—Use of emergency serve network wireless telegraphy infrastructure by multiple network providers—
“After section 8(4) of the Wireless Telegraphy Act 2006, insert—
“(4A) A licence issued in respect of a wireless telegraphy station or apparatus that is used for the purposes of emergency service network shall stipulate that more than one network provider can use the station or apparatus.””
New clause 22—OFCOM power to enforce structural separation of BT Openreach—
“After section 49C of the Communications Act 2003 insert—
“(49D) OFCOM has the power to enforce the structural separation of BT Openreach, should OFCOM consider this necessary.””
New clause 25—Ability of end-user to cancel mobile telephone contract in event of lack of signal at residence and place of employment—
“A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile device if, at any point during the contract term, the mobile device is consistently unable to obtain a signal when located at the end user’s main residence or main place of employment.”
New clause 26—Wireless telegraphy licences and medical or hearing technology—
“After section 14(4) of the Wireless Telegraphy Act 2006, insert—
“(4A) Before granting a wireless telegraphy licence, Ofcom shall carry out tests to identify the risk of any interference with any medical or hearing technology and publish its findings.
(4B) Ofcom shall not grant a licence if tests carried out under section 14(4A) have found there is a risk of interference with medical or hearing technology unless—
(a) action is taken to eliminate the risk; or
(b) a fund is set up to meet the costs of replacing all medical or hearing technology affected by the interference.
(4C) Where a fund is set up under section 14(4B), Ofcom shall require that any person who is granted a licence takes action to inform its customers of the risk that its devices may lead to interference with medical or hearing technology.””
This new clause would place a duty on Ofcom to carry out tests in advance of the sale of radio frequencies to ensure that any interference identified with medical or hearing devices is made public. Where a risk of interference is identified, Ofcom shall not grant a wireless telegraphy licence unless action is taken to remove the risk of interference or a fund established to cover the cost of replacing medical or hearing technology affected. This new clause is supported by the National Deaf Children’s Society.
New clause 27—Introduction of broadband connection voucher scheme as alternative to universal service order provision—
“The Secretary of State shall introduce a broadband connection voucher scheme to allow an end-user to access broadband other than that supplied by the provider of the universal service order, under Part 2 of the Communications Act 2003.”
Although most individuals are likely to choose the standard universal service order offering, this new clause would provide individuals with the option of a voucher scheme that empowers them to take up an alternative solution.
Government amendments 23 and 24.
Matt Hancock
The Digital Economy Bill will help to connect modern Britain, support the digital economy and keep people safe online. The measures in this group are about strengthening the enforcement of protections for children, improving access to online media, and addressing consumer protection in telecoms. I will take in turn those three sub-groups of your excellent grouping, Mr Speaker.
Turning first to child protection, I am delighted by the cross-party support for delivering the Conservative manifesto commitment to require age verification to access online pornography. During the Bill’s passage through the House, my hon. Friend the Member for Devizes (Claire Perry), who is in the Chamber, ably supported by my hon. Friend the Member for North West Hampshire (Kit Malthouse), has led debate about this by powerfully expressing the view that the enforcement proposed in the Bill is not strong enough—she is right. We have listened to the case that she and others have made. They have advanced the argument that some companies, especially those based overseas, simply will not abide by the law that is enacted by this House, so it is clear that there is a case to direct a UK internet service provider to prevent access.
We all want the internet to be free, but freedom operates within a framework of social responsibility, norms and the law. The approach set out in Government new clause 28 will protect the freedom of adults to watch pornography online, but provide adequate protections by giving children the same sorts of safeguards online as they have offline. We have worked closely with the industry and I am confident that it will take a responsible position. I therefore envisage the regulator needing to use this power only sparingly, because the vast majority of companies will want to obey the law. We will work through the technical detail with the regulator—it is expected to be the British Board of Film Classification—and others to understand the broader implications and make the new system work as we take the proposals through the other place.
We have been persuaded of another argument that was made powerfully on Second Reading. The provisions we have discussed today will see children protected by one of the most robust and sophisticated regimes globally but, as my hon. Friend the Member for Congleton (Fiona Bruce)—I see her in her place—has said, supported by my hon. Friend the Member for St Ives (Derek Thomas) and the hon. Member for Upper Bann (David Simpson), the protections have resulted in a disparity between UK-based on-demand services on the one hand, and overseas-based on-demand services and online commercial providers of pornography on the other. We have carefully considered that and concluded that we do not want disparate regimes. Government new clause 29 will ensure that children are protected from pornographic content from wherever it is derived. I am grateful to my hon. Friend the Member for Congleton for making her case; I believe that we will have a stronger system as a result.
New clause 3 proposes a legal requirement to undertake an online safety impact assessment. I understand the intent behind the new clause, but I think that the measure is unnecessary, because leading social media companies already report on their online safety practices voluntarily as part of the safety framework of the ICT Coalition. We work closely with social media companies to ensure that they take down content that is violent or that incites violence, and to flag terrorist-related content. The system is important and is working well. Since 2010, we have secured the voluntary removal of more than 220,000 pieces of content. A requirement for a safety assessment is likely to be difficult to apply in practice because of the extraterritorial organisations that are involved in this space, and it would be almost impossible to target individuals who run small online websites for commercial purposes.
Helen Goodman (Bishop Auckland) (Lab)
I am grateful to the Minister for agreeing to amend the Bill in this important area. As he is addressing the responsibility of social media sites, what action is he thinking of taking to prevent what happened recently, when Facebook refused to give the police information that it had relating to a missing child?
Matt Hancock
It is incredibly important to get the framework that operates in that sort of space right, as is the case for terrorist material and child protection online. The system that we have in place—it is essentially non-statutory, although it is underpinned by online and offline offences—is working well. Social media organisations’ collaboration with the police and others is incredibly important, and I urge them to collaborate with the police whenever they are asked to do so. We have taken the view that the effective and rigorous enforcement of rules relating to age verification is an important step to get that system up and running. The system is working well, with 220,000 take-downs since 2010, so we want to leave it in place. In all such instances, there might be difficult individual cases, but overall the system is, on the whole, working effectively. That is why we have taken different approaches for the two different areas.
New clause 10 would introduce some very specific requirements around online education. I maintain that the measure is not necessary, because e-safety is already covered at all stages in the new computing curriculum that was introduced in September 2014. From primary school, children are taught how to use technology safely, respectfully and responsibly, how to keep personal information private, how to recognise acceptable and unacceptable behaviour, and how to report a range of concerns. As hon. Members will see, we care deeply about protecting children online both through direct rules for the internet and through education. The new clause is not necessary, and I worry that putting in place a more static system would risk making the task at hand harder.
When it comes to broader protection, we expect social media and interactive services to have in place robust processes that can quickly address inappropriate content and abusive behaviour on their sites. It would be difficult to make the sort of statutory code of practice proposed in new clause 13 work, as there is not a one-size-fits-all solution. The way in which to deal properly with inappropriate content and abuse will vary by service and by incident. Technological considerations might differ by platform as innovation changes the way in which the internet operates. Legislating in this area is difficult because of the pace of change, and users will benefit most if companies develop a bespoke approach for reporting tools and in-house processes. Existing arrangements and the action taken by social media companies provide the best approach to tackling this problem.
Mrs Maria Miller (Basingstoke) (Con)
Will the Minister tell us which companies and sectors already have a code of practice in place? How he is monitoring whether such codes of practice are being brought up to date?
Matt Hancock
We are working on codes of practice in a series of different areas. About 10 days ago, as my right hon. Friend will have seen, Twitter—one of the main players in this space—brought forward work towards a code of practice on online abuse. There is more to do in this area, but it is better that we have codes of practice that the organisations themselves can buy into and that can change with the times as the usage of social media changes. My goodness, we all know how social media changes over time—not always in a good way—so we need to make sure that we keep pace with that. I worry that putting something static into legislation would get into the way of such efforts. However, I agree with my right hon. Friend that it is incumbent on social media companies to play their part in establishing and rigorously enforcing norms and social responsibility in this area if we decide not to go down, or not yet to go down, the legislative route.
Rob Marris (Wolverhampton South West) (Lab)
I quite understand that the Minister wants buy-in from the commercial social media platform providers. In response to the right hon. Member for Basingstoke (Mrs Miller), he sketched out a position that appears to be that there is no actual code of practice, but that codes are being developed. Perhaps I misunderstood the Minister because I thought he had said before the right hon. Lady’s intervention that codes of practice are in place and working well.
I will quickly mention the changing circumstances. The Minister is quite right that this is a fast-changing world. Subsection (4) of new clause 13 states:
“The relevant Minister may from time to time revise and re-issue the code of practice”,
so the very flexibility that he is praying in aid would be delivered by the new clause.
Matt Hancock
Let me be clear: when I said that there are codes of practice, I was talking about taking down online terrorist and child abuse material, on which there have been clear codes of practice for a number of years. Regarding social abuse online, we are working with the companies involved to make further progress.
Ian C. Lucas (Wrexham) (Lab)
The Minister is being very generous in giving way. He mentioned the computing curriculum, which I assume relates only to England. What discussions has he had with the devolved nations about these issues?
Matt Hancock
The Government have had significant discussions with the devolved nations on these questions. They, of course, treat these questions differently—there is a different system in Scotland and Wales, and in Northern Ireland in fact—and it is a matter for them. The hon. Gentleman is quite right that the response I gave about the computing curriculum is a matter for England, although most of the Bill involves UK matters. I am very happy to clear up that point.
The Public Bill Committee considered the subject matter of new clause 32, which calls for the regulator to approve age-verification providers and to publish a code of practice with which the providers must comply. As I said in Committee, such a measure is not necessary because clause 15 requires the regulator to publish guidance about the types of arrangements it will treat as being in compliance. That may include the characteristics of age-verification controls that would be considered acceptable. I have been made aware of a number of proposed technical solutions for age-verification controls during the passage of the Bill. Clause 15 already takes into account the need for guidance in that area.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Minister will be aware that such age verification will inevitably require the companies concerned to hold a lot of data. What assurances can he give the House that those data will not be liable to being hacked, as happened in the Ashley Madison case?
Matt Hancock
That is incredibly important. We will come on to the data protection provisions later, but this whole area operates within the scope of the Data Protection Act 1998, which provides for very strong safeguards that are set to get stronger. The Government have said that we will opt in to the forthcoming general data protection regulation, which includes stronger enforcement measures than the current Data Protection Act. All the data measures in the Bill, and all the consequences of the age-verification process, will be covered by the Data Protection Act, which has a very broad consensus of support behind it and has operated effectively over a number of years. That means that companies are responsible for the security of their data, including their cyber-security.
Mr Carmichael
Will the data therefore be held in an anonymised form that will not allow the people who have provided them to be identified, should the data be stolen? The best security in the world can still be breached?
Matt Hancock
It will be a requirement that the data are held in such a way that they are secure and not made available. It is a common principle across swathes of life that data must be held safely. The Data Protection Act is in place to make sure that that happens.
Returning to new clause 32, it is likely that a requirement on the regulator to approve providers would be unnecessarily restrictive. However, I understand of course the need to ensure that the age-verification process is of high quality.
As I have stressed, these measures are part of a broader effort to protect children online. For instance, parental control filters are an important tool to protect children from harmful online material. They were introduced by industry after the efforts of my hon. Friend the Member for Devizes in the previous Parliament. In Committee, we discussed the concern that EU net neutrality regulations will render such controls, which have worked well, illegal. I am clear that our interpretation of the EU regulations is that filters are allowed when they can be turned off, as they are therefore a matter of user choice. I know that there is still uncertainty about this matter, as well as concerns that filters could be challenged. I am happy to confirm to the House that, to put this issue beyond doubt, we will table an amendment in the other place to the effect that providers may offer such filters.
Amendments 27 to 34 have been tabled by my right hon. Friend the Member for Basingstoke (Mrs Miller), the former Secretary of State. The introduction of a new law requiring appropriate age-verification measures for online pornography is a bold step involving many challenges. It represents the first stage in ensuring that commercial providers of pornographic material are rightly held responsible for what they provide and profit from. While the internet brings incredible and unlimited opportunities, it has the potential to change the way in which younger generations grow up to understand and experience healthy relationships.
Delivering on our manifesto commitment to stop children and young people from accessing online pornographic sites remains our priority, and we want to get that right. I believe that the provisions in the Bill will enable us to do that. Our measures will protect children from exposure to material that is clearly inappropriate for them and that would be harmful to their development. Of course, pornography is not the only online content that may be harmful to children, but AV controls are part, not all, of the approach to protect children from possibly harmful content online.
The inclusion of other adult material within the scope of the Bill, as proposed in amendment 27, might not be the most effective way to address these issues. Most importantly, we must be careful to take a proportionate approach to ensure the success of our proposals. I assure my right hon. Friend the Member for Basingstoke that we will continue to work to make sure that we take all action necessary on all fronts where children are at risk of harm. I look forward to continuing discussions with her and others. I believe our approach is a targeted and effective way of protecting children from accessing or stumbling across the pornographic material that is most readily available and potentially harmful, and that the Bill fulfils our manifesto commitment.
Mr John Whittingdale (Maldon) (Con)
My right hon. Friend will be aware that one means by which young people are, more and more, accessing pornography is social media and sites such as Twitter. How will his age verification requirements apply to Twitter?
Matt Hancock
The age verification requirements apply to the commercial provision of pornography. That is not only the paid-for but that which is provided for a commercial return. There is a difference between websites that provide commercial pornography and platforms on which others can upload images. Getting this right with regard to that second group is much harder than it is with regard to the first. We are therefore proposing to put forward the measures in the Bill to deal with the larger swathe or mainstay of the problem, get them working properly and then see how they are working.
I appreciate that there is a big challenge in stopping those who really want to access porn online, but all the evidence suggests that children’s first interaction is often by accident. We are legislating to prevent as much as possible of that inadvertent viewing by those who are not desperately actively seeking to do so. I appreciate that the Bill is not a utopia, but it is a very important step forward. I hope my right hon. Friend will accept that.
Mrs Miller
The Minister is being very generous with his time. Is it not fair to say that four years ago providers such as Twitter told us it was impossible to take down visual images of children being sexually abused, but now, as he says, there is quite rightly a code of practice in place? Surely where there is a will there is a way. He has already proved that he can make significant progress, so should he not put more pressure on organisations like Twitter?
Matt Hancock
Yes is the short answer. The Bill does so, and we will best achieve that pressure by delivering on its proposals and then working with the platforms on the issue of platform-based pornography, because that is a much more difficult technical nut to crack.
Fiona Mactaggart (Slough) (Lab)
The Minister has spent more time in the past few weeks thinking about children and pornography than I am sure he wanted to. The Bill deals with the publication of pornography, but we also need to help children to be more resilient and understand that those images are not normal sexual behaviour and are the kind of violence that should not be part of relationships, because research by the NSPCC and others tells us that children, and boys in particular, think it is normal. What discussions has he had with the Department for Education to try to build greater resilience among children to some of the images that, despite the efforts in the Bill, they will see?
Matt Hancock
I agree with every word of the right hon. Lady’s intervention—both the first part and the second. Yes, working with the DFE is incredibly important in building resilience and actively ensuring that people’s health through relationships is taught effectively. The Secretary of State for Culture, Media and Sport and I have both been in discussions with the DFE on that point. That said, the right hon. Member for Slough (Fiona Mactaggart) makes an important point about the broader circumstances that should be taken into consideration, as well as the clarity in the amendment, which I hope she welcomes.
Turning to mobile phone contracts—a bit of a shift—new clause 7 seeks to place a mandatory obligation on mobile phone service providers to agree with the customer at the time of their entering into a contract a financial cap on their monthly bill. Since the new clause was first tabled in Committee, we have had further contact with mobile network operators, and providers already offer consumers ways to manage their usage: apps that allow customers to turn financial caps on and off, warning text messages when customers are approaching their allowance limits, dedicated phone numbers that tell the customer their usage, and online tools that explain how much data is needed to carry out different online activities. I expect providers to continue to take steps to minimise bill shock and ensure that their customers are sufficiently equipped to manage their usage, but I am sure that the hon. Member for Sheffield, Heeley (Louise Haigh) will agree that legislation is not currently necessary, although the movement in this direction is.
On new clause 14, I understand the frustrations of people whose mobile experience does not live up to their expectations, but while roaming appears to offer a quick fix, it risks doing more harm than good, because it could undermine the incentive for operators to invest in new infrastructure. This is particularly damaging in areas with no coverage from any provider at all. There is no incentive to invest capital in a new mast if operators can by law simply piggyback off others’ investment. The Government considered roaming in 2014, but for the above reasons it was rejected in favour of licence conditions to drive increased coverage by all mobile operators.
That agreement locked in £5 billion of investment to deliver improved coverage across the UK, and we now have 4G coverage to 97.8% of UK premises. I can confirm that this is happening: a mast was turned on just last weekend in my own constituency, and coverage on the road to Newmarket from my house is now better than it ever has been—so I have seen it for myself. The House will also have seen the recent announcements from mobile providers that they are expanding coverage to meet their 90% landmass requirements, which they must now meet under the contracts in their licence agreements. The Bill strengthens the fines they face if they miss those agreements. Of course, however, we want further improvements. Last week, new planning laws came into force to allow taller masts, and we are reforming the electronic communications code in the Bill to help operators to extend their networks, making mast-sharing easier and infrastructure deployment cheaper. These reforms have been widely welcomed by industry, and Ofcom will hold providers to account for the delivery of wider geographic coverage.
New clauses 20 and 25 seek to place mandatory obligations on mobile phone service providers to allow an end user to terminate their contract upon their being unable to obtain a mobile signal at their main residence or main place of employment. Existing consumer protections are already in place, while the automatic compensation measures in clause 3 strengthen Ofcom’s powers to require automatic compensation when there is a complete failure to provide a contracted service. I think that the ability to break a contract when one’s signal is not good enough at home is already dealt with, as contracts purchased at distance can be cancelled under the statutory 14-day cooling-off period, while for “in shop” purchases there is often a “check your coverage” cooling-off period for the first two weeks after sign up. Some providers also offer extended periods to ensure that the service meets needs, with the option of cancellation without penalty.
Grant Shapps (Welwyn Hatfield) (Con)
Does my right hon. Friend accept that this must be the only product that someone can buy and end up not being able to use? People do not just move house during the first 14 days of a contract; it can happen at any time during the two years of a contract. Will he look again at this?
Matt Hancock
I want to tackle this problem primarily by achieving universal mobile phone coverage for UK properties, and we are on track to hit 98%. By comparison, the universal broadcasting service requires 98.5%. We are getting to the point where we have near-universal service, but that is not necessarily good enough. With the forthcoming Green Paper on consumers and markets in mind, I propose to work with my right hon. Friend to make sure that it addresses the issues of concern, so that we ensure that consumers get a good deal from their mobile phone contracts and that those contracts will work.
Chris Bryant (Rhondda) (Lab)
I hear all these statistics about the level of coverage there is meant to be here, there and everywhere, but they never seem to match the reality on the ground or in the living room or in the shop. I live in the town of Porth in the Rhondda, and through the main street almost right through the town there is absolutely no mobile coverage from any of the companies, so it does not matter whether one of them is providing a good enough service—none of them are.
Matt Hancock
No doubt the hon. Gentleman will share my deep frustration over the fact that when mobile phone 3G licences were auctioned in the early 2000s, in order to get a big return to the Treasury they were auctioned without geographic coverage requirements. I think that was a serious mistake for this country. We have since engineered into the licence agreements mobile phone geographical coverage of 90%. The geography that is being covered is rising rapidly at the moment. For instance, one provider had 50% coverage last year; it is 75% now, and it has to get up to 90%. That shows how it is increasing. It is pity that from the period of the 3G licence in the early 2000s up to 2014, there were no requirements for geographic coverage, which meant that we fell behind. Thankfully, we are now catching up. As the head of Ofcom has confirmed to the Select Committee, we are in discussions with the mobile operators about getting to a universal 100% geographical coverage in the next licence period.
Chris Bryant
I am not trying to make a partisan point, but I think the Minister was trying to there. All I am saying is that even with the changes to the electronic communication codes that are in the Bill, I do not think we will be able to achieve that 98% or 100% coverage, because it is still too easy for an individual landholder to make it difficult for significant improvements to be made to the infrastructure in the area. Surely we should now be seeing access to mobile telephony as the same as access to water.
Matt Hancock
I am not making a partisan point at all. In fact, after cheering on Ed Balls on Saturday night, I am feeling about as unpartisan as I ever have! I send him my condolences.
I am speaking out of a deep frustration over the lack of geographic coverage by mobile phones in the UK. If I may say so, my constituency is significantly more rural than the hon. Gentleman’s, and this is a real problem in constituencies up and down the country. I look forward to my campaigning visit to the shortly marginal seat of Rhondda.
Damian Collins (Folkestone and Hythe) (Con)
Will my right hon. Friend give way?
Damian Collins
I, too, was pleased to hear Ofcom say in front of the Select Committee that it and the Government were looking at a universal service obligation for 3G and 4G phone signals. Does the Minister agree that there is sometimes a real frustration in communities where the statistics suggest that they have been covered, but local topography means that the mast signal does not reach homes? If the Minister visited Elham Valley in my constituency, he would meet people who suffer in that way.
Matt Hancock
Well, I have news for my hon. Friend. Next month, Ofcom will publish data for both fixed-line broadband and mobile phone coverage at the premise level for each individual premise. If the supposed coverage is different from what Ofcom says, there will be a mechanism to feed that back so that we get a proper map of coverage in both those respects. I look forward enormously to that happening, and I am sure that the Select Committee will investigate that data with great aplomb.
Simon Hoare (North Dorset) (Con)
I ask the Minister to ensure that proper discussion takes place with the Department for Communities and Local Government so that the most sensible, but liberal, planning regime for new mobile telephone masts is in place in order to provide what amounts to a basic technological requirement.
Matt Hancock
Yes, and the new rules came into place last week. Nobody prayed against the statutory instruments in either House, so there was unanimous support for a more liberal planning regime. If my hon. Friend would like to work with me on what steps might be needed to improve the planning regime further, I am all his.
Rob Marris
The Minister is being very generous, but may I caution him and press him a little on the methodology of the “premises by premises” survey? I live in a dense urban area. The coverage is nominally 4G, but I check my phone periodically, and I see that sometimes I get 3G and sometimes I get 4G. What will the premises survey say about properties like mine? I am paying for 4G, and it is the future, but I am not getting it all the time.
Matt Hancock
I would say that 5G is the future. As for the hon. Gentleman’s substantive point, I do not want the debate to turn into a seminar on mobile connectivity, but those in the industry have a wonderful phrase for the phenomenon that occurs as more people use data over a particular mast: they say that the coverage “breathes”. In other words, it comes in and goes out as other people use the data. Of course, at any one point in time the coverage may be different. The very best people to conduct the analysis are those at Ofcom, and they are conducting it, so I think it best for us to engage in this particular debate once they have published the “premises by premises” data.
Grant Shapps
I am grateful to my right hon. Friend for his offer to incorporate some of the issues raised by the new clauses in the Green Paper. He says that those at Ofcom are the best people to make the decisions. No one in the House, indeed no one in the country, will believe Ofcom’s claim that nearly 98% of UK premises are covered. It does not stack up with reality, and it does not stack up with what the British Infrastructure Group of Members of Parliament found either. I appeal to the Minister to ensure that he does not himself start to believe this nonsense.
Matt Hancock
I am looking forward to seeing the data for exactly that reason. In my rural constituency, I can drive for 10 minutes without getting a signal at all—that includes driving past houses—and the same probably applies to many other people. The lived experience is critical to judging whether the figures are broadly correct. I am entirely with my right hon. Friend on that. My job, and our job in the House, is to hold the mobile network operators to account and ensure that they deliver high-quality geographic coverage, whether it is in Rhondda, Welwyn, in Suffolk or, indeed, in Buckinghamshire, Mr Speaker.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
Will the Minister give way?
Calum Kerr
May I make what I hope is a quick, constructive point? May I urge all Members to encourage their constituents to download the Ofcom android app, which is specifically designed to gather data so that we can be better informed, and to publicise it in their constituencies?
Matt Hancock
Quite so. As you may say yourself, Mr Speaker, I am not sure that that is entirely a matter for the Bill, but the hon. Gentleman has made his point.
New clauses 21, 22 and 27, tabled by Plaid Cymru and Scottish National party Members, are not necessary, because they call for what is already the position. New clause 21 is not necessary because it is already a requirement that when emergency services network sites are used to provide coverage for the public, they must be made available to all mobile network operators. New clause 22 is not necessary because Ofcom already has the power to impose structural separation on BT Openreach if it considers that that is required. New clause 27 is not necessary because there is already a universal service obligation in the Bill to take high-speed broadband to all premises. I hope that we can use that as the means to deliver the goals that we no doubt share.
As for new clause 26, the Government take the issue of interference with assistive listening devices very seriously, and we will work with Ofcom to take appropriate action when harmful interference with such devices has been identified. I have met representatives of the National Deaf Children’s Society, and I can tell the House that further testing will begin next month and Ofcom will publish its findings by April 2017. I hope that we are making some progress on that important matter.
Richard Fuller (Bedford) (Con)
I am very encouraged by what the Minister has said about gathering further information. There is a particular issue for deaf children because of the way in which they learn. Interference from the spectrum can have a deleterious effect on their education. Will the Minister pay particular attention to the impact on children in schools?
Matt Hancock
Of course I will. I have discussed that precise issue with the National Deaf Children’s Society, and I will continue to work on it.
Government amendments 23 and 24 are detailed technical amendments concerning the installation of electronic communications apparatus on tidal land owned by the Crown.
I hope that, following my explanations and the commitments I have given, Members will withdraw their amendments and new clauses.
Kevin Brennan (Cardiff West) (Lab)
I rise to speak to new clauses 10, 32 and 7, which stand in my name and those of my hon. Friends, the Government new clauses, which the Minister has outlined, and new clause 1, tabled by the hon. Member for Devizes (Claire Perry), whom the Minister mentioned. I will also refer to some of the other amendments in the group.
In Committee, Labour Members, and indeed the hon. Lady, made it clear that we could not see how age verification could operate without a backstop power to block sites that failed to comply. In Committee, the Minister resisted that strongly. He said:
“The powers are not a silver bullet; sites that were actively trying to avoid the Bill’s other enforcement measures would also be able to actively avoid these measures. It is questionable how much additional enforcement power they would bring, given those downsides.”
He went on to say:
“I think the Bill has ended up with the correct balance.” —[Official Report, Digital Economy Public Bill Committee, 20 October 2016; c. 209.]
Clearly, the Secretary of State disagreed with him on that. She has now overruled her junior Minister by tabling new clauses 28 and 29 in her name, as we can see on the amendment paper. The new clauses tabled by the Secretary of State, who unfortunately is no longer in her place, represent significant changes at quite a late stage in the passage of the Bill in the Commons, confirming our contention that the Bill as published was not ready to leave home when it was allowed to do so.
Claire Perry (Devizes) (Con)
As the hon. Gentleman knows from his ministerial experience, it is the job of junior, middle-ranking Ministers to do all the work and Secretaries of State to take all the credit. In this case, I assure him that the ears of all the Government Front Benchers were open to the changes that he and I wanted to make.
Kevin Brennan
I am grateful for that intervention. All I can say is that I have just given the Secretary of State credit for the change, as the hon. Lady suggests I should.
The new clauses introduce significant changes at this late stage in the consideration of the Bill. We support blocking, but concerns have been raised in the press that the new clauses go beyond a backstop power to block sites to under-18s and could be used in practice to extend internet censorship to adults. The Government need to be clear whether that is the intention of the new clauses.
Matt Hancock
I have also seen those reports. I think that they misread the Bill. That is neither our intention, nor our understanding of the working of the new clauses.
Kevin Brennan
It is helpful to have that on the record. No doubt, the new clauses will be pored over in a lot more detail after they arrive in the other place. Given our time constraints today, I want to put on the record our concern that we did not have an opportunity in Committee to pore over such proposals; had the Bill been ready, perhaps we would have had. Notwithstanding our support for blocking, we think a lot more scrutiny will be required when there is more time available in the other place to discuss these Government new clauses, on the assumption that the House passes them tonight.
We have argued repeatedly that the Bill should have prepared the UK for the challenges faced by the digital economy and, crucially, should have featured digital resilience as a key part of the provisions. The opportunities of the digital economy cannot be exploited unless we feel safe and secure online, and that is nowhere more important and clear than with our children.
Children are growing up in the midst of an information revolution that, even a decade ago, was unimaginable, with instant access to an astonishing range of content and information. Today’s children are taking in an astonishing five times more information than the generation that grew up in the not so distant 1990s. So, far from tabloid stories about a distracted generation, those growing up today are in some ways on course to be the most informed generation in history. But of course knowledge is not understanding, and wisdom comes in part from experience.
Mrs Miller
I am attracted to the shadow Minister’s proposal because I, too, feel more needs to be done to educate children in this area, but I am concerned that it is talking about internet pornography in isolation and potentially will not address the problems he is trying to address in his remarks, which go far broader than simply internet pornography.
Kevin Brennan
I would certainly welcome the right hon. Lady’s support for a wider amendment and for a wider change in Government policy in this area, because a problem does exist. Our proposals have had to be drawn up to be within the scope of the Digital Economy Bill. In Committee, we were unable to table an amendment that was in scope, so I am incredibly grateful that we have been able to get one in scope and within the confines of the Bill today.
Rob Marris
I entirely support my hon. Friend. I suspect that his experience of going round schools—particularly secondary schools—will be similar to mine. Among the things that bedevil teachers are mobile phones, online bullying and sexting, but the teachers—God bless ’em—often do not have the training to deal with those issues. Although they have the best intentions, they sometimes fumble in their attempts to help. Having these measures structured into the curriculum would help just about every secondary schoolteacher, even if they did not have to teach these things.
Kevin Brennan
My hon. Friend makes a valuable point. I am a former teacher—from the analogue age, I hasten to add—and I have no doubt that many teachers who started their careers around the same time as I did would fall into that category.
Statutory online education could work in tandem, as I have said, but protecting our children is a major challenge and it cannot happen without education. That is why I was disappointed that the Minister chose not to support our proposal. I believe that it represents the other side of the coin to what the Government are trying to achieve through age verification. We contend that our measures are necessary, and we will therefore divide the House on this matter if we have to.
Our new clause 32 would oblige the age verification regulator to ensure that all age verification providers—the companies that put the tools on websites to ensure compliance—were approved by the regulator. It would also oblige those providers to perform a data protection impact assessment and to make it publicly available, as well as to perform an array of other duties. The new clause is designed to address concerns about the practicality of age verification checks. It would ensure that only minimal data were required, that those data were kept secure and that individuals’ liberty and privacy were protected.
We have not been reassured by the Minister’s comments, either in Committee or today, that the fact that age verification software is improving is enough. We should be able to guarantee the privacy of an individual before the verification tool comes into force. We are not asking anything unreasonable of the regulator or of the age verification providers. The principles of privacy, anonymity and proportionality should underpin the age verification tool, but as far as I am aware, they have not as yet featured in any draft guidance, codes of practice or documents accompanying the Bill.
If anyone thinks I am being partisan, I can tell them that the Information Commissioner agrees with me on this. In its response to the Department’s consultation on age verification for pornography, the Information Commissioner’s Office stated:
“The Commissioner’s concern is that any solution implemented must be compliant with the requirements of the DPA and PECR.”
That refers to the Data Protection Act 1998 and the Privacy and Electronic Communications (EC Directive) Regulations 2003 that sit alongside it.
Kevin Brennan
I will finish the quote, then I will give way. The Information Commissioner’s response went on:
“The concept of ‘privacy by design’ would seem particularly relevant in the context of age verification—that is, designing a system that appropriately respects individuals’ privacy whilst achieving the stated aim. In practical terms, this would mean only collecting and recording the minimum data required in the circumstances, having assessed what that minimum was. It would also mean ensuring that the purposes for which any data is used are carefully and restrictively defined, and that any activities keep to those restricted purposes. In the context of preventing children from accessing online commercial pornography, there is a clear attribute which needs to be proven in each case—that is, whether an individual’s age is above the required threshold. Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information”—
[Interruption.] I will go on for a lot longer if the Minister keeps making gestures at me. The quote concludes:
“Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information (such as actual date of birth).”
Matt Hancock
I am grateful to the hon. Gentleman for giving way; I just want to clear up this point. When this question was asked while I was on my feet, I responded by saying that the Data Protection Act, as cited by the ICO, is the legal framework for delivering this. The further quotes that the hon. Gentleman read out outline how the Act would operate in this case. In a sense, therefore, those quotes prove the point that the required legislation for ensuring protection of data already exists in the Data Protection Act and other measures.
Kevin Brennan
We will see whether the Information Commissioner agrees. She made it clear that she would have
“significant concerns about any method of age verification that requires the collection and retention of documents such as a copy of passports, driving licences or other documents (of those above the age threshold) which are vulnerable to misuse and/or attractive to disreputable third parties.”
The Minister gave no real reason in his intervention about why he does not support new clause 32, which would provide that reassurance.
The risks of creating databases that potentially contain people’s names, locations, credit card details—you name it—alongside their pornographic preferences are clear. Our priority here is the protection of children and that is agreed across the House, but one consequence of the recent hack that was mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael) was the number of suicides. We should take things seriously and proceed with caution before creating anything that would result in the storing of data that could be leaked, hacked or commercialised that would otherwise be completely private and legitimate. That is the reasoning behind our reasonable, straightforward new clause, which the Minister rejects. It would place a series of duties on the age verification regulator to ensure that adequate privacy standards were applied, that any data obtained or stored were not for commercial use and that security was given due and proper consideration.
New clause 7 would mean that mobile phone service providers give all consumers the opportunity to place a financial cap on their monthly bill and that a mobile phone service cannot be provided until the service provider has put in place a cap of the agreed amount if the consumer has made an express request. Again, the Minister’s arguments, both in Committee and today, were nowhere near sufficient. The new clause would be welcomed by the many who have found that when they receive an email or check their bank balance at the end of the month, their mobile phone bill has come in much higher than expected. Mobile tariffs are complex, particularly on data, and few of us actually understand how much data we need for an average month. Consumers of all kinds can find that they use much more data than they expected.
Citizens Advice provided an example that reveals the problems. One of its clients changed his shift pattern and started using his mobile phone to watch films. He then received a text message saying that he had gone over his monthly allowance. He did not think too much about it until he received a bill for more than £2,000 at the end of the month. Unsurprisingly, his service was subsequently cut off. Research suggests that as many as one in five consumers find it difficult to keep track of how much they spend on data. The average unexpectedly high bill is often double the cost of the original monthly fee.
Helen Goodman
Another problem with the unpredictability is that people under some contracts pay for what they receive—what other people send in texts, emails and so on—but that is not under their control.
Kevin Brennan
My hon. Friend is absolutely right. That is why new clause 7 is so helpful. Consumers could prevent that from happening by voluntarily asking for a cap. Citizens Advice received more than 60,000 inquiries about telephone and broadband debt, with its in-debt specialists dealing with nearly 27,000 individual mobile phone debt cases. Consumers support the measure, with more than 77% of them welcoming the idea.
This is not the first time such a proposal has been considered: in 2012, Ofcom considered introducing regulations but could not overcome the objections of providers, who argued it would be too costly. In fact, the lack of regulation is what has proved too costly—too costly for struggling consumers. Two providers now do what is suggested in our new clause. The Government say they want to help the JAMs—those who are just about managing—so if they fail to support the new clause, it will show they are not serious when they say that.
Ian C. Lucas
I strongly support this proposal and the new clause. Constituents have contacted me specifically about this point, because the complexity of the tariffs and the lack of knowledge about what makes up the information and the cost is huge for consumers, and this proposal would be a major step forward for them.
Kevin Brennan
I welcome my hon. Friend’s intervention in support of our proposal for caps on mobile phone bills, and so that I do not exceed mine at this point, I will hang up, Madam Deputy Speaker.
Mrs Miller
It is a pleasure to follow the hon. Member for Cardiff West (Kevin Brennan), and I share his regret that it is not possible to address online abuse in this Bill. I hope that the Minister will show the Government’s determination on this issue, as Ministers have done regularly in response to questions on a number of other measures. I particularly noted his response to my intervention about codes of practices. He is right to say that the industry has been able to move swiftly and effectively to deal with issues relating to terrorism and child abuse, but I think issues relating to online abuse more broadly are just as worthy of their attention. I hope that he is clear about the Government’s priorities in this area, to make sure that the industry really does act.
It is an art form to draw the scope of a Bill, and the Minister should get a grade-A medal for drafting the scope of this Bill extremely tightly to make sure that a number of issues that many of us would have liked to have drawn to the attention of the House are not covered by this Bill. That does not, however, mean that they are any the less important.
I really welcome Government new clauses 28 and 29 on the powers to block access to material where age verification is not sufficiently robust. That shows the Government’s intention. They have done well to reflect the intentions of my hon. Friend the Member for Devizes (Claire Perry) in her new clause 1 and of my hon. Friend the Member for Congleton (Fiona Bruce). It shows action and energy from Government to try to clean up the internet so that it is safer for children to use. My amendments 27 to 34 raise the question of whether the Government could have gone further in that, although I acknowledge that they are very much adhering to the manifesto commitments we made at the general election.
We have heard from the Minister at length, and I listened carefully, particularly to his response to my amendments. With his usual elegance and wit, he attempted to explain how this Bill can be at odds with Government policy but people can be very happy with it—I may be being a little unkind. He often tells us at the Dispatch Box that what is illegal offline is illegal online too, but it is illegal for children under the age of 18 to view adult material—I refer not just to pornography; as he knows, “adult material” is drawn more broadly than pornography alone. It therefore seems a little arbitrary for us to introduce a new law that makes such a distinction. I do not understand why one needs to be made.
Mr Whittingdale
My right hon. Friend says it is illegal for children to view adult material, but she will be aware that vast amounts of adult material are broadcast by our national broadcasters after the watershed at 10 o’clock, and it is not illegal for children to watch that, although it may be undesirable. How does she propose to deal with BBC iPlayer, ITV Play and 4oD, which broadcast 18 material?
Mrs Miller
My right hon. Friend, the former Secretary of State, makes an extremely important point. I suppose that the advantage broadcasters have over the online world is that they can use a notional watershed, although, as he rightly says, that is clearly not the case when it comes to iPlayer. I shall come on to technology that is on our side. Technology has moved on and given us opportunities, which my right hon. Friend would welcome, to make sure that children do not view things that we have said in Parliament are inappropriate.
I gently urge the Minister to consider how he might embrace my amendments in future. The law makes it clear that adult material does not just mean pornography. In response to my right hon. Friend the former Secretary of State, that is the point that I am making. Whether it is extreme violence, beheadings, sadomasochism or other such behaviour or material, it is deemed as adult-related. However, for reasons that are unclear, that is excluded from the Bill. Perhaps the Minister can give me a little more information about why he decided to do that, and assure me that in future that will be dealt with.
I took the time to talk to some primary schoolchildren in my constituency about the sort of things that they came across on the internet. A group of them talked about viewing age-appropriate material—I think it was pictures of small kittens—but at the end material popped up that frightened them to their core. They were young children, and they were not out and out looking for such material—it just popped up. Restrictions and parental controls could be put in place to catch that, but the Minister has an opportunity to make sure that organisations such as YouTube are more careful about advertisements linked to child-related material. That is an important point for him to consider further in relation to my amendments.
Ofcom has done a great deal of work in this area, and the Minister will be well and truly aware of that. It says that this is a significant problem, and that this year, one in 10 under-11s has seen something online that is “worrying, nasty or offensive”. Two thirds of young people think that sites should do more to protect them from that type of adult content. One of the guiding principles of the new regulator, the British Board of Film Classification, is to protect children from harmful media content. We protect them on television, albeit with the problems that my right hon. Friend the former Secretary of State has mentioned, and we protect them in the cinema. In one of the most uncontrolled environments —online—we allow them freely to view things that are far more difficult for us as parents to control. My amendments would help to draw those restrictions and website blocking more broadly if proper age verification procedures are not put in place, and it is worth the Government considering that further.
Ofcom was charged with looking at common media standards four or five years ago, so perhaps the Minister can update the House on the progress that has been made in that area. Can he explain how the new regulator will balance its narrow responsibilities to look solely at pornography with the organisation’s broader remit offline with regard to adult-related material? Organisations such as Childline have to deal daily with the aftermath when young people look at more broadly defined adult material online, as I have said before, in videos of extreme torture, violence, and—this is particularly upsetting—beheadings. My amendments, which have the full support of the National Society for the Prevention of Cruelty to Children seek to put safeguards that we take for granted offline into the online world. Content that would require an 18 certificate in a film or video game would be subject to an age-verification system.
The technology exists to do that. We have an incredible IT sector in this country, and it has invented ways to verify age in an anonymised way online, particularly with the use of passport data and biometrics. Companies such as Yoti have developed facial recognition apps linked to passports so that they can make sure, using anonymous data, that individuals are the age that they say they are. These things exist; Parliament does not need to invent them.
Accepting that adult over-18 material should not be viewed by children does not undermine freedom of speech, because we insist on it offline. It does add to costs for businesses, but we accept that cost for offline businesses, and I believe we should accept it for online businesses too. Fundamental rights and freedoms have always been subject to limits within the law, and the amendments simply call for the law relating to adult material in general to apply online, and for children to be protected. People who choose to flout the law should be subject to the same action by the regulator as people who distribute pornography.
I should like briefly to touch on a couple of other amendments in this group. New clause 3, which was tabled by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), talks about the creation of personal accounts and removing anonymity on the internet. I sympathise with the measures that it proposes, but it is as important for non-commercial sites as commercial sites to adopt such a measure, and I do not think that the Bill is the appropriate vehicle for such a change.
New clause 10 was discussed at length by the hon. Member for Cardiff West. As I said in an intervention, I sympathise with the point that he made, because the guidance on sex and relationships education is 16 years out of date. It does not quite pre-date the internet, but it is close to doing so, and it does not address issues such as pornography and the way in which it drives young people’s understanding of relationships—something that no one in the Chamber feels very comfortable with. I do not believe, however, that the Bill is the proper vehicle for him to achieve the objectives that he has set out, as he may well end up distorting the issue, because people might think that we have addressed it with his provision. However, we would not have done so, because the measure deals only with online pornography. He will agree, especially if he has read my Select Committee report on sexual harassment in schools, that any measure to address SRE and its improvement in schools should be drawn much more widely than the internet alone. I hope he will forgive me for not supporting that narrowly drawn provision, although I accept that he probably did not have any choice, given the scope of the Bill—he is absolutely right about that.
I urge the Minister to consider stronger undertakings than those he gave me in his opening statement, given the importance of prohibiting children from viewing adult material in the broader sense, rather than the narrow sense on which the Government have chosen to focus. He has a personal responsibility to children who use the internet day in, day out. We need to make sure that it is a safe place. He has done more than any other Minister today in making the internet a safer place for children such as mine and his, but he needs to do more, so will he give me that undertaking today?
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
A large number of hon. and right hon. Members want to catch my eye. This debate finishes at 6.47pm, so I urge speakers to keep their remarks brief so that everyone can speak. I call George Howarth.
Mr George Howarth (Knowsley) (Lab)
I am grateful, Madam Deputy Speaker, and I shall try to comply with your instructions. It is a great pleasure to follow the right hon. Member for Basingstoke (Mrs Miller), who made a powerful case for her amendments. She certainly has my support.
I shall try to be brief as I talk to a narrow and esoteric part of the Bill. Virgin Media has a workplace in my constituency that employs 250 people. The company has a particular concern which I shall take the liberty of connecting to new clause 27, because it is about the position before that measure could take effect. I am not arguing against new clause 27, which would provide individuals with the option of a voucher scheme that would empower them to take up an alternative solution. It has been tabled on the presumption that most individuals would be likely to choose the standard universal service order offering.
My argument is that in order for that proposal to be successful, there needs to be coverage in the first place to enable people to choose one option or the other. There are a number of obstacles in the way of that happening, and the Bill does not resolve the problem. Virgin Media argues that communications providers should, in effect, be treated the same as utility companies when it comes to being granted access rights or wayleaves from landowners to deploy their infrastructure on their land. The Government talk of broadband as a fourth utility, which generally is the case, but the code reform in the Bill is, in the words of Virgin Media, “a halfway house”.
Under the reforms as currently envisaged, broadband companies would face three drawbacks that water companies do not face and, as a result, higher deployment costs, which I shall say more about in a moment. The first drawback is that communications operators have to pay a rent for accessing land, whereas water companies do not. Instead, they have only to compensate landowners for any loss of value. Secondly, water companies have a right to net off any compensation that they pay with any increase in the value of the land resulting from the fact that sewerage is in place. Communications operators do not have that right, although in some cases they might seem to be carrying sewage of a different kind. Thirdly, water companies notify landowners of their intention to deploy by giving 42 days’ notice, whereas communications operators have to negotiate access with landowners who often have no particular incentive to grant it, which can cause huge delays.
Rob Marris
I have great sympathy with what my right hon. Friend is saying. We talk glibly about access to telephony being almost a human right in our country. Obviously we need water to live, and having telephony is not a physiological necessity, but in modern life telephony is a necessity. Some 40% of the Bill is contained in schedule 1, which runs to 60 pages and deals with issues relating to that raised by my right hon. Friend. Does he agree that there is a missed opportunity in schedule 1 of dealing with the particular issue that he raises?
Mr Howarth
I am grateful to my hon. Friend for pointing that out. Earlier today I waded through schedule 1, after which I was no wiser about its relevance to my argument. He, as a Member with a reputation for having an eye for the fine detail of legislation, will have spotted that in rather less time than it took me.
According to Virgin Media, it costs a communications service provider—Virgin Media or any other—150% more to put in infrastructure than it costs a water company, and 66% more than it costs an electricity company. I do not want to steal the thunder of the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr), although I condemn him roundly for not using new clause 27 as an opportunity to resolve the problem—that is not a criticism, really—but I ask the Minister to consider this problem before the Bill gets to the House of Lords. I have a handy amendment available if he wants one, but if he does not, I shall try to persuade somebody in another place to table it so that the issue can be more thoroughly debated there.
Claire Perry
As the House knows, I welcomed part 3 of the Bill on Second Reading, but I did raise, as did many other right hon. and hon. Members, the question of enforcement. We considered the possibility of internet service providers being asked to block sites that disregarded the Government’s requirement for age verification, and I tabled a series of amendments on that point in Committee. I disagree with the hon. Member for Cardiff West (Kevin Brennan) because I think that Ministers absolutely were in listening mode about a manifesto commitment that they were clearly keen to deliver. Against that backdrop, I am delighted to speak on Report by welcoming new clause 28 and Government amendments 35 to 42, which address this critical concern.
The Government had argued for rather a long time that it was disproportionate to make provision for statutory IP blocking because that had been dealt with on a voluntary basis for child pornography—we are all aware of the wonderful work done by the Internet Watch Foundation—and with reference to terrorist material. There was perhaps a hope that internet service providers would voluntarily get involved in blocking sites in the absence of age verification. Many right hon. and hon. Members campaigned for years for the voluntary introduction of family-friendly filters by internet service providers. We have led the world by working across industry and across the Government to produce a sensible set of provisions. We now have online filters that are introduced—in some cases automatically—by ISPs and others on a voluntary basis, and they seem to be working well.
There were, however, significant problems in assuming that ISPs would operate voluntarily. It was not just me and other colleagues in the House who were concerned. Bodies such as Christian Action Research and Education, the Children’s Charities Coalition for Internet Safety, the NSPCC, the British Board of Film Classification, which is now the regulator, and the Digital Policy Alliance were concerned that this sensible provision for age verification would not stick unless there was a more robust enforcement regime.
I am delighted that new clause 1, which I tabled, has been co-signed by 34 colleagues from seven political parties. That demonstrates that although we might like to stand up and shout at each other, our best work is done when we work together on such vital issues. It is a testament to the power of this place that we can work together so effectively to get this done. I know that this is a difficult argument; we have only to look at some of our Twitter feeds to see that. I am no longer on Twitter, but we know from other parts of the internet how difficult these conversations are because they go right to the heart of issues surrounding the regulation of the internet, which grew up, very properly, in a regulation-free environment, and in many respects that environment contributed to its growth and its glory.
Are we asking Governments and companies to restrict legal material for adults? I would argue strongly that the new clause is not about censorship or the restriction of legal access for adults; it is about proving that those who are consuming the material are indeed over 18. The new clause simply puts in place the sort of Government regulation and advice, and corporate socially responsible behaviour, that has been seen in many other industries. Example of that include the watershed in broadcasting, the fact that adult content often sits behind PINs on online media, and restrictions on what children can buy on the high street.
There is also a sense that the argument in relation to child sex abuse images and terrorist material is really not relevant. There is a strong global consensus that images or movie materials relating to neither of those things should be tolerated, so there is no need for statutory compulsion. However, the sites we are talking about, which offer material defined as pornographic, are quite different, because they provide a product that it is generally entirely legal for adults to access, and in many cases entirely reasonable, as there is no sense in which this is a kind of anti-pornography crusade. In that context, it is completely unsurprising that the ISPs made it clear they would not block pornographic sites without statutorily defined age-verification checks. Indeed, in evidence given on 25 October to the Communications Committee in the other place, the director of policy at Sky said of IP blocking under part 3 of the Bill:
“If there is a desire for ISPs to be blocking access to those sites, then legislation is required…If you want ISPs to block, I think they will struggle to do so, unless they are compelled to, and not because they do not want to but because they would probably be breaking the law.”
Indeed, Ofcom gave the Committee a similar message a week later, saying:
“If ISPs were to take any action blocking non-compliant sites, they would do so on a voluntary basis…I think you…have heard from ISPs about the legal difficulties they…would face if they were to undertake voluntary blocking…it would raise issues in relation to net neutrality.”
The second point, which has been widely raised among colleagues, is that there is overwhelming support among the majority of the British public for introducing these age-verification measures robustly. Eight out of 10 people absolutely support this very good manifesto commitment and want it to work. Indeed, the BBFC, which the Minister has chosen to be the regulator—I think all of us absolutely support it as a trusted brand in the space; it is not me or anyone else deciding what is over-18 material, because that will be based on the BBFC’s tried and tested guidelines—said itself that it felt that the regulator needed this power if it was effectively to carry out its work.
Mrs Miller
My hon. Friend says that this power is consistent with the guidelines that the regulator uses already, but my point was that it is not. Its powers are far more broadly drawn with regards to adult material over and above simply pornography.
Claire Perry
I do have great sympathy with the provisions my right hon. Friend has tabled; she is absolutely right to keep pushing on the issue. We defined the manifesto commitment and the Bill very tightly in terms of the online pornography space, and I wanted to achieve that first before we moved to broader definitions which, as she will be aware, quickly throw up many more questions about the scope of regulation. As she and I both know, there is a great desire in this space to make the perfect the enemy of the good, and with almost every advance we have made, we have been told, “Back off,” because something is not absolutely perfect. She, I and many other Members think that this is a process of iterative steps forward, and the Government are doing a great job in that respect.
The final argument for putting such blocking on a statutory basis is the precedent for IP blocking in the case of copyright infringement under the Copyright, Designs and Patents Act 1988. It would seem perverse for the House to argue that it was legal to instruct people to block sites that infringe copyright, but not those that infringe a legal requirement for age verification. It would be quite wrong for us to suggest that child protection is less important than protecting the interests of often very large commercial businesses.
I have two other quick points to make about why the case for change is so compelling. The first is that the BBFC has said that it will focus primarily on offshore sites, which are the main source of much of this material. Of course, as we know, it will be very difficult to enforce fines outside the UK jurisdiction. Secondly, we know that many sites are not reliant purely on financial transactions coming through the sorts of sites discussed in the Bill, given that there are systems such as Bitcoin and other forms of revenue generation.
I am absolutely delighted that the Government have tabled new proposals. I will not press my new clause and I will support their measures wholeheartedly. However, I want to probe the Minister—perhaps he will answer this question in a moment—about who will actually enforce the Bill. My understanding is that the BBFC does not currently have the enforcement powers required by new clause 28, which was why many of us assumed that Ofcom would be the enforcer of choice, as was set out very explicitly by my neighbour, my hon. Friend the Member for North West Hampshire (Kit Malthouse). We would therefore be keen to hear who will actually enforce the Bill, because we know that, without robust enforcement, there will be little incentive for websites to implement age verification, despite these new powers, and I think almost the whole House will support me in saying that we want this to be a great success.
Calum Kerr
I stand to speak to new clauses 22 and 27, neither of which I think the Minister referred to—unless I slept through that bit. I hang on his every word normally, so I am sure that was not the case.
Before I do that, I would like to touch on a couple of other new clauses. It is a pleasure to follow the hon. Member for Devizes (Claire Perry). She and her many colleagues in the House have campaigned hard on this issue, and the Government’s move in new clause 28 is welcome. However, I would just quickly recount a story. When I was on the Bill Committee, I phoned home one night. Of course my wife said, “What have you been up to today?” I explained about access to under-age pornography, and she said, “Well, funnily enough, I came home today from work and found Robert”—he is seven years old—“looking at inappropriate content.” My heart sank. She said, “He was watching the third presidential debate,” and I can see where she was coming from. She said to him, “Robert, do you know what you are watching here?” He said, “Yes, I do.” She said, “Well, why are you watching that?” He said, “Because it’s important, and I have a friend at school called Donald.”
That brings me on to the concerns raised by the hon. Member for Cardiff West (Kevin Brennan), which we share. As we proceed down this route, it is important that these powers are a last resort, that they do not stop access to sites they were not intended to affect and that, as a result, we proceed with care. We should take sufficient time to look at the implications, and we should seek to avoid unintended consequences for ISPs and websites, while still developing a robust set of measures that stop young Robert accessing the content we really want him to avoid.
Earlier, we had mention of the importance of the method of verification and of the tool Yoti. I always pronounce it “yachty”, because I like yachty a loty, given that it means that databases are not built of what people are accessing, and individuals are protected. I commend those on the Labour Front Bench for some of their efforts to push these things further.
Let me quickly touch on two issues before going on to my own new clauses. On new clause 7, I am surprised by the Minister’s approach to mobile phone contracts. If he consulted Ofcom, it would tell him that it was highly supportive of measures such as a maximum bill level. It seems eminently sensible that when people sign up for a contract, they are asked, “Would you like to set a maximum amount?” I really cannot fathom why the Government would block that. I fully expect to revisit that sometime soon.
I would also ask the Minister to check some of the wording in terms of the ESN sites, which he said would be available to all providers. That is not my understanding. The ESN is provided by EE, but also by extended area network sites, and those are the sites that will be multi-platform, but they are only part of how the service will be provided, so perhaps the Minister will revisit and consider what he said there.
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), whose constituency name is as long as mine, is worried he may not get to speak, so I will mention his new clause 20, which is very similar to new clause 25, and provides for a constituent to cancel a contract if they do not have service.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
In some circumstances, a consumer is unable to get what they have paid for. For example, I had consumers in Fort Augustus who had to wait over four months to be reconnected to their mobile signal and were threatened with a £200 cancellation fee. Does my hon. Friend agree that that is flatly unacceptable and they should have an option to get out of these contracts?
Calum Kerr
I wholeheartedly agree with that excellent point. This is another common-sense measure that should be taken. I also welcome some of the other comments about linking it to auto-compensation so that it should be a case of either cancelling a contract or potentially—
Drew Hendry
I wonder whether my hon. Friend is surprised, as I am, although perhaps I should not be, that the Minister has refused to accept this, given that last year his predecessor said to me:
“The suggestion you make—that mobile customers ought to be able to leave their contracts if the service is unacceptable is a good one. Mobile customers should not be trapped in contracts if they have no effective signal and an unusable service.”
Calum Kerr
I thank my hon. Friend for that extra clarification. This is why we entered the Bill Committee in a spirit of naive optimism that our sensible new clauses could yet be accepted.
Calum Kerr
How we learned, indeed.
I now move on to my two new clauses. New clause 22 proposes that there should be an explicit power for structural separation of BT Openreach were that deemed necessary. We in this place know how critically important connectivity is, and I am sure that all right hon. and hon. Members welcomed, as I did, Ofcom’s digital communications review. I support its taking a fairly strong line on the measures that BT should take on access to ducts and poles, and on making a planning tool and other things more readily available, while retaining the option of structural separation. Indeed, the Secretary of State confirmed this on Second Reading. If structural separation is truly to be an option on the table, it is essential that Ofcom is confident that it can enforce it if it concludes that it is necessary.
The current situation is that Ofcom considers that it has the power under the EU framework directive to impose structural separation. Clearly, though, taking such a case to the EU Commission at a time when Brexit means Brexit is fraught with difficulty, especially considering that it is highly likely that BT would appeal any such move. It is also worth noting that BT has stated publicly that it believes there is no mechanism for structural separations of a telecoms company, and has even threatened 10 years of litigation and arguments. This Bill offers a simple way to remove any ambiguity around the issue, and that is what the new clause aims to do.
Unfortunately, owing to the processes of the House, I can press only one new clause in this group to a vote, so I will not press this one, much as I would like to. However, I encourage the Minister to revisit this measure and add it in, even though I still believe that the Ofcom strategy is right and that separation is the correct route only if combined with something else, such as a significant investment plan in Openreach from other providers who are currently making a lot of noise.
New clause 27 is about introducing a broadband voucher scheme as an alternative to the standard USO provision. Let me first say that I welcome, as I am sure we all do, anything that improves connectivity, but I have huge reservations about the approach being taken. I appreciate that, as the Government outlined in supplementary papers during the Bill’s progress, there is a flexible element to their design of the USO in terms of download speed, upload speed, latency and other aspects, but much is undecided. Although I disagree fundamentally with the 10-meg starting point, what really concerns me is the use of a universal service obligation. Pursuing this route pushes the Government into having to follow a very prescriptive process that will lead to a provider, or perhaps of couple of providers, being selected. It looks highly likely, as I think we all know, that it is likely to be BT. Sharon White confirmed before the DCMS Committee that BT is in pole position on this.
Drew Hendry
My hon. Friend is making an excellent point. Does he agree that the people who need the service should be able to choose the best option for them, and that in rural areas one size does not fit all?
Calum Kerr
I absolutely do agree. I will come on to that point later.
I would contrast the USO measure with last week’s announcements. We have heard the Government say that fibre is the future, but our record in this country on fibre-to-the-home, or fibre-to-the-premises, is pretty woeful. The broadband investment fund announced in a previous Budget had some money put into it, and hundreds of millions of pounds were committed to 5G trials and fibre backbone. All that is welcome, if slightly unambitious, but we have not seen anything specifically for rural areas. We are talking about a fibre and gigabit future in urban areas while telling rural areas that they should settle for 10 megs and a USO. That is not closing the digital divide—it is turning it into a gaping chasm of inequality. A badly implemented USO will not fix the issue but might, through legislation, cement this digital divide.
My new clause aims to address this issue. From the start, as I have looked at potential solutions, the one that I kept coming back to was a voucher alternative. At the Broadband World Forum, a representative from the Independent Networks Cooperative Association said that if we introduce a voucher scheme, we turn a universal service obligation into a universal service opportunity. In our constituencies we have highly motivated groups of people who will, yes, okay, maybe on day one, be happy with 10 megs because if they have been living with 1 meg it will be transformational, but quickly see that they are being left behind and be very unhappy about it. Although the Bill includes provision to revisit this, it does not specify when, and these people will be left further and further behind. The idea of a voucher scheme was endorsed by INCA chairman David Cullen, who said:
“The principle of a Universal Service Obligation is an outdated concept in a sector focused on significant growth and could well translate into a ‘ceiling’…a voucher scheme for premises could be far more effective.”
The Minister did not deal with this new clause in his opening remarks. I urge the Government to embrace the option of a voucher alternative to empower our rural communities, who, as I know from my own community, want to go further. They understand technology. They will put in fibre-to-the-home, providing a much faster solution. This is not a one-size-fits-all—
Matt Hancock
I did address this point. I said that the USO contained in the Bill will get high-speed broadband everywhere. Furthermore, a broadband voucher scheme does not require legislation. In fact, we have had one in the past without legislation. This new clause is therefore unnecessary.
Calum Kerr
I thank the Minister for that intervention. He makes a point that I forgot to make, which is that there is previous history in this area. Broadband Delivery UK managed a voucher scheme that was phenomenally successful. Perhaps I have become a cynic far too quickly in this place, but if the Government do not put this in the Bill, I do not believe it will happen. I will therefore press the new clause to a vote. We should ensure that as the Government say that fibre—
Matt Hancock
As an example of the fact that we can do this through non-legislative means, not only did we have such a scheme in the past, but at the autumn statement last week we announced that we are to consult on a new one. I think that that takes care of the concerns behind the new clause.
Calum Kerr
I thank the Minister for that positive news, but it does not take care of those concerns. I am seeking a specific alternative to the USO, so that my communities who want fibre to their home can have this foundational voucher that sets them on a path to something far more ambitious than what the Government propose. The Government say that fibre is the future. Guess what? My constituents want to be part of that future, too.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. We have about 15 minutes and quite a few Members wish to speak, so brevity would be fantastic.
Mr Whittingdale
I start by making it clear that I fully support the provisions in the Bill to require age verification to access pornographic sites. As I observed on Second Reading, it is just as well, since my name is on the front of the Bill.
I would like to introduce an element of caution. Unlike a lot of other material online that has been discussed—child pornography, racist material, hate speech, extremist encouragement and copyright breaches—we are talking here about legal content. Like it or not, the sites we are discussing are visited by millions and millions of people every day. They are some of the most popular sites on the entire internet.
As I have said, I support the idea of age verification to ensure that only those who can appropriately view this material do so, although there are concerns. I have yet to see exactly how age verification is going to work. We have seen examples of existing content access control systems through things such as credit cards, or mobile phones that have been verified as belonging to an adult. It is, in my view, asking a lot to ask people who want to access legal content to hand over their credit card numbers to pornographic website operators. The right hon. Member for Orkney and Shetland (Mr Carmichael) was absolutely right to flag up the data protection concerns about that. I hope that Ofcom will look very carefully at how the CAC systems work.
As I mentioned earlier, one of the main ways in which young people are now exposed to pornography is through social media such as Twitter, and I do not really see that the Bill will do anything to stop that happening. That is not to say that we should not take action against pornographic sites. The original Bill contained a number of quite significant enforcement measures, such as requiring payment providers, website hosting companies and advertisers to stop dealing with websites that had been identified as not complying with the law under the Bill. There are already signs that a number of the big providers are going to comply. MindGeek, which is probably the biggest operator, has said that it will introduce age verification systems, although it wanted others to do so as well. I hope that it will happen.
Mr Whittingdale
If my hon. Friend will forgive me, I am very conscious of the Deputy Speaker’s strictures.
I was not persuaded of the necessity of introducing ISP blocking. It represents a considerable infringement of the civil liberties of individuals who want to access material that, as everybody has recognised in this debate, they are perfectly entitled to access. At a time when we are very concerned about the growth of censorship online, and when certain countries would like to take this as a precedent for saying, “It is fine to block content that we do not particularly like,” I think that it is a dangerous road to go down. I hope that the measures originally in the Bill will prove sufficient, that operators will introduce age verification and that we will pause before taking the next step and introducing ISP blocking. To that extent, I rather hope that this Digital Economy Bill is like the Digital Economy Bill that we debated in 2010. That Bill provided for the Government to intervene and require ISP blocking, but the measure was never introduced.
Helen Goodman
I am pleased to take part in this debate, and I was pleased to put my name to new clause 1. I am extremely pleased to follow the right hon. Member for Maldon (Mr Whittingdale), and I am glad to see the new regime on the Government Front Bench, who have basically accepted new clause 1. The right hon. Gentleman’s argument that because something is legal and enjoyed by grown-ups, we should not have restrictions for children, is patently absurd.
Mr Whittingdale
I support age verification completely. I have said that I support age verification.
Helen Goodman
The right hon. Gentleman said that, but he also said that he thought that this was a difficult area, and one of the reasons why he thought so was that people enjoyed doing it. Grown-ups enjoy having sex and grown-ups enjoy drinking alcohol, but that does not mean that those things are okay for children.
My real purpose this evening is to speak to new clause 26, which I had considerable help from the National Deaf Children’s Society in preparing. The new clause is designed to protect from frequency interference those with hearing loss who have hearing aids, radio aids, cochlear implants and other hearing technologies. Ofcom is about to sell spectrum, and there is a concern that the part of the spectrum that it is going to sell is so close to the wavelength used by such technologies that interference will be caused.
The new clause would place a duty on Ofcom to carry out tests in advance of the sale of the radio frequencies to ensure that any interference is identified and made public and to take appropriate action. That action could take two forms: either Ofcom should not grant a wireless telegraphy licence unless action is taken to remove the risk of interference; or a fund should be established to cover the cost of replacing medical and hearing technology affected by interference. That is important for the 10 million people who suffer from hearing loss and the 45,000 deaf children in this country, and it will enable Ofcom to fulfil its duties under the Equality Act 2010.
The Minister has said that tests have been done and more tests will be done and that we will know what those tests come up with in April 2017, so everything is fine. That is not the view of the National Deaf Children’s Society, which is not confident about the way in which the tests will be carried out. It has undertaken considerable correspondence with the regulator, and there is still dispute about how the tests should be done and how the results should be interpreted. Even if the tests are done and the results published on this occasion, as the Minister suggested, what happens then? What if there is interference? Will the spectrum then not be auctioned off as the Government intend? Will there be some funding for people who have to have new hearing aids as a result? The Minister’s response, I am sorry to say, is not adequate.
Interference will be a problem for children who use radio aids in the classroom to help them to hear what their teachers are saying. Unlike grown-ups, they cannot easily guess what a person is saying, because they are hearing things for the first time. The tests done in 2014 found that someone with a mobile phone using the relevant frequency could interfere with a hearing aid 4 metres away. I know quite a lot about hearing aids, because my husband has terrible hearing and he has two hearing aids. If he goes to a party, he can hardly hear what other people are saying anyway, and if his hearing aids were interfered with by other people standing in the room, it would be a nightmare. I urge the Minister to be flexible and to look at the matter again.
Grant Shapps
I rise to support my new clause 25, on the ability of end-users to cancel mobile contracts. It is very similar to new clauses tabled by other hon. Members—indeed, on the last count, by hon. Members from four different parties. I am grateful to the Minister for saying that this will now be considered in the Green Paper that the Department for Business, Energy and Industrial Strategy will bring out next year. However, I want to point out that the idea that a 14-day cooling-off period after purchasing a phone is somehow sufficient for a contract lasting for two years is, frankly, completely inadequate. Some 60% of people now have contracts for two years, and there has been a 19% increase in the number of people with lengthy contracts during the past five or six years.
It in no way negates the problem to say that, if someone realises during the first 14 days they cannot get a signal, they can exchange their contract. What happens if they move or if their place of work moves and they are stuck with such a contract? This problem can actually be solved quite easily. All we need to do is to split out the cost of the device—on average, about £800—from the cost of the mobile contract for the phone and data elements. If we did that, the person could stay within the contract to buy the device, while being able to move to another operator that can provide a contract with the ability to access a signal for phone and data use.
My point is very simple. I think that the briefing on this is extremely misleading. I do not believe that Ofcom is likely to do anything about this in the next year or two. I thank the Minister for his advice that this will be considered in the Green Paper next year, because unless we get a bit more radical, people will be forced to pay hundreds of pounds for a service they quite simply never receive.
Hywel Williams (Arfon) (PC)
I would have liked to speak to new clauses 3, 14 and 21, but I will restrict myself to new clause 13. New clause 13 would introduce a statutory code of practice to improve the performance of social media platforms when dealing with incidents of online abuse that cross the criminal threshold. It would place an obligation on the Minister to issue a code of practice, which would cover the processes and quality of the services provided. Such matters are commonplace in complaints procedures that already exist throughout the public utilities sector.
The code of practice would also cover an industry-specific requirement to set and enforce appropriate privacy settings for minors. This would be drafted after consultation with the industry, the criminal justice system, charities and other key stakeholders. An extensive consultation with a number of a significant bodies would guarantee a comprehensive set of guidelines.
Technology is ever adapting, which is why subsection (4) of new clause 13 states:
“The relevant Minister may from time to time revise and re-issue the code of practice.”
As technology is ever adapting, it is right and proper that legislation protecting vulnerable people from predatory and unacceptable behaviour online should be updated to reflect the dynamic nature of the online world. The new clause would have allowed that. I would have talked about this matter extensively had there been the time, but I hope that the points I would have made will be taken up in another place.
Fiona Bruce (Congleton) (Con)
I am pleased to say that I will not press my amendment 2, but that I will support new clause 29. The new clause addresses the loophole that my amendment sought to address, and about which I spoke on Second Reading. I thank the Minister for listening and for acting by tabling the new clause.
The loophole is that, as established under the Communications Act 2003, the current law covering pornographic content online in the form of video on-demand only requires age verification for R18, not 18-rated, material when streamed from sites based within the UK. Without the new clause, the Bill would only deal with the provision of age verification for 18 and R18 video on-demand pornography streamed into this country from abroad.
New clause 29 will deal with the issue. The House has determined that it is not appropriate for under-18s to purchase videos that are 18-rated from a shop, and rightly so, so where the technology is available to apply similar protections online, it would be quite wrong not to use it. I am grateful to the Minister for tabling the new clause. Public opinion is very much with us on this issue. ComRes polling of 2,000 adults in Great Britain in July last year showed that 73% of people support age verification of any 18-rated DVDs shown online and that just 13% disagreed.
Mr Alistair Carmichael
I rise to echo some of the concerns that have already been expressed by the right hon. Member for Maldon (Mr Whittingdale) about new clause 28. I should say at the outset that, as the parent of two teenagers, I completely understand the motivation of those who have raised these concerns with the Government. I commend them for the way in which they have done so, and, indeed, I commend the Government for responding in the way they have. However, I fear that this is another occasion on which the Government are responding because, as we say, something must be done. I fear that we are in fact going down a road that will leave us exposed to the law of unintended consequences.
Madam Deputy Speaker (Natascha Engel)
Unfortunately, the hon. Gentleman will not get his one minute of speaking time.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to discuss the following: “personal data section 1(1)” “personal data breach section 24A(1)”
New clause 8—Responsibility for policy and funding of TV licence fee concessions—
“After section 365(5) of the Communications Act 2003 insert—
“(5A) It shall be the responsibility of the Secretary of State to—
(a) specify the conditions under which concessions are entitled, and
(b) provide the BBC with necessary funding to cover the cost of concessions,
and this responsibility shall not be delegated to any other body.”
This new clause seeks to enshrine in statute that it should be the responsibility of the Government to set the entitlement for any concessions and to cover the cost of such concession. This new clause will ensure the entitlement and cost of over-75s TV licences remain with the Government. It would need to be agreed with Clause 76 not standing part of the Bill.
New clause 17—PSB prominence—
“(1) The Communications Act 2003 is amended as follows.
(2) At the end of section 310(1) add “that satisfy the qualification criteria to be set by OFCOM in the code.”
(3) In section 310(2) leave out “OFCOM consider appropriate” and insert “required by OFCOM”.
(4) In section 310(4)(a) after “programmes” insert “, including on-demand programme services,”.
(5) In section 310(5)(a) after “service” insert “, including on-demand programme service,”.
(6) In section 310(8)(a) after “services” insert “, including on-demand programme services,”.
(7) In section 310(8)(b) after “services” insert “, including on-demand programme services.”
This new clause would modernise the PSB prominence regime, as recommended by Ofcom in its 2015 PSB Review. This proposal would extend the provisions in the Communications Act 2003 which currently only apply to traditional public service television channels and menus to on-demand services.
New clause 18—Listed events qualifying criteria—
“(1) The Broadcasting Act 1996 is amended as follows.
(2) Omit section 98(2)(b) and insert—
“(b) that the service has been watched by at least 90 per cent. of citizens in the United Kingdom in the course of the preceding calendar year.”
(3) After section 98(2) insert—
“(2A) The Secretary of State may by Order amend section (2)(b) by substituting a different percentage for any percentage for the time being specified there.
(2B) No Order under subsection (2A) shall be made unless a draft of the Order has been laid before and approved by a resolution of each House of Parliament.””
This new clause seeks to future-proof the listed events regime. This replaces the criterion on the capability of ‘receive’ a channel with an alternative based on its actual usage over the period of a year, lowers the threshold from 95% to 90%, and proposes delegating powers to the SoS to amend the 90% threshold.
New clause 24—Review of sale of counterfeit electrical appliances on the internet—
‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a review of the sale on the internet of counterfeit electrical appliances and shall lay the report of the review before each House of Parliament.
(2) The review under subsection (1) shall consider whether operators of trading websites that allow individual sellers to use those websites to sell electrical items should be obliged to report to the police and trading standards any instances of the selling of counterfeit electrical appliances during the course of their business of trading.”
New clause 33—Report of cost to UK economy of counterfeit electrical goods on the internet—
‘(1) Within six months of this Act coming into force, the Secretary of State shall prepare and publish a report on the cost to the UK economy of counterfeit electrical goods on the internet and shall lay a copy of the report before Parliament.
(2) The report under subsection (1) shall include an assessment of—
(a) the amount of counterfeit electrical goods being imported into the United Kingdom,
(b) the efficacy of the 1994 Plugs and Sockets regulations, and
(c) the amounts of counterfeit electrical good being sold on trading websites on the internet.”
New clause 34—Review of impact of digital platforms on media advertising—
‘(1) Within 12 months of this Act coming into force, Ofcom shall conduct a review of the impact of digital platforms on media advertising and the sustainability of the UK media.
(2) Ofcom shall conduct another review on the matters under subsection (1) within five years of the publication of the first review, and within every five years thereafter.
(3) The Secretary of State must lay a copy of the report of any review in this section before Parliament.”
Government amendments 20 to 22.
New clause 15—Power to provide for a code of practice related to copyright infringement—
“(1) The Secretary of State may by regulations make provision for a search engine to be required to adopt a code of practice concerning copyright infringement that complies with criteria specified in the regulations.
(2) The regulations may provide that if a search engine fails to adopt such a code of practice, any code of practice that is approved for the purposes of that search engine by the Secretary of State, or by a person designated by the Secretary of State, has effect as a code of practice adopted by the search engine.
(3) The Secretary of State may by regulations make provision—
(a) for the investigation and determination of disputes about a search engine’s compliance with its code of practice,
(b) for the appointment of a regulator to review and report to the Secretary of State on—
(i) the codes of practice adopted by search engines, and
(ii) compliance with the codes of practice;
(c) for the consequences of a failure by a specified search engine to adopt or comply with a code of practice including financial penalties or other sanctions.
(4) Regulations made under this section—
(a) may make provision that applies only in respect of search engines of a particular description, or only in respect of activities of a particular description;
(b) may make incidental, supplementary or consequential provision;
(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”
This new clause would amend the Bill to present an opportunity for the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites. There is an absence of a specific provision in the Bill to achieve this.
New clause 16—E-book lending—
“In section 43(2) of the Digital Economy Act 2010, leave out from “limited time” to “and loan.”
This new clause aims to extend public lending rights to remote offsite e-book lending.
New clause 30—Devices or services that infringe copyright—
“(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In section 107(1)(d)(ii) after “offers” insert “, advertises”.
(3) After section 107(1)(d)(iv) insert—
(v) installs, maintains or replaces, or
(ii) otherwise promotes by means of commercial communications, or”
(4) In section 107(1)(e) after “article” insert “, device, product or component”.
(5) In section 107(1)(e) after “work” insert “or which is, and which he knows or has reason to believe is, primarily designed, produced, adapted or otherwise used in a manner described in this section whether alone or in conjunction with another article, device, product, component, or service supplied by or with the knowledge of the same person for the purpose of enabling or facilitating the infringement of copyright”.”
This new clause allows the Government to fulfil its commitment in the IPO’s Enforcement Strategy to ensure that UK business and rights holders have the necessary legal means to protect their IP. It brings in language to cover the supply of IPTV boxes clearly being marketed or sold for the purpose of enabling or facilitating copyright infringement, recognising that many devices may not, themselves, infringe copyright, but are supplied in conjunction with information which enables users to infringe copyright.
New clause 31—Offence to use digital ticket purchasing software to purchase excessive number of tickets—
“(1) A person commits an offence if he or she utilises digital ticket purchasing software to purchase tickets over and above the number permitted in the condition of sale.
(2) A person commits an offence if he or she knowingly resells or offers to resell, or allows to be resold or offered for resale on a secondary ticketing facility, a ticket that the person knows, or could reasonably suspect, was obtained using digital ticket purchasing software and was acting in the course of a business.
(3) For the purposes of subsection (2) a person shall be treated as acting in the course of a business if he or she does anything as a result of which he makes a profit or aims to make a profit.
(4) A person guilty of an offence under this section shall be liable on summary conviction to—
(a) imprisonment for a period not exceeding 51 weeks,
(b) a fine not exceeding level 5 on the standard scale, or
(c) both.
(5) In this section—
(a) “digital ticket purchasing software” means any machine, device, computer programme or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets.
(b) “retail ticket purchasing platform” shall mean a retail ticket purchasing website, application, phone system, or other technology platform used to sell tickets.
(6) Subsections (1) and (2) shall apply in respect of anything done whether in the United Kingdom or elsewhere.”
This new clause creates an offence to use digital ticket purchasing software to purchase tickets for an event over and above the number permitted in the condition of sale. It also creates an offence to knowingly resell tickets using such software.
New clause 5—Personal data breaches—
“(1) The Data Protection Act 1998 is amended as follows.
(2) After section 24 insert—
“24A Personal data breaches: notification to the Commissioner
(1) In this section, section 24B and section 24C “personal data breach” means unauthorised or unlawful processing of personal data or accidental loss or destruction of, or damage to, personal data.
(2) Subject to subsections (3), (4)(c) and (4)(d), if a personal data breach occurs, the data controller in respect of the personal data concerned in that breach shall, without undue delay, notify the breach to the Commissioner.
(3) The notification referred to in subsection (2) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.
(4) The Secretary of State may by regulations—
(a) prescribe matters which a notification under subsection (2) must contain;
(b) prescribe the period within which, following detection of a personal data breach, a notification under subsection (2) must be given;
(c) provide that subsection (2) shall not apply to certain data controllers;
(d) provide that subsection (2) shall not apply to personal data breaches of a particular description or descriptions.
24B Personal data breaches: notification to the data subject
(1) Subject to subsections (2), (3), (4), (6)(b) and (6)(c), if a personal data breach is likely to adversely affect the personal data or privacy of a data subject, the data controller in respect of the personal data concerned in that breach shall also, without undue delay, notify the breach to the data subject concerned, insofar as it is reasonably practicable to do so.
(2) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.
(3) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from section 7(1).
(4) The notification referred to in subsection (1) is not required if the data controller has demonstrated, to the satisfaction of the Commissioner—
(a) that the data controller has implemented appropriate measures which render the data unintelligible to any person who is not authorised to access it; and
(b) that those measures were applied to the data concerned in that personal data breach.
(5) If the data controller has not notified the data subject in compliance with subsection (1), the Commissioner may, having considered the likely adverse effects of the personal data breach, require the data controller to do so.
(6) The Secretary of State may by regulations—
(a) prescribe matters which a notification under subsection (1) must contain;
(b) provide that subsection (1) shall not apply to certain data controllers;
(c) provide that subsection (1) shall not apply to personal data breaches of a particular description or descriptions.
24C Personal data breaches: audit
(1) Data controllers shall maintain an inventory of personal data breaches comprising—
(a) the facts surrounding the breach;
(b) the effects of that breach; and
(c) remedial action taken
which shall be sufficient to enable the Commissioner to verify compliance with the provisions of sections 24A and 24B. The inventory shall only include information necessary for this purpose.
(2) The Commissioner may audit the compliance of data controllers with the provisions of sections 24A, 24B and 24C(1).
(3) In section 40 (Enforcement notices)—
(a) in subsection (1)—
(i) after “data protection principles,” insert “or section 24A, 24B or 24C”;
(ii) for “principle or principles” substitute “principle, principles, section or sections”;
(b) in subsection 6(a) after “principles” insert “or the section or sections”.
(4) In section 41 (Cancellation of enforcement notice”)—
(a) in subsection (1) after “principles” insert “or the section or sections”;
(b) in subsection (2) after “principles” insert “or the section or sections”.
(5) In section 41A (Assessment notices)—
(a) in subsection (1) after “data protection principles” insert “or section 24A, 24B or 24C”;
(b) in subsection (10)(b) after “data protection principles” insert “or section 24A, 24B or 24C”.
(6) In section 41C (Code of practice about assessment notices)—
(a) in subsection (4)(a) after “principles” insert “and sections 24A, 24B and 24C”;
(b) in subsection (4)(b) after “principles” insert “or sections”.
(7) In section 43 (Information notices)—
(a) in subsection 43(1)—
(i) after “data protection principles” insert “or section 24A, 24B or 24C”;
(ii) after “the principles” insert “or those sections”;
(b) in subsection 43(2)(b) after “principles” insert “or section 24A, 24B or 24C”.
(8) In section 55A (Power of Commissioner to impose monetary penalty)—
(a) after subsection (1) insert—
(1A) The Commissioner may also serve a data controller with a monetary penalty notice if the Commissioner is satisfied that there has been a serious contravention of section 24A, 24B or 24C by the data controller.”;
(b) in subsection (3A) after “subsection (1)” insert “or (1A)”;
(c) in subsection (4) omit “determined by the Commissioner and”;
(d) in subsection (5)—
(i) after “The amount” insert “specified in a monetary penalty notice served under subsection (1) shall be”;
(ii) after “Commissioner” insert “and”;
(e) after subsection (5) insert—
(5A) The amount specified in a monetary penalty notice served under subsection (1A) shall be £1,000.
(5B) The Secretary of State may by regulations amend subsection (5A) to change the amount specified therein.”
(9) In section 55B (Monetary penalty notices: procedural rights)—
(a) in subsection (3)(a) omit “and”;
(b) after subsection (3)(a) insert—
“(aa) specify the provision of this Act of which the Commissioner is satisfied there has been a serious contravention, and”;
(c) after subsection (3) insert—
(3A) A data controller may discharge liability for a monetary penalty in respect of a contravention of section 24A, 24B or 24C if he pays to the Commissioner the amount of £800 before the time within which the data controller may make representations to the Commissioner has expired.
(3B) A notice of intent served in respect of a contravention of section 24A, 24B or 24C must include a statement informing the data controller of the opportunity to discharge liability for the monetary penalty.
(3C) The Secretary of State may by regulations amend subsection (3A) to change the amount specified therein, save that the amount specified in subsection (3A) must be less than the amount specified in section 55A(5A).”;
(d) in subsection (5) after “served” insert “under section 55A(1)”;
(e) after subsection (5) insert—
(5A) A person on whom a monetary penalty notice is served under section 55A(1A) may appeal to the Tribunal against the issue of the monetary penalty notice.”
(10) In section 55C(2)(b) (Guidance about monetary penalty notices) at the end insert “specified in a monetary penalty notice served under section 55A(1)”.
(11) In section 67 (Orders, regulations and rules)—
(a) in subsection (4)—
(i) after “order” insert “or regulations”;
(ii) after “section 22(1),” insert “section 24A(4)(c) or (d), 24B(6)(b) or (c),”;
(b) in subsection (5)—
(i) after subsection (c) insert “(ca) regulations under section 24A(4)(a) or (b) or section 24B(6)(a),”;
(ii) for “(ca) regulations under section 55A(5) or (7) or 55B(3)(b),” substitute “(cb) regulations under section 55A(5), (5B) or (7) or 55B(3)(b) or (3C),”.
(12) In section 71 (Index of defined expressions) after
insert—
(13) In paragraph 1 of Schedule 9—
(a) after paragraph 1(1)(a) insert—
“(aa) that a data controller has contravened or is contravening any provision of section 24A, 24B or 24C, or”;
(b) in paragraph 1(1B) after “principles” insert “or section 24A, 24B or 24C”;
(c) in paragraph (3)(d)(ii) after “principles” insert “or section 24A, 24B or 24C”;
(d) in paragraph (3)(f) after “principles” insert “or section 24A, 24B or 24C.””
This new clause seeks to create a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of a breach of personal data security. The proposed obligation is similar to that imposed on electronic communication service providers by the Privacy and Electronic Communications (EC Directive) Regulations 2003.
New clause 11—Public register of information disclosures—
“(1) No disclosure of information by a public authority under Part 5 shall be lawful unless detailed by an entry in a public register.
(2) Any entry made in a public register under subsection (1) shall be disclosed to another person only for the purposes set out in this Part.
(3) Each entry in the register must contain, or include information on—
(a) the uniform resource locator of the entry,
(b) the purpose of the disclosure,
(c) the specific information to be disclosed,
(d) the data controllers and data processors involved in the sharing of the information,
(e) any exchange of letters between the data controllers on the disclosure,
(f) any other information deemed relevant.
(4) In this section, “uniform resource locator” means a standardised naming convention for entries made in a public register.”
New clause 12—Review of the collection and use of data by government and commercial bodies—
“(1) Within six months of this Act coming into force, the Secretary of State shall commission an independent review of the collection and use of data by government and commercial bodies and shall lay the report of the review before each House of Parliament.
(2) The review under subsection (1) shall consider—
(a) the increasing use of big data analytics and the privacy risks associated with big data;
(b) the adequacy of current rules and regulations on data ownership;
(c) the collection and use of administrative data; and
(d) any other matters the Secretary of State considers appropriate.
(3) In conducting the review, the designated independent reviewer must consult—
(a) specialists in big data, data ownership and administrative data,
(b) those who campaign for citizens’ rights in relation to privacy, personal information and data protection,
(c) any other persons and organisations the reviewer considers appropriate.
(4) In this section “big data analytics” means the process of examining large datasets to uncover hidden patterns, unknown correlations, market trends, customer preferences and other useful business information.”
New clause 19—Disclosure of information by local authorities in relation to free school meals—
“(1) A “specified objective” under section 29(6) also refers to the disclosure of information held by a local authority to a relevant school to enable them to carry out the duty in Section 512 of the Education Act 1996 to provide free school meals to eligible children.
(2) For the purposes of this section, “information” refers to the disclosure of information to a relevant school on the names of—
(a) pupils who live within a household that claims council tax benefit;
(b) pupils who live within a household that claims housing benefit;
(c) pupils who live within a household that claims any other benefits administered by the local authority.
(3) The objective under section (1) may be specified by regulations only if it complies with the conditions under subsection (4).
(4) That condition is that the disclosure is for the purposes of assisting children eligible for free school meals to have access to the entitlement under section 512 of the Education Act 1996.
(5) Under subsection (1) local education authority must provide a relevant school with sufficient information collected to enable them to carry out the duty in subsection 3.
(6) For the purposes of this Act, a school is “relevant” to a local education authority if that school has on its pupil roll a qualifying child resident within that local education authority’s area.
(7) For the purposes of this Act, a “school” is any local authority maintained school, free school or academy, or voluntary-sector alternative provision working with the local authority.
(8) Local education authorities must provide the means for a parent or guardian of a qualifying child to—
(a) opt out of the arrangements envisaged in sections 1 to 4.
(b) consider opting in to free school meals at the beginning of each academic year, having previously chosen to opt out.
(9) Local education authorities and schools must take all reasonable steps to preserve the confidentiality and right to privacy of qualifying children and their parents or guardians in respect of the information, information-sharing and administrative arrangements provided.”
New clause 23—Provision of information on Government website in Welsh language—
“(1) Subject to subsection (2), services provided on the internet by the Government must be provided in the Welsh language in addition to English.
(2) Subsection (2) only applies to services provided on the internet by the Government relating to subjects not listed under Part 1 of Schedule 7 to the Government of Wales Act 2006.
(3) In this section “services provided on the internet by the Government” means—
(a) information on the www.gov.uk website, or
(b) interactive services on the www.gov.uk website.”
Amendment 3, in clause 32, page 31, line 30, at end insert—
“(8A) In its application to a public authority with functions relating to the provision of health services, section 29 does not authorise the disclosure of identifiable health information held by the authority in connection with such functions.”
This amendment is to ensure that there are adequate protections for the confidential health information of patients and to prevent the disclosure of identifiable health information.
Government amendments 4 to 11.
Amendment 25, in clause 49, page 48, line 6, at end insert—
“(g) for the purposes of journalistic publication or broadcast transmission in the public interest.”
Amendment 26, in clause 50, page 49, at end insert—
“(j) for the purposes of journalistic publication or broadcast transmission in the public interest.”
Government amendments 12 to 19.
Kevin Brennan
We have 12 new clauses and amendments—and one that we withdrew so that the Select Committee could table it—in this group. New clause 6 stands in my name and those of my hon. Friends the Members for Tooting (Dr Allin-Khan) and for Sheffield, Heeley (Louise Haigh). As the Minister has done many times, I pay tribute to the latter, who unfortunately is not here because she is part of a pre-planned parliamentary delegation. She did a tremendous job in Committee and has been praised universally on both sides of the House for her efforts.
On new clause 6, although subtitling is at or near 100% across public service broadcasters, three quarters of the UK’s 90 on-demand providers still offer no subtitling at all, despite the fact that according to Ofcom nearly one in five of the UK population use them. The principle behind the Communications Act 2003 recognised that those with sensory loss should not be denied access to the information services that many of us take for granted, but those with sensory loss cannot keep up with changing technology. In July 2013, the then Minister for the Digital Economy, the right hon. Member for Wantage (Mr Vaizey), acknowledged this, arguing in the Department’s 2013 document, “Connectivity, Content and Consumers”, that if
“progress isn’t being made in three years’ time…we will consider legislation.”
Well, here we are, three years later, with an appropriate legislative vehicle right here in front of us, and the Government are failing to act.
We wonder why. There were strong rumblings that the Government were planning to act, and we were checking the amendment paper every day, anticipating that they would, so it is a bit odd that we, the Opposition, have to bring forward this new clause, which takes on the Government’s concerns, when it is supposed to be the other way around—the Government taking on the concerns of others in the House during consideration of a Bill. The new clause would update the existing regulatory regime and apply it to on-demand providers. It is clearly time the Government acted to reflect the digital world in which we live and allow those with sensory loss to play a full and active part in it. The Government should accept the new clause, and I look forward to the Minister telling us that he will.
Rob Marris
Does my hon. Friend find it shocking that just one of the 21 on-demand services offered through Virgin TiVo—we discussed Virgin’s telephony and telecommunications services under new clause 27—is subtitled? That is less than 5%. Is that not a prime example of why we need new clause 6?
Kevin Brennan
It is a prime example. I might even have had it in my notes, before I truncated them considerably in order to make some progress. My hon. Friend is absolutely right to point it out.
New clause 8 opposes the way the Government are dealing with the free television licences for over-75s. The continuation of free licences for over-75s was a promise made in the Conservative party’s manifesto, which many over-75s voted for in good faith, but now, just 16 months later, the Government are legislating to do away with that pledge in all but name, on the pretence that it should now be for the BBC to decide who gets a free television licence. I am afraid that the promise in the manifesto was unequivocal. It said:
“We will maintain all the current pensioner benefits including Winter Fuel Payments, free bus passes, free prescriptions and TV licences”.
Notice the list of Labour achievements in that quote, Madam Deputy Speaker! It said “maintain” not “play pass the policy parcel”, which is what the Government are doing. They are legislating to hand over responsibility to a body that cannot afford to maintain the entitlement.
Kelvin Hopkins (Luton North) (Lab)
Does my hon. Friend accept that this is a political decision and that it is wrong to compromise the BBC in this way by drawing it into politics?
Kevin Brennan
Far be it for me to accuse the Government of taking political decisions—this is the House of Commons after all—but it is nevertheless a broken promise, masquerading as an administrative change. I think that is the point my hon. Friend is making. If he were trying to imply that this were a craven approach, he would be absolutely right about that, too.
I am sure that the Minister will argue that, in fact, the BBC has somehow been rewarded handsomely in the charter renewal process, and that the BBC will decide its funding policy for over-75s set within that context. He will claim support from the BBC for what the Government are doing, because the BBC has said that it is in favour of it. It is the kind of support given when someone has a loaded gun placed against their head and is asked for that support. There is a reason why the BBC has agreed to take over control of setting entitlement for over-75 licences: it knows it cannot afford it at its current rate. The BBC should never have been given the responsibility for delivering on a Conservative party manifesto pledge.
Kelvin Hopkins
I apologise for interrupting my hon. Friend’s flow once again, but the BBC was given this short straw at the same time as its future was being renegotiated. The BBC was under duress and surely had to accept this move.
Kevin Brennan
Indeed. That was my reason for using the metaphor of holding a loaded gun to the BBC’s head. Opposition Members do not consider that the deal was negotiated in good faith. As my hon. Friend’s point suggests, it amounted to little other than blackmail.
Sir Edward Leigh (Gainsborough) (Con)
I apologise for being controversial—the hon. Gentleman will not agree with me—but this is rather like the triple lock. The fact is that many pensioners over the age of 75 are perfectly capable of paying a licence fee, so perhaps we should concentrate resources on people who really cannot afford to pay, rather than piling up more and more benefits to pensioners. I know that is controversial, but it is a point that needs to be made.
Kevin Brennan
It is an entirely legitimate point of view, but that is not what is under discussion. We are discussing who should take that decision. We say that the decision should be taken by this House and that the Government should be brave enough to face the electorate and say that they have decided that the policy is not, as the hon. Gentleman suggests, a priority. Instead of that, however, the Government are pretending that they are somehow keeping their pledge while transferring responsibility to an unaccountable body. The hon. Gentleman has been a powerful advocate in his long career on behalf of democracy and this House and against that kind of transfer of responsibility from this House and the duly elected Government to unelected quangos or other bodies. That is why we tabled the new clause, which I hope the hon. Gentleman will support for that reason.
It is a point of principle for us. We cannot accept a policy that takes responsibility for even a small part of our social security system and gives it to an organisation with no direct accountability to the electorate. If the new clause fails, Labour will do everything in its power to make it clear to those millions of over-75s exactly what is going on. It is not the BBC that will be reducing or taking away their entitlement to TV licences; it is the Government who have knowingly engineered the change. If we look at the Red Book for Budget 2016, we see that it is absolutely clear how much money the Government intend to save from this measure: in 2018-19, £185 million; in 2019-20, £425 million; and in 2020-21, £725 million.
Our new clause 17 aims to modernise the public service broadcaster regime, as recommended by Ofcom. Existing law would be extended to include on-demand channels and menus. The broadcasting landscape has changed significantly due to the emergence of new technologies such as the BBC iPlayer, the iPad and digital TV switchover, so although the Communications Act 2003 ensured PSB prominence on broadcast TV, it does not apply to connected TV sets or to catch-up services.
Connected TVs, such as Sky Q box, move the TV guide, where PSBs occupy the most prominent positions, so that it is increasingly hard to find. Seven out of 10 of the public say that they want the BBC channels at the top of the channel listings and that they want BBC iPlayer and the on-demand service there too. Among connected TV users, people are 10 times more likely to prefer to see the TV guide than the platform operators’ recommendations first. This holds true in focus groups, where consumers gave feedback on the obscuring of the TV guide. One said:
“I absolutely love Sky Q, but if there were one thing I would change, it would be where the TV guide is…it’s almost tucked away somewhere on my screen. You expect technological advances to make life easier, but this is making it harder…it’s an extra step.”
Essentially, the public are paying towards PSB content that is becoming increasingly hard to find.
The Minister argued in Committee that Ofcom should adapt the code in line with technological developments, but Ofcom itself has called for a legislative change. The point was made that the TV guide was of declining importance due to the increasing integration of TV and internet services. However, nine out of those who watch live or on-demand use the electronic programme guide to access TV programmes. Our new clause builds on the current system, with a strong duty placed on Ofcom to provide clearer guidelines than at present. The industry should then apply these as appropriate to their platforms. If the Government really believe in public service broadcasting—and they say they do—they should support our new clause 17.
New clause 18 deals with the listed sporting events regime, which ensures that events such as the Olympics are freely and widely available. Unfortunately, that is at risk, so our new clause would help to safeguard listed events into the future. Some 45 million people in the UK watched the Rio 2016 Olympics, while millions watched the Euros—including Wales’s stunning run to the semi-final this summer. Listed events are responsible for 5% of sports output but 60% of sports viewing in this country. The current law specifies that 95% of the population must be reached by a channel for it to acquire listed events rights. Due to the proliferation of alternative media devices, PSBs believe that by the end of this Parliament no TV channel will, in fact, meet that 95% reach criterion.
New clause 18 offers a solution. There is a crucial legal difference between receiving a channel and watching it. Replacing the criterion on the capability to “receive” a channel with the alternative that it “has been watched”, based on its actual uses over the past year, would capture factors such as continuous free-to-air availability, popularity and audience awareness. The new clause would lower the threshold from 95% to 90%, and give the Secretary of State powers to amend it so that the law is flexible enough to reflect consumption trends and change in new and unpredictable ways.
Let me deal now with new clause 15. Over the past few years, there has been a series of round-table discussions with search engines, including Google, Bing and Yahoo, and rights holders including the British Phonographic Industry, the Music Publishers Association and the Alliance for Intellectual Property. The various parties have been trying to negotiate a code of practice to tackle copyright infringement whereby search engines would do more to demote sites that carry pirate content. These discussions are dragging on and, years later, the search engines and rights holders are yet to come to an agreement. Our new clause would provide the Secretary of State with the powers to legislate for a code of practice to be agreed if the next rounds of talks fail to come to a conclusion.
Piracy continues to weaken the UK recorded music industry. For example, academic evidence based on average retail prices and Ofcom’s tracker survey indicate a loss of between £150 million and £300 million a year. Our new clause would give the Secretary of State a backstop power to legislate that a code of practice be agreed. I think the Government should accept that now is the time for action in this sphere.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Does my hon. Friend agree that, given that this issue featured in the Conservative manifesto, it would be fantastic if the Government came forward to support the new clause, so that they could implement a promise they made at the last general election?
Kevin Brennan
My hon. Friend anticipates something that I was intending to say, but did not say. She is absolutely correct to point that out. The figures clearly show that this measure is not being implemented, even though the Minister claimed in Committee that it was.
New clause 16 is about public lending right. Hon. Members might be surprised to know that it does not extend to e-books where they are borrowed remotely, which by their very nature, of course, they are. It is ludicrous that 2.3 million remote loans were made in the last year, none of which were counted for public lending right. The method by which a book is borrowed should not determine whether authors and illustrators receive fair payment for their work. That predicament has been significantly worsened by the closure of public libraries that has occurred on the Government’s watch as a result of its failed—as we now know—austerity policies. The new clause would close the loophole, and it is supported by the Society of Authors, the Association of Illustrators, and the Authors’ Licensing and Collecting Society.
Nick Smith (Blaenau Gwent) (Lab)
Does my hon. Friend agree that true fans do not stand a chance nowadays, because touts have evolved from blokes in sheepskin jackets lurking outside stadiums trying to sell spare tickets, to IT crooks who harvest thousands of tickets just seconds after they go on sale?
Kevin Brennan
I do agree with that. In Committee, the Minister told us a tear-jerking story about his efforts to buy tickets to a Paul Simon concert at the Royal Albert Hall. We look forward to a review when he rises to speak. At the moment he is chewing, so it is “The Sound of Silence”.
Luciana Berger
I look forward to hearing my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) expand on this point in more detail. Is it not time for us finally to do something about ticket-touting, on behalf of all the fans in the country who just want to enjoy music? I have not been a Member of Parliament for all that long, but we have been talking about this issue for the past six years. I see that tickets for tomorrow’s Justin Bieber concert are on sale for more than £1,000. Can we not do something about that, and ensure that everyone in the country can enjoy music?
Kevin Brennan
My hon. Friend makes her point passionately. I pay tribute to my hon. Friend the Member for Washington and Sunderland West, and I hope that we can play a part in a good result for her today when the Minister gives way on this point and accepts the cross-party new clause tabled by the Select Committee. My hon. Friend drew attention, in correspondence with us, to an analogy that was sent to her by someone who pointed out that the ticket-tout approach was nothing more or less than a protection racket. The bad guys create a problem, and then go around charging everyone else for solving it. The new clause would acknowledge ticket touting for what it really is: criminal exploitation. I hope that the Government will listen to Members on both sides of the House and do everything in their power to prevent and prosecute such behaviour.
Rob Marris
The Bill might not be the vehicle with which to do it, but another thing that needs to be tackled is the absolute scandal of administration fees, or booking fees. When one tries to buy a ticket, one pays 50 quid for the ticket and another 20 quid for the booking; the price should be £70 upfront.
Kevin Brennan
I entirely understand my hon. Friend’s point, but I shall stick strictly to the new clauses that we have tabled.
New clause 5 would establish a duty for companies to report any breach of cyber-security and to inform customers when possible. Just 28% of such attacks are reported to the police. We have welcomed the Minister’s announcement that he will implement the general data protection regulation in full, but even the GDPR provides extensive caveats, and it falls a long way short of the comprehensive regulatory system that the United Kingdom needs. Our new clause would impose a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of a breach of personal data security.
New clause 11 provides for a public register of shared data. It would require all disclosures of data between data controllers to be logged in a public register giving, at the very least, a title, a description and a web page so that people can find out more. If there is transparency through a register, there can be an informed conversation about whether a particular data disclosure will solve the problem that it claims to solve. There has been data-sharing to “prevent fraud” for decades, and there has been a complete absence of audited and accurate results from that work. With additional powers come additional responsibilities. The argument that because current data-sharing has not prevented fraud there should be more data-sharing could be described as doing the same thing over and over again and expecting a different result. While part 5 of the Bill will remain a concern—I am sure that our colleagues in the other place will examine it—we believe that the Government should accept new clause 11 and demonstrate that they understand the importance of transparency in data-sharing.
Let me now deal with new clause 12, which concerns a review of data collection. Data are the currency of the digital economy but, in yet another missed opportunity, the Bill does absolutely nothing to address people’s rights over their data, which are increasingly a cause for concern. It is time that the Government acted, because consumer mistrust in the digital economy and in the use of our data is becoming corrosive. That is why we are calling for a royal commission to examine the use of our personal data in the commercial sector, to establish the extent of that practice, and to draw up a series of rights on which consumers and customers can rely in the digital age. The new clause would require the Government to commission an independent review of information and big data, and data administration, which would seek to establish the direction in which the stated policy intent of Government and big business—for individuals to have control over their own data—is heading.
Many providers are in the market for data, and there are many ways beyond our imagination in which our data can be modified. However, it will only take one exposé on “Dispatches” or a Mail on Sunday scandal to force the Government to react, and it is likely to overreact, as all Governments do. The Bill provides an excellent opportunity for the issues to be viewed in the cold light of day rather than in the heat of reaction, and I strongly urge the Ministers to support new clause 12.
New clause 19 is about free school meals. Many families who are eligible currently do not claim them. The new clause would explicitly provide for councils to share benefit data with schools, thus allowing eligible children to be automatically enrolled to receive free school meals rather than having to apply.
Graham Jones (Hyndburn) (Lab)
The issue of free school meals was raised in Committee. Does my hon. Friend agree that two-tier authorities consisting of a shire and a district should be able to share data seamlessly and automatically, as unitary authorities do in metropolitan areas?
Kevin Brennan
I do agree. My hon. Friend made that point brilliantly in Committee, and I recommend that people read his lengthier remarks if they want to find out more about that issue.
Frank Field (Birkenhead) (Lab)
I am grateful for the new clause because it follows a private Member’s Bill that I introduced. Following Liverpool’s example, Wirral carried out automatic registration for free school dinners and the school premium, and that resulted in £750,000 more coming into the area to target those poorest families.
Kevin Brennan
My right hon. Friend is correct. I was about to say that I wanted to praise him and, again, my hon. Friend the Member for Washington and Sunderland West for their work on that matter. We hope that the Government will support this sensible new clause.
I turn to amendment 3—our final amendment, you will be glad to know, Madam Deputy Speaker, in the group. In the aftermath of the care.data scandal, it is vital that patients are able to have trust in the confidential nature of the health service and to feel confident in sharing sensitive information with health care professionals. Part 5 of the Bill—clause 29 in particular—appears to permit an unprecedented sharing of confidential information. We are extremely concerned that if the information-sharing powers cover information held by bodies providing healthcare services, patient confidentiality could be undermined.
Amendment 3 would ensure that identifiable information held by healthcare bodies in connection with their functions would be exempt from the information-sharing powers in clause 29, thereby upholding current protections for confidentiality. We believe that the Bill should be amended to ensure that patient confidentiality is protected by clarifying that the Bill does not give power to public authorities to disclose any identifiable healthcare information. That would bring clause 29 into line with clause 56, which addresses information sharing specifically for research purposes. That was amended by the Government in Committee to prevent any erosion of the status quo for sharing healthcare data for research purposes. We believe, as does the British Medical Association, that similar protections should be extended to cover part 5. I look forward to the Minister accepting that amendment, along with all the other measures in the group.
Sir Peter Bottomley (Worthing West) (Con)
This may have come up in Committee, and it might come up later on Report: the concern of the National Union of Journalists about journalists not being mentioned on private data being shared. Is that coming up now, or does it come up later?
Kevin Brennan
The hon. Gentleman might have missed it, but we have already had Second Reading and Committee stage, and we are now on Report, so that matter is likely to come up in the House of Lords.
Kevin Brennan
Sorry, I forgot that my hon. Friend’s amendment is in this group.
Having spoken on the amendments that we have tabled, rather than anyone else’s, I will sit down.
Mr Whittingdale
I will resist the temptation to be drawn by the hon. Member for Cardiff West (Kevin Brennan) into discussing his new clause 8 covering the funding of free television licences. We have already debated the issue at some length. Instead, in the spirit of consensus, I would like to concentrate on some of his other amendments, with which I have greater sympathy.
The first is new clause 15. On Second Reading, we discussed complaints by the creative industries that, when content is sought, the majority of sites produced by search engines such as Google and others are illegal. That has been the subject of discussion among the search companies, the rights owners and the Government for a long time, and progress has been glacial.
Since that discussion on Second Reading, I have had the advantage of talking to Google. I suspect the hon. Gentleman will have had that advantage, too. Google makes the point that if we put into its search engine the name of the artist and the name of the track, the overwhelming majority are legal results. That is progress. There is no doubt that it is better than it used to be. That deals with the problem of people who do not necessarily want to break the law but just find themselves directed to illegal sites, even when they are not looking for them. That is a step forward, but it does not deal with the problem of people who do not want to pay for music. If we put an additional few terms into the search box, such as “MP3 free download”, the position is completely different and the overwhelming majority of results from that search are illegal. That remains a big problem.
Pete Wishart (Perth and North Perthshire) (SNP)
The right hon. Gentleman knows—he has probably seen the results from the Intellectual Property Office—that 78 million tracks were illegally accessed between March and May this year. It is still a huge problem. Twenty per cent. of all access to the internet for music is for illegal downloads. The Conservative party manifesto promised to deal with that. Does he believe that now is the time for action? We must act now.
Mr Whittingdale
I do think that more needs to be done. The counter to the statistic that the hon. Gentleman has just quoted is the number of pages being taken down. The BPI alone is notifying half a million infringing pages and they are promptly removed, but this is a Hydra—as soon as one comes down, another three go up.
The need to achieve greater agreement between the search companies and the rights owners remains as great as ever. Therefore, the idea that the Government should spur them on to get that agreement by saying that, unless it can be obtained, the Government may have to impose the code of practice, is now something that we need at least to consider. I do not necessarily say that I support the new clause of the hon. Member for Cardiff West, but I have considerable sympathy with it because we still have a long way to go to solve the problem, and at the moment progress is almost impossible to detect.
The second new clause tabled by the hon. Member for Cardiff West that I wanted to refer to, which I have even greater sympathy with, is new clause 30. My right hon. Friend the Minister is a champion of the creative industries because he knows, as I do, that our economy benefits enormously from the strength of the UK creative industries. Their success rests upon IP rights. They have to be confident that their investment, their creation and their skills will receive proper reward from consumers who pay for that content. It is not just the film, television and music industries and the sports companies; it is also our broadcasters, who are spending billions of pounds in some cases to acquire rights. They are entitled to expect that the people who access them do so legitimately and pay for that, and do not do so through illegal streams from offshore.
The latest development in the technology, which the hon. Gentleman rightly identified, is IPTV set-top boxes. These are being marketed in vast numbers. They arrive fully loaded with the codes and the access to go straight to the sites that are providing illegal content. An empty set-top box may not in itself be illegal but, clearly, when it is being marketed on the basis that it is all too simple to fill it with the apps and the codes that will access illegal sites, that is a problem that we need to address.
I give the Minister just one example that was quoted to me today. It is an advertisement for the Amazon “Black Friday” sale, so we are talking about no more than a couple of days ago. It read:
“Come with the newest KODI 16.1. Cut your monthly TV subscription and enjoy FREE Movies, shows and live entertainment from all over the world including sports. No restrictions! Forget the limitations and necessary payments by using Apple TV or ROKU! Android on your TV. Install your favorite apps from the Google Play Store.”
This is being marketed on Amazon and those boxes are being shipped in their millions from China in the main, but from elsewhere, too. They are clearly being used to make it easy for consumers to access content for free and illegally. That is doing real damage to our creative industries. The hon. Gentleman’s new clause is not perhaps the right way to proceed. I am sure that it is deficient and that the Government will find failings in it, but the problem it identifies is a real one, so I hope that the Government will look to see what additional measures we can take to ensure that our IP law remains up to date with the technological developments that are again threatening our creative industries.
Finally, I want to talk to new clause 31. When I had the privilege of chairing the Select Committee, we spent a lot of time discussing ticket touting, and at that stage we were unconvinced that it was right either to ban the secondary market, for which there is a legitimate role, or to impose a flat rate top-up limit as to how much extra could be charged on a ticket; those were two possible solutions advanced at that time. We felt to some extent that this was more an issue for the industry and the market to address, and indeed the industry has worked hard to introduce technological requirements designed to stop people selling on tickets.
However, I was interested to hear from the hon. Member for Cardiff West about my right hon. Friend the Minister’s Paul Simon experience. I have to say that I do not necessarily share his enthusiasm for Paul Simon, but when I sought to buy tickets for the V festival I was unable to get on the website for the first 10 minutes and then in the 12th minute was informed it was sold out, and in the 13th minute I discovered those same tickets on Seatwave for about four times their face value, so I have some sympathy.
John Penrose (Weston-super-Mare) (Con)
My right hon. Friend mentioned earlier that there are possible industry-based solutions. I am reminded of the way the Government handled the 2012 Olympics, when it was not possible to get tickets without providing photo ID, and it was an end-user sale in the first place, which effectively meant the bots could not buy large numbers of tickets in the way he has just described for the V Festival, or indeed for a Paul Simon concert. Does he believe that the solution therefore lies with the sporting and entertainment industries, and that they could have done this several years ago, and it is peculiar that they have elected to come to this place asking for a legislation-based solution when there is a software answer out there right now?
Mr Whittingdale
I have a lot of sympathy with my hon. Friend on that. I was fortunate enough to attend one of the greatest concerts of all time—the Led Zeppelin reunion at the O2—where exactly that system was introduced. People had to produce the credit card used to purchase the ticket in order to get the ticket; they did not get the ticket until they arrived at the venue. There are ways around this problem, but that imposes quite a considerable additional burden on the ticket purchaser, either to supply a photograph or to take a credit card. Of course, it does not then assist when there is a legitimate reason why somebody might want to transfer their ticket to another person because for some reason they are not able to attend. We do not want to stop the secondary market working in a way that is wholly legitimate, which is the case in such circumstances.
Damian Collins
Does my right hon. Friend agree that since the Select Committee looked at this matter under his chairmanship one of the big changes is that it is less about the regulation of the secondary market than the fact that the technology has effectively destroyed the primary market, because most people have no chance of accessing the primary market to buy the tickets they want?
Mr Whittingdale
I agree, and that was my experience, and indeed my right hon. Friend the Minister’s, despite our different musical tastes, when we sought to purchase tickets. For that reason, I am interested in the suggestion in new clause 31 to target specifically the bot problem, or the electronic purchasing in a short period of almost the entire ticket allocation—hundreds of tickets in a matter of seconds bought up by these bots—which prevents ordinary fans from accessing the tickets. I cannot believe that that is what the promoters want, so looking specifically at this problem as the new clause does is an interesting approach, and certainly one worth exploring further.
Helen Goodman
I am pleased to follow the right hon. Member for Maldon (Mr Whittingdale). I was a little unkind to him earlier this evening, so I would like to make amends by saying that he spoke a lot of good sense on illegal downloads.
I would like to speak to amendments 25 and 26. I am chair of the all-party group on the National Union of Journalists, and the arrangements for the payment of the secretariat appear under my name in the Register of Members’ Financial Interests. The NUJ was extremely helpful in drawing this problem to my attention and drafting the amendments.
Part 5 of the Bill appears to put freedom of expression and journalistic rights under serious threat by criminalising onward unauthorised disclosure of information. Specifically, clauses 49 and 50 completely fail to recognise the role of journalists in providing information that is in the public interest; I think that is the point the hon. Member for Worthing West (Sir Peter Bottomley) was trying to make.
Sir Peter Bottomley
I think that clause 32, which comes earlier, should be mentioned, too, and I hope the Government will respond on them all—not just the two amendments, but all the way through that part.
Helen Goodman
The hon. Gentleman is right.
Under the Bill, publications made in the media that are in the public interest are not on the list of exceptional circumstances in which information to combat fraud against the public sector and related personal information can be disclosed. For example, if a whistleblower were to leak the records of a private company to a journalist without authorisation and the journalist ran a story based on this, both parties could receive criminal sentences. This is particularly pertinent to clause 50, which states that a person who discloses personal information not in one of the stipulated excluded situations will be committing an offence.
This is quite technical and complex, so if the Minister cannot respond in this debate today, I would like him to write to me about the definition of the information covered and of the public sector here. Let me give an example to explain why. I was given information that Coutts—which is currently owned by the taxpayer; it is a subsidiarity of one of the banks we bought in 2008—was selling tax avoidance schemes in Switzerland. I spoke about that in the House, but if I had instead given the information to a journalist and it had been printed in a newspaper, it would appear that under these provisions the journalist or newspaper would be criminalised.
This cannot be the Government’s intention. I am sure the Government do not like leaks about Concentrix or about sustainability and transformation plans in the NHS, but I am equally sure the Government are not trying to clamp down on the effectiveness of the media in our country to such an extent that we cannot use these leaks about these sources.
Matt Hancock
I can confirm that it is neither the intent, nor our understanding of the Bill, to do those things, but it is our intent to protect personal information.
Helen Goodman
I am glad that is not the Minister’s intent—I did not think that it was—but the Media Lawyers Association highlighted in its written evidence that it thought there was a problem. So if the Minister wants to avoid his colleagues in another place having to have this debate again in two months’ time, perhaps he could write to me with a full explanation of what he thinks is going on, because I think that there might be a problem with the Bill in this respect.
Sir Peter Bottomley
In very simple terms, the question is: where is the public interest defence for a journalist?
Helen Goodman
The hon. Gentleman puts it very well.
I point out that we have the Official Secrets Act and the libel laws and lots of protections; we do not need any tighter legal criminalisation on the statute book.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We have one hour and one minute left in this debate and many Members want to speak—and I suspect they will also wish to have answers from the Minister and would not like to truncate his contribution to the debate. I cannot impose a time limit; I can only ask for courtesy from one Member to another and short speeches. I am not suggesting speeches so far have been too long, but I ask Members to speak as quickly as they possibly can.
Damian Collins
I will try to adhere to your guidelines, Madam Deputy Speaker.
I would like to speak to new clause 31, but first I want to congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on her campaigning over many years to deal with the abuses in the secondary ticketing market. I also want to congratulate my Select Committee colleague, my hon. Friend the Member for Selby and Ainsty (Nigel Adams), who took up this issue strongly in the Bill Committee. In fact, the new clause that we are discussing tonight is exactly the same as the one he tabled for discussion in Committee. Such was the power of his argument that he persuaded the hon. Member for Cardiff West (Kevin Brennan) to pursue this matter on Report, and I am grateful to the shadow Minister for agreeing that the Select Committee could table this new clause for discussion on Report.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I am grateful to the Chair of the Select Committee for giving way. I just want to place on record the fact that I was pleased to be able to attend and witness his Select Committee hearing. It showed the House and its Select Committee work at their best. I witnessed some of the excellent questioning of representatives of the secondary market on the policing of their sites, and the hon. Gentleman did sterling work. I want to commend him for that, here on the Floor of the House.
Damian Collins
On behalf of the Select Committee, I am grateful to the hon. Lady for her words. I was certainly shocked by some of the things I heard in that Committee hearing.
John Penrose
I want to ask the Chair of the Select Committee whether, in among the penetrating questioning that we have heard about, anyone on the Select Committee asked the people they were interviewing why they were not installing any of the safeguards that are already available. They are already being successfully used in sporting and entertainment events. If those safeguards already exist, why should we be expected to introduce a red tape-heavy legislative solution to a problem that the industry could solve for itself? Indeed, it could have solved it several years ago had it cared to do so.
Damian Collins
Those issues were covered in the Select Committee hearing; they are there in the transcript for all to see. Some venues have introduced direct selling technology, and it can work. However, as my right hon. Friend the Member for Maldon said, it would be unacceptable to many consumers if our blanket response to this crisis in the ticketing industry was to say to the industry, “Solve it yourself.” That would place large costs and burdens on the venues, and it would be particularly unfair on the smaller ones. This problem affects not only the blockbuster events at the O2 or the Royal Albert Hall but events at small venues all around the country. I even saw tickets for a comedy event next year at the Winter Gardens in Margate being sold at three or four times their face value on the secondary market. This is affecting all sorts of venues.
More seriously, however, it is not in the interests of some of the primary ticketing sites to report the problem, because they own the secondary sites that are making the massive profits. The profit growth in the secondary market stands at between 30% and 40% a year. It is true that at the moment more tickets are sold through the primary market—through companies such as Ticketmaster —but very large profits are being made in the secondary market.
John Penrose
I completely agree with my hon. Friend on the diagnosis of the problem. I think everyone here shares the sense of injustice and iniquity that he is describing. My concern, however, is that it is not just the punters who go to see these events who are being affected. The talent—the musicians, the actors and the sportsmen and women—are also losing out because they are getting less money from the initial ticket sale when the ticket is sold on at an inflated price. They and the punters could all win if more of that value could be captured for the talent and if the punters were able to pay less. Both sides therefore have a huge interest in cutting out the middle man, and I do not understand why they are not doing it.
Damian Collins
My hon. Friend is right to say that it is in the interests of many different stakeholders in the industry to do that, but at the moment it is not happening across the board. Some of the bigger artists and events have been able to introduce these measures, but it has been difficult to do it uniformly.
We must ask ourselves why the primary ticketing sites do not report the mass use of bots to the authorities. Why did they not report it as suspicious behaviour? It would be easy for them to do so. We heard in evidence to the Committee that it is so easy to do that the primary sites’ biggest customers often have favourable terms of trade. Their own secondary ticketing sites certainly have favourable terms of trade with people who are bulk selling vast numbers of tickets. It is easy to identify who they are, and it would be easy for a primary site to report them if it became suspicious because they were selling thousands of tickets only minutes after they had gone on sale on the primary ticketing site. If they are able to do that so quickly, they must be using bot technology to pervert the market. It does not get reported, however, and we must ask ourselves why that is. Is it because they are making too much money?
Jim Shannon (Strangford) (DUP)
The hon. Gentleman mentions smaller venues, and I want to put on record something that happens in Northern Ireland. People often queue on phone lines or try to buy tickets online only to find that they have already all been sold. Does he agree that the industry needs to be regulated and that this is the place to do it? If it cannot regulate itself, let us do it here.
Damian Collins
I am grateful to the hon. Gentleman for his comments; he is right.
We are proposing a way to control the bots. The Government are in discussions with the industry, and they might find a better solution to achieve the same end, but I certainly think it is incumbent on us in this place to try to find a solution, not only because this affects the ticketing market but because it rips off the consumer. What kind of people seek to make money selling tickets in this way? We asked that question in the Select Committee and we were told that criminal gangs—some linked to paramilitary organisations in Ireland—were making money as industrial touts selling tickets on the secondary market. It is important that we regulate this industry, not only to protect the consumer but to clamp down on some serious criminal elements who are seeking to make money through this technology. If we can stop that, we will be doing this country a service.
Calum Kerr
I shall try to be brief because I am aware that a number of Members want to speak. I commend the hon. Member for Cardiff West (Kevin Brennan) for his excellent run-through of some excellent ideas. If only the Government were more often in listening mode than in broadcast mode. I wholeheartedly agree with the hon. Gentleman’s remarks about new clause 8. It was a political decision to introduce free television licences for the over-75s. We have an ageing population and a rising number of cases of loneliness among the elderly, and this is a welfare policy. Why would the Government outsource a welfare policy to an external body such as the BBC? Their answer was that the BBC wanted it as part of its financial settlement, but that does not make it right. The reality is that this is an abdication of responsibility and an outsourcing of bad news.
Kelvin Hopkins
The hon. Gentleman makes a good point. The BBC did not really want the responsibility. Did the BBC not just say that it did so because it wanted a good deal on the charter?
Calum Kerr
I wholeheartedly agree. I think people at the BBC were saying, “They’ve got us so worried about what the settlement could be. Let’s just accept the offer that’s on the table for heaven help us what might happen.” There is cross-party support for this new clause.
Calum Kerr
Six-party support; I thank the hon. Gentleman for his clarification. He is well deserving of his TV licence—when he gets old enough. I truly support new clause 8 and also back the other measures relating to the BBC in new clauses 17 and 18. If we believe in public service broadcasting, the way to protect it is to cherish it, to look after it and to ensure its listings appear as technology evolves, not to give it a huge liability and line it up for a potentially deeply unpopular future decision.
Turning to new clause 15, it was interesting to hear and largely concur with the comments of the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale). I support the idea of pushing for something further on search engines, but I am conscious that there is a dialogue between parties that both have a stake in something. It is interesting that the right hon. Gentleman is now coming around to the idea of some legislative intervention, but we look to the new Front-Bench team for answers to what that might be and when. What movement do they expect to see before they would legislate? The Minister touched on that in Committee, but what would be the trigger for intervention if the industry was not going far enough?
Digital ticketing has been well discussed already. If someone behaves illegally by going into a shop and buying all the produce and then selling it in a way that was not intended, the answer is not necessarily better security; the answer is making it illegal. I get the point of the hon. Member for Weston-super-Mare (John Penrose), but let us make it illegal and drive out this morally unacceptable behaviour. If I may paraphrase the US moral philosopher Eric Holler, as I did in Committee, every great idea begins as a movement, becomes a business and eventually degenerates into a racket. That is what we have here. Fan-to-fan ticket exchanges have led to rampant touting.
Finally, I commend the Labour Front-Bench team for their valiant efforts to rescue part 5 of the Bill through measures such as new clause 5. We had two days of evidence in Committee, during which witnesses were fairly damning of the approach being taken on data sharing or data access. As we have gone along, the Government have tried to give us a little more information and have applied sticking plasters here and there, but nothing has convinced me that they have learned from things such as the Concentrix episode. Somebody tried to buy bulk data and apply it to people receiving tax credits, leading to some of the most vulnerable in our society having their money stopped, being forced into debt or other far more severe consequences.
I remain unconvinced that the Government are heading in the right direction. There is an inherent paternalism. They say, “Don’t you worry. We’ll be fine. Trust us,” and give us a pat on the head, but when it comes to protecting people’s data we should be looking at the Estonian model, which puts the citizen at the centre. We should be open. I should be notified every time my data are shared if it is for my benefit. We should not hide that. Right from the start of the evidence-taking, people were saying that data-sharing is a good thing, but we must earn and retain public trust. I see little evidence that the Government understand that and are willing to do anything other than learn the hard way by making mistakes. I look forward with trepidation to the many debates in this place as various data breaches emerge. I urge the Government to consider removing this whole part of the Bill and to revisit it once they have actually done a proper job.
Matt Hancock
I rise to answer the points made so far, but I hope there will be time afterwards for others who still want to speak. We have had a broad debate on the amendments relating to copyright, broadcasting, ticketing, data and intellectual property, and I will speak as quickly as I can and take as many interventions as I can. There are a total of 36 proposed new clauses and amendments, and I propose to address each in turn in broadly the same order.
On copyright, new clause 15 proposes that the Government take a power to have a code of conduct on search engines to dictate how they should work to prevent copyright infringement. This new clause was also proposed in Committee, and I would like to update the House on the progress. Since then, the Intellectual Property Minister, Baroness Neville-Rolfe, has chaired a further round-table among search engine and creative industries representatives. As my right hon. Friend the Member for Maldon (Mr Whittingdale) said, that group is now making some progress towards agreeing an outline code of practice, but much more needs to be done. Following the round-table, a revised draft code will be prepared by the IPO for consideration by the group before its next meeting on 10 January. Our position on online platforms is that they must act responsibly and work with rights holders to help enforce IP rights. We are clear on the importance of getting things right and do not rule out legislation, but given the progress being made it is not necessarily the right time for legislative intervention.
We also discussed new clause 30 in Committee, where I set out the range of criminal provisions that apply to the sale and use of devices that infringe copyright. This matter relates to the IPTV devices that my right hon. Friend the Member for Maldon, the former Secretary of State, spoke about so powerfully. Following a number of investigations across the country, there are pending prosecutions relying on a number of offences. I am sympathetic to the intent behind the new clause, but it does not in and of itself offer any greater legislative protection to rights owners than the existing offences that target this type of behaviour. If the existing legal provisions are shown to be deficient when the pending prosecutions have concluded, we will bring forward proposals for legislation.
New clause 16 is another of the helpful proposals from the shadow Front-Bench team to deliver on a Conservative party manifesto commitment—this time on e-book lending. I am grateful for the degree of support that our manifesto has received from all parts of the House during the Bill’s passage.
Matt Hancock
Just you wait. We of course agree that authors should be recognised for e-lending by ensuring appropriate compensation for them in an enhanced public lending right. I need to correct an omission. I belatedly declare a potential interest which I should have mentioned in Committee—at least, I hope that I can declare an interest, as I have a book that is available for borrowing in this way, although I have no idea whether it has ever been borrowed. As I said in Committee, we have been carefully considering the options for delivering the manifesto commitment. We had to wait for the conclusion of a court case, which ended earlier this month, before setting out the proposals, but I can confirm today that we intend to legislate to extend the public lending right to include the remote lending of e-books. It is important that we get that right and ensure that any changes are compatible with the copyright directive. We will therefore bring forward legislation as soon as possible.
Turning to broadcasting and subtitling for video on demand, new clause 6 was also considered in Committee. As I said then, we are keen to address this shortcoming and want to ensure that the requirements that are placed on on-demand programme service providers are appropriate and proportionate. Since then, we have discussed how best to increase the use of subtitles in video on demand with charities, broadcasters, Ofcom and others and have worked further on the best way to address the concerns that the new clause intends to address. Through working collaboratively with all interested parties, I hope to reach a resolution in the other place that results in an increase in the provision of access services for video on-demand services.
Let me turn to new clause 8, on TV licence fee concessions, a subject we discussed at length in Committee. Government Members are clear that we support the free TV licence for the over-75s, we committed in our manifesto to keeping it and we are glad that it is protected as part of the BBC charter and licence fee settlement, which has been debated extensively in this House and is delivering on our manifesto commitment. The new clause attempts to unpick that settlement and, in so doing, undermine the stability of the BBC. This funding settlement, which the new clause would undermine, was described by the director general of the BBC as a “strong deal” for the BBC and one that “gives us financial stability”.
Kelvin Hopkins
I have already covered that point, but surely asking the other BBC licence fee payers, staff and programmers inside the BBC to pay for what is a welfare benefit is nonsense.
Matt Hancock
The point is that it is not a welfare benefit; it is about funding policy, and the BBC asked for this policy to be determined by the BBC. Indeed, the shadow Secretary of State said that
“the charter provides the BBC with the funding and security it needs”—[Official Report, 18 October 2016; Vol. 615, c. 699.]
As part of that “security it needs”, we kept, in this Parliament, the free TV licence. The BBC itself has asked for this and only this morning the BBC said that
“the overall funding settlement reached with the government provides the financial stability for a strong creative BBC. The BBC is concerned that”—
this amendment—
could reopen the whole deal and make the BBC worse off.”
So we have here an 11-year charter renewal, a strong and stable financial settlement praised by the Labour party and a clause that has been requested by the BBC, whereas the new clause could, in the BBC’s words, make the BBC worse off. Supporting new clause 8 would undermine the BBC and undermine its finances. This measure is expressly against the wishes of the BBC, and I urge anyone still considering supporting it to ask themselves how they will explain this attempt to undermine the BBC—Government Members will not do that.
New clause 17 deals with the issue of public sector broadcaster prominence, an important matter on which we consulted in the spring. In Committee, the point we reached was that a detailed, over-prescriptive regulation of the detail of the PSB prominence rules would be a mistake, and having not seen compelling evidence of harm to PSBs to date, we have decided not to extend the electronic programme guide—EPG—prominence regime for PSBs to on-demand. When PSBs make excellent content, audiences generally follow.
Finally on broadcasting, new clause 18, on listed events, was also discussed in Committee, and I have seen no evidence to change our view that the current listed events regime is not under threat—we will not let it be under threat. The range of our most loved and important sporting events will remain on free-to-air channels. Even if there were a problem, it would be undesirable to fix it in the way the new clause suggests, as it would lock in the incumbents’ positions, as the requirement to be watched by 90% of the population would narrow considerably the number of channels that could qualify. So I suggest that the problem does not arise; that were it to arise, we would legislate; and that if we were to legislate, this would not be the way we would do it.
In this Bill, we have shown that we are open to being persuaded by good argument, and we have tabled amendments 20, 21 and 22 to ensure that Ofcom is able effectively to enforce requests for information from third parties in relation to its new functions as regulator of the BBC. I hope that these provisions have broad support.
I now turn to the much discussed issue of ticketing. New clause 31 seeks to deal with bots that harvest tickets for resale in the secondary market. We have heard very powerful explanations of the scale of the problem and its breadth, and I can confirm that I had great difficulty in buying Paul Simon tickets. Initially, I failed to buy them despite having my finger hovering on my mouse the moment they went on sale, and so I had to buy them at a much greater price in the secondary market. They were worth every penny, but that in a way makes the point that my hon. Friend the Member for Weston-super-Mare (John Penrose) makes: the gap exploited is between the level at which the artists wants to sell their tickets and the amount that they represent in true value to the customer. I was still happy to pay hundreds of pounds for my Paul Simon tickets, but the point is that they were meant to be on sale for £75 so that everybody could get them. I am persuaded by the arguments and we shall be holding a roundtables meeting on Wednesday to discuss the best way to tackle the problem.
The Government will give full consideration to what is said at these roundtables, in Parliament and in the Waterson report on the issue of ticketing bots and the harvesting market. I pay tribute to my hon. Friend the Member for Selby and Ainsty (Nigel Adams), who has made a huge amount of the running on this issue. He has made the argument powerfully and, as has been said, the Olympics showed that this can be done.
John Penrose
I am not normally reassured by the advent of a roundtable, but I am enormously reassured in this case because the Minister is a very persuasive man and I am sure that he will have around that table representatives from the sportsmen’s agents groups, from Equity, the actors’ union, and from all sorts of UK music organisations and various others. I am talking about the people who represent the talent, who are currently being ripped off because they are getting only the face value when these things go on sale, when they are bought by the bots, and not the eventual secondary market value. They are the people with a huge interest in getting this done so that they get a larger proportion of the eventual value and customers are not getting ripped off, too.
Matt Hancock
Yes, we have representatives of all sides coming to the roundtable, including my hon. Friend the Member for Selby and Ainsty—I am not sure that that will reassure my hon. Friend the Member for Weston-super-Mare. Although we would not want to close down the secondary market for tickets altogether, clearly the automatic harvesting of tickets sold below market price—so that fans can afford them—for resale at a higher value is wrong. I want to build a bridge over troubled waters, listen to the points made at the round table and bring forward legislation in this Bill if this is found to be necessary.
On digital government, amendment 3 and new clause 19 concern data-sharing powers in education and health. They address the same issue from the opposite end, and it is a bit of a surprise to find that they have been submitted by the same people. Not only can people’s health and education data be incredibly powerful in improving lives, but they are very sensitive and need to be carefully handled. These two proposals from the Opposition represent amendments both to open up data sharing and to close it down. This is a slightly confused approach, but neither of the proposals is necessary, because the concerns expressed at the root of each are already addressed in the Bill. New clause 19 would open up more data sharing in education, and it is good to see this direction of travel supported by the Opposition Front-Bench team, because data sharing can improve people’s lives, for instance by making sure that we better identify eligibility for free school meals. The right hon. Member for Birkenhead (Frank Field) has made this argument strongly. This is a laudable aim, but it is already provided for in the Department for Education’s electronic eligibility checking system. Indeed, the Bill sets out how aspects of data sharing can be expanded through secondary legislation in due course.
Frank Field
I am grateful to the Minister for his comments, but would he tell us what is in the Bill to make local authorities that seem to have no interest in sharing data obtain the numbers of children eligible for free school dinners, and thus increase the pupil premium to act in the interests of those children?
Matt Hancock
The proposals in the Bill are permissive, rather than requiring action. I would be concerned if we required the sharing of data, because of their sensitivity, especially when they are not anonymised, which they would not be if the aim was to find children who are eligible for free school meals. We want to make sure that the person receiving the data has the necessary assistance to handle them, and it is incredibly important that the law should make it clear that that data sharing is permitted, as that removes a reason not to share data.
Frank Field
May I ask the Minister to keep a close eye on this, because in Wirral the number of families who have the right to opt out could be counted on the fingers on one hand, so there is a willingness for data to be shared so that schools and children can benefit?
Matt Hancock
I am glad that there is a willingness for that data to be shared, because I share the right hon. Gentleman’s passion to improve the use of data to improve people’s lives in Wirral and elsewhere. Given that passion, I hope that the clarity that we will achieve, not least as a result of this debate, will ensure that the data are indeed shared.
Clarity is supported by the Data Protection Act 1998, because all the data shared under powers in the Bill will continue to be protected under the firm boundaries of that Act, which rightly enjoys a broad consensus of support. We are strengthening in the Bill the sanction on the purposeful reidentification of data to make that a criminal sanction. The hon. Member for Cardiff West expressed concerns about the details, but the protections are important and strike the right balance. New clause 19 seeks to strengthen data sharing, but amendment 3 seeks to weaken it and put barriers in place. The amendment is not needed, as health bodies in England are not within the scope of the public service delivery power. For the rest of the UK, health is devolved. The Labour Administration in Wales and the Scottish National party Government in Scotland have signalled that they will seek the consent of their legislatures on the grounds that the amendment is not in place. The Labour party in Wales and the SNP in Scotland support this sort of data sharing for the precise reasons set out by the right hon. Member for Birkenhead, so I hope to persuade hon. Members not to divide the House on these matters. They should be reassured that we value data sharing as well as its protection and safekeeping. I therefore urge Members on both sides of the House to resist the amendments.
New clause 5 would impose obligations on organisations to report data breaches, as has been said. That is covered in the general data protection regulation, which will come into force in May 2018, so it is not necessary to legislate here. New clause 11 deals with data-sharing registers. Part 5 includes a number of commitments to transparency and proportionality in the disclosure of information by public authorities. We are committed to the transparency of information shared under part 5, and I think that the new clause is aimed at testing that. However, there are a number of problems with it, not least the fact that setting the requirement in primary legislation reduces the flexibility to learn from and adapt to the consequences of publishing a register.
New clause 12 requires that the Government commission an independent review of the collection and use of data by Government and commercial organisations. The Royal Society and the British Academy are currently undertaking such a review to consider the ethical and legal frameworks that are needed in the UK as data technologies advance. I agree with the hon. Member for Cardiff West that it is important that we develop those ethical and legal frameworks to make sure that they are ahead of the use of data and data science, not behind, so that we can take the public with us. We will consider the findings of the review when it is published.
New clause 23 was tabled by Plaid Cymru. We are firmly committed to ensuring that the needs of Welsh language speakers are recognised and met. For example, gov.uk now publishes its frequently used web content in Welsh. The Government Digital Service has helped to produce exemplar Welsh language versions of new digital services such as the register to vote service. The GDS and the Wales Office have discussed with the Welsh language commissioner how they can help Departments meet their requirements under their Welsh language schemes. Dwyn cefnogwyr brwd o S4C—I support strongly the Welsh language is, I think, a rough translation.
Government amendments 4 to 19 apply the duty to review set out in clauses 45 to 53 of the fraud and debt chapters, which require the relevant Minister after three years to review the operation of the powers. The amendments are consistent with the devolution settlements and ensure that appropriate consent for any proposed changes is sought from the affected territories.
On the illicit online trade and internet sales of counterfeit electrical appliances, we take this very seriously. The Intellectual Property Office has recently published its IP enforcement strategy for the next four years, which I think takes into account the concerns raised.
Helen Goodman
Before the Minister sits down, will he commit to write to me about the amendments that I tabled?
Matt Hancock
Yes, of course. I will happily write to the hon. Lady about the detail of the concerns—I think they are unfounded, but we want to ensure that they are indeed unfounded—that journalists might be caught by increasing the criminal penalty for the intentional disclosure of information under the data-sharing powers, which are intended for the protection of data, especially in the bulk transfer of data around the system, rather than to militate against whistleblowing of the type that the hon. Lady described.
I appreciate the intention behind new clause 34, which was tabled by my hon. Friend the Member for Boston and Skegness (Matt Warman). Here and around the world, the media landscape is changing rapidly and the emergence of new digital platforms has impacted on a wide variety of sectors, including news. Ensuring that citizens have access to a full variety of news sources is essential, and it is vital that our media are vibrant and sustainable. There is a huge challenge in maintaining high-quality journalism when advertising revenues increasingly go to the platform, but the costs fall on the content provider or the newspaper. The Government are actively engaged in examining this, and I am meeting the News Media Association later this week to discuss this very issue.
Ofcom publishes an annual report on news consumption across the UK. It includes the sources and platforms used in news consumption and the role of intermediaries, such as Facebook and Google. Ofcom undertakes ad hoc reviews where appropriate and we will explore whether this is an area where such a review is needed. Although I acknowledge the importance of the issue, I urge my hon. Friend, who has a lot of experience in this area, to work with us under existing powers to seek a solution.
I ask that hon. Members do not press their amendments and new clauses to a Division, but support the Government amendments.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We have 22 minutes left in this debate and 10 Members who wish to speak—that is two minutes each.
Kate Green (Stretford and Urmston) (Lab)
I want to address briefly the Minister’s comments on new clause 6. I welcomed his saying that he hoped progress would be made when the Bill proceeds to the House of Lords. Will he encourage his colleagues in the other place to take a positive and inclusive approach to ensuring accessibility of on-demand services? The new clause drafted by my hon. Friends suggests in subsection (4) a number of considerations which might be taken into account. I hope these will be interpreted in the most generous and ambitious way if they inform the Government’s thinking.
Lilian Greenwood (Nottingham South) (Lab)
Like my hon. Friend, I welcome the Minister’s commitment to return to the matter in the other place. Does she agree that it might be helpful if the Minister were willing to meet the all-party parliamentary group on deafness, which has made the subtitling campaign one of its top priorities for this year?
Kate Green
Indeed. My hon. Friend makes my second point. The Minister indicated that discussions had taken place with disability organisations. It is vital that the approach to developing on-demand accessible services is undertaken as a co-production, that disabled people and disability groups are right at the heart of the design of these services, and that the Government make progress on this matter.
Finally, I encourage the Minister and his colleagues to think big about whether this is an opportunity to take forward the use of British sign language in broadcast and online on-demand services. There is the opportunity to offer signed services on these channels too, and I hope the Minister might be willing to investigate how far that could be taken in this context.
Nigel Adams (Selby and Ainsty) (Con)
I would like to talk to new clause 31, which is incredibly important, and I am extremely grateful to the hon. Member for Washington and Sunderland West (Mrs Hodgson) for the incredible amount of work she has done on the issue. I would also like to thank the hon. Members for Sheffield, Heeley (Louise Haigh) and for Cardiff West (Kevin Brennan) for allowing the Select Committee to table the new clause.
I would also like to thank the Minister, whose words a few moments ago—that the Government are prepared to take action to outlaw bots, if necessary following the meeting later this week—are incredibly encouraging. I shall be at that meeting, and I am grateful for the invitation—hopefully, I will be allowed my two penn’orth. It is incredibly important that we get all the players involved.
We have heard countless examples of where this racket is going on. In the music business, there is Iron Maiden, The 1975 and Black Sabbath. We have heard about Phil Collins and KT Tunstall. My own example—of trying to buy tickets for Green Day—even made it to Prime Minister’s questions. I am not sure whether the Prime Minister is a fan of Green Day, but I am sure that, if she did go to a concert, she would have the time of her life.
However, the problem also affects all sorts of other marketplaces, including the theatre. Today, my colleagues and I met Sonia Friedman, the producer of “Harry Potter and the Cursed Child”, who told me that 60,000 tickets were released last week, and thousands of those tickets ended up on the secondary market at hugely inflated prices because of bots. That is clearly unacceptable.
To conclude, I hope we can get somewhere following the meeting on Wednesday. We are also keen to see the Government’s response to the Waterson report, and I am sure that their response will follow that meeting. It was interesting to note that, at our Select Committee inquiry, Professor Waterson agreed that action to outlaw ticket bots could be a solution, which is very encouraging.
I thank the Minister and the Secretary of State for arranging the meeting. [Interruption.] It seems that I am being wound up, so hopefully everybody else will get a chance to chip in.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I rise to speak on new clause 24, which stands in my name and those of my hon. Friends and other hon. Members.
The charity Electrical Safety First is calling on the Government to legally require online retailers to report to trading standards and/or the police people consistently selling fake electrical products. This is a growing problem, and it is estimated that 64% of fake electrical goods are now being sold online. Much of the current legislation around the sale of counterfeit goods is over 20 years old, and we need to be mindful of the fact that, in this digital age, parts of it simply may not be fit for purpose.
Sales of dodgy electrical goods are rising rather rapidly. Research found that around 2.5 million adults have purchased a counterfeit electrical product in the last 12 months—double the number who reported purchasing a fake in the previous year.
Not all counterfeit electricals may be substandard, but many carry a substantial risk. People may view these fakes as harmless—perhaps in the same way they might consider a counterfeit pair of sunglasses to be—but the fact is that they can prove deadly. These products have the potential to deliver a fatal electric shock.
As well as the safety implications, we need to be mindful of the revenue that sales of these goods generate, which is thought to be worth more than £1.3 billion per year in the UK. A large portion of this—an estimated £900 million—is thought to help to fund organised crime.
Many people who buy fake electrical goods do so without realising it. Unwittingly, they are placing their families, friends and neighbours at risk. Vendors often sell through reputable online marketplaces, so they enjoy an almost implied credibility, further giving customers confidence in their purchases.
I would like to finish by asking the Government to take those points into account so that we can begin addressing this problem and perhaps placing some of the responsibility on the websites that enable this black market trade.
Sir Peter Bottomley
I support the Minister’s response to new clause 6, which will be useful.
New clause 8 refers to clause 76 on page 76—one of the 18 times in the Bill where the clause number is the same as the page number. Perhaps that could be a Christmas quiz for the Clerks, if they are paying attention.
The point about this is that neither the BBC nor the Government consulted Back Benchers. It was Parliament that, in 2001, agreed the concession for the over-75s. The cost of £750 million can be compared with the cost of local radio at £115 million, Radio 4 at £90 million, BBC 4 at £49 million, and CBBC and CBeebies at £97 million—a total of about £340 million. We could double that and still not have got to the cost of this so-called concession.
Matt Hancock
I can confirm that any public prosecution has to be in the public interest. The public interest is not covered in this Bill, but that is because the nature of a public prosecution is that it has to be in the public interest. I hope that deals with my hon. Friend’s concern.
Sir Peter Bottomley
I am grateful to my right hon. Friend. That may be the test of whether the prosecution is brought, but if it is brought because the prosecution is thought to be in the public interest, and the journalists want to say that the public interest defence is why it has been done, then the Government ought to think again. If I may, I ask them to do so.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I rise to speak to new clause 23, which would ensure that all services provided by the UK Government respect the right of the UK’s 700,000 Welsh speakers to receive those services in our language. “Digital by default” must translate as “‘digidol yn ddiofyn”—not something to request but something that is clearly available and welcoming to use. Digital language use increasingly touches every area of communications, from social media to digital government. If a language is not on the web, it can be said, in a sense, no longer to exist for 21st-century communications. The Welsh Language Commissioner has voiced criticism of the UK Government for weakening the Welsh language services on their gov.uk website since its 2012 launch, saying:
“Over the past year I have seen agencies of the Westminster government approaching us complaining about the Cabinet Office and gov.uk and saying that it is now hampering their work and they are concerned that the strong bilingual services that they have put in place have been hampered by gov.uk.”
Given the issues arising from legacy IT systems and designing bilingual platforms, I urge the Minister to consider our new clause and commit to ensuring interactive and user-friendly Government digital services for Welsh speakers on the same basis as that for English speakers.
Matt Warman (Boston and Skegness) (Con)
I rise to speak to new clause 34. I should start by saying that it is not an attack on Facebook or Google, but it does ask Ofcom to examine whether the digital advertising world has made our media impossible to sustain. By that, I mean, “Today our local papers, tomorrow our national papers, and perhaps in due course our TV networks.” I do not ask for a review because I think there is a single answer, or even because I necessarily think that this is simply a moment in history where our media must reinvent itself for a new age that may yet be brighter than the last. The fact remains, though, that local papers and even national papers are closing, and it cannot be right for the Government to stand idly by in the knowledge that these undesirable events are happening.
Via this new clause, I seek to plant in the vast expanse of the Minister’s mind the idea that the Government should seek to reassure themselves and our constituents that if our media falls into a state of disrepair, we will have explored every possible option—whether considering copyright laws, or looking at who owns the lucrative conversation around a story to ensure that a publisher and a platform benefit equally—to find the media a role. I hope that we will ensure that we do not lose the press that have kept us all on our toes for many years, simply for want of looking for a solution.
Mrs Hodgson
I want to speak for my two or three minutes in support of new clause 19 and new clause 31. I welcome these two new clauses after my many years of campaigning to put fans first and to improve access to free school meals.
Hungry children struggle to learn in school, and they fall behind their peers. That is why it is important that we improve the provision that is on offer and the access to it, and new clause 19 will do just that. This policy proposal was first introduced by my right hon. Friend the Member for Birkenhead (Frank Field) as a ten-minute rule Bill earlier this year. I have fully supported this policy change, and I congratulate my hon. Friends on the Front Bench on bringing it forward. It is estimated that having a child on free school meals can save a family up to £400 a year. A school will net £1,320 a year for each child who is currently on free school meals or who has been in receipt of free school meals in the previous five years. The proposed changes are simple and have been tried and tested by Calderdale Council and Greenwich Council, which have both used data sharing to improve the take-up of free school meals and, in turn, pupil premium in their boroughs.
I want to speak briefly to new clause 31. I thoroughly welcome this new clause, which has been introduced by the hon. Member for Folkestone and Hythe (Damian Collins) on behalf of the Culture, Media and Sport Committee after its excellent short inquiry into bots and ticket touting a few weeks ago—I had the pleasure, as I said earlier, of witnessing it at first hand—following the amendment originally tabled by the hon. Member for Selby and Ainsty (Nigel Adams) and supported by the Labour Front-Bench team and me. The new clause would take us one step closer to sorting the market out, but it is not a silver bullet; far from it. Alongside the new clause, we need the enforcement of existing legislation, such as the Consumer Rights Act 2015, and the implementation of the Waterson review recommendations on the secondary ticketing market.
Over the years, like the Minister and the hon. Member for Selby and Ainsty, I have heard about examples—I have experienced it myself—of people trying to buy tickets but finding that they were already sold out, and within minutes finding those tickets up on the secondary market. I never relented; I refused to buy any tickets from touts, but one can only deduce that there is a serious issue about how the tickets get on to the secondary market so quickly. One way in which they do so is definitely through the use of bots. Fans are not getting a fair crack at getting tickets, just as the Minister and other Members have not had a fair crack at getting them.
In the past 18 months, there has been a massive escalation in the number of tickets harvested by the aggressive software used by touts, with these attacks becoming more and more sophisticated. Attacks appear to emanate from all over the world, but the majority of attacks on ticketing systems are orchestrated by UK-based and UK-resident touts. Some 30% to 50% of tickets for high-demand events are harvested by aggressive software and immediately placed for resale on viagogo, GetMeIn!, StubHub and Seatwave, despite the best efforts of the industry, which has tried to police itself and to bring in technical solutions. The industry has tried to sell tickets through fan clubs, but even those are attacked. Where tickets are sold by ballot, there are ballot bots. Where fan club registration is required, there are email-generating bots that flood systems with thousands of false identities. There is not one single way to offer tickets for sale to the public for which there is not already a bot out there that will attack the system.
The situation is deteriorating. Primary ticket sites have to detect an attack, examine the data, identify the software used, reverse engineer it and develop measures to prevent a further attack. That process can take months. In the meantime, a tout can simply pay a coder overseas a few hundred pounds to develop a new bot to circumvent the new security features. Bots can be coded to attack a specific ticketing system in as little as a day.
Although legislation is in place in the form of the Computer Misuse Act 1990, which has broad applications that could be used to address bots, it is 25 years old and it is yet to be tested in this regard. This is an arms race that the primary ticket sellers simply cannot win. The secondary market has already shown its blatant disregard of civil remedy legislation, such as the amendment to the Consumer Rights Act 2015, which is flouted daily. The only effective deterrent is a very clear criminal offence, with appropriate punishment on conviction, and that would be provided by new clause 31.
Madam Deputy Speaker (Mrs Eleanor Laing)
I thank the hon. Members who spoke for only two minutes. Their courtesy has been noticed and they will get brownie points. There is now plenty of time left for Mr Pete Wishart.
Pete Wishart
Thank you ever so much, Madam Deputy Speaker. I refer the House to my entry in the Register of Members’ Financial Interests in relation to my recorded work.
I would say that this has been a good evening. The concessions we have heard from the Minister are most definitely to be welcomed. I am a veteran of the former Digital Economy Bill. Looking around the Chamber, I can see a few people who still bear the scars of that experience. I must say—this is my first contribution on this Digital Economy Bill—that this one seems to be being given a much more convivial and consensual outing. I am looking at the hon. Member for Cardiff West (Kevin Brennan), and I just hope we do not get a version of “Smoke on the Water” from the right hon. Member for Maldon (Mr Whittingdale), as we did when we went out to celebrate the passage of the Digital Economy Bill last time. The hon. Gentleman does a fantastic impersonation of the right hon. Gentleman singing that, which I hope we will never hear in this House.
We have made real and substantial progress, and I welcome the Minister’s words on new clause 15. That was the provision I wanted to address most firmly. When we consider search engines, we must remember that these are the pipes or the infrastructure, and they create no content of their own. Our creative industries are very important to this country. They are driving the economy now—they are growing at a faster rate than the rest of the economy—and we are firing economic growth on the imagination of the people of this country. What a way to grow our economy. It is therefore absolutely right that we should make substantial progress on this, and the Minister’s words are welcome.
I would only say to the Minister that we are listening very carefully, and if the companies do not come up with the voluntary code, we will need him to act. We need him to ensure that our artists, creators and inventors —those who produce in this country the wonderful content that is known right around the world—are properly rewarded for their works. We are all looking forward to seeing what plans will be introduced.
On new clause 16, I have the pleasure and privilege of chairing the all-party writers group, and we welcome the Government’s clear commitment to deal with the very real measures on e-learning. All writers and authors, all those involved in publishing and all those across the country who support literature and books have been asking for this for a long time. Again, we welcome the solid progress that will be made.
Lastly, we welcome the progress that the Government have committed to make on ticket touts and the whole issue of bots. I have been in the House for 15 years, and one of the first debates I was involved in in the House was about ticket touting. Many Members have stood up in the House and demanded solid action from Governments when it comes to this really pernicious industry, which corrodes our live music scene. Live music is one of the major features and one of the growing parts of music across this country. Artists continually go on about this issue, and, at last, it looks as though it will be addressed. I pay tribute, obviously, to the hon. Members for Selby and Ainsty (Nigel Adams) and for Washington and Sunderland West (Mrs Hodgson), but also to people such as John Robertson, the chair the all-party group on music before the hon. Member for Selby and Ainsty, who stood up in the House to try to get something done about ticket touts. Again, we have made solid progress.
As we wind up these proceedings on the Bill, we have heard the Minister make these commitments—he has said that he is prepared to make progress—and it is now incumbent on us all to ensure that these commitments are brought into legislation. We have made very good progress on the Bill this evening. We have a range of provisions that mean my hon. Friends and I will be able to support the Bill. We look forward to the Government honouring their commitments, and we look forward to hearing what the Minister has to say on Third Reading.
Matt Hancock
Since the Secretary of State will open the Third Reading debate, may I take this opportunity to thank the House for all the comments we have heard, especially those from Opposition Front Benchers? It has been a very collaborative effort, especially on this group of provisions, but also more broadly. I hope that the Bill leaves the House in better shape than it entered it, as it goes off to be considered in the other place. I thank everybody involved, from the officials in the Box to all the stakeholders more broadly. I ask the House to support the Government’s proposals.
Question put and negatived.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I will now suspend the House for no more than five minutes to make a decision about certification. The Division bells will be rung two minutes before the House resumes following certification. The Government will table the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by the Doorkeepers.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2) and on behalf of Mr Speaker, I have certified clause 85 of the Digital Economy Bill as relating exclusively to England and within devolved legislative competence. Copies of the certificate are available in the Vote Office. Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move the consent motion?
Matt Hancock
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M).
[Mr Lindsay Hoyle in the Chair]
Motion made, and Question proposed,
That the Committee consents to the following certified clause of the Digital Economy Bill:
Clauses and schedules certified under Standing Order No. 83L(2) as relating exclusively to England and being within devolved legislative competence
Clause 85 of the Bill (Bill 87).—(Matt Hancock.)
The Chairman of Ways and Means (Mr Lindsay Hoyle)
The debate will take place now. Come on in, Mr Wishart.
Pete Wishart (Perth and North Perthshire) (SNP)
I am very grateful to you, Mr Hoyle, and I promise to be brief when it comes to this substantial and significant—[Interruption.]
Pete Wishart
We are discussing substantial and significant clauses that relate exclusively to England. We are here, in what is the de facto English Parliament, to debate important measures. The relationship between tuition fees and qualifications is very important to England, and I am surprised that we are not hearing more contributions from English Members. They have a fantastic opportunity to speak at length about England-only clauses, an opportunity that was demanded at the time of the last general election. So many Members, particularly Conservative Members, said then that the system was required, but none of them is here to participate in tonight’s debate.
Patrick Grady (Glasgow North) (SNP)
The former Prime Minister, David Cameron, stood on the steps of No. 10 Downing Street on 19 September 2014 and said that millions of English voices must be heard. This is the procedure that was to allow those millions of English voices to be heard. However, the Constitution Unit produced a report just this afternoon which showed that there had been a maximum of about 40 minutes of debate in all the Legislative Grand Committee procedures. Does that not show that “English votes for English laws” is not meeting the purpose for which it was set up?
Pete Wishart
I am grateful to my hon. Friend for raising that point. I have a copy of the report produced by the Constitution Unit, which goes into great detail and depth about the functioning of EVEL.
Clause 85 is critically important to the Bill. It concerns the payment of tuition fees for qualifications in England. It is important that it be debated fully, and it is important for English Members to have their say. That is what “English votes for English laws” is all about. English Members have an opportunity to express their concern about parts of Bills that relate exclusively to England, and we now invite them to contribute to the debate.
According to the Constitution Unit, a maximum of two minutes has been taken every time the House has resolved itself into an English Legislative Grand Committee. We must ensure that we use this time properly and appropriately, because clause 85 is an important measure. It is the only part of the Bill that relates exclusively to England, and I think it deserves all the debate that can possibly be mustered. I am very surprised that not even the Minister is using his opportunity.
We cannot say that this is a waste of the House’s time, because it obviously is not. It is important that the House breaks up its usual routine examination of legislation and forms a English Legislative Grand Committee to consider significant measures such as clause 85. It is important that the bell rings and the House is suspended for two minutes before the certification can take place, and that Members have an opportunity to examine such measures in detail. I hope that I shall not be the only Member to contribute, given that this was considered to be so important that the Standing Orders had to be changed.
I know that other Members wish to speak—[Laughter.] Perhaps they do not, but they have an opportunity to debate this important clause, and I am very surprised that there are to be no more contributions tonight. That demonstrates the absolute and utter absurdity of the EVEL proposals and the Standing Order changes. We are sitting here, and not one Member representing an English constituency is prepared to—
The Chairman
Order. I may be able to help. I think that there will be a speech to follow that of the hon. Gentleman, so he should not worry. Has he finished his speech?
Matt Hancock
I shall not detain the House for long. All I can say is that the hon. Member for Perth and North Perthshire (Pete Wishart) had an opportunity to talk about clause 85 on Second Reading. Did he do so? No, he did not. There was spare time during the Committee stage. The hon. Gentleman could have joined the Committee, enjoyed our company, and talked about clause 85. Did he do so? No, he did not. On Report, he could have tabled any sort of amendment to clause 85, or, indeed, tried to vote against it, but he chose not to. I think we can see through all his bluster.
Question put and agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading
Queen’s and Prince of Wales’s consent signified.
The Secretary of State for Culture, Media and Sport (Karen Bradley)
I beg to move, That the Bill be now read the Third time.
The Bill will cement the UK’s status as a world-leading digital economy. It will help people to connect to high-speed broadband, expanding their personal opportunities and stimulating economic activity. It will improve public services, thanks to better information management, and it will protect the vulnerable from some of the hazards of the digital world. It is an important measure in building a country that works for everyone.
I am very grateful to the House for the way it has engaged with the Bill. I put on record my thanks to the Minister for Digital and Culture; the Parliamentary Secretary, Cabinet Office, the Minister with responsibility for the constitution; the Culture, Media and Sport Committee; the Public Bill Committee; the Whips; and the Clerks, who have all been particularly helpful. I also want to thank the Front-Bench teams of the Opposition and the SNP for their constructive approach.
We are increasing connectivity by moving forward with a new broadband universal service obligation. There are reforms to the electronic communications code and we have greater protections for intellectual property and consumers. We have strengthened protections for children too, and I extend special thanks to my hon. Friends the Members for Devizes (Claire Perry) and for North West Hampshire (Kit Malthouse).
As well as helping to bring the country online, the Bill enables Government to share information between public bodies, where there is a public benefit. That will help an additional 700,000 fuel-poor households. It means that the public sector will be more considerate when pursuing debts from the vulnerable. There will be fewer burdensome surveys for businesses to complete. No more unwarranted post will be sent to the families of the deceased. We have ensured the provision of both transparency and robust safeguards. Those measures will benefit the whole country.
The Government added a number of important new measures in Committee. There is now further support for the financial technology sector, enabling payment firms that are not banks to access payment systems currently accessible only to banks. That will improve competition in financial services and benefit consumers. We are offering free digital skills training for adults in England who lack relevant qualifications, and the Bill gives Ofcom more power to keep harmful content from being broadcast both on radio and on television. I hope that the successful way that the Bill has been discussed and improved as it passes through this House will reassure and encourage those in the other place as they consider the Bill.
Digital technology offers tremendous opportunities. Many of them are currently hard to predict and some are unfathomable, yet we know that we must be ready now if we are to enjoy innovations in future. I want the UK to be in a position to lead the world in the development of digital technology. I want us to lead the world in digital connectivity and skills for everyone, not just the professionals and not just a privileged few.
The Bill will make our country wealthier, more efficient, more skilful, more connected and safer. I commend it to the House.
Kevin Brennan
I thank my hon. Friends who served on the Public Bill Committee and the many individuals and organisations who submitted evidence to aid the scrutiny of the Bill, as well as the Clerks for their patience and advice. I also thank the Secretary of State and the Ministers for their hard work.
The Minister for Digital and Culture has been most assiduous, as we in the Opposition have tried to be also. On Report earlier, he even tried to speak some Welsh. It reminded me a little bit—as he often does—of Winston Churchill, who when he attempted to speak French said as a warning, “Prenez garde, je vais parler français”, or “Take guard, I am going to speak French.” The Minister did not quite give us that warning when he spoke Welsh. He did say he thought what he said meant that he backed the Welsh language; in fact he said that he backed Channel 4 Wales. I think that is what he said, anyway, in Welsh. I congratulate him on his commendable effort in speaking the language of heaven.
The Opposition will not be opposing this Bill on Third Reading as it contains a number of uncontroversial measures which we welcome and support and have no wish to block. However, that is not the same as saying that we think it is a good Bill. Its weaknesses lie as much in what it omits as what it contains. President Lyndon Johnson once said of a Bill that it was like grandma’s nightshirt; it covers everything. This Bill attempts to cover everything, but I am afraid there are quite a few holes in it, because a digital economy Bill would look much better if it properly recognised the importance of the digital economy to the whole country, if it took account of the pace of change in the development and use of new technology, and if it saw its central role in the way that work itself is changing for millions of people in the UK.
Let us imagine what the Bill would be like if it was much more ambitious about delivering ultrafast fibre broadband and mobile network coverage to everyone who needs it. Imagine a digital economy Bill that recognised the need to provide people with digital skills so that they can benefit from new technologies and the jobs of the future, or paid attention to the need for digital resilience and saw fit to mention cyber-security and preventing online abuse. A digital economy Bill that did any of those things would look very different from the Bill before us.
I want to focus on the areas where there is some agreement. On connectivity, we of course support the universal service obligation, but it is too tiny and too slow a step in the right direction. Labour called for this to be introduced back in 2010, and left fully costed plans for it to be achieved by 2012. The 10 megabits that will be guaranteed to households is less than half of what is needed to achieve superfast broadband. If anyone is wondering whether 10 megabits really is inadequate, they should not just take my word for it: the Minister for Digital and Culture said in a speech to the Broadband World Forum just last month that
“while 10 megabits may be enough for today’s needs, it won’t be enough for tomorrow’s.”
Even the Minister admits that his own legislation will be out of date by the time it is implemented.
On age verification, we all share the objective of protecting children from online pornography, and we support the provisions in the Bill that aim to do that, but we remain unclear about how they will work in practice and we hope that more details emerge as the Bill continues its scrutiny in the other place. There are legitimate concerns about privacy and the security of individuals’ personal data, which the Government must do much more to answer. The Bill still lacks any mention of the need for online sex and relationships education for young people, which is at least as important as age verification in protecting children from the risks of early exposure to inappropriate material.
There are some measures related to public service broadcasting which we support and which will help to give greater stability and certainty to the sector, but one way in which the Government could clear up an element of great uncertainty that hangs over our public service broadcasting system is by clarifying their thinking about the future of Channel 4. It is now 14 months since it became known that the Government were considering options including privatisation of Channel 4, and we are still none the wiser as to their thinking. Bringing this matter to a speedy conclusion—I hope by announcing their continued support for Channel 4’s current remit and model—would help to bring stability and certainty not just to that important public service institution, but to the wider creative industries with which its work is intimately bound up.
As this Bill moves to the other place, I hope that the Government will be able to provide reassurance on many of the concerns that have been raised by our colleagues in this House, and to think harder about more of the questions which have so far gone unanswered. It is not too late for the Bill to address questions around people’s rights over their own personal data, on which it is currently silent. It is not too late for the Government to come forward with measures to secure the rights of more than 1 million workers in the digital economy, many of whom are in precarious roles with uncertain rights, hours, contracts and even legal status. It is not too late for the Bill to recognise the needs of the 12 million people in the UK who do not have basic digital skills, which are increasingly necessary to navigate public services, to do business and to get jobs.
If the additional scrutiny to be provided in the other place can do these things and more, then when the Bill comes back to this House it will enjoy more wholehearted support from the Labour Benches than it has so far.
Mrs Miller
We are seeing the internet come of age through this Bill. I very much welcome the change in the tone of Members on both Front Benches. The digital economy in this country is hugely important, but we need rules in this area just as we need them in other aspects of our lives. The acknowledgement that we need clear rules on content is welcomed across the board. I congratulate Ministers on the amendments that have been made to strengthen enforcement, particularly around harmful content, and I hope that when the other place considers the Bill, it will be able to look at some of the other points that right hon. and hon. Members have raised today. I wish the Bill well.
Calum Kerr
I should like to add to the positive vibes coming from both Front Benchers and join them in thanking the Clerks. I particularly want to thank those in the Public Bill Office, who have been fantastic in dealing with someone who is still relatively new to all this and sometimes does not get things right first time. Officials in the Department for Culture, Media and Sport and in Ofcom have also been particularly constructive and helpful to us as we have found our way.
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and I entered the Bill Committee with all the optimism of newbies, thinking, “We have such massive logic behind our case that the Government’s going to bite our hands off to get at our new clauses and amendments.” Of course, we learned the hard way that that never happens. Even when they completely agreed with us, there was always a wee excuse for why they had to do things in their own way. I remember that the Minister even spoke to my new clause. The Chair had called him to speak before me, and I sat there thinking, “Oh, this could be one of ours. I fundamentally agree with him.” Then I realised, and thought, “Oh, perhaps we’ll need a consultation on this.”
On Second Reading the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale), compared the Bill to a Christmas tree. That was quite an interesting analogy, considering where we have ended up. I said at that time that the Digital Economy Bill’s title was something of a misnomer, in that it lacked any strategy, ambition or drive to take advantage of digital opportunities. There was certainly no guiding light or star on the top of this tree. It is also fair to say that some of the things that have been hung on it leave a little to be desired. However, we should acknowledge that many of its elements are very welcome, as my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) did in his own inimitable style. He has probably now set a precedent by speaking in an EVEL debate, which he will rejoice in.
Some of those welcome elements did not get touched on today. I think we all agree that the reform of the electronic communication code is overdue, for example, and the measures on customer compensation and switching are very welcome, as are some of the powers for Ofcom and the review of spectrum. However, other parts of the Bill leave something to be desired, as I have said. They feel more tokenistic than meaningful. I am referring in particular to the universal service obligation.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
Does my hon. Friend agree that constituents in all parts of this country want a fibre future and access to ultrafast, not just fast and superfast, broadband?
Calum Kerr
I totally agree. The Government have missed an opportunity and I am disappointed that they did not accept my new clause 27, although it might be the foundation for the sudden emergence of a strategy on vouchers. Government Members will have to explain to their constituents why 10 megabits per second is okay for rural areas while urban areas aim for a gigabit connection—100 times faster.
The Bill has good intentions in some areas but, as I articulated earlier, its execution will be flawed. My hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) talked about faulty goods, and I guess these bits are a bit like the parcel under the Christmas tree that looks quite nice, but is deeply flawed when it is opened and will be returned to sender. I would have liked part 5 of the Bill to be returned to sender, but I welcome the Minister’s commitment to continue to iterate and evolve the measures—I thought the amendment paper was going to get bigger than the Bill at one point such was the desire to amend it. I read a tweet from Big Brother Watch that said:
“Good to hear support for GDPR from the minister… can govt now write part 5 so it clearly adheres to it”.
I look forward to continual efforts to ensure that that happens.
In conclusion, among all the sparring and comments—they were light-hearted at times and serious at others—there has been genuine movement on this Bill. We have tried to be constructive in discussions and by setting forward our ideas, and I look forward to continuing in that vein.
Nigel Adams
I shall speak only briefly on Third Reading. I enjoyed being a member of the Public Bill Committee, which was only the second such Committee that I have served on—[Interruption.] I notice the Whips looking at me, but this is by no means an application to be involved in more any time soon.
The team in the Bill Committee was very constructive, and we have just had an encouraging debate on Report, but I want to touch on one issue that is worth pressing home: ticketing, bots and touts. People have said to me that this is free-market issue—rightly so—but a principle of any truly free market is that there is a willing buyer and a willing seller. We cannot forget the second part of that equation. While some fans might be willing to spend, perhaps through gritted teeth, many thousands of pounds on tickets—dozens of times over the face value—to see a favourite artist, not many artists are willing to sell their tickets to parasitical touts. Touts rob artists of their right to set prices that might be more accessible to their fans. If Adele, for example, wanted to charge £10,000 or £20,000 for a ticket to one of her shows, she would, but she does not. As a seller, that is absolutely her right. We should support a free market in which a seller’s right to make such choices to develop their fan bases is respected.
I was pleased that the Minister committed on Report to act against bots if necessary, following his meeting with the Secretary of State and the industry. I have no doubt that all involved would like to work together as the Bill progresses, and I stand ready to play a small part if possible. The fundamental point is that we have now achieved broad cross-party consensus. Other countries have brought in similar laws to outlaw bots, and now is the time for this House to take action. This is a technical area that is not simple to resolve. While this is not the only measure that will tackle ticketing problems, it has cross-party support, as well as support outside the House, including from ticketing companies, which want action and bots to be outlawed. I look forward to the Minister’s response to the Waterson report and hope that any action that the Government take in the other place will give consumers the confidence that this Government are on everyone’s side, not just the side of a privileged few.
Drew Hendry
I will be brief. Overall, the work of the Bill Committee was positive, and there were several things that we can take forward and look to see the benefits of in the future. I would add that in the future there needs to be much more of a focus on the consumer, and the rights of the consumer and of the end user. There will be further opportunities to make sure that the right solutions are delivered in the right places, particularly for rural areas. When we consider speeds, we should think about going “outside in” and think of those people who normally get the technology latest having the opportunity to get it first. Consumers should also be protected when they buy things—if they make a contract, that contract should protect them as much as it does the company, so there is a balance to be achieved. I welcome a lot of the measures in the Bill and I look forward to seeing progress in the future.
Question put and agreed to.
Bill accordingly read the Third time and passed.
SPEAKER'S COMMITTEE FOR THE INDEPENDENT PARLIAMENTARY STANDARDS AUTHORITY
Ordered,
That the Motion in the name of Mr David Lidington relating to the Speaker’s Committee for the Independent Parliamentary Standards Authority shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.—(Michael Ellis.)
Digital Economy Bill
Tuesday 31st January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 28 November 2016 - (28 Nov 2016)
Lord Mendelsohn
“(2B) The universal service order shall say that broadband connections and services must be provided—(a) with speeds of 2 gigabits or more;(b) with fibre to the premises (FTTP) as a minimum standard; (c) with appropriate measures to ensure that internet speed levels are not affected by high contention ratios;(d) with appropriate measures to ensure service providers run low latency networks.”
Lord Mendelsohn (Lab)
My Lords, as well as moving Amendment 1, I shall speak to Amendments 9, 10 and 11. These amendments cover the nature of the universal service obligation and the setting of standards—issues relating to market structure and how best to roll it out are dealt with in group 5—so these focus particularly on those aspects. These are probing amendments that address whether, in passing such an important Bill that makes a further step in developing our digital economy, the measures contained are sufficient, and whether this legislation will provide leadership and adequately address our future needs. It is important that we remain ambitious and have a flexible policy and, now that we have an industrial strategy, have the mechanisms to meet it.
There is of course a strong case for a universal service obligation. A “universal service” is an economic, legal and business term used in regulated industries to provide a baseline of services to every resident. It establishes the availability of a quality service at just, reasonable and affordable rates, which should be available to all consumers. Universal services were widely adopted across Europe in the 1980s and 1990s, and there is a case to say not just why we should have one but why we have not had it. It is therefore welcome that the Bill establishes it. Across the EU, only Finland, Malta and Spain have provided for a minimum broadband speed in national law—Germany is on the way to it—but this Bill is an important step. That reflects the fact that communications, such as broadband and the like, have become a fourth utility that is crucial to modern life. Citizens face more and more encouragement to be online to access public services, commercial services or other things, and there are now penalties for those who cannot access, or are not adequately served by, broadband or who find it difficult to use.
The universal service obligation is a critical part of the Government’s strategy to ensure that the current model of broadband delivery does not risk ending up in a two-tier service, dividing the digital haves and have-nots and exacerbating the potential for holding back Britain’s regional economies. The Government are providing funding to support the rollout of fast broadband to those areas of the UK where commercial rollout has not been sufficiently attractive or where the market structure has not developed to incentivise it adequately. This is mostly, but not entirely, in rural areas. The broadband universal service obligation will act as a safety net, allowing those with poor connections the legal right to request a fast connection.
The Bill contains enabling powers for the USO to be specified in secondary legislation. The download speed will be specified in secondary legislation, and is expected to be 10 megabits per second. Amendment 1 would write that ambition on the face of the Bill, and it sets out the speed and nature of the delivery—fibre to the premises—and covers contention and latency issues.
Prior to getting into the meat of the amendments, I think that it is important to see broadband in the context of mobile. The universal service obligation should be on mobile as well, and we will come to that in later debates, but it is important to take note of it at this stage, because we are here following the market, not consumer behaviour. We are addressing much, although too little, of what is happening.
Ninety per cent of the UK adult population is online, which is about 48 million people. The share of adult users has held steady, suggesting that stubborn challenges remain to reach 100% use rates. Most room for growth lies in take-up and deeper usage of online services among the over-55s. With the growth of mobile, focus has shifted away from broadband, but the fixed broadband market is still slowly growing. Seventy-seven per cent of UK adult users connect to the internet via broadband at home, and this number has held steady. Regarding devices, laptops and smartphones, each of those boasted 38 million users; tablet ownership has been declining. Use of a desktop PC has been on a steady decline since March 2011, and this is forecast to continue over the next few years.
Mobile connectivity has become such an important part of our life that one of the central findings of the National Infrastructure Commission’s report was that,
“mobile connectivity has become a necessity. The market has driven great advances since the advent of the mobile phone but government must now play an active role to ensure that basic services are available wherever we live, work and travel, and our roads, railways and city centres must be made 5G ready as quickly as possible”.
Many in this Chamber will have digital services: many will connect via broadband; some will connect through 5G services; they are interrelated.
I turn to the issue of speed. The Government argued in the universal service obligation consultation early last year that 10 megabits per second was sufficient to enable,
“full participation in a digital society”.
Later, Ofcom was charged in its technical specification to model around that definition. It modelled 10 megabits per second—10+1 being the upload speed and 30+6 being a speed frequently mentioned by others.
Is 10 megabits per second really a sensible target? I would suggest that we look at the evidence supplied by Sean Williams, the chief strategy officer at BT Group, to the Committee in the other place. He stated that BT has,
“made clear our willingness to deliver 10 megabits to every premises in the country by the end of 2020 without any further public funding and without even really progressing the USO regulations”.—[Official Report, Commons, Digital Economy Bill Committee, 11/10/16; col. 5]
If it is that easy, is it a sensible target?
In its assessment on the technical specification, Ofcom made a very important point. Ofcom has published evidence showing,
“that a speed of 10Mbit/s is sufficient now to allow multiple users to simultaneously use the internet, including web browsing, video streaming, video calling and gaming”.
That would not be the opinion of my children, but that is another matter. It goes on to acknowledge that this minimum,
“may need to increase over time”.
Even if we took the argument that 10 megabits per second was sufficient at this stage, which I do not think is the case, it would not be a very sensible approach to start with.
What are our anticipated needs? Many representations have been made. I think the National Farmers’ Union made a very cogent argument as to the speeds it was looking at. It would need to establish, as a minimum, both upload and download of 30 megabits per second. Is that sufficient? European Union Governments are committed to providing this speed universally by 2020, and EU targets are now of 100 megabits per second by 2025. If the broadband USO is intended to be only a safety net, this means that there is currently nothing offered for the 5%, and they will have limited access to anything that is defined as superfast.
New York announced a plan that, by the end of 2018, there should be 100 megabits per second, and by the end of 2019 this should rise to 300 megabits per second. Included in the package to deliver this was an affordable broadband service to unserved, underserved and low-income residents. It is no accident that the list of top 10 countries does not include the UK but does include such luminaries as South Korea, Norway, Sweden, Hong Kong and the like. When it comes to an international comparison, looking at download speeds for fixed internet services, the UK currently resides in 23rd place. We may feel that we have achieved a huge amount, but we are only in 23rd place. If we aggregate download and upload speeds, looking for the average between the two, we drop another 15 places. That is hardly encouraging. I have to say that it is better than our mobile internet access, on which we are currently placed at 39.
A further point to make is about the nature of the digital economy. E-commerce underpins the UK digital economy. Much growth has come from online sales. Moving forward, we expect a lot of the drivers of e-commerce to be the additional interactive mechanisms —AI and other forms of activity—that require much greater speeds in order to encourage uptake. British brands enjoy great cross-border appeal among European and Asian shoppers. An important part of what we need to do, to give ourselves the infrastructure to be able to compete effectively, is to have the right broadband level.
However, this is not just about speed, and we do not just specify speed here. We go for a speed of 2 gigabits to be established by 2020. That is not an unrealistic objective. There are parts of the world servicing 10 gigabits already, so 2 gigabits is not an overly ambitious target, but it is not just about speed. There is the important issue of reliability and consistency. The noble Baroness, Lady Harding, made a good point in the Committee in the other place, when she said that,
“consumers and businesses would say that reliability and consistency are every bit as important as speed”.—[Official Report, Commons, Digital Economy Bill Committee, 11/10/16; col. 8.]
Indeed, for many people there has been a huge issue about the underinvestment in routers, which translate broadband speeds at a very low speed across the house, and among many international comparisons we have some of the worst performing routers.
Upload speed is also an important issue. We have no real specification for it, although it is as crucial as download speed.
Lord Fox (LD)
I will speak to Amendment 2 and make some comments on Amendment 1. Like the noble Lord, Lord Mendelsohn, I welcome the principle of a USO and we are having a healthy debate now. I will probe the Minister in detail about how the Government will respond to the Ofcom report. I was frankly surprised by the report’s language when it came out—it was a mere twinkle in our eye when the House last debated this. It referred throughout to “decent” broadband as a starting point, rather than “world-class” or “leading” or any of those things. As the noble Lord, Lord Mendelsohn, outlined, the work that has gone into modelling the need for broadband is, in one way, completely pointless. Most noble Lords are old enough to remember a time before the internet, or the industries which now use that medium, even existed. You could not have modelled how much bandwidth you would need today 10, 15 or 20 years ago. The industry that will use this network has not been invented so we cannot know what is necessary. Decent is fine but frankly we should be looking for the best possible. In Amendment 1 the noble Lord has set a very high bar.
In Amendment 2 we have taken as our text—as I am sure noble Lords can recognise—scenario 3 from the Ofcom report. It is really to test two things. One is the universal part of the USO. We are of the persuasion that universal means universal rather than 99-point-whatever-it-is per cent. I would be grateful to hear from the Minister what he believes universal means. On timing, we have heard various claims that by 2020 at the flick of a finger we could all have 10 megabits. There are many people where I come from in the countryside and from all over the country who would be very surprised if they could get 10 megabits. They are still struggling with ones and twos and upload speeds of practically nothing. The fact that apparently this is so easy and frictionless yet so far away for so many people seems slightly at odds. The point of Amendment 2 is very much to set what I think the previous speaker would call a less ambitious target, but one that we believe should be eminently achievable. I misspoke because it is not a target; the USO is a minimum. The noble Lord who spoke previously used the word “target”. One of the dangers is that this becomes the limit to our ambitions and it should not be. In many senses Amendment 2 is entirely compatible with Amendment 1. We have to get to Amendment 2 as a minimum but Amendment 1 and all the ambition enshrined within it can still be part of this formula.
Looking forward, we will be talking later about how we can assess the progress of this. At the moment we want an amendment that is designed to give the Minister enough pressure on Ofcom and Ofcom enough pressure on the service providers to deliver a minimum standard. It is inconceivable and unacceptable that we should be so down the pecking order at the moment. We will talk about other structural issues through the course of Committee but as a very minimum we believe Amendment 2 sets a standard.
Baroness Byford (Con)
My Lords, I have Amendments 3 and 7 in this group. I reiterate the expressions of support for this Bill given by earlier speakers. There are many aims in this Bill that I support but some specifics are worth raising at greater length. I perhaps should remind the Committee of our family interests in farming although, as far as this Bill is concerned, we are without any form of modern communication in any of our buildings. That might change in the future but clearly we are not an interested player in that part. I am a member of the CLA.
Amendment 3 is quite detailed—so I will not read it out—and tries again to tie things down more specifically than they are in the Bill. It seeks to guarantee clarity over what the consumer can expect from a universal service obligation on broadband. It will ensure that the USO delivers a minimum speed of 10 megabits—perhaps we might have further conversations about that—and that this is reviewed to reflect technological advances and increased demand. Once enforced the USO must also allow those who are not provided with access to broadband at the set minimum speeds a simple means of seeking financial redress if that is not resolved, which they can then use to find an alternative means of getting connected.
The CLA believes that this redress should mirror the reasonable cost threshold, which should sit just above the current landline threshold, at £4,000 per property. Small, rural communities should be able to pool this money to invest in alternative technologies and connection schemes that provide them with faster and more reliable—and potentially cheaper—connections compared to its being done individually. For these most remote premises, making use of a wide range of technologies, including wi-fi networks, satellite and mobile data to help provide universal coverage, will help to ensure that the introduction of the USO is a success and should be encouraged.
On my Amendment 7, which is about “may” and “must”, I need not argue the toss of the wording between the two words but feel strongly that “may” is a facilitator and “must” is a direction. I am sure that other noble Lords are probably heartily sick of receiving complaints from friends, neighbours, colleagues and family about the broadband service which they either have or are still unable to achieve at all. I have often spoken in this House of the areas that are not covered at all; of the services that advertise speeds “up to” but which achieve only a fraction of the implied promise; and of the difficulty of obtaining a helpful response from service providers when things go wrong.
The speed of change on the digital technology front is such that the Government must keep up with both the challenges and changes facing them and with their implications for society. No one can doubt that Ministers are very busy people, who are subject to a variety and quantity of pressures. I feel strongly that Parliament should assist them by indicating those priorities that are paramount. Most of us can have no idea of future provisions that will affect the universal service obligation. We ought to insist that whenever that obligation is affected, the Minister has to look closely at it more closely.
I wholeheartedly support the amendment in the name of the noble Lord, Lord Mendelsohn. I merely suggest that it be made clear that most farms—we spoke about rural areas—GP practices and businesses are small and medium-sized enterprises but are often not regarded in that way. My concern may be unnecessary, but I have read a great deal about the difficulties experienced by these enterprises, which are located in rural areas and which may not be recognised as belonging in that category of small or medium-sized businesses. Only last year, those who wanted to put forward their claims for the single farm payment were totally unable to do so in some areas because there was no broadband available, and in fact the department had to revert to accepting written paper applications, which people had been using for years.
My amendments are probing amendments, but it is important that our broadband is strengthened and is available to all. As was quoted, the NFU has suggested a speed of 30 megabits per second. Reliability is absolutely key to success in any area. As the noble Lord who spoke just before me quite rightly pointed out, many of the new businesses that have been formed would never have been started had they not had broadband access. If you look at rural areas and the growth in small and medium-sized businesses, many of them are based in those areas and give an option for employment for people in areas where it would not have been at all possible in the past. Therefore, delivery, accountability, setting challenges and holding to account are hugely important. I know that the Government are aiming at 100%, but it is often said that the aim is 95% or 99%. Often I wonder whether that refers to numbers of people or the areas covered. If it is on numbers of people, obviously it is easier in urban areas than in very rural areas.
I have tabled one or two amendments to the Bill that we will come to later. I support and welcome it, but there are areas which we need to strengthen, and I am glad to have spoken to my two amendments along with the other amendments that have been moved and spoken to already.
Lord Aberdare (CB)
My Lords, as I indicated at Second Reading, I very much support the proposal for a broadband universal service obligation. The amendments in this group raise a number of questions in my mind about how the USO will work. Like several other noble Lords who have spoken, I am not convinced that all of these can or should be left to Ofcom, or to enabling powers, to resolve. For example, is the USO intended by government to be a safety net for users for whom no other service is available? Or is it seen as part of a more ambitious and aspirational strategy aimed at ensuring that the UK is, and remains, a global leader in the quality of its broadband availability? If the latter, Amendment 1 would look attractive, setting the sorts of targets that I believe we should really be aiming for. But even if the Government are leaning more towards a safety net approach, as seems to be the case, I would be inclined to support Amendment 2, which includes not just superfast download speeds but provisions for such other key features as upload speeds, response times, information rates and data caps. As the Local Government Association points out in its briefing, and as other noble Lords have mentioned, upload speeds are at least as important to businesses, especially smaller businesses, not least in rural areas.
Ofcom itself, in its technical advice to the Government, looks at three possible USO scenarios, as laid out by the noble Lord, Lord Mendelsohn. I share the view that the USO should offer more than the basic, standard service. While Amendment 1 might be seen as representing an ideal—a very worthy ideal—Amendment 2 sets out a perhaps more realistically achievable target, which I would support. I also fully support the proposition at the end of Amendment 2 that whatever initial specifications are set should be reviewed annually and increased in line with growing need, as well as the requirement in Amendment 8, tabled by the noble Lord, Lord Fox, for an annual report on the implementation of the USO. Indeed, I would also support the review of Broadband Delivery UK, proposed in Amendment 9, and the duty proposed in Amendment 11 to ensure that the USO is, in fact, achieving its aims.
Who will the USO fall upon, and who will be designated as universal service providers? Will it be just BT and KCOM in Hull—at least initially, as envisaged by Ofcom—or is it expected that others will be designated; and if so, who might these be, how will they obtain USP status and on what terms?
Finally in this group, I also welcome Amendment 10, which is designed to ensure that the needs of SMEs are addressed as a priority under the USO. I look forward to hearing from the Minister how the proposed USO will help to take the UK further up the global league table from the position described by the noble Lord, Lord Mendelsohn, which I think was 23rd going on 38th.
Lord Gordon of Strathblane (Lab)
My Lords, I support Amendment 1, and indeed the other amendments in this group, without in any way taking away from the credit due to the Government for introducing the USO. I think we are universally in approval of what the Government have done, and they deserve great credit for it. However, as I mentioned at Second Reading, this is a rather unambitious target. That of itself is not worrying—after all, it can be left to Ofcom to increase the target—except that it will alter the way that we go about things. We need a step change in how we go about things. Ten megabits can be achieved by wringing more miracles out of copper wire, and we would change nothing. This is not even in tune with the Government’s own thinking. Again, the Government deserve great credit for what they announced in the Financial Statement about new funding to look at what we can do with 5G. 5G could revolutionise our industries and the Government have put money behind that. The department would find itself pushing at an open door if it asked the Treasury for more funding at this point.
My last point in this brief intervention is simply to say that, having looked at the broadband advice to the Government and the three scenarios, I was, frankly, pleasantly surprised by how little option 3 costs. If that is all it costs, why not go for it and get the Treasury to cough up?
Lord Mitchell (Non-Afl)
My Lords, I support all three amendments on the USO. In my view, anything is better than what we have at present and what the Government are aiming for. In particular, I support Amendment 1 in the names of the noble Lords, Lord Mendelsohn and Lord Stevenson of Balmacara. Theirs is the most ambitious amendment, and ambition is what we desperately need. I do not think that it is pie in the sky; it really is what we have to go for.
In my Second Reading speech, I said that gigabits are the future of connectivity—they are the king—and that megabits are simply history. I stick by that. We cannot have pathetically low connection speeds. As we know, sadly, from its past performance, you can set a target for connectivity as low as you like, and the one thing you can be absolutely certain of is that BT will fail to meet it.
It is very clear that worldwide the goal is gigabit connectivity. South Korea, China, the Baltics and Scandinavia are all racing to the top to ensure that their societies are right at the forefront, and so must we. If the Prime Minister wants an industrial strategy that results in a global Britain leading the world, then she and her Government have to set high targets for 21st-century Britain, and nowhere more so than in connectivity. What the Government propose is like having a man with a flag walking in front of a car to ensure that it does not exceed 4 miles per hour. That is why I support Amendment 1—it flies the flag for digital Britain.
I plead with the Minister: do not settle for a third-rate target lobbied for by BT. It has its own agenda, which is to milk its obsolete copper infrastructure. Its interest is not in the national interest. Will this Government be bold and will they set their sights on promoting a gigabit economy?
Lord Arbuthnot of Edrom (Con)
My Lords, one issue that has not been raised in this debate so far is the effect on small businesses in rural areas of the poverty of mobile telephone networks. That, combined with slow or poor, and sometimes non-existent, broadband speeds, puts rural businesses at a disadvantage. So I have a great deal of sympathy with the amendments that have been spoken to, and I hope that the Minister will show similar sympathy.
Lord Inglewood (Con)
My Lords, I join those who have spoken in support of these amendments. Like some other noble Lords, some weeks I come up from the country to your Lordships’ House. The shortcomings of the infrastructure in rural Cumbria, where I live, is far too frequently a topic of conversation.
As a number of noble Lords have said, connectivity is the crucial aspect here, because it is now part of the essential infrastructure of contemporary life. It is important that we look at this issue from the perspective of what people need, but the reality is that what we need today may not be what we need tomorrow. We have to try to bridge the gap between the digital haves and the digital have-nots, and we achieve that by looking at the issue in the way that I have just described. Therefore, I am not approaching this matter from a kind of nerdy, technical perspective. What matters is the result as much as the means by which you get there.
Over the years, there has been a lot of debate about whether a universal service obligation should be in our law and be statutorily enforceable. I had the good fortune to chair the Communications Committee, and a number of years ago, when we conducted an inquiry into broadband, we debated this issue at length. On that occasion we reached the conclusion that what mattered was the rollout and that it was quite conceivable that a USO would get in the way. With the benefit of hindsight, that was probably a mistake, and therefore it is interesting to see the provisions for such a legal obligation coming into our legislation.
However, at the end of the day I come back to where I started with all this, and it is why I will be interested to hear what the Minister has to say. It is not the detail but the result that matters here. We have got to move into a world where the digital divide is bridged. This is particularly important for areas in the country, and I speak from that perspective, but it is also true for a number of urban areas. We seriously deny people access to a whole range of commercial, and other, aspects of contemporary life if there is not adequate connectivity. As a number of your Lordships have said, we live in a country that is adopting a different approach to industry. It is crucial to appreciate that the key to increasing wealth creation in areas outside the south-east of England—which I think everyone agrees is desirable—is improving connectivity. That is the way, as noble Lords have said, to improve the potential of SMEs outside the south-east.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am glad that we are at last able to start this very important Committee. I should immediately declare an interest, which is that I suffer at my home in the country from extremely bad broadband, although we are lucky enough to be able to use microwave technology to do something about this. In addition, last night when I tried to ring my wife from central London on my mobile telephone to complain how overworked I was, I was unable to get a signal. So, I can absolutely sympathise with my noble friends Lord Arbuthnot and Lord Inglewood; I recognise the problems, particularly for rural areas and SMEs, and the Government agree with quite a lot of what has been said in terms of aspirations. I think we will differ when we come to decide how the USO should be used to fulfil those aspirations, and exactly what its role is.
The Government have a clear digital agenda, and our ambition is for world-class digital connectivity. We are determined to ensure that the UK has the digital infrastructure that our businesses and citizens need both now and in the future. The Green Paper published on 23 January makes digital infrastructure a central pillar of the Government’s proposed industrial strategy and identifies good digital infrastructure as a driver of growth.
We support the spirit of Amendment 1, requiring that the universal service order should define a gigabit-speed broadband universal service obligation—or USO—delivered via full fibre to the premises. We differ in that we do not think that the broadband USO is the right tool to use at this stage in the development of the UK’s digital infrastructure market. To pick up on the point of the noble Lord, Lord Aberdare, the rationale for a USO is to prevent social and economic exclusion. It does this by ensuring that where the market does not deliver, a minimum set of communication services are made available, on request, to everyone, no matter where they live or work. In doing so, it takes account of the prevailing technologies enjoyed by the majority of people: the USO follows the market, it does not drive market change. The UK’s fibre market is at an early stage of development—currently only 2% of UK premises have full-fibre connection—so I do not think we have reached the stage where there is a case for introducing a gigabit-speed USO. It is not a prevailing technology used by the majority and it is not needed to prevent social and economic exclusion.
We do, however, agree that more extensive fibre connectivity is crucially important to the UK’s future digital growth. We are planning now for the networks that are going to be needed to ensure continued economic growth and development across the UK in both urban and rural areas. In the Autumn Statement we announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full-fibre connections and future 5G communications. The Government are consulting on how we might further encourage full-fibre rollout.
Amendment 2, in the name of the noble Lord, Lord Fox, proposes a superfast broadband specification for the USO. This specification is, as the noble Lord said, in line with scenario 3 of Ofcom’s USO technical advice, which the Government commissioned to help inform the design of the USO. All the scenarios set out in Ofcom’s report are being given careful consideration. Once that work has been completed there will be a public consultation on the design of the USO and the specifications that will be included in the universal service order, including the minimum speed.
Lord Mendelsohn
My Lords, I have a confession: I did not expect the Minister to concede on all these points. I have another confession. One has to see the universal service obligation in context. It is a mechanism that addresses a market failure—the inability to get broadband extended across the country and to deal with the problems that are so replete in its delivery. I understand the Minister’s point, although we might disagree about how to use the USO. The Government are using it to nudge towards something that is otherwise not possible, but in the discussion on these amendments we have raised broader issues about what that means. I do not agree with the Minister when he says that we have to follow the market rather than define it. Everything that the Government have done has defined it. If you define it with such a low base, it is a major problem.
The noble Lord, Lord Fox, said that this was a minimum, not a target. Our target is a minimum, so we agree on that. I take the point made by the noble Lord, Lord Mitchell, that we are talking about gigabits because they are the future, whereas megabits are the past. We have to address that material failure.
We are disappointed at what the Minister said about the BDUK report. It established goals that it said were dynamic; it said that it was pegging itself in comparison with other countries in the achievement of its goals for the UK. If you do not measure against a changing goal, you do not believe in the goals. That is the problem. It is not a value-for-money exercise. It is about whether you believe in the goals that you have set for that organisation. If you are not prepared to report on it, it means that you do not believe in it.
In the new clause proposed by Amendment 11, we accept that the Government are looking at what is in paragraph (b), but I would be grateful if the Minister would write and say how the Government are trying to achieve what is in paragraphs (a), (c) and (d).
To finish, let me say quickly that 10 megabits is totally inadequate. If you are trying to establish a small business using 10 megabits and have a variety of people using it, it does not work. That is a huge failure for our country. You have to establish a reasonable target. As one noble Lord said, 30 megabits is certainly affordable.
Even if you get 30 megabits into a house, most people are reliant on using wi-fi to distribute it; they do not use a cable connection. I defy anyone to establish that most of the population is using anything near a definition of superfast in this country. We have a massive problem with routers and where they go. The Government talk about numbers as if they are giving us a proper and defined future. When we sell a USO, we have to have some sense that what is delivered to the public is really worth while. As a mechanism to nudge it forward, it is probably insufficient. Having said that, I beg leave to withdraw my amendment.
Baroness Janke
“(2BA) If the universal service order says that broadband connections and services must be provided to any extent, it must require the provision of a social tariff for broadband services which has the aim of preventing digital exclusion.”
Baroness Janke (LD)
My Lords, Amendment 4 deals with the introduction of a social tariff. At Second Reading, Members felt very strongly about exclusion, particularly digital exclusion, and the amendment seeks to address the issue of affordability.
Many people at the moment do not have access to broadband, particularly in some of the more deprived communities of the country. I come from a city and I know that it is easier there to access broadband than it is in rural areas. However, even where there is physical access, large sections of the population will not have broadband because the costs are unaffordable. I speak particularly of families on low incomes, children who need access to broadband for schoolwork and learning opportunities, unemployed people who are seeking jobs, people with limited mobility who have great needs and older people who may find the levels they are being asked to pay unaffordable.
It will become increasingly impossible to live in the modern world without having access to broadband, whether it is for the purposes of banking, claiming benefits, applying for a passport or any of the other things that we expect to do online. It is therefore important for the Government to consider during the passage of the Bill how they will address the issue of affordability.
The amendment seeks to introduce a social tariff. BT has a social tariff for telephones and the Government may wish to look at that. I hope that we can address this issue because, whatever the universal service obligation in regard to quality, accessibility and the extension of broadband to some of our less wealthy communities and vulnerable people is important. There is an opportunity to address this in the Bill and I beg to move.
Lord Mendelsohn
Very briefly, we on these Benches wish to associate ourselves with Amendment 4. It is an extremely good amendment which raises the important issue of ensuring that broadband is accessible to the unserved and underserved, and others.
The noble Baroness, Lady Janke, made a good point about online access for schoolchildren, particularly in communities where there are great challenges in teaching. You can already hear the reports from many schools about the divide between those who can and those who cannot afford access, with the expanding level of online teaching and resources. Schools are also administering other things online.
We have an amendment to remove the reasonable cost threshold because any extra cost associated with delivery of the USO should not be borne by the users of CSPs. It is important to make sure that the cost of ensuring delivery has been adequately taken care of in the Government’s considerations and that the companies provided to do this do not seek to transfer the costs to consumers. We must make sure that it as affordable as it can be and that it extends to the widest possible number.
Lord Maxton (Lab)
My Lords, I would like to add one category of cost to that: someone who lives in a remote area some distance away from the main telephone service. The cost of BT or another company installing a line up to that property can be outrageous, to be honest. It can be very considerable and much more than most people can afford to pay. So to the list of those who are disadvantaged and cannot get full access, including, quite rightly, the disabled, must be added those who live in a single property at some distance away from the main service. The costs can be prohibitive.
Lord Arbuthnot of Edrom
My Lords, I will address the House on Amendment 5, in the name of the noble Lord, Lord Mendelsohn. We all want to prevent digital exclusion and this is clearly an admirable way of attempting to do so. But the noble Lord suggests that,
“any excess costs … shall not be paid by users of communication service providers”.
So those excess costs need to be paid, presumably by someone other than any of the users of communications service providers. I wonder whether this amendment might be strengthened if it were to set out by whom those excess costs should be paid.
Baroness Buscombe (Con)
My Lords, let me begin by making it very clear that the Government are committed to building a country that works for everyone, and that we are working to make sure that nobody is digitally excluded. The broadband universal service obligation will provide a digital safety net by giving everyone the legal right to request a connection to fast, affordable broadband.
Amendment 4 proposes that the broadband USO should include a social tariff. The existing telephony USO already includes one—as the noble Baroness, Lady Janke, said—and BT has voluntarily added broadband for those who want it. When Ofcom was commissioned to provide advice to the Government on the design of the broadband USO, we specifically asked it to consider a social tariff to ensure that the USO was affordable for all. Noble Lords will be aware of the report that was published on 16 December. Ofcom’s USO analysis said that a social tariff was likely to be appropriate for low-income users. Once we have considered Ofcom’s report we will publish a consultation on the detailed design of the USO.
I should also make it clear—particularly in relation to the contribution from the noble Lord, Lord Maxton, and the reference by the noble Baroness, Lady Janke, in connection with vulnerability and access—that the Government are committed to actively tackling digital exclusion, which can be caused by lack of access but also by other barriers such as lack of basic skills. Some people will never be able to use online services independently, so the Government are committed to ensuring that assisted digital support is always available for these people. The Government’s digital support strategy mandates departments to provide this support.
If I have interpreted Amendment 5 correctly, it proposes that consumers would not be required to pay any excess costs above any cost threshold that is set. Under the current telephony USO, consumers pay the first £130. BT will then pay up to a threshold of £3,400. Consumers are then asked to pay any further costs above the cost threshold. Similar arrangements are in place for other essential services such as electricity and water. Ofcom’s technical advice, which we are considering, sets out analysis of this kind of model for a broadband USO.
Under the telephony USO, consumers have the option of carrying out some of the work themselves to help reduce their costs. Individual consumer requests for a USO connection can also be aggregated to help reduce the cost per premises to below the reasonable cost threshold. We are considering whether this type of arrangement would be suitable for the new broadband USO; this will be the subject of the later consultation. With that explanation, I hope that the noble Baroness will be able to withdraw her amendment.
Lord Foster of Bath (LD)
Could the Minister help the House with what she has just said about Ofcom’s recommendation being that it was likely that a social tariff would be needed? Can she explain exactly where within the legislation that social tariff will be introduced, bearing in mind what is said in Clause 1 about setting out the universal service obligation characteristics?
Baroness Buscombe
My Lords, I will need to check this to be absolutely sure, but it will not form part of the legislation. I am talking about the report that is being considered with care at the moment. There will be a public consultation after that report, so we cannot commit to this without fully exploring our thoughts and proposals in response to the report of 16 December. I hope that that is helpful—but it will be subject to regulations as opposed to primary legislation.
Lord Clement-Jones (LD)
My Lords, I do not want to prolong this but if it is to be subject to regulation, there must be primary legislation permitting that regulation to be made. Perhaps the Minister could write to us on that subject.
Baroness Buscombe
Yes, that is a good idea. We will absolutely make sure that we write to noble Lords on this point.
Baroness Janke
I thank the Minister for her response, which sounds extremely encouraging, and I look forward to hearing the Government’s response to the Ofcom report. In so doing, I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara (Lab)
My Lords, I start by drawing attention to the National Infrastructure Commission report that came out recently, which I am sure the Minister is well aware of, in particular to its references to the future of communications and mobile networks. This was central to the request by the Government for a review, so that the commission could come back with some recommendations which the Government might build into future plans. The report starts by saying that,
“the UK lacks the level of coverage … to offer … mobile services ubiquitously. In rural areas 3% of the population do not have any coverage outside their homes”,
which it calls “complete not-spots”, and that,
“25% do not have coverage offered by all the main mobile networks (partial not-spots). Coverage on our road networks is poor even for voice coverage … 17% of A and B roads are in complete not-spots and an additional 42% have only partial coverage”.
The Committee will probably have to read Hansard carefully afterwards to get exactly what I am trying to say on the not and have-not spots. However, the picture is pretty poor.
The commission’s report goes on to say:
“The UK performs poorly in comparison to other countries”.
We do not seem to have an overall plan for what to do. It also says that,
“government has agreed with operators that they should deliver 90% geographic coverage for voice and text by 2017”,
but that,
“it is not clear that this will meet consumer service expectations”—
a point which has already been made in earlier debate. It continues:
“As it stands, gaps in current 4G networks mean that around 20% of urban premises and almost 80% of rural premises are in a not-spot for 4G coverage”,
which is surely unacceptable. It then comes to the point that bears on the amendment we have tabled in this group:
“The next generation of mobile connectivity will need to deliver the right type of networks, in the right places, for the services that people and business need. This means that 5G networks cannot be thought of in isolation but must be considered as part of a wider ecosystem of mobile connectivity. Delivering the connectivity we require for the future must start by ensuring that we have the networks we need for today—this will not only provide a basic level of service to consumers … but … the backbone of the network infrastructure we need for the new services of the future”.
These points are relevant to Amendment 6. I think that we are agreed that a USO will have some value although we are not that agreed on what it will be and how much it will bite—we might be able to make some progress on that. If we have a USO, Amendment 6 addresses whether it is just for the provision of wi-fi and wire-to-premises services or will include the additional services that will probably be necessary to achieve full coverage.
Everybody hopes that the USO will deliver 100% coverage. As the report from the National Infrastructure Commission makes clear, we would not be able to reach that coverage without some element of mobile telephony. Therefore, while we shall be regulating for the wires and the fibre to take the signal by a conventional route, we shall be stuck with unmet need. We shall not be covering the last 5% or 10% of people who will probably need supplementary provision. Indeed, the Minister himself said that the only way that he could satisfy his children’s need for proper access to the internet was to provide microwave technology in addition. Therefore if the USO is to be effective, it will need to cover forms of technology other than simply communication down wires or through fibre.
Amendment 6 simply suggests that the Government should take a step forward along the lines set out by the National Infrastructure Commission. They should add in the mobile coverage that would be required to complete what would be the first widely acceptable USO at whatever level it is meant to be. That is necessary if we are to make the progress set out in that report.
Amendment 19 concerns the vexed question of roaming. A number of issues seem to arise whenever anybody picks up a contract for a mobile phone and tries to use it. First, if in the shop you ask whether you will be able to use a phone throughout the United Kingdom, a promise will almost certainly be made that will not be honoured in the detail. It is quite clear to anyone who does any travelling that service from the various network providers varies considerably. I think that the Government will argue that this is a good thing because only by having competition between the mobile network operators will one get the maximum coverage sought. However, since it patently does not achieve that, one has to ask whether this is the right way forward.
From time to time the suggestion is made that even if you could get the coverage that you wanted from the network and contract to which you signed up, it would not be sufficient. This is because there will always be a point at which the income to be generated from additional coverage will be less than the investment in new masts and equipment. Therefore there will always be not-spots, even with mobile and not just internet connections. As the National Infrastructure Commission said, voice coverage will be patchy and not be fully efficient unless we can do something to make it more possible to receive any signal, not just the signal from the contracted operator. It is going to be mixed—if we are to reach 100% we will need to have more than the current incentive for services to include that.
This amendment proposes a national roaming provision at certain points. Without this we will not see the coverage that the National Infrastructure Commission wishes, which common sense dictates and which usage will demand. Consumer pressure may well be the final straw on this point. We will need to make sure that there is a possibility of reaching out to whichever mast is nearer and whichever services are appropriate to needs. Roaming may be the answer. I beg to move.
Lord Gordon of Strathblane
My Lords, my Amendment 17 is along similar lines. Perhaps because of my comments at Second Reading, I have had various meetings with mobile phone operators. They take me to task for contrasting their performance with my experience of broadcasting where for 50 years ITV and the BBC have been sharing masts. They correctly point out that broadcasters can differentiate their product by content, whereas they cannot. Their business model is based entirely on one provider owning one mast and providing that signal to its subscribers alone. In fairness, it is not the ideal way to build infrastructure. For water, the equivalent would be three water mains running into the average house and three sewage pipes taking waste away. It is a pretty silly way to organise things, but it is the way they have been organised and—as everyone says nowadays with a degree of resignation about quite a lot of subjects—we are where we are.
Lord Maxton
My Lords, I just want to raise an issue of the future rather than the present. I hope that masts will soon be a thing of the past and we move to satellite provision of telephony in the very near future. I do not know whether that will be the case, but I have certainly heard it will be. Otherwise, I agree with my noble friends that we ought to be moving to having the best provider we can get in any area. I am with EE, and when I am sitting in my motor car driving along with my wife, who is on O2, and my son, who is with Virgin Media, who gets a service on their phone in some areas of the country will depend on the provider.
Baroness Byford
My Lords, as someone who is not as well versed as some noble Lords with the technology, it always strikes me as strange that if you go abroad, wherever you are, you seem to be able to get access. What do they do that we do not? Are there lessons that we should be learning? Do they have a different system? How does it actually work? It seems ludicrous that we are going into such nitty-gritty when perhaps, over there, there is something that we are not even opening our minds to.
Lord Ashton of Hyde
My Lords, I am grateful for the contributions in this interesting and important debate. Amendment 6, in the name of the noble Lord, Lord Stevenson, seeks to include mobile coverage within the scope of the guidance on the broadband universal service obligation. The universal service directive currently provides the regulatory framework for a broadband USO and although, depending on the design of a broadband USO, there is scope for the USO connection to be provided using mobile technology such as 4G, the directive does not apply to mobile coverage.
I am afraid we do not currently consider there is a case for a USO for mobile. The Government have already secured significant progress to ensure mobile coverage across the whole of the UK through the licence obligations arising from the December 2014 agreement with the mobile network operators, which locked in £5 billion of investment to support the rollout plans. We want to hold the mobile operators’ feet to the fire, and noble Lords will be aware that Clause 10 will give the regulator, Ofcom, the power to issue hefty fines to mobile phone companies that fail to meet their licence obligations. The noble Lord, Lord Gordon, mentioned that it does not help if you are not getting a full mobile service, but it is a direct incentive, as is compensation. We are trying to achieve what he wants.
Amendment 19, in the name of the noble Lord, Lord Mendelsohn, seeks a licence variation to require roaming within networks where there is an intermittent or no signal, while Amendment 17 in the name of the noble Lord, Lord Gordon of Strathblane, would offer roaming as automatic compensation. I understand the frustrations of people whose mobile experience does not live up to their expectations, but although roaming appears to offer a quick fix, it would do more harm than good, undermining the incentive for operators to invest in new infrastructure. This is particularly important for areas that have no coverage from any provider at all, as there is no incentive to invest capital in a new mast if other operators simply piggy-back off your investment.
Noble Lords mentioned coverage in other countries— my noble friend Lady Byford mentioned travel abroad. The reason for that is there are international roaming agreements, which apply to a UK citizen travelling in Europe. However, it is offered on a fair-use basis, when tourists travel for a limited period of time. Details of a fair-use test to prevent abuse of roaming are being agreed in the EU at the moment.
Roaming was considered by the Government in 2014, but was rejected in favour of licence obligations to drive increased coverage by all mobile operators, which locked in the £5 billion investment I mentioned earlier. We are making progress: Ofcom’s Connected Nations 2016 report, which records progress to June 2016, shows that 99% of UK premises now have indoor voice coverage and 98% have indoor 3G or 4G data coverage. Our recent reforms to mobile planning laws in England, and the proposed reforms of the Electronic Communications Code which we will be talking about later, will support further investment and improvements in connectivity across the UK and reduce coverage not-spots. We are working to make it easier and cheaper for mobile companies to invest so that consumers benefit from good coverage and can receive it at low prices. Our measures are achieving this, and our future reforms will support this further, thereby delivering a better deal for consumers across the UK.
Noble Lords will also be aware of our commitment to being world leaders in 5G, as the noble Lord, Lord Gordon, suggested. That is why we announced over £1 billion of funding in the Autumn Statement to support the deployment of the next generation of digital infrastructure. We want to support investment, and not discourage it. The noble Lord, Lord Maxton, talked about his desire to see no masts at all and for the system to be based on satellites. I am not an expert on the technical side of this, but I think I am right in saying that for 5G, which is what we are aiming for, we are going to see more masts, I am afraid, or more transmitters attached to various edifices—we will talk about that later, I am sure—because they have shorter range and greater bandwidth. So I am afraid I do not think the bandwidth that is possible from satellites will enable what we have all talked about and what is required for the future.
Lord Fox
I am grateful that the Minister has brought up the matter of smaller and more populous transmissions for 5G, because one of the issues that he could consider when implementing this is to limit the amount of new ducting and work that needs to be done on our streets and in our towns. To enforce, or expect, the sharing of ducting across our towns—which is not necessarily forthcoming—would help us with that. Perhaps the Minister will consider that.
Lord Ashton of Hyde
An amendment on that issue may be considered later today. That, however, will be a little taster for later. I have, therefore, come to the end of my explanations and I hope that, with those reassuring words, the noble Lord will withdraw the amendment for the moment.
Lord Stevenson of Balmacara
That is not at all the impression the noble Lord has given. Again, we have seen a lack of ambition to solve some of the long-standing problems. The noble Baroness, Lady Byford, was right to draw attention to what happens when you go abroad: you get a completely different experience—you are regularly connected to a service that you have become used to and there are no questions about which mast to point at. Wherever you are you will get service. Why we cannot get that here, I do not understand.
On this issue, however, we will always come up against the fact that if we are to get a 5G service across the whole of the United Kingdom the current system will not work. The directive may provide convenient help in propping up the Government’s arguments at the moment but that will not be available in a couple of years’ time when 5G begins to roll out seriously. We will come back to this issue. If we are to get to more than 92% coverage—the sort of ambition in the Government’s own paper, Connected Future—we cannot stick with the current model, which clearly does not work. In the meantime, I beg leave to withdraw the amendment.
“72B Universal service order: annual report(1) OFCOM must publish an annual report on the implementation of the universal service order for all areas pursuant to the provisions of this Act.(2) The annual report must include information on—(a) the number of premises that have been supplied with the minimum download speed as specified by the universal service order;(b) the number of premises that have been required to cover some of the cost of connection;(c) of the premises under subsection (2)(b), the average cost of connection per premises covered by residents, disaggregated by local authority area;(d) the number of premises that have chosen not to be connected via the universal service order after being provided with an estimate;(e) the amount of time on average it takes to provide an estimate and connect a premise, disaggregated by local authority area; (f) the percentage of premises nationally connected via fibre to the premises (FTTP);(g) the take-up of superfast broadband as a proportion of connected premises;(h) the measures taken by OFCOM, Government and others to increase take-up of superfast broadband;(i) the average time taken by named service providers to reconnect broken connections;(j) the number of community schemes set up in that year and the level of subsidy delivered to achieve this; and(k) the extent to which the rights of consumers are explained to them.”
Lord Fox
It transpires that since I last spoke in Committee—literally since I last spoke in Committee—I must now declare an interest: I have just received an email telling me that my broadband service conditions will change. The price has increased. I am virtually certain that the bandwidth has not.
Whether the Minister’s world-class targets, or the gigabit economy of the noble Lord, Lord Mendelsohn, is in play, the purpose of Amendment 8 is to address the issue raised very eruditely by the noble Lord, Lord Mitchell, which is that BT will miss its targets. The aim of this amendment is to introduce a way of monitoring performance regularly. There is a lot of talk about driverless cars but we do not want this to be without some serious driving. It is the central mechanism by which we on this side believe that the Minister and Parliament can drive performance on a regular basis. We talked, in Amendment 2, about an annual review of the USO, and we believe that this would be the precursor to that process. It is designed to create a sense of urgency and—to be honest—pressure, on both Ofcom and the service provider. Noble Lords will be aware that it is based on a suggestion, or proposal, of the LGA, but it has additional key measures designed to monitor progress.
It is perhaps simplistic to say so, but we should see ourselves—the Minister and Parliament—as the client in this relationship, Ofcom as the project manager and Openreach, or KCOM, as a contractor, and we need to be able to measure progress regularly. It is therefore not unreasonable to suggest some measures. Without going into huge detail, the measures address a number of issues. They address performance: paragraphs (a) and (f) look at minimum download speeds and the amount of fibre being installed on the premises. The economic aspects of (b) and (c) look at the cost of connection borne by citizens and the mean cost of connection. In (d), (e) and (i) we look at service levels, premises choosing not to connect, the time to get your estimate for connection and the time for repair—which many noble Lords will have experienced and should also be measured.
We then look at take-up and public acceptance, and my noble friend Lord Foster will pick up on some aspects of driving take-up. We need to look at the percentage of people opting to take this up and find ways of pushing it. We should have a way of measuring community schemes: in some senses the ease with which they can be established, and, frankly, the amount of resistance from the service provider that stops them happening. We also need to know that consumer rights— what they are receiving—are fully explained and understood, as I think the Minister has already said.
The reason for having an annual report is that we cannot rely on the Openreach mission to deliver this and we need to be able to put regular pressure, through Ofcom, on that delivery. Amendments coming up talk about the delivery model—the connection between Openreach and BT—but while we are in that situation, and even after, this amendment is a strong way of driving performance.
Lord Foster of Bath (LD)
My Lords, as my noble friend Lord Fox has said, I will very briefly address one element of the report, though I support the principle and all other aspects of the proposed list of things to be covered in that report. However, I draw the House’s attention to subsections (2)(g) and (h). Paragraph (g) talks about the take-up of superfast broadband as a proportion of connected premises and (h) about the measures taken by various bodies to improve that take-up.
I fully share the Government’s desire to create a digital Britain, with all the benefits that it can bring, including the online delivery of our public services. However, all the discussions I have had about broadband since joining the House have predominantly been about its speed and making it available. We know the figures—they are fairly clear: about 89% of households can currently access high-speed broadband, but we also know that only 31% of households have actually taken up the offer and 22% remain entirely offline. Furthermore, last year’s Ofcom study revealed that some 10% of households make it clear that they have no intention whatever of getting on to the internet at any speed. We also know that it is those with limited means—perhaps older and less well-off people—who make up the bulk of the 30% of the population who currently have either very limited or no access to the internet.
Bearing those figures in mind, and while I welcome all the energy, enthusiasm, debate and deliberation going on in the House—and by the Government, Ofcom and others—to improve the availability of high-speed broadband, at the same time as addressing the supply side we need to do far more work to address the demand side as well. If we are to reap the full benefits of digital Britain—to bridge the digital divide and reduce the unit cost of the installation of high-speed broadband—we need a concentrated and co-ordinated demand-side management programme. I have argued before that such a programme would address issues such as: skills training, which we will come on to later in the Bill; marketing the benefits of broadband; addressing the cost barriers—we have already had a brief debate on that with the amendment of my noble friend Lady Janke in relation to social tariffs; and of course developing quality, technology and content.
I readily acknowledge, as I have in the past, that there is good work going on in this regard by BT itself, the BBC, Barclays and many others. Local councils deserve a great deal of credit for the work they are doing, and the Do It Digital campaign is trying to help businesses get online. The Government have played their part with changes to the IT curriculum and aspired improvements, at least, to digital skills.
However, given that the take-up rate is so low, far more needs to be done, from the skills agenda to having a digital TV switchover-style campaign, advertising the benefits of getting online. It needs co-ordination. I believe that BDUK would be best placed to do that—its business voucher scheme was a good demand-driver—and the Minister might comment on where we are with the next iteration of that in his response. I toyed with tabling an amendment adding to the purposes of BDUK to cover responsibility for that but, for the time being, so that we have an opportunity to hear the Minister’s reaction and find out a bit more about what the Government plan in demand-management measures, I thought it more sensible to leave it included as one of the issues to be reported under the excellent proposal of my noble friend.
Lord Mendelsohn
My Lords, I express our support for the amendment so ably produced by the noble Lord, Lord Fox. It is entirely consistent with Amendment 21, to which we shall come in the next group, and it provides a useful window on performance. In considering what the full report should look at, I just suggest that it would be useful if it considered upload speeds, outages and user experience. We talk far too often about what speeds are delivered to the home and not enough about the user experience; it would be very useful to include that in such a report.
Lord Ashton of Hyde
My Lords, Amendment 8 also relates to reviewing the delivery of broadband policy. We have spent some time discussing broadband policy and I do not wish to repeat myself by setting out the Government’s digital agenda again. We do not disagree with the urgency, and the noble Lord is right to mention it.
The amendment would require Ofcom to produce an annual report on progress in implementing the universal service obligation. We should remind ourselves that that is the point of this part. The amendment lists a number of areas that the report should cover, not all of which relate to the broadband USO. As noted previously, I agree that it will be crucial to monitor progress of this important consumer measure, but I think that it is reasonable that the reporting requirements should be decided once the design of the USO has been finalised, not before. This will be done following the consultation on the detailed design of the USO.
Some of the areas listed are already reported on by Ofcom. For example Ofcom’s Connected Nations report, which is published annually, already provides details of superfast broadband coverage and take-up, including the percentage of premises nationally connected via fibre. The length of time taken to repair lines is also monitored and reported on by Ofcom under its market review process. Ofcom also conducts mystery shopping exercises to check compliance with the broadband speed code of practice. Under Ofcom’s voluntary code of practice on broadband speeds, broadband providers agree to give clear information on broadband speeds to consumers when they consider or buy a home broadband service and provide redress when speed performance is low. Earlier, I mentioned the Advertising Standards Authority’s review.
The noble Lord, Lord Foster, mentioned take-up, as he did on Second Reading. We agree that that is an important issue. It is interesting that Ofcom’s report assumes an 80% take-up, which we will have to think about. We agree that it is important for the per-unit cost to reduce as it is rolled out. This will be one thing we can take into consideration in the consultation. He also mentioned the broadband voucher scheme. As I said earlier, the full fibre rollout consultation included the option of a further full fibre business voucher scheme alongside other options. We will publish the findings of the consultation and the next steps alongside the findings of the business broadband review.
Therefore, although we sympathise with the spirit of the amendment, we do not think it is the correct thing to do at the moment, before the decisions have been made, and I hope that the noble Lord will feel able to withdraw it.
Lord Fox
I must confess to being disappointed. The idea that because the service provider publishes some information to consumers, the point of the amendment is addressed, misses the point. Whatever else we have in our broadband service provision, it is not a free and fair market. It does not work as a market. The whole point that we are debating is that, if we were going to build this from scratch, we would not start from where we are now. I think it was the noble Lord, Lord Mendelsohn, who mentioned market correction. This is designed to enable us to maintain market correction of something that is not a market. We have deliberately created something that is completely agnostic as to what the universal service obligation should end up being, and it would be strengthened by the suggestions of the noble Lord, Lord Mendelsohn. I ask the Minister, in quiet reflection afterwards, to think again, but in the meantime, I beg leave to withdraw the amendment.
Lord Mendelsohn
“Universal service broadband obligation: fair and competitive market
The Secretary of State must ensure that rollout of universal service broadband obligations is delivered on a fair and competitive basis.”
Lord Mendelsohn
My Lords, I shall speak also to Amendments 13, 20 and 21. These are probing amendments: three are “why nots?” and one is a rather extended “why?”. Amendment 12 follows on nicely from the final contribution of the noble, Lord Fox, to the previous debate. It attempts to address the competitive dynamic of the market—what it is there to achieve—and whether competition works in the broadest interest. We contend that the structure of the market has impeded private investment.
In 2005, responsibility for the broadband network was given to BT, which already owned the copper landline network—that seemed like a good idea to achieve a certain series of goals. Those goals were achieved but, unfortunately, time has moved on and there are other requirements.
In those terms, BT has done a good job—there are limits to what it can do—and we have much to thank it for. I should declare an interest here: I am a very small shareholder in BT—since last week, an even smaller one—and I do not believe in BT bashing. We create frameworks and incentives, and it is not a company’s fault for following them. Markets have changed. BT receives a lot of criticism for its move into content, but that is adjustment to the market. Frankly, it can find people who are prepared to buy a service to watch the Bundesliga, and I have used it to watch Borussia Mönchengladbach, but the Government are finding it difficult to balance the needs of a national broadband infrastructure with BT’s corporate requirements. The market just does not work well and there are few incentives for new entrants and little scope for small players. Bluntly, the Government’s reliance on BT’s free cash flow moves it from having a real policy to being reliant on prayer.
The communications market revenue growth has accelerated from about 5% to about 5.5%, and this is driven by two particular factors. The main one is price rises which have been unsurprisingly in that 5% to 5.5% range, and there has been a movement to try to compete on the basis of ever-faster connections, or the marketing of ever-faster connections, even if they are not met.
Lord Aberdare (CB)
My Lords, I support Amendments 12 and 13. I have no mobile coverage at all at my home in Wales and would have no broadband worthy of the name if it were not for a small local supplier offering a line of sight wireless service and willing to do so in competition with BT, although “competition” is hardly the word I would use to describe it.
I believe that a more competitive marketplace is essential to increase the speed and quality of broadband rollout, including, or especially for the final few per cent which I hope means household rather than geographic coverage, and who of course tend to be in rural areas. Similarly, my experience in Wales leads me to believe that to achieve a genuinely competitive and open market, it may well be necessary to bring about some sort of separation of Openreach from BT. I hope that the Minister will be able to tell us how the Government plan to promote a more competitive marketplace as a driver of better services across the nation.
Lord Arbuthnot of Edrom
My Lords, these are very important amendments. There is a concern that BT has tended to invest just enough in a particular area to make it uneconomic for competitors to come in and provide services there. This may just be a natural complaint by people who have been beaten fair and square in the marketplace, because BT is a very large and effective company which is, in many respects, a national champion. However, if it is a canard, it is a persistent one. I hope the Minister will be able to say something to reassure the Committee, either that it is untrue or that something is going to be done about it.
Lord Maxton
My Lords, I too support these amendments, which are on the right lines. My only reservation is that if BT is already the owner of the line into a property—it could be a commercial one—who is responsible if a repair needs to be done: Openreach or BT?
Lord Fox
My Lords, we associate ourselves with Amendment 20. I was under the impression that Ofcom was already looking at the process of legal separation, and if this is designed to strengthen its arm and make sure that it happens, then we approve. At Second Reading, I talked about the desirability of full structural separation. We know that the pension deficit has been used as a reason. When that calculation was made, was the full effect of the EE acquisition factored into the pension equation? Now that there have been substantial changes in the make-up of the corporate parent, can a different argument be made on pensions?
In the recesses of my mind I recall something being attempted in York along the lines of Amendment 21. It foundered because there was no separation in the BT/Openreach model and the route to market proved very difficult. Perhaps to be successful Amendment 21 needs Amendment 20, if not full structural separation.
Lord Mitchell
My Lords, I will address Amendment 20. The separation of Openreach from BT is fundamental to the success of Britain being a leader in the digital economy in the 21st century. It is unanswerable that BT has been given a monopoly in fixed broadband connectivity. It displays classic monopoly behaviour: it controls the distribution, sets the prices and dictates the terms to its competitors. It has no incentive to improve the quality of its service—just the minimum. I would not be so vehement on this issue if BT was supplying a brilliant service, or even if it gave us believable market facts. Its broadband coverage is awful and it successfully lobbies to persuade Ministers and others that it is meeting its targets; it is not. It is undeserving of any government support, particularly in its ownership of Openreach. Why should it be granted this monopolistic licence to print money? Alternative owners will have a real incentive to improve the service.
Fixed and mobile connectivity are converging. The route may be different, but they are joining up: data are data. BT is rapidly taking on all the attributes of the overall monopoly supplier: all internet connectivity. If you aggregate its stranglehold in broadband, add its ownership of EE in mobile and then factor in its future 42% ownership of the 5G spectrum, it is overwhelming. We have a massive monopoly in the making. Separating Openreach will certainly clip BT’s wings and improve broadband connectivity.
Baroness Byford
My Lords, at Second Reading I spoke against the continuation of BT and Openreach as one unit. Many of us have experienced disappointing results when we have asked BT and Openreach to do things: the two of them seem to pass the buck to each other. Separation is a very good suggestion and I support Amendment 20 in principle. If this is not possible —like others, I have followed the current pension debacle, which is adding to the difficulty—who holds BT to account? If it is Ofcom, is it doing its job; if not, should somebody else be doing it? One does not often hear praise of BT, and its provision is unsatisfactory. If the Government say that the amendment is not necessary, the Minister should tell the Committee what he is going to do about the current position, which is far from satisfactory.
Lord Ashton of Hyde
I am grateful to all noble Lords who have contributed. Amendment 12 would introduce a new clause to require that the rollout of the broadband USO be delivered on a fair and competitive basis. Under the EU universal service directive, the USO is delivered by one or more designated universal service providers. Designation of the provider or providers is a matter for Ofcom under Section 66 of the Communications Act 2003. The Act enables Ofcom to set out the procedure for designation in regulations, and Section 66(7) requires that this procedure must be efficient, objective and transparent, and not involve or give rise to undue discrimination against any person. Existing legislation therefore already provides for a fair and open process for the designation of a universal service provider, which meets the concerns of this amendment.
As noble Lords may be aware, in April last year Ofcom published a call for inputs, seeking views from industry and consumers on the design of the broadband USO. The majority of respondents shared Ofcom’s preference for a transparent and competitive designation process for the universal service provider. At the same time, however, few industry stakeholders expressed a desire to be designated as the provider of the broadband USO. In light of this, Ofcom’s USO technical advice, published on 16 December, explained that it considered that a more restricted process, whereby all providers are considered and an appropriate provider chosen, subject to a consultation process, was more likely than a competitive process which was unlikely to bring forward any interested providers. It also indicated that the most efficient outcome may be for BT and KCOM to be designated as universal service providers. This will be a matter for Ofcom to consider fully, once decisions are made on the detailed design of the broadband USO. I should, however, stress that the universal service provider is only able to recover from a USO fund in respect of an unfair net cost burden, as calculated by Ofcom, so the method of designation has no bearing on whether the designated provider is incentivised to deliver the USO in the most efficient way.
Amendment 13 would require the designated universal service providers to roll out in rural areas before deploying their networks in urban ones. I do not think this would be appropriate. There are, I know, more rural consumers struggling with slow broadband speeds, but I do not think that the needs of urban consumers are any different from those of rural ones in the same position. As such, they should be treated the same. The USO is being introduced specifically to target those areas where commercial providers have not provided, and are unlikely to provide, connectivity, be they rural or urban areas, and to confront social exclusion wherever it is located.
The noble Lord, Lord Mendelsohn, talked about the role of smaller suppliers in the BDUK superfast programme. Of course, smaller suppliers can successfully deliver infrastructure into communities in the hardest-to-reach parts of the UK. There are now 11 smaller suppliers contracted to deliver superfast broadband projects through BDUK’s programme. The noble Lord also asked why we do not introduce an outside-in rollout, like Germany. We agree that has been very successful but unfortunately it is not comparable to what is proposed under the USO. In Germany there is no USO, but a publicly funded rollout programme. It worked by giving the commercial sector the opportunity to roll out in more commercially viable urban areas. The USO is intended to target areas that are not commercially viable.
Amendment 20—I pay tribute to the noble Lord, Lord Mendelsohn, for his measured remarks about BT, which is a bit of a whipping boy here—would give the Secretary of State a power to direct Ofcom to begin the process of legally separating the Openreach division of BT. We do not think this power is necessary, since on 29 November last year Ofcom announced its intention to do that very thing, as the noble Lord, Lord Fox, mentioned. In answer to the question from my noble friend Lord Arbuthnot, I am afraid I do not know the details about the way it has been operating. I will check that and get back to him in writing. According to Ofcom, the only thing that can stop the process is if BT agrees a voluntary arrangement that meets all of the regulator’s requirements.
Furthermore, through its comprehensive digital communications review, which reported in February 2016, Ofcom examined closely the whole of the UK telecommunications market. It concluded that changes to the governance of Openreach could benefit competition and consumers, and consulted last summer on the form that these changes should take. Last November it announced its decision that legal separation was the way to go. Therefore, Ofcom has already carried out most of the actions set out in paragraph (2) of this amendment. If the Secretary of State were to use the power granted by this amendment to direct Ofcom in the manner described, the result would be repetition and delay due to the requirements of the clause.
Because Ofcom is an independent regulator—I can say to my noble friend Lady Byford that it is Ofcom that holds it to account—the Government do not wish to take a power to direct how it should carry out its duties. However, I can assure noble Lords that the Government are listening to Ofcom in case there is anything we can legitimately do to ensure that the changes the regulator has proposed can be carried out expeditiously. I will leave that there for the time being.
Amendment 21 would require local authorities to take steps to ensure that alternative suppliers are in place to meet the requirements of the broadband USO where they identify areas which do not receive this. It would also give local authorities the option of publishing data on broadband speeds in their area and the extent to which the broadband USO is being met.
If I have understood the intention, the first part of this new clause seems unnecessary, as the process for designating the universal service provider is intended to ensure that no operator would be excluded from being designated. It would be for operators themselves, either on a national or regional basis, to put themselves forward to be considered for designation by Ofcom. This is not something that local authorities would have a role in. If, on the other hand, the intention of the new clause is that local authorities should take a role in procuring alternative suppliers to deliver broadband to the same standard required by the USO, this would fall outside the USO measures in the Bill. Local authorities can, of course, carry out procurements to provide areas with superfast broadband through the UK’s national broadband scheme, and areas covered in this way will not need intervention under the USO.
The second part of the new clause is also unnecessary as local authorities already have the option to publish data about broadband speeds in their area without the need for this legislative provision. They would, in any case, rely on Ofcom data. Ofcom has extensive data-gathering powers and reports to the Government on the availability, take-up and use of broadband in its annual Connected Nations reports. The reports include data at local authority level. In future, once the USO has been introduced, the Connected Nations report will also provide a means of reporting on the broadband USO and whether it is effectively meeting the needs of consumers and businesses. Given those explanations, I hope the noble Lord will withdraw his amendment.
Lord Mendelsohn
I thank the Minister for his very full answer in relation to Amendment 12, but it was to a completely different question from the one I had posed, which was about having an objective, efficient and transparent process in establishing providers. His answer concerned delivering on obligations. He should take from the Committee the important message that there is great concern about the nature of the competitive market.
Turning to Amendment 13 and the outside-in approach taken in Germany, I was under the impression that, given the amount of money we have put behind this, we have a similar publicly funded rollout programme. Germany has gone for a different approach—its USO occurs later in the process—and will meet a much higher standard over time. This is one of our big competitive pressures in Europe. Such an approach still has merit because it is the one occasion when you can get the private sector to factor in reasonable infrastructure spend, which it is not doing at the moment.
I thank the Minister for saying that I have been fair-minded concerning Openreach. However, I am sorely tempted to lose that tag. He made the crucial point that if there is a voluntary agreement to meet the requirement, it can stave it off. As he will have seen in the extensive commentary on this issue over the past two weeks, there is great concern that that is exactly its intention and it will delay the process. That is why we have suggested that much swifter action be taken.
I confess that with Amendment 21, we shoehorned in something completely different that does not and cannot really fit within the USO. However, it does provide for effective support for the local and regional economies. We should look at this issue. This is a broader policy arrangement to try to solve some of the problems that we are running headlong into, because the structure of the market just will not service them in the long term and will not maintain our competitiveness. Frankly, when Chattanooga is choo-chooing along at such an incredible pace and we are falling behind, something needs to be done, and that is a bigger policy. I beg leave to withdraw the amendment.
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract, allow the end-user the opportunity to place a financial cap on the monthly bill under that contract.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or (b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”
Lord Stevenson of Balmacara
My Lords, as we reach the end of this first part of the Bill we have a bit of a conglomeration of amendments in one group. I think we will need to just go through them slowly to get the sense of them.
Amendment 14 is also in the name of the noble Lord, Lord Foster, and I am grateful to him for his support. It tries to deal with an issue that we probably all agree in this Committee is one of the most complicated areas of domestic expenditure—trying to work out what you owe for your mobile phone. I have never understood the tariffs. I certainly do not understand the various little odds and ends to opt in and opt out of, and I find it hard to get my mind round which bits are prepaid and which are costed at a rate that I do not recognise. Nevertheless, the bill comes in regularly and has to be paid. However, for some people this can be a source of worry and, as with other universal provisions, there may be some danger of vulnerable customers getting into difficulty. We therefore thought it might be interesting to suggest that the mobile operators should be encouraged, either voluntarily or if necessary through some form of statutory provision, to set caps or work on a system under which customers could set caps—more correctly—so that if expenditure was getting out of control on their mobile phone they were not being taken for a ride, even if it was for a relatively short period. Therefore, the idea of a financial cap, which is not uncommon in other areas of consumer expenditure, occurs. The suggestion in the amendment, which I hope the Minister will find of interest, is that it might be a way to make sure that there is a more secure arrangement for this important part of our everyday lives.
Lord Foster of Bath
My Lords, we on these Benches have much sympathy for Amendments 15, 16, 18 and 22, although I know that my noble friend Lord Clement-Jones will say a few words in a minute or two about Amendment 15. I will confine my remarks predominantly to Amendment 14. I am conscious that many Members of the House are probably regular users of credit and debit cards. However, we are of course also increasingly regular users of mobile phones. I suggest to noble Lords that most mobile phone contracts are in all but name no different from their credit card contracts: they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones.
As mobile phones have developed since they were first introduced 30 years ago, the services that are offered and the billing arrangements are increasingly complex. There are benefits from all of that, but their complexity can lead to difficulty for some people, not least people from low-income families, who are five times more likely to rely on their mobile phone than people from high-income families. Very often their mobile phone is their only connected device, as they do not have a fixed landline or broadband connection. Unfortunately, as the complexity has developed, some of the support systems for customers have not gone alongside them. We know from evidence from Citizens Advice that in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts, which totalled some £11 million. I was told of the case of Martin, who,
“was in the British Armed Forces and had been deployed overseas. He contacted his mobile network provider before travelling and, based on their advice, believed he had disabled data roaming. He took his phone with him and used Skype to stay in touch with his wife back in the UK, believing he was connected via Wi-Fi and that Skype calls would therefore be free. On arriving back in the UK, Martin found he had been billed £3,700 for data roaming”.
We need some mechanism to help customers from falling into debt unexpectedly. The amendment proposes the voluntary and opt-in cap system.
During the passage of the Bill in another place, a similar amendment was put before the Government on a number of occasions, and they repeatedly said that they did not think such a measure was necessary, because there are a variety of ways in which the consumer can avoid bill shocks. They talked about the range of apps that are available, dedicated phone lines for people to check on their current limits, warning texts that are sent when customers approach their allowances, and a range of different online tools. However, the reality is that none of that saves the large number of people who get into difficulty with their mobile phone bills. Nearly five years ago, Ofcom recognised that this was a problem, producing a report in which it said:
“We will also push for increased availability and use of financial caps … We have already called on”,
mobile service providers,
“to do more to develop and promote ‘opt-in’ systems so that consumers can choose to set limits on their expenditure”.
Indeed, Ofcom went even further five years ago, saying that,
“it might be more appropriate to move to an ‘opt-out’ system of financial caps”.
So, five years ago, Ofcom was alerting us to a real problem—a problem that it was proposing could be addressed by mobile service providers at least being able to offer an opt-in cap to their consumers. It did not proceed with that because the mobile phone operators said it would be far too expensive and too difficult to change their billing systems. But those were exactly the same arguments the mobile phone operators used in 2009 against the imposition of the EU roaming cap, which is in place. They said it was far too difficult and could not be done—that there were technical difficulties and so on. Yet they have done it, and it is perfectly possible for them to do it in this country. The evidence of it being perfectly possible is that two companies, Three and Tesco Mobile, have demonstrated that it can be done. They have done it, they are leading the way, and they have shown that they are providing a better service to customers as a result.
The time has now come for us to require mobile service providers to offer an opt-in cap system to their customers. The customer does not have to take it, but the offer should be there. I hope that, at this stage of the Bill— having rejected it on a number of occasions in another place, and given that Ofcom recommended it some five years ago—the Government might now be minded to accept the amendment, or at least something like it.
Lord Clement-Jones (LD)
My Lords, at the beginning of the debate on this group, the noble Lord, Lord Stevenson, said this was rather a disparate group. I agree with him, and on that basis it is entirely logical that I am quite supportive of one amendment, Amendment 15, but entirely unsupportive of another, Amendment 233.
This takes us back to the Consumer Rights Act, which feels but yesterday although, looking back, I see that it was debated at the end of 2014. Amendment 15 is very timely and it is right to probe the Government’s intentions on switching. I have a letter, which the noble Baroness, Lady Neville-Rolfe, wrote to me after we had put down various amendments on the then Consumer Rights Bill, on gaining provider-led switching. She said:
“I think we are in full agreement on the likely benefits of gaining-provider led switching for consumers and for competition in the telecoms industry. This view is reflected in our work on switching, since before the publication of the Consumers, Connectivity and Content strategy paper, when two experts from Ofcom were seconded to DCMS to help develop policy on switching”.
Moving on slightly from there, I thought it was quite encouraging that, in the Government’s May 2016 paper, Switching Principles: Government Response and Action Plan, a number of principles were set out. But I see none of them reflected in the primary legislation. I do not know what the Government’s intentions are in terms of regulations. It is not even clear that gaining provider-led switching will be permissible. Therefore, I ask the Minister whether principles such as these will be enshrined in the secondary legislation:
“Switching should be free to the consumer, unless they are aware of and have consented to fair, reasonable and clear restrictions and charges to do so … The switching process should be led by the organisation with most interest in making the switching process work effectively—the gaining provider … Sites and tools providing comparisons to consumers that receive payments from suppliers should make clear where this affects the presentation of results”.
These are principles that the Government have set out in their own paper, and it is not clear at this stage whether they fully plan to deliver on them. I would appreciate an answer from the Minister on that.
On Amendment 233, I am not sure why the noble Lord, Lord Stevenson—with whom I have sparred on a number of occasions on software issues, and certainly on the then Consumer Rights Bill—believes that we are in a different place and need another bite at this particular cherry. The software industry carefully negotiated a particular break-out from the Consumer Rights Act, for good reasons, because of the way that software is developed. There are beta applications that need to be perfected before the final product is fit for purpose, and there are upgrades and so on, as is perfectly well understood by the industry. So I do not support a call for another look at this. I do not believe the evidence is yet there that we have moved into a new place. It is barely two years since we debated these issues and I do not think technological progress has been so quick that we can afford another look at this without prejudicing our software industry.
Baroness Buscombe
My Lords, I thank all those who have spoken in this debate. I begin with Amendment 14 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Foster of Bath. The amendment seeks to place a mandatory obligation upon mobile phone service providers to agree with the customer a financial cap on their monthly bills at the time of entering into a contract.
Providers offer consumers a range of innovative ways to manage their usage, such as apps that allow consumers to turn financial caps on and off, warning text messages when customers are approaching their existing allowance limits, and dedicated telephone numbers that advise the customer about their usage. The noble Lord, Lord Foster, has already referred to some of these opportunities.
We expect providers to continue to take steps to minimise bill shock and to ensure that their customers are sufficiently equipped to manage their usage. Having said that, if the Government consider that more needs to be done, the forthcoming consumer Green Paper will be an opportunity for us to consider the issue of bill capping in more detail. It is also important to note—and perhaps it has been said before in another place—that Ofcom has guidance on its website to help consumers avoid so-called bill shock. Tips include making sure you have the right deal to suit your usage, switching provider or increasing your usage allowance, monitoring your usage, and how to protect your phone from unauthorised use.
Amendment 15, in the names of the noble Lords, Lord Stevenson and Lord Mendelsohn, seeks to amend the Communications Act 2003 and Ofcom’s power to set conditions to ensure that the interests of the consumer are protected when purchasing a contract relating to a mobile phone, and when switching mobile provider. Changing provider should, of course, be quick and easy for everyone. This is why Clause 2 makes explicit that Ofcom has powers to facilitate easier switching across all the communications sectors, including mobile services. Ofcom has an existing statutory duty to protect consumers of communications services, including consumers of mobile services, under Section 51 of the Communications Act 2003. The combination of this power and duty thus already creates the effect this amendment seeks.
The noble Lord, Lord Clement-Jones, is concerned about whether there is more to be said on this matter. The clause extends Ofcom’s power to set conditions for switching, so it will be for Ofcom to decide what should be required and whether switching is an appropriate requirement to impose on providers.
Lord Clement-Jones
My Lords, I am sorry to interrupt the Minister but I find that a somewhat extraordinary statement. The Government are responsible for policy—indeed, they have published a paper on switching principles. The question is: what has Ofcom been asked to implement? Surely the type of switching that will be implemented is not purely up to Ofcom. The Government—the business department, as was—published a paper setting out very clearly the principles on which switching was to be based. We cannot have a situation where a Minister simply says that it is all down to Ofcom and that is the kind of scheme that it will suggest. I find that extraordinary.
Baroness Buscombe
My Lords, I am sorry if the noble Lord finds it extraordinary. However, I think that he has made a reasonable request and I will make sure that we write to him in detail, giving a full reply.
Amendments 16 and 18 seek to make additions to Clause 3 to ensure that compensation is paid within a reasonable timescale and that, for mobile phone services, compensation is payable where the provider fails to meet a specified standard or obligation. Also, one of those standards must be satisfactory mobile coverage.
The drafting of the clause already allows for Ofcom to consider timescales for compensation, as well as what service standards are within scope. In the spring of this year Ofcom plans to publish a full consultation setting out how automatic compensation could work. Thus, we do not see the need for these amendments.
Amendment 22 seeks to establish a code of practice on business broadband speeds. In January 2016, Ofcom published a voluntary code of practice on business broadband speeds, and it came into force in September 2016. The code gives businesses clearer, more accurate and transparent information on broadband speeds before they sign up to a contract. Signatories to the code also commit to manage any problems that businesses have with broadband speed effectivity and to allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level. Ofcom will continue to work with the industry to ensure full transparency. With such a code already in existence, we see no need for there to be a power for the Secretary of State to prepare one.
Amendment 233 would amend the Consumer Rights Act 2015. I am grateful for the response of the noble Lord, Lord Clement-Jones, to this amendment, as I have to hand the transcript of the debate on that legislation—it makes quite enjoyable reading—when he referenced the consequences of an amendment which is the same as the one before us tonight. He said that,
“the consequences of this amendment could be quite unforeseen and extremely contrary to the interests of the strong and vibrant software industry that we have in this country”.—[Official Report, 19/11/14; col. 507.]
We entirely agree with the noble Lord that things have not changed that much, and they certainly have not changed in that regard. The rights set out in the Consumer Rights Act were designed to achieve a workable balance to reflect consumers’ reasonable expectations while not imposing unnecessary and potentially damaging requirements on our vibrant, growing and technically innovative digital content suppliers. We believe that this amendment would undermine those rights.
When formulating the Consumer Rights Act, we concluded that providing for a short-term right to reject was not necessary in the context of digital content. Unlike physical goods, digital content can on the whole be fixed rapidly and with little effort on the part of the consumer. Consumers accept that it is the nature of digital content that it may be released with minor errors and incompatibilities which come to light in use and which will be fixed to ensure that the product is satisfactory. A short-term right to reject digital content and impose strict limits on the number of repairs and replacements would not be practical in this context. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be the result of an action by the trader at all. That is why a repair is a more equitable solution in the first instance than a full refund.
Many digital content producers are micro-businesses and start-ups, and we need to maintain an environment in which they can flourish and provide innovative products, while ensuring appropriate protections. Enabling rejection as an immediate remedy could cause the industry to be more conservative in its product offerings, reducing our competitiveness and chilling innovation, to the detriment of both business and consumers.
As we know, the Act has been in force since October 2015 and the Government have received no evidence or representations to the effect that it is not working as intended. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the noble Lord, Lord Foster, for joining me on Amendment 14 and I welcome the contribution from the noble Lord, Lord Clement-Jones, with whom we can agree on one thing and disagree on another. I am sure that that will continue—he is a contrary sort of chap and it is sometimes difficult to work out where he is coming from.
I like the phrase “bill shock”—I had not come across it before. It is an issue that might be dealt with in the forthcoming Green Paper and therefore I accept that at this stage we need not progress further on that amendment. However, I should like to reflect on my experience of trying to deal with accounts from my provider of mobile telephony. It is complicated by the fact that I also, stupidly, pay my children’s bills. I should not do that because, if I can never work out what their bills are, I certainly cannot work out my bills, and the combination is almost impossible.
The only way that you can interrogate your bill from that particular provider, whose name begins with a “V”, is by going on to the website and logging in. That is fair enough, but you cannot access your account until the provider sends you a text message on your mobile phone with a number that you have to enter in. That methodology is now becoming common among the banks. However, it does not work in a not-spot, so I cannot reach my account. I cannot interrogate it, I cannot set caps and I cannot do all the things that the noble Baroness talked about in her full and very interesting response. Therefore, there is an issue there with some of the technology that is still being used. I do not think that it is anti-competitive or anti-consumer but it borders on the “difficult to use”. I think that there is an issue there that we might want to come back to, although a Green Paper may well be the right way forward.
If we could have a letter on gainer provider-led switching, that would be very helpful. This is an area where I do not think there is any doubt about where we are trying to get to, but the pace seems glacial and I do not understand what the barriers are.
On the two points on payment, I accept that a paper offering a consultation on that would be useful. If I am correct about the timescale, it seems a little unfortunate that it will appear later than the completion stage of the Bill. The Minister mentioned the spring, but if she could give us some detail in writing about when it is likely to be available, that will be helpful.
With regard to the voluntary code of practice, we come back to the point that we raised on Amendment 1 regarding what the USO will be if it does not have teeth. In some senses, an aspiration is fine and a floor is also fine, but if the code is to be used to make real progress in this area, we have to try to make sure that the ISPs that try to operate it find that it contains something that they have to deliver on. I will look carefully at the Minister’s response and we may come back to that point.
Finally, I turn to my Amendment 233 on digital content. The debates are obviously very familiar. Indeed, I think that the Minister may have been present at one or two of the previous ones and therefore what we say will ring even more loudly in her mind. The noble Lord, Lord Clement-Jones, was quick to pick up the main point, but time is moving on. So much more material is now downloaded and not supplied in hard copy, and at some point we will have to look at this again. The more the Minister talks about a strong and vibrant software industry, the more that speaks to me of customers being put at the bottom of the priority list, and I do not think that that is right. It is difficult to operate in a digital environment without the proper digital legislation. I am not sure that we know yet what that is and I accept that we may need more time to go through it. I signal that this is something that we may have to come back to at some point but, in the interim, I beg leave to withdraw the amendment.
Lord Grantchester
“( ) Any rent savings made by mobile network operators as a result of provisions in this section must be invested in efforts to increase geographical coverage.”
Lord Grantchester (Lab)
My Lords, this amendment brings the Committee to Part 2 of the Bill: digital infrastructure. This introduces, under Schedule 1, the new revised Electronic Communications Code to replace the code assembled in 1984 and revised in 2003. The Government claim that the new code gets the balance right between operators and site providers. Many of our amendments today are intended to challenge and assess that claim and to make the code work better for everyone.
The code introduces a new no-scheme regime for valuing land sites and access. Under a backstop power there is an element of compulsion—including compulsory purchase, compulsory lease and compulsory contract powers—if agreement cannot be reached. However, the code is distinct from most compulsory purchase powers in that it creates continuing relationships and seeks to impose what would reasonably be agreed. Yet this principle of agreement requires a market value, even a deemed value, rather than compensation for a loss.
In trying to get this code right, the Government sensibly undertook consultations and asked the Law Commission to come up with a solution. However, they suddenly changed tack and came up with this new interpretation which has caused consternation to many who sense that the Government have listened to only one side, the operators—characterised as huge multinationals made up of only a handful of companies —as opposed to site providers, which are, by contrast, small entities with diverse interests. The National Trust, for example, which is charged with obligations under the European Landscape Convention, has concerns where there is a need to protect landscapes and scenic beauty. Fisher German, meanwhile, which represents around 7,500 clients, not only in rural locations but also land owners and authorities in urban areas, argues that there has been close consultation with the operators only to the detriment of land owners.
The Government’s new code aims to incentivise investment in infrastructure which will in turn improve coverage and connectivity for everyone. The charge is that infrastructure costs are too high for the operators. The Government wish to change the balance in favour of those larger institutions; that is, the operators. There are certainly problems with the old code but the sector has made it work. The sector has developed more through the market than by statutory imposition. Changing that to imposition sends warning signals that could lead to much greater resistance by those affected.
BT has claimed that 20% of its costs are tied up with infrastructure. We all want improved coverage and connectivity, yet is it correct that operators blame obstructive landowners blocking development and charging ransom rents? The Government have been convinced by networks regarding these new powers.
I am grateful to Mobile, which has undertaken an investigation into the true cost of mobile network operators’ rental agreements. Its research covered 184 councils, as well as others, with 52,000 masts in the UK. The data compiled by Mobile relating to both rural and urban sites showed that estimates of the average rent costs were 34% less for rural sites and 18% more for urban sites than the information provided by Deloitte. The average urban rent was £11,346 as opposed to an average rural rent of £4,946. Yet it is the rural and more remote areas of the UK where coverage is poor. These statistics point out that the biggest costs are in the urban areas.
The Deloitte report, commissioned by the Mobile Operators Association in 2015, concluded that £270 million could be unlocked for investment in improving networks if the new Electronic Communications Code was in place. The Government assume that reducing costs will result in increased investment. Will cutting the costs of city-centre rents result in better rural coverage? Has the Minister seen the site traffic data and income figures for some of these sites? It is claimed that some sites in London could earn £1 million a month, whereas the code seeks to reduce the rent from £30,000 a year to £200. Have the Government considered the other side of the coin, by which I mean the lost income to site providers—the local authorities, hospitals, water-tower owners, sports club charities, and even clubs like Lincoln City in football whose floodlights on football stands host the infrastructure? These amendments put the challenge to mobile network operators and give real incentive to the Government’s backing. If the costs are so significant and constraining to investment, let us see the savings spent on extending and improving that coverage.
I also speak to Amendment 24 in this group. There is great concern at the concentration of ownership of wireless infrastructure in the hands of huge vertically integrated mobile operators. To encourage an independent network of sites under integrated management, this amendment proposes a threshold of 10 as a minimum size to encourage investment in independent infrastructure. Many of these investments are in alternative structures such as water towers and pylons and often improve connectivity across mainly rural areas. The challenge is whether the rents and returns can support this investment. By clarifying the situation regarding using site provider investments to become ECC beneficiaries, this probing amendment challenges the Minister to say whether he sees this as a further incentive to the sector, and to aggregated site rights in particular, to bring forward efficiencies such as multiple properties on standard terms. I beg to move.
Baroness Byford
My Lords, I have two amendments in this group. Amendment 25 suggests leaving out paragraph 3(h) of Schedule 1:
“to interfere with or obstruct a means of access to or from the land (whether or not any electronic communications apparatus is on, under or over the land)”.
As I declared earlier, at the moment we have no such masts on any of our land.
This is a probing amendment intended to ascertain what is meant here. How can it be reasonable, necessary or practicable to interfere with or obstruct access to land—any land as it currently stands, as is stated in the preamble—even when there is no apparatus on, under or over that land? Will this, as the noble Lord suggested, include children’s play areas? Will private citizens return home to find they cannot access their property because there is an unmoving Openreach van across their drive? Will farm animals be denied welfare services because they cannot be removed from their fields? Will emergency services, including air ambulances, be barred from using land where access has been obstructed? Will any obstruction be time limited to, for example, not more than half an hour? Indeed, have the Government given thought to this particular issue?
Amendment 39 deals with the height and clearance requirements of overhead lines. I am not sure why Amendment 40 has been removed from this group but I will speak to it at the same time, if I may. These are probing amendments, though the alternative heights they suggest are not to be regarded as frivolous. Three metres is only 10 feet. Modern agricultural machinery is large and growing larger. Three metres above the ground is likely to mean that combining a cereal crop will be difficult, more costly than strictly necessary and probably more dangerous. Have the Government consulted, for example, the NFU, the Health and Safety Executive and the CLA; and if so, what were their comments?
Two metres is only 6.5 feet. Wires hung in mid-air tend to stretch over time. It is likely that 2 metres will become, in places, 1.6 or 1.7 metres—less than the height of the average man. How will roof repairs, chimney repointing and the installation of solar panels be carried out safely with a wire at head height? Ladders and other apparatus will have to be positioned and lifted over the roof ridge. Who will carry the can and bear the cost if a wire set at 2 metres has lengthened and is damaged? Who will be held responsible if a wire moves suddenly and sharply in a gust of wind and hurts or kills somebody working on the roof? I believe that the height envisaged in this section of the code is from a time when agricultural machinery was much smaller and we did not, of course, have the whole question of electronic communications as we do now. As I said, this is a probing amendment. However, if we are not careful, this section of the code has the possibility to cause difficulty in the future.
Lord Aberdare
My Lords, the issues relating to valuation seem to span this and the next group. In a sense, we have not yet examined the horse to which Amendment 23 is the cart. However, I will follow the noble Lord, Lord Grantchester, and the noble Baroness, Lady Byford, in covering the area as a whole.
The no-scheme valuation methodology proposed in the Bill is designed to promote greater investment in the development of much-needed communications infrastructure. In doing so, it needs to maintain a fair and workable balance between the range of different interests involved, including that of landowners, infrastructure providers, network operators and, of course, users. Briefings from the CLA, representing landowners, and from APWireless, a land aggregator, argue that this is a market that already works well and has done so for 30 years. They express serious concern that the proposed change could in fact reduce the availability of land for wireless infrastructure development, thereby slowing the rollout of extra capacity. They point out that the Law Commission report on the ECC some years ago, which the noble Lord mentioned, warned that changes along the lines proposed in the Bill would,
“generate an extremely difficult transition, and a consequent overload of litigation; more importantly, the market in sites benefits the economy—not only small businesses in the countryside but also some larger concerns”.
A subsequent report by Nordicity made similar statements.
I am not aware of any evidence that so-called ransom rents are a significant issue under the existing regime. Independent infrastructure providers, such as VVIG and Arqiva, see it as essential that these new powers are used responsibly and only as a measure of last resort. They stress the importance of seeking voluntary agreements first, to retain the support of the landowner community. The undertakings given in the Minister’s helpful letter to Peers after Second Reading, relating to wholesale infrastructure providers and to the treatment of alternative structures such as water towers and pylons, are encouraging in this respect.
A possible effect of the proposed change to a no-scheme valuation may be to generate windfall savings for large mobile network operators whose costs of acquiring access to land will fall. For that reason I support Amendment 23, which seeks to ensure that such savings are at least reinvested in increasing coverage, rather than just disappearing into the coffers of the MNOs. However, I remain concerned that the change, particularly if applied to existing agreements or their renewal, could introduce uncertainty, risk and tension between ECC beneficiaries and landlords—and of course landlord co-operation and good will is key to a sustainable, efficient and well-maintained network. It also seems to represent a fundamental change in the rules surrounding private ownership in this country.
I hope the Minister will be able to explain why this proposed new valuation methodology was introduced into the Bill so apparently unexpectedly, as the noble Lord, Lord Grantchester, said, and contrary to what had previously seemed to be the Government’s intention. What provisions does the Minister have in mind to ensure that any savings made on rents are indeed reinvested in communications infrastructure? I apologise if I have jumped the gun in talking about some of the amendments in the next group.
Lord Ashton of Hyde
My Lords, this is an important part of the Bill. The Electronic Communications Code is the regulatory framework underpinning agreements between site providers and electronic communications operators that wish to install and maintain digital communications infrastructure. The existing code was introduced in 1984 and has been subject to persistent criticism. It is widely perceived as unclear and outdated. The reforms before noble Lords today are the result of extensive research, consultation and collaboration with a diverse range of stakeholders and other government departments. This has included review by the Law Commission in 2012, followed by full government consultation in 2015, as well as the commissioning of independent economic research. We believe the reforms will ensure that communications operators are able to deliver the coverage and connectivity that UK consumers need.
Without making a Second Reading speech, I think we should bear in mind when considering the amendments and the Electronic Communications Code the views expressed in previous debates. Noble Lords have roundly condemned the speed and availability of mobile communications. We do want to reduce costs but we do not want to tear up existing arrangements. That is why they are prospective. It is important to say, as the noble Lord, Lord Aberdare, mentioned, that we expect most of the contracts to be consensual.
Amendment 23 seeks to introduce a statutory obligation on mobile network operators to invest any savings in improving geographical coverage. The reformed code introduces an essential package of reforms that will give rise to significant savings for industry. Our impact assessment estimates that the industry stands to save around £1 billion over a 20-year period. The Government agree that if reforms are to have real impact, savings must be invested in expanding network infrastructure. Mobile network operators have already made commitments to improve coverage and connectivity. These include the 2014 joint agreement to provide voice and text coverage across 90% of the UK’s geographical area by 2017. There is also a wide-scale industry rollout of 4G technology, led by Telefonica’s licence obligation to deliver to 98% of indoor premises 4G coverage by the end of 2017. This will amount to investment of close to £5 billion in UK infrastructure. However, that is just the beginning. We are confident that the revised code creates the right market incentives to secure real investment in digital communications infrastructure. As such, regulatory intervention to direct industry savings is not necessary.
Amendment 24 seeks to expand the category of persons who can be designated by Ofcom as a code operator under Section 106 of the Communications Act 2003. The amendment would allow a new category of specified persons to use the code to compulsorily acquire land and then offer it back to the market for digital communications use. The code’s purpose is to confer code rights on operators to install apparatus on land. A person whose purpose is only to acquire land to provide to other operators is, in effect, a statutory middleman and an unnecessary addition to the code. We believe that the amendment could reduce the availability of land in the market.
Amendment 25, in the name of my noble friend Lady Byford, seeks to remove the code right to obstruct or interfere with access to land. Naturally, when rolling out or maintaining physical infrastructure, it is sometimes necessary to temporarily interfere with access to land. However, the code makes it clear that an operator cannot obstruct access to land unless the occupier of that land agrees to it or the court so orders. This is a fundamental right to protect landowners’ rights of access, long established in the current code. Its retention was recommended by the Law Commission. To confirm, the previous code provided for a right to obstruct access to the site provider’s land, but not to obstruct other land without the written agreement of the occupier of the other land. The revised code continues this provision, but as with the rest of the revised code, more clearly sets out the code rights applicable to code operators.
My noble friend spoke to Amendments 39 and 40. I do not regard them as frivolous. Clearly a £250,000 combine, which is the sort of thing that will be driving around now, is not frivolous. Her amendments deal with the right to install overhead lines. The right to install overhead lines is subject to paragraph 74(3) of the code, which stipulates that the right to fly overhead lines will not apply if it,
“interferes with the carrying on of any business carried on on that land”.
As such, the Government consider that the code provides sufficient protection for landowners who may be affected by overhead lines, and therefore these amendments are not necessary. In answer to my noble friend’s question, the Law Commission’s consultation considered whether any changes were necessary, and it concluded that they were not. The Government have not received any evidence to suggest that they are.
I hope that in light of these explanations and reassurances, the noble Lord will withdraw his amendment.
Lord Grantchester
I thank the Minister for his reply. I am well aware of the areas he spoke to in terms of the objectives in the code. However, I am somewhat sceptical that the MNOs have a real case that costs are prohibitive. That has been the draconian whip behind a lot of the code’s provisions. I am even more sceptical that these cost savings will be spent on improvements to the geographical coverage of the rural and more remote areas of the UK. However, we understand what the Minister said.
On Amendment 24, it is somewhat puzzling that the Minister mentioned middlemen in the system. I understand that they are already present in the system in that they have often bought sites from rural landowners, to give them an up-front payment, in order to receive rents when they lease them out to the telecommunications industry. The middlemen in the system have real concerns. They provide a service to the mobile networks in some of their activities congregating sites so that they can introduce an agreed package rather than dealing with each site individually. We will look at the overall thrust of the Minister’s reply on that and, more pertinently, on the big group which is to come because it will all knit together in a more comprehensive package by the time we have finished our deliberations.
Lord Ashton of Hyde
It may be helpful if I say that these are fairly technical amendments, particularly those in the next very big group. It may help the noble Lord if we agree to allow him to think about some of my answers. He can read what I have said, and we can possibly meet before Report to discuss some of the technical aspects of things so that he does not feel it necessary to go through every single scintilla of difference in the Chamber.
Digital Economy Bill
Tuesday 13th December 2016
(7 years, 11 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 28 November 2016 - (28 Nov 2016)
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, this Bill addresses a variety of areas where legislation needs to be updated for the digital age. It will ensure that the public are empowered to take full economic and social advantage of digital services. It will make the internet safer and enable the Government to harness digital platforms to make public services cheaper and better.
We are one of the leading digital economies in the world; however, our ambitions are not complete. In the recent Autumn Statement, the Chancellor of the Exchequer announced significant further infrastructure investment, including replacing copper networks with fibre. The Bill is a further statement of the Government’s ambition. It will help consumers to connect, provide them with skills training, protect children from online dangers, tackle nuisance calls and support the UK’s leading financial technology sector and other digital businesses.
More than 91% of premises can now receive a superfast broadband connection of at least 24 megabits per second. We are on track to reach 95% by the end of 2017. For the remaining few, we are working with industry to find the best possible options and have been trialling alternative technologies and approaches.
Part 1 of the Bill provides the broadband universal service obligation as a safety net, offering a minimum standard on which to develop improved connections for everyone. The minimum speed set will be enough for today’s needs but will be kept under review as our needs change.
Setting the right regulatory framework is only the first step to engaging consumers. We all need information about services that we can trust, allowing us easily to compare products. The Bill will enable Ofcom to deliver this, and there will be simpler and swifter service-provider switching. If things go wrong, consumers will automatically receive compensation for a failure to meet minimum standards for communications services. That will empower the consumer, increase competition and boost commerce.
Meeting this new demand for improved and better digital services requires a step-up in infrastructure. Part 2 delivers reforms to the Electronic Communications Code and spectrum regulation so that the best systems will be in place to create, distribute and monitor digital infrastructure across the country. Delivering the coverage and connectivity that UK consumers expect will depend upon a complex array of hardware, stretching across the country. Networks of masts, cables, wires, servers, routers and exchanges make electronic communications possible. The Electronic Communications Code must strike the right balance, not only between the interests of landowners and network operators but taking into account the wider benefits for the UK from having world-leading digital communications services. Following extensive consultation, the code has been updated to improve that balance and allow greater investment in infrastructure across the country.
Along with physical apparatus, the digital communications sector relies on radio spectrum for many wireless services, such as mobile phones and television. As an essential asset, it is vital that it is effectively managed and regulated. In a world where the number of digital devices requiring use of spectrum is increasing—now 4G, next 5G—we must ensure that not only is the best use made of what is a limited resource but that companies which hinder this process are duly brought to account. The Bill provides new tools for the smooth and reliable management of spectrum.
We take many protections that the state provides in the physical world for granted. The online world is another matter. We will defend freedom of expression on the internet but—as in the physical world—there must be certain boundaries and protections.
Following public consultation, Part 3 will require pornographic websites to have robust age-verification controls in place, with the British Board of Film Classification as the age-verification regulator. The BBFC will also regulate online pornographic material, using the same standards used to classify pornography distributed offline. The focus is on age verification, not the personal identification of adults, and means that children will be protected.
This was a Conservative Party manifesto commitment, and children’s charities have also identified that it is a real issue. NSPCC has been campaigning for action, having seen the consequences of a lack of regulation on children’s emotional and physical well-being. The Children’s Charities’ Coalition on Internet Safety said:
“Whilst it is true that most of the commercial pornography publishers acknowledge their sites are not meant for minors and say minors are not welcome on them, in practice they have done little or nothing to inhibit access by minors and it seems clear to us that they won’t unless and until they are compelled to do so by law or are otherwise highly incentivised. The Government’s approach effectively does both”.
This part of the Bill has received much scrutiny and interest in the other place and from the public. We have now included the power to require internet service providers to block websites that do not comply with the age-verification standards stipulated by the BBFC.
Internet service providers work with the Government in a number of ways, and we are pleased to see this good relationship continue in relation to the protection of children. The Government have received assurances from websites accounting for 70% of users that they will not only comply with the regulations but support them, which is encouraging and reassuring.
The legislation gives the regulator the necessary tools to deal with non-compliant providers. As part of that, we want pornographic sites to become compliant when faced with powers such as blocking. We are driving cultural change in the sector and demonstrating that we will not look the other way, but instead do everything we can to protect children.
Part 4 will bring parity between the online and offline worlds of copyright infringement. The maximum penalty for online copyright infringement is currently two years in prison. This will now be harmonised with the existing maximum sentence for copyright infringement at 10 years. This change follows extensive public consultation, and the Government remain committed to achieving the right balance between a well-functioning market and effective remedies for protecting intellectual property rights. We are also updating our copyright laws to reflect the fact that cable television is now a mainstream service, delivering a vast array of content beyond the public service channels.
The Bill is not just about encouraging consumers and businesses to grasp the digital age. It is equally about the digital transformation of government. This includes the delivery of better services thanks to more effective data sharing between public authorities. There will be many future benefits from the measures in the Bill. Some immediate ones include the potential to help an additional 750,000 fuel-poor households; making public authorities better informed when pursuing debts owed to the public sector—for example, in respect of individuals’ circumstances and ability to pay—and preventing post being sent to the families of deceased individuals.
The protection of data and transparency of its use lie at the heart of Part 5. The data-sharing powers may be used only for specific purposes. Unlawful disclosure of personal information received under the powers will be a criminal offence. Data sharing must be compliant with the Data Protection Act 1998 and the codes of practice accompanying the data-sharing powers must be consistent with the Information Commissioner’s statutory code of practice on data sharing.
Part 6 also contains provisions to make sure that our regulatory system is fit for purpose in the digital world. The Bill will ensure that Ofcom has the right powers for the effective regulation of harmful content on internet-provided television and radio broadcasts. This is to keep up to date with changing facilities and technologies used for broadcasting while ensuring the protection of the public. The Bill also improves the efficiency of the Ofcom appeals process so that it can keep pace with the rapid development of digital communications technology. We welcome the support of Citizens Advice, Three, TalkTalk and Which? for these reforms.
Part 6 makes changes to legislation to reflect the outcome of discussions with the BBC about changes to arrangements for free TV licences for those aged 75 and over. Although this has been much debated in this House, the BBC sought responsibility for this concession as part of its funding deal with the Government. Furthermore, the BBC has a history of handling licence fee-related issues sensitively and effectively. The latest BBC charter and framework agreement outlines Ofcom’s new role as the BBC’s regulator. Ofcom will monitor and review how well the BBC is meeting its mission and public purposes, regulate editorial standards, hold the BBC to account over market impacts and public value, and consider appeals. Ofcom needs to be able to carry out its new functions effectively. They include enforcing requests for information from third parties needed by Ofcom in regulating the BBC. Being able to access information about the market, and the market impact of BBC activities, will be absolutely crucial for Ofcom to do its job.
Another important provision relates to regulatory changes that will allow non-bank payment firms to have direct access to payment systems. This will be a fillip for our world-leading fintech ecosystem, and is another example of the Bill being focused on consumers. Part 6 additionally reflects the Government’s belief that digital skills are now as important as numeracy and literacy. In certain circumstances, digital skills qualifications will be free of charge to people aged 19 and over who do not already have a relevant qualification. This will mirror the approach taken for literacy and numeracy training. More than 10 million adults in England lack the basic digital skills needed to function effectively in today’s society, so this will open doors to many where they were previously tightly shut.
The Government have expressed an intention to table further amendments shortly. These additional clauses will include the delivery of a government manifesto commitment to assist public libraries in embracing the digital age by working with them to ensure remote access to e-books, without charge and with appropriate compensation for authors that enhances the public lending right scheme. There will also be an amendment to enshrine a legal requirement for subtitles, signing and audio description to be available for on-demand services. We will also bring forward an amendment to clarify that ISPs can continue to offer family-friendly filters, which give parents the power to protect their children from inappropriate material.
The digital landscape changes rapidly and profoundly. It is vital that our legislation is kept up to date. This is a big and wide-ranging Bill. Its aim is bold: to bring major change to the UK’s digital economy in infrastructure, consumer rights and opportunities, regulation, skills, safety, innovation, and intellectual property. The prize is great, and this country can be not merely a world leader in digital, but the world leader. I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the Minister for his introduction of the Bill and welcome all noble Lords who have put their names down to speak. It is going to be a very rich debate and we are looking forward to it. It is the season of awards; it would be wrong to let pass the very successful innovation from the Minister’s department of a book of the Bill. It is the best thing I have read since I came into your Lordships’ House and I recommend it to any of those who have not been lucky enough to be on the Minister’s—obviously very private—circulation list. It is a wonderful innovation and I found it most useful as I prepared for this speech.
The Digital Economy Bill before the House includes some very sound ideas which this side can support, not least because some of them have surfaced in previous Bills in your Lordships’ House. However, we by no means consider it a good piece of legislation as a whole. Indeed, its weaknesses lie as much in what it omits as what it contains. To start, a Labour version of the Bill would properly recognise the importance of the digital economy to our country and, in so doing, would be much more ambitious about delivering both ultrafast broadband and secure mobile network coverage to everyone who needs them, wherever they live. In fact, Labour called for a USO to be introduced back in 2010, with a fully costed plan for it to be achieved by 2012. We are still not there. The 10 megabit speed promised in the Bill is less than half what is needed to achieve superfast broadband, and it will not be sufficient to bring the benefits outlined by the Minister. There are also significant doubts about the pledge to extend coverage to the entire country, particularly in rural areas, along with no detail from the Government on how this is to be achieved or at what cost to local residents. At the moment, we do not even have the proposed standards to be legislated for, as we wait for Ofcom to complete a report on this issue, but I hope this will be published before we begin Committee stage. In Committee, we will be pressing for a much higher standard to be set for the universal service obligation, with fibre to the premises as standard and a minimum speed of 1 gigabyte.
Where are the policies to complement this welcome initiative? There is nothing in the Bill about improving the teaching of digital skills in schools, nothing about training or apprenticeships and nothing on conditions of employment for those using these technologies to forge careers in the creative industries or across industrial sectors more generally. We will probe these issues in Committee.
There are welcome measures in the Bill about access to digital services, with Ofcom gaining powers to set conditions for automatic compensation to be paid to users where providers fail to meet a specified standard or obligation. We welcome the proposal to help consumers switch communications provider—something we proposed in the 2015 Consumer Rights Bill, but which the Government turned down at that time. We would like consumers to have more ability to access mobile signals across the country and to be able to set a financial cap on those services. We welcome the proposal to improve consumer rights against nuisance calls and wonder whether the Government would be prepared to go further and pick up our suggestion—again from the Consumer Rights Bill—of a default-off proposition for cold marketing calls.
The Bill also seeks, albeit belatedly through a Commons Report stage amendment which was hardly discussed in the other place, to deliver the Conservative manifesto pledge to introduce robust online age-verification checks. We share the objective of protecting children from viewing harmful material on the internet but it is unclear how the Government’s proposals would work in practice. We also wonder whether the regulatory oversight issues have been properly thought through. This is a difficult area, but we are very concerned by the idea that, under the new clauses, the designated age-verification regulator appears to be given powers to censor material that is not illegal, and to have powers to take down websites even though they may have satisfactory age-verification procedures in place. This cannot be right. Children have to be protected, but censorship is not the way to do things in this country. We also take the view that age verification is only part of the story and Ministers should use the Bill to make provision for effective sex and relationship education for young people. In addition, we will put pressure on the Government to introduce measures to deter internet trolls, and to ensure effective prosecution and penalties for those who engage in this illegal behaviour.
The Bill contains ambitious proposals to enable data sharing for a public benefit, as part of a wider aim to deliver public services in a digital by default mode. We welcome the general approach, but there are legitimate concerns about privacy and the security of personal data, in response to which we want to be sure that not only will Ministers be held to account for what personal data are being shared, and for what purposes, but that the scope and scale of this change is subject to challenge by those affected. We are also interested in reviewing how consumers can be better briefed about cybersecurity affecting their personal details held by commercial and charitable bodies. At present, there seems to be no requirement for such bodies to notify customers when their security is breached.
We were pleased to see the fintech section in the Bill, and welcome the proposal to support broader access to electronic payment systems for non-banks, which might just mark the first appearance of real competition in the banking sector. I am also glad to see the section about personal debt, and the late but welcome recognition by HMRC that its current approach needs to do much more to tackle unmanageable personal debt. We may have some proposals in this field about a breathing space and a need for parity between formal and informal debt solutions for the Government to consider.
Following the signing of the BBC’s royal charter, the Bill contains details of Ofcom’s new role as regulator, along with clauses that would put into law the Government’s wish that the BBC take over responsibility for providing free TV licences for the elderly, along with any future policy responsibility. As debates in the other place showed, this is a controversial proposal that raises issues about the independence of the BBC now and in the future. Is it right that the BBC, which should be focusing all its efforts on making great programmes, has also to take on a social policy brief? Is it not time to make the independence of the BBC a reality by ring-fencing its funding requirements and preventing future Governments undertaking the sort of dawn raids that we saw in 2010 and 2015?
We are looking to add a number of provisions to the Bill. There is now all-industry support for action to prevent secondary ticket operators using computerised systems—so-called bots—to snap up seats at concerts and sporting events as soon as they go on sale, before then releasing them at premium prices. We want to introduce restrictions on the current practice of search engines promoting links to pirate sites, and we want to deal with the problem of illegal streaming through IPTV boxes. We will propose better accessibility for on-demand services—I was pleased to hear the Minister mention that this was in the Government’s thinking—and we will also press for a review of the prominence regulations and the listed events regime. We welcome the announcement just made of extending public lending rights to e-book lending but might wish to push further to check whether a tax on reading should continue to be paid on books that are downloaded, since this seems very unfair.
Finally, I return to my opening point about the need for the whole country to prepare for the digital economy. As the Minister said, there is a section in the briefing documents relating to Clause 87, about a new entitlement to digital skills training to help consumers make use of new digital services as well as to improve their chances in the employment market. This is, of course, a proposal we welcome but the devil is in the detail. The main thrust of this clause is simply to amend the Apprenticeships, Skills, Children and Learning Act 2009, with the intention of creating a duty that will work in a similar way to the current entitlement for basic literacy and numeracy. However, the factsheet goes on to point out that that funding will come from the existing adult education budget, administered by the DfE. We will want to probe what this will provide in practice. In particular, we are concerned that there may be no new money for this. Indeed, the document says that, as the AEB is finite, training providers will decide how to allocate resources to meet demand. I sense here the familiar problem posed by “wicked issues”—one department wants to will the ends of a policy but is not able to will the means because it has failed to bring on board the funding department.
We look forward to working with the Government on these issues and to hearing the contributions of other noble Lords this afternoon.
Lord Foster of Bath (LD)
My Lords, I too thank the Minister for introducing the Bill and for the early discussions he has had with us. As we have heard, it is a long Bill and, in some ways, a rather disappointing one, as it fails to address many of the issues needed to provide increased support for our amazing creative industries.
There are notable absences in the Bill which we hope may be covered by amendments in Committee—ideally, government amendments—addressing issues such as the online sale of counterfeit electrical goods; stronger action by search engines to deal with copyright infringing material and online piracy; and ensuring a level playing field in the next round of spectrum auctions. As the noble Lord, Lord Stevenson, asked, why are there no measures to tackle the mass buying-up of tickets for gigs and theatre performances by people who have no intention of attending the event but rather of reselling them at huge mark-ups and denying genuine fans the opportunity to see their heroes? This is often done using bots—web robots. They are illegal in New York and should be illegal in the United Kingdom.
Why, as we have also heard, has there been no updating of the listed events regime? With the continued changes in the way people receive television it is likely that, soon, no broadcaster will meet the current test. The listed events regime will become obsolete and we will have a free-for-all. Amendments are needed to ensure that the much-valued listed events regime remains fit for purpose.
As your Lordships Communications Committee has said, we also need a fit-for-purpose public service broadcasting prominence regime, with measures to change the rules regarding electronic programme guides. Surely we should no longer accept that, on the EPG listings of the main pay platforms, CBeebies and CBBC—with largely British-made original content—appear below listings for no fewer than 12 US cartoon channels. Similarly, the prominence rules should be developed to take account of the on-demand services from PSBs. For example, the BBC’s iPlayer should be guaranteed prominence on the first on-demand screen of any smart TV, and surely indigenous language services such as S4C and BBC Alba also need to be given greater prominence on new platforms. Yet the default on powering on the new Sky Q box is Sky’s “Top Picks”. It takes 15 clicks at present to get to BBC Alba, and PSB channels are also hard to access. As one disgruntled purchaser said,
“it’s something stupid like 7 button presses just to get the TV Guide to change channels!”.
We know why: Sky is directing viewers to its own material and away from that produced by the PSBs. Change is needed.
My noble friend Lord Lester will argue, with our support, that the Bill also provides the opportunity for Parliament to establish a set of conditions that any Government should meet when setting any future royal charter for the BBC. He will argue for statutory underpinning of the charter and will no doubt remind the Minister that such an approach is exactly the same as he recently introduced in your Lordships’ House with regard to the National Citizen Service Bill.
Despite omissions, there are many aspects of the Bill that we support. We welcome news of forthcoming amendments on, for example, e-lending. My noble friend Lord Fox will talk about broadband. We broadly support the plans for a universal service obligation, although we think the 10 megabits per second is hugely unambitious. We also support clamping down on poor service providers, an easier system of changing service provider and completing the 4G mobile rollout. However, the Minister is aware of my concern regarding poor take-up of high-speed broadband. When high-speed broadband is available, only around 30% opt for it. Unless we can improve this take-up rate, the huge benefits to individuals, businesses and the nation offered by superfast broadband will be lost. Government strategy concentrates almost exclusively on the development of superfast broadband structures. Far more needs to be done to drive up demand through skills training, marketing the benefits, addressing barriers such as cost, and by developing quality technology and content. With the welcome exception of Clause 87, the Bill is silent on all these issues. Tackling digital exclusion, not least of older and more vulnerable people, is not just a matter of structures. I hope the Minister agrees.
On these Benches we broadly support the new Electronic Communications Code, and I know from meetings with the Minister that he is now well versed in answering questions such as, “In what circumstances does a water tower or a church steeple constitute ‘land’ under the code?”. But does he agree that when code rights are granted over a piece of land, there needs to be a public record?
Rightly, there has been much debate on preventing access to pornography by under-18s. We share the Government’s objective but we have reservations about the security of data. My noble friend Lord Clement-Jones will describe how we believe it is possible to achieve the Government’s—and our—objective by using methods that anonymise the data.
We welcome bringing the maximum fine for online copyright infringement into line with that for physical copyright offences and welcome the repeal of Section 73 of the Copyright, Designs and Patents Act. Its purpose —to protect fledgling cable platforms—is no longer needed and is being used by parasitic services such as TVCatchup and FilmOn to livestream and monetise PSB content without permission. The ECJ case on this issue has rumbled on since 2007 and an update from the Minister would be helpful, but the repeal of Section 73 will provide a quicker solution.
In relation to the carriage of PSB channels on cable, a contractual agreement will be overseen by Ofcom. Does the Minister expect that such an agreement will lead to the payment of retransmission fees, and, if not, why not? There has been talk of a transitional period before the repeal of Section 73. On these Benches we believe that it should occur immediately after Royal Assent. Does the Minister share that view?
We are broadly supportive of Part 5, which deals with digital government. However, as my noble friend Lady Janke will amplify, we, like the BMA and many others, want assurances that the benefits are not to be achieved at the cost of confidentiality.
The Minister is well aware of our opposition to giving the BBC responsibility for the policy and the costs associated with free licences for the over-75s. This is a government social policy which should be determined by government and funded by government out of taxation. Although it was part of the licence fee settlement, we will still want to press on some of these issues—for example, to explore the options for the BBC to vary eligibility other than by age in Clause 77. For example, could the BBC use tax codes to ensure that those in receipt of pension credit still qualified for the concession but others paid tax on it? In such circumstances, would the Government be willing to reimburse to the BBC the tax revenues they receive?
We will also wish to explore aspects of the new powers that Ofcom has to regulate the BBC, not least in respect of distinctiveness. I know that my noble friend Lord Clement-Jones wishes to explore whether a middle way can be found in the plans to change the Ofcom appeals procedure from a merits-based to a judicial review-based system.
We have many hours of deliberation on the Bill ahead of us. I look forward to that deliberation and to the concessions that I hope we will gain from the Government.
The Earl of Lytton (CB)
My Lords, I, too, thank the Minister for introducing this important Bill. I declare that I feel a little wrong-footed in this instance by finding myself so high up the batting order and having the honour of opening for these Benches.
My interests are in the register. I am a landowner and a landlord to two code operators and one community air band operation. I am also a landlord to several businesses and residential tenants who very much rely on broadband—as I do myself as somebody who has worked from one end of my home for the last 28 years. I am a chartered surveyor with some knowledge of the compulsory purchase and compensation aspects, so it will be no surprise to your Lordships that my interests are primarily in Parts 1 and 2. However, I confess straightaway that I am no expert on digital matters, as will probably become apparent.
I know what it is like to be in an internet not-spot and to conduct a business in an area with no mobile coverage. My Sussex office, for instance, suffers from a declining broadband service. About 14 years ago I was told that I could get about 4 megabits, and it was pretty much at that level. Then BT came along and—hooray—said that it was going to upgrade me to an 8-megabit system. Since then the coverage has gradually declined from about 3.6 megabits. It now hovers at around two and a bit and sometimes gets to 3 megabits but is often below 2. At that level, things start not happening, which is a very serious impediment. My good lady wife uses a mobile network that might usefully be termed “nothing anywhere”. I commend that to the marketing people.
Naturally, all this matters because of the increasing demands on the system: the data stream, cloud computing, all the large data transfers, voiceover internet and so on. The volumes would have been absolutely eye-watering 12 or 14 years ago. The Minister referred to the need to manage the resource and I totally agree with that. But I would be a little more convinced by the Bill if it made clear that what is actually important is service delivery at the point of use; in other words, the values measured at the incoming modem connected to the socket on the wall in the home or the office. For all the claims of fibre to the exchange, to the cabinet or even direct to the home and the configuration of what I understand is traffic shaping—“demand management”, in layman’s terms—the actual experience is often different by nothing short of a country mile.
Ninety-five percent availability might mean that it is available at the exchange or to the green cabinet—but downstream, to the consumer themselves, often lie bundles of tired old copper or, worse, aluminium pairs no doubt joined in boxes liable to water ingress. The delivery really must deal with the infrastructure and attention to the permanent way, including that local loop or final mile. If, in addition to that, we have ISP network congestion or traffic-shaping effects before it ever gets to the consumer’s internal wireless network or shared users, something needs to be done to look and see where we measure these things from. So my first point is to advocate a universally accepted and accurate basis for measuring communications performance; otherwise, in 10 years we will be no further forward than we are today in this contest of salesman’s puff. The universal service obligation principle in the Bill is much to be commended, although I agree that the level is not sufficient. I also think that somebody must be empowered to make absolutely sure that these traffic-shaping and other management issues do not stand in the way.
We all know that broadband now is an essential service, like water and electricity. I would perhaps prefer a little more concentration on the communication quality and a little less on tariffs, although I agree that tariffs are an important matter. I am among those who happen to think that BT’s insistence on having a phone line with a broadband connection is mainly about it using its virtual monopoly over the permanent way and its liking for telephone-subscriber income. I recall that, some years ago, BT was awarded a huge sum of money—I forget the precise amount and other noble Lords will probably know more than I do. I understood that that money was to deal with defective parts of the hardwired system, but I am entirely unclear that there has been a proper return to the taxpayer on that.
I can, however, speak to the enormous courtesy and patience of BT Openreach staff, who I often encounter either parked in my gateway or inspecting my hedges to find out where their junction boxes are because they are never told anything about what to expect when they are sent out there. I usually end up having to tell them where to find their junction boxes and what the likely problem is that they will discover—that is after many years of experience. It really is rather like the Flanders and Swann song about the gasman coming to call. Noble Lords will remember that, in the song, each successive trade undoes something that was done previously—it is just like that. It would be funny if it was not so serious. For example, one of my tenants had their service reconnected only for the other tenant to have his second line disconnected in the process. One cannot go on like this.
Across the country, 20% of the population live in a rural area—as do I. I worry about 95% coverage nationally because that might easily mean that the remaining 4% or 5% are those in the hardest to reach rural areas, and that possibly 20% or 25% of rural householders and businesses will not get a decent service.
I point to the growing phenomenon of the absent network coverage and of ISP server downtime. I also question what standards of corporate social responsibility are deployed by some of the larger operators. I am particularly concerned that several community broadband schemes were set up and substantially undercut and made unviable by organisations such as BT. That should stop. Ofcom should be empowered to step in and deal with that sort of thing. If communities get together and get a critical mass to set up a community air band or similar mast, nobody should be allowed to come in and undercut that model, just like that, especially because the unwillingness to deal with the thing in the first place was the essential cause of the community getting together.
On Part 2, what I know about co-providers tells me a good deal about their economic power and confidence that they can, if necessary, influence government to suit their purposes. I am concerned that the operation of market forces that so far has allowed the rolling out of the mast sites across the country now seems to be in question and that the Government appear to be prepared to abandon that customary approach and compensation based on market value, appearing to ignore the Law Commission recommendation that market value should apply, so that we get some sort of compulsory acquisition-lite. I am not at all happy with that, so I shall return to that subject later in the Bill.
There are many other processes to do with the granting of rights, the perpetuation of them, their propensity for enlargement and unqualified rights to assign, which I would point to in relation to that. These things are not simply a matter of saying, “It’s the greedy landlord versus the greedy code operator”. This is a can that is being kicked down the road and will have to be picked up at some later stage when it starts to cause serious impediment to people’s reasonable aspirations and the optimal use of property.
So I have a number of reservations about the Bill, but I welcome a number of other aspects. I certainly welcome the concept of protection against underage exposure to pornography. I am less sure that data sharing is adequately framed. I am sure that I am not alone in welcoming a code controlling direct marketing and a control of the infamous bots. So while on balance the Bill is welcome, it will, I fear, need a good deal of further adjustment as we proceed.
The Lord Bishop of Chester
My Lords, I will make brief general remarks before focusing on Part 3, which deals with online pornography. When I was a student, 45 years ago, I invested in a dictionary, which I still have. The word “internet” did not appear in it and “digital” meant “pertaining to the fingers”. “Computer” was a mere derivative of the verb “to compute” and meant a calculator. At the time, I was completing a chemistry degree and learning early computer language such as ALGOL and FORTRAN, which I assume are as extinct now as we think dinosaurs are extinct.
Having abandoned my scientific career in order to pursue a vocation to the ordained ministry—God knows why, as I used to say—my involvement with the developing digital age was somewhat limited. But its opportunities and ambiguities were brought home to me in the early 1990s when, as vicar of Beverley Minster in East Yorkshire, I was approached by one of the emerging mobile networks, Orange, to allow a transmitter on one of the towers. We may have been the first church to reach such an agreement, through a rather complex process, but we did, provided that the transmitter and receiver simply looked like a flagpole, which they did and still do. The annual index-linked rental was useful for other purposes. Some people were opposed to it on the grounds of, “Goodness knows what might be transmitted through the church tower”, including an early sense that pornography or other unsavoury material might be transmitted, while others saw the benefits. I remember one older lady saying to me, “I will now happily go out in my car because if I break down I can call for help from the car itself”. That duality has remained with me over the years, and not least as the power of digital communication has expanded in such unprecedented and unimaginable ways.
Knowing how to provide regulation while not stifling the inherent creativity that the digital revolution is bringing is by no means easy. There are also profound issues of privacy that arise regularly, and which we confronted directly when dealing with the Investigatory Powers Bill. A little over a year ago I introduced a balloted debate in your Lordships’ House on the impact of pornography on society, and we had a good discussion. Two distinguished social scientists who are well known to the House, the noble Lords, Lord Giddens and Lord Parekh, urged caution in coming to any conclusions about the impact of pornography given that the digital age is transforming human experience in general and human sexual experience in particular in unprecedented ways that we are only just beginning to understand. I quote the noble Lord, Lord Giddens:
“If children are shielded too much, and for too long, they may not be able to cope when plunged into the maelstrom that is sexuality today”.—[Official Report, 5/11/15; col. 1774.]
Interestingly, the noble Lord, Lord Parekh, parted company with his noble friend Lord Giddens on that point:
“Children are not in a position to exercise personal autonomy. They cannot be entrusted with the liberty we would entrust to adults. They are … not able to distinguish between real life and fantasy, and they can easily be persuaded to do … things that ought not to be done … They need to be protected against certain kinds of manipulation and exploitation”.—[Official Report, 5/11/15; col. 1783.]
That is why the Conservative manifesto contained a pledge to introduce secure age verification for access to pornographic material and why I support these provisions in the Bill, which have been so usefully strengthened during its passage through the other place with the insertion of Clauses 23 and 80. One of my own MPs from Cheshire, Mrs Fiona Bruce, played a key role in this, as I am very pleased to acknowledge. No doubt there will be details to discuss, but the fundamental trajectory is one that I hope we can more or less all share. The two new clauses help to make the application of age verification both more enforceable and more internally consistent.
I will conclude my remarks with a brief observation and then with a specific question for the Minister. My observation is that seeking to maintain a sharp distinction between what people can do when they are under the age of 18 and what they can do when aged 18 and over will need careful consideration in the future. We and our society must prepare people for life as adults in realistic and effective ways. A great deal needs to be done in an honest and transparent manner, and here I agree with the noble Lord, Lord Stevenson, not least when looking at the PSHE curriculum because it is so much of a political football—but then nothing happens. However, there are really serious issues which cannot be ducked if we want to prepare children for the world as it actually is—the point made by the noble Lord, Lord Giddens.
At the same time, I do not think we can simply assume without further thought and the careful research which is undoubtedly needed that adult exposure to pornographic material is always justifiable in the name of individual freedom and choice. This area is beyond the current Bill and certainly, careful evidence-based research is required, but there have been too many warnings from senior judges and others who have seen with their own eyes evidence of the corrupting potential of pornography in the serious criminal trials they were overseeing. Just where the legal lines are drawn, I am not sure, because some difficult questions are raised in this area, but I would like to suggest that these issues are important ones for the future.
Finally, I have a question for the Minister. I would like him to comment on what the expectations are for social media sites like Twitter, which can themselves host user-generated pornographic content. The expectations on commercial pornography websites are set out pretty clearly in Clause 15, but will the Minister please clarify how the Bill as drafted will impact on social media sites? Clause 22 starts to cover this with its reference to “ancillary service providers”, but in Clause 22(6) the reference is restricted to business activities so provided. Evidence from the Government to the Communications Select Committee on 29 October was as follows:
“Twitter is a user-generated uploading-content site. If there is pornography on Twitter, it will be considered covered under ancillary services”.
How does that apply to material on Twitter that is not uploaded in the course of business activities? I ask the Minister to clarify this point when he responds.
Lord Baker of Dorking (Con)
My Lords, I welcome the Bill, which shows the Government’s continuing significant interest in the digital economy. So it should, because it is estimated that about 11.5 million people are employed in one way or another in digital activity in the UK. That number is likely to increase.
We are certainly in the beginning stages of the digital revolution, the fourth industrial revolution. I take the view that this industrial revolution, unlike the others, will destroy more jobs than it creates. This is unhistorical. As a Technology Minister in the Thatcher Government I made endless speeches saying, “Accept technology. It’s going to create more jobs than the Industrial Revolution, the car revolution and the computer revolution”. The digital revolution will not do that, because the agents of this revolution are much more widespread. They are artificial intelligence; big data; driverless cars, lorries and taxis; the internet of things; the growth of vast businesses in a matter of five or 10 years, such as Twitter, Facebook and Uber; virtual reality; cybersecurity; and hacking. These will all have huge effects on jobs.
I am not alone in thinking this. This is not an eccentric, lone view. The Davos meeting in January this year produced a devastating report, forecasting huge job losses right across the world in various countries, in two groups in particular: unskilled workers and middle management. For example, in America there are 3 million truck drivers and 8 million people in stopovers and sandwich bars. If the Mercedes lorries that are now being experimented with are driverless, most of those will go, so a lot of unskilled workers will go. Warehousing has already gone. The only time a human hand is likely to touch an Amazon order is when it knocks on your door and says it has a delivery for you. That will soon disappear because it is experimenting with drones for delivery in certain urban areas. A continuing massive amount of change is going on. There are also two reports from McKinsey that echo this. Only last week the Governor of the Bank of England, Mr Carney, expressed the views of his chief economist, Mr Haldane, who said that automation in Britain is likely to cost 15 million jobs.
If these forecasts are in any way remotely true, what are we going to have to do about it? I believe the answer lies in education. There is a bit of education in this Bill for, I gather, 30, 40 and 50 year-olds who cannot really cope with computing or smartphones. That is excellent and I am not criticising it—it is a bit like shutting the gate, but never mind. The Ministers in the DCMS should talk to the Ministers in the Department for Education, because that is where it has to be. The example I give your Lordships is GCSE computing, which is a very good exam, but this last year only 60,000 people took it. Some 300,000 people took a foreign language. Mastering a computer language is more important than getting the smatterings of a foreign language. I would make GCSE computing a compulsory subject for all students aged 16 and foreign languages optional subjects. The Department for Education would die a death before it did that, but it ought to do it. It would be responding to a need: if we start with GCSE computing, we will eventually produce computer scientists.
It is important to train youngsters at 16 to give them skills which will get them a job in the digital economy. That is what university technical colleges do. Our youngsters at 18 will have worked on projects—that does not happen in an ordinary school. Our youngsters will have worked in teams—that does not happen in an ordinary school. Our youngsters will have dealt with problem-solving—that does not happen in an ordinary school. Our youngsters will have been making and designing things with their hands—that does not happen in an ordinary school. Our youngsters will leave with a range of skills—personal and social skills, practical skills—which enable them to get a job in this digital world. If you leave at 18 with just academic subjects, it will not be enough; you are going to be one of those middle managers who are not there any more following the hollowing-out of middle management. So it has to start there.
I welcome the universal service obligation. It takes me back to the debates that we had in 1981, because I was the Minister who had to privatise BT and we had exactly the same problems with the universal service obligation then relating to traditional telephony. Even so, the Government have targeted only 95% of the UK by the end of next year. That other 5% will almost certainly be in remote rural areas, which can be reached only by mobile telephony. 3G is now almost old-fashioned; 4G is happening. I hope that the Government will invest very much more in masts for 5G, because that is how you are going to reach the lonely cottage at the end of the valley. As the right reverend Prelate said, we are now seeing masts on churches. Selling one’s church for this pornographic display is appalling, but it happens. Our village has a steeple, so it is not much good, but if a village has a tower and you can get a mast on it, you will get very good broadband.
The Government have pledged to provide broadband of 10 megabits to 95% of the country by the end of next year. Ten megabits per second is not very much actually. If you are in a household where two or three people might want to use the internet, it just will not work, and it is hopeless for small businesses. I think that Matthew Hancock said in the House of Commons that it was only a minimum, but it should be increased as soon as possible to at least 15 or 20 megabits. As the Minister mentioned, some areas can get to 24 megabits already.
Ofcom is given considerably greater powers in this Bill, which again takes me back to 1981, when we were privatising BT and had to set up the first regulator, which was called Oftel—I remember appointing the first director to it. The job of Oftel in those days, as to some extent it is of Ofcom today, was to ensure that BT did not cheat, because it owns most of the ducts in the country and must provide open, fair competition. I think that Oftel did that well; I think that Ofcom has done it well, too. There is a proposal that BT Openreach should be broken away from the rest of BT. I do not think that that would be very helpful. BT Openreach is the main instrument of extending broadband around the country. The controls on competition now in place mean that there is fair treatment for the other service providers that want to use those ducts. In our own place in the country, we decided to change one line where the broadband was very bad from BT to EE. It works very well, but it uses the same BT ducts. I am not sure quite why it works so well—my wife tells me that it is a better router—but we have experience of some switching, which is what the Government want to ensure. I hope that the Government will not accept the proposal from Ofcom to sell off BT Openreach from BT. It can work properly, more effectively and better in the nation’s interest by staying as it is.
Lord Gordon of Strathblane (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Baker. I am a great admirer of his UTCs and only hope that, in my native country, the Scottish Government might be persuaded to allow some of them to develop there. They are certainly much needed because Scotland, like the rest of the UK, has a huge skills shortage.
Given the time of year, I am tempted to describe this Bill as something like a Christmas tree, but it would have to be the size of giant redwood to have branches sturdy enough to bear the weight of all the legislation that has been heaped on the various branches. There are at least six Bills rolled into one, and the Minister has already promised some others. I am afraid that I shall be guilty—along with some other people, judging by what the noble Lord, Lord Foster, said—of adding another couple of ideas. The listed sporting events regulations need looking at and, unlike the question of the 95% perhaps being broken, we may need to look at the criteria and make sure that we are dealing with broadcasters that actually reach people, rather than just potentially reach them. The other issue is EPG prominence. The noble Lord, Lord Foster, has already referred to this. It is daft that CBeebies and CBBC are at 13 and 14 in the EPG, where public service broadcasters are normally given prominence.
On the positive side, while I agree that the Bill has shortcomings I am an overwhelming approver of making the provision of high-speed broadband a universal service obligation. In that, the Government have got more right than wrong. It is a rather unambitious target that could be improved, but the key thing is to get started. I would much rather have a country where everyone had at least 10 megabits than one where a few cities had high-speed and rural areas had nothing at all. I think we can do better than the Government’s target and I hope that they will give attention to that. I was on the Select Committee on Communications when it looked at this. We stopped short of saying that there should be a universal service obligation because we thought that that was rather overambitious. I therefore applaud the Government for taking that initiative. It is a great start and it will get us moving.
I do not quite know yet how the Government are going to reach everyone with even 10 megabits for everyone. It will require some pretty dictatorial powers on the part of government to ensure that the appropriate technology is used in each area. I am indebted to my noble friend Lord Macdonald of Tradeston for an idea that is only partly humorous: if we did a deal with the criminal classes whereby they would get a reduced sentence for stealing copper wire, provided that they put glass fibre back in its place, we would have a very fast uptake in glass fibre throughout the country.
The Electronic Communications Code requires updating and I approve entirely of what the Government are doing. However, they need to be rather clearer on the importance of independently operated digital infrastructures, which tend to offer better connectivity than masts simply owned by one mobile operator. My mind goes back to the early 1960s, when the BBC and ITV built separate masts. Then it struck them, “This is daft. Why don’t we have the one mast and put two different transmitters on it?”. I do not know why on earth the mobile companies have not got together before now. Instead of having five masts in some areas and none in others, they could agree to share masts. It is ridiculous, for example, that somebody coming from Europe with a mobile phone can roam but somebody in Britain cannot. We are stuck with our own individual provider.
The providers say that their business plans would not admit of that, but they should be forced to do it in new areas. If an area is totally uncovered, Ofcom should offer it to somebody on the basis that they cover it not just for themselves but for everybody else. Each company could be assigned a different area so that, by and large, we would get better coverage. We have to ensure that the investment incentives for companies that provide independent infrastructure are not inadvertently regulated as part of land. I would welcome clarification, because the Bill is not quite as clear as it should be on that.
Pornography has already been spoken about. I do not want to disagree with my Front Bench but I would guarantee that, in a way, everybody in the House is in favour of censorship. It is a question of disagreeing on which things should be censored. People who would take a very free, libertarian view of censorship in sexual matters would probably be quite extreme in demanding censorship against racial hatred or other such things. We all believe that some things should not be promulgated; we are just not united on which they should be.
I applaud the use of the BBFC on this issue. It has established a good reputation in the country for its age classification system. It is the best organisation to turn to, to ensure that age verification is robust. I also hope that this can eventually be done with the consent of the internet service providers. In a way, having a well-regulated system that people feel they can trust is in the long-term interest of the provider. I am a great believer in enlightened self-interest.
Likewise, I hope that enlightened self-interest will lead to peace being declared when Section 73 is abandoned and the cable companies finally start paying public service broadcasters for the material that they use without any acknowledgement or payment. They compound the iniquity by putting their own advertising around it—so the public service broadcasters are suffering a double whammy. One fight will be referred to Ofcom, and Ofcom will set a figure for what should be paid—after that, it will be over. Eventually, platform owners will realise that without content their platform is useless, just as in 1922 the British Broadcasting Company started radio because it realised that having the wonderful new medium called radio mattered not at all if there was nothing to listen to. Surely platform owners realise that if they end up strangling content providers and depriving them of resources, sooner or later content will wither and dry up and they will be left with nothing. However, there is no need for delay. This has been on the go since 2007 or 2008. There are some rumours that the Government may be thinking that we need a two-year transition period. I hope that the Minister will be able to assure us that that is not the case.
I realise that there are risks with digital government. I have received briefings from organisations that are alarmed by the risk of data breaches. Of course, we are all concerned about that, but it is quite remarkable that we all surrender to our mobile phone data that we would be unwilling to give to the Government. There is a slight illogicality there. Big data—data that are aggregated and anonymised—can be a very useful research tool as well as providing useful information. When I was chairman of the Scottish Tourist Board, like everyone else we relied on figures from the international passenger survey, which was a year out of date and a very small sample. It would be possible nowadays to get data from Visa or Mastercard on how many people from Alabama spent money in Scotland last year. It could easily be done, and nobody’s data would be breached as a result. It is all anonymous.
It is significant that the BBC accepts Clause 76, which gives the power to Ofcom. It is what successive Select Committees on Communications have been saying in this House for years. It makes absolute sense. The BBC is in a better position now than it has been in before. I share the view of the noble Lord, Lord Foster, and others that the provision of free licences to over-75s is a nonsense and should not have been put on the BBC—but we are where we are and the BBC’s position is that, much as it did not seek it, it does not want to start trying to unscramble the licence settlement in case other bits come adrift as well. The best thing we can say of the Bill’s provisions for the BBC is that the charter for 11 years and the licence provisions it has put in place will ensure that nothing like the raids on the BBC in the last two charter renewals can ever happen again.
Lord Lester of Herne Hill (LD)
My Lords, in my opinion, which is widely supported across the House, we need to amend the Bill to provide statutory underpinning for the BBC’s royal charter. With support from across the House, we will table amendments in Committee. Those amendments will in no way delay the coming into effect of the draft charter and agreement but will protect the future independence and viability of the BBC in performing its public service functions.
Ministers have claimed that statutory underpinning is unnecessary and that the charter provides sufficient protection of the public interest. That argument has been rejected in our debates by three former chairmen of the Communications Committee, by the former chairman of the BBC and by its former director-general. Many others across the House support the need for statutory underpinning.
The Government have themselves recognised the value of statutory underpinning in their National Citizen Service Bill, and have done so by a combination of statute and charter. The DCMS is the parent department of that Bill and the present Bill, with the same Minister, the noble Lord, Lord Ashton, in charge of both Bills’ passage through the House. It is difficult to understand why a combination of statute and charter is appropriate for the NCS Trust and not for the BBC.
What I mean by statutory underpinning is that Parliament should prescribe the basic principles protecting the independence of the BBC in all matters concerning the content of its output, the times and manner in which its output is supplied and the governance and management of its affairs. It should require the Prime Minister, the Secretary of State, the BBC, Ofcom and all other persons and bodies responsible for matters relating to the governance and establishment of the BBC to ensure that the BBC is able to operate independently from Ministers and other public authorities in the UK.
In carrying out that duty, the Secretary of State and other Ministers should be required by legislation not to seek to influence the BBC’s decisions. In addition, the Secretary of State should be required to have regard to: the need to have regard to the BBC’s independence; the need for the BBC to have the financial and non-financial support needed to enable it to exercise its functions; and the need for the public interest to be considered in regard to matters relating to the BBC.
The Secretary of State should be required to make available to the BBC sufficient funds, through the licence fee and otherwise, to enable the BBC to perform its functions and public purposes as a public service broadcaster. It is also essential for the Bill to ensure that the licence fee is for the exclusive benefit of and use by the BBC and to fund the performance of the BBC’s functions and public purposes. The licence fee should be index linked and increased at least in line with the consumer prices index. The Secretary of State should be forbidden from transferring to the BBC the responsibility for, the liability for or cost of any public expenditure. Ofcom should be responsible for overseeing the performance of the BBC’s functions as a public service broadcaster.
As regards governance, the BBC should be governed by an independent board of not more than 14 people with the knowledge and experience needed to perform the board’s functions as a public service broadcaster. Its members should be drawn from across the nations and regions of the United Kingdom, and should include BBC licence-fee payers and present or former members of staff. The Prime Minister should appoint the chair and other members of the board on the basis of a recommendation made by an independent appointments committee established by the Commissioner for Public Appointments. The board should carry out its functions in an open and transparent manner.
As regards the licence fee—this is pathetically weak, but deliberately so—the board should publish a recommendation to the Secretary of State on the amount of funding the Secretary of State should make available to the BBC. The Secretary of State should publish the Government’s response.
These amendments would not delay the coming into force of the current draft charter and agreement, and are designed to protect the BBC and the public for the future. I recognise that legislation by itself is not a panacea. It has to be interpreted and applied wisely. The safeguards must be proportionate—no more than appropriate and necessary, but also no less, in protecting the BBC’s independence and viability as a leading public service broadcaster.
Members of both Houses debated the draft charter, and there was detailed and sustained criticism of its perceived flaws. However, the Government refused to make any changes to the draft. The charter fails to protect the BBC against political interference or a repeat of the wholly improper slicing of the BBC’s revenue by transferring responsibility for the free television concession from the DWP to the BBC, which has had a drastic effect on the BBC’s revenue. The Government rely on the fact, as did the Minister in opening, that the BBC Trust consented to the transfer, but in the real world the BBC Trust was over a barrel and its consent was involuntary.
The charter that is about to come into effect does not protect the BBC’s financial viability through sufficient funding, whether from the licence fee or otherwise. It does not protect the BBC against excessive regulatory interference by Ofcom in regulating editorial standards, nor, unlike the charter proposed by the Government for the NCS Trust, does it provide for a merit-based method of appointing the chair and members of the BBC board—something that, in the light of recent developments, Channel 4 might wish that it could do. As the noble Lord, Lord Gordon, has said, what was done to the BBC in dumping the free television concession on it must never happen again. As I have explained, we need to amend the Bill to include that necessary protection.
Just as it is important to protect the BBC against ministerial interference, it is also important to protect it against parliamentary interference with its editorial independence in performing its public service functions. That is why I do not propose making future charters subject to parliamentary approval. What is needed is neither a statutory straitjacket devised by Parliament nor ministerial interference but a constitutional framework that will safeguard the BBC’s future in the public interest to the extent necessary, and no more.
I am a pathetic optimist by nature, and I hope the Minister will be able to indicate, either today or hereafter, the Government’s sympathy for this moderate and practical approach.
Baroness Hollins (CB)
My Lords, there are three areas of particular interest for me in this very wide-ranging Bill. The first is the sharing of sensitive health information. I remind noble Lords of my membership of the medical profession and that I am a past president of the British Medical Association.
The BMA believes the Bill should be amended to ensure that identifiable healthcare information is excluded from the entire scope of the Bill’s information disclosure powers. This is imperative if patients are to have trust in the confidential nature of the health service and feel confident in sharing sensitive information with healthcare professionals. The BMA recognises, and is supportive of, the many benefits in using healthcare data appropriately, such as for medical research and health service planning purposes, but this must not be achieved at the cost of confidentiality and must be in line with patient expectations about how their confidential information is handled.
I am therefore seeking clarification on two issues. First, the Bill sets out the need to comply with the Data Protection Act 1998 but overrules the common-law duty of confidentiality. It states:
“A disclosure under section 30, 31 or 32 does not breach … any obligation of confidence owed by the person making the disclosure”.
Compliance with the DPA alone does not offer adequate protections for the confidential nature of healthcare information, and the Bill as drafted could seriously undermine medical confidentiality. Why does the Bill not maintain the existing common-law duty of medical confidentiality?
Secondly, the treatment of sensitive health data under Clause 30’s powers is inconsistent with the Government’s own amendment to Clause 57’s powers in the other place. That amendment will uphold the existing protection for sharing healthcare data for research purposes. The Government said that a similar amendment to Clause 30 is not possible, because health is a devolved issue, but no justification has been provided for why Clauses 30 and 57 are being treated differently in this regard. Why is medical confidentiality not protected consistently throughout the Bill? It will be important for the Bill to be amended or clarified to provide adequate guarantees that all current protections of confidentiality will be upheld.
My second area of interest in the Bill concerns measures to make the internet a safer place for children and vulnerable adults. A number of noble Lords have already spoken about this. The NSPCC has written a very powerful briefing, reminding us that the internet is the place where children go to have fun and to learn. It calls on us to recognise the richness of children’s lives and how they deploy, use and interact with technology as a means of learning, empowerment, self-expression and connecting with others. But there are also real benefits to children and young people with learning disabilities and autism in using the internet to support learning and social interaction. Increasingly, the internet caters for these young people through using accessible design and simplified language, as well as instantly available video clips. However, with access to technology comes the potential for cyberbullying, online grooming and risk of exposure to inappropriate content. Children and young people cite viewing violent and harmful content as their second most common concern in the online world. It is important to remember that pornographic sites are not the only challenge—there are also sites promoting violence, drug use, self-harm and gambling.
This is a risk for all children and young people using the internet but the risk can be more profound for young people with a learning disability as a result of their increased vulnerability, a common tendency towards obsessional or compulsive behaviour and their social naivety. The Anti-Bullying Alliance found that pupils with special educational needs were 12% more likely to have experienced cyberbullying than their peers. Mencap, Ambitious about Autism and Cerebra were sufficiently concerned last year to publish Learning Disabilities, Autism and Internet Safety: A Parent’s Guide, which contains tips for parents on how to support their children to use the internet safely.
Many of these concerns and aspirations also apply to vulnerable adults who are at risk from the same types of intrusive and harmful content. I refer not just to people with developmental learning disabilities but to those who are experiencing a mental health crisis and for whom such material can only add to their troubles. What plans do the Government have to ensure that such vulnerable adults are also protected through the measures in the Bill?
The continued provision of the default-on adult content filtering regime is very important, including in relation to public wi-fi. While filters are not completely watertight, they will help to make the internet safer for many children and, indeed, vulnerable adults. So a great deal hangs on the promised government adult content filtering amendment, which I look forward to seeing in Committee.
The NSPCC is also calling for a statutory code of practice, with a set of minimum standards to keep children safe online. These minimum standards would set out responsibilities for anyone developing or hosting online content or services to ensure that there is parity of protection for children between the offline and online worlds.
Finally, I will speak about the possibilities offered in the Bill to protect the public from some of the harm caused by a media which refuse to regulate themselves adequately, despite cross-parliamentary acceptance of the Leveson inquiry recommendations. This country has managed broadcast regulation rather well, and Ofcom has a good track record. We do not hear of the Government being bullied by broadcast licence holders, or holding secret meetings in London hotels with ITV’s owners, or of the BBC Director-General entering No. 10 Downing Street through the back door for a quiet chat with the Prime Minister. But the same cannot be said of press regulation. This House knows the history of decades of failed press regulation—Leveson described it as a “pattern of cosmetic reform”.
Since Leveson part 1 reported, there has been an unprecedented propaganda war by the large newspaper companies opposing its moderate recommendations. We have witnessed a disgraceful retreat by the Government, reneging on promise after promise made to victims, the public and Parliament, including a willingness to abandon the incentives for the royal charter scheme that were enacted by Parliament, and a desire to cancel part 2 of the inquiry into the newspapers’ corporate cover-up and possible police corruption.
Lord Justice Leveson was alive to that happening, and warned of it in his report. He said that previous press promises to reform,
“have often not been followed through with meaningful action”.
Crucially, he said that if the press reject this final opportunity for voluntary, independent self-regulation, Parliament must act to protect the public interest and legislate. He said,
“if some or all of the industry are not willing to participate in effective independent regulation, my own concluded view is to reject the notion that they should escape regulation altogether. I cannot, and will not, recommend another last chance saloon for the press”.
I hope that this House will take up the challenge in the Bill. As Lord Justice Leveson pointed out, the news media move their position only when faced with the prospect of legislation. As Leveson found in his inquiry:
“Ultimately, the one incentive that we have heard about that has been demonstrated to be effective is the realistic threat of press standards legislation if an adequate voluntary body with full coverage is not forthcoming”.
I am still exploring what amendments will be possible, but noble Lords will recall that I was encouraged by Ministers to amend this Bill, rather than the Investigatory Powers Bill, despite the huge support in this Chamber for a mechanism to implement outstanding Leveson recommendations. I have asked Hacked Off to assist me with briefings on this matter.
Lord Grade of Yarmouth (Con)
My Lords, I draw your Lordships’ attention to my registered interests, such as they are these days at my great age.
I thoroughly welcome the Bill. It is a bold attempt to do what legislation rarely does: to keep pace with technology. Technology is moving so fast, and this is a bold attempt to try to get legislation in line with what is happening in the real digital world. I welcome it for that, and I have no doubt that the importance of the Bill will become more apparent than it already is during its progress through this House, given the level of expertise that we have already heard—and we are not halfway through this debate.
While it is fresh in what passes for my mind, I pick up on a point made by the noble Lord, Lord Lester, and his ambitions for statutory underpinning for the BBC. As a former chairman of the BBC, I have some experience in these matters. This is not the time, but there will come a moment in Committee and after to debate in detail the case that he outlined today. I just ask your Lordships to remember one thing. Whatever arguments we may have about the way the BBC is structured, governed and so on, I think we can all agree that it remains independent. I do not think there is any doubt in the public’s mind that the BBC is independent. The cornerstone which underpins that independence is that there is never a vote in either House on the detail of the management or governance of the BBC. That separation—the royal charter and the agreement—has stood the BBC in very good stead.
The best defence of the BBC’s independence is its staff, in the first instance, and the British public—who would be very angry indeed. Indeed, I walked out with the staff on a famous occasion back in the 1980s because there was an attempt at political interference with the editorial processes at the BBC. I do not think there is any doubt that the BBC is more than capable of defending its own independence. The last thing it needs is statutory underpinning because, as we all know, statutes can be overturned in Parliament. I look forward to the debate with the noble Lord.
There is an old saying in Westminster and Whitehall that nothing endures like the temporary. In 1988, a Bill became an Act which was an attempt to prop up, ensure and help the fledgling and very fragmented cable sector which was in its first throes of expansion and growth—and it was a perfectly sensible piece of short-term legislation at the time. It has endured since 1988, and I am thrilled to see that the Government have finally listened to the argument and seek in this Bill to repeal Section 73 of the Copyright, Designs and Patents Act 1988. It is good news indeed. The public service broadcasting sector of this country needs every penny that it can get today—and that includes not only the BBC but Channel 4, Channel 5 and ITV. They are under threat from so many different directions and are leaking value all the time through copyright infringements by Google and others. They are leaking value because they are in deep competition with the internet for advertising; internet advertising has now overtaken broadcasting revenues for the first time. They are under threat everywhere, and it is absolutely crucial that we scavenge every penny that we can and protect their ability to invest in content. The creative industry is one of the few sectors of the British economy that has gone on growing through periods of recession, and we must continue to do that. This measure is very much welcome.
I was somewhat depressed to hear that there may be what have been euphemistically called transitional arrangements, which may delay the repeal for a couple of years. I can see no reason whatever for that delay, and I look forward to hearing from the Minister at the appropriate time why they have suddenly decided that there needs to be some transitional arrangement. Pace the BBC, the arrangements should be left to the free market to determine and, in the event of a dispute, Ofcom is more than capable of stepping in, banging heads together and sorting it out. If you look at the American broadcasting sector, you can see that companies such as 21st Century Fox rely heavily on retransmission fees from the cable networks in America, which are more than capable of paying fees for content that has been invested in by other people. So the argument is well made and has obviously been heard by the Government. I would be very interested to see why we need any form of transitional arrangements other than to appease the giant cable companies that now exist through consolidation. It is no longer a fragmented and embryonic sector; it is a mature and very wealthy sector.
On broadband, there is a lot of talk about speed and reach, but anybody who ever has to drive anywhere in central London and tries to use their phone suffers the same problems that people do in rural areas. Coverage is absolutely shocking; we are way behind countries such as South Korea, and so on, where the wi-fi works at 100 megabits on the underground, in the street or wherever you go. I drive from Wandsworth to the West End every day, and I cannot get a signal for a phone call, never mind the internet. I do not phone when I am driving, I hasten to add—just in case. So there needs to be some concentration and emphasis on improving coverage, even in urban areas. If we are trying to get people to come off the roads and use public transport, for goodness’ sake give us what we need, which is internet connectivity, which might go some way to improving productivity, on which so many of us rely. So many businesses and people involved in wealth creation and so on rely to such a great extent on connectivity, so please give it to us as well as looking after the cottage at the end of the lane.
One of the great surprises of my broadcasting career has been the success and efficiency of Ofcom. Against all my better judgment in the early days, it has turned out to be a super-efficient and very effective regulator of so many different aspects of vital parts of our life. Ofcom has an increasing role to play and it is time it had oversight of the BBC. This is a sensible solution. We have been through a transitional phase—one that I can support—and Ofcom is now more than capable of managing the BBC’s affairs in the way that is described in the Bill. It is a very good thing and I look forward to it happening.
Ofcom has an incredibly different task in reallocating frequencies. There is huge pent-up demand for this valuable national resource. I declare an interest as I am involved in live theatre productions. The theatre community, broadcast, film and conference facility industries are all very concerned about the effect of the reallocation of frequencies on radio mics. I know that the department and Ofcom are very involved but there is no solution yet. This is vital to tourism and the creative industries in this country and I hope we can get to a solution. The importance of the Bill is going to be enhanced by the debates in your Lordships’ Chamber, to which I am looking forward.
Lord Fox (LD)
My Lords, one of the most pleasing aspects of this Green Paper is the alacrity with which everyone in your Lordships’ House accepts the importance of access to fast and reliable digital connectivity, whether it is delivered through broadband or wireless telephony. This wide-ranging Bill rightly identifies how important this is in setting up jobs and in the growth of the creative and fintech industries. Yet the Bill seems unambitious—a word already used by many noble Lords—and fails to embrace what world-class really means. It also studiously ignores one of the key elements that drives wireless performance and service levels, namely the wireless spectrum allocation which is coming up.
The Government’s proposed creation of a broadband universal service obligation is a very positive development. We are obviously waiting to see what Ofcom’s response to this will be, not just on download speeds but on upload, latency, consistency and stability. In that regard, I support my noble friend Lord Foster, who described 10 megabits per second as insufficient. The overall effect of broadband reach was very elegantly illustrated by the noble Earl, Lord Lytton. Although it might, on the one hand, have a 10 megabit label on it, what is actually received in the sitting room or office is often very much less than that. Even if 10 megabits became the accepted minimum, for many people in far-off areas it would also be the maximum. A target of 24 megabits per second has to be our first objective. Parliament should require Ofcom to develop a USO to deliver this as soon as possible; and delivered to the front room, rather than to a box in a road or, indeed, to one of the noble Earl’s hedges somewhere out there. Therefore, we do not think it unreasonable for all of the UK to have access to superfast broadband, and this should include more consistent upload speeds. My fear is that Ofcom and, indeed, the Government are limited in their ambition, and at the heart of this timidity is the fact that they both know that the broadband ownership model is not fit for purpose. This is not directly addressed by this legislation but, in terms of the digital network, it is an elephant in the room.
I apologise for making my next point, which I have made elsewhere, but if you think about what BT is being asked to deliver through Openreach, you will see that the current ownership model of Openreach is the equivalent of asking a consortium comprising Network Rail, Eddie Stobart and Tesco to build our roads. We would not do it, but that is what we have. Until the digital highway is a proper utility, and one that is independent from a company which is a digital service provider and, indeed, a telephony provider, Ofcom will struggle to deliver these requirements. Therefore, we welcome recent announcements about the partition or segregation of Openreach, but we believe this has to be a step towards full partition of Openreach from BT. In the meantime, it is for the Government through this Bill and, obviously, through their relationship with Ofcom, to make sure that the highest possible standards are delivered in the shortest possible time.
Ownership is also an issue when we come to the wireless spectrum. Recent competition decisions have very clearly indicated that the regulator wants four players in this market, yet currently the market is not balanced, with two large players plus two much smaller players, which, we should remind ourselves, were recently prevented from merging. That means that, from what had been a rather balanced distribution of spectrum, we now have a very unbalanced spectrum—by some accounts, the least balanced spectrum distribution in western Europe. BT/EE has the largest proportion of the available spectrum currently allocated at around 39%, Vodafone has 27%, with Three and O2 having just 14% and 13% respectively. Currently, the situation is asymmetric, but with the potential to become more asymmetric as the next round of spectrum sales comes up.
Ofcom will decide the terms of its next spectrum auction, which will be the 2.3 and 3.4 gigahertz sale sometime around the end of next month. We believe that it plans to restrict BT bidding on the 2.3 gigahertz but, as I am sure your Lordships know, that is a small part of the overall band width that is for sale, and BT will still have access to the larger part of that 3.4 part of the spectrum. Therefore, even with more complete restrictions on BT, there is then also an opportunity for Vodafone to clean up on this. So, far from there being four competitors, there is a lot of work to do to enable there to be more than just two large competitors and two very weak ones. Therefore, we believe that this Bill should concern itself with the equitable distribution of spectrum as well as just ensuring the smooth management of spectrum that has currently been allocated.
In summary, we welcome the introduction of the USO but absolutely challenge the very unambitious 10 megabit per second target. A higher target of 24 megabits per second with good upload, latency, consistency and stability targets is very important. We need to make sure that this is available at the point of use in the farthest-flung parts of this country.
On wireless, we believe that the path to adequate competition lies with equitable distribution of spectrum. The Minister should interest himself vigorously in how to ensure that this equitable distribution can be achieved when the next spectrum round comes up. I would be grateful if he would let us know how he plans to do that.
Baroness Howe of Idlicote (CB)
My Lords, at this Second Reading of the Digital Economy Bill in your Lordships’ House it is a pleasure to speak today on a subject that I have regularly brought before the House in recent years through a considerable number of my Online Safety Bills. It is remarkable to see that the concerns raised several years ago about the number and nature of the foreign websites that are being accessed by the UK’s young people are finally being addressed. We are beginning to witness the offline protections that parents expect for their children being applied online. So it is rather an historic day. I begin by congratulating the Government, and particularly the noble Baroness, Lady Shields, on Part 3, on which I have spent quite a lot of time with her.
I am also delighted that the BBFC has been appointed as the age verification regulator. Having met, with other noble Lords, a number of leading age verification providers, I am reassured that the available technology is robust and developed on the basis of the principle of privacy by design, which means that complete anonymity can be preserved.
As we have heard, on Report in another place the Minister indicated that the Government would introduce an amendment to the Bill in your Lordships’ House on adult content filters. However, adult content filters should not be confused with the age verification checks proposed in Part 3. The checks relate specifically to pornography, whereas the adult content filters are network-level filters that offer to filter out adult content in the round: violence, drug use, gambling, self-harm, and so on. The adult content filtering regime was promoted very effectively by the previous Prime Minister, David Cameron, who acknowledged that it was being undermined by the EU net neutrality regulations on 28 October 2015, when he stated that,
“we secured an opt-out yesterday so that we can keep our family-friendly filters to protect children. I can tell the House that we will legislate to put our agreement with internet companies on this issue into the law of the land so that our children will be protected”.—[Official Report, Commons, 28/10/15; col. 344.]
In responding to my Question for Short Debate on adult content filters this year, the Minister explained that the Government have now received new legal advice that suggests that it is not actually necessary to change the law—but, to put the matter beyond doubt, she confirmed that an amendment will be made to the Bill before us today. The noble Baroness, Lady Shields, said:
“We have examined the regulation in detail, and the potential for the network-level parental filters currently offered by providers to conflict with it. We have now received clear legal advice that such network filters that can be turned off are compliant with the regulation. Article 3.1 of the regulation states: ‘End-users shall have the right to access and distribute information and content ... of their choice’. Filters that can be turned off are a matter of consumer choice. Therefore, they are allowed under the regulation”.—[Official Report, 1/12/16; col. 411.]
I am most grateful to the Minister for this clarification—or rather, I was—but I fear that it has generated a number of follow-on questions.
First, when I read the relevant sentence from Article 3.1 in full, it seemed that the reference to “choice” upon which the Government are depending relates to “terminal equipment” rather than to “content”. The full sentence says:
“End-users shall have the right to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice”.
In other words, an ISP cannot say that you must use a particular type of router to access the service that it supplies to you. Can the Minister explain why the Government believe that “choice” in Article 3.1 refers to choice about network-level filters? If I am right, and the reference to choice pertains to terminal equipment rather than network-level filters, Article 3.1 would not lift the central obligation in the regulations, described by the European Commission in these terms:
“Every European must be able to have access to the open internet and all content and service providers must be able to provide their services via a high-quality open internet. Under these rules, blocking, throttling and discrimination of internet traffic by Internet Service Providers … is not allowed in the EU, save for three exhaustive exceptions (compliance with legal obligations; integrity of the network; congestion management in exceptional and temporary situations) and users are free to use their favourite apps and services no matter the offer they subscribe to”.
Given that the “integrity of the network” and “congestion management exceptions” do not apply in the case of filtering, this leaves us with “compliance with legal obligation”. In other words, in order to be justified, filtering would need to be the result of a “legal obligation”. However, the way in which the noble Baroness, Lady Shields, described the legislation made it sound as if the proposed amendment would merely clarify that it was legal to provide unavoidable choice or default-on adult content filters if an ISP wished so to do. Specifically, she said:
“We will bring forward an amendment to the Bill in the Lords, to the effect that providers ‘may offer’ filters”.—[Official Report, 1/12/16; col. 411.]
There was no suggestion of an obligation on ISPs to provide this service. I would be grateful if the Minister could set out what the requirements will be on ISPs and, if they are less than mandatory, how they can hope to comply with the net neutrality regulations.
Secondly, I will ask the Minister about the impact of the net neutrality legislation specifically on the use of adult content filters in relation to public wi-fi in the UK. Last year, the Minister set out the Government’s achievements in child protection on the internet. She said:
“The major public wi-fi providers have made family-friendly wi-fi available wherever children are likely to be accessing the internet unsupervised. These are significant achievements”.—[Official Report, 17/7/15; cols. 859-60.]
I strongly agree, but if the criterion for being net neutral is indeed that the user can turn off the filters, I ask myself: who should be able to turn the filters off with respect to public wi-fi for their use in this context to remain legal? I hope the Minister’s legal advice covered that point and that she will be able to reassure the House that neither net neutrality requirements nor the Government’s amendment will place family-friendly wi-fi in jeopardy.
The third question that arises from my consideration of the net neutrality regulations relates to mobile phones. The definition used in the regulation, where an,
“‘internet access service’ means a publicly available electronic communications service that provides access to the internet, and thereby connectivity to virtually all end points of the internet, irrespective of the network technology and terminal equipment used”,
suggests that net neutrality applies to ISP filtering and MPO filtering. Will the Government’s amendment consequently apply to mobile phone operators as well as internet service providers to protect filtering on mobiles?
Finally, as so many of these questions rely on legal advice, would the Minister be willing to place a copy of that advice in the Library so that your Lordships can have a full understanding of the expectations that need to be met through the net neutrality requirements and of where there is latitude for child protection measures?
I do not expect that I will be given all the answers tonight, but no doubt there will be other occasions for them during the Bill’s passage through your Lordships’ House. In any event, I very much took forward to the Minister’s response and to discussing the amendments in Committee.
Lord Borwick (Con)
My Lords, first, I declare an interest as a trustee of long standing of the Ewing Foundation for deaf children, a charity that helps deaf children to make the most of the technology that can help them in schools.
I sympathise with my noble friend the Minister in having to deal with the complex interface between legislation and technology, especially as technology is changing so fast. For example, a lot of attention will focus on Part 3 of the Bill, on the subject of online pornography, but I feel that noble Lords who, like me, depend on teenage children or grandchildren to set up a new television will fail if they believe that they can write legislation that makes it impossible for teenagers to access whatever they want online. Certainly, Part 3 will go some way to making it more difficult for tech-savvy teenagers to access such material, and that is to be applauded, but I do not doubt that many noble Lords will propose amendments to attempt to make such access impossible, rather than just difficult. Such amendments may only reduce the already low level of respect teenagers have for the law in general. Surely the answer is education, as many noble Lords have said, rather than technical prohibitions.
The Bill deals with sectors with rapidly changing technology. That means it will soon be out of date, so there is, in this case, a good argument for regularly reviewing not only its effects—such as the possible increase in credit card fraud as a result of Part 3—and the number of dwellings with superfast internet access, but the creation of new technologies that will make existing technologies obsolete.
I will be attending the Consumer Electronics Show in Las Vegas between 4 and 7 January 2017. It is said to be the largest exhibition of any kind in the world, and I should pay tribute to the far-sighted and high-tech usual channels for making sure that the House of Lords will not be sitting between those dates. I have no doubt that I will see more advanced methods of accessing the internet than copper wires or even fibre optics. I have read reports about, and heard lectures on, low-flying satellites and high-flying balloons—known, bizarrely, as Project Loon—that will continuously transmit wi-fi-type signals to eliminate not-spots. That would enable the isolated shepherd’s hut in the highlands of Scotland to get better coverage than we do in central London, and certainly better signals than we get in the Palace of Westminster. If such technology exists, is it right that the broadband universal service obligation should continue indefinitely? Certainly this obligation is needed now in the short term, but we have to write legislation that will last.
The lives of all of us have been changed by new forms of communication. I have no doubt that noble Lords of 50 years ago would have been incredulous at the communication that comes to today’s noble Lords by texts and emails. But much more important are the changes to communication that technology has brought for those with sensory disabilities, enabling their greater connection with the outside world.
Part of the change has raised the importance of literacy in the lives of deaf people. Text phones and email have radically improved the opportunities for communication. Indeed, the use of technology masks many a disability and can offer independence and equality. Noble Lords will know that deaf children use a lot of equipment based on the 2.40 to 2.48 gigahertz frequency. Many deaf people are concerned that the tests being undertaken by Ofcom before it sells the adjacent frequency—mentioned by the noble Lord, Lord Fox—will be insufficient. These frequencies are vital for connecting deaf people to society generally.
A simple acceleration of this process of connectivity could come from the subject raised in another place—regulating to ensure that all television programmes carry subtitles. In 2003, I gather, Parliament gave people with hearing loss equal access through subtitling on analogue TV. However, how we watch TV has changed. There is no legislation to provide subtitles for catch-up, video on demand and streaming, so the legislation lags far behind the technology at the moment.
TV remains one of our strongest cultural focal points, and frustration and social isolation can occur when people are excluded from programmes that their friends, families and colleagues all enjoy. Most broadcast programmes do carry subtitles, but the way we watch television nowadays, with catch-up TV and minority channels, makes it desirable that this is more widespread. It is necessary to consider how to ensure greater access. I am grateful for the help of the National Deaf Children’s Society and Action on Hearing Loss, which briefed me on this subject. Will the Minister agree to meet me and his Bill team to discuss the commitment that an amendment will be brought into this House to achieve this?
Many people who use subtitles on TV programmes are not diagnosed as deaf—not least those whose problem may be one of processing language, rather than hearing sounds, as well as those confounded by sound itself. Even those watching the post-match analysis on a TV in a noisy bar or around a family TV may use subtitles to accompany the pictures. So a wider use of subtitles will help ease the very serious problem of isolation that often accompanies any form of disability.
Of course, much more can be done to alleviate that feeling of isolation. As well as extended use of subtitles and much better internet connections from sources we have not yet heard of, things like autonomous vehicles will connect those with disabilities with the rest of the world like never before. The common theme here is technology. So I hope that, as the Bill is debated, we will be mindful that we should facilitate technological progress, rather than slow it down.
Lord Puttnam (Lab)
My Lords, I too thank the Minister for introducing the Bill. I am happy to declare a number of interests, which can be found in the register. Among them is the fact that for the past five years I have enjoyed the role of Digital Champion for Ireland, working in that country and in Europe to wrestle to the ground some of the problems created by the digital world, as well as taking advantage of the many benefits it brings.
I have also, for 10 years and more, taught in Singapore and watched the anticipatory way that country plans for and addresses technological and social change. Your Lordships will be delighted to know that in Singapore and elsewhere, Ofcom is regarded as very much the poster child for responsible regulation. That delights me, as I had the privilege of chairing the Joint Scrutiny Committee of both Houses for the 2003 Communications Bill, which set up Ofcom and in which all things digital were firmly placed in the “too difficult” box, to the frustration of all of us at the time. With what result? The result was that we have been engaged in a dozen years or more of effectively playing catch-up.
There is much that is good and timely about this Bill, so I will focus my remarks on what is not in it in the hope that we might avoid at least some of the lost opportunities of 2003, so many of which were entirely predictable, including the role of the ISPs in respect of many things from pornography to piracy.
That the world of work is changing is little more than a dull truism, but the issue that seems, for the present, to have been sailing under the legislative radar is the nature and sheer pace of some of these changes and the impact they are having and will increasingly have on the people most likely to be affected by them. I will not rehearse the history of industrial change in the second half of the 20th century, but it is pretty safe to say that it was a time of turbulence and job insecurity right across what used to be called our “blue-collar workforce”. Jobs vanished from the production line as automation bit, and indeed in some industries, continues to bite hard.
However, I believe that we are now faced with a somewhat different crisis as new forms of intelligence-driven processes threaten—and in some cases will obviate—what until now have been considered “safe” jobs in many of the professions. I give by way of example the law, accountancy, architecture and indeed even some areas of education—areas in which a decent degree seemed to assure a job, if not for life then at least for the foreseeable future.
By my reading, this Bill takes little account of the threat to individuals and to the economy as a whole of what is likely to be a wave of digitally created redundancies. I bow to no man in my belief that, over time, the digital world may be capable of generating more jobs than it lays waste to. However, the important words there are “over time”. As the Minister will no doubt tell us, the development of digital skills does receive attention in this Bill, and will receive further attention by amendments to the Apprenticeships, Skills, Children and Learning Act. But I would argue that there is a significant mismatch between the issues of training and reskilling currently identified in this legislation and the actual crisis that sits just around the corner, just a few years from now, when possibly hundreds of thousands of livelihoods could be lost to the incoming wave of intelligence-driven digital innovation.
Given sufficient thought and legislative support, it may be possible to retrain and reskill accountants to become data analysts, conveyancing lawyers to become digital copyright specialists or architects to become cybersecurity designers. However, that will not be achieved overnight and without a great deal of thought and, if I dare suggest it, preplanning. I understand that the Governments of the Netherlands and Germany, along with those of some of the Scandinavian countries, are already very well seized of this issue and have governmental task forces in place to address the myriad possibilities of a world of work that is, at least for the present, veiled in a great degree of uncertainty. When he comes to reply, will the Minister reassure the House that Her Majesty’s Government are similarly preparing themselves for these eventualities—actually, they are not eventualities, they are inevitabilities? I will not delay the House by reciting the evidence for my assertions, but I suggest that the department take a long, hard look at recent reports on the subject by Deloitte, McKinsey’s and the Bank of England, as well as numerous articles in the Financial Times and elsewhere. As the noble Lord, Lord Baker, indicated, this problem is not science-fiction: it is real, it is now and it is not going to go away.
In conclusion, I will quote a short extract from a book entitled, “The Future of Professions: How Technology Will Transform the Work of Human Experts”, by the British academics Richard and Daniel Susskind. In their book they say:
“We anticipate an ‘incremental transformation’ in the way that we produce and distribute expertise in society. This will eventually lead to a dismantling of the professions”.
If they are even half right, the impact on the taxpaying, mortgage-owning middle class of this country could be immense. I believe that any responsible Government should prepare themselves for such an eventuality, and have the legislation in place that enables this particular workforce to avoid falling victim to the combined impacts of advanced technology and globalisation.
In her introduction to the Bill, the Secretary of State said:
“We will make sure all adults who need it can receive free training in digital skills to equip them for the modern world”.
That is an entirely laudable ambition, but, try as I might, I can find nothing on the face of the Bill that might turn it into the type of complex and potentially expensive policy tool that, if I am right, the situation five years from now will unquestionably demand. I hope to gain support from the noble Lord, Lord Baker, and others during the Committee stage of the Bill to achieve agreement to amendments that might have the effect of transforming the Secretary of State’s ambition into a working reality. However, to do so, the means will have to match the aims.
Lord Storey (LD)
My Lords, Article 19 of the United Nations Convention on the Rights of the Child confers upon children the right to protection from all forms of physical and mental violence and abuse. I want to look at this in relation to the Digital Economy Bill. I guess that neither Berners-Lee nor the signatories of that convention could have predicted the degree to which technology has become such a significant part of the daily life of children and young people—a transformation which has brought both benefits and real vulnerabilities. With the introduction and increased availability of internet-enabled smartphones, the nature of children’s engagement with the digital world has been transformed. Children can have constant access; they are able to communicate and to access online material free from parental supervision. Of course the internet can empower children and young people, giving them opportunities to learn, explore the world around them, access information, have fun and socialise with their peers, but going online can also pose a significant threat to the protection of children’s rights by exposure to online grooming, cyberbullying and inappropriate violent or sexual content, and the distribution of child abuse images. We must always be vigilant in our efforts to protect as many children as we possibly can.
That is why I welcome an age-verification requirement on pornographic sites, but it must be an age-verification system that works. I have seen at first hand, as a head teacher, how young children, encouraged sometimes by older brothers and sisters, have joined inappropriate sites and, whether through bravado or innocence, regularly visited them and then bragged about it to their friends. The harmful effect to young minds of seeing, for example, a pornographic enactment of rape, is unimaginable. The National Society for the Prevention of Cruelty to Children was set up to ensure that any form of cruelty does not occur to children. Now, in a digital age, it sees the danger of these sites to young children and young minds. As we have heard, its research shows that 53% of 11 to 16 year-olds have seen explicit material online, and almost all of them by the age of 14. That is 94% of all children. Often, this material is stumbled upon through, for example, pop-up advertisements. More than half of young people in the research reported accessing pornography inadvertently. This easy access to pornography has harmful effects on children and often leaves them upset and confused. Childline has seen a 60% year-on-year increase in the number of counselling sessions with children left worried after seeing pornography. The Government are right to say that a tick-box exercise is not sufficient and that an age-verification procedure that works is required to ensure that children are safe and protected—and if we can get anonymity, even better.
I agree with the noble Lord, Lord Stevenson, that sex and relationship education in our schools is vital. It seems slightly bizarre that the Government are rightly concerned about young people accessing pornographic sites while, at the same time, presiding over an education service in England that allows schools not to teach sex and relationship education.
I want to raise two other issues that affect children. Currently, a large number of families are entitled to claim free school meals. For each pupil receiving a free school meal, the school receives the pupil premium to provide extra support for pupils who need it. Many families do not claim this entitlement, for a number of reasons: ignorance of the fact that they need to apply for it, language difficulties, stigma or perhaps a chaotic home environment. In this digital age, why cannot local authorities alert schools to families that would be eligible for free school meals, allowing for auto-registration rather than the need to apply? That would mean that more children would be eligible for a nutritional free meal, saving families up to £400 a year. At the same time, school budgets, which are stretched, would get an extra £1,320 per pupil, per year. As Russell Hobby of the National Association of Head Teachers said, auto-registration for free school meals would ensure that,
“more children would get the support they are entitled to”.
I also add my voice to those expressing concern at the positioning of UK children’s programmes on the electronic guidance system, as my noble friend Lord Foster said, behind a battery of American cartoon channels.
Finally, from a region which is rich in TV, film and television production, I welcome the Government’s decision and plans to repeal Section 73 of the Copyright, Designs and Patents Act. Considerable harm is being done to the industry by companies live-streaming the content of PSBs, placing their own advertisements around them and monetising that content, and, of course, taking funds away from further investment in the UK’s creative economy. The Government have talked about transitional arrangements in the repeal of Section 73. Perhaps, as has already been said, the Minister could tell us in his reply what these transitional arrangements are.
Lord Low of Dalston (CB)
My Lords, I speak briefly about two issues that have been brought to my attention and that concern me—the listed events regime and the prominence in electronic programming guides given to particular public service broadcasting channels and services. I welcome the fact that the noble Lords, Lord Stevenson, Lord Foster, Lord Gordon and—most recently—Lord Storey, all referred to one or both of those matters already, but I hope that it will do no harm if I deal with them as well. Before I do, I must say that I welcome the Minister saying that he will bring forward an amendment to deal with hearing-impaired subtitling. Will that cover audio description as well? If there is any doubt about that, perhaps the Minister would be prepared to meet me to talk about the matter.
The listed events regime is hugely important to millions of people who enjoy watching sport, from the FA Cup final and the World Cup finals to Wimbledon finals and the Olympics. These major sporting events bring people together, united in support of their team, their country or just their favourite player. Everyone can be a part, no matter who they are, how old they are or whether they are disabled. During the Olympics earlier this year, I am sure that no day passed in any workplace without people talking about how exciting the diving was the previous night, how nervous they were about that night’s 100-metre final or how proud they were that Team GB did so exceptionally well overall. Likewise, Wimbledon brings out the competitive spirit, with friendly office sweepstakes held up and down the land, while “Match of the Day” brings friends and families together to watch the day’s highlights and to celebrate or commiserate.
Without the listed events regime, more sporting events would almost certainly move away from free-to-air television, excluding many people from watching and being part of national events. Far from uniting families, friends, colleagues and even strangers, losing the listed events regime would divide people into those who can afford to pay and those who cannot. As noble Lords have recognised on many occasions, families all over the country already struggle to pay their bills. It is hardly going too far to say that to do anything other than upgrade the listed events regime would simply be to promote inequality. We have to protect the listed events regime to allow people to watch Andy Murray lift the Wimbledon trophy and to be a part of Team GB winning another record medal haul in 2020.
The listed events regime has been a success, which is why I am worried that it is now at risk. I understand that the public sector broadcasters agree about that risk—they agree that an update to the legislation is needed and believe that this Bill could help with that. What plans are there to ensure that this legislation is updated to protect something that has considerable importance for all of us?
The second issue that I am concerned about and believe that the Bill could help address is the prominence given to particular public service broadcasting channels and services. I know from first-hand experience and from talking to others how frustrating electronic programme guides and user interfaces can be. Navigating one’s way through and finding a particular channel can be challenging to say the least, and people with a sensory impairment find it particularly difficult. Interfaces are all different and different programming guides have channels in a different order. Finding BBC News or BBC Parliament on the iPlayer can take a considerable time. If we believe in the value of public service broadcasting, it should be easily accessible. The BBC produces some of the most informative and highest-quality programmes in the United Kingdom and as licence fee payers we should all be able to find BBC channels and programmes more easily than we can now.
In its 2013 report on media convergence, your Lordships’ Communications Committee called for legislation on prominence to be updated to take into account how people now access content, including on-demand content such as the BBC iPlayer. I believe that the Bill provides a vehicle for doing that by updating existing legislation. Does the Minister agree that this is an issue and what solution does he have in mind? Depending on his answers to the questions that I have asked, I may wish to return to these matters in Committee with amendments.
Lord Wigley (PC)
My Lords, the Bill before us today takes significant steps towards a more digitally inclusive future, and I welcome it. I particularly welcome measures relating to pornography, fraud, copyright and disability issues. I pay particular tribute to the work undertaken by the noble Baroness, Lady Howe of Idlicote, on many of these matters. It was good to hear her speak today about them. However, I have some reservations about whether the Bill resolves areas of concern expressed to me by various stakeholders and by constituents of Plaid Cymru’s three MPs on specific matters of this Bill.
I intend to mention four main areas of concern communicated to us, three during the House of Commons stages of the Bill and one thereafter. I will briefly outline them today and return to them in Committee. The first relates to the disproportionate neglect faced by people in rural Wales when it comes to mobile coverage. The second refers to the inability of the Bill to respond to technologically important developments relating to online abuse. The third addresses the limited bilingual services available on government websites. The fourth relates to public sector broadcasting’s prominence rules, which have already been mentioned.
In recent years, demand for voice and data services has grown exponentially. Mobile data traffic across western Europe is predicted to grow sixfold by 2020. Mobile devices are a vital part of modern life, wherever one lives and works. The 2014 deal with mobile companies, trading national roaming for a commitment to 90% coverage by 2017, has served rural businesses and communities particularly badly. Not-spot localities in rural Wales remain at chronic levels, with 4% of homes in Wales without any services from any mobile network operator. Ofcom’s Connected Nations 2015 report identified Wales as the country in the UK with the least 3G signal. Outdoor voice 2G and 3G coverage on A and B roads by all four operators is around just 50%, with only one operator reaching 76%. Rural Wales is hit disproportionately by this not-spot phenomenon, with north Wales in particular continuing to lag behind the rest of the UK. The percentage of premises getting basic voice calls coverage from all the big four networks in 2015 was just 65%, compared with 85% for the rest of the UK. The industry’s requirement to deliver near universal voice and mobile internet coverage underlines the need for new ideas. Clearly, the way in which mobile coverage is failing rural businesses and communities needs to be addressed. The issue of fast broadband availability in rural areas is a parallel concern and is a major consideration in the economic well-being of rural areas. I declare a personal interest as we are so challenged by that matter. My colleagues in the other place tabled amendments that sought to include practical ways of improving coverage in Wales, but they were not debated. I will table amendments along those lines in attempts to rectify this problem, and I hope to engage in a thorough and comprehensive debate in Committee.
The second area of my concern is abusive behaviour on social media platforms. The way in which we communicate with each other and with the world has changed dramatically over the past 10 years, with 37 million social media users in the UK. Last year, the then Education Secretary reported that,
“convictions for crimes under a law to prosecute internet trolls increased eightfold in the last decade, with 155 people jailed”.
Twitter’s top lawyer has himself admitted that the company has been “inexcusably slow” in fighting off vicious online crime. There is no incentive for social media platforms to implement robust processes to deal with criminal online abuse. We must therefore ensure that a statutory requirement is placed on social media providers to do all they can with regard to dealing with criminal online abuse. Plaid Cymru MPs tabled amendments in the other place to give this Bill the ability to hold social media platforms to account for their vital role in tackling the surge of online abuse, much of which is of a criminal nature. The amendments were not given very much attention in the Commons, certainly not as much as they deserved, and I hope to pursue this issue further.
The third matter I want to raise is the lack of bilingual services from English to Welsh on UK websites. Despite gradual gains in language equality and despite a statutory framework being in place following the Welsh Language (Wales) Measure 2011, bilingual services being provided by the UK Government are not advancing in line with technology. Often, services and content are available in Welsh only by specific request for translation, which inevitably deters users and limits access by Welsh speakers. Since the UK Government’s website was centralised into GOV.UK, the situation has substantially deteriorated. This concern has been expressed by Meri Huws, the Welsh Language Commissioner. She has criticised the UK Government for weakening their Welsh language services on the GOV.UK website since its 2012 launch. Following a review of GOV.UK websites and online services, she concluded that access to forms and information in Welsh is deficient and is affecting people’s experience when using the UK Government’s online services. Why should the 700,000 Welsh speakers in the UK be prevented from accessing the content available to English speakers in their preferred language? I intend to table an amendment that will help to ensure that essential communications in Welsh are made as accessible as possible in the Government’s own services as they move online. I will take a reasonable and practical approach to this matter, and will do so building on the concerns of the Language Commissioner, to which I have referred.
There is one final matter that has been raised with me by friends in the BBC and which I want to flag up today and address in detail in Committee. This Bill presents a rare opportunity to modernise public sector broadcasting prominence rules so that they are appropriate for the digital age in which we now live. Currently, there is a requirement for PSBs to have only what is called “appropriate prominence”. While this has generally ensured that that the main PSB channels are high on the listings, BBC1 being at the very top, for example, channels like CBeebies and CBBC do not have such high prominence. This is a particular issue for S4C and BBC Alba, of which I was very much aware when I was a member of the S4C Authority. I also believe that we need to modernise the current system to ensure that it covers on-demand services such as catch-up TV as well as connected TV on-demand menus. This is the way the public, particularly young people, increasingly access public service content. It would add services like BBC iPlayer to the list of those given prominence, as a number of speakers have mentioned in the debate. The BBC’s on-demand services provide a platform for S4C and BBC Alba as well as TV channels such as BBC1 and BBC2. Here I warmly identify with the comments made by the noble Lord, Lord Foster of Bath, in opening the debate.
I shall address all of these matters in greater detail in Committee, but I certainly recognise the merits of the Bill and very much hope that, in an amended form, it will proceed to the statute book.
Baroness Kidron (CB)
My Lords, I refer to my interests as set out in the register and I would like to make it clear that while the House of Lords Communications Committee on which I serve is in the middle of an inquiry into “Children and the Internet”, I speak not on behalf of that committee but as an individual—albeit one who has spent a great deal of time over the past six years thinking about the relationship between children, young people and digital technologies.
I want to make some general observations about the Bill as a whole and then I will return to the question of children. Like others, I welcome the notion of broadband as a utility, and along with that the establishment of a universal service order providing for the introduction of a minimum speed. However, I am aware of the argument against regulation in all parts of the value chain of the tech industry, with one of the major points being the speed of technological change and the expectations of those using the technology. It races ahead of the pace of legislation. Rather than enshrining the suggested 10 megabits in the universal service order, which will shortly look paltry, perhaps we might look at enshrining the principle of a minimum speed with a mechanism to set it at appropriate levels at appropriate intervals.
The noble Lord, Lord Puttnam, set out in great detail some of what I was going to talk about in the world of work, so suffice it to say that I was disappointed not to see much more ambitious intervention as regards skills and training in changing practices at work and measures to tackle the enormous deficit of skills that we anticipate. If we are to get the workforce we need and want for the future, I should mention in particular the need to take a more proactive look at supporting the acquisition by women and girls of digital skills.
I am also disappointed by Part 4, which provides new protection for intellectual copyright, but it seems to be a fairly undisguised battle between Google and major players from other areas of the media industry that make content. What I do not see in this part of the Bill is any attempt to protect user content. It is worth remembering that the vast majority of content on the internet is created by users, most of whom unwittingly transfer their pictures, words, behaviour patterns and intimate thoughts by way of those interminable terms and conditions to companies which sell the information to third parties for advertising. While I acknowledge the need for film studios, recording companies, media conglomerates and the like to be supported in this way, the poor user has not been served. I would have liked the Bill to tackle the question of terms and conditions head on.
The same attitude is evident in Part 5. Personal data are to be collated and shared across public departments. As other speakers have said, there are good reasons for doing so given some of the positive outcomes, but in a world where anything from the result of the American election to the records held by one’s bank or mobile phone company—or indeed the activities of the security services—are all rather insecure, the assurances that such data will be anonymised and individuals protected by the current status quo in the form of the Data Protection Act seem to be fairly absurd. I hope I will be forgiven if I am ignorant, but I could not find in the detail of the Bill a clause dealing with opt-out and how that might work. To allow data collection and sharing by services that one has no choice but to use seems to be setting out on a path that we will need to look at as the Bill goes through its stages in order to get a little more in the way of assurance. Given that we are in the middle of what is an unstoppable trend of outsourcing public services such as prisons, health and social services and even child protection to commercial companies, how does the compulsory sharing of data in the context of public/private partnerships protect the rights of citizens? I feel that we may need to look at this area more carefully.
I turn now to the BBC. I found it wryly amusing that one of the great travesties has been quietly laid out under the title of “Miscellaneous”; it is quite funny. The transfer of policy to the BBC for payment of the over-75s’ free licence is of course an essential piece of housekeeping: he or she who pays must indeed have their hands on the policy. However, as others have said, the BBC is a broadcaster, not a government department. While I am sure that others will join with me, and while I am equally sure that we will be collectively whistling in the wind, we have a new Prime Minister, a new Secretary of State and a new Chancellor. I urge them to distinguish themselves by reversing this unseemly raid on the coffers of the BBC by dropping both the policy and the effective funding cut.
Before I return to the subject of children, I agree with others who have outlined the prominence of the PSBs. The letter of the law is indeed set out in the Communications Act 2003, but it refers to a different technological time. If the commercial companies cannot deliver on the spirit of the law, then those of us in this House should find a way to change the letter of the law.
Part 3 fulfils the Government’s pledge to make commercial pornography sites subject to age verification. The right honourable Matt Hancock said in the other place that the Bill would give children,
“the same sorts of safeguards online as they have offline”.—[Official Report, Commons, 28/11/16; col. 1274.]
I welcome this effort at age verification. I dismiss the previous Secretary of State’s assertion that this is in any way an,
“infringement of the civil liberties of individuals”,—[Official Report, Commons, 28/11/16; col. 1301.]
who want to access this same material. However, I feel the Bill is too narrow. I have the dubious privilege in my life as a film-maker of having watched a significant amount of pornography over several decades. I have watched it change over that period. Whatever the pros and cons of watching pornography are as an adult, the one thing I am entirely certain of is that it is a really bad way of learning about sex. That is what is happening.
The accessibility and ubiquity of violent sexual content is transforming young people’s attitudes towards sex. Some of this material is deliberately sought out, but much of it is accidentally thrust upon children, causing distress and confusion—another noble Lord used that word. It is important to remember that young people are not fully formed. They do not know the rights and wrongs and cannot make these fine judgments for themselves. I find it horrifying that a third of 13 to 14 year-olds say that they want to act out the scenes they have viewed. If, like me, noble Lords have seen those scenes they would not wish children at the age of 13 or 14—indeed, possibly at any age—to act them out. There is a statistic from the NSPCC that 53% of boys said that pornography they had seen had depicted a realistic view of sex between two people.
I am going to labour this point. When I was making a film part of which dealt with the relationship between online pornography and teenagers, I came across some emerging trends: increasing and large numbers of young men with erectile dysfunction, desensitised by the constant viewing of extreme pornography; rising numbers of young women presenting at health centres with anal injuries, sustained in sexual relationships with hazy notions of consent and mutuality; and quite ghastly tales of very young children coming across graphic pornography that they could not unsee. Most of all, I was struck by the overwhelming sadness at the number of very young people, boys and girls, who articulated the way that watching pornography was intruding on their ability to form intimate relationships in the real world.
In Committee we will have to look very carefully at what constitutes pornography and exactly how the mechanism of age verification will be applied to preserve the privacy of individuals, because there is not quite enough clarity on either of these things. We will have to do that in the context of realising that a vast amount of porn is user-generated, not from commercial sites. Where does that sit in this picture? We have to recognise that this will not work 100%, but part of what is important about this measure is the adult world suggesting what a social norm might be. For a young child, transgressing and breaking the boundary is an important act in accessing this material. People who say that this is not important because it will not work have the wrong end of the stick.
Others have said but I must say also that, although it obviously will not form part of the Bill, the Government must undertake to take seriously the desire of parents, teachers and young people themselves to have statutory, age-appropriate, well-funded and well-designed SRE in all schools, whatever their status. It must be SRE that takes account of the multitude of good resources that exist for young people online, but which offers a robust and sophisticated alternative to learning about sex from online pornography. Blocking violent sexual content without putting in place positive and uninflected SRE will not serve the nation’s children. It is a developmental imperative to find out about sex; we need to find a safe and secure environment in which to do so.
I return to the Minister’s statement that this is a Bill that will harmonise children’s experiences online and offline. If that was the intention, the Bill as it stands is severely lacking. Children enjoy many more rights. A noble Lord already mentioned the United Nations Convention on the Rights of the Child. There are rights that protect them from commercial exploitation, give them privacy and demand that we take their best interests as paramount. There are rights to the highest goals in education, as well as protection from violence and harm. Those rights and our laws—EU laws and national laws—are consistently thwarted in online and digital settings. We allow profiling and wholesale data gathering. We tolerate hundreds of thousands—possibly millions—of underage children using social media sites that have an age limit of 13 years old. As I mentioned, terms and conditions for almost every online business—educational, business or social—are designed to obscure the commercial relationship that a minor is unlawfully entering into.
We have failed to conduct any meaningful conversation, let alone take action, on false news, transparency of search algorithms, gender disparity in the online experience and, most importantly for the young, the constant alerts, interruptions and encouragement to share personal information that are deliberately designed to keep the user using. The evidence is out there and growing. It is becoming very clear that young people are finding it harder and harder to put down their devices. They are tethered to the flashing of the latest alert. This is not an unintended consequence but a deliberate design feature, mirroring the very same design as casino slot machines, with their random rewards setting off dopamine in the brain. There are measurable outcomes that include anxiety and mental health issues at epidemic proportions.
We have to consider this, because this is an opportunity. For young people, the digital world is the world. Our young people will be the workforce, the parents, the teachers, the leaders and the entrepreneurs in this new world. When we consider anything at this level we have to consider how we want to bring them into this world and how that world is designed to treat them.
The Bill was an opportunity to deliver the commitment that Matt Hancock made: to harmonise the online and offline worlds; to make digital services conform to the standards we uphold offline; and to recognise children’s special status as minors, with some measures to protect their data, to have high privacy settings by default, to put digital literacy at the heart of our school system and to take a broader view of the challenges they face. The digital world offers us an unparalleled opportunity for a new and improved world, but we have more than a duty to protect. We have a duty to design the digital world in a way that benefits and empowers our young people.
Baroness Wilcox (Con)
My Lords, I thank my noble friend the Minister for introducing this welcome Bill. Increasing the maximum sentence for online copyright infringement to 10 years, making it the same as that for physical copyright infringement, is a long overdue recognition of reality. To some extent, therefore, Clause 27, while most welcome, is merely playing catch-up. For many years, serious offenders in the area of online infringement have been prosecuted for offences such as conspiracy to defraud, rather than under the 1988 Act, as the only way of securing an appropriate penalty in excess of two years’ imprisonment.
As a former Minister in this area, I admit that I must take some responsibility for this. I must also, however, urge my noble friend the Minister to ensure that, going forward, we are not simply playing-catch up in a world of rapid technological change. In this respect I agree fully with the former Secretary of State, the right honourable member for Maldon, who said in another place that although the Government are sending a clear message about the seriousness of online infringement by equalising the penalties, more must be done. The Government need to get ahead of the curve on online infringement fully to build on their promise to support our creative industries, which play such a vital role in promoting jobs and growth in our economy, contributing more than £84 billion to it this year alone.
By “get ahead of the curve”, I mean that the Government must do more than just equalise the penalties for physical and online infringement. They must ensure that online infringement is deterred in the strongest possible terms. The scope for damage caused by online infringement can be much greater than for physical infringement. This trend will only become more significant as people continue to consume ever more content online, whether legally or illegally, rather than in physical form. Indeed, this year, consumers for the first time spent more money on streaming and downloading films than on purchasing or renting them on DVD.
As a result, the scale of the challenge posed to our creative industries by online infringement is vast. In the second quarter of 2016 alone, 78 million music tracks and 51 million films or TV programmes were accessed illegally online. Within a matter of seconds, infringing content can be uploaded to the web with the potential to be downloaded millions of times, causing vast losses to rights holders. By comparison, it is hard to see how physical infringement, perhaps in the form of counterfeit DVDs, unless done on an industrial scale over many years, could have such an impact.
I note in this regard a case raised in the other place by the Secretary of State, that of Paul Mahoney, a Londonderry man who set up websites which facilitated the illegal sharing of films online. In convicting Mahoney, the court found that he had caused losses to rights holders of several million pounds. The prosecution suggested a figure as high as £12 million, with up to £120 million being put at risk though his activities. All this was done by one man working alone from his bedroom.
I therefore ask the Minister whether the Government will consider further measures, either in this Bill or going forward, to ensure that never again is the law behind where it needs to be in order fully to protect our creative industries, the contribution they make to our economy and the almost 2 million people they employ from the growing and potentially devastating threat posed to them by online infringement.
Lord Whitty (Lab)
My Lords, I am usually very pleased to follow the noble Baroness, Lady Wilcox, because she is usually the champion of the consumer. One of my few credentials for speaking in this debate is that, nearly 10 years ago, I fell out quite badly with the last Labour Government over their Digital Economy Bill because I felt that they were paying too much heed to the rights of rights owners and not enough to those of the new form of consumers. I still feel that, and shall return to that issue at some point in my speech, so I am departing from my usual terms of agreement with my famous predecessor as chair of the National Consumer Council.
My other credential for speaking here is that, only a few months ago, my sub-committee of the EU Select Committee produced a report on digital platforms. It was debated in the Moses Room on the last day before the Autumn Recess and had a distinguished but rather limited presence, including that of the Minister, whom I thank for his response then and for his subsequent letter. However, very few of the issues raised in that report are reflected in the Bill. My noble friend Lord Gordon described it, seasonally, as a Christmas-tree Bill with a lot of different things hanging from it. The trouble with Christmas trees is that some of the baubles are quite pretty and some are pretty ugly, but the real problem is that the parcel you expected to see at the bottom is not there. That seems to be a problem with this Bill. There is an elephant in the room: the role of large-scale digital companies, which dominate the market, dominate choice and therefore dominate consumers’ possibilities.
On the other hand, I welcome large sections of the Bill. I welcome the enactment of a USO in this area—very necessary if slightly belated. I agree with other noble Lords that the obligation is less than totally ambitious and that there are still problems with making sure it effectively covers rural areas, but in principle it is a major and important step. We are still well behind highly digitalised economies such as Korea and Estonia.
I welcome the provisions on consumer rights relating to switching and compensation, but they do not completely address the need for consumer control over their own information, nor do they deal with the issues of privacy and individual data. I also welcome the provisions on unsolicited electronic marketing by telephone or online, but, as my noble friend Lord Stevenson said, the only real way of dealing with that is by default. That is not enacted, but I welcome the provisions as far as they go. I welcome Ofcom’s powers relating to mobiles and telephones. I regret that the Government did not take the opportunity also to legislate for caps on individual consumer spending, which could then be enforced by regulatory action via the companies. There are therefore several bits of the Bill which deal with the interests of consumers. I wish that they went a bit further, but they are important and I welcome the Government’s move in those directions.
I welcome also the provisions on online pornography and age verification. I recognise the limitations and the extraordinarily complex issues which the noble Baroness, Lady Kidron, has just spelt out, but the Bill is a step in the right direction. However, underage children’s exposure to pornography is not the only issue of content that needs to be addressed in the online world—I will return to that in a moment.
I can also give a general welcome to the provisions on data sharing between public authorities and certain other bodies, provided that the right qualifications are put in. My interest in this area is that mentioned by the Minister: identifying people who are in fuel poverty for interventions such as the warm home discount and for local action to improve their living situation and reduce their energy bills. What is basically DWP information will need to be shared with energy companies. I hope that the list of public bodies can be extended to include GPs and public health bodies, because health professionals frequently recognise the impact of fuel poverty on individuals and their families. I would also like to see included the companies with which they deal, not just the retailers but district network and gas network operators.
For the reasons I have started to spell out, I am a little dubious about the intellectual provisions in Clauses 27 to 29, an issue on which I fell out with the last Labour Government—not a thing I did all that frequently. Since then, a number of market developments have taken place which change the scene—at that time, Spotify was almost the only place where you could provide mass access on a legal basis with some return to rights holders. I opposed then the proposed penalties for every user who, following warnings, downloaded illegal content which was covered by intellectual property rights. I thought that was overkill and still think so. I tried at that time to distinguish between those who, perhaps for their own entertainment, may have downloaded quite frequently but made no money out of it and those who made huge amounts out of it. I am glad that the Bill moves some way in that direction, while hugely increasing the maximum penalty. The penalty is probably a bit high and I would like the distinction between commercial benefit and normal consumer use made a bit clearer, but in principle I do not object to raising the penalty.
I now come to the real elephant in the room. It is the need to recognise and, if necessary, confront and intervene in areas where the dominance of large digital markets, particularly platforms, is restricting the range that business and consumers have, while greatly increasing their apparent—and real—access and transforming the speed with which we can transact. They identify options, markets, providers and consumers that we could not otherwise identify. For example, we almost regard using Google as a free public service—except that it is not free. We are all providing our information. That information can be used by search engines and other large platforms for their own and related companies’ purposes—in the case of conglomerates such as Google—by those to which they pass on information or with which they have commercial deals, and, above all, by the advertisers on those sites. Those valuable data from consumers and small traders are then combined and aggregated into an economic resource, which is the basis for the network effect and therefore the worth and increasing dominance of such companies.
The way in which companies use those data—not just selling them on but to prioritise their own rankings—is key. This Christmas, while we look on Google for sources of information on presents, on Amazon to buy our Christmas presents or on booking.com for our new year trips, the way in which the ranking comes up will be prioritised internally by those companies. This raises quite serious issues because, even within those companies, nobody understands the totality of their algorithms, yet the results are sometimes very distorting. They can put companies out of business, ruin reputations and distort the market. When the committee did its report, we found that these new technologies and large companies are not only disruptive in the positive sense—in that, through interactive technology and the internet, they provide a huge new ambit for us to operate in—but deeply disruptive of the previous traditional regulatory regimes for competition, mergers, consumer protection and data protection. We covered all those areas in our report and touched on intellectual property, along with issues as mundane as employment—as the recent Uber case showed in respect of the gig economy—let alone the rather wider employment implications which the noble Lord, Lord Baker, referred to.
As I say, the elephant in the room is that that dominance, those transactions and the way companies prioritise information to the final consumer is an enormously potent force in our society and economy. The regulatory structures have not caught up with that and, because of their dominance, it is unlikely that competition or changes in technology will easily do so. They may catch up one day, but not yet. There are sinister sides to this, as we have seen, for example, with the dominance of right-wing propaganda on Facebook and the terrible revelation today that if you type “Holocaust” into Google, the first 10 results are for anti-Semitic sites. That is a side-effect of what is otherwise a deeply benign movement for many people, which extends their lives and improves our commerce and trade. We need to address that at some point and I hope we will at least begin to do so during the passage of the Bill. I hope that we will also address some of the issues that the noble Lord, Lord Baker, raised regarding the impact of changing technology on society.
Baroness Janke (LD)
My Lords, as my colleagues have said, there is much to be welcomed in the Bill and we support many of the measures in it. I will confine my remarks today to the areas of the Bill relating to digital government in Part 5 and new Clause 85, which particularly relates to digital exclusion. I will also flag up the issue of counterfeit products, in the hope that we can raise this through possible amendments in Committee.
Those of us who have served in local government know that the effective sharing of information is essential to the delivery of joined-up public services. Local authorities are key local service providers, working across multiple agencies and in particular supporting vulnerable and disadvantaged people. The ability to better co-ordinate information and reduce bureaucracy and delays in providing much-needed support will be welcomed by many people. My noble friend Lord Storey mentioned the immense benefit of automatic registration for free school meals, which will be based on benefits data shared with schools. It is argued that more children will receive their entitlement and schools will get better pupil premium receipts based on real data, whereas currently parents must register their children and so schools very often do not get their full entitlement. I hope that we might be able to explore that in Committee, as it seems a very real benefit.
The draft codes of practice published in October are intended to provide clarity and transparency on how the powers in the Bill will operate. However, the contents of these codes are not legally binding, although public bodies will be required to have regard to the codes when making use of the powers. The codes make it clear that all information shared and used under the new provisions must be handled in accordance with the framework of rules set out in the Data Protection Act 1998. There must, however, be concerns that the Bill could authorise unconsented mass data-sharing for the administrative and low-level policing functions of local government. This could become a disproportionate interference with citizens’ right to a private life.
We would like to see the principle set out in the Better Use of Data in Government: Consultation of June 2016 being adhered to. We would also like assurances that there will be no new large and permanent databases or collecting of more data on citizens; that sharing of data within government will be strictly managed and scrutinised; that there will be no amending or weakening of the Data Protection Act; and that current safeguards which apply to a public authority’s data, such as those that apply to HMRC, should continue to apply to those data once they are disclosed to another public authority. There must be restrictions on further disclosure and sanctions on unlawful disclosure.
Liberty has raised concerns that the Bill does not provide adequate safeguards or transparency mechanisms on data sharing, including the sharing of highly sensitive medical data between authorities and/or service providers. The noble Baroness, Lady Hollins, spoke earlier of the concerns of the BMA that the Bill does not offer adequate protection of patient confidentiality and sensitive health information. There is a disparity between Clauses 30 and 58 in Part 5. The duty of common law does not apply in Clause 30 but the Bill has been amended in Clause 58, which relates to medical research, so that the common-law provision applies. Can the Minister say why Clauses 30 and 58 are being treated differently? What assurances can the Government provide on the protection of sensitive medical information under Part 5?
On digital exclusion, Clause 85 was added in Committee. Its states the Government’s commitment to provide publicly funded basic digital skills training free of charge to adults in England who need it, with courses to be delivered by colleges and other adult education providers. This of course is very welcome. However, training will be funded from the existing hard-pressed adult education budget. For many areas, this funding will be very stretched, particularly in places with high unemployment and low skills levels, where a large proportion of the budget will be spent on statutory entitlements. Digital exclusion is also a major feature of these areas. Will the Government provide clarity about how this programme will be funded?
European social funding is due to end in 2020, and between now and then stricter spending criteria have been imposed. How will the Government ensure that the adult education budget has adequate additional funding to match the new commitment without further cuts to adult learning, such as English as a second language or level 2 skills for 19 to 23 year-olds? It is essential that poor communities, currently excluded because providers have not considered it profitable to provide coverage, should have full digital access. Will the Government consider the introduction of a social tariff, in a similar manner to the telephony USO, for those who would face undue hardship if they had to pay for broadband services?
The third area I shall cover is raised by the Electrical Safety Council and concerns counterfeit electrical products sold online. The ESC would like the Bill to provide measures that would reduce the opportunity for counterfeit goods to be sold through online portals and asks that the Government conduct an inquiry into the extent of the problem with counterfeit electrical goods, including the cost to the economy, the amounts being imported and the extent of the problem online, and introduce a statutory obligation on online retailers to report to the police or trading standards people repeatedly selling counterfeit electrical products.
One issue that the Electrical Safety Council report includes is the fact that many consumers believe that when they purchase goods from legitimate online retailers they are from a trusted source. This is not the case because these sites act as a portal for vendors. Of people claiming to have purchased counterfeit goods, 64% purchased them online. Counterfeit electrical products are particularly risky as they often contain faulty parts and can catch fire or deliver a fatal electric shock. It is estimated that fires caused by faulty electrical products are responsible for more than 7,000 domestic fires a year. The average cost of a house fire is estimated to be £44,000.
I hope that the Minister will be able to answer some of the questions I have asked today and that we can explore these complex areas in Committee and improve the Bill to the benefit of the public to ensure that everybody is able to benefit from an improved quality of digital coverage.
Lord Aberdare (CB)
My Lords, this Christmas-tree Bill offers some appealing packages and I hope that when the Minister comes to unwrap them for us they do not prove disappointing, and that some of those that are missing may have been restored by then. I strongly support many of the aims of the Bill, notably wider access to broadband, at increased speeds; better and faster mobile network coverage; expansion of digital public services; and improvement of digital skills. I also applaud the Government’s intention to tackle online pornography and to clarify the regulatory role of Ofcom.
I have several questions and concerns about the specifics of how these issues are addressed in the Bill. In its report of February last year, the Digital Skills Committee, of which I was a member, highlighted two main requirements for enhancing the UK’s productivity and competitiveness in the increasingly digital world economy. The first was having the right physical infrastructure in place in terms of both broadband and mobile capability, and the Bill represents a welcome step forward in addressing both these areas. The second was the need to enhance the digital skills of people across the UK, from basic users to advanced creators of digital systems. I share the disappointment of other noble Lords that the Bill gives not much more than a nod in this direction through the new Clause 87.
Part 1 of the Bill seeks to improve access to digital services through the proposed 10 megabit universal service obligation, with a provision for compensation when performance standards are not met. Of course 10 megabytes would be a great deal better, but I think we are talking about 10 megabits. This should provide a useful safety net or floor to ensure that no one is deprived of a minimum level of broadband access, but its focus should be quite specifically on those areas—increasingly few nowadays but none the less significant—where broadband services even of this low speed are not currently available and on the final few per cent of households which lack any broadband connectivity. The longer-term goal should be to provide significantly higher capacity, so there should be regular reviews of the USO, and the minimum speed will need to be increased over time and should cover upload speeds as well as download speeds, as the noble Lord, Lord Fox, suggested.
To keep ahead of our competitors we need to be thinking in terms of ultrafast and even gigabit broadband services, at 100 megabit-plus speeds. The announcements in the Autumn Statement of £1 billion of funding for improved broadband services, rightly based on fibre to the premises, and for piloting mobile networks capable of meeting 5G standards, may be as or more significant in achieving the levels of connectivity and speed we need than the USO provisions in this Bill. I was shocked to discover that only something like 2% of premises in the UK are served by fibre, which is way behind most of the rest of western Europe. The noble Lord, Lord Grade, who mentioned poor mobile phone coverage, may be disappointed to hear that the RAC apparently thinks that we have 4,400 miles of road without mobile phone coverage.
Part 1 also includes a provision to make it easier for users to switch providers. The greatest difficulties in achieving this, as I know from personal experience at my home in London, arise from the fact that broadband and telephony services are often sold as part of a package or bundle of services also including television. I understand that fewer users currently switch from pay TV suppliers, such as Sky, than from telecoms suppliers, such as BT: only 2% against an overall average of 6%, which is itself half the rate for electricity or gas consumers, although the bundled services they receive are similar. Switching should be equally straightforward for everyone, whether moving from a provider licensed as a telecoms or a pay TV operator, and I would expect to see this principle firmly embodied in the Bill. I also point out that from the perspective of my other home in Wales, which was mentioned by the noble Lord, Lord Wigley, the ability to switch providers at all is something of an irrelevance, since I count myself extremely lucky that I have one supplier of decent broadband services.
Part 2 has the key aim of promoting greater investment in digital infrastructure. The challenge is to provide the right environment to promote investment in new digital infrastructure, particularly for mobile network connectivity, while treating fairly all the different interests involved: landowners, on whose property equipment is sited; mobile network operators with extensive existing hard infrastructure, notably BT; alternative network providers, often smaller-scale companies offering local connectivity services such as the one that provides my broadband service in Wales; and wholesale infrastructure providers—WIPs—which provide electronic infrastructure on a shared commercial basis. These last, notably Arqiva and Wireless Infrastructure Group, provide about a third of the UK’s digital infrastructure, considerably less than the equivalent in the USA, where the figure is more than 80%, and in most other countries. None the less, they provide more than half of all rural infrastructure sites. Typically their facilities are shared by three or four separate networks, providing higher capacity and greater efficiency than structures belonging to individual mobile network operators, so perhaps the Minister will indicate how the Bill will promote this kind of shared approach.
The overall approach of the Bill, it seems to me, should be to promote competition to drive investment in better, faster, higher-capacity digital infrastructure, and to do this by recognising the provision of digital connectivity as equivalent to a utility service. The proposed new Electronic Communications Code takes some important steps towards realising this concept. It makes clear that the definition of land should exclude electronic communications apparatus that may be installed on it and seeks to give infrastructure suppliers easier access to land in order to install their equipment. During later stages of the Bill, I shall be looking to see whether the balance seems right between the interests of established suppliers—notably BT, with its already large portfolio of wayleaves for its own equipment—and those of other providers of digital infrastructure, particularly those offering shared facilities with higher specifications.
All I will say about Part 5 on digital government is to welcome the aim of making government services digital by default and to emphasise the importance of building and maintaining public trust in this process, so as to avoid any repeat of the NHS care.data debacle. There are many potential benefits of sharing government data, and the noble Lord, Lord Storey, mentioned one in the form of auto-registration for school meals. But there are evident concerns about the disclosure of civil registration information in Clause 39, the possible disclosure of identifiable healthcare information, the need for appropriate controls on government data sharing and compliance with the EU’s general data protection regulation, which comes into effect next year.
In Part 6, I am worried about the proposed new approach for appeals against Ofcom decisions in Clause 75. This involves moving from a standard of review based on the merits of such decisions to a judicial review standard, which is likely to significantly limit the grounds on which decisions can be challenged. In a field as technically complex and fast-moving as this, it seems to make little sense to restrict the scope of appeals in this way, and I am struck by the range of organisations that have expressed concern about this move, including not just BT and Virgin but Sky, Vodafone, industry associations such as techUK and the CBI, and other more specialist players in the digital arena such as CityFibre. I find their arguments that the proposed change would not in fact benefit consumers, nor even be likely to reduce the time and cost involved in appeals—which seems to be the Government’s main reason for introducing this clause—persuasive. This is an area that the Government should look at carefully again before moving to put Ofcom in a privileged position of immunity from merits-based appeals, which I understand would be effectively unique among regulatory bodies.
Finally, I am pleased that Clause 87 has been added to the Bill to address the issue of basic digital skills training. I hope the Government will explain how the extra funding needed for the adult education budget to deliver this will be provided—as the noble Baroness, Lady Janke, mentioned—and will ensure that the training is available right across the UK. This training should be clearly linked to the technical education digital pathway recommended by the Sainsbury skills review and thereby overseen by the proposed new Institute for Apprenticeships and Technical Education. I also agree strongly with the noble Lord, Lord Foster, and others that there is a need to promote demand and take-up for digital services, not just the supply side. I would like to see a lot more in this area of skills training.
I look forward to hearing more from the Minister about how the laudable aims of the Bill will be delivered and some of the gaps highlighted today filled. The Bill should be a key element in enhancing UK competitiveness in the post-Brexit global marketplace, building on the many strengths we already have in the digital sphere but which will need to be constantly improved and developed if we are not to be overtaken by others. I trust it will emerge from the process of scrutiny in this House even better attuned to that aim.
Lord Holmes of Richmond (Con)
My Lords, I congratulate my noble friend the Minister on introducing the Second Reading of this most important Bill, and in doing so declare my register of interests.
I am nothing short of ecstatic that we have a Digital Economy Bill in our House this evening—not because it is perfect or because it has the level of ambition I would like, but because it goes to the heart of a fundamental truth, which is that we are in the midst of a digital revolution which will make the Industrial Revolution look like a kids’ tea-party. Many people may still think that they can have an interest in health, defence and education, and that there is a separate world of digital “over there”; this Bill speaks to the truth that digital will transform every element of our lives and of our economy. It is beholden upon all of us to ensure that that transformation is a change for the better.
I was fortunate, alongside the noble Lord, Lord Aberdare, to be part of the Digital Skills Committee that reported last year. It is gratifying to see so many of our recommendations in the Bill that is before us this evening, not least that the internet and access to it has to be viewed as a utility. A utility provides a number of basic services, but in a sense that is the base of this. Only high-speed internet access will not just enable people to get online but enable our economy to really boom in the future that is ahead of us. Similarly, there is what my noble friend the Minister said about digital literacy being seen as significant as numeracy and standard literacy. We have to grasp this, because digital literacy and everything around character education will be what our young people—the next generation—require to go forward into the labour market which will face them and which we are already in the midst of today.
We are probably only two-thirds through the debate this evening, but I will put on record my thanks to noble Lords who have already spoken, who have done much of my work for me. I am reminded of a quote from one of our greatest Britons, Churchill, which I will add to my comments this evening: “The brain can only store what the bottom will endure”. Your Lordships will note the brevity which follows.
I will concentrate on a number of issues which have already been touched upon but which fall within my areas of interest and are worth rehearsing, not least PSB prominence. What is the Minister’s view on that? I think it is absolutely essential that PSBs continue to have prominence across all their offering, not just the main channels. I am delighted that a number of noble Lords have already raised this issue, not least in terms of children’s broadcasting. There were a number of comments on this earlier, including from the noble Lord, Lord Foster of Bath, and the Liberal Benches have the absolute honour of having among their number probably the greatest children’s television broadcaster of all time, who we will be hearing from later in the debate. It is absolutely fantastic to focus on ensuring the prominence of the PSBs, not least the children’s channels.
Similarly, noble Lords may be unsurprised that I would focus on the protected list. It is absolutely essential that we take the opportunity of the Bill to revisit the list. The reasons why it came into being in the first instance are obvious; now it is absolutely ready for review. The great shared moments have already been mentioned. There are so few things now that truly unite us across society, but the events on that list are certainly some of those key moments—not least last summer’s Olympic Games, which drew communities and individuals together. That is surely a positive thing, and it is surely good to revisit that list. It is probably worth noting that PSBs’ output of sports coverage is 5% but their viewership is 60%. That is how significant it is.
I welcome the clauses in the Bill on digital skills training, but agree with comments already made by a number of noble friends and other noble Lords around the how. This is an important but complex and potentially resource-intensive thing to bring about, so I will certainly be looking to work with noble Lords across the House to ensure that we bring this to life, because it is essential. It is that combination of the hard infrastructure to enable and the superstructure of skills to be built on top of it that will enable people not just to be able to operate in the labour market but to be able to be full participants, full citizens, in society as it is going to be, going forward.
Similarly, as noble Lords have mentioned, not least my noble friend Lord Grade, the repeal of Section 73 is long overdue. Bearing in mind that long overdue nature, what exactly will be necessary in the transition period? Perhaps we can have discussions and assist with that transition period through Committee and Report. I urge the Minister to consider in his response this evening whether, when the Bill receives Royal Assent, Section 73 should evaporate with the commencement of the relevant provision when the Bill comes into force right from the outset.
I come to what is probably the main part of the Bill in terms of its impact on all of us, and it is all about fibre. We need all of us, and people out there, to keep pushing the case for fibre. I call upon the noble Lord, Lord Puttnam, perhaps to make a remake of his BAFTA-winning 1981 film. Perhaps we can get some focus around that if we have a movie release called “Chariots of Fibre”. The difference that the addition of a “b” can make to a film is extraordinary.
However, it cannot just be about fibre. As other noble Lords have mentioned, there is a case for the USO at the moment, but we need to keep that under review as well as considering the role of satellite provision and other provisions that we are only starting to consider. I look forward to my noble friend Lord Borwick coming back from the States in January full of ideas to put into the Committee and Report stages of the Bill, because the ground is moving beneath our feet as we speak. Fibre is a key part, but not the only one.
That goes to the heart of my main plea to the Minister to look across a number of elements of the Bill and really work with colleagues to consider just how ambitious we can be. The speeds that are set out are not ambitious. As for where that will lead us, we are where we are today because of a previous lack of ambition. The fibre-to-copper debacle that we have at the moment is absolutely a consequence of a lack of ambition. It is like steaming towards an airport in a jet plane but, a mile out from the runway, we are all asked to disembark and clamber aboard one of Montgolfier’s balloons. Beautiful though they are, that is not the way. As previous speakers have said, this is not a great surprise that we could not have known about; it was known at the outset, but there was a lack of ambition and a sense of, “Let’s do things within a certain envelope”.
We have no option but to be ambitious. We are facing one of the greatest challenges that this nation has ever faced and the greatest economic challenge that this nation has faced in our lifetimes, but with a phenomenal opportunity within it because we are at the forefront of digital innovation and fintech. We need to ensure that we are ambitious across all of that and more. We understand what the next generation need in order to be full participants of society so that they are able to fully play their part in a phenomenally fragmented and complicated labour market. If we can have that ambition and put that into the Bill, this truly could be one of the most significant pieces of legislation that we pass this Session.
Lord Morrow (DUP)
My Lords, I welcome Part 3 of the Bill. Government data reveal that in May 2015 there were 1.4 million unique visitors under the age of 18 to pornographic sites from desktop computers. These visits equate to 20% of all under-18s and 13% of children aged between six and 14. This is deeply disturbing, especially as, according to the latest Ofcom research, most children and young people access the internet via a tablet computer or mobile phone, not a desktop computer.
The Government must be congratulated on introducing the age-verification provisions in the Bill. They must be further congratulated on responding positively to the amendments tabled in another place by Mrs Claire Perry, the honourable Member for Devizes, and Mrs Fiona Bruce, the honourable Member for Congleton.
Clause 23 gives the nominated age-verification regulator, the BBFC, much-needed leverage in relation to sites based outside the UK and in relation to those providing free pornographic material. This is vital because the vast majority of online pornography accessed in the UK comes from sites based in other countries and because a significant amount of pornography is free. Once this legislation becomes law, every pornographic website, no matter where in the world it is located, will have a real incentive to treat the UK regulator with respect because they will know that if they ignore it, they risk being blocked.
I understand, however, that although the Government have accepted the need for IP blocking, they continue to promote the alternative means of enforcement provided by the Bill and have indicated that, where possible, these will be used in the first instance. So what are those other options? On my reading, there are two, but it is unclear how one can work at all internationally and the other seems extremely weak.
First, Clause 20 provides for a fine, which can be either a maximum of £250,000 or 5% of the qualifying turnover. When the Bill went through another place, the question arose: why would any pornographic site located outside the UK listen to the UK regulator and, if it decided to ignore its directions regarding age-verification checks, what chance was there that it would then dutifully pay the UK regulator a £250,000 fine? Indeed, an amendment was actually tabled to remove from the regulator the option of issuing fines to overseas organisations. The amendment was probing and, as I understand it, the motivation of the person tabling the amendment, Mrs Claire Perry, was to say, “Let’s be honest, this enforcement mechanism will only work in dealing with sites located within the UK”.
In response, the Minister, the right honourable Matt Hancock MP, acknowledged that fines would not always work abroad but said that there were international mechanisms for enforcing them in some countries. Specifically, he said:
“We want to be able to fine non-UK residents—difficult as that is—and there are international mechanisms for doing so. They do not necessarily reach every country in the world, but they reach a large number of countries”.—[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 217.]
What are the “international arrangements” on which the Government are depending for enforcing the fines? Which jurisdictions in the world can be reached by these arrangements? How easy would it be in practice to use these mechanisms in relation to a site in a foreign jurisdiction to which the said international arrangements apply?
The second alternative enforcement mechanism that the Bill hints at is financial transaction blocking, although it seems to me that the provision is only half present. Although Clause 22 is lengthy, at the end of the day it gives the regulator only the option of informing financial transaction providers that a site seeking access to the UK market is operating in violation of UK law by not having age-verification checks. Clause 22 does not require the regulator to relay this information to financial transaction providers, nor does it empower the regulator to require them not to process transactions with the site nor, consequently, does it empower the regulator to follow through to ensure that the financial transaction provider has complied.
I understand that the Government have suggested that this very limited power to inform the financial transaction providers is sufficient because they are already required by their terms and conditions not to facilitate illegal transactions. This, of course, is not a new argument. It is the same one that was deployed by the Government in response to the financial transaction blocking amendment brought by the noble Baroness, Lady Howe, to the Gambling (Licensing and Advertising) Bill in 2014. The House was told that there was no need to make statutory provision because the Gambling Commission would tell financial transaction providers when a site was operating illegally without a Gambling Commission licence. My difficulty is that the process completely lacks transparency, so we do not know how effective it really is. The only information that we have after nearly three years is the answers to the Parliamentary Questions which suggest that transactions have been blocked to 11 gambling websites. That seems a very low number to me. I do not find it remotely reassuring.
The benefit associated with giving the regulator an express obligation to inform about non-compliance and an express power to require action to block transactions—similar to the requirement for action in Clause 23—is that it would underline the implicit responsibility on the financial transaction providers not to process illegal transactions. Clause 22 also applies to ancillary service providers which support websites with services such as advertising. It is not clear, however, whether the Government are relying on the good will of these organisations or whether they would argue that there is regulation that would require companies supporting websites to withdraw their services if non-compliance came to light. At the moment, the obligations of ancillary service providers are very opaque. Yet making the obligations on the regulator, payment providers and ancillary service providers explicit is really important, because research suggests that without robust enforcement there will be little incentive to comply with the age-verification requirements.
A review of age-verification systems for gambling websites by University of Oxford academics notes that where there are,
“strict audit and enforcement requirements”,
there is an incentive to invest in,
“high-assurance identity and age-verification processes”,
but,
“where enforcement is patchy and uncertain, the incentives to invest in expensive authentication systems are less clear”.
According to the review, that is,
“especially true for smaller or less well-known companies who are also less likely to receive reputational damage if any illegal selling is revealed”.
I believe that there is a very strong case for amending Clause 22 to require the age-verification regulator to tell financial transaction providers of non-compliance and to place an enforceable duty on them not to process transactions between people in the United Kingdom and sites operating in violation of the digital economy legislation. I also think that there is a very strong case to be made for an amendment giving the regulator power to require ancillary services such as advertisers not to advertise on sites operating in violation of UK law.
I very much look forward to the Minister’s response to the questions I have asked and the points I have raised about enforcement.
Lord Inglewood (Con)
My Lords, I believe that in practice this welcome Bill will be one of the most pervasive in its impact of any legislation we are currently considering in this House. It is in a sector where the world is probably changing as fast as anywhere. Indeed, these days, the future is closer to us than it has ever been before. Hence, it will not be the last word on anything, but it matters because it sets the framework for the development of the operation of the digital economy in the foreseeable future. We must, of course, remember that that economy works through and across legal jurisdictions without paying much heed to traditional boundaries.
The Bill’s detailed provisions will take effect in all kinds of ways, probably many of them unexpected, which in turn may radically affect everyday life in this country and beyond it. This will be especially true in the age of the internet of things, which is already dawning. In this brave new world, communications, which are traditionally perceived as person-to-person transactions, will be replaced by devices talking to other devices, instructing myriad tasks with little or no human intervention. It will go far beyond computer dealing in the financial markets or robotic milking of dairy cows, or even adjusting the level of central heating in one’s Cumbrian home from a Spanish golf course, as a friend of mine does.
The detail of all this involves science and processes way beyond my own expertise, and my knowledge is too scant fully to understand it. Having said that, I know that the starting point is connectivity, as has already been mentioned in the debate—in particular, connectivity coupled with adequate bandwidth. That is why the clauses on the universal service obligation in respect of broadband are, in my view, so important.
When I had the honour and good fortune to chair your Lordships’ Communications Committee, one of the first reports for which I had any responsibility was on the rollout of broadband. In drafting that report, we anguished, as the noble Lord, Lord Gordon of Strathblane, commented, about whether a universal service obligation should be legally enforceable. After considerable deliberation, we concluded that it should be a political obligation, not a statutory legal one. However, like the noble Lord, with the benefit of hindsight I think we were wrong.
Now that 2016 is drawing to a close, political commentators are all discussing the revolutionary events of the year that is about to pass. They include Brexit, Trump’s election in the United States and the Italian referendum. On one level, each event is quite different, yet on another they are the same—an uprising by those who feel they are being left behind by the world as it evolves. They have nothing directly to do with the apparent subject matter of the poll behind them. In this country, there is no bigger division than between those who have decent broadband and those who do not. I should declare an interest: I live in rural Cumbria, in a near mobile not-spot—if I want to get mobile from one operator I have to go out of the house on to the lawn—and I have lousy broadband. The consequence is not merely that I cannot read the Sunday papers at breakfast on my iPlayer—that does not really matter. Rather, there are myriad entrepreneurs and, quite simply, ordinary households who cannot enjoy the connectivity of much of the rest of this country. This kills off many small businesses and erodes the quality of life and the economic potential of these disadvantaged areas. Rural Cumbria is not alone, and neither does this apply only in the countryside. Even a short distance from where we are now, there are very disadvantaged areas measured by this criterion.
It is often said that the modern world is a huge, complex network, but it is not if you cannot join it. Anyone who doubts that should look at the correspondence columns of local papers in these areas, where the anger, frustration and disillusionment of those who live there is plain for all to see. Equally, I am quite sure that such views are to be found in MPs’ incoming mail. It is some satisfaction to me that it is not my responsibility to have to read it.
Governments trumpet their successes in the rollout of superfast broadband—itself a rather weasel phrase—and the availability of squillions of megabits in the favoured corners of south-east England and the metropolises. But that is absolutely no help if you are not connected. In this respect, much of the contemporary UK is like that of Disraeli’s. There are two nations in digital connectivity: those who have it and those who do not; and those who can use it, and those who cannot. If you are in the second category, underprovision and lack of availability create a real sense of alienation and antagonism.
No one is suggesting that it can be identical everywhere, but I believe that there is a dawning recognition that a necessary degree of equivalence consistent with an even-handed approach to the provision of essential national infrastructure is important. As I said, this is not achieved by proclaiming wonderful successes in further improving what the “haves” have got, while the “have-nots” still have more or less nothing. It is for this reason that the provisions which provide a legal basis for USO are to be welcomed. I would like to think that they represent a political commitment much stronger than the legal phrases in which it is drafted. That is how I interpreted my noble friend the Minister’s opening remarks.
I turn briefly to a different topic for the second and final part of my remarks. In the debate in this House on the BBC charter and agreement on 12 October, I expressed the opinion that the BBC charter should be set in a statutory framework. I still subscribe to that view and the approach that I and others have endorsed on that and other occasions, and on which the noble Lord, Lord Lester, elaborated. There is no point in repetition, but I endorse what he said and suggest that the opportunity of this Bill to take it forward should be grasped. After all, nobody needs to be reminded that the use of the royal prerogative is a rather controversial political topic at present; we are living at a time when the desirability and requirement to consider whether checks and balances should surround it is prevalent. In my view, there are a number of areas where this is so, and this is one of them.
Finally, I might have discussed a huge number of other points that have been discussed by other speakers this afternoon. I have said enough for now, but I may well come back to some of them later. In conclusion, this is a desirable and necessary Bill which I support, despite having a few reservations about certain aspects—to which I shall, if I may, return on another occasion.
Lord Macdonald of Tradeston (Lab)
My Lords, two years ago, when your Lordships debated the Deregulation Bill in Grand Committee, the noble Lord, Lord Grade, moved an amendment to repeal Section 73 of the Copyright, Designs and Patents Act 1988, and almost all noble Lords supported repeal. The noble Lord, with his wide media experience, highlighted again today how broadcasters in the United States are able to invest billions of dollars from retransmission fees paid by cable and online streaming services to boost their programme outputs, which now include many excellent big-budget drama series sold and transmitted worldwide. However, here in Britain, this Act, introduced 28 years ago with the good intention of stimulating our emerging cable industry through Section 73, has become the loophole which denies our public service broadcasters the ability to negotiate retransmission fees for the right to carry their PSB channels on cable or, increasingly, online.
As the Minister will know, the PSBs asked the Intellectual Property Office for the repeal of Section 73 back in 2008. Since then, they have spent a lot of time and money on litigation on the issue. Meanwhile, the proliferating online streaming services have been able to retransmit BBC, ITV, Channel 4 and Channel 5 programming and sell advertising around programmes which are largely paid for by UK viewers. Bear in mind that the commissioning budget for original UK-made programming totalled about £2.5 billion a year. At long last, the Bill promises, in Clause 29, repeal of Section 73.
As any arrangements post-repeal will, I hope, be reached through individual commercial negotiation between parties across global media markets, it is hard to quantify how much our public service broadcasters might gain from the retransmission of their products, but it could over time be a substantial sum. My concern in this regard is that the Government have said that they might favour a “no net payments” approach, suggesting that cable and online services might pay no money in return for the PSB channels continuing to be given prominence near the top of cable and online electronic programme guides. That does not seem a sensible long-term solution in such a rapidly changing digital marketplace.
A related concern is that, even after all this time and all the litigation and consultation, it is being suggested that there should now be a further two-year transition period. The Minister will recall that, in the Commons, there was cross-party support for repeal without delay, and I echo other noble Lords in saying that, to make up for lost time, the Government should implement the repeal of Section 73 immediately on Royal Assent.
The new charter and agreement for the BBC is a much better settlement than many of us thought likely last year. Although the requirement on the BBC to bear the cost of free television licences for the over-75s is still understandably criticised, we should not risk unravelling the agreed deal at this late stage when we debate Clause 77. With the Government compromising on many of their more radical proposals for a new charter, and with agreement on an inflation linking of the licence fee and an end to top-slicing to fund pet government schemes, it appears that the BBC would prefer to bank what it has won and move on. I think noble Lords should support its pragmatic approach.
The role of Ofcom as the BBC’s regulator has also been widely welcomed. Last week, it published Ofcom’s Preparation for Regulation of the BBC. Noble Lords may recall from recent debates in this House on diversity that the BBC accepts that it could have done more during the previous charter period to ensure greater diversity across the breadth of its operations. The new charter and agreement requires the BBC to reflect the diversity of the UK, with particular regard to underrepresented communities. Ofcom can now hold the BBC to account on how it meets those obligations. I note that the Campaign for Broadcasting Equality responded positively to the statement from Ofcom on diversity, which says:
“We will measure and scrutinise what the BBC is doing, and report on its delivery. We will also have the power to set appropriate regulatory requirements on the BBC’s output in this area”.
However, as we have heard, concerns have been expressed about the new regulatory powers given to Ofcom in other sectors covered in the Bill, particularly in Clause 75. At present, appeals against Ofcom rulings by communications companies have a review standard to be judged, in legalese, as “on the merits” grounds, which allow a complete review of Ofcom’s decisions. The Government believe that the “on the merits” test is overly burdensome and that the delays caused by constant, costly and extended litigation inhibit effective regulation—a view shared by the consumer group Which?, which described the present effect on Ofcom of the “on the merits” approach as “chilling”. By contrast, large incumbent operators such as BT and Sky are strongly opposed to replacing the present test with one that sets the judicial review standard, which they say is too weak and narrow. Ofcom supports the proposed changes, saying that it wants an appeal standard that allows bad or wrong decisions to be challenged but which makes regulatory progress less difficult.
In the Commons, Labour Members supported these changes, which were set to bring Ofcom into line with the standards set for other utility regulators. Can the Minister confirm in his reply that that is the case? Are any amendments to Clause 75 in prospect to address the concerns of BT and Sky, which highlight the potentially large cost of bad Ofcom decisions for them and other companies across the UK communications industry? The noble Lord, Lord Clement-Jones, may address that question in further detail when he sums up for the Liberal Democrats.
Finally, like the noble Lords, Lord Aberdare and Lord Holmes, I was a member of your Lordships’ Digital Skills Committee, whose report we discussed earlier this year. I welcomed the late addition to this Bill in the Commons—namely, Clause 87—which will allow for basic digital skills to be publicly funded in training and offered to adults over 19 free of charge in England. That is a start. In our Digital Skills report, we concluded that a key objective of government should be to ensure:
“The population as a whole has the right skill levels to use relevant digital technologies”.
As the noble Lord, Lord Ashton of Hyde, said earlier, the current estimate is that 10 million adults in the UK lack basic digital skills. In a recent Written Answer, he said that the intention was to put digital skills on the same footing as maths and English as part of the common core of adult education, and funding would come from the adult education budget of the Department for Education. Can the Minister give more information on how and when this commendable initiative will be rolled out?
Baroness Benjamin (LD)
My Lords, I rise to speak in this wide-ranging debate and would like to concentrate on issues concerning children. I declare an interest as per the register.
First, I address a matter regarding BBC children’s television and its prominence on the EPG—that is, the electronic programme guide. I am concerned that it is becoming more and more difficult to find BBC children’s programmes on new connected televisions. Believe it or not, on one new platform it takes at least 22 clicks on the remote to get from the home screen to CBBC. Parents know that BBC content for children is of the highest quality; it is entertaining as well as educational yet, worryingly, it is not easy to find on many platforms and televisions, especially for new parents. The legislation with regards to PSB UK-produced content prominence is already out of date. As my noble friends Lord Foster and Lord Storey and others have said, on one platform CBBC and CBeebies are buried beneath 14 commercial channels on the EPG, many of which predominately show American content. Will the Government commit to updating the legislation to ensure that BBC children’s content is prominent on all platforms?
I turn to children’s television provision. Recently there was the launch of Save Kids’ Content UK, and I believe that the Digital Economy Bill would be a timely and effective vehicle to introduce legislation that puts an obligation on commercial PSBs to meet quotas for children’s programming here in the UK. Historically, the Broadcasting Act 1990 required public service broadcasters to devote specific amounts of provision for children, from the BBC, ITV, Channel 4 and Channel 5. However, the Communications Act 2003 downgraded children’s content from tier 2 to tier 3 programming. This relieved commercial PSBs of their obligation to meet quantitative targets of children’s programming. This unforeseen consequence saw a dramatic decline in children’s programming, compounded in 2006 with the advertising ban on high fat, salt and sugar foods during children’s programmes. Since then, investment in children’s content over the past 10 years has collapsed by 95%. This dramatic decline has created a situation in which the BBC has the monopoly on producing children’s programming by default, because commercial PSBs are no longer obliged to commission children’s content. The recent decision of ITV to cut the role of head of children’s programming is a further sign that original children’s production will continue to fall and that foreign content and repeats will continue to rise.
We need to reverse this decline, because our children deserve to see themselves and their roles in society reflected in UK-produced programmes. Children have the right to access content that is rich in cultural terms, inspires their imagination and enriches their development. We need to create content that reflects them, their lives and their aspirations. Therefore, I believe changes to legislation, introduced through the Digital Economy Bill, in Part 6 relating to the powers for Ofcom, would give Ofcom the tools to actually improve commercial PSBs’ compliance. Will the Government consider this proposal to bring in this legislation?
I turn to Part 3 of the Bill, which covers age verification for pornographic content. As I said many times in this House, childhood lasts a lifetime. What children see and experience stays with them for ever. At the moment, some children are viewing graphic and horrific sexual images—children as young as four. So I am so pleased that the Government have tackled their manifesto commitment to,
“stop children’s exposure to harmful sexualised content online”,
with the proposal that pornographic websites that are accessible in the UK must have age-verification measures in place. Thank goodness for that. It is something that I have campaigned for over many years, and the noble Baroness, Lady Howe, should be congratulated, because she has brought her Private Member’s Bills to this House asking for this legislation for years. It brings the online and offline worlds on to a level playing field. I am so pleased to see Clause 80, which was introduced on Report in the other place. It means that age verification will apply to 18-rated video on-demand pornographic material live-streamed from this country to people in this country, in just the same way as the legislation has always required that of 18-rated video on-demand pornographic material streamed into this country from sites based abroad. This introduction could not come soon enough.
I sit on the Lords Select Committee on Communications, where we are conducting an inquiry on children and the internet. I am very aware of the benefits of the internet, but also of the potential difficulties of bringing in effective regulation. However, I have become more convinced than ever—as I have read about the impacts of pornography on our children and young people, with more and more of them suffering from anxieties, depression and trauma—that we would be doing them a grave disservice not to enact the measures in Part 3 of the Bill.
We expect offline protections to restrict access to certain goods that are inappropriate for children and young people, and we should expect them in the online world as well. I commend the Government for taking this action. However, I have worries about how the Bill will be enforced. Clause 20 allows the age-verification regulator, the British Board of Film Classification, to impose fines upon non-compliant websites, which is very welcome, but I am concerned about how the Government will be able to ensure that overseas sites will pay these fines. The Bill, as drafted, does not require these providers to take any action in relation to the website, although the Government’s assumption is that they will. Will there be legal certainty in place if there was an express requirement on these providers to block payments and withdraw services? I fully support the ability of the regulator to require ISPs to block access to websites that are not following the law in the UK. ISPs can block access to sites that are in breach of UK copyright law, so why not do it to protect children? Business rights are not more important than children’s rights. So Clause 23 is to be supported.
In seeking to protect children from stumbling upon pornography, it is particularly important that social media is covered by the Bill. That is one of the primary ways in which children are exposed to pornography. There has been some debate about the scope of Clause 15 and the ancillary service providers, but it seems clear to me that social media should be covered by this. I was particularly delighted that the noble Baroness, Lady Shields, confirmed to the Lords Communications Committee on 29 November that:
“The Bill covers ancillary services. There was a question about Twitter. Twitter is a user-generated uploading-content site. If there is pornography on Twitter, it will be considered covered under ancillary services”.
Can the Minister confirm that this will be the case and also the case for all other social media, including, Facebook, Tumblr and Instagram? I know that there are online issues beyond pornography that parents are concerned about, so I welcome the Government’s commitment to introduce an amendment to ensure that family-friendly filters offered by internet service providers will continue with legal certainty. One of the central pillars of our adult content filtering regime refers to public wi-fi. Will the Minister please confirm that the amendment which the Government intend to introduce will make space for the use of adult content filters in relation to public wi-fi?
Finally, the NSPCC, CEOP, CARE, the Children’s Media Foundation and many others all believe that the internet should be a safe place for children by default in the same way that other media, and indeed life, is. The Bill is an opportunity to ensure this happens and to truly protect our children. This is going to be an important debate on the future of child protection in the online world. We are world leaders in putting protection in place for children; the world is watching us and will follow suit. I look forward to hearing what the Minister has to say on the Bill.
Viscount Colville of Culross (CB)
My Lords, my interests in television can be found in the register. I will speak about the clauses concerning public service television. Like many other noble Lords, I have been shocked by the way the previous two BBC charters have been negotiated and finalised behind closed doors, in discussions between the BBC and Ministers. Public opinion and parliamentary debate seem to have played little part in the process. I disagree with the noble Lord, Lord Grade, that the BBC and the public seem to be able to defend the organisation alone. That has clearly not happened. I support the intention of the noble Lord, Lord Lester, to put down amendments which provide statutory underpinning for the next BBC royal charter settlement. It is important that the noble Lord suggests that this should not be a statutory straitjacket, devised by either the Government or Parliament, but a truly constitutional framework which will safeguard the BBC’s political independence and future viability.
I am very pleased for Parliament to play a role in the shaping of the next royal charter settlement, but I would like noble Lords to think about what that role might be. The BBC is one of the great unifying institutions in our country. In the post-referendum world, that role cannot be underestimated. Its output is consumed by 97% of the population every week. It reaches even the most remote communities and people of all backgrounds. I fear that parliamentary scrutiny will start the process of atomising the BBC. MPs rightly fight on behalf of their constituents and all parliamentarians on behalf of their pet projects. As we are already seeing, the Scottish Government are demanding that all licence fees raised in Scotland be spent in that country. I fear that parliamentarians will want to do the same thing in their local areas across the country. The BBC does indeed serve local audiences with its network of local radio, but the majority of its money is spent on national projects which bring the country together, such as the splendid “Planet Earth II” that we have been seeing on Sundays. I ask the noble Lord, Lord Lester, when he tables his amendment, to look very carefully at the constitutional framework so that this atomisation is not allowed to happen.
Clause 77 goes to the heart of the BBC’s biggest problem: funding. It is all very well the BBC being independent, but without sufficient funds to make wide-ranging and high-quality programmes, that does not mean much. Last summer’s shocking decision by the former Chancellor of the Exchequer to force the BBC to take on funding of and responsibility for the concessionary licence fee for over-75s represented a 20% cut in the corporation’s funding. At the time, my noble friend Lord Hall represented the move as a flat funding settlement, leaving the BBC no worse or better off. However, I draw your Lordships’ attention to the massive cuts faced by all sectors of the BBC. There is an aim to cut £800,000 a year from the BBC’s budget by 2021, 10% of which will come from BBC News. That seems to refute any kind of claim that this is a flat funding settlement. The draft charter is about to be finalised, so trying to unpick the settlement at this stage will not be very helpful. However, in the long term the BBC should not act as an arm of the DWP by administering the concessionary licence fee policy. I hope that some sort of sunset clause can be worked out to ensure that this welfare role ends at the next round of interim negotiations or by the next charter renewal.
Funding is central to all public service broadcasting at the moment and we see all the channels suffering from powerful competition in this multi-channel, internet-streaming era. So I welcome Clause 29, which repeals Section 73 of the Copyright, Designs and Patents Act. As the noble Lord, Lord Macdonald, said, we are not quite sure how much money that will raise, but there is a promise of it providing up to an extra £200 million in fees for PSB content providers. I am concerned that Clause 29(3), on possible transitional arrangements, could delay the implementation of these negotiations. I have been told that the “must carry” obligations on the platform to broadcast PSB channels render any negotiation impossible. However, the original Act does state that “must offer” is subject to the “need to agree terms”— in other words, to provide fair negotiation between the content providers and the platform. I am convinced that these negotiations bring a welcome boost to content providers and should be started as soon as possible.
At a time when Rupert Murdoch and 21st Century Fox are trying to take over complete control of Sky and when American and Japanese companies have turned many of our finest independent television producers into money-spinning format factories, it is time to strengthen the independence and financial viability of British public service broadcasters.
Lord Mitchell (Non-Afl)
My Lords, the Digital Economy Bill does very little for the digital economy. Of course, it addresses subsidiary issues that certainly need to be changed, but in its key objective to launch the UK into the next phase of the tech and digital economic revolution, it fails. We are entering a new, post-Brexit era in which we are told we will be taking on the world in the exciting challenges that face us. Digital has to be part of that, but what are we offered? A Bill so limp and so pedestrian, so uncoordinated and so patchy and, as many noble Lords have said, so lacking in ambition that it proves the old adage that it you set the bar low enough, you might even achieve it.
The digital world is growing fast, very fast; certainly faster than most politicians understand. If we are going to lead in a world of driverless cars, the internet of things, digital health and a host of other data-dependent technologies that require massive connectivity speeds, we need a digital infrastructure that matches our ambitions. I hear Ministers making proud statements that we will achieve 100% coverage in 10 megabit per second speeds by 2020. Do they realise just how embarrassing this is? I hear them talking about a megabit economy, but in the world around us megabits are becoming obsolete. In tomorrow’s brave new digital world, gigabits will be king. That is one thousand times faster. Without a Government commitment to a gigabit infrastructure, we have not got a prayer of meeting our digital objectives. So, my first question to the Minister is: will the Government make such a commitment to encourage the building of a gigabit infrastructure? After all, that is what South Korea, Japan and Finland are doing. We have to think big.
Nearly 50 years ago, I joined what was then called the data processing industry. I have seen an industry grow to become the world leader. If nothing else, it has given me a perspective on this industry and what it is set to offer in the future. Five of the biggest companies by value in the world today barely existed 20 years ago. Indeed, three of them—Google, Amazon and Facebook—did not exist at all. Microsoft has been around a little longer, and Apple, in 1996, was close to bankruptcy—now look at it. This is an industry which continues to experience phenomenal growth, and to many people’s surprise we in the UK have done really well. There are some powerful statistics provided by Tech City. The UK digital tech industry is worth £161 billion, of which London contributes £62 billion. Over a four-year period from 2011 to 2015, the digital industry grew 32% faster than the rest of the economy. UK Digital tech employs 1.56 million people, of which London employs 328,000. Jobs are created nearly three times faster here than in the rest of the economy. In London, one in four new jobs are in tech. There are 58,000 digital tech businesses in the UK. Finally, it is worth remembering that 41% of all digital tech jobs are in non-digital industries; it is not all apps and data management.
In usage, we are the world’s leader in online shopping, with a spend of £1 billion a week, and 35 million of us log on every day. Dare I say that 5 million of us use online dating agencies, although I point out that that does not include me? Who books travel except online? We are a tech savvy country and this is a huge success story. London has become a digital exemplar to the world. Today, it sits there right at the top, behind Silicon Valley, it is true, but certainly on a par with New York. Nowhere in Europe comes close. Why has it occurred? I would say it is because of convergence. Two of the world’s top 10 universities—Imperial and UCL—are based here. Only one other city, Boston, can match that. Then, throw in the close proximity of Oxford, Cambridge and King’s College, and it can be seen that London is a scientific and intellectual powerhouse.
Then, look at where London is also a world leader—music, fashion, media, sport, theatre and, of course, banking, insurance and financial services. These are the ingredients in the cocktail that makes London such a digital leader. This bringing together of science and the financial and creative industries is critical to London’s growth, particularly in the world of smartphone apps. Medicine is a good example. We have the universities, but we also have the Wellcome Foundation and the newly opened Crick Institute. MedCity has been created to commercially exploit the exploding world of digital health. It is a rosy position and, as I say, no country in Europe comes close, but we have to stay ahead of a very fast-moving game. That is my plea for today. The usage of internet connectivity is not a gradual process; it is exponential. Billions are being invested in new technologies, which are going to require huge data capabilities. Driverless cars will happen. When Google, Amazon, Apple, BMW and the Japanese car companies are investing tens of billions of pounds in this area, it cannot fail. A grid of driverless cars and lorries will require undreamt of levels of mobile data connectivity. So too will the internet of things, which is just in its infancy but about to become ubiquitous. Without ultrafast connectivity it does not work.
However, there is one company which on its own is restricting our digital growth and holding us back, and that is BT. The way things are going, BT will soon control a very high percentage of the access to things digital in our country, both broadband and mobile. Broadband provided on its ancient, dilapidated copper cables seems to be its solution to our short-term problems. “Sweat the assets” is its mantra, then delay and obfuscate. In the mobile sector, it has purchased EE. In the 5G spectrum, it will end up with over 40% of this key mobile technology. When you group broadband and mobile together, you see the giant that BT is becoming. To give it a historical slant, it owns the roads and it owns the railway lines. It is demolishing the competition. Its level of investment is low and that is why our connectivity is equally low. It could have diverted much more funding into digital, but it chose instead to set up BT Sport.
Speak to friends about BT’s services. Speak to MPs and hear what they say their constituents and small businesses say. It is awful. BT is holding us by the throat. Its performance is dismal. That has profound consequences for us all. It displays all the attributes of a predatory monopoly. My question to the Minister is: will the Government encourage the Competition and Markets Authority to pursue BT for anti-trust and monopolistic behaviour? Secondly, will the Government and Ofcom force BT to sell Openreach so that it can make its own way without BT holding it back? I am sure the Minister will divert my questions, but will he at least concede that BT in its digital activities is displaying monopolistic behaviour—a monopoly acting against the public interest? We are poised for spectacular growth. We are not starting from the beginning. We have done very well in digital. However, our success could slip in the proverbial nanosecond if the gigabit infrastructure is not in place. We cannot allow that to happen.
Baroness Byford (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Mitchell, who so clearly demonstrated the importance of pushing ahead with digital entrepreneurism, if I can put it that way. I will comment on three aspects of the Bill. As other noble Lords have said, the Bill is very broad. I shall comment on broadband, Part 3 on pornography, where I shall take up one or two comments made by the noble Baroness, Lady Benjamin, and the slightly different area of data protection, which one or two noble Lords have spoken about. I remind noble Lords of my family farming interests, although with regard to this Bill I do not think we have anything to declare.
As the noble Lord, Lord Mitchell, has just said, broadband is absolutely key and its success or lack of it has great implications for many people’s lives. Noble Lords will be aware that I have for many years raised this issue with regard to rural areas. We talk about gigabytes but there are still some areas of the country where there is no coverage at all, which is absolutely appalling, and some areas where the connection is very slow, and therefore the service cannot be used in the way that people in London and other areas can use it. Providing many of these rural areas with broadband access would enable them to diversify and create new businesses, which at the moment they cannot do. So for many people, companies and organisations, the whole question of broadband is one of complaints, arguments, disappointment and charges to do with its coverage, speed, maintenance and cost. I have spoken often about that in this House.
Coverage by broadband services is far from universal, in that there are many tracts of the UK where it is simply not available. There are also many places where it exists but the speeds are too slow, making it an impractical tool for many who want to create businesses, or even fill in government forms.
I would be grateful if the Minister would explain the application of the universal service obligation. The Explanatory Notes cite the telephony obligation whereby any customer can request a service but they will have to pay the extra if it costs more than £3,400 to provide. What is the base cost for broadband? What parts of the country will cost more than that: for example, ground above X metres, or buildings more than Y kilometres from a given point? As the population expands, is there a danger that the location of their dwellings will be dictated by the practicality and the cost of broadband installation?
Connection to broadband is at the moment a serious cause of anxiety, cost and time waste for many people. Consider the work/life balance of the farmer who travels many miles to fill in government forms, which is now required, to claim his entitlement to the single farm payment or to report the many statistics demanded of him. Think of the families required to manage all school contact using a two megabits per second service. Rural children are already handicapped by the length of their journeys to and from school, especially where rural bus services have been reduced. Surely they should not lose out on sleep because it takes so long to download and return homework.
This does not happen just in rural areas. I will give an example with which I am directly involved as a past Master of the Worshipful Company of Farmers. We and the Fletchers have a hall in the City of London. In September 2015 we quickly realised that the simple broadband service and wi-fi we had installed in the hall was just not adequate. We duly ordered a fibre-optic cable-based system through Onecom, a respected supplier, which would give us an uncontested 20 to 100 megabits per second service. The order was placed by email on 25 November 2015, and contract documents were signed on behalf of the hall the following day. Onecom has been helpful, but its—and our—problem is that Openreach has the monopoly on installing the cabling. It has been totally inefficient and seems to stumble from one problem to another. No one person in Openreach can be identified with the ownership of the case, and we have endured a long saga of engineers calling, being unable to resolve the issue, and disappearing again. That was a year ago, and this is London. Finally, we have been told that the connection is installed and we have been sent a wi-fi router, which we are to plug in, and away we go. As I understand from the secretary, the snag is that they cannot locate the socket that Openreach says it has installed.
The noble Lord, Lord Mitchell, said that he would advocate the splitting up of BT and Openreach. While that may not be popular with others, I, too, share his view on that case. Too much gets shifted from BT to Openreach and back again, and a clear definition of who takes what responsibility would be a huge improvement.
There is another problem, of which I cannot recall hearing any other noble Lord speak. If you cannot pay your bills, you will be taken to court by the council, cut off by the electricity provider and possibly visited by the bailiffs. What do the Government intend should happen to someone who cannot sustain a credit rating and is refused broadband installation? How will the broadband provider be entitled to deal with the customer who cannot pay a bill? I cannot find the answer in the briefings we have had.
Before I move on to Part 3 I will reiterate what other noble Lords have said about the unacceptable level of mobile reception throughout the country. In some areas you can get it, in others you cannot. It is absolutely hopeless when we can get it very much more regularly and easily when we are abroad.
On Part 3 and the Government’s intentions to look at online pornography, clearly there are those who enjoy access to pornography, just as there are those who enjoy taking drugs or smoking. In all three cases the problem is not only the enjoyment but the urge to involve others, particularly those under the age of consent. I agree with what the noble Baroness, Lady Benjamin, clearly said. I will not repeat what she said, but this is a huge problem. I would love to see pornography banned altogether, but that is an impossibility. However, we certainly need to make sure that it is controlled in an acceptable manner.
Finally, I will say a few words on confidentiality and personal data. Paragraph 33 on page 11 of the Explanatory Notes states that,
“the Bill will enable access to civil registration data like births, deaths and marriages so that public authorities do not send letters to people who are deceased”.
Having lost my husband three years ago, I very much appreciate any move to stop that from happening. I feel that if this is the level of justification employed by the Government, we should look more closely at both the mania for sharing data and the implications it has for trespass upon privacy.
There is a difference between improving a public service and selection, often by a computer, of individuals deemed to be in need of that service. I am particularly concerned that access to sensitive data is to be extended from those who have always been at the forefront of welfare provision to those whose concern for their own welfare, otherwise known as profit, has been notable. For example, who is to decide that my home is hard to heat? Who is to decree that my income is below some limit that renders it acceptable? Even if they are right, why should that information be passed to service providers whose discretion and public spiritedness is often the butt of ridicule? Freedom of information requests to Ofgem resulted last week in the publication of preliminary figures concerning the amount of money taken from customers’ accounts and held by suppliers. The sum quoted on the radio was billions of pounds.
The Data Protection Act is often quoted and I have no reason to doubt that many organisations abide by its provisions. However, when private data are divulged, how are we to find the person or organisation responsible if HMRC data are to be made available to persons unknown? In this country, personal taxation has been private and this Bill does not set limits. Will the data consist of the names, national insurance numbers and addresses of those who earn less than the tax threshold, or will there be much more detail? Page 74 of the Explanatory Notes lists the Secretaries of State for justice, education, transport, international development and culture, as well as the Duchy of Lancaster, as recipients. Does the digital economy require all this information to be disclosed, and, if so, why? If the Minister cannot answer my questions tonight, I would be grateful if he would do so in due course.
So although I welcome the Bill, I, like other noble Lords, have some questions about its implications. The digital age is opening up new opportunities, most importantly to increase education and learning. There is a whole range of possibilities with new jobs. One or two speakers have said that the Bill lacks ambition, but we need to back it because we really must move forward—and quickly.
Lord Rowe-Beddoe (CB)
My Lords, I shall speak in support of the provisions around statistics in Chapter 7 of Part 5 of the Bill. Before I do so, I want to say that I—mostly—warmly welcome the Bill. However, as discussed today by your Lordships, there are a few considerable warts which will need to be addressed at a later stage of the parliamentary process. It is indeed a mammoth piece of work. To pick up on the words of the noble Lord, Lord Gordon of Strathblane, I do not think that it is a Christmas tree so much as a forest of conifers. I would have preferred it to be somewhat divided, although joined at the end, but I dread to think how long it might take to go through the House.
Perhaps I may take your Lordships through some statistics. The Statistics and Registration Service Act 2007, and the framework that it established, is extremely close to my heart. I will stop short of saying that it is under my bed but it is very much in my study, although it is now almost nine years later. I shall give the House a brief historical context. Between 2008 and 2012 I had the honour of being the founding deputy chairman of the UK Statistics Authority under the excellent and insightful leadership of Sir Michael Scholar and, latterly, Sir Andrew Dilnot. The authority is very close to my heart and I have never forgotten how important and internationally recognised a legislative instrument it is, promoting and safeguarding the production and publication of official statistics for the public good, and, most importantly, doing so free from political interference for the first time.
The 2007 Act delivered on the then Government’s desire to improve public confidence in official statistics. It established the authority as a body independent of government, reporting directly to Parliament, with a majority non-executive board and with two important functions: first, overseeing the Office for National Statistics as our national statistical institute and the UK’s largest producer of economic and social statistics; and, secondly, establishing an independent public regulator, now known as the Office for Statistics Regulation, to ensure that the use and reporting of official statistics remains fair and objective, and to promote public confidence in their trustworthiness. These roles, I suggest, are vital but they are highly complex.
As an independent regulator of statistics, the authority must at times make some very difficult decisions about when it is necessary to intervene to correct the record. This role provides Parliament and the public with the assurance that our official statistics are trustworthy and that we can have confidence in the numbers, produced by professionally independent statisticians, that describe what is actually happening in our society and our economy. As our statistics regulator, the authority watches closely to ensure that all those who use and quote official statistics do so accurately.
As mentioned at the outset, the authority’s other important statutory role is to oversee the Office for National Statistics—to guide it and support it, but also to challenge it to ensure that it delivers the very best for all users of statistics, wherever they may be. Statisticians want to tell a numerical story that is trusted and understood, and to help decision-makers take timely and informed decisions for the prosperity of our country; including, if I may say so, decisions sometimes taken in your Lordships’ House.
I know from first-hand experience just how challenging that work is: measuring the modern economy, counting the population, and producing aggregate statistics and analysis when decision-makers need and expect them. We all rely therefore on the ONS to produce statistics and analysis on the labour market, migration, crime, inflation and the state of our economy, and to keep pace with innovations in world-leading data science and statistical methods. Clearly, to be able to do this challenging task, the ONS relies on data—and now noble Lords might see the relevance of me taking the House through a little historical detail. Those data come from a rich array of different sources, many of them surveys of individuals, households and businesses. However, surveys are costly to administer and place burdens on those who are asked to respond to them. Ensuring that the ONS has a sufficient number of survey responses to report accurately what is happening in the world in which we live is becoming not only more logistically challenging but also very expensive.
In the world of the digital revolution, which everyone keeps saying we are now living in—I am told it is the fourth industrial revolution—surveys seem a little old-fashioned and outdated. The notion of armies of people —and indeed, they are out there—knocking on doors with clipboards and forms, collecting data, feels like something of a bygone age, like punch cards, slide rules and ticker tape. Simply relying on surveys seems to be relying on an analogue instrument in what is now, after all, a digital world. Of course, there will always be a need to undertake surveys, to fill in the gaps that other sources cannot fill. However, so much of the data that statisticians need have already been collected and are held somewhere else, often within government. The problem is that current legislation makes it difficult, sometimes impossible, for the ONS to access those data sources for the purposes of producing statistics. That is precisely what this Bill is designed to sort out—to give the ONS access to the data it needs to produce the statistics we need.
As much as I love my treasured, old, battered copy of the 2007 statistics Act, it has, inadvertently, as the years have passed, put up significant legal, procedural and cultural barriers that currently prevent the ONS from accessing the administrative data sources needed to produce the statistics and analysis we demand of it. These barriers are inhibiting the ONS from transforming, preventing it from playing its full part in the data revolution, and slowing the pace of reform of the statistical evidence base on which Britain relies to take better, more timely, well-informed decisions. I hate to tell noble Lords, but we are now lagging so far behind many of our international partners in making available the sources of data that our statisticians need to produce statistics. We must do better to support them; we must help to sort this out. It is for all our benefit.
As Professor Sir Charles Bean, former deputy governor of the Bank of England, so eloquently observed when he published his recent report on UK economic statistics:
“It’s nonsensical that different bits of the government don’t speak to each other, so that businesses and households have to provide the same information twice. Unlocking the data hoard already held by the public sector will not only save … money but also”,
enable the ONS to,
“produce more timely and accurate statistics”.
As the National Statistician, John Pullinger, said earlier this year in setting out the case for why new legislation is needed:
“If the UK is to succeed in the competitive global marketplace, and if our governments are to make good choices affecting all our lives, they need to be well informed. Better statistics support better decisions. Statistics will be better if they mobilise the power of the data revolution. To do so requires a modern legal framework that enables us to deliver statistics that serve the public good in ways that sustain public trust and business confidence”.
One of the questions raised in the House today by the noble Baronesses, Lady Byford, Lady Hollins and Lady Janke, was that of security and protection. When data are being transferred, they need to be properly protected. Will the Minister assure noble Lords of the robustness of the current safeguards that exist and ensure that it will be a priority that such protection will continue going forward?
We want our professional statisticians to succeed and to contribute their very best so that we can understand our society and economy through numbers. They want us to understand the world in which we are living and our place in it. It is time to give the UK Statistics Authority the tools to do its job and that is why I commend to the House the important provisions on statistics set out in the Bill.
Lord Young of Norwood Green (Lab)
My Lords, I declare an interest as an ex-BBC governor and a former BT employee—in the days when you could hear a call go through a telephone exchange. I have a sense of déjà vu all over again, as someone once said, about this Bill, as I endeavoured to get the previous one through the House. Despite a total of about 700 amendments, it fell into the wash-up—an ignominious fate for any Bill. I wish the Minister a better experience. Like the previous Bill, this one is complex and covers a wide range of issues. Given the time of night, I will cover only a few of them.
I am somewhat disappointed that my noble friend Lord Mitchell is not with us after his barn-storming contribution. I want to deal with the issue of broadband. We should ensure that we do not fall into the trap that we sometimes do. I heard the first cry of what I could call the megabyte cuckoo. It is megabits not megabytes. There are eight bits to the byte. If only we could deliver 10 megabytes rather than bits, that would be a vast improvement. Some say that this is not ambitious enough and in some ways I share that view, but if we could deliver a true 10 megabits, it would be a good start if we could guarantee minimum speed, quality and price, which a lot of people understandably complain about.
I did not agree with my noble friend Lord Mitchell on his silver-bullet solution, which suggested BT and Openreach as the cause of all the problems. We do not need a monopolies commission to deal with this, because Ofcom has the powers if, as it has already indicated, it feels that there should be a greater degree of separation between BT and Openreach. In fact, a lot of fibre has been delivered to this country. Does it go far enough? No, probably it does not, and it is still a work in progress. But I was fascinated to hear the criticism that BT should not have invested in BT Sport. So it is quite okay for Sky to have a monopoly. That seems to be a strange analysis. Of course, getting it right on broadband is key to our economy.
There is broad agreement on the role of Ofcom, which is important, for a full external regulation of the BBC. The charter is done and, personally, I do not see the point in endlessly replaying the issue of the over-75s. I did not like it any more than anyone else did, but I would welcome the Minister’s perspective on the five-year review. I also welcome the modernisation of the licence fee, which now includes programme downloading and watching on demand, and phasing out the ring-fenced £150 million to support broadband rollout. Increasing the licence fee in line with CPI over the next fee period to 2021-22 is also good news. So surely was the £200 million-plus to expand the work of the BBC World Service in recognition of its importance. It still makes for a challenging environment for the BBC, but I think that the corporation is equipped to meet it. I would like the Minister to reassure us that, as many other speakers have said, future licence fee settlements will be more transparent, with adequate time for consultation.
I am not sure about statutory underpinning, but I welcome the debate. It is an important issue and no doubt the noble Lord, Lord Lester, will deal with it with his usual flair and careful analysis. However, I do not accept that it is absolutely the answer; the noble Lord, Lord Grade, was right to sound a note of caution.
The importance of public service broadcasting being given prominence on electronic programme guides and listed events has been well and truly covered, and I do not intend to go over those again.
Clause 29 of the Bill will repeal Section 72 of the Copyright, Designs and Patents Act 1988 to safeguard the intellectual property rights of public service broadcasters and their huge investment in content, but why do we need to wait two years, as other noble Lords have asked? Can the Minister agree to a short consultative process to ensure faster implementation, recognising that the creative industries contribute something like £84.1 billion to the UK economy?
Last but by no means least, I turn to the question of digital skills. I welcome the Government’s recognition that these skills are just as key as literacy and numeracy, and perhaps we can look forward to some modification of the EBacc if that is the case. However, I will not hold my breath on that one, although the Government are right to acknowledge the importance of these skills. Whether we totally accept the dire predictions of the noble Lord, Lord Baker, and my noble friend Lord Puttnam, who is not in his place—I see that in fact he is, and waving not drowning—both noble Lords are right to warn the Government that the workforce has to be prepared for the next phase of the digital revolution.
I look forward to what is going to be an interesting debate in Committee, and I wish the Minister good luck in reply to this very wide-ranging debate.
The Earl of Erroll (CB)
My Lords, I welcome the Bill because it has some very useful stuff in it—but, like everything else, it might benefit from some tweaking. Many other speakers mentioned the tweaks that need to be made, and if that happens I think that we may end up with quite a good Bill.
I will concentrate on age verification because I have been working on this issue with a group for about a year and three-quarters. We spotted that its profile was going to be raised because so many people were worried about it. We were the first group to bring together the people who run adult content websites—porn websites—with those who want to protect children. The interesting thing to come out quite quickly from the meetings was that, believe it or not, the people who run porn sites are not interested in corrupting children because they want to make money. What they want are adult, middle-aged people, with credit cards from whom they can extract money, preferably on a subscription basis or whatever. The stuff that children are getting access to is what are called teaser adverts. They are designed to draw people in to the harder stuff inside, you might say. The providers would be delighted to offer age verification right up front so long as all the others have to comply as well—otherwise they will get all the traffic. Children use up bandwidth. It costs the providers money and wastes their time, so they are very happy to go along with it. They will even help police it, for the simple reason that it will block the opposition. It is one of the few times I approve of the larger companies getting a competitive advantage in helping to police the smaller sites that try not to comply.
One of the things that became apparent early on was that we will not be able to do anything about foreign sites. They will not answer mail or do anything, so blocking is probably the only thing that will work. We are delighted that the Government have gone for that at this stage. Things need to get blocked fast or sites will get around it. So it is a case of block first, appeal later, and we will need a simple appeals system. I am sure that the BBFC will do a fine job, but we need something just in case.
Another thing that came back from the ISPs is that they want more clarity about what should be blocked, how it will be done and what they will have to do. There also needs to be indemnity. When the ISPs block something for intellectual property and copyright reasons, they are indemnified. They would need to have it for this as well, or there will be a great deal of reluctance, which will cause problems.
The next thing that came up was censorship. The whole point of this is we want to enforce online what is already illegal offline. We are not trying to increase censorship or censor new material. If it is illegal offline, it should be illegal online and we should be able to do something about it. This is about children viewing adult material and pornography online. I am afraid this is where I slightly disagree with the noble Baroness, Lady Kidron. We should decide what should be blocked elsewhere; we should not use the Bill to block other content that adults probably should not be watching either. It is a separate issue. The Bill is about protecting children. The challenge is that the Obscene Publications Act has some definitions and there is ATVOD stuff as well. They are supposed to be involved with time. CPS guidelines are out of step with current case law as a result of one of the quite recent cases—so there is a bit of a mess that needs clearing up. This is not the Bill to do it. We probably need to address it quite soon and keep the pressure on; that is the next step. But this Bill is about keeping children away from such material.
The noble Baroness, Lady Benjamin, made a very good point about social platforms. They are commercial. There are loopholes that will get exploited. It is probably unrealistic to block the whole of Twitter—it would make us look like idiots. On the other hand, there are other things we can do. This brings me to the point that other noble Lords made about ancillary service complaints. If we start to make the payment-service providers comply and help, they will make it less easy for those sites to make money. They will not be able to do certain things. I do not know what enforcement is possible. All these sites have to sign up to terms and conditions. Big retail websites such as Amazon sell films that would certainly come under this category. They should put an age check in front of the webpage. It is not difficult to do; they could easily comply.
We will probably need an enforcer as well. The BBFC is happy to be a regulator, and I think it is also happy to inform ISPs which sites should be blocked, but other enforcement stuff might need to be done. There is provision for it in the Bill. The Government may need to start looking for an enforcer.
Another point that has come up is about anonymity and privacy, which is paramount. Imagine the fallout if some hacker found a list of senior politicians who had had to go through an age-verification process on one of these websites, which would mean they had accessed them. They could bring down the Government or the Opposition overnight. Noble Lords could all go to the MindGeek website and look at the statistics, where there is a breakdown of which age groups and genders are accessing these websites. I have not dared to do so because it will show I have been to that website, which I am sure would show up somewhere on one of these investigatory powers web searches and could be dangerous.
One of the things the Digital Policy Alliance, which I chair, has done is sponsor a publicly available specification, which the BSI is behind as well. There is a lot of privacy-enforcing stuff in that. It is not totally obvious; it is not finished yet, and it is being highlighted a bit more. One thing we came up with is that websites should not store the identity of the people whom they age-check. In fact, in most cases, they will bounce straight off the website and be sent to someone called an attribute provider, who will check the age. They will probably know who the person is, but they will send back to the website only an encrypted token which says, “We’ve checked this person that you sent to us. Store this token. This person is over 18”—or under 18, or whatever age they have asked to be confirmed. On their side, they will just keep a record of the token but will not say to which website they have issued it—they will not store that, either. The link is the token, so if a regulator or social service had to track it down, they could physically take the token from the porn site to where it came from, the attribute provider, and say, “Can you check this person’s really over 18, because we think someone breached the security? What went wrong with your procedures?”. They can then reverse it and find out who the person was—but they could still perhaps not be told by the regulator which site it was. So there should be a security cut-out in there. A lot of work went into this because we all knew the danger.
This is where I agree entirely with the Open Rights Group, which thinks that such a measure should be mandated. Although the publicly available specification, which is almost like a British standard, says that privacy should be mandated under general data protection regulation out of Europe, which we all subscribe to, I am not sure that that is enough. It is a guideline at the end of the day and it depends on how much emphasis the BBFC decides to put on it. I am not sure that we should not just put something in the Bill to mandate that a website cannot keep a person’s identity. If the person after they have proved that they are 18 then decides to subscribe to the website freely and to give it credit card details and stuff like that, that is a different problem—I am not worried about that. That is something else. That should be kept extremely securely and I personally would not give my ID to such a site—but at the age-verification end, it must be private.
There are some other funny things behind the scenes that I have been briefed on, such as the EU VAT reporting requirements under the VAT Mini One Stop Shop, which requires sites to keep some information which might make a person identifiable. That could apply if someone was using one of the attribute providers that uses a credit card to provide that check or if the website itself was doing that. There may be some things that people will have to be careful of. There are some perfectly good age-checking providers out there who can do it without you having to give your details. So it is a good idea; I think that it will help. Let us then worry about the point that the noble Baroness, Lady Kidron, made so well about what goes where.
The universal service obligation should be territorial; it has to cover the country and not just everyone’s homes. With the internet of things coming along—which I am also involved in because I am chair of the Hypercat Alliance, which is about resource discovery over the internet of things—one of the big problems is that we are going to need it everywhere: to do traffic monitoring, people flows and all the useful things we need. We cannot have little not-spots, or the Government will not be able to get the information on which to run all sorts of helpful control systems. The noble Lord, Lord Gordon of Strathblane, referred to mast sharing. The problem with it is that they then do not put masts in the not-spots; they just keep the money and work off just one mast—you still get the not-spots. If someone shares a mast, they should be forced to have a mast somewhere else, which they then share as well.
On broadband take-up, people say, “Oh, well, people aren’t asking for it”. It is chicken and egg: until it is there, you do not know what it is good for. Once it is there and suddenly it is all useful, the applications will flow. We have to look to the future; we have to have some vision. Let us get the egg out there and the chicken will follow—I cannot remember which way round it is.
I agree entirely with the noble Lord, Lord Mitchell, that the problem with Openreach is that it will always be controlled by its holding company, which takes the investment, redirects it and decides where the money goes. That is the challenge with having it overseeing.
I do not want to waste much time, because I know that it is getting late-ish. On jobs, a huge number of jobs were created in earlier days in installing and maintaining internet of things sensors all over the place—that will change. On the gigabit stuff, it will save travel, energy and all sorts of things—we might even do remote-control hip operations, so you send the device and the surgeon then does it remotely, once we get super-duper superfast broadband.
I want to say one thing about IP. The Open Rights Group raised having thresholds of seriousness. It is quite important that we do not start prosecuting people on charges with 10-year sentences for trivial things. But it is also sad how interesting documentaries can disappear terribly quickly. The catch-up services cover only a month or so and if you are interested, it is quite nice being able to find these things out there on the internet a year or two later. There should somehow be a publicly available archive for all the people who produce interesting documentaries. I do not know whether they should make a small charge for it, but it should be out there.
The Open Rights Group also highlighted the bulk sharing of data. Some of the stuff will be very useful—the briefing on free school meals is interesting—but if you are the only person who really knows what might be leaked, it is very dangerous. If someone were to beat you up, an ordinary register could leak your address across without realising that at that point you are about to go into witness protection. There can be lots of problems with bulk data sharing, so be careful; that is why the insurance database was killed off a few years ago. Apart from that, I thank your Lordships for listening and say that, in general, this is a good effort.
Lord Clement-Jones (LD)
My Lords, we are rapidly getting to the point where the egg is hatching and the chicken is emerging. I refer the House to my interests as declared on the register. We have had a superbly wide-ranging debate. I thank the Minister for his introduction, and for the meetings and briefings that he and his team arranged for us, including the material that the noble Lord, Lord Stevenson, spoke about so glowingly.
The digital economy in the UK is of huge importance to our future and the Bill needs to take full account of new developments and the pace of change, which the noble Lord, Lord Puttnam, and the noble Baroness, Lady Kidron, spoke about. All that makes connectivity vital, as the noble Lord, Lord Inglewood, emphasised, and as the noble Baroness, Lady Byford, illustrated so well. We expect a full report from Las Vegas by the noble Lord, Lord Borwick.
Even in the last few years, the rate of change has of course been extraordinary. With drone development, the internet of things, driverless cars, robotics, artificial intelligence, 3D printing, cloud computing and virtual reality it is difficult for legislators to keep up, let alone to determine the skills needed in future. When two of our most digitally savvy Members of the House talk about the hollowing-out of jobs in the future, we have to sit up and take notice. I appreciate that the noble Lord, Lord Holmes, was rather more optimistic but we have to address the issues raised by the fourth industrial revolution, which were so graphically described during the debate.
Despite a fair degree of debate in the Commons, particularly in the Public Bill Committee and on Report, many matters in the Bill are unresolved, as we have heard in today’s debate. There was a very strong measure of agreement on this, given which, on these Benches our welcome to the Bill can only be conditional and dependent on the information and assurances given by Ministers, and the amendments to be made during its passage. For instance, while we welcome action to ensure that superfast broadband will be available within a short time to all UK households—driving the final mile, as discussed by the noble Earl, Lord Lytton—we are not yet convinced that a USO as opposed to vouchers is the way to do it.
Even if were persuaded of the merits of a USO, we are not convinced that setting a modest 10 megabits per second will be adequate for future increases in demand for speeds and capacity. As we have heard throughout the debate, why should there not be a higher rate of 24 megabits per second if nearly 90% of households will have that next year? My noble friend Lord Fox described this as a very unambitious goal, as did the noble Lord, Lord Aberdare, while the noble Lord, Lord Holmes, described the Bill as generally lacking in ambition. I thought that the noble Lord, Lord Mitchell, made the most futuristic speech in the debate; I rather liked his phrase “Gigabits not megabits”, which should be the slogan as we go forward.
We on these Benches also want a requirement for a minimum upload to be included, and to have standards of latency, resilience, reliability, consistency and contention also spelt out. They are every bit as important as speed. We will question the Government further on the review process for the USO. What will the criteria for change be? When will the first review take place and what will the new funding model be? Will there be an open tendering process for the delivery of the universal service obligation? Will Openreach be the main instrument of rollout again? Despite the advocacy of the noble Lord, Lord Young, we are not convinced that Openreach, even as a separate legal entity within BT, is the right instrument, and I know that that view is shared by the noble Baroness, Lady Byford, the noble Lord, Lord Mitchell, and my noble friend Lord Fox. They made a strong case for structural separation. We are definitely not convinced that government investment is sufficient. However, I am reassured by the recent speech of Sharon White at the Institute for Government that full structural separation of Openreach could become a reality if the proposed level of separation is demonstrated to be inadequate.
Again, although we have a high regard for Ofcom and the way it has performed its duties since formation, we want to be extremely careful in Clause 74 that we are not handing it far greater power with less corresponding accountability than its European counterparts under Article 4.1 of the European framework directive or indeed other UK regulators. That was also mentioned by my noble friend Lord Fox, and the noble Lords, Lord Aberdare and Lord Macdonald. We appreciate the consumer arguments put forward by Which? and that opinion is divided, but the Government are going to need to give chapter and verse, real evidence of why we should make such a radical change to the appeals process from a merits approach all the way down to a judicial review test.
Above all, our aim on these Benches is to ensure that in a holistic way we bear down on digital exclusion in the most effective way. Of course we welcome Clause 87, as far as it goes, but it is not sufficient and we need more information about the funding aspect. As my noble friend Lady Janke asked, do the Government accept the arguments for a social tariff for broadband? Many have argued that it should be equivalent to that in other forms of telephony.
On the other hand, when it comes to the new electronic communications code dealing with phone and internet infrastructure, we broadly welcome the new version set out in Schedule 1. We will, however, want the Minister to explain, as my noble friend Lord Foster pointed out, where we have got to on the definition of electronic communications apparatus because of its importance to the various operators. We need to ensure that investment incentives for independent and wholesale infrastructure are maintained, as the noble Lords, Lord Gordon and Lord Aberdare, pointed out, so that there cannot be free piggybacking on the infrastructure investment of others. This is vital if we are to get the infrastructure we need for 5G in the future.
Having campaigned for some years on the subject, we welcome the higher penalties for online piracy and the proposal to allow web-link marking for design rights. I welcome the conversion of the noble Lord, Lord Whitty, to better protection from online piracy. We will however question why the Government are not using the Bill to outlaw the supply of devices designed to infringe copyright, such as IPTV streaming boxes, which are a growing threat to pay-TV services. I thought the noble Baroness, Lady Kidron, made a very interesting point about better protection for user content.
Depending on progress on a voluntary agreement with search engines to ensure that sites infringing copyright are not listed, we will also want to explore the benefit of giving a power to the Secretary of State to require search engines to adopt a code of practice. We welcome the new powers for Ofcom as regards gaining provider-led switching provisions. I argued for these rights to be included as long ago as the Enterprise and Regulatory Reform Act, but should these provisions not be wider and include so-called quad-play bundled services which include pay TV? Similarly as regards Section 73 of the Copyright, Designs and Patents Act 1988, which I have long argued should be repealed, we will want to hear assurances from the Government—these were requested by the noble Viscount, Lord Colville, and the noble Lords, Lord Grade, Lord Macdonald and Lord Gordon—that commercial PBS channels will be able to negotiate retransmission fees as a result and that the repeal will take place without delay. We will also want to know from ITV that any fees will go into new production—children’s programming, for instance, as mentioned by my noble friend Lady Benjamin.
As regards Part 3 of the Bill, some very fine speeches were made, including by the right reverend Prelate the Bishop of Chester. I pay tribute of course to the long campaigning of my noble friend Lady Benjamin and the noble Baroness, Lady Howe, on these issues. My noble friend Lord Storey was also very eloquent on the subject, and I was very taken by the noble Baroness, Lady Kidron, saying that pornography is a really bad way of learning about sex. That will stay with us for some period.
We strongly share the desire of all parties to ensure that children and young people are not able to access pornography online, but we are concerned that the current requirement for a verification process does not explicitly provide for proper protection of people’s personal data. As my right honourable friend Alistair Carmichael said in the Commons:
“My real concerns centre on the holding of the data. As I put it to the Minister when he was at the Dispatch Box, there are no provisions in the Bill to secure the privacy and anonymity of those using these sites. He said that the data will be held in accordance with the Data Protection Act, but as we saw in the Ashley Madison leaks, that was of no great assistance”.—[Official Report, Commons, 28/11/16; col. 1304.]
We believe that the answer is to make sure that the type of verification required for pornography sites is itself specified in the Bill, so that personal data acquired by any verification process have to be held in an anonymised form. I did not agree with everything that the noble Earl, Lord Erroll, said in his contribution today, but I thank him for some of the technical advice he gave to enable us to demonstrate that that anonymity in terms of verification and authentication is perfectly feasible. The Government Digital Service itself has developed Verify, and there is the Certificate Transparency, or CT, system which uses distributed ledger technology to mitigate this problem. Other verification systems are becoming available, such as Yoti and VeriMe, that would meet the objections of many to this clause, which we all concede has the best of intentions.
My noble friends can of course see the merit of site-blocking being available as a last resort—although I hope this would be after Clause 22 has been invoked, and the noble Lord, Lord Morrow, made some very interesting points about the efficacy of that clause. However, it should be a last resort, at the instigation of the age verification regulator, the BBFC, if pornography sites do not provide adequate age verification—which should be anonymised, as I have argued. But it is a different matter altogether, as the current Clause 23 makes it, for the regulator to act as a censor of “prohibited material’' on internet pornography sites in general. This goes well beyond the harm test in the Video Recordings Act 1984 and includes material covered by the CPS guidance on the Obscene Publications Act. To us, that is disproportionate, and has no relevance to access by young people and verification.
We welcome the promised government amendment to confirm that default parental filtering does not fall foul of the EU’s open access regulation, although I thought the noble Baroness, Lady Howe, raised some extremely interesting points on that. It is also of huge importance and central to protecting children in this context—this was raised by the noble Lords, Lord Stevenson and Lord Borwick, and by the right reverend Prelate—that we introduce compulsory, age-related, sex and relationship education in our schools.
Moving on to other parts of the Bill, we welcome the fact that the Bill updates the regulation of the BBC by making Ofcom responsible for the regulation of all BBC activities, although as we have expressed on previous occasions we have great concern about Schedule 1 to the framework agreement. My noble friend Lord Lester was extremely eloquent about the issues involving the independence of the BBC, and quite a number of noble Lords lined up behind him in support, including the noble Viscount, Lord Colville, and the noble Lord, Lord Inglewood. It was interesting that the noble Lord, Lord Grade, did not support that. I felt he was perhaps coming on a little like Anthony Joshua, so we have some quite interesting debates coming in the future.
In Part 5, we welcome increased digital government provision but we have a number of concerns. I will not adumbrate them here but we are particularly concerned about personal healthcare information. We think there are opportunities, and the noble Lord, Lord Rowe-Beddoe, had an interesting description of the need for better statistics, but there is some tension between better statistics and personal data confidentiality and we need to resolve that.
The former Secretary of State, John Whittingdale, aptly described the Bill as a Christmas tree at Second Reading in the Commons. That has been echoed today, although I think by now we have a forest of conifers, which may be the new epithet that we are going to have to use. There are quite a number of additional matters that we will want to see included, such as the listed event amendments. We want to see EPG prominence tackled, along with the whole issue of bots with regard to ticket purchase. I see that Congress has just passed a BOTS Act that will soon be signed by President Obama. We want to see a level playing field on spectrum, the extension of remote e-lending and of course improved transparency of the reporting of royalties to creators in a variety of creative industries.
For some time we have been promised a new communications Bill, a new digital Bill, but I am afraid this is a bit of a disappointment; as the noble Lord, Lord Mitchell, pointed out, it does not really deal with all the challenges of the future. It may deal with the here and now but there is nothing really future-facing in it. For instance, in the report Distributed Ledger Technology: Beyond Block Chain the Government’s own scientific adviser says:
“Government needs to consider how to put in place a regulatory framework for distributed ledger technology”,
but that is absent from the Bill.
I hope my noble friends and I have given the House a comprehensive picture of what my party supports in this Bill but also of where the Bill is deficient. We look forward to the Minister’s reply and to the Committee in the new year.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for introducing the Bill and I am grateful to all noble Lords who have contributed to the debate. I sense a good deal of commonality in the views that have been expressed today.
We on our side welcome many of the objectives of the Bill. This is a fast-moving industry, and clearly the current legislation is no longer fit for purpose. Like others in the debate today, though, we are concerned about the Bill’s lack of ambition. It was an opportunity to reach into the future, to design a strong and healthy digital sector that would have secured its reputation as a market leader in the world. Inherent in that model would have been robust systems and checks to address concerns about issues like data privacy, cybersecurity, big government and a lack of digital resilience. The Bill ducks many of those issues, although they are in fact undermining people’s trust in the online world.
The Bill also fails to address the revolution in jobs and skills that was very eloquently flagged up by my noble friend Lord Puttnam and a number of other noble Lords in the debate. Instead, it merely addresses a series of relatively uncontroversial provisions. A number of people have described it as a Christmas tree Bill—in fact I think we have got as far as a forest now—on which a number of disconnected policies have been hung. We agree with that analysis. It leaves us with a strong sense of frustration and the inevitability that we will be back here next year and the year after with further iterations of the Bill, which can best be described as a “patch and mend” approach to the challenges that we are facing. This approach has been compounded by the late changes to the Bill on issues such as age verification and net neutrality, which clearly will need a significant input from this House to perfect. I am sure that as ever we will rise to this challenge and the Bill will leave this House in better shape than when it arrived.
I turn to some of the specific policies in the Bill. First, a number of noble Lords raised concerns about the broadband universal service obligation. This is not surprising as it is an issue that has caused massive frustration over the last few years, peppered as it has been with failed government promises and missed targets. This is our opportunity to get it right. As many noble Lords have said, though, the Government’s objectives in the Bill are simply not ambitious enough, and I am sorry to say that I disagree with my noble friend Lord Young on this matter.
The proposal for 10 megabits per second is less than half what is needed to achieve the updated definition of superfast broadband. It will leave some households in the slow lane and others completely out of range of the new offer. That is why we will be tabling more ambitious amendments for a future-proofed state-of-the-art broadband provision, as well as independent evaluation of the speed of delivery.
We agree with the noble Lord, Lord Baker, and others that we should be embracing the future technology that mobile can deliver, particularly in reaching the most isolated communities. We believe that we should be setting similar ambitious targets for mobile, which are so far missing in the Bill. My noble friend Lord Gordon made a compelling case for the sharing of mobile masts and the need to reconsider roaming, particularly in those dead zones where no provision is currently available.
Secondly, we welcome the Government’s initial steps to control children’s access to online pornography. We have, of course, rehearsed those arguments many times in this House. I pay tribute, as others have done, to the noble Baroness, Lady Howe, for her tenacity in continuing to pursue this issue. However, we are concerned that many of the proposals have been introduced late in the proceedings in the other House and we have not had the chance to give them sufficient scrutiny. We recognise that no system of parental filters or age verification can provide the perfect answer to this huge social challenge. However, during the course of the Bill’s proceedings, we hope to work with the Minister and the industry to produce a robust system that, on the one hand, protects children and, on the other, addresses the legitimate concerns of adults regarding privacy and the right to access pornography legitimately. In particular, we want to be assured that websites which flout the system cannot find simple tricks to circumvent the system that we are establishing; that age-verification providers are properly regulated; that on-demand material is subject to the same tests as those of other online services; and that the new role allocated to the British Board of Film Classification is properly overseen by an independent body.
We are also aware that the relationship between the new EU rules on net neutrality and the systems in place for parental filters needs to be resolved by the new amendments promised by the Minister in the other place. We look forward to scrutinising those amendments when they appear to make sure that they are fit for purpose.
There has been a widespread view around the Chamber today that we will not sort this problem by legislation alone. We have consistently joined with others in the House to press the case for compulsory sex and relationship education in schools, and we will continue to press this case during the course of the Bill’s proceedings. We hope that the Government, belatedly, will come to see the sense of those arguments.
Thirdly, we want to address the real concerns about digital government and data sharing. We can all think of areas of government where improved data sharing makes perfect sense, but we need to make sure that it does not become the default option. Proper controls need to be put in place to safeguard access to personal data and ensure that information is used only for the purpose originally requested. We will be tabling amendments to make sure that proper independent controls are in place to sign off and oversee the use of data.
We are also proposing the establishment of a big data commission to review the collection and use of data by government and by commercial bodies. The noble Baroness, Lady Kidron, quite rightly raised particular concerns about private bodies increasingly being involved in delivering public services. There need to be controls over how they use publicly accessed data. We will want to see a public register where all disclosures of data will be logged so that everybody has the right to see what is going on. We would also like a requirement for breaches of data security to be reported as a matter of course.
We would like the Bill to include measures to tackle online abuse and trolling, which a number of noble Lords have mentioned. In particular, we want to look further at how to control abuse on social media which, as we know, is an increasing scourge on our society.
Fourthly, we want to revisit the unwarranted decision by the Government to transfer responsibility to the BBC for setting the over-75s concessionary TV licence. We are not ready to let this issue lie, as some noble Lords have suggested. Apart from the fact that it is a clear breach of the Conservative manifesto, it sets a worrying precedent by passing part of our welfare system to an organisation with no direct accountability to the electorate.
As part of the scrutiny of the BBC’s new royal charter, we will also want to check that the new powers of Ofcom to regulate the BBC are proportionate. In scrutinising these clauses, we also want to ensure that the predominance of public service broadcasters on TV listings is protected and extended to online on-demand services.
Several noble Lords mentioned the importance of providing audio-visual services for those with disability across all on-demand providers. We very much welcome the Minister’s commitment today and look forward to receiving details in due course.
Like others, we welcome the proposed repeal of Section 73, with all the benefits that it will bring to PSBs. We would like to follow it up by ensuring that any profits that occur from it are reinvested in programme development. We are also concerned about the concept of a transition, and we would like to explore exactly what is intended by it, as we feel that speed is of the essence in introducing the changes.
In the spirit of equalising offline and online transactions, we also welcome the Minister’s commitment today to extend public lending rights to e-book lending; again, we would like to explore its reach. On the basis of parity, we also look forward to exploring whether VAT should continue to be paid on downloaded books.
Finally, our colleagues in the Commons played a significant role in the cross-party initiative to tackle automated ticket touting, or bots. We will be tabling an amendment to end the use of digital ticket purchasing systems which buy event tickets in large numbers through automated systems, thereby blocking access for real fans, whose only choice then is to buy them on the secondary market at inflated prices. As I understand it, the Minister in the Commons raised concerns about the wording of the amendment tabled there but expressed some sympathy for the cause. I very much hope that the noble Lord will agree to work with us on this issue to find the right words to end this rip-off in ticket sales.
On that issue, and on many others, we look forward to working with the noble Lord as we follow these changes through the course of the Bill, and we look forward to his response.
Lord Ashton of Hyde
My Lords, the fact that this is a wide-ranging Bill is not surprising when you consider how the digital economy is transforming the world before us, and it has certainly been a wide-ranging debate. I thank all noble Lords for their contributions today, particularly those who have come to see me in the past week to discuss the legislation. Before the noble Lord, Lord Stevenson, asks me, as he usually does, I will of course write to those whom I fail to answer this evening, and there will be many of them, because I think there have been hundreds of questions.
Starting with the universal service obligation, broadband and connectivity, I think that there is clearly a strong consensus in the House that we need faster broadband and better mobile phone signals, especially in the less well-served rural parts of the country. The Government agree, and we have been working to achieve it. Only 8% of premises in the country have access to broadband at speeds of less than 24 megabits per second, and that number is likely to halve by the end of the year. The broadband USO provided by the Bill will be a safety net, should anyone need it, by 2020. I was grateful for the support of my noble friends Lord Baker and Lord Holmes and the noble Lords, Lord Gordon, Lord Whitty and Lord Young, for the broadband USO.
Many Peers, including the noble Lord, Lord Fox, my noble friend Lord Holmes, the noble Lords, Lord Mitchell and Lord Clement-Jones, and the noble Baroness, Lady Jones, queried whether a 10 megabits per second USO is sufficiently ambitious. It will be Ofcom that recommends the speed and provides the technical advice on upload, download, latency, and so on. The Government believe that 10 megabits per second should be the minimum speed but have ambition for more—so we agree there—as we complete the superfast delivery programme.
The Bill provides powers to review and to increase the speed. In fact, 10 megabits per second is adequate for most households and allows high-definition video streaming as well as simultaneous video calling and web browsing, according to the Ofcom Connected Nations report and the digital communications review in 2016. We have ambitions for the future, but we think that it is adequate for the safety net—and, speaking personally, I can tell you that, if you had 1.5 or 2 megabits per second broadband and you were given 10 megabits, you would think that it was a tremendous difference.
Lord Young of Norwood Green
But that is if you are given a true 10 megabits per second, is it not? The complaint so often is that you are told that that is what the speed is going to be, but they fail to deliver—so that is the important thing. It is delivery that counts.
Lord Ashton of Hyde
Yes, I quite agree—that is why I mentioned that Ofcom will provide technical details and advise on latency, upload, download and average speeds. The consultation paper is, I think, coming out at any minute.
The noble Baronesses, Lady Janke and Lady Byford, and the noble Lord, Lord Clement-Jones, asked whether there should be a social tariff in addition to the USO. Ofcom is reporting on possible approaches for a USO; the report will include consideration of measures to take account of those for whom affordability is an issue.
The Electronic Communications Code and infrastructure and apparatus and things like that were mentioned by the noble Lords, Lord Foster, Lord Aberdare, Lord Gordon and Lord Clement-Jones. In the interests of time, I am going to duck the interesting discussions of when a water tower is a communications mast and when it is apparatus. We will deal with those things a lot in Committee.
The noble Earl, Lord Lytton, was concerned about the new land valuation model in the ECC. We have consulted widely on this and employed experts to allow government to strike the right balance between landowner rights and the need for better digital communications. We expect the parties to negotiate a fair outcome. The code valuation applies only when parties cannot agree terms.
The noble Lord, Lord Foster, asked whether there should be a public record for when rights are granted over land under the ECC. The Law Commission considered this as part of its review of the code; the Government consulted on the issues subsequently and concluded that code operators should not be required to register their rights. This maintains the position under the existing code, but prospective buyers will be able to ascertain what code rights might apply to land by inspecting the land and making appropriate inquiries before the contract.
Several noble Lords, including the noble Lords, Lord Aberdare, Lord Clement-Jones, and others, talked about the change in the appeals mechanism for Ofcom. I have spent many happy hours in your Lordships’ House talking about the extent of judicial review and its applicability. We think that there is a wide consensus that reform is needed, and the Government believe that judicial review is the right remedy. Direct comparisons to other regulated sectors are helpful but, for example, where one sector has a full “on the merits” appeal, there is another example showing the opposite. This is because every regulatory regime is quite different from the next. Communications is currently the most litigated sector, and it is holding up reforms and investment and delaying consumer benefits. That is why we are forced to act—but I accept that we will probably spend some time on this issue in Committee.
Another thing that we might talk about, which was mentioned by the noble Lords, Lord Fox, Lord Mitchell and Lord Clement-Jones, was the position of Openreach. A number of noble Lords suggested that the way in which to reach a competitive and effective market in telecommunications is through the structural separation of Openreach from BT Group. Ofcom is the independent regulator for the sector and there is a process available for it to pursue structural separation, should it consider that necessary. We have made it clear that Ofcom should take whatever action it considers necessary and that structural separation remains an option.
Several noble Lords mentioned digital exclusion and digital skills. The Bill provides for free training for adults in basic digital skills, which was mentioned by many noble Lords. We have set up the Council for Digital Inclusion, which brings together leaders from business, charities and government to come up with innovative ways to help get everyone online. Some people cannot use online services independently. The Government Digital Service works with services to ensure that those people get the support that they need. More than £9.5 million has been spent by the DfE and the NHS since October 2014 to support almost 750,000 people to gain basic digital skills. The DfE will be investing a further £1.5 million in the remainder of this year to support 100,000 more.
My noble friend Lord Baker made an interesting speech, echoed to a certain extent by the noble Lord, Lord Puttnam, about the digital revolution, skills and employment. The noble Baroness, Lady Kidron, and the noble Lord, Lord Aberdare, mentioned this as well. We are establishing 15 routes to a technical education post-16, including engineering and manufacturing, digital health and construction. Students will be able to learn through an employment-based route—apprenticeships—or a college-based one that will ensure they can progress into employment or further study. For pre-16s, we will continue to equip schools to embed a knowledge-based curriculum as the cornerstone of an excellent academically rigorous education. We will continue to embed reforms to assessment and qualifications, including more robust and rigorous GCSEs, and the ambition that at least 90% of pupils in mainstream education enter GCSEs in maths and science. In 2016, 62,100 pupils entered for a computer science qualification, up from 33,500 in 2015.
Many noble Lords—the right reverend Prelate the Bishop of Chester, the noble Baronesses, Lady Howe, Lady Kidron and Lady Benjamin, the noble Lords, Lord Stevenson, Lord Storey, Lord Gordon, Lord Whitty and Lord Morrow, the noble Earl, Lord Erroll, and there may have been others—talked about and approved of the age-verification regime, at least to a certain extent. The Bill delivers on the manifesto commitment but there is always more to do and we think that is possible. I look forward to debating this in Committee. The noble Lord, Lord Stevenson, asked what oversight there will be of the BBFC to ensure that these powers are used responsibly. We are pleased that we are working with the BBFC; it has a strong track record as an independent regulator. We recognise that age verification brings challenges and we must provide the regulator with the framework to succeed. We are already working closely with it to implement this ambitious policy and it is not the case that the Government’s role will then be finalised. The Bill provides for the designation of funding of the regulator by the Secretary of State, who must be satisfied, for instance, that arrangements for appeals are being maintained. In the case of blocking, the regulator must inform the Secretary of State whenever it intends to notify an ISP.
The right reverend Prelate, the noble Baronesses, Lady Kidron and Lady Benjamin, and the noble Earl, Lord Erroll, asked a valid question about social media and Twitter. The Government believe that services, including Twitter, can be classified by regulators as ancillary service providers where they are enabling or facilitating the making available of pornographic or prohibited material. This means that they could be notified of commercial pornographers to whom they provide a service but this will not apply to material provided on a non-commercial basis.
The noble Baroness, Lady Howe, asked some very detailed questions about net neutrality and family filters which I am not going to answer today. First, I will read carefully what she said and will certainly write to her. We believe that family filters that can be turned off are permitted under EU regulation. To support providers, and for the avoidance of doubt, we will amend the Bill to confirm that providers may offer such filters. This will ensure that the current successful self-regulatory approach to family filters can continue.
ISPs are best placed to know what their customers want and we do not intend to lay down mandatory rules for family-filter provision. The current approach works well, engaging parents to think about online safety, but applying filters where parents do not engage. As far as public wi-fi is concerned, we believe that filters on many types of public wi-fi are likely to be compliant with EU regulation. Coffee shops, hotels and restaurants, for example, where the end-user is the proprietor, can turn filters on and off. I am afraid that noble Lords may not be surprised to hear that we do not think it is right to share legal advice on these matters.
There will be a lot of discussion on prohibited material in Committee. It is a complicated area. Free speech is vital but we must protect children from harm online as well as offline. We must do more to ensure that children cannot easily access sexual content which will distress them or harm their development, as has been mentioned. We do not allow children to buy pornographic material offline, and this material would not be classified for hard-copy distribution. The BBFC has a well-understood harm test and would not classify material that, for example, depicts non-consensual violent abuse against women, and it may not classify material which is in breach of the Obscene Publications Act, as clarified in guidance by the CPS. Prohibited material has always been within the regulatory framework of this Bill. We consider that having a lesser regime for prohibited material than lawful material would be unsustainable and undermine the age-verification regime. As I say, I am sure we will come back to this in Committee.
An important point was made with regard to sexual content and the need to look at sex education. We have taken steps to raise awareness of the risk to young people of exposure to harmful content online. E-safety is now covered at all key stages in the new computing curriculum, which was taught for the first time in September 2014. The Government agree that we need to look again at the case for further action on personal, social, health and economic education and sex education provision as a matter of priority, with particular consideration being given to improving quality and accessibility. We are carefully considering the request to update existing sex and relationship guidance.
Many have asked for the intellectual property reforms in the Bill for many years. We need to ensure that valuable assets are protected. My noble friend Lady Neville-Rolfe has been working hard to ensure that that is the case. I am grateful to my noble friend Lord Grade, the noble Lords, Lord Storey and Lord Macdonald, and my noble friend Lady Wilcox, who supported the Section 73 appeal. My noble friend Lady Wilcox asked what else we are doing to protect IP rights online. The Government’s strategy for IP enforcement published earlier this year, Protecting Creativity, Supporting Innovation: IP Enforcement 2020, outlines the breadth of activity the Government are taking to tackle IP infringement of all types online.
As regards the remuneration issue from the abolition of Section 73, the Government are not seeking to set any retransmission fee arrangements. These will be negotiated in the context of the existing “must offer/must carry” regulatory framework. This will mean there is likely to be some, albeit limited, value extracted in any future negotiations between public service broadcasters and Virgin Media. Coming to the—
Lord Foster of Bath
I am grateful to the Minister for giving way as it is late but this is a very important issue. I would be grateful for greater clarification of the Government’s position, bearing in mind that it was only in July of this year that, in responding to the balance of payments consultation, the Government said:
“Government therefore expects that there will continue to be no net payments between all platform operators and the PSBs”.
Has the Government’s position now changed?
Lord Ashton of Hyde
We think it should be left to the market to decide that. My noble friend Lord Grade and the noble Lords, Lord Foster, Lord Storey and Lord Macdonald, and probably others talked about the length of the transitional arrangements, and basically said that we should get on with it. The Intellectual Property Office has recently consulted on this, as is right and proper. The Government are considering the responses received and we will state our intentions on how this reform will be implemented shortly.
The noble Baroness, Lady Janke, asked about counterfeit electrical goods. The Government have committed in their recent IP enforcement strategy to develop a methodology for assessing the availability of and harm caused by counterfeits, which will of course include counterfeit electrical goods. Government officials regularly meet with major online retailers to help reduce the availability of counterfeits on their platforms and to help co-ordinate efforts with law enforcement to take action against sellers. In addition, as required by EU law, most online platforms already have routes to allow suspected IP-infringing content to be reported and promptly removed.
Data sharing is an important part of the Bill. The noble Baroness, Lady Janke, and the noble Lord, Lord Clement-Jones, expressed concern about bulk data sharing. Under the powers, data sharing must comply with the Data Protection Act. Information can be shared only for the specific purposes set out in the Bill, and only the minimum data required to achieve these purposes will be shared—a point reinforced in our draft codes of practice.
The noble Baroness, Lady Kidron, asked whether data would be shared without consent. Where possible, consent will be sought, but this is not always possible. These new powers are to allow government to reach out and help. We have given examples of reaching out to the fuel poor and to the vulnerable so that help and support can be offered rather than sought. These people may not have consented to data sharing, but that is partly because we often never know when we might need to help in future. We will, where appropriate, conduct privacy assessments and publish them, and we will always protect personal data under the Data Protection Act.
Several noble Lords raised the question of health data. As noble Lords appreciate, health data are of great value to research, as they address multiple complex issues that affect individuals, households and other purposes. However, great sensitivities are involved in how this is handled, which is why we are excluding the use of health and adult social care data from our powers until the recommendations of the National Data Guardian’s review have been implemented and public confidence in the way the health and care system uses confidential personal data can be demonstrated. I should mention that the Government support Jo Churchill MP’s Bill on the National Data Guardian, which has its Second Reading on Friday.
The BBC is an important part of the Bill and we have debated this as part of official business 18 times since last June—and I suspect we may do so again. When we scrutinised the new charter on 12 October, there was a consensus that enormous progress had been made. The charter has now been approved by Her Majesty the Queen and will soon be in force. The noble Lords, Lord Lester and Lord Stevenson, the noble Baroness, Lady Kidron, and the noble Viscount, Lord Colville, talked about the budget deal last year. This was part of a negotiation with the BBC that is complete. The BBC said only two weeks ago that,
“the overall funding settlement reached with the government provides the financial stability for a strong creative BBC”.
The BBC is clear that reopening the settlement would just create uncertainty and potentially leave it worse off.
With regard to the future process, let me be clear. The charter, for the first time, sets the timing for the BBC’s future financial settlements at once every five years. The charter also requires the BBC to provide data ahead of each licence fee settlement. The BBC will be able to use this to make its case, and the Government of the day will be able to consider that.
The noble Lords, Lord Lester and Lord Foster, mentioned the National Citizen Service charter. I agree that that was a royal charter and that it had a Bill, but we think that is different. I could go into the reasons, but undoubtedly we will talk about that in Committee, so I will not do so at this time.
Lord Lester of Herne Hill
I am very grateful to the Minister as the hour is late. I am sure he appreciates that I made it clear that I did not favour undoing the deal that had already been done. However, I am looking to the future. Will he be able to address in some form, before Committee, the reasons why the Government reject any statutory underpinning—if that is their position?
Lord Ashton of Hyde
That is their position and I certainly will do that. If that point was not in a specific question, I will certainly endeavour to address it. I expected the noble Lord to raise that point because he warned me during the debate on the BBC that it would be coming.
We are reaching the end of our time and there are still a few things that I could talk about. I will have to write to noble Lords about extending EPG prominence and about subtitles on on-demand and audio-visual services, which we are intending to bring in. A lot of noble Lords asked about ticket bots. We agree that there is a problem and that the Government should fix it. A series of round tables has been held at enforcement agencies and with the sector. The Government will give full consideration to what was said at those round tables, in Parliament and in the Waterson report on ticket bots and harvesting tickets.
I think that we have run out of time. I thank noble Lords for all their constructive and interesting comments on the Bill and I look forward to further discussions. It is clear that the Bill is complex but, despite all the seasonal jokes about its Christmas-tree appearance, I hope that your Lordships can take inspiration from Antony Gormley’s tree at the Connaught, which has not a single bauble upon it.
The Digital Economy Bill will support investment in digital infrastructure and support consumers and businesses in taking advantage of the opportunities of the digital economy. It will also enable the digital transformation of government. I commend the Bill to the House and ask your Lordships to give it a Second Reading.
Digital Economy Bill
Tuesday 31st January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 80-II Second marshalled list for Committee (PDF, 278KB) - (31 Jan 2017)
Lord Stevenson of Balmacara (Lab)
I am sorry, my Lords, but I am in some disarray, because my noble friend Lord Grantchester is about to walk in and take over.
Lord Grantchester
“(4) For the avoidance of doubt—(a) neither the inclusion of such a building within the meaning of a structure, nor anything else in this code, shall prevent any code right for further electronic communications apparatus being conferred on any operator in respect of the roof or external walls of such building; and (b) any structure, whether or not a building, which would not otherwise be considered electronic communications apparatus, shall not be considered as falling within sub-paragraph (1)(d) simply by reason of the installation upon that structure of any operator’s electronic communications apparatus under this Code or other lawful agreement.”
Lord Grantchester (Lab)
I am grateful to the Minister for his helpful remarks before the Committee adjourned. I agree that we should not become overly concerned with technical drafting, but in Committee, it is important that we bring out the important issues. Many interested sector representations have been made to us, and the noble Lord, Lord Aberdare, has already raised some of them. I am greatly indebted to Mr Jeremy Moody of the Central Association of Agricultural Valuers, who has immense experience in this field. I shall endeavour to be brief and, as the Minister said, I am sure that a period of reflection and dialogue will become necessary before Report.
In moving Amendment 26 I shall speak also to Amendments 29 to 36 and 41 to 43. It is a huge group, and I will endeavour to be as brief as I can, yet do justice to all the important matters that they raise.
I spoke earlier about the new code, which readjusts the balance of interests in infrastructure between operators and site owners. The code will extend largely untrammelled powers to operate, if the Committee is not careful. The new code makes substantial changes. Operators will have new automatic rights to upgrade and share, and cannot be charged extra for changes where, to their interpretation—the wording is as yet untested—there is minimal adverse visual impact or burden on site providers.
The new code will enshrine reassignment of code rights by the operators to communication providers, with no option for site owners to negotiate new terms for existing contracts. There may be no future bids for further rents to benefit site providers, as well as operators, for new technologies as they come on stream, bringing further income and wealth to operators only.
Code rights will continue to apply on any land transfer without any requirement to register these rights. These are some of the severe implications of all these changes and demand a balance of behaviour reflecting competing responsibilities and objectives in the various rights between the parties which will continue to wish to develop their businesses. The amendments in this group also have the intention of making the code work better in the business environment.
On Amendment 26, the Government’s stated policy intent with regard to the scope of the new EEC is not to disrupt market incentives for investment in passive infrastructure by establishing a legal framework to allow compulsory access to site towns in which infrastructure providers have made a significant investment. The Government seem to look to achieve this through the Bill by developing the definition of land over which operators will have code rights that exclude “communications apparatus” in line 13, page 152. There are questions around whether this does or does not confer mobile operators with code rights over purpose-built masts provided by infrastructure providers as the drafting in line 28 of page 93 goes significantly further than this, creating the risk that non-telecom infrastructures used for fixed-line telephony will fall outside the scope of the code.
On the one hand, I am probing whether it is the Government’s intention to remove a significant proportion of sites from the scope of the code, diluting the impact of the code reforms. On the other hand, it should be made clear that non-telecom structures, such as electricity pylons, water towers, floodlights, church steeples, and so on, do not become electronic communications apparatus when an operator installs a dish or antenna on the structure and is therefore within the scope of the new code, subject to the full force of code powers.
Given the Government’s intention that code operators should be free to assign code agreements between themselves, Amendment 29, replacing paragraph 15(4), would give a better process for the fair treatment of site providers. It does not qualify the intended freedom to assign but it would establish a better process than that proposed by the Government so that, for example, the assignee would have the benefit of the rights only once a site provider is notified by the assignment. Secondly, the notice would state that there is an assignment and to whom and give an address in the United Kingdom for the service of notices on the assignee. The requirement that the address be in the United Kingdom would be consistent with other legislation, such as the Landlord and Tenant Act 1987, which makes rent enforceable against many tenants only when a new landlord has provided such an address. An address outside the United Kingdom would be problematic for many site owners and it would add to a sense that this was opaque.
Amendment 30 is proposed as an alternative to provide a better climate between operators and site providers. Paragraph 16 gives operators substantial but qualified rights to upgrade apparatus where it will have,
“no more than a minimal adverse impact”,
and to share apparatus where this does not impose an adverse burden on the site provider. That, however, could see operators simply proceeding with such plans, careless of the site provider who would only become aware of effects as they arose afterwards, so having to object only when the investment or action has already taken place. Many examples could be provided and I know that the National Trust is very concerned as to what may be interpreted as “a minimal adverse impact” if, in other people’s eyes, the apparatus could be described as a blot on the landscape.
This amendment would resolve this in a practical way, by requiring the operator to notify the site provider beforehand, so that these issues can be considered before the event. It gives a timetabled structure for the site provider to object and refer the matter to arbitration— a more appropriate forum for such an issue than a court or tribunal. Failure to meet that timetable would enable the operator to proceed with the benefit of code rights.
Amendment 31 seeks to underline the Government’s intention that the new code will initially apply only to new sites and new agreements. The Government have yet to clarify the transitional arrangements whereby agreements can be renewed over the longer term, perhaps taking 15 to 20 years to complete. There is a fear that many existing agreements will potentially be exposed to challenge, on what may be considered rather spurious grounds, in order to be superseded by new agreements under the new code. This amendment will ensure that the focus remains on rollout to new sites and increased coverage, rather than operators tearing up current contracts. This will initially avoid network disruption, protect good working relationships and provide clarity and certainty to businesses and communities.
Amendment 32 makes reference to the code of practice which Ofcom is initially consulting on, to clarify behaviour between the parties, and which we will be discussing when we consider paragraph 103. Experience in other sectors, be it the water industry or even retail supermarkets, shows that however good a code of practice may be it has no merit if it is not remembered and respected. This amendment is one of several which seek to achieve that status. It would give the code of practice default status as part of all agreements, save where, and to what extent, the parties or the court decide otherwise. It does not impose the code of conduct where the parties see parts of it as inappropriate to their specific circumstances.
Amendments 33 to 36 are intended to determine that, under the new code, consideration or price is properly based on the market and agreement, taking into account all the relevant features in the wording of the amendment, and from the fact of the date of the occupation being either before or after the introduction of the new Electronic Communications Code. The amendments refer to paragraph 23 of the schedule and are extremely complex on the issues they raise. They are intended to specify that the value of code rights and agreements still have a reference to the established market-value methodology, reversing out the no-scheme approach of the new code until any reference is needed in any court or tribunal. Under Amendments 33 and 34, any move to a new system of compulsory agreement must offer businesses certainty, while at the same time seeking to avoid dispute. These factors are listed, especially regarding future additional burdens as technology advances and greater access is required.
The proposed new code importantly affirms that the payments for rights, taken under the code, are still to be assessed as a price and not as compensation—as market value, not recognition of loss. That maintains the consistent principle that the code operates on the basis of agreement, albeit that this may on occasion be imposed. In this, we stress that all definitions of market value in professional valuation standards turn on the price expected to be agreed between willing and well-informed parties after suitable marketing and with no compulsion. It is stressed that the concept of market value excludes ransom value—a special category which also includes a marriage value for properties. Market value is the value of a property in a market, not its particular value or worth to any individual. In this case, the market value need not be the value it may have to either the operator or the site provider. This is where the schedule’s current paragraph 23(3) is confusingly worded as it imports a concept that is not market value. Paragraph 23(3) should be deleted as confusing and inappropriate. The Government’s policy, if approved, would be more clearly stated by a straightforward disregard of the use of the apparatus for electronic communications purposes.
There is no requirement for a market value to be a high price or one that always goes up. Properly functioning markets will see prices reflect their realities and so the value of some sites will be less than others and may, according to circumstances, go down. Thus, sites that can serve only distinctively small or remote areas or those with low populations may naturally have a lower value than ordinary masts, but that is to be found in the market. Ideally, the policy should, as now, be as simple as that. The consideration should be market value. The present arrangement has worked well and with little litigation for perhaps two centuries, and the core concept is an agreement—with recourse to an agreement being imposed by a court—for which the price is market price and market value. That would remain the most satisfactory answer.
However, the Bill’s proposal in paragraph 23 compromises the market-value approach to an unknown extent by a change in policy announced in May—that the assessment of market value is to be on a no-scheme basis, making it subject to an awkward series of disregards and special assumptions. The drafting needs significant improvement to assist both the parties and their valuers in applying the intended basis. Many in the sector believe that it would be more rational and practical to stay with the present basis and do not see that that impedes the development of the sector, as rents paid for masts and cables are a very small share of the operational costs of operators and assist affected owners to view the infrastructure positively.
I have already spoken about costs and their relative size in considering an earlier amendment. The valuation change would have a substantial impact on many site providers who may no longer to wish to have their land used in this way, and create issues that operators may not yet have foreseen. It may be much harder for, for example, school governors, a village hall committee or a church council to explain why they should enter into an agreement affecting their property if they are not to be properly paid for it, especially if they are aware that it may complicate future plans they may have for the structure. That issue is equally critical for those with valuable buildings offering good sites for infrastructure but for whom it can simply be an ancillary inconvenience, impeding redevelopment or even necessary repairs and maintenance. They are deterred from having code apparatus by such events as expensive and frustrating delays to critical repairs that could be needed to a building, caused by an unresponsive operator.
There is concern in professional practice about the artificiality of the assumption to be imposed by paragraph 23(4)(b) that requires the parties or their valuers to disregard the statutory limitations which the code will apply to agreements in permitting assignment or the sharing or upgrading of equipment. The effect of this is that valuers will be asked to assess the consideration payable for a site on terms that cannot exist in practice because they are not permitted under the code. This is akin to asking for a semi-detached house to be valued as if it was a detached house, but in a world where no detached house exists; or indeed, as I am advised, to value a horse, whether a racehorse or a nag, by reference to an achieved sale value for a unicorn. I have not seen a unicorn, not even in my dreams.
If agreements are effectively to be all-inclusive on these points, they should be valued as such. Developments in the marketplace may often mean that the current financial conditions or bars on site sharing in agreements are already ineffective, meaning that rental differences between the regimes may, in reality, be less marked than might have been supposed. To expressly recognise the proposed inability to bar assignment, site sharing and upgrading would remove an assumption that is not only artificial but contrary to practical and commercial reality. That would enhance transparency with the use of direct comparables and aid the functioning of the market that delivers this infrastructure.
Lord Foster of Bath (LD)
My Lords, I have been a Member of your Lordships’ House for just 14 months, so I am relatively new. That probably explains my confusion as to what exactly happened to the previous string of amendments. I look forward to the Minister’s response to them, even though they appear to have been withdrawn at a later stage—but I am sure it is all very simple.
Another surprise is that I never thought I would hear a debate in which a spokesman on the Front Bench, in this case the noble Lord, Lord Grantchester, would appear to be singing the tune of the Country Landowners’ Association. I say openly to the Minister that, on these Benches, we are broadly supportive of the new Electronic Communications Code. The noble Lord, Lord Grantchester, is absolutely right to ask a number of questions about some of the details of it, and concerns have been raised about some aspects by a number of organisations. However, we believe it is vital that the new code is brought in quickly, because we want to see an expansion of the infrastructure that will enable us to deliver the increased connectivity that this country desperately needs.
I do not want to go through all the amendments in this group in the way that the noble Lord, Lord Grantchester, did. We look forward to the Minister going through them—and the previous ones—in a few minutes. However, I want to pick up one amendment. It is probably the one that has most surprised me—the lead amendment in this group, Amendment 26. The noble Lord, Lord Grantchester, acknowledged that this was a probing amendment. But, at the same time, he made it fairly clear that he was quite supportive of what was contained within it.
On these Benches, we believe that independent wireless infrastructure providers have benefited this country enormously by investing in the development of alternative structures—water towers, pylons and so on—to make them some of the most productive telecommunications facilities in the country and improve connectivity, not least in rural areas. Our real concern about Amendment 26 is that, if accepted, it could alter investment planning by independent infrastructure providers in a way that would curtail much of the development we want to see.
I believe the issue raised in Amendment 26 was adequately addressed in a letter that the Minister sent to many of us some time ago. For the benefit of Members who do not have the letter in front of them, he said:
“Code rights can only be obtained to install apparatus on, under or over land. Where operators have invested significantly in the physical apparatus that underpins coverage they should be able to achieve appropriate commercial returns. Alternative structures that have been adapted for the purpose of delivering network coverage are essential to connectivity and there will be cases where code rights do not apply”.
He said that questions had been asked,
“about whether code rights apply to various structures such as church steeples and water towers”—
and so on. But he goes on to make it very clear when he states:
“Whether a water tower has been adapted to the extent to which it can be considered to be electronic communications apparatus will depend on the specific circumstances of the adaptation … We have established a clear and robust legal framework within which parties can resolve matters by agreement and if necessary apply to courts to resolve any disagreements”.
That is very clear—we want to protect these sorts of developments because we do not want to attack the investment that we hope will be made in the future.
That position is exactly the same as the one taken by the Labour Party Front Bench when this issue was debated in another place. Louise Haigh said:
“We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained”.—[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 165.]
I entirely agree with the Front Bench of the Labour Party in another place on this issue—but I confess that I am concerned and confused by the Labour Party Front Bench in this House. I look forward to hearing where the Minister stands on this.
Perhaps I may give the Minister notice that, having said that we are very supportive, on the next group of amendments we may have a slight disagreement—but we will have that debate a little later this evening.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, perhaps I can clear up one thing for the noble Lord. I have not been in this House much longer than he has but I was in the Whips’ Office for two years and I have a vague understanding of what is going on. The noble Lord, Lord Foster, obviously missed my thrilling answer on the last group but I responded to it and the House resumed before the Deputy Chairman called the amendment. Therefore, the amendments in that group were dealt with and we resumed the Committee stage of the Bill with the Front Bench withdrawing their amendment. That got us back to where we should be, which is with this group. Therefore, I think that everything is in order.
Amendment 26 seeks to alter the definition of electronic communications apparatus. I too was rather surprised by some of the things that the noble Lord, Lord Grantchester, said. I shall try to explain where we are on this subject, although I think that the noble Lord, Lord Foster, made my case for me. This is a fairly interesting proposal. I will take a look at what the noble Lord, Lord Grantchester, said in the cold light of day and we will obviously have discussions about it if necessary. I accept that he has made a long case, but I cannot answer it in complete detail today.
We have had many meetings with noble Lords on this subject and we have discussed whether various edifices such as water towers are apparatus. The Government are clear that the code should not interfere with incentives to invest in infrastructure. The reformed code makes a clear distinction between land and apparatus, and an operator cannot exercise code rights against another’s infrastructure. A building used solely for enclosing apparatus is appropriately defined as apparatus. This might include a small brick-built cabin that was part of a site. Permitting operators to secure compulsory access to such a building could encourage one operator to exploit another’s existing investments, and this would naturally create disincentives for future investments in digital communications infrastructure. Here, I agree with the noble Lord, Lord Foster.
Equally, a range of structures are adapted for use in providing a digital communications network. Whether a structure has been adapted so as to make the entire structure “apparatus”—rather than only part or none of it—is a question of fact and degree, having regard to what the parties have agreed, the nature of the installation and the extent of the adaption, as outlined in my letter. These are fact-sensitive questions that should be the proper subject of agreements and, if necessary, determination by the courts or tribunals. As such, I do not consider the amendment to be appropriate or necessary.
Amendment 29 seeks to do two things. It would ensure, first, that the assignor remains liable to the landowner and, secondly, that the assignee does not have the benefit of the assignment unless the landowner is given notice of it. We want to ensure flexibility for operators and continuity of service for consumers when companies go through mergers or restructuring. This amendment would frustrate that objective, which was based on the Law Commission’s recommendation that code agreements can be freely assigned. Further, the additional protection the amendment seeks to give the landowner is unnecessary: if no notice of assignment is given, the current drafting means that both the assignor and the assignee are liable to the landowner under the terms of the agreement, which is a substantial protection.
Lord Grantchester
I am very grateful to the Minister for his reply. This group hangs together as quite a difficult jigsaw of amendments. To go through them again in replying to his reply would be excessively tedious, I am sure, because they interrelate in many different ways. We are happy to look at the Minister’s reply and, no doubt, will meet later to try to understand our way through it all.
I say to the noble Lord, Lord Foster, that my brief did not come only from the Country Land and Business Association. I am glad that he received its communication, just as I did, but he may not have received the much wider range of submissions I did from many others who have to adjudicate between interests en masse, in urban and rural areas, including local authorities, health authorities and many more. If one of their buildings hosts such an apparatus, they may face many complexities in wanting to develop their operations and around the rights that operators will have in determining how that apparatus is maintained. The CLA did not endorse any of my comments in the amendments on the market value. Like Members from all around the House, it wishes the rollout of communications to proceed as fast as possible.
I merely wished to draw out some of the difficulties in the Government’s drafting. That has been achieved tonight, but I would be very grateful to the Minister if we could look at it all again to make sure there are no unintended consequences in any of the provisions. I am very glad of his clarifications and notifications—for example, on Amendment 31—which were very helpful. With those comments, I am very happy to withdraw the amendment tonight.
Lord Foster of Bath
“(e) must be notified to Land Registry, Registers of Scotland or Land and Property Services, whichever is appropriate.”
Lord Foster of Bath
My Lords, the Minister will be aware that at Second Reading I argued that there should be a public record kept of when rights over land are granted under the Electronic Communications Code. The Minister said that he was not minded to do that. He told me that,
“prospective buyers will be able to ascertain what code rights might apply to land by inspecting the land”.
If I went to see a field or a piece of land that I owned and saw nothing on it, it would not mean that there were no fibre-optic cables underneath it, and I am not sure how I would find that out by inspection. He gave me another option of,
“making appropriate inquiries before the contract”.
If I have a piece of land with nothing apparently on it, I have absolutely no idea of to whom I would start making those inquiries. Perhaps the Minister can assist me. He also said—presumably it was the basis of his reply—that the Law Commission had considered this issue, and as a result the Government were going to stay where they were, maintaining,
“the position under the existing code”.—[Official Report, 13/12/16; col. 1226.]
I therefore thought it would be a good idea if I looked at what the Law Commission said about this matter and the existing code. It said in its report:
“Paragraph 2(7) of the 2003 Code states:
‘It is hereby declared that a right falling within sub-paragraph (1) above is not subject to the provisions of any enactment requirement the registration of interests in, charges on or other obligations affecting land’”.
That is what is to be continued, according to the Minister, in the new arrangements. Yet the Law Commission said of this:
“It is not clear what this means”,
and that:
“RICS noted that: ‘the current situation, whereby Code Operators are unsure as to the correct interpretation of paragraph 2(7) of the Code, has led to some Code Operators registering their legal agreements and others deciding not to do so’”.
Following that, the Law Commission proposed a significant change to the arrangements. That appears in paragraph 2.116 of its report. In coming to that conclusion, it noted that some organisations proposed that we change the situation. For instance, Mobile Phone Masts Development Ltd said:
“There is no reason why rights created or granted should be exempt from the LRA 2002”—
the Land Registration Act 2002—and that:
“It is in the public interest for the rights/obligations to be recorded on the register”.
Some, including the Agricultural Law Association, took the view that it should go even further and that some things that currently would not be covered under the code should also be covered by land registration. Others, as the Law Commission pointed out, had a completely opposite view. The Country Land and Business Association, to which I referred earlier, and BT,
“suggested that a requirement to register would place an unwelcome administrative burden on Code Operators”.
I can see that the Minister was in a difficult position because some people wanted one thing and some wanted the other, but his solution has landed us back at the very thing that currently exists, of which the Law Commission says:
“It is not clear what this means”,
and which others say is a confused situation. In that difficult position, the Minister would no doubt look to the Law Commission’s final conclusions. I shall read two of them out and ask the Minister to tell me which of them will be registered in the Land Registry and which will not, and why he will not support my simple amendment, which would require that all rights conferred through the ECC be registered in the relevant Land Registry, depending on the system the devolved Administrations have.
The two recommendations from the Law Commission are, first:
“We recommend that where Code Rights are conferred by a lease, the revised Code should make no special provision as to who should be bound by the lease and its provisions, and should not amend or disapply the normal rules of land registration”;
and, secondly:
“We recommend that where Code Rights are conferred otherwise than in a lease, the revised Code should provide for them to bind successors in title to the Site Provider who granted them, and those with an interest subsequently derived from the title of the Site Provider, as if they were property rights”.
Can the Minister tell me which of those two should be registered and why we should not just register all of them for simplicity?
Lord Ashton of Hyde
My Lords, I start with the noble Lord’s test of which of the two should be registered. The answer is none because we do not think we should have registration of these rights. However, I accept that there are many issues about the Law Commission, which I will investigate and come back to him because I do not have all the answers at the moment. I am not by that guaranteeing that we will accept the amendment but I accept that he has made some points that deserve a closer look before Report.
The amendment proposes to include a requirement for code agreements to be notified to the Land Registry. The noble Lord will not be surprised to know that we have not changed our opinion on this. We held a consultation on the code in February 2015 and one of the issues consulted on was land registration. We concluded then that code rights should not be subject to a requirement that they are registered. This reflects the position under the existing code, which the noble Lord mentioned, which has worked effectively since 1984 and avoids creating unnecessary administrative burden.
When buying land it is usual to inspect the physical property and to make inquiries before contract to establish what burdens may be on the land that are not registered rights. These include standard checks by purchasers and conveyancers which should identify whether there are any existing code rights over the property, in the same way that when a property is bought in other circumstances the onus is on the seller to inform, and that becomes part of the contract.
However, as I have said, I accept that the noble Lord has made extra points about the Law Commission and so, on the basis that I will look at those before Report, I hope he will be able to withdraw his amendment.
Lord Foster of Bath
I am grateful to the Minister for his helpful reply that he will look at the matter further. With that assurance, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees
I should inform the Committee that if Amendment 28 is agreed I cannot call Amendment 29 by reason of pre-emption.
Amendment 28
Baroness Buscombe
“(1) Any agreement under Part 2 of this code is void to the extent that—(a) it prevents or limits assignment of the agreement to another operator, or(b) it makes assignment of the agreement to another operator subject to conditions (including a condition requiring the payment of money).(2) Sub-paragraph (1) does not apply to a term that requires the assignor to enter into a guarantee agreement (see sub-paragraph (5B)).(3) In this paragraph references to “the assignor” or “the assignee” are to the operator by whom or to whom an agreement under Part 2 of this code is assigned or proposed to be assigned.(4) From the time when the assignment of an agreement under Part 2 of this code takes effect, the assignee is bound by the terms of the agreement.(5) The assignor is not liable for any breach of a term of the agreement that occurs after the assignment if (and only if), before the breach took place, the assignor or the assignee gave a notice in writing to the other party to the agreement which—(a) identified the assignee, and(b) provided an address for service (for the purposes of paragraph 91(2)(b)) for the assignee.(5A) Sub-paragraph (5) is subject to the terms of any guarantee agreement.(5B) A “guarantee agreement” is an agreement, in connection with the assignment of an agreement under Part 2 of this code, under which the assignor guarantees to any extent the performance by the assignee of the obligations that become binding on the assignee under sub-paragraph (4)(the “relevant obligations”).(5C) An agreement is not a guarantee agreement to the extent that it purports—(a) to impose on the assignor a requirement to guarantee in any way the performance of the relevant obligations by a person other than the assignee, or(b) to impose on the assignor any liability, restriction or other requirement of any kind in relation to a time after the relevant obligations cease to be binding on the assignee.(5D) Subject to sub-paragraph (5C), a guarantee agreement may—(a) impose on the assignor any liability as sole or principal debtor in respect of the relevant obligations;(b) impose on the assignor liabilities as guarantor in respect of the assignee’s performance of the relevant obligations which are no more onerous than those to which the assignor would be subject in the event of the assignor being liable as sole or principal debtor in respect of any relevant obligation;(c) make provision incidental or supplementary to any provision within paragraph (a) or (b).”
Baroness Buscombe (Con)
My Lords, in moving Amendment 28 I shall speak also to Amendments 37 and 38.
Paragraph 15 of the new Electronic Communications Code provides protections for landlords when a code agreement is assigned from one operator to another. This might occur when an operator is bought by another company or an operator transfers infrastructure assets to another company. Amendment 28 extends these protections to landowners in Scotland. This follows extensive discussion with the Scottish Government on how to bridge the differences in land law across the United Kingdom. In applying these protections to Scotland we have removed the reference to the Landlord and Tenant Act 1995 and instead replicated the relevant provisions in paragraph 15.This improves clarity and avoids reference to a law which is applied only in England and Wales. Paragraph 15 does not affect the position of third-party guarantees that may have been given in relation to the original agreement.
Amendment 38 removes paragraph 59, which deals with what happens to electronic communications infrastructure installed on or under a road which then ceases to be a road. An unintended consequence of paragraph 59 is that it transfers the costs associated with the alteration of equipment found on a stopped-up road from the landowner to the operator. Removing this paragraph preserves the status quo arrangement that the Law Commission seeks to maintain. Amendment 37 is consequential to Amendment 38. I beg to move.
Lord Ashton of Hyde
Lord Grantchester
“Code of Practice Adjudicator
The Secretary of State must appoint a person who shall act as an adjudicator with the powers—(a) to determine the validity of complaints as to breaches of the code of practice; and(b) on finding a breach of the code of practice, to determine whether it warrants an award of compensation, costs between the parties or a penalty as the adjudicator shall deem appropriate and proportionate.Status of the Code of Practice
Compliance with the Code shall be a material consideration—(a) by the court in considering disputes referred to it under this Schedule as may be relevant to both the determination of the dispute and any ancillary matters including the award of costs between the parties; and (b) by the adjudicator in considering any question arising over the grant or retention of a licence to Operator enabling it to have the benefit of Code Rights under this Schedule.”
Lord Grantchester
My Lords, I will move Amendment 44 and my noble friend Lord Stevenson will speak to Amendments 47 and 48. Paragraph 103 requires Ofcom to ensure the preparation of a code of practice as to behaviour regarding information in negotiations and operations under this schedule. Ofcom, new to this level of detail in this sector, has commenced that process and a working party is well advanced in drafting. It is clear that the Government set considerable store by the potential of these codes of practice to lubricate the operation of the statutory Electronic Communications Code in practice. By setting out expectations on behaviour and conduct, the codes of practice are intended to address concerns that many stakeholders expressed about the imbalance of power between operators, which are usually very large corporations, and those with an interest in the site on which the apparatus is sited, who may be individuals, small businesses or local authorities.
I am reminded of the Groceries Code Adjudicator, where the Government were resistant to introducing the power to fine transgressions, believing that reputational damage was enough. I am pleased to reflect that the Government reconsidered and, in that piece of legislation, allowed supermarkets to be fined for unfair practices.
There is also a parallel in the water industry. Written in the early 1900s, its guidance is still relevant and practical today. It is very largely ignored in practice, meaning that much work results in damage to property and business. The problems arise in part because of the strength of the water companies’ statutory powers and in part because the work is increasingly carried out by contractors and sub-contractors who are either not aware of the code of practice or whose contracts do not make reference to it. Breaches of the code of practice can only be taken to Ofwat, which will occasionally uphold a complaint and issue a minor financial penalty. In practice, few complaints are made to Ofwat, and as a result, it is not seen to be worth the effort involved.
I am concerned here that we draw lessons from both these codes as we try to decide how the Electronic Communications Code can operate effectively. In the communications industry, consumers already have the benefit of a referral to one or two ombudsman schemes if telecommunication companies do not deal with their complaints, but there is no parallel scheme in place for those whose land or buildings might be used or abused by telecommunications operators and their contractors.
With the model of the Groceries Code Adjudicator in mind from a sector with similar imbalances of power, our first proposed paragraph would provide for an adjudicator to hear complaints about breaches of the code of practice, with powers to make awards for restitution or penalties. Such a forum—especially if it is, as suggested, independent and accountable to the Secretary of State—would give all the more confidence that the code might be remembered so that it can, as intended, support better behaviour.
The second proposed paragraph would make compliance with the code a material consideration when awarding licences to a code operator or determining the grant or renewal of a code agreement. I suggest that the harder it is for these issues to be referred to independent resolution, the worse the operators will tend to behave. This perspective should also apply in this sector. I beg to move.
Lord Ashton of Hyde
My Lords, we are now in our final group on the Electronic Communications Code, so I will spare noble Lords further explanation of what the code seeks to achieve. Amendment 44 is similar to Amendment 41, which we recently discussed. It seeks to create a code adjudicator to examine breaches of the code of practice and impose sanctions. I repeat that I will examine what the noble Lord, Lord Grantchester, said. However, we do not consider that a costly and resource-intensive statutory code of practice and adjudicator are necessary, for the reasons that I outlined on the last but one group.
Amendments 47 and 48 relate to points made by—
Lord Stevenson of Balmacara
The Committee may have picked up that my noble friend was at pains to say that he was speaking only to Amendment 44 and that I would give a brief introduction to Amendment 47. I can almost anticipate what the Minister will say but I will still do that.
Lord Stevenson of Balmacara
The Clerk of the Parliaments has said that is all right, so obviously it is—he is the boss.
I will probably say what the Minister was about to say: that Amendments 47 and 48 are drawn from the reports of the Constitution Committee and the Delegated Powers and Regulatory Reform Committee. Both committees stated that they took a dim view of the way in which the powers expressed in Clause 6, on page 4, suggest that it would be possible for Ministers to make and pass secondary legislation that has not even been discussed with the Ministers of the devolved Assemblies and Parliaments. I would be grateful to hear what the Minister intends to do about that.
Lord Ashton of Hyde
My Lords, it was worth hearing what the noble Lord, Lord Stevenson, said before I replied to it—although he may not agree by the end. As he mentioned, these amendments relate to points made by the DPRRC and Constitution Committee reports. I will take this appropriate opportunity to thank the members of those committees. We will be responding in full shortly, before Report.
Any amendments to devolved legislation would be related to telecommunications legislation, which is a reserved area of competence. As a matter of good practice, officials would consult with the devolved Administrations if we intended to make changes to devolved legislation. This commitment to the principle of good communication is referenced in the memorandum of understanding between the UK Government and the devolved Administrations. We will of course provide a fuller response once we have completed consideration of the DPRRC and Constitution Committee reports.
As this is the final group on the Electronic Communications Code, I will take this opportunity to assure noble Lords that there will be further opportunities for interested parties to shape the way that the new code is implemented. As I have already mentioned, Ofcom will hold a full public consultation on the code of practice that it is developing. Industry representatives have also agreed to work with DCMS to develop an industry code of practice, covering matters such as best working practices. So I hope that in the light of this, the noble Lord will be able to withdraw his amendment tonight.
Lord Grantchester
I thank the Minister for his reply and in doing so, recognise his answer to Amendment 41. On Amendment 44, I will further draw out that there are many issues involved with this code which give operators quite extensive powers to assign without recognising or even informing site owners. They could lead to many problems further down the field. At some point, a code of practice might need a body other than Ofcom, which has no experience of any adjudication in this field.
Nevertheless, the Minister has replied extensively. We will look at all our amendments and, as I said in withdrawing my earlier amendments, take due cognisance of his remarks in considering how we might propose amendments on Report. If we can secure some agreement with him to some of our more challenged considerations, it would be much the better way to proceed. We shall see how we proceed. We will have the opportunity to look at these issues again on Report. With that, I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
I am sorry that we did not have the benefit of the contribution of the noble Baroness, Lady Byford. However, we have three amendments in this group. I will move Amendment 50 and speak to Amendments 51 and 52. These are small amendments that need not detain us long. They were drawn to our attention in correspondence with the Scottish Law Commission, which keeps a beady eye on your Lordships’ work. It has been a useful source of information and helpful advice on many matters, including these. It picks up relatively straightforward, rather minor but none the less important points.
This section of the Bill, on page 6 line 5, does not specify whether representations are to be oral or written. Amendments 50 and 51 suggest inserting the word “written”. Amendment 52 would ensure that the notices issued by Ofcom contain specifications about any right of appeal. At the moment there is silence on that. Clause 8 inserts a new section into the Wireless Telegraphy Act 2006 but it does not say how appeals should be made. It should do. I beg to move.
Lord Ashton of Hyde
My Lords, these amendments relate to Clause 8, which enables Ofcom to register dynamic spectrum access service providers. Amendments 50 and 51 require representations to Ofcom about, for example, a possible breach of a registration condition to be made in writing. We do not want to constrain people from making representations in other suitable ways. Having this flexibility could enable minor infringements to be dealt with swiftly by Ofcom where appropriate. It wants to keep this flexibility. We are therefore minded to disagree with these amendments.
Amendment 52 would require a right of appeal to be specified in any notification to a DSA provider about a contravention of its terms of registration. Ofcom is already required to give the provider the opportunity to make representations about a notification before it can make a confirmation decision under new Section 53G. Decisions taken by Ofcom under Section 53G are appealable. However, the right of any notified provider to appeal to the Competition Appeal Tribunal against a decision would depend on whether the appellant properly followed the tribunal’s rules. It is for the tribunal to decide whether it has jurisdiction to hear the appeal.
Ofcom’s other enforcement powers do not require it to notify a provider of the right to appeal to the tribunal. This is consistent with the approach taken by other regulators, for example, Ofgem and the Competition and Markets Authority. For that reason, I hope that the noble Lord will be able to withdraw his amendment tonight.
Lord Stevenson of Balmacara
I am grateful to the noble Lord for his comments. I am sure that the Scottish Law Commission stayed up to listen to them and we will be getting a pigeon at any minute. In the circumstances, I beg leave to withdraw the amendment.
“OFCOM power to impose caps upon wireless telegraphy licenses
In paragraph 3 of Schedule 1 to the Wireless Telegraphy Act 2006 (information to be provided in connection with applications), at the end insert “, or(b) that the applicant owns more than 30% of the total useable mobile phone spectrum in the UK and OFCOM has a reasonable belief that the award of further licences would have a damaging impact upon competition in a given electronic communications market.””
Lord Stevenson of Balmacara
My Lords, this is an interesting issue which has been drawn to our attention, and we thought it would be worth putting a probing amendment down. I am grateful that grouped with it is a more substantial amendment in many ways tabled by our colleagues from the Liberal Democrat Benches. Both bear on much the same thing.
It is quite common in commercial arrangements to find that there are limits set on ownership and control in proportions which are often around 30%, to reflect the ways in which people might control a market. Yet the way in which the Governments of the day have set up regulations to control the spectrum has not introduced any official cap. Amendment 54 suggests that it might be time now, given the intensity of concern about how much the spectrum is valued and how it is used, to have some form of competition cap, of about 30%. This probing amendment is there to invite the Government to comment on that.
Having said that, I am sure the Minister will want to cover another point, which I think will be the subject of other amendments later. We will come back to this, but I want to flag up now that the spectrum is not a single thing—I cannot think of the right word—and its value depends on which part of the spectrum we are talking about. Lower frequencies and higher frequencies are different, so to impose a 30% limit on the spectrum that any company can own would be slightly perverse, but the issue is important enough to raise the point. Future amendments may deal with the dispersion of the higher-value spectrum among operators, particularly in mobile telephony, where there is concern—I am sure that the Minister expects us to raise this at the appropriate point in the Bill—over the current way in which spectrum has been allocated among the existing players in this field, so that the larger ones tend to have more of the higher-value spectrum. This is an issue we will need to come back to, but it is not the subject of this amendment, which deals with a general concern about the possibility of a monopoly operating within this area, which might be dealt with perfectly properly by a regulator, but where it might also help if there was a specific cap. I beg to move.
Lord Fox (LD)
As the noble Lord, Lord Stevenson, intimated, Amendment 54A comes out of the same concern, but takes a slightly different view of the problem, placing the onus on the Secretary of State rather than Ofcom. The noble Lord, Lord Mitchell, spoke about fixed and mobile convergence, and at the heart of the concern here is that we are not talking about two separate markets when we talk about broadband and wireless; with the approval of BT’s acquisition of EE, one player not only has a dominant position in fixed line but already has the lion’s share of the spectrum already allocated, at 42%. As the noble Lord, Lord Stevenson, has said, this may come up in a different place, but it is at the heart of concerns expressed here.
Clearly the two weaker players were not allowed to join together, so we have an asymmetry in the wireless market, with two strong players and two weaker operators, which adds to the imbalance of spectrum allocation. We should be aware that spectrum allocation imbalance can clearly affect prices. It could affect access and also the speed with which technologies are rolled out: a land bank, or the equivalent, could be created.
It seems that Ofcom has already recognised this issue and is seeking to limit access to one of the bandwidths—the 2.3 gigahertz—but has not covered bands in the 3.4 gigahertz range so the principle appears to have been acknowledged by Ofcom but the measure has not been fully thought through. In a sense, we are debating how much of a problem this is, given that Ofcom has acknowledged that it is a problem.
This is, therefore, also a probing amendment, and it would place a requirement on the Government, rather than Ofcom, to assess the situation and come back with a thorough review of whether this really is an issue. Clearly there is a perception, but we need to measure that perception and publish some sort of assessment of whether 30% is the right limit and, indeed, whether there is a problem at all. I therefore ask your Lordships to consider this as a way of teasing out issues that, if they are not dealt with now, will come back to haunt us much later.
Lord Ashton of Hyde
My Lords, these two amendments concern the allocation of spectrum for mobile telephone networks. There are two main issues: the percentage amount of the cap; and the role of Ofcom as opposed to the Secretary of State, as dealt with in the amendment of the noble Lord, Lord Fox.
First, on the amendment of the noble Lord, Lord Stevenson, the Government have released a considerable amount of spectrum for mobile broadband. Ofcom has just concluded a final consultation on rules for allocating it through an auction. The intention of the amendment—to ensure that Ofcom can enforce competition in the mobile market—is a worthy one. Ofcom already has the power to set appropriate rules for its spectrum licensing, taking due account of competition implications. Ofcom must award licences by processes that are open, objective, transparent and proportionate in what they are intended to achieve, without unduly discriminating against particular persons or a particular description of persons.
In principle, Ofcom could make a similar rule for its forthcoming auction to that proposed in the new clause. Indeed, it considered a number of possible spectrum caps in its consultation. The provision allows Ofcom to reject some possible results of the auction on competition grounds. Ofcom already has competition powers which would bear in such a situation. It also strikes us as unlikely that Ofcom, having determined appropriate rules for an auction, would immediately nullify the results.
Amendment 54A, from the noble Lord, Lord Fox, proposes that the Government commission an evaluation of the current usage and allocation of mobile spectrum. Ofcom already has a responsibility, when carrying out its functions, to consider competition issues and whether radio spectrum is being used efficiently. Ofcom considered many of these issues in its recent consultation on the forthcoming auction. In future, it may well wish to review the state of competition in the mobile market—perhaps on similar terms and to a similar timescale to those proposed by the noble Lord—but in our view, that is for Ofcom to decide.
Given those issues, it seems to me that the proposed new clauses do not help Ofcom to carry out its duties, and I hope that noble Lords will therefore agree not to press them.
Lord Stevenson of Balmacara
My Lords, I thank the Minister for his comments. I think we are trying to achieve much the same aim here. The judgment will be whether Ofcom has sufficient powers to achieve that shared objective. I will look carefully at what he said in Hansard but, in the meantime, I beg leave to withdraw the amendment.
Digital Economy Bill
Thursday 2nd February 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 80-III Third marshalled list for Committee (PDF, 262KB) - (2 Feb 2017)
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, it may be for the convenience of the House if those noble Lords who wish to leave do so before I call the next amendment.
Clause 15: Internet pornography: requirement to prevent access by persons under the age of 18
Amendment 54B
“( ) the overarching duty of care of internet service providers and ancillary service providers and their responsibility to ensure that all reasonable steps are taken to ensure the safety of a child or young person involved in any activity or interaction for which that service provider is responsible.”
Baroness Jones of Whitchurch (Lab)
My Lords, we all share a common purpose in wanting the new age verification process in Part 3 to be robust, trusted and effective. It is of course vital that we put in place powers to protect children from viewing inappropriate pornographic material, and we have rehearsed the arguments as to why it is important many times before in the House. We therefore believe that there should be an overriding duty of care on internet service providers and ancillary service providers to keep children and young people safe when using these sites.
The details of how this duty should be applied need to be subject to further consultation, which is what our Amendment 54B seeks to achieve. However, more substantially, we are concerned about the scale and the scope of the regulatory functions in the Bill, which to our mind have not been thought through and were not given sufficient scrutiny in the Commons. This was not helped by the fact that substantial new clauses were added to the Bill late on in the process which considerably extend the powers of the age verification regulator. The result is that Part 3 feels very much like a work in progress, with many of the usual checks and balances unresolved.
This was identified by the Constitution Committee and the Delegated Powers and Regulatory Reform Committee which, as we know, raised a number of specific concerns that we will address in later amendments. By way of example, the Constitution Committee stated:
“We question whether the House can effectively scrutinise the Bill when its scrutiny is impeded by the absence from the face of the Bill of any detail about the operation of the proposed age-verification regime”.
We agree with that point and we have concerns about the whole regulatory structure as it is currently set out in Part 3. That is what Amendment 54D seeks to address.
The amendment in the name of the noble Baroness, Lady Howe, specifies that the regulator should be the British Board of Film Classification, and it has been widely assumed that it would take on a similar classification role for online to that which it already carries out for offline. But the new, expanded role set out in Part 3 has much more extensive powers to follow up those who fail to apply age verification filters with fines and ultimately with the blocking of their sites by internet service providers. We believe that these functions are separate and should be carried out by a separate regulator. Indeed, when we recently met the Minister, Matt Hancock, he said that Ofcom was in a better position than the BBFC to handle the financial penalties proposed.
In addition, there is a need to specify who will carry out appeals and to ensure that this is a separate, independent organisation and not one that is appointed by the regulator. This point was raised by the Delegated Powers Committee and again we have tabled separate amendments on it that will come up later. Finally, we would argue that there needs to be effective oversight and supervision of the new regime to ensure proper governance and value for money. Arguably, Ofcom rather than the Secretary of State should have a role in holding both the classification and the enforcement agencies to account, as well as reporting to Parliament from time to time on progress. But of course Ofcom cannot do everything, which is an additional reason why we believe that we need to take time to allocate the different layers of responsibilities correctly.
No doubt other noble Lords, like ourselves, have received over the past few weeks representations from many bodies providing internet service provision, payment and ancillary services. They have raised concerns about the new powers in the Bill and how they will work in practice. Indeed, one of the ISPs went as far as to say that it was so concerned that it was going to redraft the whole of Part 3—so there is a major concern about how the powers are to be allocated. This is why we believe that it is important to get this right by taking more time to consult on the role and functions of the regulator or regulators and to bring a clearer set of proposals back to both Houses. Amendment 54D would achieve this objective.
We believe that we need to take extra time to get this right. It should not be left to the Secretary of State and the eventual system for protecting children, which is something we all agree with, will be much more robust as a result. I beg to move.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, with the permission of the Committee, it may be helpful if I say a few words before other noble Lords make their contributions in order to help the rest of our debate on this part of the Bill and to put on record the Government’s position on a key issue that we will be debating today.
The BBFC is going to be given powers in the Bill to give notice to payment service providers and ancillary service providers under Clause 22 and to ISPs under Clause 23 of websites that have inadequate age verification as well as prohibited material. Many noble Lords have raised concerns with me about the scope of what amounts to “prohibited material”, so let me put on record what I have been telling those noble Lords in the many meetings we have had. The Government disagree that “prohibited material” should be excluded from the regulator’s powers. We must not unintentionally legitimise all types of pornographic content as long as age verification controls are in place. Extreme pornography can involve dangerous content. The current definition of “prohibited material” in the Bill would bring parity with the offline world—material that would not be classified by the BBFC, including material that is in breach of criminal law.
The Government’s intention is to protect children from harmful content. We have listened to the arguments that in doing so, the drafting of the Bill may have unintentionally extended the powers of the regulator too far. We all share a common goal of keeping children safe and the Government will ensure that, in achieving this aim, we have a proportionate and fair impact on others who enjoy the freedoms and equalities that are important to everyone. So I can commit that we will give this further consideration in order to reach a conclusion that this House agrees is a satisfactory way of meeting our aims of protecting children from harmful pornographic content. I will be very happy to discuss this with interested Peers before Report.
Baroness Howe of Idlicote (CB)
My Lords, as I said at Second Reading, I am pleased to be speaking today on a subject that I have regularly brought before your Lordships’ House over recent years in my several online safety Bills—the importance of protecting children online, which is very much today’s subject. I have tabled my probing Amendment 55 so that the Government can set out their plans for which organisations will act as the age verification regulator for which sections of this Bill, as this is crucial to ensure the child protection provisions of Part 3 are successfully implemented.
My amendment would designate the British Board of Film Classification as the age verification regulator for the whole of this process. I know that many in this House and the other place were delighted to hear the Government’s announcement that the BBFC will be the notification regulator for Part 3, a position for which it will be formally designated later this year. I am sure we can all agree that it will bring a level of expertise to that role which will be really invaluable. The use of the term “notification” regulator, however, suggests that the BBFC will provide only part of the regulatory function and that another kind of regulator will have a role to play. Indeed, this was backed up by the BBFC, which stated in its evidence to the Public Bill Committee in another place that it did not intend to have any role in enforcement under Clauses 21 and 22 on fines and informing payment providers and ancillary service providers.
This same message is repeated in the Explanatory Notes:
“The BBFC is expected to be the regulator for the majority of the functions of the regulator (including issuing notices to ISPs to prevent access to material), but is not intended to take on the role of issuing financial penalties and enforcement notices to non-compliant websites”.
This begs an important question to which the Minister must now provide an answer. Who will be the other regulator? It is one thing to have not clarified this at the point of introducing the Bill. It is, however, quite another for the Bill to have passed entirely through one House and be well on its way through another without any update.
In asking this question, I should say that I was very pleased to see that the Government have said that the BBFC will assume the enforcement role in relation to Clause 23, which was introduced on Report in another place. This, however, still leaves questions about the enforcement regulator for Clauses 21 and 22 and how the enforcement regulator in these clauses will interact with the BBFC in its role as “notification” regulator.
In its report on the Bill, the Delegated Powers and Regulatory Reform Committee criticised the lack of information about the regulator, saying:
“The decision as to who to appoint as regulator should be taken before, not after, a Bill is introduced so that it can be fully scrutinised by Parliament. This is especially because the regulator will have important and significant powers conferred by Part 3 which include the ability to impose substantial civil penalties”.
Parliament should know who the enforcement regulator will be, since it will be able to impose these substantial penalties.
Your Lordships’ House should be informed how the enforcement regulator, assuming the Government are still planning on a second regulator, will operate with the BBFC in terms of the mechanics of deciding whether to issue a fine, an enforcement notice, or notice to internet service providers to block certain sites, and how the two regulators will produce consistent guidance for this part of the Bill. Ofcom would be an obvious option for enforcement, but last November it made it clear that it does not want the role. I ask the Minister: who do the Government have in mind? When will he bring that information to the House? I look forward to hearing what he has to say.
Lord Paddick (LD)
My Lords, I apologise to the Committee for not taking part in Second Reading. Having led on the Investigatory Powers Bill and the Policing and Crime Bill I was hoping for some time off for good behaviour, but apparently a policeman’s lot is not a happy one, even when he has retired.
My noble friend Lord Clement-Jones and I have Amendment 55B in this group. The first thing to say is that we on these Benches believe everything that can be demonstrated to be effective should be done to restrict children’s access to adult material online. We also believe that everything should be done to ensure that adults can access websites that contain material that it is legal for them to view. That is why Amendment 55B would require the age-verification regulator to produce an annual report on how effective the measures in the Bill have been in general in reducing the number of children accessing adult material online and how effective each enforcement mechanism has been. We also share the concerns expressed by the noble Baronesses, Lady Jones of Whitchurch and Lady Howe of Idlicote, on these provisions having been made somewhat at the last minute, and that they may not have been completely thought through.
The aims of the Bill and the other amendments in the group are laudable. The ideal that there should be equal protection for children online as there is offline is a good one, but it is almost impossible to achieve through enforcement alone. We have to be realistic about how relatively easy it is to prevent children accessing physical material sold in geographic locations and how relatively difficult, if not impossible, it is to prevent determined children accessing online material on the internet, much of which is free. An increasing proportion of adult material is not commercially produced.
That is not to say that we should not do all we can to prevent underage access to adult material, but we must not mislead by suggesting that doing all we can to prevent access is both necessary and sufficient to prevent children accessing adult material online, the detail of which I will come to in subsequent amendments. Of course internet service providers and ancillary service providers should do all they can to protect children, but there are also issues around freedom of expression that need to be taken into account.
Baroness Kidron (CB)
My Lords, in light of these and some later amendments, I want to raise the matter of ancillary service providers. My understanding is that social media platforms continue to argue that they do not fall within the definition of ancillary service providers and are seeking confirmation from government that they have no role to play in preventing children accessing pornography online.
I am aware that the Minister stated at Second Reading:
“The Government believe that services, including Twitter, can be classified by regulators as ancillary service providers where they are enabling or facilitating the making available of pornographic or prohibited material”.—[Official Report, 13/12/16; col. 1228.]
I was pleased to hear him say that, but I would like confirmation that it remains the Government’s position. Unless such platforms are included, I simply do not understand what Part 3 of the Bill hopes to achieve.
I am unconvinced that it is possible to remove all adult content from the purview of children, but it is imperative to make it clear to young people that viewing adult sexual content is a transgressive act and not a cultural norm, so, at a minimum, it should be as difficult as reaching the top shelf in a newsagent or being underage in a pub. That is imperative for reasons I set out in great detail at Second Reading, so I will not repeat them here but simply say that children and young people are turning in large numbers to pornography to learn about sex, with unhappy consequences. Often violent, mainly misogynistic, unrealistic adult male fantasy is not a good starting point for a healthy, happy, consensual sex life.
I would have preferred for the age verification system to be fully thought out, prototyped and beta-tested before it came to the House in the form of legislation. None the less, I agree that Part 3 is a valiant attempt to stem the flow of adult material into the hands and lives of children. In the absence of a better, more thought out plan, I support it. But if this is the path we are taking, we must be clear in our message: this material is unsuitable for those under the age of 18.
The BBFC says that it intends to take a proportionate approach to its new role and will target the top 50 adult websites as accessed by viewers in the UK. Its research shows that 70% of all those who access such sites in the UK visit the top 50. Among children, concentration among those top sites is even higher. In that respect, I understand that age-verifying 70% of adult material websites sends a clear message.
However, a brief search on Twitter, which has a joining age of 13, shows that commercial pornography is readily available, with popular accounts attracting hundreds of thousands of followers. Many of those who access pornographic social media accounts do not publicly follow them, so it is more than likely that the follower figures are dwarfed by the number of actual viewers. In the case of younger viewers, such platforms if accessed via an app leave no browser footprint that might be discovered by parents—a very attractive proposition.
If social media companies provide alternative access to the same or similar pornographic material with no restriction, surely the regulator should be entitled to take the same proportionate approach and target pornographic social media accounts with similar viewer numbers to those for adult websites. For most young people, social media platforms are the gateway to the internet. Unless they are to be included within the definition of ASPs, neither the problem of young people accessing pornography nor the ambition of setting a social norm that puts adult sexual material beyond the easy reach of children and young people will be achieved. It will simply migrate.
I note that social media platforms are not homogenous and that some, including Facebook and Instagram, already take steps to prevent pornography being posted and act quickly to take it down when it does go up. It is disappointing that not all platforms take this approach. I do not want to focus on Twitter, but noble Lords might like go to the account, @gspot1177, with its 750,000 public followers, which has been publishing pornography with impunity since 2009. Surely it is necessary to bring this into scope of the regulator. Nobody is claiming that the measures set out in the Bill will prevent 100% of pornography being seen by children and I understand Ministers’ arguments that doing something is better than doing nothing, but I am concerned that in the lack of clarity about what does and does not fall within the definition of ASP there may lie a lack of political will about holding certain stakeholders to account.
I would love to hear from the Minister whether major social media platforms including Tumblr and Twitter have confirmed to the Government how they would respond to requests from the BBFC to withdraw services from a non-compliant site—and whether his statement at Second Reading that social media platforms may be considered ASPs by the regulator still stands.
Lord Storey (LD)
My Lords, I welcome the wise words of the noble Baroness, Lady Kidron. I also want to pay tribute to the work that the noble Baroness, Lady Howe, and my noble friend Lady Benjamin have done on this area. I well remember my noble friend Lady Benjamin almost doorstepping the former Prime Minister David Cameron to get something done on this area. He agreed that action would be taken.
I spoke on this at Second Reading—not in any technical way because I am not a particularly technical person; I spoke as a head teacher of 20-odd years on the harm that pornography potentially does, and is doing, to young people. We are rightly always concerned about the safeguarding of children and young people. We put in place all sorts of safeguarding procedures, yet we seem to find all sorts of reasons why we cannot do anything about pornography. Many young lives, frankly, are being corrupted in the pure innocence of childhood as they follow an older brother or sister, a friend or a mate, who might say, “Oh, have a look at this”. Once they get involved in this, it does immeasurable harm, not only to the child but to their view of women, for example.
A young child of 12 or 13 on the internet, perhaps by accident, perhaps by a dare, perhaps encouraged by another person, watching female rape enacted—this is not something I want to be part of. I do not want a society that allows that to happen. It is important, and my noble friend Lord Paddick is right to say, that we should be effective in what we do. He also said that if children are determined they can access this, no matter what we put in place, but that is not a reason not to do something. The vast majority of children will do something. If somebody is determined to do something, they will always be able to do it. I hope that will not be a reason not to do something. I am relaxed about our having a look at this to get it right. I know it whizzed through the Commons, but even at this late stage I am relaxed about making sure that every “i” is dotted and every “t” is crossed in the interests of young people.
Baroness Byford (Con)
My Lords, I spoke at Second Reading on this aspect of the Bill. I was one of the people who said very clearly that I should much prefer not to have pornography of any sort on any website, because the world would be much better without it. The previous speaker is quite right. The influence that modern communication has on young people is devastating. In some families, it really has been disruptive and led to unfortunate consequences within them.
I welcome the Minister’s statement that they will take this away, think about it and come back again. I reiterate my dismay that again we have another very important Bill from the Commons that really has not been dealt with in the proper manner. I hope that in future the Commons will be allowed more time or will organise itself so that it can do the job it should and can do, and not leave it to this House to be the one saying, “Hang on”.
If you look at the number of amendments tabled to this one Bill, it reinforces the whole position that my noble friend the Minister must deal with, which in many cases should have been dealt with before. I am an old hand here and still feel strongly about this. I do not complain that my right honourable friends at the other end have not had the opportunity to do this—that is how the system works. However, we go on, year after year, saying the same thing and it is high time we got to grips with this. I would like to push a little further on the Minister’s response earlier that the Government will look at this: it is hugely important that they do.
I have slight concerns about Ofcom being perhaps one of those who should undertake this. In some ways, Ofcom is not always as robust as I would like it to be, which is perhaps unfair. Secondly, we certainly need to identify in the Bill before it leaves our House exactly what is to happen: who the enforcer is where there are dual splits within what we seek to do in the Bill. The Bill is hugely important and I hope that the Government will, as they have already indicated, take it away after Committee and think seriously about it. I would hate to think that some of the final detail will come through in secondary legislation, which we cannot alter. We need to get this into primary legislation. I support the comments made by other noble Lords and look forward to the Minister responding and, I hope, being able to take it away and come back, even if that means it happens a little later. It is much better to get it right later than to leave it in its current form.
The Earl of Erroll (CB)
My Lords, I will make some brief points. First, on this set of amendments I am afraid I disagree with the noble Baroness: we must get on with this. It will not be perfect on day one but the sooner we get moving the better. We have talked about this for a very long time. That is why I am not really pro these amendments.
On Amendment 55, I agree entirely with my noble friend Lady Howe. She is absolutely right to spot this lacuna: the BBFC will look at this stuff and age verification, but who will enforce it? That is a problem and I was going to raise it later anyway. She was absolutely spot on there. My noble friend Lady Kidron was also absolutely spot on about these sites. Twitter could be classified as commercial because it takes money from pornography sites to promote them. I can get evidence of that. It would be difficult for it to say that it does not promote them.
Very quickly on what the Minister said, I was going to raise under the group starting with Amendment 57 the issue of including prohibited material with the age verification stuff. We should separate protecting children from protecting adults or it will confuse things. The big danger is that if we start using this to protect adults from stuff that they should not see—in other words, some of the adult prohibited material, of which there is quite a lot out there—we run the risk of challenges in court. Everything that the BBFC does not classify because it falls into certain categories is automatically prohibited material. It is not allowed to classify certain acts. I should probably not tell noble Lords about those now as they are pretty unpleasant but they are fairly prevalent in the hardcore pornography out there. If the pornography sites are blocked from supplying adults with what they want, they will just move offshore and get round this. If they do that, there will be no point in doing age verification and we will not protect our children. That will create the first major loophole in the entire thing.
I have this from the pornographers themselves. They know what they are doing. However, they are very happy—and would like—to protect children. If we leave them alone and argue through the Obscene Publications Act and other such things as to what they must stop adults seeing, they will help block children. They are very keen on that. Children just waste their time as they do not have money to spend. At the end of the day, the pornographers want to extract money from people.
I am advised that the real problem is that prohibited material includes content that would be refused a BBFC R18 certificate. The Crown Prosecution Service charging practice is apparently out of sync with recent obscenity case law in the courts. Most non-UK producers and distributors work on common global compliance standards based on Visa and Mastercard’s brand-protection guidelines. Maybe we should start to align with that. We should deal with that separately under the Obscene Publications Act. It will be very easy for the BBFC, the regulator or the enforcer to tell what does not have age verification on the front. That is yes/no—it is very simple. The trouble is that if we get into prohibited material, it will end up before the courts. We will have to go through court procedures and it will take much longer to block the sites. I would remove that from here. I shall leave my other comments to a later stage.
Lord Ashton of Hyde
My Lords, I am grateful for those contributions. They address some very important issues, some of which we will deal with now and some of which we will deal with later during the progress of the Bill. To start at the end, the noble Earl, Lord Erroll, made some interesting points regarding the statement that I made. We absolutely acknowledge some of them. I have listened to his suggestions. Our focus here is to protect children. That is what this Bill is for. That is what our manifesto commitment was. When he sees our suggestions, I hope that he will be able to contribute to the debate on Report—but I have noted everything he said.
The introduction of a new law requiring appropriate age verification measures for online pornography is a bold new step. It represents the first stage of ensuring that commercial providers of online pornographic material are rightly held responsible for what they provide and profit from.
Amendment 54B would require the regulator to publish guidance about the overarching duty of care on internet service providers and ancillary service providers, and their responsibility to ensure that all reasonable steps are taken to ensure the safety of a child or young person involved in activities or interaction for which the service provider is responsible. The purpose of our measures is to protect children from pornographic material. Seeking to stretch the framework further to regulate companies on a different basis risks the delivery of our aim. However, that is not to say that we want to ignore the issue. We take the issue of child safety online seriously and engage intensively with the industry through the UK Council for Child Internet Safety to ensure that robust protections are in place.
The Government expect industry to play a leading role in internet safety provisions, as it is best placed to offer safety and protection to children and young people. We know that it is already doing this and has default protections for under-18s, including the use of parental controls and tools to allow users to flag content, protect user privacy as well as educate users on staying safe with information and advice. We will have further opportunities to discuss the role of the industry, including social media and internet service provider filters, later in Committee.
Amendment 54D seeks to introduce a new clause with the requirement that the Secretary of State must consult on the role of the age verification regulator. The clause further seeks that the Secretary of State must lay before each House of Parliament a report on the results of the consultation and the Secretary of State’s conclusions, with any appointments to be subject to approval in each House. The introduction of the measures requiring appropriate age verification for online pornography follows public consultation. We asked about the powers that a regulator should have and there was strong support for a number of responsibilities that we have introduced. The passage of this Bill has provided an important opportunity for debate on this and we have seen the introduction of an important new blocking power for the regulator, which we shall discuss later.
We are grateful to the DPRRC and the Constitution Committee for their reports, which a number of noble Lords mentioned. They made a number of recommendations about the designation of the regulator and how the regulator should fulfil its role. We are carefully considering those and will publish our response before Report.
Amendment 55, in the name of the noble Baroness, Lady Howe, would specify that the Secretary of State is to designate the British Board of Film Classification as the age verification regulator. As the Committee will know, Clauses 17 and 18 provide for the designation of the regulator and we intend to designate the BBFC to carry out most—as the noble Baroness, Lady Howe, reminded us—of the functions of the regulator. Indeed, some noble Lords may have seen the BBFC’s recent presentation to the Children’s Media and the Arts APPG.
Baroness Jones of Whitchurch
My Lords, I thank the Minister for his opening statement and for his comments now, but I do not really feel that he addressed our concerns about the overarching architecture of the regulatory structure: where the power should lie, the detail of which regulator has which functions and so on, and whether there is a need for someone to oversee the whole regime.
I also thank the Minister for his offer of further discussions about this, but as a number of noble Lords have said, it is rather frustrating that the information and debate that we ought to be having here in Committee is being shifted backwards so that we will have it in correspondence or perhaps offline before Report. Normally, we would expect the government proposals to be in front of us here, so that we can debate them in detail. As the noble Baroness, Lady Byford, said, once again we find that the debates that we should be having in Committee are happening on Report, which makes it very frustrating for everybody involved. That also applies to the reports from the Delegated Powers Committee and the Constitution Committee. With respect, the Government have had those documents for several weeks now, and I would have thought it would have been possible to have given us a response as to how the Government intend to react to them before today’s debate. I find this whole process for considering Part 3 very frustrating. Notwithstanding that, I know that the Minister means well and I am sure we will all want to take up his offer of further discussions, if that is possible.
The noble Baroness, Lady Howe, made a very good point about who the other regulator will be, and I was not sure that the Minister really answered it. Again, if we are going to get down to putting in the Bill that the BBFC will have part of that function, it is right that we should also say who will have the other part of it; otherwise, the Bill is not going to make sense. So I have an ongoing sense of frustration. Some of the issues that a number of noble Lords have raised will spill into some of the discussions that we will have on other amendments and will no doubt come up several times, regrettably, although maybe that is just because of the way that we have structured some of the amendments.
I agree absolutely with the noble Baroness, Lady Kidron, that we need a much clearer definition of ancillary service providers. To the outside world, that is a non-phrase really, but it means either so much or so little, and we just need some clearer definition of what it means in terms of the responsibilities of social media providers. It may well be, as I think the noble Lord was suggesting, that some of them have different responsibilities from others, but we need that debate. It is a really important debate, since, as the noble Baroness was saying, children are accessing this material and there do not seem to be any real proposals in front of us for how we are going to get a grip on that. That is perhaps something that we can return to later as we debate other provisions in Part 3.
Finally, I think the Minister strayed into the whole issue of what is prohibited material. Again, we have amendments on that later and will return to it when those are discussed, but I thought that we had made more progress on that than the Minister is now suggesting. I know that a number of noble Lords had a meeting with Matt Hancock, the Minister, a couple of weeks ago, and I thought that we were edging towards a new form of words, but it does not seem that this is before us from what the Minister has said. So again, we have a level of frustration about this.
Lord Ashton of Hyde
Let me confirm that I hope we are edging towards some agreement; it is just that, as the noble Baroness will be aware, there are times when one can announce these things and there are times when one cannot. I agree with her that it is somewhat frustrating—in the same way that it is frustrating when, though we have had the Explanatory Memorandum since the Summer Recess, amendments appear at the last minute. It is a frustrating process.
Baroness Jones of Whitchurch
Well, this is because the discussion has gone on over the summer, with the Government and with other people. We have been seeking clarification, which we have not had, which is why we finally put down amendments. Anyway, this debate is going to continue, I think, through the course of Part 3. In the meantime, I beg leave to withdraw the amendment.
“( ) The Secretary of State shall by regulations made by statutory instrument lay guidance for the purposes of subsection (3) before both Houses of Parliament.”
Baroness Jones of Whitchurch
My Lords, this returns to some of the more detailed proposals of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee. As I have already said, when we first looked at Part 3, we were immediately concerned about the lack of oversight and accountability of the powers and functions of the age verification regulator or regulators. So we were not surprised, when the reports of the Constitution Committee and the Delegated Powers and Regulatory Reform Committee were published, that they very much echo our concerns. For example, the Constitution Committee said:
“We are concerned that the extent to which the Bill leaves the details of the age-verification regime to guidance and guidelines to be published by the as yet-to-be-designated regulator adversely affects the ability of the House effectively to scrutinise this legislation. … The House may wish to consider whether it would be appropriate for a greater degree of detail to be included on the face of the bill”.
This is what we are debating and grappling with today.
The Delegated Powers Committee raised a number of more detailed criticisms. For example, it was concerned that the Bill leaves it to the Secretary of State to determine who the regulator or regulators should be, and said that it is inappropriate for the regulator to then decide what the appeals mechanism should be. It flagged up the need for this to be an independent body. It was deeply concerned that the regulator would be left to draw up its own guidelines on the circumstances in which internet sites would be deemed to be publishing pornographic materials. It went on to say:
“We consider it objectionable as a matter of principle that a regulator, who is to be clothed with extensive powers to impose fines and take other enforcement action, should itself be able to specify how key concepts used in clause 15(1) are to be interpreted”.
It also noted that further broad discretion to the regulator was being granted to produce guidelines on the application of those financial penalties. In all these areas it therefore recommended that the regulator’s guidelines should be laid before Parliament and subject to the affirmative process. In the absence of a positive government response to these recommendations, we have been helpful by setting out a number of amendments that aim to achieve that desired outcome.
So Amendment 54C would require the guidance on the types of arrangements for making pornographic material available, and circumstances in which it is judged to be commercial, to be laid as SIs before both Houses. Amendment 55A specifies that the Secretary of State should make regulations for a clear appeals procedure which would come before both Houses, and makes it clear that the appeals regime should be independent. We are also supporting Amendments 69 and 229B, in the name of the noble Lord, Lord Paddick, which aim to achieve a similar outcome.
Amendment 56A would require an SI on the arrangements for issuing enforcement notices to those who contravene the age verification regime. Amendment 62A would require the guidelines on the blocking of access to sites via payment providers and ancillary service providers to come before both Houses in the form of SIs. All these proposals are drawn from the recommendations of the Delegated Powers Committee.
I have also added my name to Amendment 66, in the name of the noble Lord, Lord Paddick. We believe that the power to block sites, while important as an ultimate deterrent, should be imposed proportionately and with careful scrutiny. The current wording of Clause 23 allows for the regulator to give a notice to an internet service provider that it should block non-compliant sites so that the offending material cannot be accessed. The clause also specifies that the regulator should inform the Secretary of State of its intention to give such a notice. We do not believe that that is the right mechanism, and it does not provide enough independent scrutiny of the decision. This is why the amendment requires a blocking injunction to be initiated by the Secretary of State in conjunction with the regulator.
Lord Morrow (DUP)
My Lords, when I spoke at Second Reading on 13 December, I addressed the enforcement provision in Part 3, and want to do so again today. I warmly welcomed Clause 23, as have other noble Lords, which the Government introduced on Report in another place, and I continue to do so.
Clause 23 is a robust provision and I believe that it would be far more effective than the proposal in Amendment 66, tabled by the noble Lords, Lord Paddick and Lord Clement-Jones, which would replace Clause 23 with one entitled “Court orders”. The truth is, as I shall explain when speaking to amendments in the next group, that there are real problems with the enforcement mechanisms provided by Clauses 21 and 22 of the Bill, especially in relation to websites based outside the United Kingdom. This has always been a special concern, because the vast majority of online pornography accessed from within the UK is accessed from sites based in other jurisdictions.
The failure of Clauses 21 and 22 to provide credible enforcement mechanisms for the age verification requirement in Part 3 was highlighted very effectively in another place by parliamentarians from across the political spectrum. The critical thing about Clause 23 is that it gives the age verification regulator the power to enforce the age verification check provision without delay. The knowledge that, regardless of where in the world the site is based, it can be blocked by the UK age verification regulator will give those sites a strong incentive to introduce robust age verification. Amendment 66, by contrast, would place this in great jeopardy.
I want to raise three major problems with Amendment 66. First, it causes delay in the sense that, if it were to become law, we would then have to wait for the Secretary of State to introduce regulations, without which the age verification regulator would have no power to initiate IP blocking. Secondly, Amendment 66 makes the provision of these regulations, and thus the provision of IP blocking, entirely optional. If the Secretary of State does not get round to producing the regulations, there will be no IP blocking at all. Thirdly, in depending on a court injunction process, this amendment apparently prefers a very much slower, more expensive and more cumbersome mechanism, which websites will know cannot be used very often. This will give them hope that they can carry on without age verification checks because the chances of their being caught will be much less. Of course, the existence of the current Clause 23 powers does not mean that those powers will be used frequently, but the fact that websites will know that they could be deployed quickly and easily will make them much more wary about taking such risks, and will therefore keep children that much safer.
In setting out these objections, I make two other points. First, I understand the argument that there is a copyright precedent for the use of court injunctions, but the idea that we should therefore necessarily follow it is not remotely compelling. There was once a time when injunctions were not used in relation to copyright, but—rather than saying that there is no precedent to act and therefore we should not act—the decision was made that we should act and, in the case of copyright infringement, the use of injunctions was appropriate. Today, though, we are not dealing with copyright infringement; we are dealing with something quite different, which has a concern for child protection at its core. In this context, the mechanism set out by the Government in Clause 23 is more effective and much more appropriate. Secondly, if Amendment 66 is based narrowly on a civil liberties concern, I would have to say that, quite apart from the fact that this concern has to be balanced with a concern for child protection—which, in my view, Amendment 66 does not manage to achieve—it is important not to lose sight of the fact that any decision on the age verification regulation could be judicially reviewed.
When faced with a relatively robust provision of an enforcement mechanism for age verification that would help keep children safe, Amendment 66 with its delays and optional, rather than mandatory, standing cannot but be seen as an attempt to weaken the child protection provisions in the Bill, which I find deeply disturbing. Part 3 of this Bill entered your Lordships’ House as a robust and progressive measure placing us at the cutting edge of child protection online. If we were to replace Clause 23 with Amendment 66, it would leave us much weaker and—in the sense that websites would know that they could risk never being held to account for not having age verification checks—fatally compromised. I believe that this is misjudged, misconceived and mistimed. I very much hope that the Minister will stand by Clause 23 and oppose Amendment 66.
Lord Clement-Jones (LD)
My Lords, I am absolutely delighted that we have had the views of the noble Lord, Lord Morrow, about my amendment before I had a chance to speak to it, but maybe that’s life—he has given me the benefit of his views before I have set my own on record. I thought that the noble Baroness, Lady Jones, set out extremely well the frustrations of those of us who, in the words of my noble friend Lord Storey, are very keen to make sure we get the right shape for this part of the Bill. There is absolutely no difference between us, in that we wish to see Part 3 be as effective as possible in preventing access to child pornography. We have been debating for only an hour and it is quite clear that this part of the Bill is worryingly embryonic.
Lord Maxton (Lab)
My Lords, just for the sake of clarity, the noble Lord used the term “child pornography”, which is not the purpose of the verification. Verification is to stop children accessing pornography—let us get that absolutely right and on the record.
Lord Clement-Jones
I am grateful to the noble Lord, Lord Maxton, for that intervention. He is entirely correct—I misspoke. We are also grateful to the noble Baroness, Lady Jones, for highlighting that the Constitution Committee and the Delegated Powers and Regulatory Reform Committee both pointed out considerable flaws in the way this part of the Bill is constructed.
In particular, I want to speak about the lack of appeal mechanisms. The Delegated Powers and Regulatory Reform Committee said:
“We consider it inappropriate for the important question of appeals to be left to ‘arrangements’ made by the regulator, subject only to the approval of the Secretary of State, without any type of Parliamentary scrutiny”.
The committee was not the only one that made such comments. Interestingly enough, even the UN Special Rapporteur has commented on this:
“Moreover, I express concern at the lack of judicial oversight with respect to the power of the age-verification regulator to shut down websites that do not comply with the age-verification requirement. Any legislation restricting the right to freedom of expression and the right to privacy, as well as any determination on the shut down of websites must be undertaken by a body which is independent of any political, commercial or unwarranted influence in a manner that is neither arbitrary nor discriminatory”.
That is fairly powerful testimony.
There are a number of different ways of achieving an appeals mechanism. The first mechanism, to which the noble Lord, Lord Morrow, takes such considerable exception, is to have a judicial process at the beginning, before any website blocking can take place. The other is to allow an appeal after a website has been blocked. With regard to the appeal afterwards, at the time the amendment was drafted it was thought that the BBFC would be the age verification regulator, and we very much welcomed its involvement. However, it has now become clear—perhaps “clear” is not the adjective I should use; rather, it appears to be emerging—that the BBFC will not be the only regulator involved in Part 3.
When Amendments 69 and 229B were drafted we tried to make the new form of appeal very similar to the kinds of appeal mechanism that the BBFC uses for the purposes of the Video Recordings Act. In fact, most of the rubric in Amendment 229B comes from the part of the BBFC website that demonstrates the system of appeals on certification and so on. That seemed a sensible and reasonable way of proceeding, on the basis that the BBFC would be the age verification regulator for the purposes of Clause 23. One may wish to adopt a different form of appeal if that is not the case.
The second approach, which the noble Lord, Lord Morrow, objects to so strongly, is set out in Amendment 66. That is obviously a mechanism designed to make sure that before the very serious step of website blocking is taken, a certain procedure is gone through, ensuring that it is a last resort, and that there is proper oversight of the way in which the age verification regulator has conducted itself. That, too, seems an entirely reasonable approach.
What we are all looking for is an indication from the Government that they accept the need for this kind of appeal mechanism, whatever it may be, and that we will be able to have a look at it on Report. I should point out that we finish our fourth day in Committee next Wednesday, after which we break up for half term, and then come almost straight back to Report stage. There is very little time for much debate and discussion about these matters. This is one of the real issues, so I hope the Minister will ensure that the discussions start immediately and that, as the noble Baroness, Lady Jones, asked, the Government will respond quickly to the report of the Delegated Powers and Regulatory Reform Committee, and to the Constitution Committee’s report. Otherwise we will all remain in the dark until the Minister decides to enlighten us on 22 February.
The Earl of Erroll
My Lords, I put my name down to one of these amendments because I wanted to talk about appeals. The reason for that is very simple and comes back to what I said earlier. I do not think there should be any question about there being no age verification. That should be almost an absolute offence: if there is no age verification, a site can be blocked, just like that. If the relevant people want to make an appeal, they can do so later and make it as complicated as they like. The main issue has already been raised and I agree entirely with the noble Lord, Lord Morrow, that Clause 23 is ideal. I entirely agree with the point about the foreign sites. They are not going to do anything if we do not block them. They will just mess around and children will get access to adult pornography for goodness knows how long. We need to be able to block immediately sites that do not have age verification.
I refer to appeals as we are muddling up the question of what is pornography with that of what is material that adults are not permitted to view. We need an appeals mechanism as we are going to get wrapped up in the lacunae and the mismatches between the Obscene Publications Act, the court cases and everything else, as I said earlier. We can see a Lady Chatterley-style case going through and taking years. In the meantime, all the non-age verified sites have to do is to keep appealing or whatever. That is not going to work. If we are going to include what is permitted for adults to view in this part of the Bill, we need an appeals process for that, but not an appeals process if the relevant sites do not have age verification in relation to potentially pornographic material. I will talk about that when we discuss the group of amendments commencing with Amendment 57.
Baroness Benjamin (LD)
My Lords, first, I thank the Minister for his opening remarks at the beginning of this debate. I was pleased to hear that the Government are in listening mode as we work our way carefully through this Bill.
When we speak about the crucial subject of the enforcement of the age verification provision, it is vital to remember that we are talking about how we ensure that children and young people are kept safe. All the evidence is that early exposure to pornographic material can be extremely harmful to children. The Economist reported that given the view that sexual tastes are formed around puberty,
“ill-timed exposure to unpleasant or bizarre material could cause a lifelong problem”.
As I repeatedly say, childhood lasts a lifetime.
There is evidence that pornography can lead to unrealistic attitudes to sex, damaging impacts on young people’s views of sex and relationships, putting pressure on how they look or influencing them to act in a certain way. All of that reminds us of the context in which we are having these discussions on the finer points of enforcement. With this context in mind, we need to make sure that the age verification provisions in Part 3 are backed up with the most effective means of enforcement.
We have heard noble Lords set out why they think Amendment 66 would be better than Clause 23, but does it really stand scrutiny? There is a concern about the delay that would result from Amendment 66. Quite apart from the fact that requiring the age verification regulator to enforce the age verification requirement through court injunctions would be much slower and much more expensive than the procedure under Clause 23, there is the fact that Amendment 66 would further delay the provision of effective enforcement, and therefore child protection, through the requirement that IP blocking would take effect only if the Secretary of State at some future point decides to make regulations allowing this. In this regard I am particularly concerned that the drafting of proposed new subsection (1) in Amendment 66 implies that the Secretary of State can consider making regulations only when the BBFC considers that there is an actual person in contravention. The BBFC cannot be ahead of the game and will be on the back foot while it waits for the regulations to be made, if they are to be made at all. This does not make our children and young people safer. I am also concerned that Amendment 66 does not provide legal clarity for ISPs at this stage of the Bill on whether IP blocking will be required and, if so, how that will need to be delivered.
While Amendment 66 does not provide certainty, Clause 23 sets out very clearly its central requirement in subsection (2)(c) that an ISP must,
“prevent persons in the United Kingdom from being able to access the offending material using the service it provides”.
It sets out when that would be required in subsection (1), how it would be implemented in subsection (2) and the obligations on the ISPs in subsection (8). The BBFC knows what it can do; the ISPs know what will be expected of them; and the pornographic websites will be clear that their sites might be blocked if they do not comply with Part 3. In comparison with the much weaker Amendment 66, Clause 23 is so effective that exchanging them would fundamentally weaken the child safety provisions in the Bill. That would be a real tragedy.
Why are we making exceptions for porn merchants? We have had a system in place in the UK for dealing with child abuse images for over 20 years. It is the envy of the world. It has never required prior judicial authorisation. Let us be clear: the Internet Watch Foundation, which runs the system, could at any time be brought to court to explain an action or decision it has taken, because it is subject to judicial review. Not only has the IWF never lost a judicial review case, no one has ever taken one against it. We get rid of terrorist material without requiring any judges or courts to get involved and I have never heard any criticism of that system. But if we are talking about protecting children against porn—oh no. Everything slows down, everything becomes more expensive and we have to get a judge and lawyers involved, because it is suggested that, uniquely, we need prior judicial authorisation.
However, the age verification regulator will have an appeals system. Every decision the regulator takes can be made the subject of a judicial review. If the regulator gets taken to court and loses all the time, perhaps we would need to look at the provisions again, but I have absolutely no reason to believe that would be the case. Therefore I think that Amendment 66 should be rejected, because the material we are talking about here is extremely harmful to children and we want it out of sight as quickly and simply as possible. I am sure that no one in this House would want their children or grandchildren ever to be exposed to or damaged by this vile material. Our overworked courts and judges have enough on their plates. We simply do not need to drag them into this on a routine basis. Let us put our children’s well-being and protection first. I very much hope that the Government will stand by Clause 23 and reject Amendment 66.
Baroness Howe of Idlicote
My Lords, like the noble Baroness, Lady Benjamin, I rise to speak against Amendment 66, which in my judgment would seriously undermine the scope for Part 3 of the Bill to be enforced. I have campaigned for child safety online for many years and am far from reassured that the amendment will deliver on that objective. I have also raised repeatedly concern about the quantity and type of pornography accessed in the UK but based in other jurisdictions. I am very pleased that the Government have recognised that this is a significant issue. However, without being able to ensure that foreign websites take the action that is required under Part 3, in practical terms we will be no further forward.
This is no theoretical discussion. In its evidence to the Public Bill Committee in the other place, the British Board of Film Classification said that it planned to target regulation at about 50 sites and that it does not expect any of these to be in the UK. Clause 21 sets out fines but is far from clear about what the Government can do if a site in another jurisdiction refuses to pay a fine; your Lordships can come back to that when we debate the next group of amendments.
Clause 22 has a better international reach but it fails in a number of different scenarios relevant to the discussion on Clause 23: first, if a site offers free pornography; secondly, if it does not use conventional credit cards but relies on payment methods such as bitcoin; and thirdly, if the website does not use a UK-based ancillary service provider. These very brief statements highlight the need for another enforcement option for foreign websites, and I am pleased that many Members in the other place agreed. I commend the work of Mrs Claire Perry, the honourable Member for Devizes, who had the support of 34 MPs from seven parties for her amendment, which had a similar objective to Clause 23. I also congratulate the Government on responding constructively with the introduction of Clause 23.
For Part 3 to be effectively enforced, it is critical that foreign sites know that the UK regulator could block them. The Digital Policy Alliance, in its briefings on the Bill, said that that there would be a major loophole in the Bill without an IP-blocking option. To this end, the proposals in Amendment 66 are deeply problematic. My noble friend Lord Morrow has already mentioned concerns about delays arising from the need for the Secretary of State to produce regulations and the question of whether he or she will use the power. On top of this, court injunctions are expensive and cumbersome, and every website would know that they could be used only very occasionally, which could tempt foreign sites accessing the UK to risk not bothering with age verification.
I am also concerned that Amendment 66 would undermine the admirable work the Internet Watch Foundation does on removing child abuse images. I understand that if blocking of pornographic and prohibited material should require court injunctions, it will form a very difficult precedent for bodies such as the foundation, which help to keep our children safe. If it had to use a court injunction every time it requested that a page should be taken down, that would greatly limit and inhibit its capacity and as such would be a grave and very serious mistake.
By contrast, Clause 23(1) allows the BBFC to use IP blocking, after notifying the Secretary of State, from the day Part 3 comes into effect. The BBFC may need to use this power early into the Bill’s implementation if it cannot trace a foreign website or if the website is unresponsive and does not use credit card payments, which might be blocked under Clause 22. There will be no delay as to when this enforcement power can be used. Secondly, it will give the BBFC the power to ask ISPs to block sites when they need to. It is not saying that they must use this power but that they can. There will be no delay or the expense of going to court to get a blocking injunction. Thirdly, there will be no negative impacts on the Internet Watch Foundation and the admirable work it does on removing child abuse images.
In a context where the majority of online pornography accessed in the UK comes from websites based in other jurisdictions, the provision of a robust and flexible IP blocking mechanism is central to the ability of this legislation to enforce the age verification provisions that are at its heart to keep our children safe. To swap Clause 23 for Amendment 66 would not reflect well on us. In closing, I warmly congratulate the Government on Clause 23 and hope that they and the Minister will stand resolutely by it and against Amendment 66.
Lord Ashton of Hyde
My Lords, this has been an important and interesting debate—I can tell that by the number of Peers who are arriving to hear my response. I also appreciate very much the offer of help given by the noble Baroness, Lady Jones. I have listened carefully to the arguments and again I acknowledge that we are not able to give our answer on the DPRRC’s report, but as the noble Lord, Lord Clement-Jones, said, it is very important to get it right and we will produce the response soon.
The age verification regime was designed to provide a proportionate and practical response to the very real problem of the easy availability of internet pornography to children, and we need to bear that in mind when considering this issue. Amendments 55A, 69 and 229B are concerned with appeals. The BBFC has a strong track record in running the system of classification, including a two-stage appeals process which includes an appeal to an independent authority. We understand the desire to specify in detail in the Bill what an appeals process must look like for what is undoubtedly a serious matter, but we are satisfied that the BBFC is in a strong position to develop and administer a fit-for-purpose appeals process. Clause 17 specifies that the Secretary of State may not designate the regulator until satisfied that arrangements will be maintained by the regulator for appeals by the key persons involved in the regulatory framework, as set out in Clause 17(4)(a) to (e). As the noble Baroness, Lady Jones, said, the DPRRC has made some well-considered recommendations on appeals that we are considering and will be responding to before Report.
Amendments 54C, 56A and 62A provide that the Secretary of State must, in regulations made by statutory instrument, lay guidelines before each House of Parliament on different areas of the regulatory framework. The internet, as we all know, is a fast-changing area and the legislation has been drafted with the necessary flexibility to create a proportionate regulatory framework. For example, it will be for the regulator to publish guidance about ancillary service providers. I have also noted the recommendation of the DPRRC on these matters and I can assure noble Lords that we are considering it carefully before responding.
On the issue of ISP blocking, government Amendment 67 ensures that the regulator must not direct an ISP to block a non-compliant site should that be detrimental to national security, the prevention or detection of serious crime, or an offence listed in Schedule 3 to the Sexual Offences Act 2003. We believe that it is right that the actions of the regulator in seeking to protect children from pornographic content should not have unintended consequences for the work of law enforcement and the security and intelligence agencies in combating serious crime and protecting national security. I am confident that the industry will take a responsible position and therefore envisage that the regulator will need to use this power only sparingly. However, where it does need to be used, I would suggest that the regulator would never wish to be in a position where it might have an unintended impact on efforts to ensure public safety.
The provision provides an important safeguard for circumstances in which a site might form part of an investigation. The Government and the regulator will agree arrangements for how the deconfliction process will take place. This is an important step towards ensuring that the regulatory regime functions in a successful way and giving the regulator a framework in which to succeed.
Amendment 66 tabled in the name of the noble Lord, Lord Paddick, and other noble Lords brings forward blocking by court order. We recognise that providing the regulator with the power to direct internet service providers to block content is a serious step, but the conflicting views of noble Lords in the debate show that this is a difficult area to get right. We have always been clear that we want to build an effective regime. This is fundamentally different content to regimes where court orders are used. As I have said, and the noble Baroness, Lady Jones, agreed, we envisage that the regulator will need to use this power only sparingly. However, the cost and process of the court order procedure would place an undue burden on the system We know that the court order process for copyright, for example, is not without issues, and unlike copyright where the individual is seeking a court order, in this case there is a regulator with expertise in classification.
It is important to note that our regime is about encouraging compliance by the industry. Giving the regulator the power to direct internet service providers is the proportionate and right approach to ensuring that children are not inadvertently exposed to harmful pornographic material. With that explanation, I hope that the noble Baroness will withdraw her amendment.
Baroness Jones of Whitchurch
My Lords, I thank all noble Lords who have contributed to this discussion. I say to the noble Lord, Lord Morrow, that we are all trying to balance child protection and civil liberties; that is the issue we are trying to resolve. Indeed, there is no black-and-white answer and it may well be that we will need to have further discussions. But I remind noble Lords that the Delegated Powers Committee said that it considered it objectionable for an unspecified regulator—people have talked about it being the BBFC but I do not think it necessarily will be—to have so much power to impose fines and take other enforcement action. We need to look again at how we can ensure some other oversight of those powers. Amendment 66 would provide a legal structure for all that, and we still feel it would provide the certainty that does not exist under Clause 23. Further, it would provide a degree of independent oversight, which Clause 23 as it stands does not.
I say again that the ISPs caught in the middle of all of this are very concerned about the way Clause 23 is worded. They feel that they will be caught in the middle of legal battles, and it may well be that whatever we decide, these matters will end up in court anyway. Given that, the more legal clarity and specification we can put in the Bill, the better, because that will help everyone to understand their rights. Some noble Lords have also queried the appeals process, but it is important to spell out not only what that process should be, but that it should be independent. Again, our amendments seek to achieve that.
I know that the noble Lord has said that he wants to come back to this when the more detailed response to the Delegated Powers Committee’s report has been produced. I hope that our amendments have been helpful and that they may provide a working copy from which he can put his ideas together. In the meantime, I beg leave to withdraw the amendment.
Digital Economy Bill
Thursday 2nd February 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 80-III Third marshalled list for Committee (PDF, 262KB) - (2 Feb 2017)
Lord Morrow
Lord Morrow (DUP)
My Lords, I wish to speak to Amendments 56, 58 and 65, which stand in my name and that of the noble Baroness, Lady Howe of Idlicote. At Second Reading, I made clear my concerns about how Part 3 would be enforced. Given the wide-ranging scope of the Bill, I did not expect to get detailed answers to my questions when the Minister wrapped up the Second Reading debate on 13 December. However, I am disappointed not to have received any subsequent reassurances from the Minister about my concerns and I therefore raise the same points again today, in the hope of receiving some concrete answers.
Part 3 of the Bill relies on three enforcement mechanisms, one of which is IP blocking, in Clause 23, which I support but will leave others to discuss. I am concerned about the other mechanisms, which many hope will be used before IP blocking is even considered. My Amendment 56 is to Clause 20, which allows the age verification regulator to impose a fine of either a maximum of £250,000 or 5% of the qualifying turnover. How will this power operate if the website which is not in compliance with the age verification requirements of Clause 15 is based outside the UK? I am not the only noble Lord to have this concern. At Second Reading, the noble Baroness, Lady Benjamin, said that she was concerned about how the Government would be able to ensure that overseas sites would pay these fines. The noble Earl, Lord Erroll, with all his experience chairing the Digital Policy Alliance, also said that:
“One of the things that became apparent early on was that we will not be able to do anything about foreign sites”.—[Official Report, 13/12/16; col. 1214.]
As it seems unlikely that the Government will be able to collect fines from individuals outside the United Kingdom, my probing amendment, Amendment 56, would make that position explicit by ensuring that fines can be imposed only on someone resident in the UK. I would very much like to be proved wrong, but there is no evidence yet as to how this policy will be successfully enforced.
Baroness Benjamin (LD)
My Lords, I wish to speak on my two amendments in this group. Amendment 63 relates to the guidance that the age verification regulator may issue under Clause 22(7). It would make publishing this guidance mandatory rather than discretionary. It has been noted by the Delegated Powers and Regulatory Reform Committee that the regulator has extensive powers to issue guidance under Part 3—that is, in Clauses 15(3), 21(9) and 22(7). The guidance required in Clauses 15(3) and 21(9) is mandatory, but in Clause 22(7) it is discretionary.
The effectiveness of Clause 22 is central to the Government’s enforcement strategy. It is great that they want to disrupt pornography websites that are not in compliance with the age-verification requirements of Clause 15(1) by either stopping the money via the payment providers or disrupting other business activities via what the Government deem ancillary service providers—ASPs—a term that is broadly defined in Clause 22(6).
The Bill states that the age verification regulator,
“may publish guidance for the purposes of subsections (1) and (6) about the circumstances in which it will treat services provided in the course of a business as enabling or facilitating the making available of pornographic material or prohibited material”.
It is essential that the guidance in clause 22(7) be published. It is not just something that would be nice to have, which is how the Bill currently stands.
In making the case for mandatory guidance, I would like to make two additional points. First, Parliament should know what the Government intend should be considered an ASP, so that the debate we are having today can inform the guidance. In their original consultation document on age verification, the Government defined ASPs as,
“services which support and profit from the delivery of pornography on commercial sites. These include, but are not limited to, payment systems, advertising on pornography sites, web-hosting services, and other revenue-generating processes associated with these sites”.
Payment providers are defined in subsection (5) but whether the Government still intend that other types of organisation listed in the consultation document should fall within the scope of Clause 22 is not clear. The truth is that we do not know whether there will be any clear, comprehensive guidance, and that is simply not good enough from the Government. There is a strong argument that the definition of an ASP should be fully provided in the Bill. My hope is that, at the very least, we should have an absolute guarantee that the regulator will provide guidance defining who will be considered an ASP.
Secondly, I would like to raise questions about how social media and media sites will be treated for the purpose of Clause 22. We need clarity on this. If my amendment was accepted, that clarity could be provided through mandatory guidance. I was pleased to hear the Minister reconfirm that all social networking sites will be classed as ancillary service providers, and that this arrangement would apply to the likes of Facebook, Tumblr, Instagram and so on when showing commercial pornographic material.
However, I want to mention briefly user-generated material on social media, an issue that naturally arises in debating this Bill if we are told that it will not cover it, despite a vast amount of hardcore porn that can easily be viewed by anyone, including young children, being just a couple of clicks away. The majority of social media sites say that 13 year-olds are allowed to use their sites. In fact, 75% of all 10 to 12 year-olds in the UK are on one or more social media sites. So there is no justification for a site that says 13 is its minimum age providing easy access to harmful 18-plus material; even less so when the same site also knows that in fact, large numbers of under-13s are its customers.
As it stands, commercial porn sites will be required to introduce age verification to limit access to over-18s, but social media sites escape such a requirement if the material is user-generated. Therefore, we leave the door wide open and we may end up driving kids away from big porn sites straight into the virtual clutches of porn merchants who operate via social media. One suggestion is that perhaps the proposed new regulator could identify individual accounts or profiles persistently publishing pornography on a significant scale on any site or service. The regulator should then have the power to require the owner of the site or service to delete the account or profile, or put it behind an age verification gateway. Importantly, the whole site or service would never be blocked or restricted.
I welcome Amendment 69A in the name of the noble Lord, Lord Paddick, which would seem to be an additional sensible means of beginning to address some of these concerns regarding non-commercial pornography. Requiring the Secretary of State to lay regulations concerning non-commercial porn is helpful. I particularly support the proposal for a warning sign on a website that the user may be about to access pornographic material. A warning of this kind may not be a silver-bullet deterrent but is a welcome step in the right direction and a platform upon which we can build for the future.
If the Government are not going to address user-generated content through this Bill, then I wonder what their child protection policy is with respect to engaging user-generated content. If the Government have reached the conclusion that commercially generated content is something from which children should be protected, then it seems illogical not to be concerned about user-generated content. It is worth remembering that the Government’s manifesto commitment was to,
“stop children’s exposure to harmful sexualised content online”.
There is no mention of how the content was produced. The Government’s response may be that addressing user-generated content is more difficult, but we need to address this issue. I hope that the Minister will meet me and other concerned Peers to discuss this challenge.
I turn briefly to my other amendment, which is short and to the point. Amendment 237 would add a new paragraph to ensure that Part 3 and Clause 80 come into force one year after Royal Assent. The Bill as it stands does not say when, or even if, Part 3 and Clause 80 will ever come into force. This is an oversight which would do our children and young people a great disservice. I am sure that is not the Government’s intention. When the Bill was debated in Committee in the other place, the Minister said he expected that Part 3 would be in effect 12 months after Royal Assent. This is a welcome expectation. However, to give certainty to all the organisations affected by Part 3 and video-on-demand providers who will need to adjust their age verification systems, there should be confirmation of that 12-month timetable by putting that commitment in the Bill. It seems to me that this lack of clarity stands at odds with the explicit commitment to commence other sections of the Bill to a specific timetable. Clause 89 sets out that six sections will come into force the day the Act passes, 17 sections and one schedule two months after Royal Assent, and one section on 1 June 2020. Every other section will depend on the Secretary of State bringing the relevant sections into force by regulations.
This situation with Part 3 is completely unsatisfactory. I urge the Minister to commit to the timetable set out in the other place by tabling an amendment on Report to ensure the child protection measures we have debated will come into effect a year after Royal Assent, and to place on notice all those providing commercial pornographic websites that they will need to prepare to comply with the age verification requirements in Part 3. I look forward to hearing what the Minister has to say in response to my questions and very much hope that the Government will accept my amendments.
Lord Paddick (LD)
My Lords, I have Amendment 69A in this group. Before I discuss that I wish to address a few remarks to the other amendments in the group. I understand the concerns of the noble Lord, Lord Morrow, about enforcing fines on people who are not within the United Kingdom. However, I do not understand how his Amendment 58 would be any more effective if the payment service provider or the ancillary service provider is also outside the UK. Perhaps when he addresses the Committee shortly, he will also indicate to me, because I am a little confused, the difference between his provision in paragraph (a) of proposed new subsection (2) in his Amendment 65, where enforcement of the age verification regulator’s decision on the payment service provider or ancillary service provider is implemented by way of an injunction, and the proposals suggested for a similar process under Amendment 66.
On Amendment 69A, as I mentioned on an earlier group, there are increasing amounts of adult material available on the internet that is not commercial in any sense. Much of it is taken from commercial websites but there is no reference to which website the material has come from, and therefore no suggestion that it is intended as a lure or as providing a link to a commercial site.
To take up issues just raised by my noble friend Lady Benjamin, increasingly there is pornographic material that might be described as “home videos”, either those produced by what might be described as exhibitionists or others where innocent members of the public, including some celebrities in recent years, are deceived into performing sexual acts to their computer camera not knowing that they are being recorded for subsequent posting on to publicly available websites. There is also the issue that Liberal Democrats have been very strong in trying to tackle: those instances of “revenge porn” where disgruntled exes post compromising videos online. From what I can see, that type of material is not covered by the Bill, as there is no commercial aspect and no ancillary services involved. There is confusion about what “ancillary service providers” means. In his remarks on an earlier group of amendments, the Minister talked about pornographers to whom ancillary service providers provide their services. In the case of self-generated or home-grown obscene material, though, there is no pornographer that the website is providing a service to, at least in one sense. Perhaps the Minister will clarify that.
The noble Baroness, Lady Kidron, spoke about the fact that there are some social platforms, such as Facebook and Instagram, which are very good at taking down inappropriate material: they have strict rules about obscene material posted on their platforms. However, there are particular difficulties here with platforms such as Twitter and Tumblr. Although 99% of the content is innocent and of no harm to children, or anyone else, there are Twitter feeds and Tumblr pages that have adult material on them. Those are not simply links to porn sites, but actual videos on the actual pages or Twitter feeds. While most have a warning on the front page—NSFW, or not suitable for work, or 18+ only—that is usually also the page that has already got pornographic images on it. Even on Twitter, it may not be clear that the media content is pornographic until one has accessed those images. Clearly, there is difficulty in enforcing age verification on those platforms when the overwhelming majority of the material contained on them is not adult material.
What I believe needs to be explored is making a tool available to those who want to use social media for adult material, so that when the Tumblr page or Twitter feed is accessed, the user is diverted to a page that warns what lies behind and provides an option to divert away from the adult material. That alternative page could be a government-specified warning about the impact that pornography can have on young people, advising where support can be given and so on: the equivalent to the warning messages that are now printed on cigarette packets, for example. Alternatively, the Government could by regulation insist that such a tool was made available to ensure such a warning page is placed on accounts, as the noble Baroness, Lady Benjamin, mentioned just now, so that people are alerted that such pages or Twitter feeds have adult content on them. It falls short of requiring age verification or blocking such accounts, which I am sure Twitter and Tumblr would resist, but it would still address an important issue.
In its useful briefings on this aspect of the Bill, the NSPCC says there is a particular problem with children who accidentally stumble across adult material. This would go some way to addressing that issue. The NSPCC says a particular problem is pop-up advertisements from commercial pornography sites, which regrettably this amendment does not address—nor is that addressed by any other part of the Bill. Will the Minister tell the Committee whether there is any move by the Government to address that issue?
It is one thing for the BBFC to block a porn site that does not have age verification; it is quite another to suggest—as the Minister said on an earlier group of amendments—that we block a platform such as Twitter, if it fails to do the same for a handful of feeds that contain adult material. I accept that the amendment as drafted is probably far too wide in the powers it gives to the Secretary of State, but it is important that we do not ignore non-commercial adult material, which in increasingly a problem on the internet.
Baroness Howe of Idlicote (CB)
My Lords, my amendment to Clause 17, which noble Lords have already discussed, raised the importance of knowing how the Government plan to enforce the Bill through the appointment of one or more age verification regulators. The amendments tabled by the noble Lord, Lord Morrow, and the noble Baroness, Lady Benjamin, raise similar questions about the mechanics and processes of enforcement and I am very glad to be able to speak in support of Amendments 63, 56, 58 and 65.
On Amendment 63, I agree completely with everything that the noble Baroness, Lady Benjamin, has said. If we are not to have real clarity about the identity of ancillary service providers in the Bill, the idea that we can make do with optional guidance is unsustainable. It must be made mandatory. On Amendment 56, I support the call from the noble Lord, Lord Morrow, to hear a full explanation from the Minister of the mechanisms for enforcing the fining provisions in Clause 22 in other jurisdictions, which were alluded to by the Minister in another place.
In the time available today, however, I would like to focus particularly on Amendments 58 and 65. Any noble Lords who were in your Lordships’ House when we debated the Gambling (Licensing and Advertising) Act 2014 will know that I had a major reservation about the Government’s plans to rely on payment providers to enforce the licensing provisions applying to foreign websites. I think that the noble Lord, Lord Morrow, has demonstrated that my reservations were well founded. In response to written Parliamentary Questions I tabled last year, the Government said that, since the law came into effect in 2014, the Gambling Commission has written to approximately 60 gambling websites reminding them of the law, and payment providers have been asked to block payments 11 times. Given the size of the global online gambling market that can access the UK, that surely seems tiny. If we are supposed to be reassured, I suggest that the Government should think again.
The noble Lord, Lord Morrow, also raised questions about why the Government think that ancillary service providers will act to withdraw their services. I recognise that the Government want to disrupt the business models of pornographic websites, but for some companies, to withdraw their services would be disrupting their own business models. They may be small businesses, not major international organisations such as Visa and Mastercard. In such cases, it would not be in the interests of the business to act. They cannot be expected to do so unless it is made an explicit legal requirement with a clear sanction. My concerns about the absence of any sanction or requirement to act are readily acknowledged by the Government’s own publications, in a manner that I find rather unnerving. In the press release the Government issued when they announced their plans for IP blocking, they said they were,
“also seeking co-operation from other supporting services like servers to crack down on wrongdoers”,
and in the notes to the release said:
“Websites need servers to host them, advertisers to support them, and infrastructure to connect them. With the international and unregulated manner in which the Internet operates we cannot compel supporting services to be denied but the regulator will seek to gain cooperation from the industry”.
They seem to be hoping that, although they have inserted this age verification requirement into statute, it is acceptable to back it up with what is effectively a non-statutory, half-hearted good will enforcement mechanism. Lest anyone doubts this, they should review the Government’s evidence to the Delegated Powers and Regulatory Reform Committee about the delegated powers in the Bill. The Government reported on the guidance to be issued under Clause 22(7) about who will be given a notice about non-compliance of pornographic websites. Importantly, the Government said:
“The recipients of those notices can decide whether or not to take action. Accordingly it is considered that no Parliamentary procedure is necessary”.
It seems that the Government hope that by placing the obligation for age verification in statute, we will congratulate them on fulfilling their election manifesto commitment, without—at least as far as Clause 22 is concerned—any credible commitment to enforcement.
Lord Maxton (Lab)
My Lords, I am very reluctant to take part in this debate, because I was not available to speak at Second Reading, which always restrains noble Lords from speaking in Committee. However, I will make three points.
First, I confess openly that I have indulged in sexual activity—I will not say when, as that might be unfair. But I have never fired a gun or a revolver in anger, or taken part in a fight with a knife, or indeed taken part in a fight at all. Yet we are not banning scenes of violence, even on the news, which are seen by children all the time, whereas we are involved in banning scenes of sexual activity. That may be right, but we ought to be looking at other areas of life as well, because they can damage children just as much as sexual activity can.
Secondly, this law as it stands—many noble Lords who have moved or spoken to amendments have admitted this—is almost inoperable. It cannot be enforced—or can be enforced only on rare occasions. That is rather like speeding in your motor car, which is an analogy I have used before. Everybody breaks the law by speeding—or most people do—because they know that they will not get caught. That is rather like this law, as it stands at present. The problem with unenforceable or rarely enforced laws is that they bring the law into disrepute—and that is the danger of this part of the Bill as it stands. We are in danger of bringing in something that is not enforceable and, by doing so, we are bringing the law itself into disrepute.
Lastly, I will give my solution to all of that. The aim of this part of the Bill is not to stop pornography sites but to stop children watching them. There is a simple answer to that—but, unfortunately, it is an answer that the Liberal party do not support and which the Tory Government got rid of when we introduced the voluntary part of it. It is an identity card. If you introduce a mechanism whereby you can get into pornography sites on any device only by using your fingerprint or via eye recognition, or whatever it might be, of course that can stop it. On my iPad I already have a device by which I can save my passwords and which will show them to me when I want to use them. But I can get into it only by using my fingerprint; I cannot do it any other way. I cannot even use my normal four-digit pass code; I can do it only with my fingerprint. Why not do that sort of thing for pornography sites as well? Only adults will be able to get into them; children will be barred by the introduction of an ID card mechanism, so that you can get into it only by that means. Unfortunately I have hospital appointments during the next sitting of Committee, but I hope that on Report I will be able to introduce amendments to that effect.
The Earl of Erroll (CB)
My Lords, I have one amendment in this group. I very much support Amendment 65, but there is no point adding anything to what the noble Lord, Lord Morrow, said. He covered it in great detail and for all the right reasons. I will add only for the noble Lord, Lord Paddick, that a lot of the payment service providers—this is the key to it—such as Mastercard, Visa, and so on, are international. If there is a duty on them, they are very good at trying to stick to the law. That would close quite a few holes and make life a bit difficult for sites—so as a deterrent, it would really help.
Sadly, this whole approach to cutting off the ancillary service providers years ago was enough to kill off pirate radio in the 1960s—which I was very sad about. But this time I approve of being able to do it, because I approve of the motive behind it: trying to stop children accessing pornography.
Amendment 68B, in my name, questions what a “large number” of children is. I realise that it is obvious that you have to prioritise, because 80% of the sites are over a certain size and they will definitely come under this. They handle 80% or so of the traffic, or whatever, so I can see that you should check up on them first. But they are also the ones that will comply, because many of them are onside anyway. However, let us say that there are 10% of sites left. That is an awful lot of children, if you do the maths in your head. You knock one nought off the end of however many children there are, but you still leave an awful lot. I therefore do not understand why we are leaving in a “large number” as a constant target. There must come a point when it is worth moving on to the smaller numbers as well. I therefore do not understand the purpose of the clause. It is self-evident that they will have to prioritise. If they do not, they are idiots—and I know perfectly well that the members of the BBFC are not. Therefore I cannot understand the purpose of it.
Amendment 69A, in the name of the noble Lord, Lord Paddick, has some merit in it. As the noble Baroness, Lady Benjamin, said, there is a lot of non-commercial stuff out there. The purpose of this is to stop children viewing pornography. It does not matter whether it is commercial or not. If you put in something like this, there are clever ways in which people will try to define their sites as non-commercial. In particular, if they can start appealing against this—this is where having a complicated appeals process would become so dangerous—I can see loopholes opening up. So we need to start including non-commercial pornography—and it is okay if it takes a year.
I also support Amendment 237, in the name of the noble Baroness, Lady Benjamin. We need to have a deadline. It is something that all sites can work towards. We should say that, on whatever date, if sites are not compliant—we suggest that it ought to be a bit like a speed limit, where you ought to slow down before you hit the 30 miles per hour limit—we will issue notices to the ISPs to block them. Something might happen, because you have a level playing field, everything happens on the same date, and under the amendment in the name of the noble Baroness, Lady Benjamin, they will have a year to do it in. That is probably enough to get your regulations in place and so on. It is a very good idea.
Lord Browne of Belmont (DUP)
My Lords, I am pleased to be able to support Part 3 of the Bill, and Amendments 58 and 65, in their objective of increasing child safety. However, I am concerned that the Government’s proposal in Clause 22 currently leaves many questions unanswered. I am raising these points in the context of the Government stating in the impact assessment for the Bill, published last May, that the regulatory system to be set up under Clause 22 would merely,
“nudge porn providers to comply and put age verification in place”.
That is not consistent with the much bolder manifesto commitment simply to,
“stop children’s exposure to harmful sexualised content online by requiring age verification for access to all sites containing pornographic material”.
Since then the Government have set out a robust position on IP blocking, which leaves websites little room for doubt as to what might happen if they do not comply with Part 3. The enforcement action is clear: the age verification regulator can issue a notice and internet service providers have a duty to respond. In this regard, and alluding back to the previous debate, I think it is vital that Clause 23 should remain as it is—unamended.
However, there has been no upgrading of Clause 22 in parallel with the introduction of Clause 23, so we are left with the notion of “nudging” websites—which gives me little reassurance that this is a robust approach to enforcement. Under Clause 22(1) the age verification regulator may give a notice to a payment provider or an ancillary service provider, but it is not clear when or if the regulator would inform the service provider that such a contravention was happening. Would it be after a fine was not paid or after a letter had been sent—and, if so, how long would a website have to respond before a notice would be given? I hope that the Minister will set out the Government’s intentions.
I support Amendment 58, tabled in the names of the noble Lord, Lord Morrow, and the noble Baroness, Lady Howe. It would require the regulator to issue a notice under Clause 22(1). The noble Baroness deserves much credit for her persistence in bringing this issue before your Lordships’ House over many years. My bigger concern is that, having set out clearly that internet service providers must act in response to a notice from the regulator, there is no transparent statutory expectation on payment providers or ancillary service providers. How do the Government expect enforcement to take place without this power? Others have set out their case on this point in detail and I will not take up the time of the Committee by repeating it, but I am left feeling concerned that there is no power to require service providers to take any action after receiving a notice from the regulator. Furthermore, such a lack of teeth undermines the Government’s manifesto commitment to prevent children accessing all pornographic websites.
I fully support Amendment 65 in the group, which would make it a duty for payment providers and ancillary service providers to act by removing their services from contravening websites, and makes that duty enforceable. I hope that the Government will agree.
Baroness Jones of Whitchurch (Lab)
My Lords, I rise to support in particular the inclusion of Amendment 65 on the requirement for payment services providers to cease providing a service to those who flout the age verification rules, and I am pleased to say that it looks like we are building slightly more of a consensus on that than we did on the previous group of amendments. It seems to us that this is the most powerful measure that can be taken against rogue pornographic sites. If we can cut off their source of income, the likelihood of a positive response is almost inevitable.
The very nature of commercial pornography is based on the vast sums of money that can be made from it. Indeed, when we debated Part 3 at Second Reading, several noble Lords made the point that legitimate pornography sites would welcome the age verification process as they do not make any money from children casually visiting their sites; they want the more serious players to be involved because obviously they are the ones who are going to pay the money, so there is a kind of internal logic to what is being proposed. For these sites, the overriding concern is to harvest the profits, and any threat to that is likely to bring about an immediate response.
However, I also accept the point that we have to get the enforcement right, and I listened carefully to the noble Baroness, Lady Howe, about the experience with regard to the Gambling Bill, some of which I did not know. If there is a problem, let us talk it through and work it out because somewhere in the mix is the answer to our problems.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am grateful to all noble Lords for bringing up these rather difficult points which we have to address. This highlights that trying to fulfil our manifesto commitment is much easier in some parts, but there are also some areas on the edges that we accept are difficult. I do not think we are going to achieve a 100% success ratio and we are cognisant of that.
I shall start by addressing some of the general points that noble Lords made before I get on to the specific details of the amendments. I apologise to the noble Lord, Lord Morrow, for not answering his questions asked at Second Reading. I wrote a long letter on 21 December and I missed out some of his points, although at the end I made an offer to all noble Lords to bring up anything that they wanted.
As far as porn sites overseas is concerned, and how we should enforce this new law against such websites and companies that are not based in the UK, the aim of our policy is to capture all commercial sites regardless of where they are based. Overseas providers will still be incentivised to comply by the elements of the scheme which will disrupt their income streams. ISP blocking powers greatly increase the chance of effectiveness of the whole regime—I will come on to that more in a minute. The regulator will have the power to identify and notify infringing sites and to enable payments providers to withdraw services under their existing terms and conditions. These already require merchants to act legally, both in the country they are based in and in the countries they serve.
It is of course possible that there will be cases where it is difficult to enforce a financial penalty—for example, in the case of websites with no UK presence, as identified by the noble Lord. Even in those cases, however, circumstances may change and the option to enforce will remain. For example, the location of a pornographer may change or enforcement regimes may evolve. The regulator has discretion to take a proportionate approach. What I do not understand, however, is why not even allowing the regulator to include foreign sites is an improvement.
The noble Lord, Lord Morrow, also talked about payment providers and ancillary service providers. I can inform noble Lords that we have had constructive discussions with payment providers and they have indicated that they will act under our regime. The noble Earl, Lord Erroll, confirmed that. There are ranges of potential ancillary service providers. In some cases, the existing terms and conditions will allow them to act when notified by the regulator. We believe that companies will take responsibility when enabling or facilitating the availability of pornography.
The noble Baroness, Lady Benjamin, talked about ancillary service providers that carry pornography not being blocked. The Bill strikes a balance. It is our belief that the key issue is the commercial providers who monetise pornography, attracting large numbers of underage visitors in the process. Like the noble Earl, Lord Erroll, we believe that dealing with the largest of these providers will be a great step towards a reduction in access by children.
The noble Lord, Lord Paddick, referred to content such as revenge porn. This was brought up again by the noble Baroness, Lady Jones. We are clear that abusive and threatening behaviour online is totally unacceptable. Legislation is in place to prosecute online abuse. In the case of revenge porn, Section 33 of the Criminal Justice and Courts Act 2015 created a new criminal offence of disclosing private sexual photographs or films without consent and with the intent to cause distress, so there is existing legislation. There is new legislation and old legislation that has been adapted to deal with that very problem.
I shall now come to the detail of the amendments. Clause 20 provides that the designated age verification regulator may impose a financial penalty where someone has breached the requirement to have age verification controls in place, has not complied with an information requirement or has not complied with an enforcement notice. Clause 20 allows the designated regulator to give an enforcement notice where someone has breached the requirement to have age verification controls in place.
Amendment 56 would reduce the regulator’s discretion by restricting its ability to apply financial penalties for a breach of the requirement to have age verification controls in place. It would remove the power to apply financial penalties to non-UK residents in breach of Clause 15(1). The Government’s view is that the regulator should have the flexibility to apply sanctions to persons who are non-compliant, regardless of where they are based. During the Government’s consultation on these measures, arguments were made over the potential difficulties of enforcement, especially on taking action against non-UK companies. We are clear, however, that a flexible approach that includes a number of options is needed. We accept that there may be difficulties in taking enforcement against companies based overseas. However, as I said, we should not restrict the options available to the regulator, which should be able to take a view on enforcement based on the particular facts of any given case.
The Government recognise that financial penalties may not be effective in every case. That is why we have included other options for the regulator. For example, the power enabling the age verification regulator to instruct ISPs to block content to sites that remain non-compliant greatly increases the effectiveness of the whole regime and of compliance by providers of pornography. Our regime is designed to ensure that financial penalties are not the only sanction; there is also the ability to disrupt non-compliant sites’ business models. But we should ensure the regime allows for both fines and enforcement notices as appropriate to the individual, regardless of where they are based.
Clause 22 is an important provision containing powers at the heart of the regime to enable the age verification regulator to notify payment service providers and ancillary service providers of non-compliant persons. Amendment 58 would make it mandatory for the age verification regulator to serve notice to any payment services provider or ancillary service provider under Clause 22(1) where it considers that a person is contravening the age verification requirements in Clause 15(1) or making prohibited material available on the internet to persons in the UK. We need to be careful to ensure that we do not constrain the BBFC, which is expert in this area and committed to its role as an AV regulator in carrying out the role in the most effective way. It is important that the regulator has the flexibility to take the most appropriate action depending on the facts of any given case.
Amendment 63, in the name of the noble Baroness, Lady Benjamin, would require the regulator to publish guidance under Clause 22(7), rather than having the discretion to do so. I realise that the Delegated Powers and Regulatory Reform Committee and the Constitution Committee have made recommendations about increasing the level of parliamentary oversight for this guidance. We have listened to and noted those concerns; we are carefully considering our response to the committees as a matter of priority. Again, as I have said, we will be able to outline that before Report. On the question the noble Baroness asked about who would be classed as an ancillary service provider, I will correct something she said. I think what I said was that the Government, under the legislation, believe that internet sites can be classified by the regulator as ancillary service providers— it is ultimately the regulator’s decision—where they are enabling or facilitating the making available of pornographic or prohibited material. If that is the case, it could be notified.
Amendment 65 would require payment services providers and ancillary service providers to block payments or cease services provided to the non-complying person where the regulator has given notice to the payment services provider or ancillary service provider under Clause 22(1). This approach represents a considerable change. We are quite clear that it is not necessary. It is important that the BBFC has the freedom to build effective working partnerships with payment service providers and ancillary service providers. As part of a proportionate system, it is not necessary for the BBFC to begin regulating those services. We think that the focus should rightly be on the providers of pornography.
Lord Morrow
My Lords, I respectfully thank everyone who has participated in this debate. I have to be honest with the Committee that I am disappointed by the response. However, I must be very truthful, too, in that I am watching the clock with one eye as I have a flight to catch, and I may not catch it if I stand here any longer. So noble Lords may understand why I will be brief. I was looking forward to the Minister perhaps explaining in some detail how the fangs would apply abroad and how that would work. I would be grateful if, even now, he would take that on board. Perhaps he would write to me and outline in some detail how he sees that working.
Very briefly, on the point made by the noble Lord, Lord Paddick, this will bind services and financial transaction blockings only if they have a foot in the UK. My amendment would provide leverage in that instance. That was the point that maybe I did not make clear, but it was the point I was trying to make. Also, I was very struck by the point of the noble Lord, Lord Maxton, when he said that he thought the way forward would be identity cards. If that amendment is brought up at a later stage, he will discover that I am very close behind him going through the Lobby when he makes that suggestion. At least he can look to me for that—whether that is good news or bad news. He does not seem very impressed. I leave it there and thank everyone for speaking today. I beg leave to withdraw the amendment.
Baroness Jones of Whitchurch
My Lords, in moving Amendment 57, I shall speak also to Amendments 59, 60, 61 and 64. These amendments address the issue set out by the Minister this morning, but I make no apology for revisiting this and setting out our position so that it is on the record, although I take the point that he may not be able to answer all the points this afternoon.
Nevertheless, I should like us to have that debate. These amendments would remove the reference in Clause 22 to the regulator defining and imposing new controls on what is prohibited material on the internet. Noble Lords will know that there has been increasing concern about the implications of this wording. It is felt that it would give the regulator extended powers of censorship beyond that originally envisaged in the Bill. When our colleagues in the Commons originally raised concerns about press reports that the Bill could be used in practice to extend internet censorship for adults, the Minister, Matt Hancock, was quite clear. He said:
“I have also seen those reports. I think that they misread the Bill. That is neither our intention, nor our understanding of the working of the new clauses”.—[Official Report, Commons, 28/11/16; col. 1284.]
However, others have since put a different interpretation on the scope of the wording, so there has been ongoing concern about what can best be described as mission creep.
The purpose of Part 3 of the Bill is to provide protection for children from accessing online pornography. We all agree with this intention. However, as the wording stands, it potentially sets new limits on consenting adults accessing pornography that is not harmful to themselves or others. This is material that would not receive a film classification certificate, but neither would it be subject to prosecution. It is not helped by the fact that, by all accounts, the Crown Prosecution Service’s guidelines on this issue are out of date. There is a resulting grey area of pornography that by practice, but not by statute, is not prosecuted. We strongly contend that this is not the place to resolve these wider debates on adult consensual pornography. It is an issue for public debate and for consultation at another time.
In more recent days, Matt Hancock has met with various groups of us and has, I understand, accepted that the wording in the Bill is not as it was intended. He has proposed, albeit informally, that instead a definition of prohibited material should be based on that of extreme pornography, as defined in the Criminal Justice and Immigration Act 2008. We agree that this is a helpful proposal that could well resolve the debate.
We regret, therefore, that the Government were not able to produce an amendment along these lines in time for today’s Committee, which is really where some of these important principles should be resolved, before we get into the more formal, technical detail on Report. These amendments flag up our concerns with the current wording to urge the Government to come forward with detailed proposals before Report and, we hope, to build a consensus to go forward on this issue. Child safety is the issue here, not adult consensual pornography. I beg to move.
Lord Clement-Jones (LD)
My Lords, briefly, I strongly support what the noble Baroness, Lady Jones, said. That is why these Benches support the amendments. I took quite a look of comfort from what the Minister said early on in today’s proceedings. As the noble Baroness, Lady Jones, said, there are considerable concerns about the width of “prohibited material” and the very existence of that particular set of conditions inserted at a fairly late stage in the Commons.
Of course, we have talked about the site-blocking provisions but the prohibited material aspects really confuse the issue as they deal with access by adults. It was very useful having the meeting with the Minister and his colleague, Matt Hancock, to talk about these issues. Having discussed the matter, we felt that the proposed new definition of prohibited material, limited to the 2008 Act, was acceptable as that is very tightly defined. Again, I entirely agree with the noble Baroness that it was very disappointing that immediately after that meeting the wording as in this amendment was not made available or put down for the Committee. That would have been enormously helpful in settling people’s concerns about the width of the definition of prohibited material, which goes well beyond the harm test used by the BBFC under the Video Recordings Act.
That is really the essence of it—tying it back. I hope the Minister will shortly explain this in greater detail than he did at the beginning of this session to allay our many fears about something fairly extraneous being introduced into the Bill. I stood corrected earlier by the noble Lord, Lord Maxton, about the exact purpose of Part 3, which is to prevent access by children to online pornography. We must be very clear that that is what we are about, rather than trying to censor the internet on a broader basis.
Lord Browne of Belmont
My Lords, on Second Reading, a number of noble Lords raised concerns about censorship and the definition of prohibited material. I found this surprising as we have so often heard the mantra that what is illegal offline is illegal online. Offline, the British Board of Film Classification has operated for a long time on the basis that it will not classify certain types of video work based on the content. This principle is well established and has been in statute since an amendment to the Video Recordings Act 1984 was made in 1994 after the Jamie Bulger murder. That requires the BBFC to have special regard to any harm to potential viewers. A “potential viewer” means,
“any person (including a child or young person) who is likely to view the video work in question if a classification certificate or a classification certificate of a particular description were issued”.
Moreover, it is of course an offence under Section 9 of the Video Recordings Act to supply a video work which the BBFC decided is not suitable for classification. It is also an offence under Schedule 10 to have such a work in possession for the purpose of distribution and supply.
Lord Gordon of Strathblane (Lab)
My Lords, time is somewhat against us this afternoon. I will be extremely brief. I pass no judgment on where the line should be drawn. I say simply that it is an unassailable argument that it should be drawn in the same place offline and online. Well before the internet of things arrives, the internet is already regarded as a method of distribution of DVDs, CDs and books, so it would be entirely illogical to have one rule offline and not implement it online.
The Earl of Erroll
My Lords, first I thank the noble Lord, Lord Browne, for supporting my amendment in the last group about proportionality and the order in which websites should be tackled. Moving on to this group, I spoke to this set of amendments when we addressed this issue in the group starting with Amendment 54B—so I can abbreviate my speech and be quick. I support the noble Lord, Lord Browne, on the point made in the part of the briefing he was reading about the Obscene Publications Act and the Crown Prosecution Service advice et cetera being out of step with each other and out of step with enough members of the public for it to matter—that is the real trouble. I had thought to mention one or two of the unsavoury practices that you might find that will not be classified under the current ruling in Clause 23, but I think I have been trumped by the newspapers.
Some in the BBFC probably see this as an opportunity to clean up the internet. But it is not going to work; it will have the reverse effect. This whole issue of what is prohibited material needs to be tackled in another Bill, with a different regulator or enforcer, so it does not get confused with the business of protecting children, which is the purpose of this Bill. It will not protect children anyway, as this material ought to be behind the age verification firewall in any event. In fact, the noble Lord, Lord Browne, pointed out why it might not be: you have a possible lacuna in the Bill. If you say that the material is stuff that the BBFC has classified, the really nasty stuff is not included, because it is not able to be classified—so suddenly Clause 23 might not apply to it. He is absolutely right there. This is one of the dangers, which is why they are having to try and draw in the idea of prohibited material. It would be much easier to remove prohibited material altogether.
It has been suggested to me that the easiest thing would be to alter Clause 16, which deals with the definition of pornography. Instead of having this very limited scope, it would be much easier just to have the one simple definition which is already in Clause 16(1)(e)(i), but with the wording slightly expanded to say, “Without prejudice to the application of the Obscene Publications Act 1959, any material produced solely or principally for the purposes of sexual arousal”. You could leave it at that, and then you would protect children from anything unsavoury that we do not want them to see. That is a much simpler solution than getting into this terribly complicated debate about what is prohibited material.
Baroness Howe of Idlicote
My Lords, I very much share the concerns expressed by the noble Lord, Lord Browne, about this set of amendments and prohibited material. As they stand, the amendments would have the effect of causing the Bill to place 18 and R18 material behind age verification checks, which Clause 16 limits to 18 and R18 material, while prohibited material would be freely available without any such protection. This would be pretty irresponsible and would show no regard for child protection. Even if the Bill was amended so that prohibited material was only legal online if placed behind age verification checks, we should not forget that the important strategy of targeting the biggest 50 pornography sites will not create a world in which children are free from accessing prohibited material, so that adults can relax and access it without concern. Even if the material was made legal online and given a BBFC classification, this would give a measure of respectability in the context of which it would no doubt become more widely available, and thus the chances of children seeing it would be further exacerbated.
Moreover, the crucial point is that we cannot make prohibited material legal in an online environment at the same time as maintaining the category of prohibited material offline. The former would inevitably result in the latter. Mindful of this, and of the fact that the category of prohibited material is long established, it would be wholly inappropriate for the House or indeed the Government to simply end the category of prohibited material online without a major public consultation. I very much hope that the Minister will completely reject these amendments and stand by what he said on this matter at Second Reading.
Baroness Benjamin
My Lords, I was very grateful to the Minister, Matt Hancock, and to the noble Lord, Lord Ashton, who met concerned parliamentarians to discuss the Government’s thinking about how to move forward on this issue. I look forward to seeing the wording around what will and will not be prohibited in order to ensure that the protections that apply offline also apply online. I believe that we need to build on the consensus in this House that children should be protected from harmful content online and I firmly believe that prohibited content is harmful to children.
The BBFC’s harm test under the Video Recordings Act, on which the definition of prohibited content is based, has proved to be an effective child protection standard offline with DVDs, and online with UK-regulated video-on-demand content. So I ask the Minister for an assurance that the Government remain committed to keeping prohibited content in the Bill. Most importantly, I ask the Minister to confirm that prohibited content will include content which covers simulated sexual abuse of child characters—and I stress sexual abuse in the widest sense, and not limited to rape and incest fantasies. I also want an assurance that the prohibited content I have set out covers not only realistic portrayals of children but CGI material. If this legislation is to be future-proofed, it is vital that CGI portrayals of child sex abuse are prohibited. I would welcome the Minister’s assurance that this will be the case.
This is not about freedom of speech, civil liberties, censorship or invasion of privacy; it is about the bigger case of putting children first, and of protecting and safeguarding our innocent children from harm. I often find myself in agreement with the Opposition Front Bench—but not on these amendments, which take too much risk with child safety. So I urge your Lordships to consider the implications very carefully before pursuing the wholesale removal of prohibited material from Clause 22.
Lord Ashton of Hyde
My Lords, this is an important debate, dealing not just with age verification but whether prohibited material should be included. I do not want to stand here and defend opposition amendments or put words into the mouth of the noble Baroness, Lady Jones, who can correct me if I am wrong, but I do not think that the object of the exercise was to completely get rid of prohibited material; it was to raise the extent to which the definitions may have exceeded what was originally intended. I say to the noble Lord, Lord Browne, and others that the point is that the current definition of prohibited material in the Bill allows the BBFC to consider content based on its existing hard-copy guidelines. We recognise that some think this goes too far and therefore we are continuing to listen to views on that. On the other hand, asking the regulator to consider only classifiable pornographic content creates the real risk that more extreme content will proliferate further.
I realise that it would have been easier if we had had a definition in front of us today. I know that we have discussed this with various noble Lords. The noble Lord, Lord Clement-Jones, is obviously teasing me because he knows that it takes time. As a lawyer, he will know that these issues are complex, and we have to make sure that all parts of government are happy with the wording. I shall repeat, for the benefit of the noble Baroness, Lady Benjamin, and other noble Lords, the important bits of what I said this morning. It is our intention to protect children from harmful content. Therefore, we have listened to the arguments that, in so doing, the drafting of the Bill may have unintentionally extended the powers of the regulator too far.
I committed this morning—and do so again—to giving this further consideration in order to reach a conclusion that this House agrees is a satisfactory way of meeting our aims of protecting children from harmful pornographic content. I repeat my offer to discuss this with interested Peers. I think that the noble Lord, Lord Browne, and the noble Baroness, Lady Howe, can be temporarily satisfied that we do not intend to get rid of prohibited material entirely. There is not much more to say at the moment, but we will come back to this on Report. In the meantime, I would be grateful if the noble Baroness would withdraw her amendment.
Baroness Jones of Whitchurch
I am grateful to the Minister. He is absolutely right and I am sorry if I did not make that clear. When we were proposing to take those words out, we were rather hoping that somebody would come up with a definition that would replace them—it was not just an attempt to take them out finally and for ever. It rather highlights the fact that we do not have another form of words to be working with today.
I do not envy the Minister in trying to balance all these different desires to get the wording right. We agree with the principle that offline and online should be dealt with on the same basis, but the problem is that in practice, what happens with offline material is not what is necessarily captured in the current legislation. That is the difficulty we are trying to grapple with. Our aim is to maintain the status quo. We do not want to ruffle any feathers or change anything. We want to make sure that what people can access online has the same checks and balances as offline has at the moment. The problem is the lack of a current substantial legal definition. As I said, there is a grey area, so we have to work our way through it. That is the difficulty.
As I said, I do not think that we should start redefining anything massively without a public consultation. People have talked about that and I agree. We are simply trying to protect the status quo so that adults who currently look at material can carry on looking at it—and this has nothing to do with child protection and children’s access to pornography. We need to understand what we are aiming for, but it is a question of getting the wording right. I am sure that the noble Lord will come up with something with which we can all agree in the medium term. In the meantime, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“No power to give notice under section 23(1) where detrimental to national security etc
(1) Before giving a notice under section 23(1) requiring an internet service provider to—(a) take steps referred to in section 23(2)(c)(i), or(b) put in place arrangements referred to in section 23(2)(c)(ii),the regulator must consider whether the steps or arrangements would be likely to be detrimental to a matter mentioned in subsection (3).(2) The regulator may not give a notice under section 23(1) where it appears to the regulator that the steps or arrangements would be likely to be detrimental to any of those matters.(3) The matters are—(a) national security;(b) the prevention or detection of serious crime, within the meaning given in section 263(1) of the Investigatory Powers Act 2016;(c) the prevention or detection of an offence listed in Schedule 3 to the Sexual Offences Act 2003.”
Lord Paddick
“Anonymity
(1) Age-verification providers must be approved by the Age-Verification Regulator.(2) In this section an “age-verification provider” means a person who appears to the Age-Verification Regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.(3) The Age-Verification Regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.(4) The Code must include provisions to ensure that Age-Verification Providers— (a) perform a Data Protection Impact Assessment and make this publicly available,(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,(c) minimise the processing of personal information to that which is necessary for the purposes of age verification,(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet,(e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,(f) do not create security risks for third parties or adversely impact security systems or cyber security,(g) comply with a set standard of accuracy in verifying the age of users.(5) The code must include provisions to ensure that publishers of pornographic material take full and appropriate measures to allow their users to choose the Age-Verification Provider of their preference.(6) Age-Verification Providers and publishers of pornographic material must comply with the code of practice.(7) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the code, that term is unenforceable.”
Lord Paddick
The amendment is in my name and that of my noble friend Lord Clement-Jones and the noble Baroness, Lady Jones of Whitchurch. I have to say that it is only because we were quicker on the draw that I am leading on this amendment rather than the noble Baroness.
As I have previously alluded to, we believe that age verification is not sufficient protection for children on the internet. It can easily be circumvented, and it would be very difficult to place age verification on such platforms as Twitter and Tumblr. In relying on this mechanism, there is a danger of diverting attention away from other important and effective methods of addressing the issue of children accessing adult material online. Despite our misgivings, we believe that everything should be done to protect the privacy of those who have their age verified to enable them to access adult material on the internet. I am grateful to the Open Rights Group for its briefing and suggested amendment on this issue, which is the wording we have used for our amendment.
Age verification systems almost inevitably involve creating databases of those who are accessing adult material. It is completely lawful for those who wish to look at adult material to access these websites, but it is a sensitive area and many will be wary about or even deterred from accessing completely legal websites as a result. Security experts agree that unauthorised hacking of databases is almost inevitable, and the advice to organisations is to prepare contingency plans for when rather than if their databases are accessed by those without authority to do so. The consequences of breaching databases containing sensitive personal data can perhaps be most starkly illustrated by the public exposé of the personal details of those who were members of Ashley Madison, which reportedly resulted in two suicides. The risk to privacy can be reduced if the age verification regulator approves minimum standards for age verification providers. These are set out in the amendment.
The amendment suggests that the age verification regulator publish a code of practice, approved by the Secretary of State and laid before Parliament. The code of practice should ensure that everything possible is done to protect the privacy of users and to allow them to choose which age verification system they trust with their sensitive personal information. For example, some websites provide a service that enables users to prove their identity online, including their age, for purposes unconnected with access to adult material but which could also be used for that purpose. The full extent of the provisions are set out in the amendment, and the evidence in support of the amendment is set out in the Open Rights Group’s updated briefing on the Bill.
The Constitution Committee addressed this issue in its 7th report of 2016-17:
“We are concerned that the extent to which the Bill leaves the details of the age-verification regime to guidance and guidelines to be published by the as yet-to-be-designated regulator adversely affects the ability of the House effectively to scrutinise this legislation. Our concern is exacerbated by the fact that, as the Bill currently stands, the guidance and guidelines will come into effect without any parliamentary scrutiny at all. The House may wish to consider whether it would be appropriate for a greater degree of detail to be included on the face of the bill”.
That is exactly what this amendment attempts to do. I beg to move.
The Earl of Erroll
My Lords, I want to say a few words because I have been working on the issue of age verification for a long time. I became interested in it when it became apparent a couple of years ago that it was going to come to the top of the agenda. For the last year or so, the Digital Policy Alliance, which I chair, has been working with the British Standards Institution to produce a publicly available specification—PAS 1296—exactly on this issue. Its whole point is to enable anonymised verification of the attribute of your age. People have said that you would have to give the information to the adult content site, the porn site, but you do not necessarily need to.
There are two stages: when the child, or the adult, first arrives at the site; and, if they are allowed into the site, what they then do. At the point when they come to the front page of the site, where they should be asked to prove their age, there should be an option—and this is the point about anonymity—that allows them to bounce off, with a token, to an age verifier. I have on my smartphone, for instance, one from Yoti. I can identify myself to Yoti; it knows about me and can send an encrypted token back to the website, which does not contain any identity information at all—purely the fact that I am over 18. If the regulator later needs to unravel the token because it appears that rules have been breached, it is possible to present the token and start unravelling it—but only with proper powers. The point is that a hacker cannot find out who presented that token. So it is possible now to do what is necessary.
That answers the point made by the noble Lord, Lord Maxton. The problem with an identity card is that it will identify you. If you gave your identity to one of these websites and it happened to be hacked, like Ashley Madison, and if you were a Cabinet Minister—or even like most of us here, actually—your career would probably be in ruins. So I think it is essential that people be permitted anonymity. That is why, I am afraid, I am not in favour of the identity card method. There are other similar ways of doing the same thing—
Lord Maxton
I would, maybe, accept the noble Earl’s point in this particular context, but the ID card has, of course, a variety of different uses—particularly if it is a smartcard—rather than just this one.
The Earl of Erroll
Absolutely; I know what the noble Lord means. I simply meant that this is not necessarily an ID application—except, maybe, to identify yourself to the site which then gives your attribute to the other website.
I am thoroughly in favour of the amendment, and so is the industry. We hope to publish a standard on this in the not-too-distant future, which may help the regulator determine who is a fit and proper person to carry it out.
There is just one other thing I want to say. Once you have done your age verification and then go on to the website, if you then choose to subscribe, and give it your credit card number and everything else, that is up to you. I hope and trust that the sites—I know that they are pretty careful about this—will encrypt properly and guard the information with their lives, if not yours.
Lord Clement-Jones
I do not want to overload the Front-Bench contributions from this side, or to turn this into a mutual admiration society, but I want to say that the noble Earl, Lord Erroll, has played a blinder in educating many of us in this House about the possibilities and the technologies being developed on anonymised age verification. As the Minister probably knows, we had a very useful session with many of those developing new apps for this precise purpose. Yoti was one, VeriMe was another—one could go on. There are different types of age verification, which can be chosen by the consumer. The most recent, which is now virtually available for general use, is Yoti, which the noble Earl mentioned. These methods are now available for use; this is not a question of pie in the sky, or of things not being available for a year or so. That makes the amendment highly practical, and, as my noble friend said, it is absolutely essential for the protection of personal privacy.
Baroness Benjamin
My Lords, I support the amendment and congratulate the noble Earl on all the hard work he has done. Six months ago I told him to get on with it, and he certainly has. We had a presentation, and I was so impressed by the progress that has been made in this area. Congratulations, and I thank him very much for all that he and his colleagues are doing to make sure that our children are safe, and that people feel that their data are protected if they go online for age verification.
Baroness Jones of Whitchurch
I support the comments that have been made by a number of noble Lords. I think we all understand the need for particular care to protect the identity of those who are over 18 and legitimately want to access pornographic sites. Apart from anything else, as has been said, we must protect those individuals from blackmail threats.
In this respect, the age verification process has to be more rigorous in providing anonymity than other regulations where proof of credit card details may have sufficed, but may also have made identification of the individual all too easy. The noble Baroness, Lady Howe, is not in her place, but I understand that the site that does the gambling checks does it on the basis of credit card details. Clearly, that would not be appropriate in the context of the issues we are grappling with here.
Thankfully, as we have heard, the technology is catching up with the need and there are now new age verification provider sites that can carry out the age checks. I am grateful to the noble Earl, Lord Erroll, for explaining in some detail how that works; it is all very reassuring. I do not think I have anything else to add: we have a consensus that some such measure needs to be built into the legislation, and I hope the Minister will agree with us.
Lord Ashton of Hyde
My Lords, I am grateful to all noble Lords again, particularly the noble Earl, Lord Erroll, for the teach-in.
Amendment 68 calls for the regulator to approve age verification providers and to publish a code of practice with which those providers must comply. This was similar or identical to the amendment that was rejected in the other place in Committee and on Report. I am afraid that the Government do not consider this clause necessary. However, I can assure noble Lords that we approach this issue with the utmost seriousness.
Clause 15(3) already requires the regulator to publish guidance about the types of arrangements it will treat as being in compliance. As the noble Earl explained, the technology is with us and the providers of age verification controls will be subject to data protection laws. The BBFC is already in discussion with the Information Commissioner’s Office to ensure that best practice is observed. It has indicated that it will give the highest priority to ensuring that the guidance it issues reflects data protection standards. The Government and the BBFC are also in discussion with the Information Commissioner’s Office on privacy and data requirements to ensure that the appropriate guidance is issued, as they are experts in this field.
The Delegated Powers and Regulatory Reform Committee has additionally made a recommendation on the approach to the types of arrangements for making pornographic material available that the regulator will treat as complying with Clause 15(1). We are considering whether we can address those concerns and, as I said, will respond as soon as possible.
As the noble Earl explained, innovative age verification solutions are coming to market, and we want to ensure that the regulator is enabled to make a determination as to the sufficiency of different and new controls. As noble Lords know, there are existing privacy and data security protections provided by the Data Protection Act 1998, administered by the Information Commissioner’s Office. The Act established a framework for the protection of personal data, balancing the privacy rights of individuals with the legitimate needs of organisations to make use of such data. It ensures respect for individuals’ rights to privacy and keeps their personal information secure from abuse. The Act ensures that data are handled safely and securely. It is right therefore that we do not seek here to duplicate this legislative and regulatory framework. However, we agree that we must ensure that it is built into the age verification process in a meaningful way and, as I have said, we will provide a response to the DPRRC recommendation on this matter. In the meantime, I hope the noble Lord will withdraw the amendment.
Lord Paddick
My Lords, I am very grateful for noble Lords’ contributions to this short debate, particularly to the noble Earl, Lord Erroll, for illustrating how a system as set out in our amendment already exists. I join my noble friend Lord Clement-Jones in thanking the noble Earl for his work with the industry. I thank my noble friend Lady Benjamin for driving him on, apparently. I also thank the noble Baroness, Lady Jones of Whitchurch, for her support for the amendment.
The Minister said that the amendment was not necessary despite the Constitution Select Committee believing that such an amendment is necessary. On that basis, I cannot give an undertaking that we will not return to this issue on Report. However, at this stage, I beg leave to withdraw the amendment.
“Review of online abuse
(1) The Secretary of State must carry out a review of online abuse.(2) In conducting the review, the Secretary of State must consult—(a) specialists in child protection;(b) people and organisations who campaign for child safety on the internet; and(c) any other persons and organisations the Secretary of State considers appropriate.(3) The Secretary of State must consider measures to prevent online abuse and harassment.(4) The Secretary of State must lay a report of the review before each House of Parliament within six months of the passing of this Act.”
Baroness Jones of Whitchurch
My Lords, as well as moving Amendment 70, I shall also speak to Amendments 71AA and 71AB, all of which would add a new clause to the end of Part 3 of the Bill. The amendments are all, in different ways, trying to move forward on the increasing social evil of online abuse and trolling.
Amendment 70 would require the Secretary of State to carry out a review of online abuse, consult widely and report back to Parliament within six months of the passing of the Act. Amendment 71AA would require commercial internet sites that host personal accounts to take responsibility for the material posted on the sites, issuing a safety impact assessment, informing the police of violent threats and removing posts that incite violence. Amendment 71AB would require the Secretary of State to issue a code of practice with which social media platform providers must comply and which would include how they should respond to online abuse and how they should protect children. We believe that our amendments all provide the Government with a road map for action on an issue of huge social concern. They are in themselves probing amendments, but provide practical solutions that we hope the Government will take seriously.
The deluge of online abuse has massive child welfare implications. We know that social media sites are increasingly being used to bully, bribe and intimidate young people. The charity Childnet has identified that one in four teenagers suffered hate incidents online last year, and the incidents are increasing. Teenagers with disabilities and from minority ethnic groups are disproportionately targeted. Schools are reporting that malicious posts, personal abuse and fabricated stories are undermining young people’s self-esteem, distorting their self-image and encouraging risky behaviour. All these trends are having a knock-on effect on child mental health, with demand for support increasing and services unable to cope. For example, a record 235,000 young people accessed mental health services last year, but many others were denied the help they need.
I have focused on young people, but we know that this is also a problem in the adult world. The recent survey of MPs highlighted the threats of violence, appalling levels of anti-Semitism and sexist abuse. The MP Luciana Berger has spoken openly about the torrent of anti-Semitic abuse she has received, including threats of violence. The latest reports show a 36% increase in anti-Semitic incidents last year. Luciana reported that Twitter was slow to act, even when cases were drawn to its attention, and that the police and social media did not co-operate effectively to intervene when allegations were made. Even when prosecutions took place, some of the abuse sites could still be accessed on Twitter. Other women MPs have been subjected to graphic messages threatening rape and murder, and we know that those are not always idle threats, as the tragic death of Jo Cox all too starkly reminded us.
Of course, the abuse directed at MPs is a tiny example of what is happening day in, day out, both to those in public office and to private individuals. Some of these incidents are investigated and some are not. For example, we know that 155 people were jailed for sending grossly offensive, indecent or obscene material. Equally, we know that that is the extreme end of trolling, and that many other people have reported that their complaints were not taken seriously. It feels as though we are no longer in an agreed area for behaviour. There are no longer clear rules about what is acceptable and there are no longer clear penalties for those that transgress them.
We do not pretend that the measures we are proposing will be a panacea that will resolve these huge social challenges, but we hope that they might be a first step to capturing the scale of the problem and giving people more reassurance about the direction of legislation in the future.
Baroness Janke (LD)
My Lords, this group of amendments includes Amendment 233A, which is in my name and that of my noble friend Lord Clement-Jones. When I read the initial amendments proposed by the noble Baroness, Lady Jones, I felt supportive towards them. They relate particularly to children, but, as she has said, there is also an issue with regard to adults.
As the noble Baroness, Lady Jones, said, not only Members of Parliament have suffered and spoken about this—and I am glad that they have done so—but people with disabilities or learning difficulties. Social media sites are often used as a tool by stalkers, and, as the noble Baroness said, such behaviour has led to people suffering mental illness and, at times, to murder. I very much support the amendments in her name. The difference between them and my amendment is that mine would introduce a criminal test under the guidance of the CPS. I think we all agree that we must have some form of enforcement of the action that should be taken against this form of behaviour.
It seems to me that the providers have to take some responsibility. It was put to me that, if people were damaging themselves fighting and stabbing each other in a pub, the landlord would have some responsibility for that. The internet service providers also have some responsibility in this matter.
I realise that this is a difficult area to legislate for, and I know that there are other forms of legislation. Here we are looking for a way to work with interested parties, such as the NSPCC. We have made progress on action for children, but we are woefully behind in taking action against this damaging behaviour against adults.
I very much support the amendments in the name of the noble Baroness, Lady Jones, and I hope that the Minister might support some of the sentiment, and the letter, of my Amendment 233A.
Baroness O'Neill of Bengarve (CB)
My Lords, I had not intended to speak on this point, but this may be relevant evidence. Last year, I went to a meeting with a parliamentary group that was looking at hate speech issues, and a representative of Facebook was there. She said—one may say that this did not show quite a correct view of freedom of expression—that Facebook takes down whatever its customers find offensive. A member of the public said, “Actually, when you have had 20 independent complaints, you take it down and it is immediately put up again”. That second step is where the remedies are not working at present. It does not get taken down. This was mainly about anti-Semitic hate speech of a vile sort that would have been well known in certain quarters in the 1930s. This is an urgent matter, which we need some remedy for.
The Earl of Erroll
My Lords, it has been suggested to me that this group of amendments could also be used in the code of practice and the safety responsibilities could also be drawn up to include non-age-verified pornography.
Lord Ashton of Hyde
My Lords, the Government take the harm caused by online abuse and harassment very seriously, and we will continue to invest in law enforcement capabilities to ensure that all online crime is dealt with properly.
Amendment 70 would require the Government to carry out a review of online abuse and lay a report before Parliament within six months of Royal Assent. We do not believe that it is necessary to include provision for a review in primary legislation. As part of the ending violence against women and girls strategy, we have established an official government working group to map out the current issues, prevalence, initiatives and barriers to addressing gendered online abuse and to produce an action plan.
We are absolutely clear that abusive and threatening behaviour is totally unacceptable in any form, either offline or online. As the Committee will be aware, any action that is illegal when committed offline is also illegal if committed online. Current legislation, some of which was passed before the digital age, has shown itself to be flexible and capable of catching and punishing offenders, whether their crimes were committed by digital means or otherwise. The Protection from Harassment Act 1997 was amended to introduce two new stalking offences to cover conduct that takes place online as well as offline. In addition, the Government will be introducing a new civil stalking protection order to protect victims further.
We will continue to take action where we find gaps in the legislation, just as we did with cyberstalking, harassment and the perpetrators of grossly offensive, obscene or menacing behaviour, and of course we introduced a new law making the fast-growing incidence of revenge porn a specific criminal offence.
The Law Commission recently consulted on including a review of the law covering online abuse as part of its 13th programme of law reform, which will launch later this year. It is expected to confirm with Ministers shortly which projects it proposes should be included.
We are also working to tackle online abuse in schools and have invested £1.6 million to fund a number of anti-bullying organisations.
In addition, we are working to improve the enforcement response to online abuse and harassment so that it can respond to changing technologies. The Home Office has also allocated £4.6 million for a digital transformation programme to equip forces with the tools to police the digital age effectively and to protect the victims of digital crime, including online abuse and harassment. Police and prosecutors evidence offences carried out digitally, non-digitally or both. The CPS Guidelines on Prosecuting Cases Involving Communications Sent via Social Media makes clear the range of criminal law which can be brought to bear on offences committed through social media. Moreover, from April 2015, police forces have been recording online instances of crimes, including stalking and harassment.
I shall talk about the next three amendments together, as they all cover the duties of social media sites. Amendment 71AA seeks to make it a requirement for all social media sites to carry out a safety impact assessment. Amendment 71AB seeks to require Ministers to issue a code of practice to ensure that commercial social media platform providers make a consistent and robust response to online abuse on their sites by identifying and assessing online abuse. Amendment 233A seeks to impose a duty on social media services to respond to reports posted on their sites of material which passes the criminal test—that is, that the content would, if published by other means or communicated in person, cause a criminal offence to be committed.
The Government expect social media and interactive services to have robust processes in place that can quickly address inappropriate content and abusive behaviour on their sites. On the point made by the noble Baroness, Lady O’Neill, it is incumbent on all social media companies to provide an effective means for users to report content and perform the actions that they say they will take to deal with this. We believe a statutory code of practice is unworkable because there is no one-size-fits-all solution. Dealing properly with inappropriate content and abuse will vary by service and incident. Technological considerations might differ by platform and as innovation develops. Users will benefit most if companies develop their own bespoke approach for reporting tools and in-house processes.
Social media companies take down content that is violent or incites violence if it breaches their terms and conditions. We expect them to inform the police where they identify significant threats or illegal activity happening on their sites. It is, however, extremely difficult to identify where the threat has come from and whether it is serious. We work closely with companies to flag terrorist-related content and have so far secured the voluntary removal of over 250,000 pieces of content since 2010.
I can assure the Committee that we share the sentiments expressed in these amendments. At the moment, though, they are not practical or necessary, so I hope on that basis noble Lords will not press their amendments.
Baroness Jones of Whitchurch
My Lords, first, I am grateful to the noble Baroness, Lady Janke, for stressing her point on enforcement. That is at the heart of the debate that we are having today. A lot of fine words are being said, but they are lacking the guts and enforcement to make any real change.
I am also grateful to the noble Baroness, Lady O’Neill, who quite rightly made the point that material does not consistently get taken down. That very much chimes with evidence that we have received as well. Luciana Berger MP has made the point that, even when a case of anti-Semitism was taken to court and the perpetrator was taken to jail, the site that they had created stayed up on social media and was still there for anyone to access—that cannot be right. It raises questions about the responsibility of social media sites and whether they are acting with enough responsibility and consistency.
I was really saddened by the Minister’s response this afternoon, because I felt there was a degree of complacency in what he said. I do not know how much more evidence he needs to realise that the current arrangements are not working. As we have been saying, children and adults are suffering. There does not seem to be a mechanism where, if you feel that you are being abused, threatened, or having vile things said about you on sites, you can get any consistent recourse to have the matter dealt with. People say, time and again, that social media sites and the police are not working together consistently. On some occasions social media sites take action, but then the police do not follow it up. Sometimes it is vice versa: the police get involved, but then the social media sites do not carry out their responsibilities. This needs another look at—whatever the level or structure for which that is appropriate.
I will not press my amendments today, but I will not give up on this issue. I say to the noble Lord—and it may be that we can have further discussions on this—that a more robust response is needed from the Government than we have had so far, so I hope we can carry on this discussion. I beg leave to withdraw my amendment.
“Internet pornography: requirement to teach age requirement and risks as part of sex education
After section 403(1A)(b) of the Education Act 1996, insert—“(c) they learn about the risks and dangers of internet pornography, and the legal age requirement to access internet pornography under Part 3 of the Digital Economy Act 2017.””
Baroness Jones of Whitchurch
My Lords, Amendment 71 requires schools to teach the risks and dangers of internet pornography, as well as an understanding of the new age restrictions which will apply to accessing pornography. This is not a new issue. For the last six or seven years we have been pushing for updated guidance on sex and relationship education. It remains a mystery as to why the Government have been dragging their feet on this issue for quite so long. The fact that our amendment addresses only part of this bigger demand results from the restrictions placed by the scope of the Bill, rather than from a watering down of our commitment to PSHE being a mandatory part of the school curriculum.
Lord Storey (LD)
My Lords, I added my name to the amendment. I find it bizarre that we have spoken for a couple of hours now about the dangers of internet pornography, and we have rightly worried about sexting, the harm that inappropriate images would cause to children, and about possible dating sites, but when it comes to educating children and young people we wring our hands and walk away from it. I do not understand that. Any parent would want their children to know what is going on. As the noble Baroness said, any child would want to have professionals talking these issues over with them and educating them about them.
Children need to be taught about the dangers of meeting people online, the risks of dating apps, the consequences of sexting and the problem that young girls feel they have to look and appear in a certain way. No wonder the levels of anxiety and depression among teenage girls are, as we have heard, the highest ever. Research by the DfE—not some distant organisation, but the Government’s own department—found that 37% of girls feel miserable and worthless. That should not be happening in 2017. What on earth is going on? There are frightening levels of self-harm, with a 52% increase in the number of admissions of self-harming children under the age of 16.
I congratulate the noble Lord, Lord Stevenson, on putting down this amendment. He and many Members of this Chamber—on the Government Benches, on the Opposition Benches and on the Cross Benches—know that we have raised this issue over and again. During all the time that we have pressed for such a measure to be introduced, the Government have shrugged their shoulders and said, “Well, you can do it”. Yes, it is compulsory in maintained schools, but it is not compulsory in academies or free schools. As academies now make up more than 70% of our secondary schools, there is real concern about what is happening with sex and relationship education.
It is interesting that Ofsted found in 2013 that 40% of schools that offered sex and relationship education required improvement or were inadequate in their provision of it. Even though schools provide the subject, there is real doubt about the quality of that provision. The noble Baroness was right that it has to be properly taught and that we have to ensure that the syllabus is of the highest possible level.
I want to cite a couple of other figures which highlight how worrying this whole issue is. In 2016, a parliamentary report found that almost a third of 16 to 18 year-old girls had experienced touching at school, while 70% of 11 to 15 year-olds in England said that they believed sex education should be compulsory, and a whopping 94% said that they wanted to learn about the risks and consequences of sharing pictures with people online or on social media. Our own children want us to make this subject available at school. Will we not listen to them? Barnardo’s research shows that three-quarters of young people believe that sex and relationship education would make them feel safer.
What are the arguments against? It used to be, “Well, this is for the parents to do”. The argument that I now hear raised from time to time is, “Well, we couldn’t really force faith schools to teach sex and relationship education, because some aspects of it might go against their own religious belief”. Really? I just do not accept that. Faith schools do a hugely important job in our society, but part of that job must also be protecting our young children. I and my party wholeheartedly support this amendment.
Baroness Kidron (CB)
My Lords, since the Bill introduces age verification, it follows that children must be informed users. Not only does that make it more likely that they observe it but it would give teachers the necessary opportunity to discuss what they might find a difficult subject. Like others, I believe that this is a tiny part of a broader picture.
As some noble Lords know, I regularly speak in schools about pornography but more broadly about young people and their relationship to the internet. I have to report to the Committee that they have a palpable appetite for better digital education, not only SRE but a much broader digital education. By that, they mean a comprehensive understanding of the purposes and methods by which platforms and businesses interact with them, their rights as consumers and citizens and their urgent desire for some code of conduct. Interestingly, they want a code of conduct that covers their behaviour to each other. They also want a code of conduct that would determine the behaviour of businesses and platforms towards them. Above all else, you find what they want is a single moral landscape that recognises that the distinction between online and offline is completely immaterial to them.
Part 3 of the Bill deals with a single issue and this amendment deals with a narrow piece of learning. But the young people I speak to yearn for more. They repeatedly complain that e-safety is narrow, repetitive, badly delivered, and comes in the wrong lessons and from the wrong teachers. Although they themselves have fast fingers, many if not most have little idea of the workings of the technology they are using, let alone the full gamut of risk, from fake news to fake friends. A young person who can spot spam without clicking, is one less likely to see the unwanted adult sexual content that is our subject today. A young person who is knowledgeable about the way their personal data are collected is less likely to make bad decisions about what, where and when to give them up.
Children are not simply the objects of our concern; they are participants in their own good outcomes. We must learn to listen to their stated needs, not relentlessly pursue an adult agenda. I direct the Minister to the recent report of the Children’s Commissioner, Growing up Digital; to the report published this week, The Internet on our Own Terms, which captures the policy recommendations of young people; and to the evidence collected by the Communication Committee’s inquiry “Children and the Internet”, all of which has a great deal to say about the value, nature and scope of the education that children need.
In supporting this amendment I ask the Minister not only to recommend it to colleagues, but to listen very carefully to young people about the scope of the learning and the manner of teaching that they feel makes them secure and able users of the internet, which ultimately will help them to be contributors to the cultural shift that must accompany the legislation that is in front of us.
Lord Paddick
My Lords, I shall speak very briefly, as my name is on this amendment, to support what other noble Lords have said and echo the noble Baroness, Lady Jones of Whitchurch, in that we also tried to table a broader compulsory sex and relationship education amendment to the Bill but were told it was out of scope.
We have to address the fact that despite our best efforts young people, and indeed very young children, will be confronted with inappropriate images and inappropriate adult material on the internet, and they need to be taught how to respond. They need to be taught to turn it off immediately and to tell their parents about what is happening. Older children need to be told that the way in which actors in pornographic films treat each other is not the way that we expect our young people to treat each other.
Lord Ashton of Hyde
My Lords, I think we can all agree—and I certainly do—that this amendment has expressed very worthy concern about the safety of young people growing up in modern Britain today, and it is of great interest to many Members of this House and Members of the other place too.
As we have always said, age verification is not a panacea, and should certainly not be seen as the limit of child online protection activity in which the Government and key stakeholders are involved. Age verification controls are a part, but not all, of the approach to protecting children from potentially harmful content online. Education, awareness-raising with parents and carers, and equipping children with the resilience and tools to deal with their online experiences are critical. So I can agree with much of what the noble Lords, Lord Storey and Lord Paddick, and the noble Baroness, Lady Kidron, have said on this subject.
Keeping Children Safe in Education, the statutory guidance for schools and colleges on safeguarding children and safer recruitment, sets out that governing bodies and proprietors should ensure that children are taught about safeguarding, including online, through teaching and learning opportunities as part of providing a broad and balanced curriculum.
As my honourable friend the Minister of State for Vulnerable Children and Families, Edward Timpson, has said in previous debates during the passage of the Children and Social Work Bill, this Government heard the call for further action on improving the quality of PSHE provision in schools and we are fully committed to exploring all the options available. I understand that this will come up in the Report stage for that Bill in the other place, where the Government committed to providing an update to Parliament on the issue.
This Government are clear that to improve provision any change must be made in the right way with proper consideration of all the issues, including online safety. I assure the Committee that the Government are committed to handling this important matter well. We intend to work with stakeholders and listen to the voices of young people over the coming months. With that assurance, I hope the noble Baroness can withdraw her amendment.
Baroness Jones of Whitchurch
I thank the Minister and the other noble Lords who spoke in support. What the Minister said was quite right: if we were to start drafting Part 3 on our own terms, it would begin with education and everything else would filter down after that. The age verification process is definitely a supplementary part of a bigger challenge we face.
I accept, as the Minister said, that maybe progress is being made on this matter in another place on another Bill. That Bill will probably be resolved before we come back on Report, so we will watch what happens in the other place in some detail. If they are not able to resolve it, maybe we will be—so we could return to it at that point. In the meantime, I beg leave to withdraw the amendment.
“Independence of the British Board of Film Classification
(1) The BBFC is to be a body corporate which is independent from the Government.(2) All appointments to the BBFC are to be subject to fair and open competition.”
Lord Stevenson of Balmacara (Lab)
My Lords, we spent a considerable amount of time earlier in Committee on the question of the powers that would be allocated to any regulators appointed under the Bill. We did not spend much time on who the regulators would be, although some concerns were raised. However, over the weeks and even today, we have increasingly gathered that the Government’s intention is that the British Board of Film Classification, the BBFC, should be given a major role in the work discussed in this particular part of the Bill.
I will start with the report of the Delegated Powers and Regulatory Reform Committee, which has already been extensively referred to in the debate. It raised questions about what the position would be of any regulator appointed under the powers being taken in the Bill. It said, for example, that the age verification regulator—without naming that regulator—will have powers including,
“to require the provision of information … impose substantial civil penalties … take steps to direct internet service providers to block access to material … and … publish guidance”.
Of course, there is a quite a lot in the report that we have already discussed about how and under what conditions a body such as the regulator that will be appointed should be able to publish guidance, particularly if it is on behalf of the Secretary of State and has not been subject to discussion within Parliament.
Without having any expert knowledge of the work of the committee, I think that, had they known directly who the regulator would be, they might also have raised the issue in my amendment: the status and constitution of the body that is likely to be appointed. I assume that the comments made by the Minister earlier in this Committee session that the BBFC is to be appointed will be carried forward in due course. If I am wrong, obviously the points I make are still valid—although they may apply to a different regulator of a different nature.
The issue I want to pick up comes in paragraph 15 of the DPRRC report, which talks about a memorandum exchanged between it and the department in relation to the powers that would be applied to the regulator. It starts by saying where those powers are found: in Clause 17. It explains that the department feels that it is important to retain flexibility as to who is to be appointed to ensure that the right person or persons are appointed as a regulator. Of course, that point has probably now been overcome by time. It also makes the point that the functions could be regulated. Indeed, we had earlier recommendations that suggested quite persuasive arguments for the regulatory burden to be carried by more than one body. I hope that we will be able to make progress on this as we move through the Bill.
It is clear that if the regulator is to be the BBFC, the work of which is really the basis for the classification system that will be relied on in the legislation, it has a designation to do only part of its work under the Video Recordings Act 1984. It is important to pause here. The amendment that I am putting forward asks the Government to think hard about the correctness of a decision to appoint as a regulator a body that is only partially covered by statute at present. Does the Minister think it right that a private company over which the Secretary of State has limited powers in relation to who is appointed to that body should take on the sorts of responsibilities on civil penalties and the blocking of activity, as well as regulatory functions?
As the amendment suggests, does he not think that it might be more appropriate to look carefully at the body that takes on these responsibilities and to propose, as I do, that it should be either a body corporate or subject to more extensive powers of direction as to who is appointed and how any appointments are made? If that were the case, we could have more confidence in the ability of that body to make the right decisions in relation to all the functions that it has, which extend quite widely, and in particular to age verification, which is the subject of the Bill.
The British Board of Film Classification is a private company. Its number is 00117289. I checked today on the company’s register and, limited as the information is, it is quite revealing. It was first incorporated on 17 August 1911. So for nearly 107 years it has been a monopoly operator in a private capacity, acting in some senses on behalf of the Government in some of its functions. As I said, there are statutory functions in relation to video and now DVD, but none to any great extent in relation to film classification, which is the basis of the work that is being carried on in the Bill.
It is well known that, in its original form, the BBFC was called the Incorporated Association of Kinematograph Manufacturers Ltd. It was created by the then manufacturers of projection equipment to protect the investment that they made in cinemas up and down the country against the watch committees, which had sprung up before but were now displaying an active concern about the impact of films on the morals of the population. This still exists. Technically, films are licensed for exhibition in the United Kingdom only through the local authorities. They normally take the advice of the BBFC. That was a clever move by the manufacturers of the equipment, which was at risk, to ensure that they stepped in ahead of the possibility of moral outrage by creating a situation in which they said and alleged that people would not be shocked by the sorts of thing that might cause alarm and despondency around the country. At that stage they could not have anticipated that Life of Brian is still banned in Glasgow—I think that I am right in saying that. That may or may not be of interest to anybody in the Committee, though perhaps it woke your Lordships up a bit. That is the kind of thing that can come from this rather unfortunate arrangement.
I will recap slightly. This private company last year made a profit of approximately £1.5 million on a turnover of £5.4 million. It owns freehold property not a million miles from here worth quite a lot of money. It has a board appointed by itself and a membership that is not disclosed in the company’s records. It operates in an area of considerable complexity and certainly some moral concern—and it is about to be given additional statutory responsibilities. Those are the main points that I want to make in this amendment.
I do not know whether what I propose in this amendment is right. It is an issue that should be thought carefully about before we move further. For instance, within the BBFC structures at the moment there is no appeal system. The regulatory functions of the Secretary of State are limited; they are mainly related to video and not to film. The powers that are about to be referred to it are mentioned by the Delegated Powers Committee as being of concern, so we need to find a way through that. We have yet to see how that will happen because we have not yet had the Minister’s response. I beg to move.
Lord Paddick
My Lords, I support the amendment but not necessarily for the reasons articulated by the noble Lord, Lord Stevenson. Our concern is that if the Government started to appoint members of the British Board of Film Classification and therefore it was not independent of government, we would have a situation in which the Government would potentially be involved in deciding which films or material should be censored or not, which is not a path we would like to go down, particularly in the current climate of populism and the historical issues that that raises.
Lord Arbuthnot of Edrom (Con)
My Lords, the noble Lord, Lord Paddick, has just given the speech that I was rather expecting the noble Lord, Lord Stevenson, to give. The amendment suggests that the Government should be completely out of the running of the BBFC, yet in his very interesting and important remarks, the noble Lord, Lord Stevenson, said that he was a bit concerned that the Government should think it right for this private company, over which the Government have very little power, to have such responsibilities.
The noble Lord, Lord Stevenson, was right to say that the current position is that the BBFC appoints itself. The council of management is chosen from leading figures in the film industry; that council chooses the president and the director, and then they do this important work. If we are to change that, we need some evidence that either there is a risk of the Government interfering in these decisions or that these decisions are being got wrong in some respect. I am not aware that these decisions are being badly taken. As far as I can tell, the BBFC is doing a pretty good job, and until we are clear what regime we want to go to, I would rather leave the law as it is.
Lord Ashton of Hyde
My Lords, I am grateful to noble Lords who contributed to this brief debate, especially the noble Lord, Lord Stevenson, who demonstrated his long experience in the world of film trivia.
The BBFC is an independent, not-for-profit, non-governmental body which classifies films and videos. The BBFC operates a transparent, trusted classification regime based on years of expertise and published guidelines that reflect public opinion. It is self-financed through fees from industry for the work it carries out on classification. It protects children and other vulnerable groups from harm through its classification work, which is legally enforceable and empowers consumers, particularly parents and children, through content information and education. In addition, it is the independent regulator of content delivered via the UK’s mobile networks. Using the standards in the BBFC’s classification guidelines, content which would be age-rated 18 or R18 by the BBFC is placed behind access controls and internet filters to restrict access to that content by those under 18 on all non-age-verified phones.
Amendment 71A introduces a new clause which seeks to clarify the position of the BBFC as an organisation independent of the Government. This proposed new clause also seeks that all appointments made by the BBFC be subject to fair and open competition. I am afraid we do not agree with the noble Lord, Lord Stevenson, that it is necessary to make provision for the independence of the BBFC. The role of age-verification regulator will be one that the BBFC carries out alongside its other independent roles. We do not seek this requirement for its work under the Video Recordings Act, where BBFC officials are also designated by the Secretary of State via notification through Parliament.
The Bill sets out clearly the powers of the regulator, and where it is thought appropriate that the Secretary of State should have a role, this is made clear. For example, in relation to ISP blocking it will be important that the Government and the BBFC work together on a deconfliction process. The Bill provides for a parliamentary procedure for the designation of the regulator, as it is right that Parliament should have the opportunity to scrutinise this important appointment. As we have already covered, the DPRRC has made a recommendation on the designation of the regulator and I assure noble Lords that we are currently considering this carefully before responding.
The other requirement in this proposed new clause is that any appointments made by the BBFC should be subject to fair and open competition. The BBFC is an independent body, and it is not the place for government to set prescriptive guidelines on its recruitment practice in a Bill. The BBFC is a well-respected organisation, as my noble friend mentioned, and has unparalleled expertise in classifying content. I have every confidence the BBFC will deliver on its aims.
With that explanation, I hope the noble Lord will feel able to withdraw his amendment this afternoon.
Lord Stevenson of Balmacara
I thank those who have contributed to the debate. I should make it very clear that I was not in any sense suggesting that the Government should take a closer or more direct action in relation to the work that we are talking about. The Minister made it very clear that the case was for an independent body. I had in mind a not dissimilar situation that arose in a Bill that the noble Lord and I debated only recently, when it was decided that an organisation set up as a private company, which was operating in the public interest, should move from that position and be given company status under a royal charter. The National Citizen Service Trust emerges very shortly from that chrysalis, and it struck me that there were parallels—the Minister is smiling, so I think he gets the point I am making.
The response was also interesting in that the Minister was making the same point that I was making, but from a slightly different direction. It is inevitable that the Government and the regulator so appointed—probably the BBFC—will have to think very closely together about these matters. I think the Minister said they had to be on a “deconfliction” basis—a new word that I have not heard before, although I think I get the message. I think it also means that they have to be of similar mind and aiming in the same direction. In time, the need to ensure that this work is done properly and effectively, in accordance with broad principles already set out in statute law elsewhere, will inevitably mean that the Government should take the steps I am suggesting here, even if it may not be appropriate yet to do so. In saying that, I am not aware of any evidence that would convince the noble Lord who spoke from the other Benches that there is need for urgent action here. I just feel uncomfortable about any body that has responsibilities of a statutory nature not being subject to statutory control. That is really the basis of this, but in the meantime I beg leave to withdraw the amendment.
“( ) In section 107 (criminal liability for making or dealing with infringing articles, etc.), after subsection (1) insert—“(1A) A person commits an offence who—(a) manufactures for sale or hire,(b) imports into the United Kingdom otherwise than for his private and domestic use,(c) in the course of a business—(i) sells or lets for hire;(ii) offers or exposes for sale or hire;(iii) advertises for sale or hire or otherwise promotes;(iv) possesses in the course of business with a view to committing any act infringing copyright;(v) installs, maintains or replaces;(vi) distributes; or(d) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the copyright owner,any article or related software which is primarily designed, produced, or adapted for, or which is primarily used for, the purpose of enabling or facilitating copyright infringement and which he knows or has reason to believe will be used (whether alone or in conjunction with another article or service) to infringe copyright.”
Lord Stevenson of Balmacara
My Lords, this moves us into Part 4 and intellectual property. We start with rather a narrow but quite important point about the way technology is moving forward in this area and the need to make sure that the statutory basis under which we look at issues relating to broadcasting and television is kept up to speed. I am joined in Amendment 71B by the noble Lords, Lord Clement-Jones and Lord Foster, for which I am very grateful. I am sure they will give more examples of and more detail on the topic that we are discussing in this group, about devices and services that infringe copyright.
These amendments look at digital TV piracy, which is a relatively new phenomenon but has come about because of the growing amount of close-to-live retransmission of broadcasts—and indeed of live broadcasts themselves—and the services that provide on-demand access to films, television series and other audio-visual content, including music. The categories are slightly different, but they are both very damaging to rights holders. Devices normally feature a mixture of both categories of services, and you can buy them readily on the open market and install them yourself, so it is a growing problem for those who control content and wish to make sure that rights holders earn from it.
These amendments suggest changing two sections of the Copyright, Designs and Patents Act. Amendment 79A relates to Section 297A and transmissions, while Amendment 71B relates to Section 107 and on-demand services. I beg to move.
Lord Clement-Jones
My Lords, as the noble Lord, Lord Stevenson, has said, we strongly support this amendment and I am grateful to him for having tabled it. I shall go into a little more detail than he was able to do in order to illustrate some aspects that very much concern the creative industries. A substantial and growing threat is posed to the creative industries by a combination of faster broadband speeds and the widespread availability of cheap plug-and-play devices offering access to infringing software. These devices can be simply plugged into TV sets, offering viewers increasingly easy access to pirated digital content. The Government’s IP enforcement strategy recognises this threat.
The creative industries are deeply concerned about the growing scale of digital TV piracy and have noted a significant increase in the levels of illegal streaming, which inevitably undermines business models within these industries and threatens investment in new content creation. Clearly, the challenge needs to be met on multiple levels, including education campaigns, use of technology, increased enforcement activity and, crucially, clearer laws which are simpler to enforce.
There are a variety of ways that users access infringing content. Typically, this involves a device such as a USB stick or small android box which is plugged into a TV set using a standard connection. The device can be “fully loaded”, meaning it has software and add-ons preconfigured, giving access to thousands of streams, or users can purchase boxes with software such as Kodi installed—an open-source software platform—and then source and configure their own illegal add-ons. The Government’s own statistics highlight the significant growth in the use of this technology, and research by the Industry Trust for IP Awareness shows worrying signs that such behaviour is becoming normalised and socially acceptable.
The scale of the problem is very significant. Listings on Amazon give the boxes a legitimacy—the Industry Trust study revealed that 44% of people assume that if they buy a box or stick from a retailer such as Amazon, it must be legal. An Amazon search for “Kodi” just yesterday auto-completed with “Kodi box fully loaded” and “Kodi fully loaded TV box with Sky Sports and Movies”. That “Kodi” search produces 4,554 results. The first listing is highlighted as an Amazon best-seller and is on offer through Amazon Prime, despite the Q&A under it saying rather different things. IPTV boxes, as they are called, are widely available, with more than 14,000 listings across 511 online marketplaces, equating to more than 4 million items in stock globally. There are more than 200,000 videos on YouTube providing a step-by-step guide on how to install and use Kodi add-ons in order to stream free TV.
Given the rapid growth of such devices, it is not unreasonable to suggest that illegal IPTV boxes could become the second largest pay-TV operator in the UK within 18 months. Despite the IP enforcement strategy identifying the problem, there appears to be a reluctance to make the law simpler and more effective. At present, law enforcement has to rely on general provisions, such as aiding and abetting offences under the Fraud Act, or encouraging offences under the Serious Crime Act. This is because the Copyright, Designs and Patents Act does not address today’s or future issues, and the various offences in it do not include what is by far the most prevalent offence today: the supply of devices intended to commit digital piracy. A specific offence is much needed and was proposed in the other place as an amendment to the Bill.
There are examples of law enforcement agencies such as trading standards and PIPCU being unable to pursue strong cases due to the lack of an appropriate offence. As a result, despite the industry dedicating considerable resources over a long period to protecting its intellectual property through existing enforcement mechanisms, there has been insufficient success and what limited progress has been made has taken far too long. Now, a fit-for-purpose enforcement regime is needed which is kept up to date with technological advancements and new risks posed. This requires the creation in the CDPA of a specific offence relating to devices used for IP infringement.
We have been told that over the past year, the Sky security team has identified more than 100 cases involving digital TV piracy, but they have been extremely difficult to pursue through trading standards or, indeed, through PIPCU. The industry has gone to the extent of seeking counsel’s advice on whether anything in existing law adequately covers the offences involved. It is clear that, while there has been a recent successful five-week private prosecution of a complex case involving pan-European organised crime, this is not the most efficient way to deal with a new challenge. The CDPA, originally written in 1988, needs to be updated to reflect new technology and the subsequent risks posed. New legislation would help trading standards to prosecute those preloading and distributing IP devices.
I very much hope that the Minister will take this opportunity to support this important amendment.
Baroness Kidron
I too support Amendments 71B and 79A. It is perhaps worth reiterating my interests as a film maker and, therefore, often a rights holder. I share the concerns of broadcasters about the challenges of piracy and the implications for future financing of original content. The noble Lord, Lord Clement-Jones, has done justice to that point.
This is also a generational issue, as 11 to 15 year-olds are the biggest users of these devices, which are plugged directly into television sets. Technical studies of IPTV use recently conducted by the Industry Trust revealed that they often include unauthorised apps, add-ons and advertising, and totally bypass the current systems of parental control, age rating and BBFC guidance. They are not subject to the usual protections that apply to content that we normally view on our television screens. If they can be bought from legitimate retailers and paid for through legitimate payment providers, we can hardly blame people for not really understanding that they are illegal.
Contrary to the Minister’s previous suggestion that I might like to shut down Twitter—far from it. By what other means would I know what the American President was thinking day and night? I am not a huge fan of blocking or censorship.
I beg noble Lords’ patience, as I want to go back to something that we may have gone through. It is about consistency. My argument is all about consistency. I was disappointed by what the Minister said about social media companies, which seem to have picked up very few responsibilities this afternoon.
I wonder whether we have done the maths right. Surely, even a small slice of these huge companies with their billions of daily interactions is comparable with the large sites entirely dedicated to pornography. I have listened very carefully to the debate and wonder whether, if we had been using the word monetise rather than commercial, we might have got a little closer to where we need to go. I hope I will be forgiven for going back to Part 3, but I have risen to speak about consistency.
Given the ambition of Part 3 of the Bill, it seems inappropriate that unregulated content is being delivered to TV screens outside of Ofcom or BBFC oversight. I feel that every child, parent or carer should have access to the technical and regulatory protections while streaming content on their TV screens, should they elect to use them. The current legislative framework is out of date and does not make it sufficiently clear that devices adapted for digital TV piracy should not be sold by legitimate online retailers. As a result, children are watching content in an unregulated context. That should be a factor when considering the merits of these amendments.
Lord Gordon of Strathblane
Very briefly and anecdotally, I had a briefing session with Sky and the Motion Picture Association and, as somebody who is in the wrong age group for being able to use these kinds of things, I was absolutely appalled at how easy it is to get hold of a pirated film. I agree with the wording of the amendments; they are sufficiently vague that they will, hopefully, future-proof us. If they were too detailed, we would run the risk of having something that the criminal classes would find it all too easy to evade. I urge the Minister to give this consideration.
Lord Foster of Bath (LD)
My Lords, I, too, will be brief, but I think it is important that we keep pointing out the number of problems that are currently not being addressed. My noble friend Lord Clement-Jones has given some figures, as have the noble Baroness, Lady Kidron, and others, but it is worth recalling, for example, that in the second quarter of 2016 alone, no fewer than 51 million pieces of film and TV content were accessed illegally online, according to the Intellectual Property Office.
The case has already been made that this is damaging very seriously the commercial ability of the legal providers of content. We know from another survey that one in five people who are using this illegal approach has now either completely cancelled or cut down their subscription to legal platforms. As has been pointed out, any attempt at enforcement has so far found itself in difficulty because of the inadequacy of the existing legislation—hence the call in both Amendments 71B and 79A that we put in place a fit and proper enforcement regime and definitions of specific offences.
The noble Lord pointed to the briefing he had from Sky—and no doubt he will have heard from Sky about the number of times that it has been able to identify illegal activity going on, whether it is with local trading standards or the Police Intellectual Property Crime Unit, but has had difficulty taking prosecutions through to the final stages. People have got away when perhaps, if we had had fit and proper legislation as is being proposed here, that would not have been the case.
Sky gave one example:
“Following an investigation … where live sport was being streamed and made available on IPTV boxes via two websites, a referral was made to PIPCU in September 2014. Search and seizures were made in July 2015 … the pirate was remanded in custody, he was later released following an appeal. Two years later, the pirate has re-opened his site with the same name but moved from .net to .biz with the Crown Prosecution Service still considering”—
how it might go about prosecution. It is for this sort of reason that we need these amendments, or something like them.
Baroness Buscombe (Con)
My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.
An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.
That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.
In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.
Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.
IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.
With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.
Lord Clement-Jones
Before the noble Lord, Lord Stevenson, expresses his view of the Minister’s response, may I ask her a few questions? She gave a bit of a “curate’s egg” response, giving with one hand and taking away with the other. At the end of the day it might be considered that a criminal offence is appropriate—but as to the call for evidence, does the Minister have a timetable that she can reveal to the House for this to take place? Will it include the role of intermediaries?
I think that the Minister can understand some of our impatience in this area: legislative opportunities to deal with this kind of infringement are few and far between, and this is a major problem. The percentage of people using this software and these boxes is rising inexorably, and that is having a very bad impact on the business models of many in these industries. We urge urgency on the Government.
Baroness Buscombe
I respect what the noble Lord has just asked, but I did say—maybe I was not clear—that we would run a public call for views over the coming few weeks.
Baroness Buscombe
Absolutely—weeks. We will ask investigators, prosecutors and industry representatives whether they think the existing legislation provides all the tools needed. IPO officials have also been meeting intermediaries, and I am sure that they would welcome more such meetings to see that we get this right.
Lord Maxton
That does not include material that would not be shown otherwise on either a tablet, a computer or on television. I am wearing the tie of Hamilton Rugby Club, and I can watch the games on YouTube the week after.
Baroness Buscombe
My Lords, we are talking about taking on the seriously important issue of all illegal access. That is part of the problem with primary legislation, as it is very often not otiose but an anachronism before it has even begun. So often primary legislation leads to us being behind the curve. In fact, I remember so well sitting where noble Lords opposite are sitting when the then Communications Bill was taken through the House in 2003. I remember asking officials why there was no mention of the internet in 2003 given that a certain person called Mark Zuckerberg was developing Facebook and the new world of social media. I was told privately, “Because it’s too difficult”. We are dealing with complex areas of law but I have history in this regard. I look at the noble Lord, Lord Gordon of Strathblane, who, of course, was sitting on this side of the House in those days. I think he will attest to the fact that we were grappling then with issues which almost immediately turned out to be behind the curve when that enormous piece of legislation was introduced. I hope noble Lords will accept that it is much more important to try to get these issues right than enshrine our hopes of tackling these serious problems in primary legislation in ways that will not work almost immediately.
Lord Stevenson of Balmacara
This has been a very useful exchange and I think that we have moved forward a little. I think the noble Baroness would accept that the point on which we ended was really the point that the noble Baroness, Lady Kidron, made—that there is a way of getting into this argument which tries to embrace that point about the technology. We may not have the flexibility or the ability to work the technology as well as our children and grandchildren do. It may be a generational issue. The problem may lie more in enforcement than in changing the law because, as the noble Baroness pointed out, the Fraud Act, the inchoate offences legislation and the CDP Act all contain provisions which can probably be used to tackle this issue. However, there is a lack of fit with that movement forward and the technology and the use being made of it by younger generations who do not see the issue in quite the same terms as we do.
Intellectual property as a business model is not well served by traditional models involving traditional economics. The whole point about a patent is that it gives you the monopoly that most of competition law seeks to remove, albeit for a limited period. Copyright is no different in that sense. This is not perhaps the time to argue this, certainly not at this stage in the proceedings, but it could be argued that by going to a “life plus 70 years” model for copyright—noble Lords who are earning money out of this should close their ears—we are probably making a mistake which future generations will want to come back to, because the incentive to invest in innovation has to be matched against the right to exploit that at some point. Arguably, life plus 70, particularly as people live longer, is probably not the appropriate model and a more restricted term, which would also be subject to additional requirements to make material available, might be the way forward. In that sense, some of this stuff might not therefore be a problem today as opposed to when we are a long way into it.
However, I welcome the investigation that the noble Baroness mentioned. The timing seems rather rapid for government; I was surprised to hear it but, if that is the case, who are we to say no to it? If the commitment is there and the Government are prepared to bring forward legislation to tackle this issue—I am sure that she said this, as I wrote it down—we could not be more happy. I beg leave to withdraw the amendment.
Lord Clement-Jones
Lord Clement-Jones
My Lords, in moving Amendment 73 I wish to speak also to Amendment 235. It has been a longish road towards Clause 29. I seem to remember putting down an amendment similar to this clause on two previous occasions, when we had considerable debate about its merits. I am delighted that Clause 29 has finally, after much debate and discussion within government and outside, seen the light of day. I welcome the Government’s saying that they are seeking to implement repeal soon. However, there is considerable concern that they may attempt to delay effective repeal through transitional arrangements for up to two years. There is a very strong view within the television industry that Section 73 should be repealed as soon as possible in order to provide certainty for PSBs and to ensure that investment by public service broadcasters in UK content is protected.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
I must advise the Committee that if Amendment 73 is agreed to, I cannot call Amendment 73A by reason of pre-emption.
Viscount Colville of Culross (CB)
My Lords, I declare an interest as a director and producer of television programmes for public service broadcasters. I have put my name to Amendments 73 and 235 because I want the public service broadcasters in this country to benefit as soon as possible from the repeal of Section 73. I also support Amendment 73A, which seems a very sensible use of any money the PSBs might garner. The question of whether there should be a transitional period after the repeal of Section 73 seems to revolve around the issues of whether underlying rights need to be worked out as part of the retransmission negotiations and whether it will take time to introduce a new structure for negotiating licensing arrangements between PSBs and cable providers.
At the moment, all channels, including the PSB channels, routinely buy the rights for “traditional” cable retransmission if they anticipate content being carried on cable, so rights should not be a problem. Therefore, any negotiations will focus on the licensing arrangements between the PSBs and the cable providers. As there is already a structure in place for the licensing arrangements of the PSBs’ non-core digital channels, this surely cannot be an excuse to put off the introduction of a similar framework for the core channels the moment Section 73 is repealed. I, too, am saddened by the extraordinary amounts of money that seem to be made by the streaming catch-up websites, such as TVCatchup and FilmOn. The litigation appears to suggest that millions of pounds has been made by these websites and therefore lost by the PSBs. The sooner we can stop that loophole, the better.
There is a genuine need to give extra financial support to the PSBs in this country. As the noble Lord, Lord Clement-Jones, said, they are the major customers for original UK content in all genres. They are threatened by the success of BSkyB and, in the BBC’s case, threatened with a 20% cut in funding as it takes on the burden of the concessionary TV licence fees. The noble Lord, Lord Clement-Jones, said that huge amounts of money would not be made by the repeal. However, the 2013 NERA report in the US noted that the free-to-air American broadcasters received $3.3 billion in retransmission payments, while the fees accounted for less than 3% of the cable operators’ cost. Therefore it seems that while UK PSBs will be able to raise extra money from new retransmission fees to invest in new content, the repeal will not have much impact on the price charged to the viewer. The removal of Clause 29(3) and the rapid introduction of the repeal of Section 73 will benefit both the PSB content providers and the creative industries across this country.
Lord Black of Brentwood (Con)
My Lords, I should like to say a few words in support of Amendments 73 and 235, to which I have added my name, and in doing so draw attention to my media interests as listed in the register. Like the noble Lord, Lord Clement-Jones, whose summary of the issues was excellent and which I wholeheartedly endorse, I warmly welcome Clause 29 and the Government’s decision to scrap Section 73, but I urge them to get on with it straightaway rather than having any form of transitional period, as time really is of the essence.
There is a good reason for that. No one can be in any doubt about the speed of change right across the media. A technological tsunami is overwhelming all those involved in content production, while the pace of development in the sector is relentless and punishing. It is the clear responsibility of any Government who believe in the creative economy—and this Government certainly do—to do all they can to support them through it, in this case by allowing the commercial television sector to invest more in world-class content. The question of retransmission fees is one where the Government can be a real help or, indeed, a real hindrance.
The legislation that is being repealed is nearly 30 years old. When it was put on the statute book, the fax machine was a technological novelty and there is simply no rationale for it continuing a day longer than it has to. Like the noble Lord, Lord Clement-Jones, I cannot see any reason for there to be a transitional regime, especially as all those involved have had fair warning of something which, as he said, we have been discussing since 2008. A further delay of up to two years is a lifetime in the creative industries and Section 73 is doing real harm now. If we are committed to a successful commercial public sector broadcasting industry and want to see investment in brilliant content, we should make sure that Section 73 goes as soon as the ink is dry on this legislation. Any law that is out of date and doing positive harm should go straightaway and not linger. It would be a real boost right across the whole of the UK’s creative economy and ensure that it gets an immediate benefit from this very important Bill.
Lord Stevenson of Balmacara
My Lords, this has been a good debate on a topic that has been well rehearsed in this House. I have stood at this Dispatch Box and in the Moses Room trying to support the Government in their attempts to get to the root of this issue over a number of years and I sense that we are reaching the end of a journey. At this stage I am not opposing the decision by the Government that is reflected in the Bill to remove Section 73, but when the noble Baroness responds I hope she will be very clear about some of the thinking behind it. I do not think the issue is as uncomplicated as some other contributors to the debate have said.
In the first place, I understand that the primary reason is the abuse that has been exercised by non-cable operators in recent years, referred to by the noble Lord, Lord Clement-Jones, in relation to using Section 73 to try to gain access to PSB material for retransmission on iPad and other devices, but not on cable. Obviously, the review carried out by the Government was important, but the conclusions seem to reflect the fact that the thinking is still that the “must offer, must carry” provision will interpose itself into any negotiations about value. That is because if you must offer and there is a “must carry”, that will not make it a free and open negotiation about what the price should be. So I shall be interested to hear what the noble Baroness thinks. I understand that the Government have decided that although the repeal should go ahead, it should not result in significant fees flowing from cable operators to PSBs so, as I say, I should like to know what the thinking is on that.
While I agree with the way the Government are going forward, I worry about the risk of blank screens. If negotiations are to take place but result in a failure to agree, a very large number of people who have signed up in good faith to cable channels might not be able to watch the programmes that primarily drove them to sign up; that is, those of the PSB channels. In that sense it is important that we get absolutely the right story on that.
Our Amendment 73A, which I am delighted to hear is supported by the noble Viscount, Lord Colville, the feeling is that if money is to be paid for carrying this material, it is important that it should be recirculated into original British production and not used simply to repay shareholders and others.
Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in this important debate on the issue of retransmission fees. A number of noble Lords have tabled amendments urging the Government to get on with the repeal of Section 73 as quickly as possible.
The Government, through the Intellectual Property Office, consulted on the technical aspects of the repeal, including on the question of a transition period. The Government will, hopefully very shortly—and I say that with some strength—be publishing their response to this consultation, and I believe that the noble Lords will find this response enlightening and helpful. I therefore suggest that we return to this issue on Report, where I can fully set out the details of how the repeal will be conducted.
The noble Lord, Lord Stevenson, also tabled an amendment that would require any new fees which may flow to the public service broadcasters to be reinvested in original British content. I believe it is premature to legislate on this issue. We need to see how this new market develops after the repeal of Section 73. The British broadcasting landscape, with its steady flow of high-quality output, is envied around the world. The public service broadcasters are already pulling their weight here and face content requirements set by Ofcom. I do not believe that it would be necessary or desirable to legislate in this area that works so manifestly well for British audiences.
Clause 29 will repeal Section 73 of the Copyright, Designs and Patents Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services—and any work in the broadcast—retransmitted by cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, cable TV platforms are currently not required to provide copyright fees in relation to the core public service broadcaster channels. Last year, the Government consulted on the repeal of Section 73 and the balance of payments between public service broadcasters and TV platforms. The conclusion reached was that Section 73, as noble Lords have said tonight, is no longer relevant.
Today, a wide variety of platforms ensure that virtually everyone in the UK is able to receive public service broadcasts. Following digital switchover, completed in 2012, digital television services are now available for over 99% of consumers through a combination of digital terrestrial television, satellite and cable platforms. The cable market has now moved from a large number of local providers in the 1980s to one big provider and a few—very small—local platforms, and from 130,000 subscribers to over 4.5 million to date. The Government are satisfied that the objective of ensuring that public service broadcast services—as well as other TV services—are available throughout the UK has been met, and therefore Section 73 is no longer required to achieve that objective.
Moreover, the repeal of Section 73 will close a loophole used by providers of internetbased live streaming services of broadcast television programmes. These providers are relying on Section 73 to exploit PSB content by retransmitting channels and selling advertising around the service, without any benefit flowing to the PSBs.
I hope that, on that basis, noble Lords will feel able to withdraw their amendments.
Lord Clement-Jones
My Lords, I thank the noble Viscount, Lord Colville, and the noble Lord, Lord Black, for their comments and support for these amendments.
The noble Viscount, Lord Colville, talked about underlying rights and, of course, there should not be any anxiety about whether these have been obtained sufficiently for retransmission. Channel 4 tells us that it has a multiyear contractual arrangement in place with Virgin Media for which all the rights are cleared, so there is no impediment. The noble Viscount also made the point that the money involved in retransmission fees is a large amount for public service broadcasters but relatively small for cable operators. That is another factor.
The noble Lord, Lord Black, stressed the point about time being of the essence. I am delighted that the Minister responded to that, because we are in a context where the creation of world-class content to be competitive on the world stage could never be more important. He described further delay of two years as being a lifetime in this industry. That is absolutely true.
In the circumstances, and compared with many ministerial responses, I thought the Minister’s response extremely positive. I do not think I have ever had such a tantalising response about revealing all on Report. That is quite something.
I may be getting this wrong and the Minister can correct me, but I assume there will be some sort of revelation on Report about the timetable. I am perfectly happy to table a probing amendment to get the full benefit of her response on timing, but if she is going to table an amendment that would move things towards the kind of timing we are looking for in this amendment, as a result of the technical consultation finally being determined by the IPO, I will not quarrel with that. I am very happy to suspend judgment, but a nod is as good as a wink in Committee. If the Minister would like to say anything further about what precisely she meant by what she might do on Report, I would be open to suggestion.
Baroness Buscombe
My Lords, I will not be tempted at this stage, but I repeat that, when we get to Report, I think noble Lords will find my response enlightening and helpful.
Lord Clement-Jones
My Lords, that is even more positive than the first time around. In those circumstances, we will suspend judgment. I beg leave to withdraw the amendment.
Lord Clement-Jones
“Remote e-lending
(1) Section 5 of the Public Lending Right Act 1979 (citation, etc.) is amended as follows.(2) In subsection (2)—(a) in the definition of “book”—(i) after “(an “audio book”)” insert “which has been licensed by the publisher on agreed terms for library lending”,(ii) after “(an “e-book”)” insert “which has been licensed by the publisher on agreed terms for library lending”;(b) in the definition of “lent out”, for paragraph (b) substitute—“(b) includes communicating by means of electronic transmission to a place other than library premises”.”
Lord Clement-Jones
My Lords, I am very conscious of the time and I will try to be as brief as I can. The amendment is designed to amend the Bill to extend the public lending right to remote e-book lending.
The way we access books is increasingly changing as technology offers new ways to access the written word. Libraries are now lending many e-books: 2.3 million e-book loans were made in 2015 alone and the figure in 2016 was more than 3 million. But authors are not being remunerated for those loans, despite the Government having committed in principle as long ago as March 2013 to extending PLR payments to e-books when a suitable opportunity arose.
The public lending right allows authors to be fairly paid for each loan when their work is lent through public libraries. It is designed to balance the social need for free public access to books against an author’s right to be remunerated for the use of their work. The scheme provides authors with a modest payment of around 7p each time one of their books—written or audio—is borrowed from a public library. More than 22,000 writers, illustrators, photographers, translators and editors receive PLR payments each year under the Public Lending Right Act 1979 and subsequent amendments. There is a minimum payment threshold of £1 and a maximum of £6,600. Although this does not replace the royalties authors would receive if their book had been purchased by each borrower, PLR provides a significant and much-valued part of many authors’ incomes, particularly for authors whose books are sold mainly to libraries and for those whose books are no longer in print but are still being read.
While the Digital Economy Act 2010’s extension of PLR to audiobooks was a useful and overdue reform—I remember well when we passed it—the extension to on-site loans of e-books was nugatory, as no such loans are made. By contrast, remote e-book lending has increased significantly and is increasing much faster than physical lending, particularly since reduced opening hours and the regrettable extensive library closures that the Government have taken no action to prevent mean that it is more and more difficult for readers physically to visit a local library.
Writers are keen to see the Government develop the public lending right to reflect modern media. I should stress that even though the precise wording of the amendment is not agreed across the board, its spirit is strongly supported by a range of bodies, including the ALCS, CILIP, the Booksellers Association, the Society of Authors, the Association of Authors’ Agents, the SCL Leading & Managing Public Libraries and the Publishers Association. So it has extensive support in principle.
The amendment would amend the Digital Economy Act to ensure that remuneration is received by writers for remote e-lending at the same rate per loan as for physical books. It is vital that authors receive remuneration for loans of their works, irrespective of format. The principle of remuneration that enables authors to work should not be unfairly obstructed by technical and technological change. I know that Europe is not fashionable in some quarters, but a recent opinion of the Advocate-General relating to a case on rental and lending in respect of copyright works currently before the Court of Justice of the European Union supports this view. He said:
“The lending of electronic books is the modern equivalent of the lending of printed books”.
This removes the Government’s previously expressed concern that such a change may not be compatible with the copyright directive—it clearly is.
The ability to access e-books facilitated by public libraries is a service valued by the public, and remuneration for public lending is a requirement of European law under the rental and lending directive. The current situation where millions of e-book loans receive zero remuneration is unlawful and creates significant prejudice to writers. It also places libraries in a position where works lent regularly may infringe authors’ rights.
The changes needed are achieved simply by taking measures to amend the Digital Economy Act 2010 by removing Section 43(2)(b), which sets remote loans outside the definition of lending under PLR. It would also be necessary to add a sentence to make sure that the commercial market was protected and that e-lending was put on a par with physical lending. The jargon in the trade, used by the Sieghart report which recommended that PLR be extended to remote e-lending, is “frictions”—which basically are the conditions under which digital books can be loaned to one reader at a time, just as with a physical book.
Other conditions are that a digital copy of a book can be loaned only for a limited period and that digital copies of books should be deemed to deteriorate, ensuring their repurchase after a certain number of loans. Those conditions are broadly accepted by the industry, but there was no desire to incorporate them in primary legislation so that they might be taken on board in the commercial arrangements made between publishers, authors and libraries.
The cost of this measure would be negligible, but the principle is extremely important—as was recognised by the Government in 2013. I hope that they will take this on board, because it is long overdue. It would do proper justice to our authors and writers. I beg to move.
The Earl of Clancarty (CB)
My Lords, I apologise for not having spoken at Second Reading. I want, however, to speak to Amendment 74, to which I have put my name, and to Amendment 79B.
I very much support Amendment 74, in the name of the noble Lord, Lord Clement-Jones, although I am delighted that there is now a firm agreement between the interested parties—including CILIP, ALCS and the Society of Authors, among others—for an amendment which is almost but not quite the same as Amendment 74. I hope that this tweaked amendment, which clarifies the nature of what is being loaned, or an amendment equally acceptable to all parties, can be brought forward by the Government and accepted on Report.
Lord Arbuthnot of Edrom
My Lords, conscious as I am of the time, I shall simply say that I hope that the Minister will be able to respond positively to this for the very good reasons given by both noble Lords who have just spoken. It is a matter of natural fairness; it reflects the convergence issues which have been spoken about in this Committee already; it reflects the technological tsunami that my noble friend Lord Black has spoken about; and it reflects what the Minister Matt Hancock has said in another place.
Lord Maxton
My Lords, I too support this amendment, but—there is a “but” to it—there are of course two types of e-books. There are those physical books which have been transferred over and copied into an e-system, but there are also increasingly a number of authors who write an e-book directly; they do not publish them at all in written form. I am not sure that this amendment takes account of the fact that there are increasingly these two different types of e-books.
Secondly, the fact is that Amazon which, rightly or wrongly, is the major contributor to the e-book revolution—I have a Kindle in my own pocket, which I read, and I have never picked up a book since I bought it—does not take part in the British national library system at all, as far as I am aware, although it does in America. Increasingly, Amazon is setting up its own lending system, where you can borrow an e-book from Amazon for a relatively small sum of money. You can only borrow it for three or four weeks at a time, but you can borrow it directly from Amazon. I have just a quick question to the Minister. Is there any progress in terms of Amazon becoming part of the system? I gather that one of the problems is that it uses a different type of e-book to the one that is used by the public libraries in this country.
The Duke of Somerset (CB)
My Lords, I intervene briefly to support this amendment, which seeks to rebalance the need for public access to all types of books against authors’ rights to some modest payment for their work. The PLR gives authors a small income where their books are sold mainly to libraries. The main point is that the PLR was extended to audiobooks in the 2010 Act for on-site loans but the need here is to extend it to remote loans, an area quickly increasing in popularity where items are downloaded to a computer situated away from the library.
We heard that zero remuneration is now illegal after the European Court of Justice ruling last November, so I expect that the Minister will have no difficulty in accepting this simple but important amendment. However, that ruling also drew attention to the difficulty of ensuring that only one copy is downloaded and that after expiration of the lending period no further listening can be enabled. Could the Minister indicate how this might be enforced or will it probably just be ignored?
Lord Stevenson of Balmacara
My Lords, briefly, I apologise to the House for the brevity of our Amendment 79B. We ran out of time and did not have the skills or ability to write an amendment that should properly have been in the Budget. We also lacked the temerity to do that. It is an aspiration not a probing amendment; it does not even qualify for that. It is a flag-waving exercise as we ought to think harder about the tax on knowledge. As the noble Earl, Lord Clancarty, said absolutely rightly, it is ridiculous that we believe that books in physical form somehow transmit knowledge and are worthy of having a VAT-exempt regime but when they are downloaded they must be subject to VAT. That seems unfair. We support Amendment 74 in the name of the noble Lord, Lord Clement-Jones, and look forward to hearing the responses from the noble Baroness.
Baroness Buscombe
My Lords, I thank all noble Lords for this important debate and for this proposed new clause. It seeks to extend the public lending right to include remote lending of e-books and e-audiobooks by public libraries. This would allow authors of these to receive payments from the public lending right fund, as they do for public lending of printed and audiobooks. It would also amend the definitions of e-books and e-audiobooks so that these works could be lent by public libraries only if they have been licensed by publishers on agreed terms for library lending.
The Government support recognising authors for e-lending by libraries. We committed in our manifesto to work with libraries to ensure the public can access e-lending, and to appropriate compensation for authors that enhances the public lending right scheme. As the Minister in another place confirmed, we intend to legislate to extend the public lending right to include remote e-lending. In response to the noble Lord, Lord Maxton, I say that our intention is to include all e-books regardless of technology.
This proposal is supported across the sector, including by libraries, authors, publishers and booksellers. I am therefore pleased our commitment is also supported by noble Lords in this House. Public libraries increasingly provide e-lending to support reading and literacy in response to the needs of their communities. Most library loans remain of printed books, with over 200 million such loans in Great Britain in 2015-16—so not everyone has given up the printed word, as has the noble Lord, Lord Maxton. However, e-lending is growing, with 4 million e-book and 1 million e-audiobook loans in Great Britain in the same period.
In considering how to legislate to extend the public lending right to include e-lending, we are engaging with representatives of authors, libraries, publishers and booksellers to understand their views. A number of these have raised points that need careful thought before the Government table their own clause.
One point made by representatives of authors and publishers is that an amendment to the legislation should include protections for the commercial market. The proposed new clause seeks to do this by specifying that e-books and audiobooks could be lent out from public libraries only if they had been licensed by publishers on agreed terms for library lending. However, others had raised concerns about whether such a provision might impact on public libraries’ ability to acquire and lend e-books.
This is an important issue. Officials have therefore met sector representatives to allow us to consider carefully the views and decide on the appropriate way to proceed with our commitment. I understand that the discussions in recent days have been promising and that the respective parties have been considering whether they can agree a settled view on the issues. We want to continue to work together to support a strong book sector that helps promote opportunities for reading and learning by the public, so we intend to table our own proposals for the necessary legislative changes as soon as possible. We will carefully consider these views in deciding how to proceed. I hope therefore that noble Lords will not press this proposed new clause.
Amendment 79B requests that e-books be exempt from VAT. Issues affecting taxation are a matter for the Chancellor of the Exchequer. It would therefore be inappropriate to include this amendment in this Bill. There are other difficulties, however, in accepting such an amendment. VAT is an EU-wide tax and is applied by member states within agreed structures. While we remain in the EU we are bound by our international obligations. This amendment would cut across those obligations in respect of VAT. EU VAT law, agreed unanimously by member states, currently specifically requires the standard rate to be applied to all electronically supplied services. This includes e-books, which are services, not goods. Because of this, if we accepted the amendment we would be in breach of our obligations. To make the change proposed in this amendment a change of EU law will be necessary, supported by all 28 member states. While a proposal is currently on the table there have been a variety of different reactions from member states and no unanimous agreement. I hope that the noble Lord will therefore not move his amendment.
Lord Clement-Jones
My Lords, I thank those who have taken part in the debate. The noble Earl, Lord Clancarty, has throughout been a doughty campaigner for the arts and for authors. I also thank the noble Lord, Lord Arbuthnot, for his contribution, and the noble Lord, Lord Stevenson, in particular for an amendment that we would all support if only it were practical. Who knows? There may be some silver lining to Brexit at the end of the day. I do not think that that is quite substantial enough for many of us but it is certainly a little glimmer. I thank the noble Duke, the Duke of Somerset, as well. Of course we always bow to the superior technological knowledge in these matters of the noble Lord, Lord Maxton. I agree with the Minister: I am still an aficionado of the printed book, and am one of the digital book. There is a place for both in one’s library.
I welcome what the Minister said. In a way she performed a political ju-jitsu on us by thanking us for supporting her government line on this, which I thought was magnificent. I accept that it is in the Conservative manifesto. The Minister in the Commons pledged to come up with a solution to this. All that we have done really is to give the Government a bit of a push today. This wording is not the agreed wording. Agreement was reached, at the final hour—not in time to include in Committee today—between the various parties involved, particularly CILIP. As the noble Earl, Lord Clancarty, said, I am delighted that there has been agreement reached between the parties and the wording about which I have been told will perhaps be the wording to which the Minister will return, having performed her ju-jitsu at Report. Perhaps I have her in an armlock now to come back at Report with a suitable amendment. In the meantime, I beg leave to withdraw the amendment.
Digital Economy Bill
Monday 6th February 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
Baroness Janke
“Review of sale on the internet of counterfeit electrical appliances
(1) Within six months of the coming into force of this Act, the Secretary of State must commission a review of the sale on the internet of counterfeit electrical appliances.(2) The review must consider whether operators of trading websites that allow individual sellers to use those websites to sell electrical items should be required to report to the police and trading standards authorities any instances of the selling of counterfeit electrical appliances which are arranged through their website.(3) The Secretary of State must publish the report of the review, and lay a copy of the report before each House of Parliament.”
The Lord Speaker (Lord Fowler)
My Lords, it might perhaps be for the convenience of the Committee if we had a short pause so that those not engaged in the next business may leave the Chamber.
Baroness Janke (LD)
My Lords, I shall speak to Amendments 75 and 76, which deal with the sale of counterfeit electrical goods on the internet. There is growing concern about this practice, which has increased massively over the past 20 years—by 10,000%—and is continuing to increase at around 15% a year. The industry of counterfeit goods is worth something like £1.3 billion, according to the Electrical Safety Council, and 64% of these goods are sold on the internet. People believe that they are buying reputable brands, as they are dealing with an online retailer that is well known and they assume that the goods are genuine.
The fact that there are so many accidents and so many problems with these goods is another reason that we are bringing these amendments today, as we see this Bill as an opportunity to do something about this practice. The goods are often dangerous. The Electrical Safety Council calculates that something like 7,000 domestic fires are caused by faulty goods, and many of these are counterfeit goods. The practice of selling these goods undermines genuine brands and causes great difficulty within the industry. Faulty goods can also cause great harm directly to individual people.
These amendments seek to give some responsibility to online retailers to report to trading standards and the police goods that they know to be counterfeit. The second amendment requires the Government to provide a review and report on the extent of this practice as well as its impact on the economy. I beg to move.
Lord Tope (LD)
My Lords, my name is also to this amendment, so I support my noble friend Lady Janke. I declare that I am a patron of Electrical Safety First.
My noble friend has stated the problem very well. The ask from this amendment is very modest: we are asking the Government to establish a review. It may not be appropriate for that to be in the Bill, but it gives us an opportunity at this stage for the Government to come back and tell us what they are going to do about counterfeit goods, which are clearly a fast-growing problem.
Our particular concern is with electrical goods, although I could probably add gas goods as well. Counterfeiting clearly is a problem, and I do not minimise it, but a counterfeit handbag is unlikely to kill you; counterfeit electrical goods most certainly can, and do, kill people. I happened to spend my Sunday reading the trading standards journal TS Review, as I imagine many of your Lordships would have been doing. I read that,
“More than 99 per cent…fake Apple chargers failed a basic safety test. Twelve were so poorly designed and constructed that they posed a risk of lethal electrocution to the user”.
On the same page, it is reported that the London Fire Brigade has stated that,
“Across London, 2,072 fires involving white goods have been recorded since January 2011, with more than £118m estimated to have been lost from London’s economy as a result”.
This clearly is a problem, not only to those who produce the products legitimately. Indeed, I noticed that eBay, of all places, is setting up an authentication scheme so that the proper producers can have their goods authenticated by experts as being not counterfeit. This indicates a huge problem.
The purpose of these amendments is to seek a commitment from the Government that they will establish reviews into goods sold and, in particular, goods sold on the internet. I hope that the Minister will be able to tell us, first, that the Government recognise this increasing problem and, secondly, if they do, what they are going to do about it.
Baroness Buscombe (Con)
My Lords, I reassure the noble Lord, Lord Tope, that we recognise this problem, although I have to admit that I certainly did not spend my Sunday reading the trading standards review.
Amendments 75 and 76 seek to impose a commitment to review and report on the sale and cost of counterfeit electricals being sold online. The sale of counterfeit goods of all kinds, not just electrical goods, has, as noble Lords said, the potential to cause consumer and economic harm by damaging legitimate traders and often supporting organised crime.
This is an issue the Government take extremely seriously, and that is why the Intellectual Property Office is committed to tackling counterfeiting of all kinds. We do this by working through our IP attaché network in manufacturing countries, targeting import routes in conjunction with UK Border Force and targeting UK sellers and distributors along with trading standards and police services across the UK.
We have heard reference to the challenges of the online world and sales via social media. We absolutely recognise that, and that is why we have supported some very successful work through Operation Jasper, working with police and trading standards to tackle the sale of counterfeits through social media sites.
The full range of work undertaken by government in this area is outlined in the IPO’s IP enforcement strategy, which was published last year. This strategy makes a number of commitments that are very relevant to the ideas proposed in these amendments. The strategy commits the Government to further improving the reporting of IP crime as well as to developing a credible methodology to measure the harm caused. Work is also ongoing with academics to build the structures necessary for commercial entities to share information that they hold about levels of infringement in a safe manner. The IPO also hosts the IPO crime intelligence hub, which is able to receive, develop and disseminate intelligence on IP crime, whether online or physical. The hub is in regular contact with the UK’s leading online sales platforms, and they are continually developing better mechanisms for sharing information about sellers and products.
In addition to this, the IPO, on behalf of the IP crime group, which is a collection of government departments, industry bodies and enforcement agencies which work to tackle IP crime, publishes an extensive report each year on a wide range of IP infringement, including counterfeit electrical goods. The IPO is also working with Citizens Advice to see how it can offer better information to consumers so that they in turn can make more informed purchasing choices. Finally, the IPO is working to encourage trade associations voluntarily to share information about sales of counterfeits that raise safety concerns.
In light of all the things that the Government and others are involved in, I hope the noble Baroness will withdraw her amendment.
Baroness Janke
I thank the Minister for the information she has shared with us. It is very encouraging. However, there is a feeling that this issue has been around for a very long time and that perhaps stronger enforceability is needed to do something about it. I read that eBay is now producing its own mechanism for preventing the sale of counterfeit goods and that other online retailers will be looking at that, but it still seems that the ability to enforce action on this is missing. I hope to look at the work the Government are already doing on this and consider its future contribution and then consider whether to return with this matter at a later stage. I beg leave to withdraw the amendment.
Lord Foster of Bath
“Copyright and the role of active hosts
(1) The Electronic Commerce (EC Directive) Regulations 2002 are amended as follows.(2) At the end of Regulation 19 insert—“(2) Where an information society service is storing and providing access to the public copyright protected works, and is playing an active role, including the promotion and optimising the presentation of those works, sub-paragraph (1) shall not apply.(3) The service provider of an active host under sub-paragraph (2) is required to secure licensing agreements with rightsholders.””
Lord Foster of Bath (LD)
My Lords, in moving Amendment 77, I shall speak briefly to Amendment 79. Amendment 77 probes the Government’s intentions with regard to the recent proposals for an EU directive on copyright in the digital single market. The amendment would clarify that the hosting defence contained within paragraph 19 of the Electronic Commerce (EC Directive) Regulations 2002 does not apply to digital services that play an active role in the provision of online content, specifically those user upload services that optimise the presentation and promotion of copyright-protected works. The amendment would require those services to secure licensing agreements with rights holders.
To explain in more detail, many services are passive hosts, which are defined in EU law as those that provide a,
“technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient”.
Examples would include internet service providers such as BT, TalkTalk or Virgin, cloud locker services such as Dropbox, Microsoft’s One Drive or Google Drive, and online bulletin boards such as HootBoard or MyBB. Services such as these are accepted as essential to the operation of the digital market and so quite reasonably have what is called “safe harbour protection”—that is, a limitation of their copyright liability on the basis that they have no knowledge of copyright infringement. On the other hand, there are sites that also give access to works made available by third parties, but actively provide functionality that promotes works, makes recommendations and optimises the upload for the purpose of presentation. It is this functionality that provides users with the ability to find what they want when they want it. These are active hosts. They directly compete with licensed providers. Examples include Facebook, YouTube, Dailymotion, Bandcamp, Vimeo and Metacafe. They should not have safe harbour protection and should be required to secure licencing agreements with rights holders.
Therefore, while there was, and in some areas continues to be, justification for exemptions for passive hosts, like all exemptions they must reflect the balance between the rights of rights holders and users. There is a strong argument that the existing provisions are not sufficiently defined and as a result are open to deliberate misinterpretation. This means that some services can use copyright-protected content to build their businesses without fairly remunerating rights holders. UK Music’s recent report Measuring Music highlighted that the user-uploaded service YouTube, the most frequently used global streaming platform and one that currently benefits from the safe harbour provisions, increased its payments to music rights holders by only 11% in 2015 despite consumption of the service growing by 132%. This further underlines what is called in the trade the “value gap”. The current legal ambiguity and imbalance has created distortions in the digital market with services like YouTube benefiting from these exemptions whereas Apple Music and Spotify, providing similar services, do not. The growing significance of the music streaming market must not go unremarked. Over a four-year period, the UK music industry has grown by 17%, and during the same period, there has been a massive shift from consumers owning music to streaming it. The value of subscription streaming services jumped from £168 million in 2014 to £251 million in 2015.
There has been a number of legal cases seeking to clarify the situation. In 2011, in the L’Oréal v eBay case, the Court of Justice of the European Union held that online marketplaces cannot benefit from the hosting exemption where they play an active role, for example by promoting and optimising content. This amendment seeks merely to clarify what should already apply in the law right across the EU, including in this country. However, some services are still arguing that they are not active hosts, and as a result, avoid licences or are underlicensed, hence the need for the clarification that may be provided by this probing amendment.
There is another reason why we need greater clarity from the Government. Initially, the Government made it clear that they believed:
“Clarification of terms used in the Directive would, we believe, help to address … concerns”,
about the active/passive host issues. However, in a letter to the EU institutions in April last year, the then intellectual property Minister, the noble Baroness, Lady Neville-Rolfe, argued in relation to digital services that,
“we should avoid introducing legislation that might act as a barrier to the development of new digital business models and create obstacles to entry and growth in the European digital market”.
This probing amendment seeks to ensure that that sort of view does not preclude strong and robust positions being taken in support of safe harbour clarification. The proposals in the draft EU directive in this regard are welcome, and we ask that the UK Government continue to support the clarification in the law that the draft directive seeks and that they continue to engage in this important process.
The referendum result and the path towards Brexit raise many issues in relation to these proposals. It is highly conceivable that we will be Brexiting at the very time that Europe begins to adopt copyright rules for the digital age, so an opportunity to clarify UK law will be lost as a consequence of other factors. It is therefore necessary to consider how we can take this opportunity of having a Digital Economy Bill to safeguard these important principles once we leave the European Union. I hope very much that the Minister will confirm that the Government are committed to implementing the draft directive, and Article 13 and Recital 38, into UK law, if they are not implemented by the point that we leave the European Union. Finally, I am well aware that the Government have been consulting stakeholders on these issues. I hope we get a commitment from the Government to publish the consultation and that the new IP Minister, Jo Johnson, will commit to a meeting with representatives of the music industry and others to discuss these issues.
Briefly, we on these Benches fully support Amendment 79 in the name of the noble Lord, Lord Stevenson, which my noble friend Lord Clement-Jones and I have also signed. I have no intention of stealing the thunder of the noble Lord, Lord Stevenson, and will leave him to explain the importance of the amendment, which seeks simply to help the Government achieve their own manifesto commitment to reduce copyright infringement and ensure that search engines do not link to the most offending sites.
I will say merely that the Government have already hosted a number of round tables to seek ways forward, and some sources are telling us that a voluntary agreement for a code of practice is close to finalisation. If that is true then I am delighted to hear it, but this amendment would not preclude a voluntary agreement. Already many have argued to us that tabling the amendment may have helped to speed up the process towards a voluntary agreement with teeth, but the amendment would not do anything other than ensure that we had a backstop mechanism in the event of a failure to get a voluntary agreement or if the voluntary agreement fails. I hope that on that basis Amendment 79 will also be considered seriously by the Government.
Lord Stevenson of Balmacara (Lab)
My Lords, it is extremely kind of the noble Lord, Lord Foster of Bath to introduce my amendment for me, saying that he was not going to speak to it and then covering all the points I was going to make. That means we will move a little faster than we would otherwise have done. I think I can limit my speech to three points, in the sure and certain knowledge that the noble Lord, Lord Clement-Jones, will cover any points that I do not cover in great detail.
We understand that there is a voluntary code in circulation that has been offered to all parties, and it is thought that it might be signed some time this week—at least, that is the deadline that the Government have given. If that is the case, as the noble Lord, Lord Foster, says, then that is obviously good news and takes us a step down the road, but my amendment would be necessary if not everyone who has been offered this signs up to it, which I think is quite likely. There may be new entrants and other companies that participate in this area for which the activities that facilitate copyright infringement by users will remain a problem, and of course there may be changes in technology that we cannot even anticipate at this stage that may make it necessary, as adumbrated by the amendment, for the Secretary of State to return to this issue in future. For all the reasons given by the noble Lord, Lord Foster, this is a helpful amendment, intended to ensure that this long-running problem gets solved. I hope very much that the Government feel able to accept it.
Baroness Buscombe
My Lords, on Amendment 77, over recent years the UK has made great strides in the enforcement of intellectual property, and we are now judged to have one of the best IP enforcement regimes in the world. This is definitely a position that we are keen to maintain, and the Bill sends a clear signal that the Government believe copyright infringement is a serious matter, irrespective of whether it is online or offline. This includes measures to increase the penalty for online copyright infringement from two years to 10 years. We understand that there are concerns in the music industry particularly that online intermediaries need to do more to share revenues fairly with creators, which the amendment seeks to tackle. However, we need to find balanced solutions that provide clarity without undermining basic freedoms or inhibiting the development of innovative digital models.
As the e-commerce directive is EU single-market legislation in origin, we will in effect have to wait until after we exit the EU and then possibly initiate a debate as to whether this regime, or indeed the e-commerce regulations as a whole, is still fit for purpose. We are also wary of making piecemeal changes to this important regime that has helped to foster the development of online services and has been helpful to the development of the UK’s burgeoning tech sector without a proper debate involving all parties.
That said, the current law, including the exemptions from liability, has fostered an open and innovative internet, giving online services the legal certainty required to start up and flourish. This has been good for creators, rights holders, internet businesses and consumers alike. Platforms, like all businesses, have a role to play in helping to remove copyright-infringing material, and there is no place for a system that encourages copyright infringement online. However, the UK Government are fully committed to ensuring that our creative industries receive fair remuneration for their work. We want to see creators remunerated fairly, while encouraging investment in new content and innovative services. We will carry forward these principles when engaging at policy level with the EU while considering our own UK-based solutions.
The Government are clear that we must maintain our rights and obligations as members of the EU until we leave. That means that we carry on making arguments within the EU concerning our preferences for EU law. Once we leave the EU, we may choose to reconsider a range of issues, including the limited liability regime, but for now, government policy remains unchanged. The European Commission has recently published a series of copyright proposals in that area, and we are in the process of carefully considering those proposals. While we remain a member of the EU, we will continue to engage with policy development in this space, alongside considering the development of our own copyright framework.
Amendment 79 would mean that the Government take a power to impose a code of practice on search engines, to dictate how they should work to prevent copyright infringement. The return of that suggestion, which was also discussed in another place, gives me an opportunity to update noble Lords on progress in this important area. Since the idea was last discussed in the other place, IPO officials have chaired a further round-table meeting between search engines and representatives of the creative industries. While there are still elements of detail to be settled, the group is now agreed on the key content of the code and I expect an agreement to be reached very soon. All parties have also agreed that the code should take effect, and the targets in it be reached, by 1 June this year. The search engines involved in this work have been very co-operative, making changes to their algorithms and processes, but also working bilaterally with creative industry representatives to explore the options for new interventions, and how existing processes might be streamlined. I understand that all parties are keen to finalise and sign up to the voluntary agreement, and so we believe there is no need to take a legislative power at this time.
Surely it is better to act on a co-operative basis now, and start tackling this serious issue right away. If, however, a voluntary deal cannot be achieved, we will re-evaluate our options. I hope therefore that the noble Lord is reassured, and feels able to withdraw the amendment.
Lord Foster of Bath
My Lords, I thank the Minister for her response. On the second amendment, my concern is that although she is optimistic that we will have a robust agreement in place, if that does not happen—or if the agreement breaks down at a future date, for whatever reason—she has said merely that the Government will re-evaluate their position. She will be as aware as I am of the difficulty of bringing new legislation before your Lordships’ House to address any decision they might make at this time. The amendment would provide that backstop mechanism if it is needed in the long run, which is why I hope we will have an opportunity to discuss that at further stages of the Bill.
On the first amendment, the Minister has not been able to reassure me that the Government are committed to introducing appropriate legislation if the EU legislation has not been finalised at the time we leave the European Union. I hope therefore that we will have an opportunity to discuss that matter in more detail on a future occasion. For the time being, however, with an opportunity for us to reflect on what the Minister has said, I beg leave to withdraw the amendment.
Lord Clement-Jones
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due. (2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”
Lord Clement-Jones (LD)
My Lords, my noble friend Lord Foster of Bath has referred to the draft directive on copyrights on the digital single market. Many authors, writers and artists welcome the provisions to balance the playing field for creators announced in that draft directive and would like to see them incorporated in our domestic law through the Digital Economy Bill. Some of my concerns about the timing of the adoption of the directive mirror exactly those mentioned by my noble Friend, Lord Foster.
The directive proposes in article 14 one particularly important safeguard—namely, transparency: a right to regular, timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights, including details of modes of exploitation, revenues generated and remuneration due. This right will apply even if copyright has been assigned and will allow authors and performers to assess how their work has been used.
Some assignees and licensees are exemplary, but by no means all. Authors and performers under these provisions will have a right to detailed and full statements on the uses of and revenues from their work, unless such reporting is disproportionate. That in itself would be an enormous improvement on the present situation, whereby authors and artists often do not know how widely their work is used and have no way to check whether payments made to them are correct. This problem can become more acute in the digital age, when work can be disseminated in many ways and there is no physical stock which can be counted to ensure that accounting is correct.
As for music, subscription streaming is set to become the most significant revenue stream for the recorded music market in the near future. Streaming requires a fundamentally new licensing model from those who control the recording and song—lyrical and musical—copyrights, which the digital service providers wish to exploit. A complex model was developed, and is now utilised by most subscription services. The evolution of this licensing process for streaming music has resulted in a number of transparency issues for artists and songwriters which have not yet been fully addressed—not least, the presence of non-disclosure agreements between the digital service providers and the record labels, distributors, publishers and collective management organisations, which mean that artists and songwriters are not always allowed to know the revenue share and minimum guarantee arrangements that each digital service provider uses to calculate what the copyrights from which they benefit are due each month. There is also a lack of clarity over how labels and publishers apply contract terms that impact on how creator payments are calculated.
The amendment would work in a similar fashion to the proposals in the draft directive, ensure that creators can audit the royalties they receive from streaming and other services, and assess the relative merits of different services and business partners. Licensees and assignees already have systems in place for recording usage and revenues and reporting to creators. These systems are increasingly detailed in the digital age, and could easily be adapted to take account of any increased requirements. According to a medium-sized book publisher, reporting on 600 titles on the basis of spreadsheets takes 80 man hours per year, and the average time required for compiling and sending a report on a title is eight minutes. Simpler cases can be dealt with in two to three minutes, while the more difficult ones can take 10 to 15. The advantages far outweigh any cost and would help to make creative careers more attractive. Greater transparency would give a powerful message to consumers as they are generally more willing to pay for copyright-protected works if they know that fair remuneration would reach the original creators.
The directive itself is now subject to further consideration and review and may take 12 to 18 months, at best, to adopt, and perhaps even longer, as my noble friend indicated. As the Minister, or the Minister’s noble friend, reminded me recently, the Government have published a call for evidence on the copyright proposals. When will they take a definite view on the proposals, including these transparency provisions? The UK has an unparalleled opportunity to create a fairer playing field for creators by incorporating these provisions into the Digital Economy Bill, irrespective of whether we want to or can sign up to the directive. The question is whether it will. I beg to move.
The Earl of Clancarty (CB)
My Lords, I fully support the amendment of the noble Lord, Lord Clement-Jones. I do not have much to add to his thorough analysis of the issue other than to say that the right of artists, authors and performers to know what is being done with their work, and to obtain fair remuneration for the exploitation of it, is incontestable. This amendment would, in an effective manner, enshrine that right.
In one sense, information is money. This amendment will doubtless have hidden benefits in that anything that can be of further help to artists, particularly those who are less well off, to survive and thrive, and, perhaps, to become the high earners of the future, is a worthwhile long-term investment and can only be good for the individuals, the creative industries and the UK economy as a whole.
Baroness Buscombe
My Lords, I thank the noble Lord, Lord Clement-Jones, for raising this issue. Our creative industries ultimately depend on the efforts of authors, musicians and other creators, and I agree with the principle that they should be fairly remunerated when their works are used. We want to create an environment where the UK’s creative industries can continue to thrive and retain their world-leading edge. The creative content tax reliefs are one of the Government’s flagship policies, and the film tax relief alone supported over £1 billion of expenditure in the UK in 2015-16. The Government are also investing in skills to create a pipeline of future talent. Since 2013, we have made available up to £20 million match funding to the skills investment fund to help employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.
The amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on their use and the revenue they generate, and states that this obligation could be met by complying with a code of practice determined at sector level. It would also provide creators with recourse to court if these requirements are not adhered to. The principle of transparency is an important element of well-functioning markets. I am aware that some creators and their representatives find it difficult to access information on the use of their works owing, for example, to difficulties in negotiating suitable contractual terms. I am, however, happy to confirm to your Lordships’ House that the Government are already engaged in discussions to address this issue. The European Commission has made proposals in this area as part of its current draft directive on copyright, and the UK will actively engage in these debates while we remain a member of the European Union. As such, I hope the noble Lord, Lord Clement-Jones, will understand the Government’s wish to allow this process to develop before considering the case for domestic intervention.
I welcome the noble Lord’s recognition in his amendment of the important role that collectively agreed industry standards can play in this space. Creators and publishers alike have highlighted the role that such standards can play in improving transparency and fairness. Examples in the UK include the Publishers Association’s Code of Practice on Author Contracts, and the fair digital deals declaration operated by the Worldwide Independent Network. I believe that it is worth giving careful consideration to the part that these industry-led initiatives can play, and I hope the debate at EU level will be a chance to explore that. With this explanation, and the assurance that these issues are under active consideration, I hope the noble Lord will withdraw his amendment.
Lord Clement-Jones
My Lords, I thank the Minister for an extraordinarily well-crafted response—it seemed to throw bouquets in various directions, but I am not quite sure where the petals will fall at the end of the day. It was splendidly positive at the outset, and I felt a speech on industrial policy for the creative industries might be coming on. I thank the noble Earl, Lord Clancarty, for his very supportive contribution.
The Minister talked about transparency being an important element of a well-functioning market and went on to talk about codes of practice, the Government’s active engagement in discussions of elements of the EU draft directive, and so on, but she never actually agreed that the principle of transparency should be incorporated into UK law. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. However, the Minister did not say, “Yes, and moreover, given the call for evidence, we have heard the evidence on transparency and we fully support that element of the directive”. It was rather a case of saying, “Let’s keep talking and actively engaging”, and so on and so forth. I suspend disbelief slightly given that the Minister supported the principle but I am not sure she went so far as to support its incorporation into law. That is a rather different matter. We may well return to this issue on Report. In the meantime, I thank the Minister and beg leave to withdraw the amendment.
Lord Collins of Highbury
“( ) Information disclosed from one specified person to another specified person should be used for the purposes of a specific objective only.( ) Where the information is to be used for purposes other than the specified objective, additional approval must be provided.”
Lord Collins of Highbury (Lab)
My Lords, this group includes a wide range of amendments and our debate on it will be one of our key debates on this section of the Bill. Clause 30 allows specified persons to share data for a specified objective. Our amendments seek to define and limit this and to ensure that additional approval is required where there is broadening or leakage
My honourable friend Louise Haigh thoroughly scrutinised this provision in the other place. Certainly, it took me most of Saturday to read what was said in that Committee stage. I do not intend to repeat all the arguments that were made—but I give fair warning that it will take me some time to go through these key elements, given that the principles in these clauses have given rise to concern, certainly in your Lordships’ Delegated Powers and Regulatory Reform Committee.
I start by saying that we on these Benches are completely in favour of effective data sharing across government to achieve public sector efficiencies, value for money, improved public sector services, improved take-up of benefits for the most vulnerable such as the warm home discount, free school meals and, most importantly, an improved experience for those who use public services. We will come to a lot of those issues in later groups today where we have tabled specific amendments.
The public also support these objectives, but their trust is fragile. In recent years we have seen a number of failures in managing data. The Information Commissioner said in her recent briefing distributed to all noble Lords:
“Transparency and a progressive information rights regime work together to build trust”.
This part of the Bill gives the Government considerable powers to share data. But those building blocks in restoring trust that the Information Commissioner and just about everyone else agree are needed are sadly not mirrored in the Bill. That is the crux of today’s debate.
Instead, the building blocks are covered in regulations and codes of practice. As I said, many, including the Information Commissioner and your Lordships’ DPRRC, have stressed the importance of including such measures in primary legislation as opposed to codes of practice. Having read through all the codes of practice, I sometimes asked myself what we were dealing with. Is this Bill really at the stage of being submitted for parliamentary consideration? So much of it needs further work and further consultation that I really do wonder whether it should be in this House at all at this stage. This is something that we may have to return to.
A specified objective to permit disclosure must meet conditions set out in subsections (6) and (10) of the clause, but they are so all-encompassing that it is difficult to see anything that the public sector does that is not covered by the clause. The published codes give examples of objectives that would fall foul of these criteria, including those that are punitive, and it is useful to see those examples. But it is a real concern that such a clarification of the power is not in the Bill. Why does the Bill not explicitly contain or exclude a punitive objective? What are we avoiding here?
The codes also give examples of objectives that are too general rather than too specific, and it would help if the Minister could say exactly where that line could be drawn. Not only are the objectives not limited in the Bill but the bodies that can share or receive data are not particularly limited either. Subsection (3) states:
“A person specified in regulations under subsection (2) must be … (a) a public authority, or (b) a person providing services to a public authority”.
This is another area that gives people a lot of concern.
In the Government’s original consultation on the Bill, they stated their intention to proceed with proposals to enable non-public sector organisations that fulfil a public function on behalf of a public authority to be in scope of the powers. In that consultation, they said:
“We will strictly define the circumstances and purposes under which data-sharing will be allowed, together with controls to protect the data within the Code of Practice. We will set out in the Code of Practice the need to identify any conflicts of interest that a non-public authority may have and factor that information in the decision-making”.
I read the code of practice. Paragraph 71 refers to this and mentions non-public sector organisations. It says that,
“an assessment should be made of any conflicts of interest that the non-public authority may have”—
but it does not give any examples of what those conflicts of interest might look like. I hope that in his response the Minister will be able to give more examples of what they might look like. We will come back to this issue in our consideration of other groups of amendments to this section.
The code also states that data-sharing agreements should,
“identify whether there are any unintended risks involved with disclosing data”,
to an organisation. In the Commons, my honourable friend Louise Haigh—I congratulate her on this work—raised the behaviour of Concentrix, which was mentioned again on the radio today. It was contracted by HMRC to investigate tax credits and fraud. But the code of practice does not list any examples of risks or set out how specified persons might go about ascertaining them. We heard on the radio today that that contract and the mismanagement of the data has caused huge distress to tens of thousands of people, and that it is ongoing.
The code also states:
“Non-public authorities can only participate in a data sharing arrangement once their sponsoring public authority has assessed their systems and procedures to be appropriate for secure handling data”.
It does not give any sense of what conditions they will be measured against and how officials should assess them. I hope it is not going to be on the same basis that the HMRC gave the contract to Concentrix. It is that that we need to know about. This draft code—and I will keep coming back to it—is in an extremely draft form and needs substantially more work done on it. I hope that the noble Lord will assure us that these codes will be revised and I hope that, within the revisions, he will acknowledge that substantial improvements will be made.
Baroness Janke
My Lords, I, too, wish to speak to this group of amendments, many of which are in my name and that of my noble friend Lord Clement-Jones. As the noble Lord, Lord Collins, said, we on this Bench support the sharing of information. I have been a local councillor for many years and I certainly see the benefits of being able to share information. It would make people’s lives a great deal easier and enable them to access benefits and exemptions that they have not easily been able to in the past. We feel, however, that far more privacy safeguards are needed in this part of the Bill. The amendments introduce some tightening of the terms of the Bill, but more clarity is needed, with a number of principles involved in this.
Many of the people to whom the information relates are among the most vulnerable: they are people who are unemployed or on benefits, perhaps with children involved, and not necessarily in a position to understand what is happening if there is no transparency and some idea of consent in sharing the information. It is also important that we are assured that data being shared are minimised—that as little as possible is shared. There needs to be a clear justification for sharing data; the purposes must be clear and the definitions governing that must be tight.
The noble Lord, Lord Collins, mentioned Concentrix. We know that there have been other issues with the Government’s breaches of information and that government departments are not always as well equipped to deal with sensitive information as they might be. It is therefore all the more important that we have much more tightly defined terms in the Bill. I agree with what the noble Lord, Lord Collins, said about our not having those before us at the moment and about what is needed to reassure us on that if we cannot see them at the moment. The codes of practice are dealt with in the next group of amendments, and we will want to say a few words about them then, but there needs to be much more rigour and clarity, and many more conditions and safeguards to protect vulnerable people of the future, not just from wilful misuse of their personal information but from errors that could pursue them throughout their lives. I hope the Minister will be able to reassure us about this and I look forward to his comments.
Baroness Byford (Con)
My Lords, I shall speak to my Amendment 85, which is linked with this group. I thank the noble Lord, Lord Collins, for his introduction. I believe in data sharing; I declare that straightaway. However, it needs to be well managed, because, as the noble Baroness has just stressed, we do not want information to be used in a way that is, unfortunately, not fair to some of the very vulnerable families of which she has spoken.
Although the amendment moved by the noble Lord, Lord Collins, deals with Clause 30, my amendment relates to Clause 33. I have asked that Clause 33(2)(c) to (f) be deleted, if only to give me an opportunity to express my concerns about this aspect of the Bill. In these two clauses, we are talking about information being disclosed by gas and electricity companies and information being given by other authorities to gas and electricity suppliers. That is why one or two of my thoughts went searching as to why they would be in this group.
My amendment is very much a probing amendment and seeks clarification. The Explanatory Notes state that these paragraphs are included to enable personal information to be used in,
“criminal investigations, civil or criminal legal proceedings or the prevention or detection of crime or the prevention of antisocial behaviour”.
My amendment refers particularly to subsection 2(c) in that group. Will the Minister explain in what way the gas and electricity suppliers will be involved in such activities other than reporting persons and their behaviour to the police? I do not quite see what responsibility the gas or electricity suppliers have with this part of the Bill in that context.
I also confess considerable alarm at the prospect of power suppliers having access to very personal and private information to enable them, as I understand it, to investigate, detect, prevent or prosecute anything outside the realm of their normal expertise. Surely, their original expertise was the supply, maintenance and, where necessary, repair of power lines and pipes, but in this part of the Bill it seems to go very wide. I shall speak to other amendments later, so I will not go on at great length at this stage, but this part of the Bill raises questions for me. I can see some of the advantages of data sharing, but how do we define antisocial behaviour and what does that have to do with gas and electricity boards? I may be wrong; I look forward to hearing from the Minister.
Baroness Hamwee (LD)
My Lords, I come rather late to the table with the Bill, but fresh, if that is the term, from the Investigatory Powers Act, as does the noble and learned Lord. Like me, he may have reflected on the fact that one of our basic documents in debating the Investigatory Powers Act was called by David Anderson A Question of Trust; the issue of trust is equally relevant to the provisions in the Bill. Like other noble Lords, I see the value of sharing information but—and for me it is a big “but”—with constraints, limits, conditions, checks. I would say balances but I do not think they always do the job. It would be too easy in this area to let convenience obscure other considerations. I have concerns about fundamental issues and I have difficulty, as I suspect do other noble Lords, knowing quite what to raise where, but my most fundamental concern is about respect for privacy. The use of bulk data, which we will come to, is bound to raise this.
I share concerns which have been raised about providers—not the public authorities and public services themselves, but the providers. Maybe we have to be realistic, as our public services are now provided so much through commissioning and procurement but, as I read the Bill, the regulations will not be required to list specific providers. I may be wrong about that. If providers have to be included, it would be appropriate for the public to be reassured, for instance, that the public authority in question maintains a register of its providers and publishes it. Maybe, also, all records of information held under these provisions should be destroyed at the termination of the provider’s contract.
The purposes set out here include well-being, which includes the contribution to society. I am not going to let this pass without saying that that risks being read, and I read it, as very paternalistic. I cannot see how it properly covers anything that is not covered by the other well-being provisions. Others have suggested that Clause 30 might lead to profiling. There is certainly a concern over health information, which we will come to separately. I also find it quite hard to think: if you are not contributing to society, are you not deserving of or entitled to public services? I think it is a very unfortunate term to use in legislation.
I share the concerns about Clause 33. At the very least, to share personal information to prevent anti-social behaviour which is not a crime—we know it is not a crime; you do not even need to go to the legislation about anti-social behaviour to know that, because it is referred to separately from crime—is going several steps too far. I start—I am not suggesting that others do not—from the premise that personal information should be kept confidential unless there is good reason not to do so, and if it is not confidential it needs to be treated with the greatest care and sensitivity. Respect for private life is one of our basic values. The Minister would be able to quote Article 8 of the European Convention on Human Rights—as I will do—without reading it. It says that there are “necessary”—I stress that word—exceptions in the interests of national security, public safety, the economic well-being of the country, the prevention of disorder or crime, the protection of health or morals or the protection of the rights and freedoms of others. I support the amendments—I think they are in this group—that would import the term “necessary”.
Article 8 refers to disorder and crime, but—I will not be surprised if the Minister quotes some case law at me on the definition of “disorder”—I would have thought that in this context it must refer to something a good deal more serious than what may fall within “anti-social behaviour”.
The Investigatory Powers Act includes the much-welcomed and much-discussed “privacy” clause; during the debate on that we considered the requirements of both necessity and proportionality. The Act also refers specifically to the Human Rights Act and to crime as a consideration when it is a serious crime, and it refers to using “less intrusive means”. These points are all relevant to this debate.
For my part, this amounts to support for all the amendments in the group and a concern to persuade the Government to look at the issues through the lens of rights to privacy as well as efficiency. Most citizens accept—indeed, expect—that in a digital age government departments will share information, but with narrower purposes and stricter checks than the Bill offers.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I am obliged to noble Lords for their observations on this group.
The powers in Chapter 1 of Part 5 will support the delivery of better services to achieve specified objectives, such as providing assistance to those suffering, for example, from fuel poverty. Your Lordships would all appear to be agreed on the need for effective data-sharing, but when we talk about that we must mean data-sharing that is secure and commands the trust of the general public—that is sufficiently ring-fenced to give confidence in the whole process. No one would take issue with that.
In that context I make this observation at the outset. It applies not only to this group of amendments but to further groups that we will come to this afternoon and perhaps much later this evening. We have to look at the provisions in this Bill in the context, first, of the Data Protection Act 1998, because the provisions of that Act apply in the context of this Bill. Therefore, as we look at the Bill, we must remember the protections that already exist in law with regard to data in this context. First, processing of personal data must always be fair and lawful. Secondly, data cannot be processed in a way that is incompatible with the purpose for which they were gathered. Thirdly, personal data must be,
“adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed”.
The personal data should be “accurate”, so a subject may be in a position to demand that they should be corrected.
Furthermore, on the point made by the noble Baroness, Lady Hamwee, personal data can be kept no longer than is necessary for a particular objective. Where, therefore, they have been employed for a particular objective—or a party has received them for a particular purpose—and a need to keep the data for that purpose can no longer be displayed, they cannot be retained.
Baroness Hamwee
My Lords, will the noble and learned Lord address—in a later group, if not this one—why the terminology in the Bill is “personal information” rather than “personal data”, which might have made the marrying-up of the legislation a bit easier?
Lord Keen of Elie
Indeed I can. The reason is that in the present context, personal information extends to bodies corporate and other personalities that are not otherwise covered by the first definition. I will elaborate upon that later but that is why there is a distinction between the two terms. We can see that the two terms substantially overlap but it is only because of that technical distinction that they are employed in this way. I hope that that satisfies the inquiry from the noble Baroness, Lady Hamwee.
The Data Protection Act not only circumscribes the use of data in very particular ways—for example, personal data must be processed in accordance with the data subject’s rights under the Act and be held securely to guard against unlawful or unauthorised processing, which addresses a point that many of your Lordships referred—but provides remedies in the event that those obligations are not adhered to. Generally speaking, that involves a complaint to the Information Commissioner.
Of course there have been lapses in data control. We are well aware of many of them. The noble Lord, Lord Collins, alluded to Concentrix, where there clearly appeared to have been lapses such that the Revenue terminated its contract without further notice in November of last year. We recognise that there are risks associated with data and data-sharing. That is why we emphasise the need to look at the provisions in the Bill not only alone but in the context of the Data Protection Act.
Lord Collins of Highbury
There were obviously risks associated with the contract for Concentrix and the fall-out from that contract is certainly ongoing, because of the people who have suffered hardship. The Government will undoubtedly have to investigate even more because at the moment, we are dealing only with the people who have appealed. Can the Minister tell us exactly why the existing provisions for a risk assessment did not stop this contract from going sour?
Lord Keen of Elie
As the noble Lord is aware, Concentrix was not the only incident in which there were data breaches. They have happened not only in the context of parties operating with government but also entirely in the private sector. So far as I am aware, no one has made a claim for infallibility where data protection is concerned. Albeit that we aspire to the highest standards in data protection, we are not making claims of infallibility.
The noble Lord, Lord Collins, also referred in the present context to the GDPR, which will come into effect as a European regulation in May 2018. I reiterate that the provisions in Part 5 of the Bill are compatible with the GDPR. The noble Lord appeared to take some issue with that term, but let me be clear: the provisions of Part 5 are drafted in such a way as to be compatible with the regulation. When the regulation comes into direct force, we will look at the provisions of the Act and the codes of practice to ensure that they are consistent with it. That is the way in which these things are done. The regulation is not yet in force and will be applied to the existing statutory structure from May 2018. I reassure him that it has always been intended that Part 5 of the Bill should be compatible with the regulation, for very obvious reasons.
Then there is the matter of the draft codes of practice. At this stage they are, of course, a draft. Those drafts have incorporated comments and advice from practitioners right across the public sector, from the Information Commissioner and from the devolved Administrations, so they have brought in that body of knowledge at this stage.
Baroness Byford
I specifically asked why the responsibility has been placed on gas and electricity suppliers to have regard to some of the things stated in the Bill, and I would be grateful for an answer. I do not mind if the answer is not given now, but if that could be clarified I would be grateful.
Lord Keen of Elie
I am perfectly prepared to write to my noble friend to clarify that point, and I will place a copy of any letter in the Library.
Lord Collins of Highbury
I thank the Minister for his response. One of the things that we will encounter as we go through this section is the fact that the 1998 Act has some fundamental principles but that we have the Bill before us because there is a need for greater clarity. The world has changed in the past 20 years, certainly in the way that we handle and interrogate data. We no longer simply say that this set of data will go to that person and so on. We do not necessarily even have to share the whole dataset. The point is about how one might interrogate data. It is a very different world. I am not suggesting for one moment that errors do not occur, accidents do not happen and mistakes cannot happen, but in the modern world we conduct risk assessments to understand how we can minimise those things. That is what I want properly addressed when we come back to some of these issues.
The Minister says that the Government will consider the report of your Lordships’ committee. If there are to be further amendments, I hope that we will have time to consider them and even to put down our own amendments to ensure that the principles about which we are concerned will be able to be addressed. With those comments and, if you like, fair warnings, I beg leave to withdraw the amendment.
Digital Economy Bill
Monday 6th February 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
Lord Collins of Highbury
Lord Collins of Highbury (Lab)
My Lords, I have no doubt that we will constantly return to codes of practice, especially about the need for them to be revised and, I hope, improved. But the purpose of these amendments, particularly Amendment 81, is to ensure that when they are finally agreed they have strength and a statutory basis to ensure that they are properly applied. It is important that the principles and safeguards that we have debated so far are included and statutory. I am concerned that having “regard to” provides too many loopholes that will undermine the very public confidence that we seek in passing the Bill. I hope that the Minister will be able to reassure all sides of the House, once again, about how we can consult broadly on these codes and ensure that they are properly referenced in legislation and properly complied with.
In Amendment 107B, we know that what is important is that corrective action can take place if there is a breach of the code. We know that measures are also in the Bill, including criminal sanctions, where data protection is breached. But what about those areas and cases where public authorities exceed those powers for supposedly public good? Will the Minister tell us what adequate measures would be in place? The Minister in the other place said that the wording “had regard to” already follows common practice in legislation, as illustrated in Section 25 of the Immigration Act 2016 and Section 77 of the Children and Families Act 2014. He argued that as the power covers a range of public authorities and devolved territories, the Government want flexibility about how the powers can be operated so that we can learn what works and adapt the code as necessary. This comes to the crux of the matter once again and why so many noble Lords have concerns about these provisions. It is this open-ended flexibility and uncertainty about where this is going to lead to that raise concerns. We are told that to put these matters into the Bill would hamper the ability to adapt for future purposes. If bodies fail to adhere to the code, the Minister will make regulations that remove their ability to share information under that power.
Part 11 of the code states:
“Government departments will expect public authorities wishing to participate in a data sharing arrangement to agree to adhere to the code before data is shared. Failure to have regard to the code may result in your public authority or organisation being removed from the relevant regulations and losing the ability to disclose, receive and use information under the powers”.
Is that really sufficient? Is that enough? What about the cases that we have heard? As the Minister said in the previous debate, departments are not infallible. I do not think that this is sufficient. We know that the Information Commissioner wants changes; we know that they want these codes not only to be improved but to have proper force. I beg to move.
Baroness Janke (LD)
My Lords, I, too, shall speak to this group of amendments, having put my name to some of them. The noble Lord, Lord Collins, has already raised the issue about the permissive approach in the Bill, which we have rather rejected, and the question of inserting “complied with” rather than “had regard to”. Many of the amendments deal with that issue across the various agencies involved. When you consider that this is operated in relation to various criteria to do with improving people’s physical health, their emotional well-being, their contribution to society and their social and emotional well-being, the breadth of those areas is really rather daunting. You could justify almost anything under those four areas, and I do not really believe that the code of practice could be remotely enforceable if those were the criteria that were used.
Worse still, they could be used in a rather punitive way. For example, it could be argued that it is improving people’s well-being by making them work; and if they are disabled, pursuing people who have disabilities or difficulty in getting work could be used to penalise vulnerable groups. It would affect people who are on benefits or are pensioners—all sorts of vulnerable people. There needs to be somewhat more rigour in the Bill than criteria such as those that we see there now.
Moreover, these amendments deal with a minimum consultation period, which we support. Finally, the code of practice should be laid before Parliament, which, again, would be another safeguard. We must have much more transparency and greater rigour of application, enforceability and consistency across all the agencies and with other rules of disclosure. I would like to hear what the Minister has to say about these concerns. We believe that these matters must be answered and wish to understand the Government’s approach in order to decide whether we need to take this forward at a later stage.
Baroness Hamwee (LD)
My Lords, I, too, support the various amendments in this group. “Having regard to” a matter always seems to leave some wriggle room. If there should be exceptions to compliance—because I think we are talking about compliance here, not about consistency—then those should be spelled out. I accept that having codes of practice outside primary legislation allows for flexibility, which might be useful, for a response to experience of the operation of the code and, perhaps, for changing circumstances. However, there is so much reliance on codes of practice here that an inclusive process for constructing and finalising them is very important, as well as transparency in operation.
The noble and learned Lord will probably have a better recollection than I have of the discussion during the passage of the Investigatory Powers Bill about providing transparency by way of ensuring that people who were affected by the transmission of information knew about it. This was rejected for security reasons, but that would not be the case here. The overall objective has to be transparency and inclusiveness.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, Amendment 81 and the other amendments in this group are intended, of course—and I understand this—to strengthen enforcement of the codes of practice in relation to the public service delivery, debt and fraud, and research powers by requiring authorities who use the powers to “comply with” rather than “have regard to” these codes. The noble Lord, Lord Collins, has sight of a loophole, and the noble Baroness, Lady Hamwee, has encountered wriggle room, but I would take issue with those descriptions.
There is common ground here. We, too, believe that the codes are an important part of the data-sharing powers. However, the Government believe that “have regard to” is the right level of obligation for a code of practice. This is a legal obligation. Such persons when disclosing or using information will be expected as a matter of law to take the codes seriously and follow their requirements in all cases unless there are cogent reasons why they should not do so. It is, of course, common practice for legislation to set out the critical limitations on a power while codes of practice—which are more adaptable, as the noble Baroness, Lady Hamwee, acknowledged—are advisory tools that supplement with regard to best practice, principles and guidance.
The noble Lord, Lord Collins, alluded to a situation in which an authority exceeds its powers for the public good. In such a situation—without going into the detail of it—the authority would be exceeding its powers and it would have to answer for that, whatever the public good might justify in other circumstances.
Key conditions for the disclosure and use of information are set out in the Bill, including what can be shared, by whom and for what purpose. We have followed a common approach taken by government and others, including the Information Commissioner, to provide more detail on how data are to be shared in a code of practice. That does not mean that the code is to be treated lightly. Legal consequences may follow if the code is disregarded, as the Delegated Powers and Regulatory Reform Committee pointed out in its report on the Bill. The relevant Minister can make regulations to remove a body’s ability to share information under the power if it fails to adhere to the code. The noble Lord, Lord Collins, raised the question as to whether that is considered sufficient in the circumstances. We do consider that that is a sufficient safeguard in the circumstances. I also remind noble Lords—in particular, the noble Baroness, Lady Janke—that the first requirement of the Data Protection Act is that processing of data should be fair and reasonable. That underpins in existing legislation the whole approach that should be taken to this Bill.
The noble Baroness, Lady Hamwee, sought to draw a distinction between the provisions here and those in the Investigatory Powers Act about knowledge of data transfers. Of course, although we are not necessarily dealing here with national security, we are dealing with issues such as fraud, where it would be wholly inappropriate to give people advance notice of data sharing, particularly if one were going to address issues of criminal conduct.
Amendment 107B would require breaches of the code of practice on the public service delivery power to be reported to the Investigatory Powers Commissioner. It also places a duty on the Investigatory Powers Commissioner to investigate serious breaches and, where necessary, to inform the relevant individual of the breach. In doing so, the commissioner would have to ask the person in breach to make submissions before making a decision. With respect, the amendment would impose a considerable additional function on the Investigatory Powers Commissioner, where he or she would be bound to deal with breaches of a code of practice on information sharing which in no way relates to the commissioner’s remit of investigatory powers.
Indeed, placing such duties on the Information Commissioner would effectively be broadening the Information Commissioner’s remit without appropriate consultation. It would, as with Amendment 81B, cut right across the functions of the Information Commissioner, as distinct from the Investigatory Powers Commissioner; the Information Commissioner being responsible for upholding the Data Protection Act 1998, and also the safeguards and procedures for dealing with breaches of the code, which are already set out in various provisions. Such an amendment would blur the lines between the responsibilities of the Information Commissioner and the Investigatory Powers Commissioner and potentially lead to confusion and unnecessary duplication. If, in making those observations, I referred to the Investigatory Powers Commissioner when I meant the Information Commissioner and referred to the Information Commissioner when I meant the Investigatory Powers Commissioner, that simply underlines how easy it is to cause confusion in this area.
Amendments 108, 115, 134 and 151 call for the codes to be subject to approval by Parliament. A similar requirement was also raised by the Delegated Powers Committee in its recent report. We are carefully considering that proposal and I assure noble Lords that we will be responding to it shortly. Amendments 109 and 135 would introduce a requirement for the Minister to consult publicly on the code for a minimum of 12 weeks before issuing or reissuing it. Amendments 110, 152 and 190 would require that the Minister demonstrate that responses to the public consultation,
“have been given conscientious consideration”.
The policy in respect of these powers, and much of the content of the codes of practice, have been developed over two years of open policy development with a range of public authority and civil society organisations. The code sets out procedures and best practice drawn from guidance produced by the ICO and Her Majesty’s Government. We amended Clauses 36, 45, 53 and 61 in the other place to ensure our code will be consistent with the Information Commissioner’s data-sharing code of practice. The clauses contain a requirement that the Minister consults the devolved Administrations, the Information Commissioner and any other person the Minister considers appropriate prior to the issue or reissue of the code. I assure noble Lords that these other persons will include civil society groups and experts from the data and technology areas. It is, indeed, our intention to run a public consultation before laying the code before Parliament. I need hardly add that all consultations are taken seriously by the Government and all responses considered with appropriate conscientiousness.
I understand the interest in the codes and the desire to make sure they are effective. The codes will provide a strong safeguard for the use of the power, backed up by real consequences if they are not adhered to. With that, and while we consider the recommendations of the Delegated Powers Committee further—as I have indicated, we intend to do that in the very near future—I invite the noble Lord to withdraw his amendment.
Baroness Hamwee
The noble and learned Lord warned us against giving advance notice to potential fraudsters, but I think we are talking in these amendments about notice which may be in retrospect. I am looking at the noble Lord who has tabled the amendments. There are different issues, I think, about giving notice in advance and telling people that you have transferred information. Maybe we need to come back to the distinction between the two at the next stage. On the requirement to have regard but not necessarily to comply, does that not point up the real weakness of a code that is not approved by Parliament? These two bits of fragility seem to me to go hand in hand and undermine the security, as it were, of the regime.
Lord Keen of Elie
I am content that we return to the noble Baroness’s first point if she feels that there is a point of distinction to be made. On her second point, I do not accept that there is fragility in this context. We are well aware, by virtue of past practice, that this formulation is appropriate to the application of codes of practice. Indeed, the noble Baroness herself observed that when applying one’s mind to a code of practice, a degree of flexibility is necessary. One cannot freeze them. That is why we consider that the wording here is appropriate.
Lord Collins of Highbury
I thank the Minister for his response. Obviously, the codes of practice are key to giving a sense of security and to building public confidence. They are critical, which is why noble Lords want to see exactly how they will end up. I am very happy with the reassurance that the Minister gave regarding parliamentary involvement and consideration of the report of your Lordships’ committee. That is very welcome and we will return, obviously, to some of the issues, particularly on medical information and other information set out in other groups. We will return to the subject of the Investigatory Powers Commissioner in the next group and I will explain in that discussion why we see, perhaps, a distinct role, arising from the debate this House had on the Investigatory Powers Act. In the meantime, I beg leave to withdraw the amendment.
Lord Collins of Highbury
“( ) The effective maintenance of the electoral register must be specified as an objective in regulations under subsection (6).”
Lord Collins of Highbury
Are we dealing with Amendment 81ZA? I would hate to give the wrong speech on the wrong group, although I suspect that noble Lords would notice. I have been in other forums where people have not noticed, but that is another matter.
Amendment 81ZA focuses on the extension of sharing objectives to include the electoral register. A number of amendments in this group address concerns that have been raised about living in cold homes or school meals provision: basically, how we make this sharing of data more effective. I have no doubt that the Minister will say in response that the Bill will allow for this, but we want to raise on the Floor of the House the importance of these extensions of sharing objectives to the overall, broad objectives set out in Part 5.
Focusing on the electoral register, we know that the Electoral Commission has said that up to 1.9 million people could lose their right to vote as we transition to the individual registration of electors. Of course, until 2009 one person in each household completed the registration for every resident eligible to vote. It was a Labour Administration who accepted the principle, and there may be very good reasons, but the way the changes are introduced could be a disaster for our electoral system. That is why it is fundamentally important that we see data sharing as a positive way to address this potential effect on our democratic system. My noble friend Lord Stevenson has tabled an amendment to the higher education Bill that seeks to enhance the responsibility of higher education institutions to remind students of their right to register to vote—and particularly to decide where to vote. In this amendment we are trying to ensure that institutions have proper powers to share data to that end.
It must be understood that this transition to individual registration has put a huge burden on cash-strapped local councils, who need to contact 46 million people instead of 20 million. Some people have been unable to register, many of them because they simply do not have the required access that they would previously have had. This amendment focuses on people who are vulnerable, who need help, or who have not previously taken up their rights, perhaps because they do not have the necessary access or are not fully aware. That comes back to the issues—many other noble Lords will pick up the point—of fuel poverty and access to free school meals. The right to free school meals is important not only for the individual child—for the benefits the child will get—but for the funding of the educational institutions. I hope, therefore, that the Minister will accept these amendments, which are about ensuring that we can do these things and that these issues are addressed, even if he does not think that they should necessarily be in the Bill.
Lord Storey (LD)
My Lords, I shall speak to Amendment 82. This Bill is an opportunity possibly to enhance the lives of the most disadvantaged and vulnerable people in our society. The words of our Prime Minister always come to mind:
“a country that works for everyone”.
This amendment will help the country work for everyone. Currently, the parent of a child wishing to have a free school meal must apply for it. Not only does that provide a free school meal, which is hugely important for children because hungry children are not good learners, but it ensures that the school gets a pupil premium—a substantial sum of money—to help those disadvantaged pupils.
This simple amendment would ensure that local authorities automatically enrol those entitled to receive free school meals. Local authorities currently administer a number of benefits, such as council tax and housing benefit, so they are aware of families that would be eligible to claim free meals and would automatically contact the school. This would ensure that parents who, for a host of reasons, fail to claim would be able to do so.
It is estimated that a family with a child receiving free school meals can save up to £400 a year. Noble Lords may imagine that if the parents have more than one child the saving is quite substantial. As well as the family saving money and the child getting a free school meal it ensures that the school gets a substantial amount of money—the pupil premium—to help disadvantaged pupils.
The Minister will probably reply—as did the Minister from the other place—that the department’s own electronic eligibility checking system means that the clause is not really needed. That, however, is only a system which enables a school to check whether the parent is on the free meals register: it has speeded up the process but does not do the job that this amendment hopes to do.
I make a further point about this, at a time when we are all sensitive about the amount of private data that circulates: there is perhaps a fear that leads people to question why schools should have private data on pupils entitled to free meals. For that reason the amendment clearly states that parents will be notified before this information is made available and that there will be opt-out arrangements. I hope, therefore, that the Minister will be sympathetic to this very important amendment.
Lord Kirkwood of Kirkhope (LD)
My Lords, it is a pleasure to follow my noble friend. I support his Amendment 82 and shall speak to Amendment 92, which is in a similar vein but relates to the warm home discount. I am grateful to the right reverend Prelate the Bishop of St Albans and to the noble Baroness, Lady Massey, who have other duties in the House and would otherwise be here.
It is my pleasure to speak to Amendment 92, which seeks to test the possibilities that Clauses 30 to 32 open up. For years I have been banging away at the Department for Work and Pensions to make proper and better beneficial use, in terms of client well-being, of the vast amount of data that it has on families. That, together with the data held by HMRC, and particularly the data generated when universal credit comes in, will give the Government as a whole immensely enhanced abilities to promote well-being, particularly in our low-income households. I warmly welcome Clauses 30 to 32.
I am listening carefully and correctly to some of the interrogation that is being properly directed at the Government, because we have to get this right; it is very important that the protections are there. Subject to those protections, I am an enthusiast for making use of these provisions. I am slightly surprised that there have not been more attempts—like mine and that of my noble friend—to prise open new opportunities as the Bill goes through. This amendment tries to test the willingness, enthusiasm and ingenuity of Ministers in seeing how they can expand public services to our citizens under Clauses 30 to 32.
Amendment 92 simply seeks to improve the use of data-sharing powers to extend the reach of the warm home discount. The provenance of this amendment is work that I have been doing over months and years for the Children’s Society, and I acknowledge and pay tribute to the work it does with families, particularly with children in fuel-poor households. The Children’s Society has been making the argument to me about the importance and urgency of getting the issue of fuel poverty dealt with more adequately. We need only look at the announcement from npower last week, and indeed some of the wider economic indicators that are showing that this group of fuel-poor households is likely to find things getting a lot worse before they get any better. We need to pay attention to that.
I am told by the Children’s Society that, according to the Government’s own figures, families with children are now the biggest group affected by fuel poverty: 45% of households that can claim the warm home discount are now families with children under 18. The Children’s Society has some valuable survey evidence of a project that it carried out in Bradford and in other places, which indicates clearly the distress caused by fuel poverty. For instance, there is the fact that parents in these households are frightened to turn up the heating in cold winter months because they fear the level of the increased bills it would occasion. Some of those same parents believe that their children’s health is potentially affected by not doing so, so it is a real concern for the parents involved.
Lord Whitty (Lab)
My Lords, like those of the noble Lord, Lord Kirkwood, my three relatively small amendments in this group relate to fuel poverty. I was not at all surprised when my noble friend Lord Collins of Highbury was a bit confused at the beginning of this rather mixed-up group. It covers not only my subjects but voter registration and free school meals; most of the government amendments seem to relate to water and sewerage. I was tempted to say that it covers electoral rolls, bread rolls and toilet rolls. However, my amendments deal with something entirely different and their intention is very much the same as those of the noble Lord, Lord Kirkwood. I will not repeat all that he said.
My aim here is to make the system of data sharing more effective. I recognise all the concerns expressed around this Committee about the dangers of data sharing by public bodies and I understand them, because in different circumstances I have been deeply suspicious of the gas and electricity companies, as the noble Baroness, Lady Byford, clearly was a couple of groups ago. To make identification of the fuel poor more effective, we need more effective and comprehensive data sharing, along with the ability of different authorities and companies to share them, but this must be subject to all the safeguards. One safeguard is clearly stated in the Bill: that the information that can be used and shared in this way relates to the health of those affected by fuel poverty because they live in cold, draughty and damp homes. I do not need to spell out the effects of fuel poverty on those people’s health. It is quite important that in addition to the provisions in Clause 30(8) for helping the delivery of services and benefits, the clause should also refer to improving the health of those affected by it. My first amendment would do that.
My second and third amendments simply extend those gas and electricity operators which need to be engaged in it and will be subject to the same safeguards. It is increasingly the case that consumers and householders, including the fuel poor, have a closer affinity with the distribution networks than with their sensible supplier, which sends them the bill. To improve their situation, they will have to deal with the electricity distributor and, shortly, with the gas network distributor company. These amendments to Clause 31 deal with putting those distributors in the same category as gas and electricity suppliers. These are tidying-up amendments but they will make data sharing in this important area of fuel poverty more effective. The noble Lord, Lord Kirkwood, spelled out why that is necessary and, in particular, why those not automatically assigned to the warm home discount need to be identified and automatically put on the list of those who receive it. If we achieve that via the Bill, it will be a very important improvement and a step towards eliminating fuel poverty in our society.
Baroness Hamwee
My Lords, I want to ask a question about government Amendments 83A and 83B, which are about water and sewerage. Will these provisions apply only where there is a water meter? I am struggling to understand how they can work if the customer does not have metered water, and whether the information would be relevant—and how it could be used—if that is not the case. I am quite prepared to be told that I have not understood this properly but if I am right, should the provision not spell out that it is confined to that situation? That would make it clearer.
Lord Hunt of Wirral (Con)
My Lords, I declare my interest as a partner in the global insurance law firm DAC Beachcroft and as chair of the British Insurance Brokers’ Association, along with other interests set out in the register.
In speaking to Amendment 196A, I seek to address a small but important point on the operation of the Employers’ Liability Tracing Office, or ELTO. Colleagues may recall that I also raised this when we debated the Enterprise Bill in 2015. Although it has been grouped with amendments to Clause 30—I am happy to accept the grouping—it seeks to insert a new clause after Clause 65 in Chapter 6 of the Bill, which deals with Her Majesty’s Revenue and Customs.
In 2010, the Department for Work and Pensions identified the need for a tracing office, and ELTO was established in the same year. Sadly, former employees continue to contract industrial diseases, including cancer, due to workplace exposure many years earlier. All too often, the employer is no longer in existence by the time the disease is diagnosed. This was considered by our colleagues at the Department for Work and Pensions as a major obstacle to the former employees’ obtaining compensation.
ELTO was established, and the insurers are now required to provide to ELTO details of all employers’ liability policies that have been issued since April 2011. According to the information I have received, ELTO is working well. In the 11 months to the end of November last year, there were more than 178,000 successful searches of the Employers’ Liability Database, but it could be working better.
The piece of the jigsaw that is often missing is the employer’s PAYE reference number. This number is now used to identify an individual employer in the Pay as You Earn system. Each employer is given a unique reference number. If this unique reference number could be applied to the Employers’ Liability Database, it would make searches more accurate, as it would avoid problems of company names’ changing over time. Generally speaking, it would enable the correct employer to be traced.
One major obstacle is that by law ELTO is unable to gain this information under the Commissioners for Revenue and Customs Act 2005, which prevents HMRC from sharing information except in specified circumstances. Alternatives to primary legislation have already been explored with HMRC. Although we often think of employers as large companies, many are sole traders or family partnerships. For them, the reference number could well amount to personal data, which are rightly protected from general disclosure.
The measure, which I now understand is supported by ELTO and HMRC, is proportionate. HMRC has a ready-made database of these unique reference numbers to which ELTO could be given limited access. All ELTO needs is the reference number itself and the name and address of the employer as a cross check. The amendment would permit ELTO and HMRC to set up, at no cost to HMRC, a facility to share this limited information. It will help make the ELTO database fit for the future.
Many noble Lords will know that I have the honour to be an officer of a number of all-party groups, including not only the Occupational Safety and Health All-Party Group but also the All-Party Group on Insurance and Financial Services, so I should also declare those interests because this amendment is strongly supported by my colleagues on those groups.
This amendment would provide great benefit to employees, employers and insurers alike. I hope my noble friend the Minister will feel able to accept it.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am grateful to all noble Lords who have spoken. It is refreshing that, after the debate that we have had on all the concerns and worries that noble Lords have on data sharing, we now hear proposals on how data sharing can benefit various groups. This is our ambition. This is why we set the Bill up as we did and also why the devolved Administrations are so supportive. The noble Lords, Lord Collins, Lord Kirkwood, Lord Storey, Lord Whitty and my noble friend Lord Hunt all made valuable suggestions. I will come to some of the reasons that we agree or disagree with them, but fundamentally the principle is exactly why we set the system up.
Amendment 81ZA, in the name of the noble Lord, Lord Collins, seeks to require the effective maintenance of the electoral register to be specified as an objective in regulations under the public service delivery power. Electoral registration officers already have extensive powers to seek access to information in public records, providing it is for the purpose of ensuring that electoral registers are as complete and accurate as possible. Under current provisions, they would not be able to seek access to other public records for the purposes of identity verification if an applicant’s details cannot be matched against DWP records or local data sources.
Lord Collins of Highbury
I thank the Minister for his response. The problem is that these issues are not simply about entitlement but about a system in which people have to choose. The point is how you make that easier. With individual voter registration, which is a new system, there is a possibility that people will be removed from the electoral roll and therefore denied the opportunity to vote. We talk about a positive outcome. It might be one for one particular party. The boundary reviews will be based on registers that will be removing people and therefore on numbers of electors that are not necessarily the real numbers. I find it a bit disappointing that the Minister sees it as simply an administrative step.
This comes back to the fundamental point that everyone who has spoken, whether about school meals or the warm home discount, sees that this is an opportunity to improve governance and outcomes for people, obviously with the required safeguards. I think all of us in this Chamber will want to return to these issues because they are vital for the well-being of our people. In the light of the Minister’s comments, I beg leave to withdraw the amendment.
Lord Collins of Highbury
“( ) The Investigatory Powers Commissioner has a duty to ensure that the data protection rights of citizens are considered and protected for the purpose of the powers provided by this section.”
Lord Collins of Highbury
The Minister gave me some preliminary notice of the Government’s attitude to this amendment and alluded to the potential confusion of different roles and different names. No doubt I might even make the mistake of using the term “Information Commissioner” rather than “Investigatory Powers Commissioner”.
However, there is an important point here on which we want to probe the Government, and that is about the changing world and how we respond to it to make sure that the interests of the individual are properly thought of and protected. The point is about restoring public confidence. We have a legal framework that is structured around the Data Protection Act and a regulatory framework that allows breaches to be investigated and matters to be determined where there has been a breach. It is a system that protects the individual after the event. What we are trying to do here is what the Investigatory Powers Act, which became law at the end of last year, sought to do—that is, it does everything possible to ensure that intelligence agencies and law enforcement use only such powers as Parliament approved after a careful and well-informed debate. We cannot revert to a world in which the Government understand and apply the law in ways that were not foreseeable to the rest of us, still less to a world in which our freedoms depend on the potentially harmful activities of whistleblowers.
This amendment seeks to ensure that, in this fast-changing world, in the plans for the future use of powers identified in the Bill, the rights of the individual are not only safeguarded but are put at the head of the agenda rather than considered as an afterthought. That is why we have used the framework of the Investigatory Powers Act to raise this issue. With regard to future changes or extension of powers, who is thinking of the rights of the individual? It is important that the Government, if they are unable to deal with this consideration in today’s group, return to this subject in future provisions.
Baroness Janke
My Lords, our amendments in this group add safeguards. The noble Lord, Lord Collins, referred to some of these: that sharing of information be minimal; that the authorised conduct be proportionate to the object of the exercise; that a privacy impact assessment be conducted; and that proposed measures be subject to public consultation.
In addition, we support the amendments advocated by the BMA. Amendment 89 would remove the subsection through which sharers of information are not bound by the principle of confidentiality. Amendment 93 is a further safeguard preventing an authorised sharer of information from disclosing identifiable health information. I look forward to the Minister’s response.
Baroness Byford (Con)
My Lords, in this group I tabled Amendments 100 and 196. Within this group we are debating data sharing and the putting in place of safeguards that make us confident in the next move to make life better for the majority of people. I have one or two direct questions, particularly on the level of data that will be supplied from one authority to another. For example, does the Bill intend that information be supplied on the number of households in a given postal area where child benefit is being claimed and/or where all adults are unemployed? Would it be up to the users of the data to extract a summary picture from details of, for example, names, addresses, whether benefits are received, whether householders are unemployed or any other data?
At any level of inquiry, I presume data will be transferred such as dates of birth and marital status that, were they to fall into the wrong hands, could be used to perpetrate private fraud. No one today has mentioned private fraud, but it can come about as a result of lack of security and safeguarding. Again, perhaps the Minister will indicate what relevant provisions there are. I am unsure whether I have missed some. At earlier stages of the Bill I mentioned the amount of fraud going on and it is horrifying. If the Bill can in any way tighten up on that, it would be an advantage.
For example, will personal information cover things such as whether an individual has a diagnosis of dementia or whether a family has been a cause of concern to the social work department in their own area? Who makes these judgments? At what stage are these activated? I may not have read the Bill carefully enough to find the missing answers. I pose these fairly simple questions to make sure that our safeguarding of this information is secure.
Amendment 100 is a probing amendment that seeks to complete the explanation of what information HMRC would disclose, providing examples of the circumstances under which it would be disclosed and a complete list of the groups or persons whose information would be handed over. This relates to Clause 30, of which we spoke earlier. Subsections (9) and (10) specify the well-being of persons or households and define well-being in terms of physical or mental health, contributions to society—which we have covered slightly earlier on and which is difficult; I should be glad of clarification on that—and emotional, social and economic well-being. The latter are easier to understand.
Clause 31 refers to people living in fuel poverty. Again, we debated this previously. Fuel poverty has been defined as,
“living on a lower income in a home which cannot be kept warm at a reasonable cost”.
Clause 32 also refers to people living in fuel poverty. I do not understand what is intended, nor what will be involved for those deemed to be affected. Defining well-being in terms of well-being suggests that definitions of those covered by this legislation could depend on the personal and political stance of those making those decisions. What is “lower income”? Within what limits do homes qualify under these clauses and who will rule that they cannot be kept warm at reasonable cost? What will be the limits of powers of such a decision-maker over, for example, someone who prefers to wrap up for three months of the year so they may enjoy their garden for nine; in other words, somebody who is living in a bigger house that costs more to heat? Will an individual be able to opt not to have personal information shared within local authorities and/or with gas and electricity suppliers?
Turning now to my Amendment 196 in this group, I do not pretend to know anything about the structure, organisation or responsibilities of HMRC. Hence, I do not understand whether an “official” is someone equivalent, say, to a board member in a quoted company. I fear, however, that that is unlikely to be the case. In this era of Facebook, Snapchat and the substitution of public opinion for demonstrable fact, I am unhappy—I do not know whether other noble Lords are—that perhaps a more junior member of HMRC could decide that disclosure would be in the public interest. In other words, where does the buck stop?
Disclosure of personal information, even supposedly non-identifying, should be done only on the authority of the head of the organisation. He or she presumably will have the knowledge, experience and breadth of understanding to be sure that it cannot be combined with other data to name individuals. He or she will also, presumably, be less likely to make errors of judgment, and of course a claim of ignorance of any such disclosure would not stand up to scrutiny, as they would obviously be at the most senior level.
Baroness Hamwee
My Lords, I will just pick up the noble Baroness’s last point about who is an official. There are examples, in other legislation, of references to “senior officials” and “designated officials”, which might be somewhere between the junior official she has in mind and the Permanent Secretary, but she is right to draw the issue to the Committee’s attention.
On an earlier group, the noble and learned Lord indicated that he was going to speak at greater length—I assume that may be on this group—on the reason for using the term “personal information” rather than “data”. Perhaps I may use my noble friend’s Amendment 213 to ensure that we get to share more of Government’s thinking. I understand the point about corporations, since in the one case, they come within the group covered, and in the other they do not. But I am still puzzled as to why such efforts have had to be made to deal with personal information and then to add in references to the Data Protection Act, rather than starting from the DPA—with any necessary exclusions—which would have taken us straight to the involvement of the Information Commissioner, the data protection principles and so on.
I wondered during the Statement whether to have a go at some alternative drafting for Report, but thought I had better wait for this discussion. But perhaps part of it boils down to a question on Clause 33(8), which says, in wording replicated elsewhere, that,
“nothing in section 30, 31 or 32 authorises … a disclosure which … contravenes the Data Protection Act”.
To look at it from the other end of that telescope, is there any personal information which is the subject of the Bill that would not fall within the DPA and therefore not be protected by that clause?
Lord Clement-Jones (LD)
My Lords, I thought I would intervene to see if it might help the Minister. The code of practice does not make things any clearer. With reference to my noble friend’s very apt point about information versus data, paragraph 4 of the code says:
“The definitions of ‘personal information’ contained in the Bill are intended to ensure that the information shared through these powers is handled carefully”.
That does not sound like a particularly good legal answer to the question. It goes on:
“Though the definition of ‘personal information’ for the purposes of the Bill may differ from the definition of ‘personal data’ in the DPA, all information shared and used under the public service delivery, debt and fraud provisions must be handled in accordance with the framework of rules set out in the DPA”.
Where is that explicitly set out? It would be very helpful if the Minister, in answering, could advert to that as well.
Lord Keen of Elie
My Lords, Amendment 81B seeks to place a duty on the Investigatory Powers Commissioner to ensure that the data-protection rights of citizens are considered and protected under the public service delivery power. The effect of this amendment would be to impose similar duties on the Investigatory Powers Commissioner as are already carried out by the Information Commissioner. It is for that reason that we do not consider that this amendment is necessary. I understand the points that the noble Lord, Lord Collins, has made in this context. We are all concerned to ensure that these powers are ring-fenced as far as is reasonably practicable and that any breach should be policed to the extent required. However, in our view, the Investigatory Powers Commissioner is not the appropriate party to deal with this matter. The Bill is not about investigatory powers, and accepting this amendment would result in a substantial and, as I sought to indicate earlier, confusing addition to the portfolio of the Investigatory Powers Commissioner.
We are of course concerned that there should be public confidence in the provisions of the Bill and in the whole body of data-sharing powers. I understand the observation of the noble Lord, Lord Collins, that the Investigatory Powers Act does everything possible to ensure security is there, so that only the given powers are exercised and that the rights of the individual are put at the head of any agenda, but that is clearly the intention of this Bill as well. That can be achieved by having regard to the position of the Information Commissioner in the context of the present provisions.
I understand and indeed admire the noble Lord’s suggestion that we should in some sense be seeking to future-proof the Bill. There are limits to our ability to do that, but I will return to that point in the context of the regulations that come into force in May 2018. We have already had regard to that in order to try to ensure that the provisions of the Bill will comply with imminent regulations, such as those I have just referred to.
The noble Lord also raised the question of confidentiality and the concerns that have been expressed by the medical profession in that context. Let us be clear that, as noble Lords will recollect, common-law obligations of confidentiality are rarely if ever absolute. We know that various common-law issues of confidentiality tend to be subject to one qualification or another. Concerns have been expressed over the interaction between the provisions of the Bill and medical confidentiality, primarily in respect of the statutory override within the Bill. The provisions of the Bill are clear that sharing data under the powers in the Bill does not breach any existing duty of confidentiality. That includes the common-law duty of confidentiality to the extent that it applies to patient information.
The use and processing of medical information is governed by common law, but also by the Data Protection Act 1998, by the provisions of the Human Rights Act 1998 and indeed by specific legislation which allows, requires or prohibits certain uses of such data. There is no blanket ban on the use of medical information outside the patient-doctor context, and it is not the case that every instance of sharing such information will constitute a breach of confidentiality. Indeed, the General Medical Council’s 2017 guidance expressly states personal information can be disclosed,
“without breaching duties of confidentiality”,
in particular circumstances, one of which is where the disclosure is,
“approved through a statutory process that sets aside the common law duty of confidentiality”.
So it is acknowledged by the General Medical Council itself that this may occur from time to time, and the provisions of the Bill are structured to reflect this. They override duties of confidentiality only in order to ensure that public authorities have clarity in terms of what they can and cannot share under the powers of the Bill. I hope that goes some way to meeting his concerns about confidentiality in that context.
Amendments 84, 87, 119, 138 and 213, which are also in this group and were referred to by the noble Baroness, Lady Janke, cover a broad range of suggested additional safeguards and restrictions on the use of the powers. They seek to introduce, among other things, an express data minimisation rule, a requirement to conduct and publish a privacy impact assessment and provisions extending the Information Commissioner’s powers in respect of enforcement notices. They also introduce a provision enabling data subjects to request that inaccurate personal data disclosed under the powers be amended. We are firmly of the view that while all of these requirements represent important safeguards on the use of our powers, they are already provided for in different ways under the Bill, the codes of practice or existing legislation, including in particular the Data Protection Act 1998. Indeed, under the DPA only the minimum personal data necessary may be shared to achieve the particular objective, and all personal data that is held must be accurate. I hope that that goes some way to meeting one of the points made by my noble friend Lady Byford about excess data being given to public authorities. That is simply not permitted in the existing legislation, particularly the requirements of the Data Protection Act 1998. Over and above that, the Information Commissioner already has a range of mechanisms to enforce compliance with the DPA. Amendment 213, which would insert a new clause on enforcement notices, would not add to those powers in any material way.
Further, Amendment 213 requires certain information to be gathered in respect of the benefits of data-sharing arrangements. Again, that is not necessary: bodies wishing to exercise the powers in these provisions must consider benefits as part of their privacy impact assessment. We acknowledge the importance of privacy impact assessments and, following discussions with the Information Commissioner’s Office, will look to return to this matter on Report to address concerns about public authorities’ adherence to the Information Commissioner’s specific guidance on privacy impact assessments, as well as privacy notices. I hope noble Lords will accept our willingness to return to that matter in due course.
Amendment 213 would bar the processing of personal information under the powers for particular purposes. With respect and understanding of what lies behind the amendment, our approach is simpler and more complete. There are specific limited purposes for which personal information can be disclosed under Part 5 of the Bill. Other than a few limited exemptions, the disclosure or use of personal information for other purposes is not permitted. Tough new criminal sanctions will apply to all unlawful disclosures.
Amendment 87 seeks to introduce a duty to review in the public service delivery power, akin to the existing duty in the debt and fraud powers. All data-sharing arrangements under the debt and fraud powers have to be piloted and reviewed after three years to ensure that the powers deliver demonstrable benefits. The public service delivery powers are different in kind, being more conventional data-sharing powers, constructed specifically to improve the delivery of services to citizens in cases of acknowledged need, such as assisting those suffering from fuel poverty.
On that point, my noble friend Lady Byford essentially raised the question of definitions—what do we mean by “fuel poverty”, “well-being” and “warm home discount”, as mentioned in Clause 31? All this is dealt with in Part 2 of the Energy Act 2010, which contains the schemes referred to in Clause 31(3)(a). I hope further consideration of those provisions of the Bill may go some way to meeting her concerns about those definitions.
On the question of private fraud, of course we are alert to the idea that where there is data sharing there may be data intrusion, and we are determined to guard against that. That is why we seek to ring-fence these powers in the way that we do in the Bill. We have not claimed that any system we introduce will inevitably be infallible; history tells us that where we ring-fence, people will seek to go under, over or through such a fence. However, we shall try to ensure that all data that are shared in this context are kept as secure as we reasonably and practicably can keep them.
Amendment 88 would change the definition of “personal information”, a point raised by the noble Baroness, Lady Hamwee. The point here is that in the current draft “personal information” includes “a body corporate”. The existing definition is intended to capture all persons, including all corporate bodies, to ensure that taxpayer information, including that of bodies corporate, is protected irrespective of the size of the organisation. Narrowing the definition would limit the protections for HMRC data under these powers, which would be likely to affect significantly HMRC’s willingness to make use of the powers. I am sure the noble Baroness is aware that the disclosure of data by HMRC is subject to additional statutory controls quite distinct from the provisions of the Bill, and these have to be factored in. This is where the term “official” comes into use because the existing statutory legislation uses that term in the context of data and disclosure. Therefore, for the purposes of consistency, that term is used in this context. It is not an attempt to suggest that the janitor, or anyone else, should be responsible for disclosing relevant information—certainly not the commissioners of revenue in isolation.
Amendments 87 and 93 are also in this group. Clause 33(7) provides that a disclosure under the public service delivery power does not breach any obligation of confidence or any other restriction on the disclosure of the information. This provision ensures that public authorities can be confident that their disclosure is lawful, provided that they comply with the strict requirements of this legislation. To remove that subsection would undermine a primary objective of providing authorities with the legal certainty required to ensure efficient and effective data sharing under these powers. In other words, where they satisfy the requirements of this legislation, they do not have to go back and worry about any aspect of the common law of confidentiality on individual occasions, which would effectively make the provision unworkable.
Amendment 93 seeks to expressly exclude health data from the public service delivery clauses. I have already touched upon this. The Government believe that this amendment, while well intentioned, is unnecessary and would lead to the kind of legislative barriers that the Bill is designed to overcome. As I have indicated before, the Government recognise the particular sensitivities around identifiable health information, and indeed this was highlighted in the National Data Guardian’s recent review of data security, consent and opt-outs. For this reason, health bodies in England are not included in the draft list of bodies that will be permitted to use the powers in the Bill. Health and adult social care information, however, could potentially be of considerable assistance in bringing benefit to individuals, as this power aims to do. I acknowledge that we may wish to bring such bodies within the scope of these powers in future, but we will form a view on this after the implementation of the National Data Guardian’s recommendations and public consultation on the issue. We believe it would be wrong to rule out that possibility until that debate has been concluded. However, I underline the point that at present health bodies in England are not included in the draft list of bodies that will be permitted to use these powers.
I turn to Amendment 100. Clause 34(8) provides that the prohibition on onward disclosure, and its associated provisions, do not apply to personal information disclosed by HMRC. The amendment seeks to remove that provision. There was a suggestion that someone was seeking consistency here. Throughout Part 5 of the Bill, in order to take account of HMRC’s statutory duty of confidentiality and maintain consistency with the existing statutory framework in respect of HMRC information, the Bill contains separate provisions for the disclosure of information by HMRC. Criminal sanctions apply to the disclosure of HMRC information, but it is all framed slightly differently in order to be consistent with earlier statutory provision. I refer in particular to the Commissioners for Revenue and Customs Act 2005, which already covers these areas. The effect of the noble Baroness’s amendment would be to create two regimes for disclosing HMRC information under this power. We suggest that that would undermine consistency between Part 5 of the Bill and the provisions that already exist under the Commissioners for Revenue and Customs Act 2005. I hope that that goes some way to explaining why HMRC, though not a special case, is dealt with slightly differently within Part 5.
The noble Baroness, Lady Byford, then referred to Amendment 196. Again, in the context of accountability for public interest disclosures of non-identifying HMRC information, the aim of Clause 65 is to enable Her Majesty’s Revenue and Customs to meet requests from external organisations to provide aggregate statistics or general information, which is what other government departments do. Safeguards for disclosure of personal information will continue to apply for the reasons I have already alluded to. This amendment, again, would be inconsistent with HMRC’s existing statutory framework which authorises officials to act on behalf of the commissioners of revenue. It would not be practicable for the commissioners of revenue to have to deal with each of these requests. Indeed, it would be an unnecessary use of public resources if that was the case.
The noble Lord, Lord Clement-Jones, raised a point that appears to have prompted a note from the Box which I have not yet read. I shall scan it now. And I will undertake to write to the noble Lord. On that occasion, I will use typescript.
In those circumstances, I invite noble Lords not to press these amendments.
Baroness Hamwee
My Lords, the noble and learned Lord may have already answered this, as his response was inevitably very full and quite dense, but on my question about Clause 33(8)—and the words are repeated in other clauses—although nothing in the sections authorises a contravention of the DPA, is there personal information within the Bill that would not be within the DPA and therefore not protected by that subsection?
Lord Keen of Elie
I am obliged to the noble Baroness, Lady Hamwee. Although the definition of personal information differs from the definition of personal data in the DPA, all personal data shared and used under the public service delivery provisions must be handled in accordance with the framework of rules set out in the DPA, and in particular with the data protection principles, because the DPA is not overridden by this chapter. To the extent that the class of personal information is wider than personal data, although the DPA does not directly govern such information, we still expect that information will be handled in accordance with that framework because of the requirements of the codes of practice under Part 5. I hope that answers the noble Baroness’s question.
Lord Collins of Highbury
My Lords, I thank the noble and learned Lord for his comprehensive response. Clearly, there is a lot in the codes of practice, so we await the response. I welcome, too, his commitment to come back to report on the issues that the Information Commissioner and we have raised.
Both the GMC and the BMA raised the issue of confidentiality and the common law. They obviously have legitimate concerns about the future impact. Confidentiality is not simply an issue of administration and protection administratively; it is a fundamental issue about the nature of the relationship between doctor and patient, where trust is absolutely vital for medical treatment, ongoing treatment and so on. We may have to come back to this issue at Report. In the meantime, I beg leave to withdraw the amendment.
Lord Collins of Highbury
“Review of the collection and use of data by government and commercial bodies
(1) Within six months of the passing of this Act, the Secretary of State shall commission an independent review of the collection and use of data by government and commercial bodies and shall lay a report of the review before each House of Parliament.(2) The review under subsection (1) shall consider—(a) the increasing use of big data analytics and privacy risks associated with big data;(b) the adequacy of current rules and regulations on data ownership;(c) the collection and use of administrative data;(d) any other matters the Secretary of State considers appropriate.(3) In conducting the review, the designated independent reviewer must consult—(a) specialists in big data, data ownership and administrative data;((b) those who campaign for citizens’ rights in relation to privacy, personal information and data protection; (c) any other persons and organisations the reviewer considers appropriate.(4) In this section “big data analytics” means the process of examining large datasets to uncover hidden patterns, unknown correlations, market trends, customer preferences and other useful business information.”
Lord Collins of Highbury
My Lords, as one of my colleagues in the trade union movement used to say, there may be a sense of déjà vu: we are going to be repeating issues in these amendments. As we have said, transparency is a vital ingredient in building public confidence. If we do not have public confidence we will not have effective data sharing and therefore the aims and objectives of the Bill will not be met. That is why we are very keen to focus on the elements of how we build that confidence, with transparency as the vital ingredient. That is why we are proposing to have an independent review of the collection and use of data by government and commercial bodies. A report of that review would be put before Parliament.
Having spent a considerable part of the weekend reminding myself about the Data Protection Act—I was responsible in the trade union movement for elements of implementation of data protection—I was struck by how complex the law can be and how different elements impact on each other. That is where we need to do more to build public confidence. People are concerned, asking. “Why do they want it? How are they going to use it? Have they used it? Have they done it without my knowledge? Have I given consent? Shouldn’t I be allowed to give consent?” All those issues need explanation. That is why transparency provisions in the amendments are really important. Where there has been a breach it needs to be effectively reported and dealt with. Some of the episodes we have seen in the private sector are scandalous—breaches of data have occurred and nothing has been said for years, let alone weeks and months. Whether we like it or not, those breaches in the commercial and private sector will impact on people’s confidence about the Government’s ability to share data fairly. That is why we need to be open about how we are dealing with problems. I come back to the Minister’s point on infallibility. Of course we are not infallible; but whenever mistakes happen, we want to make sure we learn from them and minimise the risk of them happening again. That is what we seek to do in these amendments.
The more we move towards digital government, the more we need to ensure that all these issues are properly recorded. Again, that is why we are proposing mandatory transparency in the public register of data-sharing agreements. It is about building trust in the process, with people knowing they will have to be accountable for their decisions in this area.
Transparency must be central to the process, alongside privacy and security. It is one of the arguments that we would make strongly in this group of amendments. No doubt we will hear from the Minister about it being mentioned in the code of practice and how that will be vital. I agree that we have seen a lot of movement; what we want to do as we move forward is to receive reassurance that the principle of building confidence will be openness and transparency. I beg to move.
Baroness Janke
I am drawn to recall the words of the noble Baroness, Lady Buscombe, when she spoke on some of these issues. She said that the technology was moving so quickly that we need to be aware that things are changing—and that it would be important for the public to trust these procedures. A review of these processes is a good thing. Equally, government sometimes changes very slowly, so it may be a better opportunity to revisit some of the issues during a review. We would certainly support that. Again, it has been drawn to our attention by a number of data breaches that have not been notified, ever—so we certainly support the processes that have been outlined in the amendments about putting these on record to have the trust and confidence of the public. Our Amendment 111 in this group is to do with individuals being notified that personal data have been disclosed about them. Again, we feel that this is very important to engender public trust in the processes that we are introducing.
Baroness Finlay of Llandaff (CB)
My Lords, I would like to speak to Amendments 213A to 213C, which explore the Government’s commitment to transparency and how people can know about information-sharing agreements that are in place and, looking to the future, how the equivalent of a subject access request could work, explicitly to assist with fraud detection.
I draw the Committee’s attention to the comment from the Delegated Powers and Regulatory Reform Committee at paragraph 52, which noted that, without even allowing for parliamentary scrutiny, the powers in Clause 39 as drafted are as “inappropriately wide” as those in Clause 30, and seem to be deliberately so. Those very wide powers are of great concern. As an increase in digital technology emerges, the public need to be informed to understand how to use the resources available to them—and they need to know how data on them, as citizens, are being used. They must have confidence in the safeguards in place, otherwise we will have a population that increasingly refuses to engage with any kind of data registration.
It is unclear where health issues sit in this Bill. I declare all my interests in relation to health, as in the register. The powers can include, in Clause 30(10)(a), individuals’,
“physical and mental health and emotional well-being”.
That suggests that health data must fall within the remit of this clause, whether held originally by the NHS or whether they are then held by other bodies. It was in an interview that the Government Digital Service director-general gave as an example the large databases between the NHS and the DWP, commenting that these are large databases of citizens’ records and that we really need to be able to match them, which would suggest a read-across between the two. So while there is a prohibition in the Bill on the use of health and social care data for research, the approach may not have a prohibition in relation to data otherwise disclosed. The NHS bodies, for example, hold the data and, although the Secretary of State is not currently listed in the regulations as published, it is difficult to see how the Secretary of State could not be added to regulations at a later point.
Lord Keen of Elie
My Lords, the noble Lord, Lord Collins, should make no apology for revisiting the issues of transparency and public confidence because they lie at the heart of what this Bill is attempting to achieve and are contained in Part 5. It may be déjà vu again but that is perfectly justified by the circumstances. We are all concerned to ensure that there is such transparency within these provisions as to maintain, and perhaps even restore, public confidence in the use and sharing of data.
Amendment 82ZA proposes that, within six months of the Act coming into force, an independent review of the collection and use of data by the Government and commercial organisations is conducted. With respect, the scope of the review appears extremely broad and goes much further than the provisions of Part 5. The Royal Society and the British Academy are undertaking a review to consider the ethical and legal frameworks needed in the United Kingdom as data technologies advance. We intend to consider the findings of that review when it is published. In addition, I mentioned that the general data protection regulation will come into effect in the United Kingdom in May 2018. The implementation of that regulation will represent a significant change to the data protection legal framework for both the public and private sectors, including strengthening rights for individuals so that they have more control over their personal data. We intend to work with the Information Commissioner to explore how we can best meet these requirements, as well as to improve transparency in this space. As such, we do not see the value in commissioning a further major review of data ahead of preparing to implement the new data protection framework when the regulation comes into force in May 2018.
Amendment 103 also seeks to improve the transparency of data sharing under the powers in Part 5. As I have indicated, we support this intention as transparency, along with the protection of personal data, is clearly at the heart of all these proposals. There are, however, a number of real problems with the proposed new clause. Setting the requirement and contents in primary legislation would significantly restrict our ability to explore and consider the benefits and consequences of publishing a register. For example, there may be a need to exempt the inclusion of certain types of data sharing for reasons such as national security or commercial confidentiality.
Ahead of the 2018 regulation coming into force, we will work with the Information Commissioner’s Office and other interested parties to explore how we can best meet its requirements and improve transparency. In our view, the statutory codes of practice in the Bill are a more appropriate vehicle for setting out requirements to support greater transparency. We will run a public consultation on the codes of practice as well as the required statutory consultations and we propose, as part of that, to gather views on the type of information about data sharing that should be captured and made public, as well as the risks and benefits. In addition, the draft codes already contain requirements for privacy impact assessments to be prepared and published. Further, we are continuing to explore with the Information Commissioner whether more can be done in this Bill to ensure that his codes of practices on privacy impact assessments and privacy are fully considered when data are shared under Part 5. I hope to return to this point later in the proceedings.
Amendment 104 proposes an obligation for organisations to report data breaches and submit associated audit returns to the Information Commissioner’s Office. As I have indicated, the EU general data protection regulation will apply in the United Kingdom from May 2018. The new regime will introduce tough measures on breach notification, making it a requirement for all data controllers and data processors to report breaches to the Information Commissioner’s Office if they are likely to result in a risk to the rights and freedoms of individuals, and the individuals affected must also be notified where there is a high risk. The new regime will also allow tougher penalties to be imposed on organisations in breach of the rules. I believe these will be penalties of up to 4% of the organisations’ total global annual turnover, or €20 million.
Under current arrangements, the Information Commissioner’s civil monetary penalties guidance says that he can take into account what steps, if any, the person or organisation had taken once they became aware of the contravention, when determining the amount of the monetary penalty to be issued, so there is provision for those who delay or defer the reporting of data breaches. At this stage, we are confident that the Information Commissioner has the necessary powers to take action against those organisations that are in breach of the rules so, while I accept the spirit of the amendment and understand the need for transparency, I do not believe it is necessary as the new tougher rules under the EU regulations will apply from May 2018. As I stated, under the current regime, the commissioner can and does take into account what steps, if any, an organisation has taken in addressing breaches and in deciding penalties under the Data Protection Act.
Amendment 111 would require a secure audit record to be compiled specifying the personal information shared under the public service delivery power. This well-intentioned amendment is also considered unnecessary. The code of practice that has been drafted in support of the public service delivery provisions already requires an audit to be kept by data controllers of information shared under this power, and the Information Commissioner’s data-sharing code of practice similarly requires organisations to keep records of information shared. In addition, the EU general data protection regulation will apply to Part 5 and place further specific legal obligations on organisations to maintain records of personal data shared and of processing activities. Organisations will now make the necessary preparations to comply with that regulation.
For the benefit of the noble Baroness, Lady Finlay, I emphasise that the processing of personal data under the public service delivery power must already be in accordance with the Data Protection Act. The Information Commissioner is responsible for enforcing and promoting compliance with the Data Protection Act. The commissioner undertakes a programme of consensual audits across the public and private sector to assess their processing of personal information. The commissioner also has the power to conduct compulsory audits of public sector entities to evaluate compliance with the data protection principles. The commissioner has powers to obtain access to the information she may need to conduct those assessments.
Lord Collins of Highbury
I thank the Minister for his response. We await the revised and improved codes of practice, which will be a fundamental ingredient in building confidence in data sharing. If there are existing powers with regard to the requirement to report breaches, I think most people in this country will wonder why Yahoo was not picked up for failing for 10 years to report a breach which could have impacted on its confidential financial information. I welcome the fact that we will come back to these issues at later stages following consultation with the Information Commissioner. We know what is in the GDPR and what we are required to do. It will come into force in May 2018 and it is very important that the Government commit to the principles in it. We may have to come back to that issue at later stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“Disclosure of information to water and sewerage undertakers
(1) If the first and second conditions are met, a specified person may disclose information held by the person in connection with any of the person’s functions to— (a) a water or sewerage undertaker for an area which is wholly or mainly in England, or(b) a water or sewerage undertaker for an area which is wholly or mainly in Wales.(2) The first condition is that the disclosure is for the purpose of assisting people living in water poverty by—(a) reducing their water or sewerage costs,(b) improving efficiency in their use of water, or(c) improving their health or financial well-being.(3) The second condition is that the information is disclosed with the intention that it will be used by the undertaker in connection with provision in the undertaker’s charges scheme under section 143 of the Water Industry Act 1991 which is included in that scheme—(a) in compliance with regulations under section 143A of that Act which impose requirements within subsection (2)(d) of that section (power for regulations to require charges schemes to make special provision for particular classes of individual), or(b) by virtue of section 44 of the Flood and Water Management Act 2010 (social tariffs).(4) In the case of a person (“P”) who is a specified person merely because of providing services to a public authority, the reference in subsection (1) to the functions of a specified person is limited to the functions P exercises for that purpose.(5) For the purposes of this Chapter a person lives in water poverty if the person is a member of a household living on a lower income in a home which—(a) cannot be supplied with water at a reasonable cost, or(b) cannot be supplied with sewerage services at a reasonable cost.”
“Disclosure of information by water and sewerage undertakers
(1) If the condition in subsection (2) is met, a person to whom information may be disclosed under section (Disclosure of information to water and sewerage undertakers) may disclose information held by that person to a specified person.(2) That condition is that the disclosure is for the purpose of assisting people living in water poverty in England and Wales by—(a) reducing their water or sewerage costs,(b) improving efficiency in their use of water, or(c) improving their health or financial well-being.”
Lord Ashton of Hyde
Digital Economy Bill
Monday 6th February 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
Baroness Buscombe
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Baroness Buscombe (Con)
My Lords, this group consists of mainly technical amendments to make sure the Bill works in the way it is meant to. Although they are technical, they are important. They fall into four broad subject areas: whistleblowing and journalistic freedoms; the meaning of “anti-social behaviour”; references to the Investigatory Powers Act; and the description and powers of devolved authorities.
In relation to whistleblowing and journalistic freedom, the first series of amendments relates to the new criminal sanctions for unlawful disclosure of personal information disclosed under the powers. Concerns were raised that the clauses as drafted could criminalise disclosures made by whistleblowers and journalists making disclosures in the public interest. This was never the Government’s intention. These amendments make sure that disclosures made by whistleblowers and journalists will not be subject to criminal sanctions.
There is a distinction here in terms of how the amendments address HMRC information and non-HMRC information. In respect of non-HMRC information, the amendments introduce additional exemptions to the general prohibition on further disclosure to cover “protected disclosures” under the Employment Rights Act 1996, which will protect whistleblowers pursuing the proper channels for disclosure. Disclosures made for the purposes of journalism are also removed from the criminal sanctions, provided that the disclosure is in the public interest.
There are already separate provisions in each of these chapters for personal information disclosed by HMRC. These amendments make clear that the criminal sanction for unlawful disclosure applies only to an official who wrongfully discloses HMRC information outside the permitted scope of the information gateways in Part 5 of the Bill at Chapters 1, 3, 4 and 5. This brings the provision into line with HMRC’s statutory regime in the Commissioners for Revenue and Customs Act 2005 and its other statutory information gateways.
I am conscious that the noble Lords, Lord Stevenson of Balmacara and Lord Collins of Highbury, have two amendments that relate to this section, Amendments 138A and 146A. I suggest that I reply to those amendments separately after hearing from noble Lords.
The second series of amendments concerns the definition of anti-social behaviour. Chapters 1, 3, 4 and 5 of Part 5 all contain a general rule restricting the use of information disclosed under these powers to the particular purpose for which it was shared and a general prohibition on further disclosure. There are a number of exceptions to these rules. A previous amendment added an exception enabling disclosures made for the prevention of anti-social behaviour. The definition as currently drafted needs to be adjusted to work in Scotland and Northern Ireland. These amendments provide a revised definition that works across the UK.
In relation to reflecting the enactment of the Regulation of Investigatory Powers Act, the third series of amendments is also minor and technical in nature. The public service delivery, debt, fraud, research and statistics clauses provide that information cannot be disclosed under these powers if that would contravene the Data Protection Act 1998 or if it is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000—commonly known in your Lordships’ House as RIPA. The Investigatory Powers Act 2016 received Royal Assent last December and will replace RIPA. These amendments replace the references to RIPA with references to the equivalent provisions in the IPA, with a provision for RIPA until that Act is fully in force.
Regarding devolved public authorities, the final series of amendments facilitates information sharing across the United Kingdom, including by and with public authorities in devolved Administrations. The amendments broadly fall into two categories, which I will take in turn. The first category provides personal information disclosed by Revenue Scotland and the Welsh Revenue Authority with equivalent protection to that given by Clause 60 to personal information disclosed by HMRC. In order to protect information relating to taxpayers, these two new clauses provide, as is the case for personal information disclosed by HMRC, that persons who are processing Revenue Scotland or Welsh Revenue Authority information cannot further disclose that information without the consent of Revenue Scotland or the Welsh Revenue Authority, as applicable. Secondly, reflecting the Government’s amendments to Clause 60, the amendments provide that persons who receive Revenue Scotland or Welsh Revenue Authority information under Clause 57(1) also cannot further disclose that information with the consent of Revenue Scotland or the Welsh Revenue Authority, as applicable.
Amendments 171 and 172 are consequential amendments to those tabled separately in respect of preventing unlawful disclosures under the research power. The first of these amendments is necessary to ensure that the separate safeguards regime for HMRC that has been maintained throughout Part 5 also applies to the criminal offence as amended. The second ensures that the separate arrangements for HMRC will be mirrored in respect of Revenue Scotland and the Welsh Revenue Authority.
The second category ensures that the definition of “Welsh body” in Part 5 is consistent with the definition of “devolved Welsh authority”, as will be enacted by the Wales Bill. The amendments will ensure that no devolved Welsh authority will be inadvertently excluded from the relevant Part 5 powers. The amendments also provide for Welsh Ministers to commence the provisions which relate to the disclosure of information by the Welsh Revenue Authority. This reflects the fact that the Welsh Revenue Authority is not yet operational. I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the Minister for a very well-read response to the questions we all had about these technical amendments, although some of them were not quite technical of course. In terms of the four categories, I listened to three very carefully, and I will read what she said in Hansard, but we have no further comments to make on them at this stage.
She touched on the issue in relation to which we have two amendments down. I am grateful to the Government for responding so quickly to the discussion in another place on this issue, because as originally drafted, the Bill would have criminalised disclosures by whistleblowers and investigative journalists revealing matters of legitimate public interest. The point was picked up and discussed at some length, and had attracted interest from a wide range of people such as Sir Peter Bottomley and Helen Goodman, who raised it. The Minister in another place undertook to take it back, and we have now had the amendments put forward.
Those of your Lordships who have bothered to read the amendments in Clauses 50 and 51 will recognise that the wording is very similar in both cases. The difference, narrowly put, is that the amendment that we were advised would take the trick in this area included not just print journalism but also broadcast journalism. I am not certain whether that is necessary or not, but the Government have come forward with a slightly narrower point of view. I think we agree the aim, and it may just be a question of the correct wording, so unless there is any particular issue, we can do this either by correspondence or perhaps in a quick meeting, and I do not think there is anything on this point that need detain the Committee further. We are agreed and are delighted that the Government are making the move. It is just a question of trying to use what time we have to make sure that we have absolutely nailed it down completely.
Having said that, what has proved difficult in other pieces of legislation is how one defines whistleblowers. There is no attempt to do that here; the test is simply whether or not what has been disclosed was in the public interest. Again, there might just be something around that where we might look at other discussions and come back on it. But for the moment, I will leave it.
Baroness Buscombe
I thank the noble Lord for that. The opposition amendment makes specific reference to broadcast transmission when the government amendment on this topic does not. However, the word “publication” in our view can be construed sufficiently broadly to cover broadcast media. Section 32(6) of the Data Protection Act 1998 provides that:
“For the purposes of this Act ‘publish’, in relation to journalistic … material, means make available to the public or any section of the public”.
The ICO guidance on this indicates that publication for these purposes would therefore cover broadcast. As a result these additional changes are not necessary.
Lord Stevenson of Balmacara
It is quite an interesting point. The world has moved on since those original drafts, and we have to think a bit more carefully about what happens on YouTube and whether disclosure on social media will be covered by this. I do not dissent from what is being said but would just like to be certain that we have used this opportunity, which may not come again, to make sure we have this nailed.
Baroness Buscombe
I thank the noble Lord for what he has said and absolutely understand where he is coming from.
Baroness Buscombe
Baroness Buscombe
Baroness Buscombe
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (8)(b) has effect as if it included a reference to that Part.”
Baroness Buscombe
Baroness Buscombe
Baroness Buscombe
“( ) which is a protected disclosure for any of the purposes of the Employment Rights Act 1996 or the Employment Rights (Northern Ireland) Order 1996 (SI 1996/1919 (NI 16)),( ) consisting of the publication of information for the purposes of journalism, where the publication of the information is in the public interest,”
Baroness Buscombe
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Baroness Buscombe
Baroness Buscombe
Lord Arbuthnot of Edrom
“Cyber-security reporting
(1) The Companies Act 2006 is amended as follows.(2) After section 416 insert—“416A Contents of directors’ report: cyber-security(1) The directors of a company must prepare a cyber-security report for each financial year setting out measures the company is taking to address cyber-security risk.(2) This report should include—(a) cyber-security audits undertaken by the company,(b) details of breaches notifiable under the General Data Protection Regulation,(c) measures in place to ensure the confidentiality and integrity of data processing systems, and(d) processes in place to test and evaluate data protection measures and information technology systems.(3) Cyber-security audits must be undertaken by organisations accredited by the Secretary of State.(4) The cyber-security report must be approved by the board of directors and signed on behalf of the board by a director or the secretary of the company.(5) If a report is approved that does not comply with the requirements of this section, the directors commit an offence.(6) A person guilty of an offence under this section is liable on summary conviction to a fine.””
Lord Arbuthnot of Edrom (Con)
My Lords, I draw noble Lords’ attention to my interests in the register, particularly to the fact that I am chairman of the Information Assurance Advisory Council, chair of the advisory board of Thales UK and a member of the advisory board of IRM, among other cyber-interested companies.
This Bill is about the digital economy, but it contains very little mention of security. Yet cybersecurity is essential, both to the proper functioning of the internet, on which we so rely, and to the trust we place in the digital economy. Global research has been done by the Information Systems Audit and Control Association of the United States of America, and I am indebted to it for its help on these amendments. That research has shown that two-thirds of chief executives of major corporations do not have confidence in their workforces to deal with anything beyond the simplest of data breaches. We all know that there has been no shortage of high-profile data breaches on both sides of the Atlantic over the last 12 months. That has damaged the economic performance of companies and their stock price, and has significantly reduced consumer and business confidence.
I congratulate the Government on making real progress in this area. They have introduced Cyber Essentials, which has been helpful in boosting implementation of cyber controls. I suggest, though, that the uptake of Cyber Essentials has been disappointing. It is not always a requirement that companies observe even the relatively low level of assurance that Cyber Essentials suggests. I use the word “suggests” because of course it is not compulsory. Equally, the new cybersecurity strategy has brought £1.9 billion into developing a capability across the whole of society to address everything from the biggest companies to individual citizens. The Minister of State for Digital and Culture recently indicated in another place that the Government intend to implement the General Data Protection Regulation in full. That is a good thing, but I very much doubt that businesses—and probably even government departments—are anywhere near ready for the GDPR, nor as far along as they really should be by this stage.
In view of the existential nature of our reliance on cyber nowadays, I therefore suggest that we need to go further. Consumers, investors, executives and government alike all need confidence that businesses are taking appropriate steps to safeguard their data and their IT systems—and those of their supply chains as well—from malicious activity. So, I have decided to be helpful. I propose these amendments, which introduce the notion of a cyber audit. They are probing amendments: their wording creates obligations that are perhaps more imperative than I would like to see, because I believe we should start with encouragement rather than requirement.
Everyone is now accepting of, and accustomed to, the notion of external independent financial audits, which have become the norm throughout the world. I believe that a similar approach now needs to be followed in relation to cybersecurity. My suggestion is that we should undertake cyber audits—perhaps as part of financial audits, or perhaps separately; it does not really matter. Those audits could be based on standards that could be evolved by industry, rather than by government, because government legislation never manages to keep up with the astonishing pace of technological change. These cyber audits should include external stress tests of a company’s cybersecurity in areas such as email, and possibly even in relation to a company’s products.
I think the entire House knows that, in 2013, the Target chain of 1,800 stores in the United States of America was hacked by people who broke into its air conditioning system, which was supplied by a third party. Everybody knows about last autumn’s botnet attack by rogue webcams. So if we did this and went for cyber audits, we could gradually begin to address the issue of cybersecurity, so that over time no longer would it create quite the existential threat that it does now. It would need to start on a voluntary basis and be driven by business, not by government, but, in time, I believe it would spread internationally, so that the United Kingdom would not be disadvantaged in competitive terms. It would also ensure that the United Kingdom was in the vanguard of global best practice. I beg to move.
Baroness Jones of Whitchurch (Lab)
I expected more people to be inspired by the contribution of the noble Lord, Lord Arbuthnot, and to join in the debate. I am rising to give my support to Amendments 105 and 106 and to thank the noble Lords, Lord Arbuthnot and Lord Carlile, for highlighting this simple failure in company policy, which can lead to much bigger dangers and threats. As the noble Lord said, it can have commercial implications, personal privacy implications and, ultimately, national security implications. While we all have a part to play setting the highest standards of data protection, it is true that all too often we put the focus on national Governments without recognising the equal responsibilities of the private sector and private companies to play their part. This is particularly vital, given the number of private sector organisations which access data for government contract work. However, it also extends into other realms of commercial activity, such as commercial personal profiling, in which companies build vast data banks of our shopping habits, our friends, our movements—literally, where we are moving around in cities and towns—and our vulnerabilities, all of which have huge value both in their own hands and in the hands of cyber-thieves. These are issues which we have also flagged up in other amendments tabled today, and we have tried to build in more safeguards. My noble friend Lord Collins has said that we believe that individuals should have the right to know what information is being held about them, for example. They should have the right to be able to withdraw permission for the data to be held, and they should have the right to know immediately if a data breach has taken place.
We welcome the amendments, which would begin to address some of our concerns, by putting a straightforward obligation on companies to prepare a cybersecurity report each year, detailing the measures being taken to ensure that data are being kept safely. It is a simple ask, and it should not really be necessary, but the all too frequent security breaches taking place underline why a legal requirement has to be imposed. An Institute of Directors report last year showed that companies tend to keep quiet when there has been a security breach. As a result, there are no accurate figures on the extent of this crime, or the extent to which companies are being held to ransom. A survey of business leaders found that only half had a formal strategy in place to protect themselves and just 20% held insurance against an attack. Yet we also know that companies are also losing confidence in their encryption systems, their staff capabilities and awareness and the ability of their software to withstand a deliberate assault.
This is a huge issue. Of course, we have a vested interest in sorting this out, as often it is our personal data which are being stolen. But on a wider sphere it impacts on everything from company finances to sensitive market data and research and development. So we very much welcome the initiative set out in these amendments, and agree with the noble Lord, Lord Arbuthnot, that they are helpful. In itself, they will not completely solve the problem, but they represent another small step in getting companies to act responsibly in managing the data that they hold.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, Part 5 of the Bill requires public authorities and specified persons to specify and meet specific legislative conditions and controls on the handling of personal information. As I have said on a number of occasions this evening, these provisions will be underpinned by codes of practice setting out data security requirements, including cybersecurity. A body that fails to meet these could be prevented from using the data-sharing powers. That is the context in which I turn to Amendments 105 and 106.
Amendment 105 would require all but the smallest of companies to conduct audits on their cybersecurity and to report annually on it and their data protection measures. Clearly, the Government recognise that effective cybersecurity risk management is important to the success of the economy and, indeed, to ensuring the safety and integrity of private citizens’ data. The Government conducted the Cyber Security Regulation and Incentives Review in 2016 to consider whether we need additional regulation or incentives to boost cyber risk management in the wider economy and it showed strong justification for regulation to secure personal data.
The Government will seek to improve cyber risk management through our implementation of the EU general data protection regulation in May 2018. Its requirement to report breaches to the Information Commissioner and individuals affected, and the fines that can be issued under it, will represent a significant improvement. These will be supplemented by a number of measures to more clearly link data protection with cybersecurity, including through closer working of the Information Commissioner and the National Cyber Security Centre. However, we will not seek to pursue further general cybersecurity legislation for the wider economy as would be required by Amendment 105.
We believe that mandating the inclusion of cyber risk information in annual reports, or the introduction of legal provisions for cyber audit, is unlikely to be an effective way of encouraging large-scale change in cyber risk management. Instead, the National Cyber Security Centre plans to work with stakeholders to develop guidance for investors. The long-term aim of the organisation is to include cybersecurity in the guidance it provides to businesses on the kind of information it wants to see in an annual report, and in the reports it provides to investors each year on every listed company.
Amendment 106 is very broad in its aims and, as such, could have unintended consequences for the diverse range of grants that the Government fund each year. The supporting audit and insurance regime would be costly and challenging to enforce given the diversity of grant recipients, including those from voluntary and research communities. Furthermore, this amendment is unnecessary as many of these checks are in place as a matter of routine. The level of cybersecurity risk in grants will continue to be monitored and consideration given to how recently launched grant standards could be used to strengthen guidance in this area. This provides a far more flexible and proportionate solution than legislation.
With respect to subsection (2) of the proposed new clause in Amendment 106, the Government are already taking tangible steps to reduce the level of cybersecurity risk in their supply chain. As of October 2014, suppliers of central government contracts that involve the handling of personal data or the supply of IT products and services must demonstrate they have met the technical requirements set out as part of either the government-owned Cyber Essentials scheme or a suitable equivalent. The scheme was developed jointly with GCHQ and industry to support organisations of all sizes and across all sectors in getting a good, basic level of online security in place. In response to my noble friend Lord Arbuthnot I would observe that, as of the end of December 2016, nearly 5,500 certificates had been issued under the scheme, and we have a strategy in place to significantly increase the adoption of the scheme over the coming year. With that explanation, I hope my noble friend will withdraw his amendment.
Lord Arbuthnot of Edrom
My Lords, I am grateful to my noble and learned friend for his comments. From what he says I suspect that the Government are not quite there yet. However, I hope that my amendments will help to encourage them along a path of some form of regulation in this area. I suspect that the arguments my noble and learned friend used were similar to those that were first used when financial audit was suggested. However, I am grateful for what he has said. I am also particularly grateful to the noble Baroness, Lady Jones, for what she said and for the gracious way in which she said it. However, my amendments were aimed not so much at government as at business. I suspect that this will be part of a long-term campaign, so, with those words, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) a devolved Welsh authority as defined by section 157A of the Government of Wales Act 2006, or( ) a person providing services to a devolved Welsh authority as defined by that section.”
“( ) References in this Chapter to people living in water poverty are to be construed in accordance with section (Disclosure of information to water and sewerage undertakers) (5).”
Lord Clement-Jones
“(a) the authority or civil registration official to whom it is disclosed (the “recipient”) requires the information to enable the recipient to exercise one or more of the recipient’s functions, and(b) the data subjects whose information is being disclosed have given valid consent under data protection legislation.”
Lord Clement-Jones (LD)
My Lords, I wish to speak also to Amendment 116.
This issue is extremely straightforward. My remarks may anticipate some of the points that the noble Baroness, Lady Byford, will make in due course on the clause stand part question, for which we have considerable sympathy. However, we on these Benches and many others outside the House are deeply concerned that Chapter 2 of Part 5 contains no safeguards against bulk copying of civil registration data. We accept the case for a power to disclose civil registration information where an individual has consented. A citizen should, of course, be able to choose to let the registrar inform other bodies of changes. However, new Section 19AA in Clause 39(2) appears to remove any limit to copying registration data in bulk. As regards the draft civil registration code of practice, there appears to be no explicit limit on that sharing of data in bulk, and certainly no requirement for individual consent. Therefore, the essence of this amendment is quite simply to require that there should be express consent of the data subject.
As regards Amendment 116, approximately 1.3 million births and deaths are registered each year under legislation dating back to 1953, which consolidated provisions going back to the start of civil registration in 1837. In 2009, a system was introduced to allow registrars to register births and deaths electronically but it is the hard copy which this generates which is the legal copy that will be used to issue the certificates. Registrars also have to use the electronic system to submit an electronic copy of each event to the superintendent registrar. Primary legislation is required to make the electronic copy the legal copy and to remove the need for paper altogether, although individuals could still order hard-copy certificates should they so choose.
It has been estimated that such a move would save the local registration service and the Home Office around £2.5 million a year, primarily through removing the routine creation of registers containing loose-leaf, watermarked registration documents. Local authorities currently have to pay to store hard copies of all documents, so the change would reduce future storage costs. Provided that sufficient checks are in place, electronic documents are more secure than paper ones, which is particularly important when loose-leaf documents are being moved.
I hope that I have made the case for this amendment, which is very much supported by many in this field, and I hope that the Minister will look favourably on it. I beg to move.
Baroness Byford (Con)
My Lords, my opposition to Clause 39 standing part of the Bill forms part of this group. I have listened carefully to what the noble Lord, Lord Clement-Jones, has just said. I come to this from a slightly different angle but the conversation goes round and round in a circle, and here we are trying to introduce protections again.
I tabled my opposition to the clause for probing reasons. I wonder whether it is possible to have examples of when and why a civil registration authority would disclose information. The definition in new Section 19AA(6)(e), introduced in Clause 39, lists as civil registration officials those local authority classifications which also appear as specified public authorities. Do the disclosure powers mean therefore that a civil registration official in, for example, my home county of Leicestershire may disclose information to other personnel employed within the county council, or do they empower him to disclose information to any or all of the other specified public authorities? From my reading of the subsection, that is not quite clear.
Would the regulations be used to divulge information specific to a person or perhaps a family, or could they ever cover everything registered at a particular time or relating to a particular location? For example, why would the NHS have an interest in receiving such information?
Could this chapter result in a large-scale information exchange between civil registration officials and public authorities using the internet? If so, how will such data be protected both in transit and at the receiving end? Do all public authorities use the same methods to guard against data theft and hacking? I shall be interested to hear the Minister’s response.
Baroness Hamwee (LD)
My Lords, perhaps I may ask a couple of questions which arise from the fact sheet on this issue. On civil registration, it says:
“The Bill establishes a framework, with appropriate safeguards, to share bulk registration information where there is a clear and compelling need”.
I wonder whether the Minister can help the Committee in understanding where that is translated into the Bill. The fact sheet also says:
“There are no intentions to share data with the private sector or for data to be used for any commercial purposes”.
It then goes on to say that,
“the powers would not permit this”.
However, I am sure that the Minister will understand my querying the words “no intentions”, because they suggest that there could be a change, and possibly one with which Parliament is not hugely involved. I am going to assume that the points made by the Delegated Powers and Regulatory Reform Committee are in the rather large pile of items that it raised and which the Government will reply to before Report, so I am referring to that only in passing, but it would be very helpful to understand how the points in the fact sheet, which is where many people would start, move over into the legislation.
Lord Keen of Elie
My Lords, the proposals in Chapter 2 of Part 5, which are being addressed here, will ensure that citizens are able to access future—can I have a moment to sort out my own speaking notes?
Lord Maxton (Lab)
While the Minister is doing that, can I ask whether this amendment covers Scotland? He is replying as the noble and learned Lord, Lord Keen of Elie. Registration of births, deaths and marriages was not introduced in Scotland until 1855 rather than 1837—I think—so does this amendment cover Scotland?
Lord Keen of Elie
It does not extend to Scotland. It is a provision pertaining to England and Wales. I am obliged to the noble Lord for giving me time to find my place in my notes. It is greatly appreciated.
As I said, the proposals in Chapter 2 of Part 5 will ensure that citizens are able to access future government digital services efficiently and securely, while removing the current reliance on paper certificates. I will address the two amendments first before addressing the clause stand part aspect of this debate.
Amendment 113 would add a requirement for a civil registration official to be satisfied that the information is required by a recipient to fulfil one or more of their functions before disclosing data and also seeks to add a requirement that an individual must have given valid consent under data protection legislation prior to any disclosure of their personal data. With respect, this amendment is unnecessary because disclosure of personal data under these clauses will already be subject to the provisions of the Data Protection Act. To require explicit consent in all cases would exceed the requirements of the Data Protection Act and the purpose of this clause. Disclosure will take place without consent only if to do so would be consistent with the Data Protection Act, which governs fair disclosure. Examples of how the powers would be exercised in practice include allowing registration officials to disclose information within and across local authority boundaries in order to safeguard children. Being able to share information will ensure that children are known to the local authorities in which they reside and action can be taken to address any needs of the child or the parent. That is what lies behind this matter.
Amendment 116 seeks to amend the Births and Deaths Registration Act 1953 to introduce an electronic register for the registration of births and deaths. However, the proposed amendment to Section 25 of the 1953 Act as currently drafted does not go far enough. The legislation which provides for the registration of births and deaths is based on legislation in place in 1836—or 1837—and very little has changed to the process of registering births and deaths since then. The Act would need more amendment in order to introduce an electronic register. Moving to an electronic register would remove the requirement for hard-copy registers and the electronic register of births and deaths would be the legal record instead of the paper registers. It is certainly an area of reform that the Government are keen to take forward. However, we need more time. I reassure noble Lords that the Government will look in more detail at what changes need to be made to the Act in order to bring in this change and we will consider legislating in due course. We recognise the benefits that the noble Lord, Lord Clement-Jones, suggested could be achieved once that entire process is completed. In light of those points, I hope that the noble Lord will agree not to press that amendment.
I turn to my noble friend Lady Byford and her opposition to the clause standing part of the Bill. Unless there is a specific statutory gateway, information from the records of births, marriages, civil partnerships and deaths may not be disclosed by registration officials other than in the form of a certified copy of an entry, such as a birth or death certificate, on payment of the statutory fee. As I have indicated, the system is outdated and based on paper processes from the 19th century. This clause introduces new data-sharing powers that allow registration officials to share data from birth, death, marriage and civil partnership records with public authorities for the purposes of fulfilling their functions. However, only the minimum amount of data will be provided to enable the public authority to fulfil the function.
My noble friend asked for examples of the benefits of sharing such registration data. Being able to share data about deaths with local authorities would assist in combating housing tenancy fraud. The National Fraud Authority estimates that housing tenancy fraud costs local authorities £845 million each year. An example of this is when someone continues to live in a property following the death of the tenant even when they have no right to do so. The sharing of birth data within the local authority would assist social services, for example, if they wanted to engage with one of the parents in the interests of a child. Sharing marriage data would help to target those living together if there were a fraudulent claim to be single for the purposes of claiming benefits. Sharing death data within local authorities would help them to recover medical equipment following the death of an individual.
There are many examples where such data sharing would be of assistance. It paves the way for citizens to access government services more conveniently, efficiently and securely, for example, by removing the current reliance on paper certificates to access services. This will provide more flexibility and will modernise how government services are delivered. An example is where registration officials will be able to share data on births that have occurred in one district, but where those concerned live in a neighbouring district with no hospital. This would allow local authorities more accurately to plan the provision of health care, school planning and other local services. Being able to share death data across boundaries will also help to prevent unwanted mail being sent to the family of a deceased person.
Registration officials will be able to share registration data only with the public authorities defined in new Section 19AB of the Registration Service Act 1953. Any data sharing will of course be carried out strictly in accordance with the requirements of the Data Protection Act. The sharing of registration data will be underpinned by a statutory code of practice as required by Section 19C. One of the requirements in the code will be that the Registrar-General must personally approve any request for the sharing of large amounts of data.
Before data are shared, the code of practice requires privacy impact assessments and data-sharing agreements to be drawn up and agreed with public authorities to include such things as how data are to be used, stored and retained. Data will be able to be used only for the purpose they have been provided and retained only for as long as necessary. Data-sharing agreements will forbid the creation of a database or the linking of registration data in any way. Any breach would be reported to the Information Commissioner, who has the power to impose penalties where it is appropriate to do so. I hope that that deals with the fears expressed about the bulk use of such registration data.
Lord Clement-Jones
My Lords, I am not sure whether the Minister has dealt with the questions raised by my noble friend.
Lord Keen of Elie
I apologise for omitting to respond to the questions asked by the noble Baroness, Lady Hamwee, by reference to the fact sheet. Rather than poring over the provisions of the Bill, I will undertake to write to her pointing out the cross-reference between the terms of the fact sheet and the relevant provisions in the Bill. I will place a copy of that letter in the Library.
Lord Clement-Jones
My Lords, I thank the Minister for his response, but I am a little bit baffled. Here we are—and I am talking here particularly with reference to Amendment 116—discussing the Digital Economy Bill. It should be doing what it says on the tin. I put forward, in my name and in the name of my noble friend Lady Scott, who is the inspiration behind the amendment, something that would make sure that it was the electronic copy that was the legal copy. Here is the Minister saying—and I do not think I have ever had a Minister say this to me—that the amendment does not go far enough. That is a very joyous response, but on the other hand he wants more time and “it will all happen in due course”. This is the Digital Economy Bill: what other opportunity are we going to have to ensure that our Registrar-General and so on—the General Register Office and local authorities—are under a legal obligation to hold electronic copies rather than the old, steam-driven paper copies? We have been doing this since 1837 or 1836, as we heard earlier. Is it not about time that we changed our practices, and is it not possible that we have been cooking up an amendment over the last 50 years that might suit the book and be able to appear on Report? That is my response on Amendment 116.
My response on Amendment 113 is a little bit dustier. I have read the code of practice, and I accept the Minister’s assurances; throughout this process he has given a lot of assurances about the impact of the Data Protection Act. There is no doubt about that: either explicit consent or, where no explicit consent is given, it is in accordance with the Data Protection Act and so on. There are some very worthy purposes in terms of data sharing: safeguarding children was an absolutely splendid example for the Minister to produce, and he produced some very good examples to the noble Baroness, Lady Byford, as well. Of course, there are some very good examples, but the code of practice is very opaque in that respect. It really does not get into any of that kind of worthy purpose: it simply talks about disclosing in accordance with the Data Protection Act. I looked through when the Minister was talking to see whether it was the Registrar-General who was the one person who was going to authorise disclosure, and it seemed to me that there were an awful lot more people who were authorised to disclose than simply one person.
There is something defective about these codes of practice. They seem to be far too bland and they do not give the public the reassurance that they should. We have talked about public trust right across the Committee, and the fact is that the reason why so many amendments have come forward from a variety of different sources to this part of the Bill is precisely that lack of trust. I suggest that the Minister and his colleagues look again at whether these codes of practice are doing their job.
That is another reason why, at the end of the day, these codes of practice should be approved by Parliament. That has also been a running theme of the Delegated Powers and Regulatory Reform Committee, which had it absolutely right in every single chapter that it dealt with. These codes of practice should be approved by Parliament. Otherwise, I do not believe that the Government are going to build that public trust in this data sharing, which is absolutely essential. The Minister should look again at that aspect, but in the meantime, having given the Minister a hard time at this time of night, I beg leave to withdraw the amendment.
“Data sharing for the purpose of supporting better debt management
In addition to the purposes set out in section 41(3), information about debt may be shared by specified persons under this Chapter for the purpose of helping individuals to manage their debts, including by provision of a breathing space.”
Lord Stevenson of Balmacara
My Lords, in an idle moment, a moment of complete frivolity, I looked up GOV.UK to check facts—I thought that would be a useful contribution to the debate. The date we have all been searching for is 1837: the General Register Office is part of Her Majesty’s Passport Office and contains records dating back to 1837. I thought that would be useful.
I beg to move Amendment 117A in my name. This stems from my period of service as chairman of a wonderful charity called StepChange, which deals with individual debt owed by ordinary people. In the time I was there—I resigned about two years ago—we had about 600,000 people a year contacting the telephone helpline or going online to try to seek solutions to their debt problems, so it is a very significant problem in British society and something we must take a great deal of care about. Most people who came to us were struggling with multiple debts; in other words, they owed money to a variety of different sources, ranging from local authorities, mobile phone companies, debt collection agencies, Revenue & Customs, payday lenders, utility companies and catalogue lenders—there is a very large number of them.
A median client would be aged about 45, female and owing about £20,000 to eight different creditors, so it is a significant problem that people get into. Within that, with a tremendous requirement now for debt advice, with lots of people struggling with debt, one worrying trend has been how bad central and local government have been in dealing with people, particularly those with multiple debts. A recent survey of about 1,000 StepChange clients found widespread aggressive enforcement from local authorities even when people were asking their authority for help. Clients were more than twice as likely to be threatened with court action or bailiffs than to be offered an affordable payment option. This is despite guidance being issued by central government about how debts should be treated.
Of course, what happens when people face strong demands, very often from central or local government, is that they tend to go to people who can lend them money quickly, probably from an existing credit line, almost certainly, until recently—but even today it is still happening—taking out a payday loan. They try to borrow more to try to pay back original debts and get themselves into a worse situation than they were before. The same survey asked clients to rate what their creditors had done to them and whether they treated them fairly or unfairly. I am afraid to say that public sector creditors came out very badly, occupying three of the top six places in the unfair treatment table. It is interesting to note that HMRC, for instance, scored no better than payday lenders, which the Government, through the FCA, have spent a lot of time trying to sort out over recent years.
That is the background of our concern. We welcome the provisions in the Bill to think again about how debts owed to the public sector are collected. In that light, these amendments are put forward for suggestion, they are probing amendments at this stage, and I hope that they will elicit a response, because it is not just StepChange, the debt charity, that has been concerned about this. Citizens Advice has also raised concern about public sector debt collection practices, finding that public sector creditors are,
“mostly out of step with financial services and utilities companies when it comes to setting affordable repayment rates, and that our clients can suffer detriment when public bodies have uncoordinated and inconsistent approaches to debt collections ... central government debt collection lags behind the higher standards expected of other creditors”.
This is focused on individuals who have problems with their debts, but of course there is a wider cost to society as a whole which, through relationship breakdown, homelessness and difficulties with maintaining concentration at work, et cetera, has been estimated at about £8 billion a year. The Bill contains clauses that relate to this and they seem to suggest that central government as a whole—but in this case HMRC—are thinking about how the data-sharing powers that are coming should be used to allow them to collect several debts at once, but also to do it in a slightly different way. I hope that is the case. We are back with our old friend, the code of practice, because what is said in the code of practice will determine whether this will work.
I have, then, four things I invite Ministers to respond to. First, Clause 45 is limited to departments that seek data-sharing powers and says only that they should “have regard to” the code of practice. This has, I think, been picked up in other amendments that we have considered today. It would be good if the code of practice were also embedded in a much stronger statutory provision, to give it real bite. We have seen examples of guidance—I mentioned one involving central government issuing guidance on council tax collection methods—but such guidance does not work, because it is non-binding and only advisory. If there is a code, it should be embedded in the statute and people affected by it should be able to refer back to it to make sure that it works properly.
Secondly, the public body itself must believe that this is the way in which it needs to operate. Within the amendments are a range of issues that central government bodies might pick up that would match the best practice in utilities, banks, credit cards and store cards—all of which have been through the cycle of trying to get money out of individuals who owe them and other people money, and have recognised that you have to deal with people with multiple debts in a completely different way from those who just owe money directly. That is gradually changing the way people operate. There is further to go, but it is a lesson that should be learned. I hope that the codes can be adapted to reflect that.
Thirdly—this may be too much of an ask, but it should be recognised—this Bill applies only to public bodies, and their creditors, when they are seeking to use the data-sharing powers. The problem is, of course, wider than the data-sharing powers. Problems with central and local government debt collections are widespread: practices need to be reformed and this is not likely to relate only to places where data sharing is used. The Government should think ahead about this and try to set out an understanding for all their agencies that poor debt-collection practices can harm the rate at which they get their money back and the time it takes, and it will also harm the financially vulnerable people. Taking account of that across all their practices would be a very good thing.
These amendments, therefore, try to raise those points, but there is one other thing that the Government should try to do, which is in the first amendment. It is to take a lesson from Scotland—I am sure that the noble and learned Lord from Scotland will wish to pick this up and think harder about it—where, when you have a private or a public debt and seek guidance from the state agency that operates that scheme, you are given statutory protection from excess charges and your interest rates are frozen, providing you stick to your debt repayment plan. That means that people get a breathing space, time to organise their finances, think about their budgets and work out what they are going to do, without the terrible pressure from those who are owed money to start repaying it. It is only when all those issues have been brought together, and an agreement reached between the creditors and the agency, that repayment begins. That has a very much higher rate of success than any other scheme. England lags way behind on this, and it would be no skin off the Treasury’s nose if it took a leaf out of the Scottish Government’s book and brought in their procedures—with a statutory breathing space that gave some hope to people who want to repay their debts but cannot do so because the practices are not as good.
Lord Keen of Elie
My Lords, I acknowledge the point made by the noble Lord, Lord Stevenson, that this is a significant issue, and I understand that this is a probing amendment to allow us to consider some of the wider issues that he has touched on in the debate.
Amendment 117A seeks to include in the Bill an additional purpose: to enable debt information to be shared under the powers provided by Clause 41. It seeks to state explicitly that debt data can be disclosed,
“for the purpose of helping individuals to manage their debts”.
There is also a reference to the breathing space, and I will come back to that point in a moment in response to the questions posed by the noble Lord.
In the first instance, we would venture that the amendment is not necessary. The provisions as drafted enable information to be shared,
“for the purposes of the taking of action in connection with debt owed to”,
a public authority or the Crown. This includes but is not limited to, for example, identifying or collecting debt. The provision is sufficiently broad to enable sharing for the purpose set out in this amendment. That is the position of the Government. The Government are considering the recommendations that have been made following work to look into the merits of introducing a breathing space for customers, which we are aware is available in other jurisdictions. While the Government are considering these recommendations, it would be premature to incorporate a reference to this initiative in the Bill at this time. I hope the noble Lord will accept that the matter is being looked at.
Lord Stevenson of Balmacara
I thank the Minister very much for his considered response. I am grateful to him for that. The breathing space proposal has been around for some time, so I was hoping to get a bit of an edge on it but we will clearly have to wait and see. It would provide a very big step forward for how public debts are organised. As I said, how the code of practice is framed is the main issue and I am grateful for the Minister’s thoughts that there might still be opportunities to influence it. What was said today might do that trick but we will certainly look at it carefully. With that, I would like to withdraw the amendment.
Lord Ashton of Hyde
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Lord Ashton of Hyde
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (8)(b) has effect as if it included a reference to that Part.”
Lord Ashton of Hyde
“( ) which is a protected disclosure for any of the purposes of the Employment Rights Act 1996 or the Employment Rights (Northern Ireland) Order 1996 (SI 1996/1919 (NI 16)),( ) consisting of the publication of information for the purposes of journalism, where the publication of the information is in the public interest,”
Lord Ashton of Hyde
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) a devolved Welsh authority as defined by section 157A of the Government of Wales Act 2006, or( ) a person providing services to a devolved Welsh authority as defined by that section.”
Lord Ashton of Hyde
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (8)(b) has effect as if it included a reference to that Part.”
Lord Ashton of Hyde
“( ) which is a protected disclosure for any of the purposes of the Employment Rights Act 1996 or the Employment Rights (Northern Ireland) Order 1996 (SI 1996/1919 (NI 16)),( ) consisting of the publication of information for the purposes of journalism, where the publication of the information is in the public interest,”
Lord Ashton of Hyde
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) a devolved Welsh authority as defined by section 157A of the Government of Wales Act 2006, or( ) a person providing services to a devolved Welsh authority as defined by that section.”
Lord Ashton of Hyde
“( ) Information may be disclosed under subsection (5)(b)—(a) only with the consent of the Commissioners for Her Majesty’s Revenue and Customs, if it is information to which section 60 (2) applies;(b) only with the consent of the Welsh Revenue Authority, if it is information to which section (Information disclosed by the Welsh Revenue Authority)(5) applies;(c) only with the consent of Revenue Scotland, if it is information to which section (Information disclosed by Revenue Scotland)(5) applies.”
Lord Ashton of Hyde
“( ) any person (including the public authority) who is involved in processing the information for disclosure under subsection (1);”
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, these amendments apply to the research power, and there is an additional amendment which applies to the statistics power. Together, they add clarity and strength to the set of robust safeguards that have been developed to facilitate the processing and safe disclosure of personal information provided by public authorities for research purposes. To encourage greater use of publicly held data for research in the public interest, it is important that everyone concerned can have confidence that personal information is appropriately protected, while at the same time researchers are able to interrogate the information to produce research findings that further the public interest. These amendments further help strike that balance.
The amendments fall into four categories. First, Amendment 155, to Clause 57(9), makes clear, for the avoidance of doubt, that a public authority that processes another public authority’s personal information must be accredited to do so, as well as to process its own information.
Secondly, Amendments 159 to 180 and Amendment 191 correct defects in the drafting of Clauses 59 and 60. The defect in each clause prevents persons who receive processed information from processors under Clause 57(1) disclosing that information at all if that information meets the wide definition in Clause 57(12), whereas it was always intended that researchers would be able to disclose the information that they receive under the power to other researchers for the purposes of peer review. The amendments also strengthen the unlawful disclosure provisions by adding a new offence which applies to disclosure of a defined category of personal information by a person who has received processed information under Clause 57(1). The information that is protected is consistent with Section 39 of the Statistics and Registration Service Act 2007. The amendments have been drafted in a way that will enable researchers to submit their findings for peer review and for publication in a similar way to current practice under that Act. These amendments have been developed with the assistance of the UK Statistics Authority, which has considerable expertise in this area.
Thirdly, Amendments 183 to 189 and Amendments 192 to 195 tidy up a drafting error by which the code of practice currently applies to the disclosure, holding or use of both personal information and information that is not, or never has been, personal. To apply the code or any other safeguards in this power to information that does not identify or risk identifying individuals would be unnecessarily bureaucratic.
Finally, Amendment 210 to new Section 53A supports devolved statistics by giving the UK Statistics Authority a mechanism to share information with its statistical counterparts in the devolved Administrations. In Northern Ireland, the principal statistical department is the Northern Ireland Statistics and Research Agency, or NISRA. Some of NISRA’s functions are held specifically by its parent department, the Department of Finance. Other statistical functions are held only by the Registrar-General for Northern Ireland. New Section 53A(2) does not currently list the Registrar-General for Northern Ireland as a devolved authority, meaning that UKSA cannot share information with NISRA relating to the Registrar-General’s statistical functions. This amendment resolves this difficulty by adding the Registrar-General for Northern Ireland to the definition of devolved authority in new Section 53A(2). I beg to move.
Lord Ashton of Hyde
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (2)(b) has effect as if it included a reference to that Part.”
Lord Ashton of Hyde
“(A1) Subsection (A2) applies to personal information—(a) in which the identity of a particular person is specified or from which the identity of a particular person can be deduced, whether from the information itself or from that information taken together with any other published information, and(b) which is received by a person (“P”) under section 57 (1)(disclosure for research purposes).(A2) Personal information to which this subsection applies may not be disclosed—(a) by P, or(b) by any other person who has received it directly or indirectly from P.(A3) Subsection (A2) does not apply to a disclosure—(a) to a person by whom the research referred to in section 57(1) is being or is to be carried out, or(b) by a person by whom such research is being or has been carried out—(i) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, and (ii) to a person who is accredited under section 62 as a person to whom such information may be disclosed for that purpose.”
“( ) Subsection (2) does not apply to a disclosure—(a) under section 57(1) or (5), or(b) of information previously disclosed under section 57(1), where the disclosure is made by—(i) the person to whom the information was disclosed under that provision, or(ii) any person who has received the information directly or indirectly from the person mentioned in sub-paragraph (i),(but subsection (A2) may apply to such a disclosure).”
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) which is a protected disclosure for any of the purposes of the Employment Rights Act 1996 or the Employment Rights (Northern Ireland) Order 1996 (SI 1996/1919 (NI 16)),( ) consisting of the publication of information for the purposes of journalism, where the publication of the information is in the public interest,”
(a) is likely to cause harassment, alarm or distress to any person, or(b) is capable of causing nuisance or annoyance to a person in relation to that person’s occupation of residential premises.”
Lord Ashton of Hyde
“(A1) Subsection (A2) applies to personal information—(a) in which the identity of a particular person is specified or from which the identity of a particular person can be deduced, whether from the information itself or from that information taken together with any other published information, and(b) which—(i) is disclosed under section 57 (1)(disclosure for research purposes) by the Revenue and Customs, or(ii) is disclosed under section 57 (1) by a person other than the Revenue and Customs and is derived from information disclosed under section 57 (5) by the Revenue and Customs,and is received by a person (“P”) under section 57(1).(A2) Personal information to which this subsection applies may not be disclosed by P.(A3) Subsection (A2) does not apply to a disclosure—(a) to a person by whom the research referred to in section 57 (1) is being or is to be carried out, or(b) by a person by whom such research is being or has been carried out—(i) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, and(ii) to a person who is accredited under section 62 as a person to whom such information may be disclosed for that purpose.”
“( ) Subsection (2) does not apply to a disclosure under section 57(1).”
Lord Ashton of Hyde
“Information disclosed by the Welsh Revenue Authority
(1) Subsection (2) applies to personal information—(a) in which the identity of a particular person is specified or from which the identity of a particular person can be deduced, whether from the information itself or from that information taken together with any other published information, and(b) which—(i) is disclosed under section 57 (1)(disclosure for research purposes) by the Welsh Revenue Authority, or (ii) is disclosed under section 57 (1) by a person other than the Welsh Revenue Authority and is derived from information disclosed under section 57 (5) by the Welsh Revenue Authority,and is received by a person (“P”) under section 57(1).(2) Personal information to which this subsection applies may not be disclosed by P.(3) Subsection (2) does not apply to a disclosure—(a) to a person by whom the research referred to in section 57 (1) is being or is to be carried out, or(b) by a person by whom such research is being or has been carried out—(i) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, and(ii) to a person who is accredited under section 62 as a person to whom such information may be disclosed for that purpose.(4) Subsection (5) applies to personal information which—(a) identifies a particular person, and(b) is disclosed by the Welsh Revenue Authority under section 57 (5)(disclosure for processing) and received by a person (“P”).(5) Personal information to which this subsection applies may not be disclosed—(a) by P, or(b) by any other person who has received it under section 57 (5).(6) Subsection (5) does not apply to a disclosure under section 57 (1).(7) Subsection (2) or (5) does not apply to a disclosure which is made with the consent of the Welsh Revenue Authority (which may be general or specific).(8) A person who contravenes subsection (2) or (5) is guilty of an offence.(9) It is a defence for a person charged with an offence under subsection (8) to prove that the person reasonably believed—(a) that the disclosure was lawful, or(b) that the information had already and lawfully been made available to the public.(10) A person who is guilty of an offence under subsection (8) is liable—(a) on summary conviction, to imprisonment for a term not exceeding 12 months, to a fine, or to both;(b) on conviction on indictment to imprisonment for a term not exceeding two years, to a fine or to both.(11) In the application of subsection (10)(a) to an offence committed before the coming into force of section 154(1) of the Criminal Justice Act 2003 the reference to 12 months is to be read as a reference to 6 months.”
“Information disclosed by Revenue Scotland
(1) Subsection (2) applies to personal information—(a) in which the identity of a particular person is specified or from which the identity of a particular person can be deduced, whether from the information itself or from that information taken together with any other published information, and(b) which—(i) is disclosed under section 57 (1)(disclosure for research purposes) by Revenue Scotland, or(ii) is disclosed under section 57 (1) by a person other than Revenue Scotland and is derived from information disclosed under section 57 (5) by Revenue Scotland,and is received by a person (“P”) under section 57(1). (2) Personal information to which this subsection applies may not be disclosed by P.(3) Subsection (2) does not apply to a disclosure—(a) to a person by whom the research referred to in section 57 (1) is being or is to be carried out, or(b) by a person by whom such research is being or has been carried out—(i) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, and(ii) to a person who is accredited under section 62 as a person to whom such information may be disclosed for that purpose.(4) Subsection (5) applies to personal information which—(a) identifies a particular person, and(b) is disclosed by Revenue Scotland under section 57 (5)(disclosure for processing) and received by a person (“P”).(5) Personal information to which this subsection applies may not be disclosed—(a) by P, or(b) by any other person who has received it under section 57 (5).(6) Subsection (5) does not apply to a disclosure under section 57 (1).(7) Subsection (2) or (5) does not apply to a disclosure which is made with the consent of Revenue Scotland (which may be general or specific).(8) A person who contravenes subsection (2) or (5) is guilty of an offence.(9) It is a defence for a person charged with an offence under subsection (8) to prove that the person reasonably believed—(a) that the disclosure was lawful, or(b) that the information had already and lawfully been made available to the public.(10) A person who is guilty of an offence under subsection (8) is liable—(a) on summary conviction, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory maximum or to both;(b) on conviction on indictment to imprisonment for a term not exceeding two years, to a fine or to both.”
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
“(ca) may accredit a person as a person to whom such information may be disclosed for the purposes of a review of the kind mentioned in section 59(A3)(b), 60(A3)(b), (Information disclosed by the Welsh Revenue Authority)(3)(b) or (Information disclosed by Revenue Scotland)(3)(b),”
Lord Ashton of Hyde
( ) a register of persons who are accredited under subsection (1)(ca).”
Lord Ashton of Hyde
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (9)(b) has effect as if it included a reference to that Part.”
Baroness Byford
“(2) Subject to subsection (1) of this section and section 45E, the Board may, by notice in writing to a public authority to which this section applies, require the authority to disclose to the Board information which—(a) is held by the authority in connection with its functions, and(b) is specified, or is of a kind specified, in the notice.(3) A notice under subsection (2) may require information to be disclosed on more than one date specified in the notice within a period specified in the notice.(4) A notice under subsection (2) other than one within subsection (3) must specify the date by which or the period within which the information must be disclosed.(5) A notice under subsection (2) may specify the form or manner in which the information to which it relates must be disclosed.(6) A notice under subsection (2) may require the public authority to consult the Board before making changes to—(a) its processes for collecting, organising, storing or retrieving the information to which the notice relates, or(b) its processes for supplying such information to the Board.(7) The reference in subsection (6) to making changes to a process includes introducing or removing a process.(8) The Board may give a notice under subsection (2) only if the Board requires the information to which the notice relates to enable it to exercise one or more of its functions.(9) The Board must obtain the consent of the Scottish Ministers before giving a notice under subsection (2) to a public authority which is a Scottish public authority with mixed functions or no reserved functions (within the meaning of the Scotland Act 1998).(10) The Board must obtain the consent of the Welsh Ministers before giving a notice under subsection (2) to a public authority which is a Wales public authority as defined by section 157A of the Government of Wales Act 2006.(11) The Board must obtain the consent of the Department of Finance in Northern Ireland before giving a notice under subsection (2) to a public authority if—(a) the public authority exercises functions only as regards Northern Ireland, and(b) its functions are wholly or mainly functions which relate to transferred matters (within the meaning of the Northern Ireland Act 1998).(12) A public authority to which a notice under subsection (2) is given must comply with it. (13) But the public authority need not comply with the notice if compliance—(a) might prejudice national security,(b) would contravene the Data Protection Act 1998,(c) would be prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000, or(d) would contravene directly applicable EU legislation or any enactment to the extent that it implements EU legislation.”
Baroness Byford (Con)
My Lords, I rise to move the amendment tabled by my noble friend Lord Willetts, who apologises that he could not be here tonight. I have the two other amendments in the same group. Clause 68 makes mandatory the provision of data by Crown bodies to the ONS for defined statistical research purposes. An alternative approach might be for an organisation such as the Information Commissioner’s Office to provide arbitration on contentious requests.
Clear insight into whether the Bill directs Crown bodies to share data from statistics is needed in Clause 68. At the Bill’s Committee stage in the House of Commons, where there was a long discussion on this, Chris Skidmore, Minister for the Constitution in the Cabinet Office, said it would be possible for a Crown body to refuse an ONS request for data and,
“where necessary, have their refusal put before Parliament”.—[Official Report, Commons, Digital Economy Public Bill Committee, 27/10/16; col. 379.]
The Royal Statistical Society’s primary objection to this is that it provides no subsequent mechanism for the ONS to secure access to the data. It is also unclear to it what the process means in practice, which part of the legislature will deal with that correspondence, what it is expected to do with it and what sanctions it can apply for non-disclosure. The RSS has been asking why this is in place and whether it is justified, especially as other countries, such as Canada, operate with less burdensome arrangements. I should say that I am very grateful to the Royal Statistical Society for its briefing, otherwise I would be really lost. The RSS says:
“Including the Minister’s contribution, we have heard two arguments thus far … The Minister explained the different treatments for Crown bodies and other public authorities as being due to conventions: ‘That way of working, set out in sections 45B and 45C, ensures consistency between how a Crown body interacts with another on the one hand, and how a Crown body interacts with a non-Crown body on the other’ … We have also been privy to a different, earlier argument that due to the indivisibility of the Crown, one Crown body cannot give directions to another”.
If we thought earlier discussions were difficult, I think it is getting even more so.
The briefing continues by saying that,
“we have sought and obtained legal advice, which suggests that Parliament could technically direct departments to do what it deems fit. The government’s position, although it is not unprecedented, appears politically or culturally based. It may be that the government has heard objections from some departments to a mandatory approach. We are aware that there could be reluctance on the part of some departments to share data generally, and with ONS and researchers in particular. However, problems of risk aversion to data sharing ought to be addressed without obstructing the proposed right for ONS to access data for statistical purposes, which has been more widely supported and called for, for example, by the Public Administration Select Committee (2013) and the Science and Technology Select Committee (2016), and in other reports described in the House of Commons Library’s analysis”.
There is much more material here but I shall not push the matter further. I hope I have given my noble friend enough to respond to.
My Amendments 208 and 209, which are linked to this, are much simpler and more direct as far as I am concerned, because I am not technically astute on the other topic. Large, well-known charities employ many people using many skills and who are occupied full-time in their jobs. Little charities rely on unpaid volunteers who may not have a wide range of skills and who use their free time to work purely for the charity. I have two examples in mind. The first is Freddie’s Wish, which commemorates a little boy who died in a car crash. His mother set up the charity to help local bereaved families and to raise money for the children’s hospital and the air ambulance. In two years it has raised over £50,000 and trained more than 100 volunteers in paediatric first aid.
The second example is Evelyn’s Gift, which has been a registered charity for less than a year although its founder and volunteers have been working for nearly four years. It is in memory of a seven year-old girl who died of respiratory illness. Its aims are to arrange CPR training and to continue her practice of doing little acts of kindness. The list of acts done in her name and in the name of people and the organisations that support them is inspiring. The charity employs no one and all the work is carried out by unpaid volunteers.
Organisations such as these have no resources to supply the Statistics Board with information. An unpaid voluntary worker would have to give time to filling in forms instead of doing the work he or she has signed up for and dearly wishes to do. It could be difficult to persuade anyone to donate even more time in this pursuit. A small charity with irregular income but making an important local contribution could well be destroyed by a fine levied under new Section 45F(3).
Most people nowadays have heard of charitable shoe boxes. These are sent, filled with practical gifts—hand-knitted hats, scarves and gloves, pens and paper, recycled soft toys, tennis balls and so on—to underprivileged children in Africa and eastern Europe, and, indeed, in our own country. Those who fill them spend their own money and devote much time to making up these boxes. The work is carried out throughout the year and each box going abroad to Africa costs at least £2.50 to transport in November and December. Villages, primary schools, care homes and religious groups donate goods, money, time and effort to reclaiming, recycling and packing huge quantities of otherwise unwanted items. They also raise funds for basic toiletries, small packs of sweets and things such as pens and paper, without which some children cannot go to school. I know of one village that last year sent 1,326 boxes to the central depot.
Who is to fill in the forms for the Statistics Board, and is that really necessary for these very small charities? The boxes come from all over the country. They must not contain liquids, chocolate or sweets dated for expiry before the end of March of the following year. Beyond this, there is no record of contents, value or hours worked. With such charities, my concern is that the figures available to the Statistics Board will be solely to do with the transport of the finished items. That would surely distort the results of any study by the board. I suggest that we should therefore exempt such charities from the Bill. I beg to move.
The Deputy Speaker (Viscount Ullswater) (Con)
I must advise your Lordships that, if this amendment is agreed to, I will not be able to call Amendments 200 to 202 because of pre-emption.
Baroness O'Neill of Bengarve (CB)
My Lords, I rise briefly to support this amendment. There seems to be something quite perverse in obstructing the access of the Statistics Board to datasets that are in the hands of other public bodies. That is a very simplified account, but it is a curious place in which to have an obstacle. I hope that the Minister can consider this clause very seriously.
Lord Keen of Elie
I am obliged to the noble Baronesses for their interest in this part of the Bill. As your Lordships will be aware, Clause 68 gives the UK Statistics Authority the powers to access important data needed to produce official statistics to support decision-making.
On Amendment 199, new Section 45B gives UKSA a right of access to information held by Crown bodies. A Crown body must respond in writing to a formal notice issued by the UK Statistics Authority and explain any refusal to give the authority information. If the Crown body’s explanation is inadequate or it fails to respond or comply, the UK Statistics Authority may lay the request and any response before the relevant legislature. A Crown body must therefore either comply with the notice or explain its refusal in writing. Where the Statistics Authority puts that correspondence before Parliament, then Parliament can judge the body’s actions openly and transparently. We consider that this is the right approach, creating effective, proportionate accountability and transparency.
Of course, my noble friend Lady Byford would argue that the amendment is a more effective means of requiring a Crown body to give the Statistics Authority the information. We cannot accept that it is either necessary or desirable. The Statistics Authority is part of the Crown, as are government departments. As my noble friend anticipated, it would be extremely novel, and possibly unprecedented, to legislate to compel one part of the Crown to obey another. Even the Health and Safety at Work etc. Act 1974 excludes the Crown from being subject to enforcement measures such as prosecution, instead providing long-standing structures to help departments to work with each other administratively. In this context, new Section 45B strikes the right balance. I hope that explanation reassures my noble friend.
Baroness Byford
I am very grateful to my noble and learned friend for his response. I am unable to really comment properly on Amendment 199, because I would like my noble friend Lord Willetts to have a chance to read and reflect on the Minister’s response to that issue.
On my own two amendments, I thank him for his comments. One thing that has always troubled me with charities is that sometimes you have a small charity that has a large income, but at the other end you have a large charity with a very small income. I am not totally clear, but I shall read very carefully on whether the lay-down that we have at the moment on micro and small is correct for what I am trying to suggest the Government should think about. However, I thank the Minister for his full response, which I shall read carefully in Hansard. In the meantime, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (3)(b) has effect as if it included a reference to that Part.”
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (13)(c) has effect as if it included a reference to that Part.”
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (9)(c) has effect as if it included a reference to that Part.”
Lord Ashton of Hyde
( ) the Registrar General for Northern Ireland.”
“( ) Until the repeal of Part 1 of the Regulation of Investigatory Powers Act 2000 by paragraphs 45 and 54 of Schedule 10 to the Investigatory Powers Act 2016 is fully in force, subsection (10)(c) has effect as if it included a reference to that Part.”
“Creation of a digital system for lasting power of attorney
(1) The Secretary of State must by regulations make provision for a fully digital process to apply for and create a lasting power of attorney, and for the verification by appropriate bodies of attorneys appointed under this process.(2) Regulations under subsection (1) may in particular—(a) provide for the use of secure electronic signatures in place of any requirements for physical signatures;(b) use electronic online methods to verify the identify of donors and proposed attorneys, either in conjunction with or in place of electronic or physical signatures;(c) require at least one other person to be notified automatically when an application is made;(d) permit in-depth checking of selected applications; (e) require the involvement of a solicitor in the application process;(f) create an offence of knowingly or recklessly providing false information in relation to an application for a lasting power of attorney, subject to a maximum penalty on summary conviction of a term of imprisonment not exceeding six months;(g) provide for appropriate bodies to use secure online methods to verify the identity of an attorney or donor; and(h) cover both health and welfare lasting power of attorney, and property and financial affairs lasting power of attorney.(3) Regulations under this section must be made by statutory instrument and may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Baroness Finlay of Llandaff (CB)
My Lords I declare my interest as chair of the National Mental Capacity Forum, and in that role I have been working closely with the Office of the Public Guardian.
For some time the Public Guardian has wanted to move away from the wet signature requirement for the creation of lasting power of attorney for both health and welfare, and property and financial affairs decisions, as laid out in the Mental Capacity Act 2005. This amendment would allow that process to be purely electronic and carried out online, with the safeguards it outlines. A digital process should now be secure given the advances in technology since the original provision was made, and the amendment would simply allow the Secretary of State to make appropriate regulations rather than creating the process.
As the hour is late I am inclined to ask the Minister, if he has any reservations about this amendment and the powers it would give to the Secretary of State, to curtail the debate by meeting with me and the Public Guardian before Report. However, I am rather pre-empting the Minister’s decision. If he decides to accept my amendment, that would be just wonderful. I beg to move.
Lord Keen of Elie
My Lords, in view of the hour, it occurs to me that it would be appropriate to give a lengthy and detailed analysis of powers of attorney, and, indeed, to take us back to the Powers of Attorney Act 1971 and the subsequent developments of the law. Nevertheless, and despite the enthusiasm from the Opposition Benches, I am perfectly happy to accept the kind invitation advanced by the noble Baroness, Lady Finlay, and to meet with her to explain the Government’s position on this matter. I would be obliged if she could at this stage withdraw the amendment.
Baroness Finlay of Llandaff
My Lords, in light of the forthcoming meeting—which I am sure the Public Guardian will wish to join—I beg leave to withdraw the amendment.
Digital Economy Bill
Wednesday 8th February 2017
(7 years, 9 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
The Lord Speaker (Lord Fowler)
It might be convenient to have a short pause to allow those who are not involved in the next business to leave.
Amendment 214
Lord Lucas
“Evaluation of algorithms
(1) The Communications Act 2003 is amended as follows.(2) After section 134C insert—“Evaluation of algorithms134D Evaluation of algorithms(1) OFCOM may, in the interests of the end users of public electronic communications services, carry out and publish evaluations of algorithms, or of electronic systems embodying algorithms—(a) which are implemented electronically;(b) which impact substantially upon some such users or impact upon a substantial number of such users; and(c) where the details of the algorithm are not freely and publicly available.(2) In undertaking such evaluations, OFCOM may—(a) collaborate with any organisation using and affected by the algorithm in question; and(b) act as a “mystery shopper”, using assumed identities and information, despite any and all conditions that may purport to forbid such behaviour.””
Lord Lucas (Con)
My Lords, I beg to move Amendment 214. We all know that Ofcom has a great interest in traditional media. As we can see, not least from Clauses 70 and 71, we are happy to give Ofcom a panoptic role when this is required. My amendment is designed to give Ofcom a panoptic role in new media.
We are all familiar with algorithms, particularly in such contexts as a Google search. It is just a set of rules and procedures that gets us to where we want to go from wherever we happen to be. I do not know of any great harm currently being done by any algorithms, but we ought to be aware of the power these procedures have in our lives. They govern the choice of what people see on the internet. The potential for this to interfere with news flow is obvious. If you type something into Google, it decides what you get to see. In the context of a referendum or an election, the potential for altering the result is clear. It also has an effect when you are just looking round to see what is there. Google has had trouble recently with its response to people typing in “are Jews”; it was autocompleting that with the word “evil”. This has now ceased, but it shows what influence algorithms can have in directing people to particular sources of information—in this case, with particularly nasty implications.
The function of an algorithm is to discriminate, but how are algorithms discriminating? What do we know about what they are doing in terms of fairness, when it comes to race or gender, in the context of job offers, accommodation or access? Referring again—I am sure unfairly—to Google, there was an episode last year when, if you put “three black teenagers” into the Google image search, you got mug shots of prisoners; but if you put in “three white teenagers” you did not. How do we know the effects of these things on our lives? If people start trying to correct them, what effect will these corrections have?
Most of these algorithms—or at least the big ones—are run by large, dominant, international organisations. Who controls them? We think we have some idea but there is no predictability; there does not seem to be any effective system of governance, least of all by government or institutions. They are a law unto themselves and they will continue to be so, unless something fantastic changes.
Under these circumstances, we ought to know what is going on. We ought to have the ability to take a look and make sure that it is fair and as we wish it to be, as we do in similar areas of the old media and of life. I hope my amendment will enable Ofcom to do just that. I beg to move.
The Earl of Erroll (CB)
My Lords, I support the amendment. There is a huge amount of power in the hands of search engines regarding the way they influence how people think. This could be used as a form of propaganda, as we have seen with the recent rows about fake news. From the point of view of protecting Britain, there could even be some security implications because of the way they could affect how people think. So it is quite a sensible power to have, just in case.
Baroness Kidron (CB)
My Lords, I too support the amendment. I thank the noble Lord for his explanation of what an algorithm is. I always found BBC Bitesize’s explanation rather helpful—a set of rules to solve a problem—along with its corresponding explanation of how an algorithm can go wrong: a set of rules designed for getting dressed that insists on your coat going on before your jumper. This would lead to a great many children arriving at school in sartorial disarray. It helpfully indicates that a set of rules is not benign—it has a purpose and a process, both of which are man or woman-made.
It is not possible to exaggerate the importance of an algorithm. I recently read Weapons of Math Destruction, by Cathy O’Neil, a Harvard PhD and Wall Street quantitative analyst. It goes step by step through the ways in which algorithms—apparently neutral and benign—have the capacity to change lives in huge ways and in an ever-increasing list of scenarios. If wrongly attributed or designed, they can have devastating effects on job prospects, education, financial outcomes or the reputation of an individual, with very little possibility of appeal, correction or compensation.
Lord Gordon of Strathblane (Lab)
My Lords, I, too, support the amendment. Yesterday, along with many of your Lordships, I attended a meeting with Channel 4 on the subject of fake news. Here we are not talking about opinion, where people can legitimately take one view or another in a democracy, but about things that are demonstrably totally false. Yet there is no mechanism at the moment for screening them out of social media. If in the United States 44% of the population regard Facebook as their primary source of news, there are dangers for democracy.
I do not know whether the noble Lord’s amendment will work. I do not know whether, for example, the companies will regard algorithms as commercially confidential and refuse to release them. I do not know what powers we actually have over these bodies, but it is worth exploring. It would be ridiculous if this massive Bill, which deals very well for the most part with a wide range of subjects, were to leave out the most topical and potentially the most dangerous of all: social media.
The Lord Bishop of Chester
My Lords, this is an important amendment because it touches upon the bigger issue of the impact of artificial intelligence on all sorts of aspects of our lives. There is a law called Moore’s law, which says that every two years the power of computers doubles. That has been true over the past 20 or 30 years and we should assume that that power will continue to develop. Artificial intelligence in all its impacting forms will be more and more prevalent in our society and more and more potent in the hands of terrorists in the years to come.
We cannot ask Ofcom to solve all the problems in this area, but I would like to know where the ownership of these risks and the rapid changes in our society falls in the eyes of the Government. Perhaps Ofcom has a role in this regard—search engines or whatever—but it is really part of a bigger picture of how we get ahead of the game with the impact of artificial intelligence. We read in the papers about driverless cars appearing on our streets, and in many other areas of life artificial intelligence will impact upon us. Where is this owned in the corridors of government?
Baroness Byford (Con)
My Lords, I would like to support my noble friend in his amendment. Algorithms are basically mathematical. The power of computers is used to record, classify, summarise and project actions that indicate what is happening in the world around about us. Algorithms can be applied in particular to social media, which other noble Lords have referred to, and to normal internet usage and browsing. They reach decisions about public interest, about you and about me.
According to a recent radio programme, algorithms are used to make individual decisions in the fields of employment, housing, health, justice, credit and insurance. I had heard that employers are increasingly studying social media to find out more about job applicants. I had not realised that an algorithm, programmed by an engineer, can, for example, take the decision to bin an application. If that is true, that is absolutely unacceptable. It certainly explains why so many jobseekers do not receive a response of any kind. There is a very real danger that a person could also be refused a mortgage or a better interest rate as the result of an algorithmic decision. Even now some companies use algorithms based on phone numbers to decide whether a caller is high or low value. Highs get to speak to a person: lows are left holding on until they hang up. Algorithm designers refuse to answer any questions, I understand, about the data that are used or their application on grounds of commercial confidentiality. There are real concerns that if we continue to allow such liberties, there will be an increasing risk of discrimination—intentional or accidental—against people of certain races, religions or ages. One example of algorithm use cited in the programme was that of differential pricing by Uber.
The EU intends that by July 2018 citizens will have the right to an explanation of decisions affected by the workings of these algorithms, such as the online rejection of a bank loan. I do not feel that we should wait until then, and although my noble friend’s amendment might not be perfect, I am really grateful that he has tabled it today and that we are having this worthwhile debate.
Lord Clement-Jones (LD)
My Lords, I also thank the noble Lord, Lord Lucas, for putting down this amendment. Indeed, this amendment has many good aspects to it, but I will adopt a phrase which the noble and learned Lord, Lord Keen, used the other day, which is, “It doesn’t go nearly far enough”. It really highlights—and I declare an interest as the co-chair of the new All-Party Parliamentary Group on Artificial Intelligence—some of the issues that this Bill simply does not deal with. This does need huge consideration: all the ethics involved not only with artificial intelligence, but with the internet of things and the great many regulatory issues which spring from the new technologies. Algorithms are a part of it, of course they are, but we need further consideration.
I agree with those who have said that perhaps Ofcom is not necessarily the best regulator for this—I do not know—and it may be that we need to construct a purpose-built regulator for the world of artificial intelligence and the internet of things in ethical terms. I am not quite sure that Ofcom has got the necessary tools in terms of the ethics aspect of it.
I am very much in spirit with the noble Lord and I am delighted that he has raised it, but we are at the very beginning of a really important debate on a lot of these areas. The essence of all this is trust. We had a continuous debate through Part 5 about the government sharing of data. This is about the private sector and its use of a lot of our data and the way it sorts them and places them in the search engines. Trust is the overwhelming issue of our age, and we are not there yet. If we are going to reassure people who want to use these new technologies, we really do need to come up with a proper regulatory system. I do not think that this new clause quite provides it.
The Earl of Erroll
Before the noble Lord sits down, may I just ask him: is it not dangerous to make perfection the enemy of better? In other words, the amendment may not be perfect, but it is moving in the right direction, and to say, “Do nothing”, because it is not perfect is surely very unwise, given all the other stuff that he has said.
Lord Clement-Jones
My Lords, I know that the noble Earl himself is perfect in almost every way, so I would very much hesitate to argue with him. Still, I feel we need something rather broader than this proposal would provide.
Baroness O’Neill of Bengarve (CB)
My Lords, I share the view that the noble Lord, Lord Clement-Jones, has expressed, that the amendment probably is not the way to go about this. Algorithms are too ubiquitous, useful and powerful in this case. I do not know what we could do instead, but I note that one of the things we are looking at, together with the problem that the noble Lord, Lord Lucas, has identified, is that the internet service providers and the big media companies are supposedly platforms, not publishers, and they do not have the responsibilities of publishers for that reason. Facebook will say that it merely hosts the material that individuals post. When individuals post material, they ought to think that it reaches an indefinite number of people because the algorithm spreads it through the echo chambers. It is the cyber silos that we are going to have to think about. With the greatest regret, I do not think the amendment would do that, but I very much support the principle of looking into this matter.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very interesting debate. We, particularly those of us of a certain age, often get to a point where we are scared of the technology that we are expected to use. We are in the hands of our children, who shout things like, “It’s intuitive! Just do it!”, but we do not have the faintest idea what we are trying to do. However, we should not be scared of technologies. History should tell us that the reason why Shakespeare’s Globe is outside the city walls of London is that people like us in those days felt that they were dangerous plays that should not be seen by too many people. Video nasties and indeed concerns about some of the issues that are in the Bill are examples of the same thing. We have to be careful that this is not just another “penny dreadful” story but a serious issue.
I was not that concerned about this matter in my own consciousness until I came across it personally and in relation to something that has already been mentioned in the debate. I work with a small charity that relies entirely on a website presence in order to try to help people who suffer from the condition that it serves. For the first seven or eight years of the charity’s life, we were ranked number one on a search engine—let us call it Google—so when you searched for the condition, we came up top. In the last six months, we have gone from top to, I think, 44th in the rankings for this condition, which means that no one now uses our services, rings up or communicates with us. We are now on page four of the search results and that turns out to have been achieved by a change in the algorithm, which prunes out the people who apply. The ISP put in a particular search term that managed to knock down the efficacy of the inquiries that were coming to us at our charity. So the charity, which was doing good work and reaching 2,000 or 3,000 people a year, is now reaching no one, and we cannot change that because the algorithm is behind a commercial confidential situation. So I pick up the points that are being made all round the Chamber about the need for us to get more clued up about this without being scared of it, and I support the amendment for that reason.
The second point that has been picked up, which slightly goes against the wise words of the noble Baroness, Lady O’Neill, is that, where an algorithm is helping to achieve a relatively straightforward systems approach, it is probably not as much of an issue as where it is substituting its judgment for yours. It is not knowing what that judgment is that is the problem, and that is where the points that have been made need to be picked up. That is something that we would all benefit from. Whether or not this is the right amendment, there is an issue here that will need to be pursued, and I look forward to hearing the Minister’s response.
Baroness Buscombe (Con)
My Lords, I thank noble Lords who have taken part in this very interesting debate. Clearly there is a principle upon which everyone is agreed, and that is that this is a serious and growing issue. It is certainly an issue that the Government take very seriously.
As my noble friend Lord Lucas has set out, the basis of the amendment aims to understand the impact of algorithms on users of digital services. As we have already heard, algorithms play an important role in modern life, from making recommendations for books you might like to read, to more important matters such as credit ratings and detecting fraud. Indeed, there is a real debate here on the extent to which the public are willing to compromise on what is termed privacy for a better service. Transparency itself is incredibly important in terms of knowing how information about oneself is used, for what and with whom it is being shared, and having some control over that.
Lord Elton (Con)
Before my noble friend sits down, can she tell us a little more about the involvement of the Royal Society, when we might hear a result from it and whether it will be shared with this House? Can she in fact bring about a further debate in the light of its findings?
Baroness Buscombe
I believe that my noble friend’s idea is very good. We hope to hear from the Royal Society and British Academy later this year and, on the basis of their recommendations, it might then be timely to have a debate in your Lordships’ House.
Lord Lucas
My Lords, I am very grateful to all who have spoken in this debate. This is something which the Government should have their mind on. I am delighted that my noble friend on the Front Bench says that the Government are paying attention to this, and that we will get something we can get our teeth into later this year. I beg leave to withdraw my amendment.
Lord Clement-Jones
Lord Clement-Jones
My Lords, I shall speak also to Amendment 216.
It is common ground that anyone affected by Ofcom’s decisions should have the right to appeal if they consider that Ofcom has got something wrong. Ofcom itself makes the point that there needs to be an appropriate balance between properly holding it to account and enabling it to make timely and effective decisions in the interests of citizens and consumers and the wider UK economy. But in the brief for this debate, it goes on to say that,
“the current merits system for appealing Ofcom’s decisions does not achieve that balance. It results in some appellants effectively asking the courts to become the primary decision-maker in place of Ofcom rather than conduct an appeal which focusses on errors which Ofcom is alleged to have made. This is particularly the case in price control appeals, where appellants have consistently used the system as a second attempt to run arguments they have already made to Ofcom during its extensive consultation processes”.
Those propositions are hotly disputed not only by many telecoms and internet service providers but also by others such as the CBI and techUK. Their position was made clear on this matter as far back as September 2013, when the Government published their summary of stakeholder views on the appeals system.
I will take the House through the fundamentals of Ofcom’s case for the change embodied in Clause 75. First, it says:
“Almost every single decision by Ofcom is promptly appealed in the courts”.
Roughly one in eight decisions have been appealed over the past decade, and this has been declining significantly over the past five years. The potential for merits-based appeals is an incentive for high-quality regulation. Here is another claim:
“This has resulted in lengthy delays in putting through quite important measures”.
Almost invariably, Ofcom’s decisions take effect immediately and stay in place while an appeal is heard. In the case of price controls, no Ofcom decision has ever been delayed in its application while an appeal is heard. Here is another proposition:
“This change will bring Ofcom into line with other regulators”.
Virtually every other economic regulator faces scrutiny of its decisions to establish whether it is in error under regimes not limited to judicial review. I could take your Lordships through energy, water, post, the NHS, aviation, rail, but I will not go into great detail unless I need to respond to the Minister at the end of the debate.
The new approach in Clause 75 would therefore not be in line with almost all other comparable public authorities—that is, the economic regulators. The standard of appeal is not much lower in telecoms than in other sectors. All the UK’s major economic regulators have a form of statutory review that is in law or in practice merits review. All EU telecoms national regulatory authorities make decisions that must stand on their merits.
Here is a further proposition: Clause 75,
“should also free up Ofcom resource to deliver better outcomes for citizens and consumers”.
Far from being good for the consumer, Clause 75 would have denied the court’s ability to implement corrections to bad decisions which have resulted in something like £350 million to £400 million of direct consumer benefit over the past decade. Over a number of cases in the past 10 years—again, I can give the Minister references if he needs them—the tribunal’s decision was that Ofcom’s decision had not gone far enough in the consumer’s favour. This would not have been fixed through judicial review.
A further proposition:
“The big incumbents will no longer be able to use the process to hold-up regulatory decisions through aggressive use of the appeals process”.
Opponents of the change in fact represent the vast majority of the investing industries—small and large, ex-incumbent and insurgent. BT was joined by other industry appellants on most of the cases it appealed. Merits-based appeals work pretty well for SMEs, too, and are disproportionately used by them.
Here is another proposition:
“If material error is present it can be addressed in judicial review”.
Judicial review tests generally relate to illegality, procedural impropriety, irrational behaviour—in other words, has the decision-maker taken leave of their senses? To repeat, JR would have denied consumers benefits of something of the order of £400 million in value. Here is another proposition:
“JRs will be fewer in number and take less time”.
Increased uncertainty for this procedure could be likely to result in an increase in appeals. On average, judicial review takes 10 months from start to finish, versus 11 months on average for a merits appeal. Judicial review requires the decision to go back to the regulator, which can add years to the process, while a merits-based appeal provides powers to the appeals body to fix the problem.
Its final proposition is that:
“Ofcom wins 85% of cases”.
That is rather misleading. Ofcom wins just over 60% of appeals and in the rest it is found to have erred in some material respect. Ofcom’s statistics only tell us that in 15% of cases it lost absolutely every point in an appeal. That is the true 85% figure.
For all the above reasons, the vast majority of telecoms communications providers of the UK’s fastest-growing new fibre networks, the UK’s premier business organisation, the UK’s trade association, providers of internet services and the body which represents the UK’s technology sector, strongly oppose the proposed change. They fear the change will mean that regulation will become unpredictable and prone to risk, with no corrections for inconsistency, error, or lack of rigour in approach.
In summary, a move to judicial review will leave wrong decisions standing. Judicial review, as I said earlier, is solely concerned with whether the decision is unlawful in a technical sense—that is, was the correct process followed? The decision itself is not reviewed. Many decisions that have been found in merits appeals to be clearly wrong and that harm the interests of consumers would have been allowed to stand under judicial review. As I have emphasised above, the existing appeal regime protects the interests of consumers. Ofcom can and does make mistakes, and in the vast majority of cases, these mistakes have meant higher prices for consumers. Correcting those mistakes has delivered benefits of hundreds of millions of pounds.
These amendments steer a different and compromise course. We accept that there may have been some gold-plating of the original framework directive, and have tried to meet some of the criticism through these amendments. Amendment 215 is a direct copy of the European framework directive wording, without any gold-plating. As I have said, this is followed by all other national regulatory authorities in the EU. The tribunal must decide the appeal,
“by reference to the grounds of appeal set out in the notice of appeal and taking due account of the merits of the case”.
This version no longer requires the appeal to be decided on the merits but with “due account” of the merits being taken.
Amendment 216 is an alternative, focused on specific grounds used in appeals in other sectors. The tribunal must decide an appeal by reference to the grounds of appeal set out in the notice of appeal only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the grounds set out in proposed new paragraphs (a) to (f). This version has a narrower scope than the current approach but allows for an assessment of whether the substantive decision is correct, not simply whether the correct decision-making process has been followed.
Clause 75 is a serious change to make to the telecoms regulatory regime. I very much hope that, in the face of these arguments, the Government will change their mind. I beg to move.
Lord Aberdare (CB)
My Lords, as I indicated at Second Reading, I am extremely uncomfortable with the proposed shift from a merits-based to a judicial review standard of appeal from Ofcom decisions, and I very much support these amendments moved by the noble Lord, Lord Clement-Jones. Indeed, he has made the case so thoroughly and strongly that I can be extremely brief.
It is inappropriate that in a market as innovative and fast moving—indeed, fast changing—as telecommunications, it should not be possible to test decisions made by the regulator not just on their legality but on their correctness and fairness in terms of the merits of the issues raised. As the noble Lord mentioned, I have received briefings both from Ofcom and from a group representing the bulk of the telecoms industry and industry more widely, through the CBI, as well as from the technological sector through techUK.
I remain slightly baffled at the apparent contradictions between the arguments cited by the two sides. I would encourage the Minister to look very carefully at these arguments to establish as clearly as possible where the evidence points—perhaps one could describe it as the merits of the case—before proceeding towards allowing only judicial review-based appeals.
I will not go through the detailed arguments because there is not a single one on my list that the noble Lord did not cover better that I could hope to do. However, from what I have heard, I am far from convinced that the proposed narrowing of the appeals standard will benefit either consumers or investors—and we need a great deal of investment in this sector—let alone the wider national interest in fostering a fair, competitive and vigorous telecommunications marketplace. I am therefore happy to support either or both of the proposed amendments. I hope the Minister will have another careful look at this issue and consider introducing amendments of his own, designed to ensure that important issues relating to the merits of Ofcom reviews can be properly challenged.
Lord Lester of Herne Hill (LD)
My Lords, I support these amendments, which seem a very good compromise. They ensure fairness and balance and avoid the very narrow approach of judicial review regardless of merit in any circumstances, without going into the substance of matters in a way that would turn the review into a whole general appeal. For those reasons, I am glad that the noble and learned Lord, Lord Keen, is taking part in this debate. He will know a great deal about the subject from his private practice as well as his public practice. This is a good compromise. It may be that the Government can come up with something better, but this is certainly better than Clause 75 as it stands.
Lord Stevenson of Balmacara
My Lords, I am not a lawyer—I feel a bit uncomfortable joining this debate; I am sure there are issues it is much beyond my abilities to deal with. But I say to the Minister before he responds, the point made about the degree of concern in the industry is important. This is a big and complicated Bill with many different aspects. It reaches far into aspects of our digital world. This clause, however, is the one that has generated the largest number of responses and—to judge from the meetings I have had with people—the most anger.
In a sense, so what? If it is the right decision, it should go ahead. However, it is clear that there is a lot of support for the current situation, even though there are arguments against it. The point was made time and again that the existing arrangements seem to work well, so why are we changing them? The industry, as I said, is pretty well united against it. One or two are speaking up for it but they do not represent the majority of voices we have heard.
There is also a real danger that—particularly at a time of uncertainty over technological change and regulatory positioning—having a period when we deliberately create confusion and delay until the new guidelines, or baselines, are established, is probably not the best way of making progress. Uncertainty over a long period will affect investment, which is not what we want. So there are reasons for asking the Government to be very clear that this is the right way forward.
We all share the same wish: we want an efficient and trusted regulator that can deal with this complicated, fast-moving and complex area. But it would be quite improper to have a situation in which there was a very limited right of appeal on any case determined not to have been carried out correctly—not so much about the judicial aspects, but on the merits of the case; in other words, where the evidence does not support the decision that has been taken.
I do not understand quite what the difficulties are. I have looked back over comments made by the noble and learned Lord when he was Advocate-General for Scotland. He is on the record in a number of places and a quick search with an algorithm of some complexity, which I could not possibly describe, reveals him to have said several things about judicial oversight. As it has developed, he says, it has,
“provided us with a flexible standard of oversight, which in many senses is wide-ranging”.
However, judicial oversight is the issue and that is what we have to emphasise. He might like to reflect on that in relation to what has been said. There are other things—I will not quote them as I am sure he is embarrassed enough already, or perhaps not. But the issue needs bottoming out—there is a serious point at its heart. There are issues that will affect the whole nature of the business we are regulating in this manner which need to be resolved.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I am obliged to the noble Lord, Lord Clement-Jones, for raising this matter because it has generated a great deal of heat and debate in the context of the Bill. I appreciate the point made by the noble Lord, Lord Stevenson, with respect to the number of responses there have been. I just emphasise that judicial review is a form of judicial oversight, and a very effective one, but I will elaborate on that in a moment.
We are aware that the major telecoms operators in particular, and their agents, have lobbied vigorously and in detail on this point. Indeed, the noble Lord, Lord Clement-Jones, brought out many of the points that have been made by their agents in the course of that vigorous and detailed lobbying. I shall not go into the detail of Ofcom’s position on this. It has expressed its position very clearly and we understand it. What I would say is that there is no single position for all utility sectors, and both judicial review and appeals on the merits may be used in the same sector for different kinds of appeals. It is not a black and white situation.
The Government’s case is not that this change is needed to ensure consistency with other utility sectors but that the public interest will be best served in the communications sector by an appeals regime that focuses on errors which Ofcom is alleged to have made, rather than asking the court to reach a different conclusion. Let us remember that Ofcom is a qualified regulator and its decisions are entitled to respect. They are informed decisions and they are not irrational. They are not determined on the toss of a coin. That is why judicial review is an appropriate approach.
The noble Lord, Lord Clement-Jones, also talked about consumers. I find that interesting. Perhaps I may refer briefly to the Which? response to Clause 75. It sees this measure as one of the most important currently contained in the Digital Economy Bill, saying that it will give the regulator the power and confidence to take the necessary actions to protect consumer interests without fear of costly and lengthy litigation procedures. Introducing a judicial review standard for appeals in telecoms will mean that decisions made by Ofcom in the interest of consumers should be easier to implement and quicker to take effect. That is a reflection of Ofcom’s own view of the matter. This is not necessarily about coming to the aid of Ofcom but about recognising these matters from the perspective of the consumer. That is extremely important.
Currently, appeals brought under Sections 192 to 196 of the Communications Act against Ofcom’s regulatory decisions are decided “on the merits” by the Competition Appeal Tribunal. That exceeds and, as the noble Lord, Lord Clement-Jones, acknowledged, effectively gold-plates Article 4 of the EU framework directive, which requires that the merits of the case are duly taken into account in any appeal. That is not quite the wording of the proposed amendment.
The result of this over-implementation is an unnecessarily intensive and burdensome standard of review that can result in very lengthy and costly appeals litigation, which in turn can hinder timely and effective regulation. Some of the appeals that have taken place have done so over extraordinarily lengthy periods. Of course, the very large communications operators are in a position to fund that sort of appeal process. Clause 75 will change the standard of review so that the Competition Appeal Tribunal will decide appeals against Ofcom’s decisions by applying the same principles as would be applied by a court on an application for judicial review and, in particular, judicial review of other administrative actions. This will focus appeals on the key questions of the legality and reasonableness of Ofcom’s decision-making.
The noble Lord, Lord Stevenson, suggested that there might be cases in which there was simply no merit in a decision. If that was so, and if Ofcom proceeded without reliance on the facts of a particular case, that would be amenable to review under a judicial review standard.
Lord Lester of Herne Hill
Judicial review itself varies according to whether or not there is a European element. If the review is about a case where free speech under the convention is concerned or an EU directive is concerned, then judicial review embraces the principle of proportionality. However, if it is not about a case where European law can be involved—either system of European law—under the deciding case law, judicial review does not apply the principle of proportionality. In other words, it still—in my view, wrongly—does not look at whether the means employed to pursue a legitimate aim are necessary to achieve that aim. Is not what I have just said an indication of the unsatisfactory nature of relying on judicial review as the solution?
Lord Keen of Elie
With respect to the noble Lord, Lord Lester, I have to say no, because here we are dealing with judicial review in the context of the EU framework directive, which requires that the merits of the case are duly taken into account in any appeal, therefore effectively introducing the issue of proportionality into that process. Therefore, even if there are cases which some might criticise as involving too narrow an approach to judicial review, that does not apply here. This is an incidence in which the issues of proportionality will arise in the context of judicial review. By taking this route, we are applying an appropriate standard to Ofcom’s decision-making.
As has been acknowledged by noble Lords, this is a fast-moving sector, and regulation needs to be able to keep pace with technological and market changes. This is rather difficult when appeals can drag out for a year after a regulatory decision has been made. As the UK’s expert regulator in the telecommunications sector, it is right that Ofcom itself should be given an appropriate margin of appreciation by the tribunals. That is why we have an expert regulator there—so that it can make an informed decision that should be given an appropriate margin of appreciation by the Competition Appeals Tribunal.
A judicial review basis for appeals is intended to be a flexible process that will ensure that those affected by Ofcom’s regulatory decisions can still challenge those decisions effectively within the framework of Article 4 of the EU framework directive. A number of Ofcom’s regulatory decisions are already appealable only on a judicial review basis. I made the point earlier that, with regard to individual regulators, you can find instances in which there is a merits-based appeal for some matters and a judicial review standard in respect of others.
By changing the standard of review to reduce over-lengthy and costly litigation, this clause will enable consumers to benefit sooner from the outcome of decisions made by Ofcom in pursuit of its statutory duty to further the interests of consumers. I emphasise that: one of Ofcom’s statutory duties is to further the interests of consumers. The clause will also remove a significant potential barrier to the participation of smaller communications providers in the appeals process, benefiting smaller, “challenger” communications providers. Again, they are inhibited by the prospect of massive merits-based appeals going before the Competition Appeal Tribunal.
The noble Lord, Lord Clement-Jones, has tabled two alternative approaches. Amendment 215 would replace the existing “on the merits” standard with a requirement for the tribunal to take,
“due account of the merits of the case”.
I acknowledge that the amendment essentially replicates the wording of Article 4 of the EU framework directive, albeit it is not identical to it. While this would in one view remove the gold-plating of the existing standard in a technical sense, the Government consider that it would not lead to any substantive change in approach. That might be why this proposal is being pushed so hard by the major operators in the telecoms sector. It would not, therefore, result in quicker appeals, timelier implementation of regulatory decisions or resultant consumer benefits.
Amendment 216 would alternatively replace the existing “on the merits” standard of appeal with a list of specified grounds. The tribunal would be able to uphold an appeal only where it was satisfied that Ofcom’s decision was wrong on one or more of these grounds. However, as noble Lords may be aware, the previous Government consulted on a similar approach in 2013 and we do not consider that this approach has merit. On balance, we consider that such an approach would risk significant satellite litigation if it were to be introduced—about the nature of the new standard of appeal, for example, which could lead to longer appeals and further regulatory delay. A standard of review based on judicial review principles, including the principles of proportionality in the context of the application of the European directive, which is well understood and used in many other sectors, will minimise this kind of uncertainty. In these circumstances, I invite the noble Lord to withdraw his amendment.
Lord Clement-Jones
My Lords, I will not disguise the fact that I am not happy with the Minister’s reply. But I would like to thank the noble Lord, Lord Aberdare, for his support and I particularly thank my noble friend Lord Lester, who himself is a master of judicial review. I take very seriously what he has to say on the subject. I also thank the noble Lord, Lord Stevenson, who raised a number of pertinent points. He is obviously a very good client when taken to Chambers. I was hoping that the noble Lord, Lord Faulks, was going to take part in the debate, as then a ruffle or a jabot of QCs would have emerged; I do not know what the collective noun for QCs is.
Quite seriously, I am afraid that the Minister and the Government have bought not just the Ofcom line, but the hook and the sinker as well. We have an interesting conjugation: “I make my case, you lobby”. That seems to be the construction put on Ofcom’s behaviour. So Ofcom’s decisions are entitled to respect and “a margin of appreciation”. We are talking about the appeals process for an immensely powerful regulator. I do not think that that is an appropriate form of words. Of course, decisions are entitled to respect, but the rights of those who are investing in the telecoms industry are entitled to respect as well. This is an argument about the appropriate form of appeal.
I did not touch on whether this new clause is in line with European law. It may be academic because we might be out of the stable, so to speak, before we have to test the proposition as to whether the use of JR in these circumstances conforms to the framework directive. But that is an important matter. Ofcom has clearly been vigorous in its lobbying and certainly vigorous in its lobbying of noble Lords. I am glad to say that many of them have resisted in the circumstances. The Minister went through the nature of the amendments in a perfectly proper fashion, but he did not really make a particularly good case about why they were not appropriate. He did not really address my argument about other regulators. At the outset, I took the Minister through a number of economic regulators, none of which have JR as the fundamental point of appeal, so that requires an answer.
My purpose in tabling the amendment is to make sure that there is an effective challenge to Ofcom. We have swung way too far with Clause 75. We are serving the interests of the regulator far too much. I do not believe that all the propositions that Ofcom has put forward are valid and we need to keep kicking the tyres further on this particular clause until we find a better solution. We may have to make express reference in Clause 75 to the EU framework directive, which might be one way of dealing with this. But I guarantee that we will return to this at a future date. In the meantime, I beg leave to withdraw the amendment.
Lord Lester of Herne Hill
“The BBC Charter: timing
(1) The Communications Act 2003 is amended as follows.(2) After section 198ZA (inserted by section 76 of this Act) insert—“198ZB The BBC Charter: timing(1) The first BBC Charter to be granted following the day on which this Act is passed must have effect for a term of 11 years beginning with the day on which it is granted, and each subsequent BBC Charter must have effect for a term of 10 years beginning with the day on which it is granted.(2) In this section “the BBC Charter” has the meaning given by section 362(1) of the Communications Act 2003.””
Lord Lester of Herne Hill
My Lords, this is a paving amendment for this group of amendments. My noble friend Lord Clement-Jones asked just now what the appropriate collective description of Queen’s Counsel is. I was pondering that; at first, I said to myself, “Avarice”, but then I thought that the true answer would be given by The New Yorker book of cartoons, which had a cartoon of a lawyer looking at his client and saying, “How much justice can you afford, Mr Pitkin?”
The Committee will be deprived of several speakers who cannot be here today, who have supported this amendment and the others in the group. They include the noble Lords, Lord Pannick and Lord Inglewood, who asked me to apologise on their behalf.
I explained in previous debates why I believe that statutory underpinning is needed to protect the BBC’s independence and viability, free from political interference. During the take-note debate on the draft BBC charter on 12 October 2016, I expressed the hope that the drafts would be amended. I pointed out that the central problem with the Government’s proposals for the charter—raised across the House by, for example, the noble Lords, Lord Fowler, Lord Inglewood and Lord Best, former chairs of the Communications Committee, the noble Lords, Lord Stevenson of Balmacara, Lord Burke, Lord Pannick, Lord Colville and the noble Baroness, Lady Deech, and my noble friends Baroness Bonham-Carter and Lord Foster of Bath—is that there are no statutory criteria or requirements that must be met in the charter or the agreement with the Secretary of State.
I noted that the draft charter and agreement did not put the Government under any duty to ensure that the BBC remains independent. They contain no obligation to ensure that the BBC is properly funded to perform its public functions. There is no commitment to avoid further top-slicing of the licence fee after the transfer of the cost of free licence fees for the over-75s, which will have a serious adverse effect on the BBC’s funding and programming—a 20% to 25% cut in licence fee funding. In my view, that was unseemly and deeply regrettable, but it is now too late to reverse it.
I criticised the lack of an independent process for appointing the members of the new unitary board on merit, to prevent cronyism. I warned that Ministers remained able to determine what “distinctiveness” means. There was no protection for the BBC against much richer competitors, challenging the current and future BBC programming. Powerful criticisms to similar effect were made across the House, but the Minister did not give ground on any of those points. The new charter and agreement were brought into force completely unchanged. As the Minister may confirm—I hope that he will—the Government retain the right to make further inroads into the BBC’s revenue by transferring responsibility, including liability and costs, for any public expenditure.
I also spoke during the Second Reading debate on the Bill on 13 December 2016—I am becoming something of a BBC charter bore in this House. I explained that what I meant by statutory underpinning is that Parliament should prescribe the basic principles protecting the BBC’s independence and viability as a public service broadcaster. I concluded by describing myself as an optimist and expressed the hope that the Government will sympathise with our moderate and practical approach. I am still optimistic that we may reach agreement with the Government on a protective framework of principles during the remaining stages of the Bill’s passage. That would be in the Government’s, and the public, interest.
A question raised by these amendments is one of principle, to which I would be grateful for the Minister’s reply. The question is this: is statutory underpinning of a royal charter both possible and legitimate? I hope he will confirm that the answer is yes.
There are several precedents for a combination of legislation and charter, notably the Leveson legislation on the print media and the National Citizen Service Bill. Both provide underpinnings for royal charters, although no doubt civil servants will come up with clever arguments as to why they are different. However, I am not raising that question but the question of principle: is there any reason in principle why statutory underpinning is incompatible with the idea of a royal charter?
In his letter to me of 4 January, for which I am grateful, the noble Lord, Lord Ashton of Hyde, claimed that the Government had increased the BBC’s freedom, “to use its money as it sees fit”. I should be grateful for his confirmation that the BBC’s revenue from the licence fee is indeed the BBC’s and not the Government’s money, and for his assurance that there will be no further raid by this Government on the BBC’s revenue. Will he also confirm that without legislation, a future Government would be free to make further raids: in other words, that the most he can do is give an assurance about this Government? The Minister went on to say in his letter that the Government remain of the view that any statutory underpinning to the charter which would expose the BBC to party political pressures would not be in the interests of an independent BBC. There is a whiff of the Brexit debates about that statement. Ministers exercising monarchical prerogative powers claim to be better able to protect the interests of the BBC than Parliament. I agree that the BBC needs to be protected against politicians, whether in or out of office. Ministers are as susceptible to party political pressures as other MPs, and the BBC needs to be protected against both. If the amendments are agreed to, they will give protection and can be abolished or weakened only by a future Act of Parliament. I submit that Parliament’s use of its legislative powers provides better protection than ministerial assurances, which in any case are outlived when the Government change.
I turn now to the specific amendments and hope that the Minister will be able to reply to each of them at the appropriate point. I introduced them in some detail in my speech at Second Reading, so I will not bore the Committee by going through them again. I simply wish to explain to those who are interested what the amendments are designed to. Your Lordships will see that Amendment 217 on the Marshalled List is simply a paving amendment to provide the statutory underpinning that follows. Amendment 218 deals with the independence and funding of the BBC. I am not going to read out the whole amendment—some of it can be found in the royal charter, but in my view all of it ought to be in legislation. If it can be in the royal charter, I am puzzled as to why the Government believe it should not find its way into the Act of Parliament. For example, subsection (2) would insert proposed new section 198ZC, in which new subsection (1) states:
“The BBC is to be independent in all matters concerning the content of its output, the times and manner in which its output is supplied, and the governance and management of its affairs”.
Does the Minister agree with that? I am sure that the answer is yes. Proposed new subsection (2) goes on:
“The Prime Minister, the Secretary of State, the BBC, OFCOM, and all other persons and bodies with responsibility for matters relating to the governance and establishment of the BBC must ensure that the BBC is able to operate independently from Ministers and other public authorities in the United Kingdom”.
Again, does the Minister agree with that? I would expect him to say yes.
Proposed new subsection (3) states:
“In carrying out the duty … the Secretary of State and other Ministers of the Crown must not seek to influence the BBC’s decisions; and … must have regard to the need to defend the BBC’s independence; and the need for the BBC to have the financial and nonfinancial support necessary to enable it to exercise its functions”.
Does the Minister agree? Surely, he does. Then, in carrying out the duty, the Minister,
“must have regard to the need for the public interest to be considered in regard to matters relating to the BBC”.
Again, I see no cause for controversy.
Proposed new subsection (4) states:
“The Secretary of State must make available to the BBC sufficient funds, through the licence fee and otherwise”—
because there are other ways of funding apart from the licence fee—
“to enable the BBC to perform its functions and public purposes as a public service broadcaster”.
I cannot see any conceivable controversy about that notion.
Proposed new subsection (6) states:
“The licence fee is to be for the exclusive benefit of and use by the BBC to fund the performance of the BBC’s functions and public purposes”.
Again, I should have thought that was obvious. Then there is indexation, but I do not need to pause for that.
Viscount Colville of Culross (CB)
I declare my interests in broadcasting as set out in the register. I support this group of amendments. I think it is about time that we seriously considered statutory underpinning to protect the independence of the BBC so that it can operate free from the influence of Ministers and other public authorities in the UK.
The last two charter negotiations have both ended up being a smash and grab by the Government on the BBC’s funding and independence. In my view, the negotiations for the 2017 charter have been the most egregious attack by Ministers in the history of the corporation. The new charter has been portrayed as a great victory that has not only saved the licence fee but also extracted an annual inflation-linked increase in the fee. However, the director-general and the strategy team at the BBC spent a great deal of the last three years constantly anticipating and fending off attacks by Ministers—surely a serious distraction at a time when public service broadcasting has been under unprecedented attack by satellite and internet rivals.
I particularly welcome the new clause that would be inserted by Amendment 218, which states that the BBC should be independent in all matters concerning,
“the content of its output, the times and manner in which its output is supplied”.
There is a groundswell of opinion among many politicians that the BBC needs to concentrate on content that cannot be provided by the market. Noble Lords have only to look at PBS in America to see that, although its programmes are very worthy and wholesome, they are watched by a tiny minority of the audience and are not really relevant to national discussion.
What was most extraordinary about the most recent negotiations for the charter was the level of interference attempted by the Government in BBC content provision. Your Lordships should know that the rumours in the press that the Government wanted to interfere not only in the content but even in the scheduling of BBC programmes were true. They wanted to force the BBC to move the “Ten O’Clock News” to another time. Surely that really is none of their business—even if many noble Lords who like to go to bed early might have appreciated the move.
I also welcome proposed subsections (3) and (4), safeguarding the BBC so that it can “exercise its functions” by providing,
“sufficient funds, through the licence fee and otherwise”.
“Otherwise” is an important word for me. As part of the charter negotiations the Government quite rightly demanded that the BBC find sources outside the licence fee to raise revenues. BBC Worldwide, the corporation’s sales arm, has been doing just that—and very well indeed. It promises to return over £1 billion to BBC content provision over the next five years.
As a former BBC programme maker myself, I know that the uplift from worldwide funding for a programme budget can transform its content. The extra money allows an increase in the number of days’ filming, the locations to be used and the ability to work with a craft film crew—all of which means that viewers can see the money on screen and have a better viewing experience. Yet in the last negotiations the Government very nearly managed to privatise BBC Worldwide. I believe that these proposed subsections would stop such a threat in future.
Many attempts to reduce the independence of the BBC were eventually successfully fought off this time round. But the existing charter mechanism allows similar interference by the Government in the BBC in the future. The risk of placing the future of the BBC on a statutory footing is that there are plenty of politicians from all parties who would like to do the corporation harm, or even to interfere directly in how and where the BBC spends its money. Amendments could be made by Peers and MPs which would atomise the BBC so that its content served their own interests or constituency, which would damage one of the great unifying institutions in our country.
However, if noble Lords look at Channel 4 and its statutory underpinning, they will see that it has made public ownership of that organisation more secure. Last year’s threat to privatise Channel 4 was only too real, but in the end it would have needed a very controversial Act of Parliament to carry out that threat. And what did we see? No such Bill was presented to Parliament, and Channel 4 remains in public hands. I am convinced that this group of amendments would give the BBC powerful protection from future government attacks on its independence. I urge the Minister to give them serious thought.
Lord Gordon of Strathblane (Lab)
My Lords, I cannot work up the same sort of enthusiasm for the statutory underpinning of the BBC. Although I deplore interference with the running of the BBC and the licence fee, and welcome the promises of better behaviour in future in the recent licence settlement, it seems to me that statutory underpinning creates a platform for statutory interference as well, which could be a lot more dangerous. Things are run quite well and we now have a royal charter that will last for 11 years. That gives us time to reflect on possible changes at some point in the next 11 years—but certainly not at the moment.
Lord Birt (CB)
My Lords, I accept that I have a special interest, but I have yet to be bored by the noble Lord, Lord Lester, on this matter. Indeed, I applaud his tenacity and hard work. The day this House discussed the royal charter was the lowest day in all my time in the House. It was a particularly distinguished debate, and there was a wide consensus on all sides that the charter was inappropriate. I do not plan to rehearse the arguments that I made on that day again, but there was wide agreement that, although we had all long believed that the charter was the right way of governing the BBC—I certainly believed that when I was the director-general—we had learned the hard way that it was not.
The royal prerogative is simply archaic; it flows from our history, with its origins in medieval times. Its shortcomings have just been unfolding in the Supreme Court; it has been found wanting there. That was a low day for me because, despite consensus across the House, the Government did not give an inch. I do not expect them to do so today. However, the good thing about this debate and about what the noble Lord, Lord Lester, and his colleagues are doing is that it puts this issue firmly on the agenda. If it is not won today, I predict that it will be won one day. The BBC simply has to be put on a statutory basis.
Lord Wood of Anfield (Lab)
My Lords, I should declare that my wife works at Ofcom, so I have an interest of some relation to the BBC. These amendments are crucial to an issue we all care about: the independence of the BBC and ensuring it is not compromised. The Government may protest that they have no intention of compromising the BBC’s independence—I am sure they do not—but I know from the debate and from many conversations over the past few months that I was not alone in being alarmed by the initial proposal floated last year that the Government would appoint a majority of members of the new BBC unitary board, replacing the BBC Trust. I am pleased to say that the Government seem to have moved away from that proposal in response to concerns expressed in this House and elsewhere.
But concerns remain. For one thing, we discovered last week just how close the Government intend still to remain to Rupert Murdoch’s companies, whose hostility to the BBC is well known. Senior executives from Murdoch-owned companies met the Prime Minister or Chancellor 10 times last year—more than any other media organisation. In the past 18 months, News Corp executives had 20 meetings with senior government representatives, 18 of which were with the Prime Minister, Chancellor or Culture Secretary, seven involving Rupert Murdoch himself, whose views on the BBC are very clear. Quite what was discussed in these meetings we do not know, but I would be astonished if complaints about the BBC were not raised repeatedly.
As the noble Lord, Lord Lester, eloquently set out, threats to the BBC’s independence come in much more subtle forms. The combination of financial constraint plus extra responsibilities has been a long-standing part of the Government’s relationship with the BBC. I worked for Gordon Brown as Prime Minister; we did a bit of that as well. But, as the noble Lord mentioned, in this new charter the Government have raised their sights and shifted more than £500 million-worth of responsibility for licence fees for the over-75s without allocating a single penny to support it. This process of shifting responsibility for government policy on to the BBC while tightening the purse strings even further, and, presumably, reserving the right to complain when the BBC revisits the viability of these commitments, is a serious threat to the autonomy of the BBC. We should be on our guard against it.
When it comes to the new unitary board, I agree with the spirit and content of the amendments. It is important that we have a transparent process to ensure a genuinely independent board. The Government’s current proposal on composition risks lining up a slate of government appointees against a slate of BBC appointees, aiming for some kind of internal balance rather than ensuring real independence for the board as a whole. It is also vital, as the noble Lord, Lord Lester, set out, that we have clarity on the terms of appointment to the new board.
We need only look at other countries in the European Union to see the dangers that can quickly arise when the independence of public broadcasters is compromised. For example, last year the Polish Government assumed the right to appoint the heads of state broadcasting authorities and removed the guarantees for independence of public service TV and radio, in breach of Council of Europe norms and the Polish constitution. We are a long way from being Poland in this respect, thank goodness, but the combination of governance change, political pressure from rival organisations, financial pressure and the temptation to offload policy commitments on to the shoulders of the BBC provide a real threat to autonomy and independence. It is right to err on the side of vigilance and caution in the spirit of this group of amendments.
I look forward to hearing the Minister’s response. We on these Benches will then take a view about how to work with others across the House on the issues raised, including this debate, which, as the noble Lord, Lord Birt, just said, will become more and more live, about whether it is time to put the BBC’s independence on a statutory basis.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am grateful to all noble Lords who have taken part in this debate and in particular to the noble Lord, Lord Lester. He mentioned that he remained optimistic. When he spoke to me outside the Chamber, he said that he was “pathetically optimistic”. I would prefer to say that he is “characteristically determined”. He has produced argument after argument, not only in the BBC charter renewal debates, but also at Second Reading. I fear I may disappoint him yet again. I am sad that some of his supporters are not here.
We return to an issue which we have debated at length as part of the recent discussions on the BBC’s royal charter which were completed last year. The new royal charter was sealed on 8 December. Amendments 217, 218, 219, 229A and 234, in the name of the noble Lord, Lord Lester, seek to constrain future BBC royal charters through statute. I note and acknowledge that the noble Lord has made a number of changes to his amendments in the areas of parliamentary votes over future charters and governance. I appreciate the thought he has put into this and the dialogue we have had so far. In a skilled way, he has set a number of questions, some of which I will try to answer. He is right to say that whether we should have statutory underpinning for the royal charter is an issue of principle. He asked whether statutory underpinning was possible and legitimate. As he knows full well, because he almost answered my question for me, I agree that it is possible, and sometimes legitimate—but not always.
There remain some very serious, potential dangers associated with the noble Lord’s amendments and we cannot, therefore, support them. These amendments restrain future royal charters and funding settlements. Let me talk about two specific examples where this is problematic. On the subject of appointments, these amendments hardwire a unitary board into legislation. While we may now believe that we have found the best solution to the BBC’s governance, it is not guaranteed that we will still believe this in 10 years. As the last 10 years have shown, while governance arrangements can be drawn up with the best of intentions, these can prove unsatisfactory in practice. The new charter replaces the BBC Trust, which has been widely regarded as a failed model, and it is right that we should be able to address this in future.
The noble Lord, Lord Wood, and other noble Lords, talked about the independence of the board. I cannot see that the structure that we have reached in the royal charter can be criticised in this respect. At the moment, there are 14 members of the board, including five non-execs appointed by the BBC, four executives appointed by the BBC and four members, one for each nation, who need to be approved by the devolved assemblies. The Government have hardly got undue influence there. They are all appointed following a fair and open competition. Candidates for the chair must have a pre-appointment hearing by the Culture, Media and Sport Committee. If a change in this composition were required, an Act of Parliament would have to be amended, with the party-political debate, tactical pressure and uncertain legislative timetable that this would entail. This is not the right vehicle to make sure that the BBC can be governed effectively. Charter review remains the right vehicle—one that affords ample opportunity for debate and consultation, but also one that allows for effective decision-making and, crucially, a negotiated agreement with the BBC.
The second serious problem concerns the part of the noble Lord’s amendment which specifies that the licence fee needs to rise in line with inflation, or at a rate greater than inflation if the board recommends this, in perpetuity. This provision is not in the licence fee payer’s best interest: it sets the wrong incentives for the BBC to continue to strive to be efficient and to provide the high-quality programming that audiences expect and deserve. The BBC should continue to make efforts to increase efficiency and value for money for its audiences. This is something that the licence fee payer should be able to expect. A guaranteed income which keeps on rising is not the way to ensure this.
Furthermore, we must remember that the licence fee is a tax. It should therefore be possible for the Government of the day to ask the BBC, as is the case for every other public body, to contribute to lightening the pressures on public spending or the taxpayer’s purse, if the circumstances require it or when public spending priorities change. The noble Viscount, Lord Colville, and the noble Lord, Lord Wood, referred to the so-called raid and the cut in the licence fee income. The licence fee has been frozen at £145.50 since 2010. We will end this freeze and increase the licence fee in line with inflation to 2021-22.
Lord Birt
Does the Minister agree that in future, in the event that the Government interfere, as they have done twice in recent years, and require the BBC to spend its licence funding in some other way, it would be appropriate for Parliament to discuss that before the measure goes forward?
Lord Ashton of Hyde
I will come to that. Of course, future Governments will have to make their own arrangements in negotiations with the BBC. The BBC licence fee is a tax. Of course, the Chancellor of the Exchequer and the elected Government have a say in how taxes are raised and spent.
Lord Lester of Herne Hill
The Minister has twice said that the licence fee is a tax. What is the basis of that? I would have thought that the licence fee is a service charge for a service provided to those who pay the licence. That does not sound like a tax. It is not imposed by the Treasury. It is a service fee. When I watch television, because I am old I no longer have to pay, for some reason—that is another matter—but I cannot understand how it can be regarded as a tax. By calling it a tax, surely the Minister is making a threat about future inroads into the BBC’s revenue.
Lord Ashton of Hyde
I certainly do not intend to make threats and I am hardly in a position to do so. I called it a tax because it is so classified by the Office for National Statistics. It is regarded officially as a tax.
The funding agreement announced last July included a number of measures which will increase the BBC’s income—for example, the closure of the iPlayer loophole and the increase of the licence fee with inflation. In combination with the transfer of funding for the over-75s concession, this means that the BBC will have a flat cash settlement to 2021-22, not a 20% cut. Indeed, the director-general said in July last year:
“The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC”.
The amendments in the name of the noble Lord, Lord Lester, would endanger the effectiveness with which the BBC can be governed, and weaken the incentives for the corporation to strive for excellence and efficiency, as well as public support for the BBC’s funding.
As noble Lords know, both Houses had many opportunities to shape the future of the BBC throughout the charter review, and the Government appreciate that valuable input. But we remain of the view that the royal charter in its current form has served the BBC extremely well over many decades. The BBC agrees. The BBC’s director-general, Tony Hall—the noble Lord, Lord Hall—has welcomed the new charter, saying that,
“we have the right outcome for the BBC and its role as a creative power for Britain. It lays the foundation for more great programmes and journalism”.
With that, I hope the noble Lord will withdraw his amendment.
Lord Lester of Herne Hill
I am grateful to the Minister for his reply. I am not at all surprised and I remain optimistic. What I shall now do is read very carefully all the points he has made, look at the amendments that we have been discussing, strip out anything which can reasonably be objected to in the opinion of the Government and those taking part in the debate, and come back to the matter on Report—
Lord Ashton of Hyde
If it is helpful, I am very happy to meet and discuss this.
Lord Lester of Herne Hill
What I am hoping will happen is that Lord Hall of Liverpool—the director-general—will meet Ministers himself. He has been quoted in particular ways now and I will not attribute any views to him, because that would jeopardise the independence of the BBC, but I very much hope that he will meet the Secretary of State and explain privately what he thinks about these issues. From my point of view, as a would-be midwife, all I am trying to do is create a framework of principles which do not have any of the detrimental effects that the Minister has pointed to. I will seek to do that, and I hope that it will not be necessary on Report to divide the House. I am optimistic enough to believe that a thinking, open-minded Government in discussion with the BBC could come up with some statutory underpinning that would give a framework of principles without these detrimental effects. On that basis, I shall withdraw this amendment and will not pursue others in the group.
Lord Lester of Herne Hill
I apologise to the places, their populations and to the noble Lord, Lord Hall, himself. I beg leave to withdraw my amendment.
“Duty of OFCOM to make a recommendation on BBC funding
It shall be the duty of OFCOM to make a recommendation to the Secretary of State regarding appropriate levels of BBC funding in respect of the settlement from 1 April 2022.”
Lord Best (CB)
I shall also speak to Amendments 221 and 222 in the names of the noble Lord, Lord Inglewood, the noble Baroness, Lady Bonham-Carter of Yarnbury, and myself. I declare my interest as chairing your Lordships’ Select Committee on Communications, and this amendment encapsulates one of the principal recommendations from that committee’s report on the renewal of the BBC’s charter, Reith not Revolution.
Most of the recommendations in our report, which did not cover matters of governance and management, have been taken forward by the Government in the BBC’s new charter, which the Select Committee appreciated. In particular, the Government accepted our recommendation for an 11-year period for the new charter: this provides stability and security for the BBC, enabling proper forward planning. We were also very pleased with the line taken by the Government, following our subsequent representations, that the mid-term review of the charter would not reopen the debate on the purposes, scale and scope of the BBC, but would concentrate exclusively on reviewing the new governance arrangements for a unitary board and an extended role for Ofcom.
However, one crucial ingredient has remained unresolved, since it was not a matter that had to be settled within the charter itself. This was the issue of how the BBC’s licence fee should be set—ie, what process should be followed when establishing the charge made to all the users of the BBC’s services, now including those delivered online through the internet. Of course, the licence fee represents the vast bulk of the BBC’s income and therefore determines its scale and scope. How that fee is set is obviously of the utmost importance to the future of the BBC. This is a much narrower point than the question of statutory underpinning for the BBC, but it relates to the independence of the BBC. Although the charter will cover a full 11-year period, the next setting of the licence fee, upon which so much depends, is only five years away.
Lord Lester of Herne Hill
My Lords, I am very grateful to the noble Lord, Lord Best, for his amendment. I agree with the object, but not the means. In fact there are not three but four options open to the Minister. The first, and most pathetically moderate, is of course my original one in Amendment 219, where I borrowed from the way that we deal with judicial salaries and revenue by proposing in new subsections (9) and (10) that “the board”—that is to say, the BBC board—
“must publish a recommendation to the Secretary of State on the amount of funding that the Secretary of State should make available”.
This is on the basis that the BBC should know best what it needs. Then the Secretary of State publishes,
“a response to each recommendation made under subsection (9)”.
If this is rejected, we are in a completely hopeless position so far as this subject is concerned.
My problem with the amendment of the noble Lord, Lord Best, is that it is a bit odd to give the regulator the function of recommending an increase in the licence fee. That is why I have produced Amendment 222A to create an independent body—the licence fee commission. The disadvantage of this is that we do not like creating a whole lot of new bodies unless there is some very important reason. Then the noble Lords, Lord Stevenson of Balmacara and Lord Wood of Anfield, have a more modest way of achieving the same thing: they would have a BBC licence fee commission to do it. Those are, I think, the four options. My own view is that the Government should now accept one of them or come up with a formula of their own that we can agree on Report. I am optimistic that this will happen, so I am now watching this space with great enthusiasm—and suspense.
Lord Birt
My Lords, I support the drift of the amendment of the noble Lord, Lord Best; I think that we need a proper, open, rigorous and transparent means of setting the level of the licence fee.
A little bit of history is that we did have a commission in the late 1990s, when the then Government appointed Gavyn Davies, a very distinguished economist and later chairman of the BBC, to do just that. As you would expect, he produced a searching, rigorous report. A further little bit of history is that he made a recommendation, and the Secretary of State, as you expect in politics, lowered the recommendation; as you do not expect, it went to No. 10, and the then Prime Minister not only upped his Secretary of State but recommended a level for the licence fee which was higher than that which Gavyn Davies recommended. It was the famous RPI plus 1.5% for seven years settlement, which allowed the BBC fully to enter the digital age. It was the process that Gavyn Davies led that enabled the Prime Minister to make a considered judgment.
However it is done, that body needs to look at the total environment. The most important issue in British broadcasting today, barely discussed at all, is the long-term decline of UK production. It is not going up; it is going down. It is going down because of the economic position of ITV and Channel 4. Any discussion of the level of the licence fee should look not only at the BBC but at the totality of the broadcasting production environment in the UK.
Some suggest that the licence fee should be linked to the RPI. There can, from time to time, be good reasons for that. I think that, strategically, it should be linked to GDP. The BBC performs a fundamental role in society, like the Armed Forces. We have a view of GDP and the investment we should make in the rest of the world; we should have a view in relation to GDP of how much we invest in our most important public service broadcaster. When GDP is stretched, as it has been over the past 10 years—though, thankfully, it is going up again—and if the country’s economy is suffering a reverse, then the BBC’s revenues should go down. If the country is prospering, so should the BBC—so should society’s investment in its most important public service broadcaster.
Baroness Bonham-Carter of Yarnbury (LD)
I add my support to these amendments and also pay my respect to the noble Lord, Lord Best, who so ably chaired the Communications Committee, of which I was a member, and produced this report. As everyone in this debate has said, a greater level of transparency must be introduced into the setting of the licence fee. Never again can there be backroom deals.
What these amendments seek to achieve is that in future there will be clarity and public scrutiny. The public, after all, pay the licence fees. These are moderate proposals which will rightly leave an elected Government with the final say in determining the BBC’s revenue, but introduce an important element of accountability into the process, which is surely appropriate for such a vital national institution. There is obviously room for debate as to which body oversees this process, but I hope that the noble Lord agrees that there should be a more open and transparent process.
Lord Gordon of Strathblane
My Lords, I was a member of that licence fee commission under Gavyn Davies in 1998. It may interest the House to know that we had a subcommittee under the late Lord Newton looking at the issue of possibly funding a licence fee for over-75s and making it free. The unanimous conclusion of the committee was that that was a very bad idea and wholly inappropriate for the BBC.
Lord Wood of Anfield
My Lords, I wish to speak to Amendments 222B, 222C and 222D, which go together and which draw on the spirit of the excellent arguments from the noble Lord, Lord Best, and share many of the features of what the noble Lord, Lord Lester, set out. The idea is to reinforce the credibility of the licence fee, to ensure the BBC receives the resources it needs to fulfil its responsibilities under the charter. These amendments go together because, logically, the problem is that the process of negotiating the charter and setting a licence fee level do not always sit easily together.
At present, the connection between the charter process and the licence fee process is, at best, an indirect one. Each has its own political dynamics, so in setting the licence fee Governments have a range of considerations and pressures to contend with. One of those is the interests of the BBC to fund what the charter says it has to do, but it also includes the interests of other broadcasters, the politics around the headline licence fee rate—which is a huge thing for Ministers, proving to the public that they have got more for less out of the BBC and the overall settlement—and, as we discussed earlier, financial pressure to offload government responsibility on to the BBC without extra cost. So the temptation always exists for government to inflate the ambition of the charter and to put a lid on the increases in the licence fee simultaneously. That not only threatens the BBC’s autonomy but risks casting the Government with the suspicion of unwarranted interference.
Viscount Colville of Culross
My Lords, I too add my voice to say that it is important that the BBC’s funding should be transparent and inclusive. I listened carefully to my noble friend Lord Best on his Amendment 220, which argues for Ofcom as a possible way of looking at this. However, I read Sharon White’s evidence to his committee, in which she said that she was already going to be fairly stretched with taking on the new regulatory powers and looking after the BBC. I also listened to the noble Lord, Lord Lester, and his concerns that it is rather odd to have a body that is both regulating the BBC and has the additional power to recommend the setting of licence fee levels. I rather prefer the suggestions made by the noble Lord, Lord Wood, for an independent commission which would make a recommendation to the Secretary of State.
Even if the Minister is not prepared to accept any of these amendments, serious thought needs to be given to the future process for funding the BBC. The constant arrival of new technologies means a shortfall in the number of licence fees being paid, and I doubt that the new digital licence fee is going to provide adequate compensation. The digital age is throwing up an extraordinary array of alternative funding models. An independent body should not only investigate the level of funding for the BBC but the manner in which the public contributes to that funding.
I urge the Minister to think very seriously about facilitating legislation which would enshrine the financial independence of the BBC. Without adequate funding, this great British institution will wither and may even become irrelevant to our national life.
Lord Berkeley of Knighton (CB)
My Lords, I will make one brief point as a broadcaster who works for the BBC. When we speak about transparency, I completely agree with what I heard about transparency from the point of view of the public. However, I make a plea for transparency from the point of view of the BBC over being able to budget. That means knowing in good time what it will get. More and more, we have heard about digital technology, and buying rights and planning broadcasts depends on knowing what kind of budget you are going to have. That is all I need to say, but I make a strong plea for giving the BBC the chance to know what it will have to spend, even if it is going down.
Lord Ashton of Hyde
My Lords, I am grateful to the noble Lords who tabled these amendments today, and in particular to the noble Lord, Lord Best, and the Communications Committee, which he chaired. I am also grateful for the contributions of the noble Lord, Lord Birt, and the noble Viscount, Lord Colville, on the future of the licence fee itself and how it may be arranged in the future, which is slightly separate from the debate we are having today about the process for doing it. I accept that, as technology changes, the way it is structured may have to be changed in the future. I hope we can have debates on that separately at some stage in the future. I am also grateful to the noble Lords, Lord Lester and Lord Stevenson, for their amendments.
Today we are debating a new nuance regarding the BBC licence fee. On a number of occasions, Members of the House have been clear that they would like to see an end to what some have called “midnight raids” on the BBC licence fee, and we have listened to that. The BBC’s new charter regularises the BBC’s future financial settlements for the first time, and the next one will be in five years’ time. In the meantime, there will be an inflation-linked increase.
The current charter also requires the BBC to provide data ahead of each licence fee settlement to inform the Government’s decision. It is, therefore, explicitly clear that the BBC will be able to make its case and the Government of the day will be able to consider that. It also follows that anyone with valuable views and thoughts on the subject, including noble Lords—many of whom I know have experience in these matters—can share these views with the Government when the time comes.
The noble Lord, Lord Best, suggests that Ofcom should recommend what the level of funding for the BBC should be, and he proposes further that there should be a public consultation on the appropriate level of funding. It is entirely appropriate that the assessment of the BBC’s funding needs and the subsequent level of the licence fee should remain a matter for the Secretary of State. As I said before, the licence fee is a tax paid by the licence fee payer, and taxation is a matter for the elected Government rather than an unelected regulator. It is right that the Government should have some responsibility for decisions that affect the tax bills of UK citizens, as I have set out before. We would be setting potentially odd incentives for the BBC’s regulator if—as the noble Lord, Lord Lester, pointed out—it would now also be called upon to make funding recommendations. The now-abolished trust model showed that mixing regulatory and strategic functions breeds confusion and conflicting incentives. The consensus has been that this has not worked and we do not want to recreate this model.
Ofcom needs to concentrate on regulating the BBC effectively. The noble Lords, Lord Lester and Lord Stevenson, have both proposed the establishment of an independent licence fee commission to make recommendations to the Secretary of State. We agree with the sentiment of independent advice. The Government stated in their White Paper, published last May, that they would consider taking independent advice at the next settlement should it be appropriate. However, that is a matter for the Government of the day. As with Ofcom, it would not be appropriate for an independent commission to make recommendations on level of taxation.
Lord Lester of Herne Hill
As I listen to the noble Lord, the problem arises when he says, “That would be a matter for the Government of the day”. All this is very interesting and relevant, but none of it is binding. Effectively, the Minister is putting forward perfectly reasonable ideas for the future, but none of them has any bite. None of them is binding unless Parliament makes it so. I am afraid it is a question of wriggling to find ways of avoiding any parliamentary underpinning at all. It is that which everyone who has spoken in this House, but one, believes to be wrong. Therefore we will have to come back to it on Report.
Lord Ashton of Hyde
I understand the point the noble Lord is making; he illustrated it right at the beginning of his speech in the previous debate. This is a matter of principle: whether we think statutory underpinning is the right mechanism for the royal charter for the BBC. I acknowledged to him that in some cases it might be, but I did not agree that it was appropriate for the BBC. I take his point and his due warning about Report. I agree it is relevant to this, but we have established that we have a disagreement on that point of principle. As for binding future Governments, of course we do not want to do that, and, in fact, we cannot.
The next question is that of public consultation on the settlement or the level of the licence fee. As noble Lords will appreciate, funding a public service is not a straightforward topic for public consultation. For example, the recent charter review found that almost 75% of the public consider the BBC’s programming to be of a high quality, but just 20% said that they would like to see the licence fee rise in line with inflation, thus helping the BBC maintain these high standards. Public consultation, therefore, needs to be approached with due sensitivity.
The BBC’s funding needs are a very complicated and technical issue, as we have seen at every licence fee settlement. The judgment about the overall package is a fine one. It should therefore remain for the elected Government to decide how to approach reaching an appropriate level of BBC funding in a detailed and extensive negotiation with the BBC. As I have said, this resulted in a position that the director-general has said is a strong deal for the BBC that gives it financial stability.
Finally, Amendment 223 seeks to remove the ability of the BBC to set age-related licence fee concessions in the future. I have already explained that the licence fee is a tax and it is right that the Government should retain the ability to determine the outline priorities of what it should be spent on. The BBC explicitly sought responsibility for the age-related licence fee concession. Removing the BBC’s ability to determine this policy—for which it will pay—simply prevents the BBC being the master of its own destiny. I believe it is particularly arbitrary to withdraw the BBC’s ability to set this concession without knowledge of what the overall funding package for the BBC will be at that future point. I do not believe that that is in the BBC’s interest, now or in the future. With those explanations I hope that, for the time being, the noble Lord will feel able to withdraw his amendment.
Lord Best
My Lords, I am extremely grateful to all noble Lords who have spoken, all of whom spoke in support of a change. I get the very strong impression that the Ofcom route, which is the one proposed in my amendment, would not find so much favour with your Lordships as the creation of a separate new licence fee commission. The independence of that body would be assured. I can see that some regulators do take an interest in the fees and charges made by the bodies that they regulate—it would not be entirely unheard of for Ofcom to have a view. However, I take the point that Ofcom is fully stretched with the duties that it already has. On balance, although everyone who spoke accepts that the current arrangements have been entirely unsatisfactory and that change is needed, the idea of a new body—which does not always find favour—might be the preferable route.
In response to the Minister, there is absolute agreement that the Secretary of State must take the final decision—that is not under dispute. It also should be clear that this should not be confused with the statutory underpinning of the royal charter, which we debated earlier. This is a one-off, separate issue relating to the licence fee. I am glad the Minister accepts that independent advice might be required. However, I think it is possible to bind future Governments, in the sense that putting a process in the Bill would ensure that the transparency that everyone seeks comes to pass and that proper public consultation and parliamentary scrutiny whenever the licence fee is reviewed, which will be five years from now, happens. It might be useful to come back to this later. For the moment, I beg leave to withdraw the amendment.
“Impact of Royal Charter and Agreement on radio production
The Secretary of State must report, within a year of the passing of this Act, on the impact of the BBC Royal Charter and Agreement, on—(a) the balance of in-house and independent production of programmes for BBC radio broadcast;(b) the extent to which training and development of production staff may have been affected;(c) the numbers of staff active in radio production compared to 2016, including details of gender and other indicators of diversity; and(d) the impact the changes have had on the salaries and conditions of radio production staff.’’
Lord Stevenson of Balmacara
My Lords, I was slightly surprised at the way the Minister rebuffed concerns about the way in which Parliament engaged with the royal charter process last time. It might be because he joined us halfway through, to a little bit of shock but quite a lot of pleasure. Looking back on it, I do not think it can be said that Parliament was as engaged as it wished to be in the process. The ability to speak on two occasions when Statements were graciously made by Ministers, and to speak in one debate focusing, at that stage, on the draft charter, with the agreement as yet not finalised, can hardly be described as participating actively in the process. I think we can agree to differ on that point. I am sure that noble Lords who spoke in the earlier debate had a very different version of how that might have gone, including involvement by Select Committees and involvement in the detail, which would have resulted in proper and effective scrutiny of the Government’s proposals and the eventual outcome.
This amendment, by serendipity, actually deals with some of the fall-out of the rather deficient process we are going through. When charters are drafted, considered and debated, they are never alone: there are lots of other things going on. Many people present will be able to give witness to that effect. One of the things that sometimes gets missed out is the detail in the agreement. The agreement, of course, is really the mechanics of how the arrangement between the Government and the BBC works in practice. One was brought in in such a way and at such a time that it was never discussed in your Lordships’ House or in the other place. It only really became an issue once the charter was about to be sealed. The issue was the changes to the way national radio output was to be operated in future, which were being imposed on—although not necessarily resisted by—BBC management. That is the subject of this amendment.
Amendment 222E is a probing amendment, asking the Government to conduct a review of an important sector of the creative economy. It does not specifically relate to the BBC—although it is cued into something that is happening there—but it would provide useful information and detail that would be of interest to the Committee. If the review were carried out in the way I suggest, with a report covering a range of topics related to radio production, I hope it could be brought to your Lordships’ House and generate a good discussion.
In short, about 60% of BBC national radio output is going to be put out to competitive tender over the next few years, to 2020. Over the past 20 years, BBC radio has actually increased its external commissioning from zero to around 20% of output. That is quite a slow rate of progress, but that is not unconnected with the fact that we are talking about a very fragile sector of the creative industries. Radio production does not involve a very large group of people. The independents are usually quite small and not in the habit of operating on a scale that would enable them to take over the huge increase in the proportion of radio that we are talking about.
The proposal would mean an extra 3,000 hours of national radio output being put out to tender every year. That, of course, does not come free of charge, but with the cost of a commissioning process in-house at the BBC. Therefore, it is not all a one-way process: there will be additional costs. Those costs will not be funded by any additional funding from the licence fee or any other process, so there is bound to be a squeezing of radio budgets, and neither external nor in-house producers will be able to rely on getting any increase. It is going to be a rather difficult situation, affecting the people involved. Current in-house BBC radio producers will find that their jobs are largely going to disappear, because, although a significant number of programmes will be retained in-house, the 60% figure means that the majority will be produced externally.
The question of how the BBC will continue to operate as a major trainer in this area must be raised, because without the numbers, that training might well be at risk. Who else is going to do the training to ensure that radio has a flow of qualified people coming forward? Smaller independent production companies might not be able to scale up either quickly enough or with sufficient range to compete against those that will, perhaps, sweep the pool.
This is a really big change in an important part of our national life—a real adjustment—and it has not been given sufficient scrutiny. Given that it was not discussed in Parliament as far as I am aware and was hardly raised externally, the Government have a duty to think harder about the issues arising. The allegation was made that this proposal did not emerge from any consideration of the needs and purposes of BBC radio production, or indeed the independent radio production sector. In meetings I had with those involved, I was told that the ask for the independent sector was to get from the current 20% of output to 25% by 2020—in other words, a marginal increase on the existing arrangements. To go from 20% to 60% reflects what I think must have been external pressures. That rather makes the point that we need to know more about what is going on, and transparency would help.
The main purpose of the amendment is to focus on the situation that will emerge after 60% of national radio output is put out to competitive tender, and the benefits that will flow from that. I beg to move.
Lord Foster of Bath (LD)
My Lords, I have much sympathy with the amendment moved by the noble Lord, Lord Stevenson, although I have some disagreements with it as well, which I will come to. As the noble Lord said, the new charter obligation commits the BBC to extending competition for radio production. It was my understanding that that proposal came directly from the BBC—that it was not, as the noble Lord suggested, imposed on but not necessarily resisted by BBC management. As he said, it may or may not have been rather more than the independent radio producers were expecting or had requested. The Committee would benefit from hearing from the Minister a little about the background to this part of the charter and agreement.
What is clear is that it has been agreed that from April 2017, over a six-year period, the BBC will open up 60% of relevant hours—that is non-news, news-related current affairs or repeats—to competition both from in-house and indie producers. That represents about 27,000 hours of programming per year being open to competition. Although it will not go as far as what is happening in television, it is a further development of the process that began right back in 1992, when the BBC voluntarily made 10% available to independent production. That has developed over a number of years. The 10% voluntary figure was made compulsory, we then saw further developments and eventually the “compete and compare” framework was introduced, designed to drive up standards, reduce costs and ensure continuous improvement in all areas of operation.
Of course, the 60% available for competition does not guarantee the independent sector extra commissions. Independent companies will obviously have to have sufficiently good ideas and be able to demonstrate a track record of producing sufficiently high-quality content. The independent sector, of about 150 relatively small companies spread right across the country, has a growing track record of producing high-quality content and helping to increase the range and diversity of content available to BBC radio services. They produce some great programmes that win awards, and since the guide price for radio production is the same for both in-house and external producers, there is no increase in the production cost to the BBC.
It is good to hear that the independent sector is increasingly involved in training the next generation of producers through training programmes and mentoring schemes, helping to improve diversity: around 60% of learners are women, 15% are from BAME backgrounds, and 5% are people with a disability. But we have to be alert, as the noble Lord, Lord Stevenson, suggested, to the impact these changes may have on the BBC and its own staff. They will certainly need increased levels of training and skills to negotiate, so that they can compete on a level playing field with the independents.
The review that is called for in the amendment is of course sensible, but we question whether it should take place quite as early in the process as recommended by the noble Lord, Lord Stevenson. The 60% target for competition does not come into full effect until the end of 2022, which should provide the independent sector with plenty of time to develop the scale and expertise to pitch to make more programmes. It also allows time for the BBC to retrain and restructure. But the BBC acknowledges that while greater competition should deliver greater efficiency in programme costs, increasing the number of commissions open to competition threefold will require a larger in-house commissioning team, and there is already a potential impact on other in-house staff. I understand that the BBC is already in discussions with staff and trade unions about that.
It would make sense to have a review, but it should perhaps take place at the midway point between Royal Assent and 31 December 2020. If we are to have such a review, we need to look at some other issues that may form part of it, not least the BBC’s commissioning process, to ensure that the developing competition between in-house and independents is truly fair. However, we support the broad principle of the proposed review.
Lord Ashton of Hyde
My Lords, I am grateful to the noble Lords, Lord Stevenson and Lord Foster, for their contributions. I start with something that has nothing to do with this. I point out to the noble Lord, Lord Stevenson, who said that I did not realise quite what was going on with the BBC because I only joined halfway through, that the BBC was debated 19 times before the BBC charter review in various different forms—so it certainly had an outing if not in quite the way that noble Lords might have wished.
Moving on to the amendments in this group, the amendment in the name of the noble Lord, Lord Stevenson, concerns the impact of the BBC’s new royal charter on radio production. There has been a lot of misinformation and confusion about this change, so I hope to set the record straight. In answer to the noble Lord, Lord Foster, the proposal for change originated from the BBC. It was well received by the Radio Independents Group, which had for a number of years been seeking to have more opportunities to bid for commissions from the BBC. Following negotiations between those two bodies, it was announced by the director of BBC Radio in June 2015. That agreement predated the publication of the BBC Green Paper.
Under the agreement, the BBC agreed to move from the current very limited quota-based arrangements to a new commissioning structure, opening up 60% of eligible hours to competition by 2022. This is a change that we strongly support, since it gives significant new opportunities to the growing independent radio production sector and gives BBC radio audiences access to the best ideas out there. But increasing the competition between independent and in-house productions does not guarantee, as the noble Lord, Lord Foster, reminded us, that the independent sector will receive more commissions. Companies will have to bid for work and BBC in-house staff will still be capable of winning. Unlike TV, there will still be, in effect, an in-house guarantee of 40% of all programmes, which reflects the BBC’s continuing importance to radio.
The new BBC charter sets a firm timescale for the implementation of this change. However, the timescale for the transition—by 2022—was set by the agreement between the BBC and the RIG in June 2015. It has to be for the BBC to consider the transitional arrangements in consultation with the independent production sector and to report on them as appropriate. These are operational matters for the BBC and it is not for us to have to report on them. The BBC already reports on a number of its production and commissioning outcomes across TV and radio and I am sure that it will continue to strive for transparency here. I do, however, acknowledge the concerns that the noble Lords, Lord Stevenson and Lord Foster, raised about the implications for BBC staff.
The changes are being introduced with a long transition and both the BBC and RIG are taking steps to ensure that the transition is as smooth as possible. The noble Lord, Lord Foster, talked about training. There is a strong ethos of training and diversity in the independent sector. For example, the next RIG offers a training programme that so far has provided training days to 1,089 individual learners, including a diversity mentoring scheme. Of the learners, 60% are women, 15% are BME and 5% are disabled. The RIG encourages its members to recruit from a diverse pool of candidates and also liaises with the BBC’s diversity team. It encourages its members to match the BBC’s employment conditions.
I am sure that both the BBC and the radio industry will pay close attention to the points raised by noble Lords today and take steps to ensure that the transition is handled as sensitively as possible. Fundamentally, though, this is about giving commissioners greater choice and ensuring that listeners have access to the best possible radio shows.
With that explanation, I hope that the noble Lord will be able to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the noble Lord, Lord Foster, for his not unqualified support. It was useful to have another voice in the debate and he raised good points, which I broadly support. He is right that, on reflection, one would perhaps want to look at the issue of timing in more detail.
I would like to depart from the Minister’s comments on one issue: the focus of the amendment. The amendment is not really about what is happening in the BBC; it is an attempt to focus on what might happen in the broader ecology of radio production. In that sense, I was not straying into encouraging him to interfere in what must be an operational matter for the BBC—I absolutely agree with that. I do think, though, that there will be consequential waves of impact across the whole of radio production, which ought to be of interest to the Minister and to the department.
I still think that there will be strong changes here in matters such as conditions of service for staff. It is nice to hear that the RIG group is encouraged to match BBC conditions, but the likelihood of it doing so is very slim. That in itself may not be the biggest issue, but it is still going to have an impact and we should know about that. For all the reasons previously given, I still think that this would be a good idea.
However, the underlying point that will cause us the greatest concern as we go forward is that this seems to signal a change of approach. I think the Minister said that he strongly supported what was being proposed by the BBC in these measures—I will check in Hansard. Whether or not it was something that originated in the BBC or something it picked up in the negotiations and felt that perhaps it ought to do is a matter we can talk about later. The point is that, as a result of these and other changes, the BBC is moving inexorably from being a producer and broadcaster to a broadcaster that largely commissions work. That in itself has to be of concern. It may or may not be the right thing to do in the circumstances; it may be inevitable, given the way that technology is moving; but it is a change. Unless we mark and measure that in order to assess what is happening, we will all be the losers. That is perhaps for another day; in the meantime, I beg leave to withdraw the amendment.
Lord Wood of Anfield
“Listed events qualifying criteria
(1) The Broadcasting Act 1996 is amended as follows. (2) For section 98(2)(b) substitute—“(b) that the service has been watched by at least 90% of citizens in the United Kingdom in the course of the preceding calendar year.”(3) After section 98(2) insert—“(2A) The Secretary of State may by Order amend section (2)(b) by substituting a different percentage for any percentage for the time being specified there.(2B) No order under subsection (2A) shall be made unless a draft of the Order has been laid before and approved by a resolution of each House of Parliament.””
Lord Wood of Anfield
My Lords, Amendment 224 is designed to protect the so-called listed events regime, the rules designed to ensure that major sporting events in the UK remain universally and freely available. The listed events rules have enjoyed cross-party support for well over 30 years, and have succeeded in preserving live coverage of certain major sporting events on free-to-air TV—such as the Olympics, the World Cup, the Grand National, the Rugby World Cup Final—while also ensuring that a second category of sporting events is guaranteed to have highlights available on free-to-air TV, such as the Six Nations rugby and the Commonwealth Games. Those rules have successfully managed to combine two competing sets of considerations: the desire of the public to be able to access, without extra payments, the major sporting occasions that define our culture and bring us all together; and the need for sporting bodies to maximise their commercial revenues to invest in both their professional sportsmen and sportswomen and to develop their grass-roots activities.
The audiences for these major sporting events testify to the success of the listed events rules. In 2015, over 40 million people watched the Rugby World Cup on ITV. Some 45 million people watched the Rio Olympics and Euro 2016. England’s disastrous performance against Iceland in the Euros last summer was the most watched sporting event of the year, with 15 million—which I am sure will cheer us all. The men’s final at Wimbledon and the final of Euro 2016 attracted more than 13 million viewers. Some 80% of the public say that listed events are important to our country and 25% say that the BBC’s Olympic coverage during the London Olympics inspired them to take part in sport themselves.
In recent years the listed events regime has come under some moderate threat, largely from competitors to PSB broadcasters, which want to undermine the privileged position of free-to-air channels. So far, all political parties—and all parties—have resisted the lobbying to reform those rules, and I trust that the Government have no intention to revisit the principle behind the listed events regime. However, this amendment is not about protecting the rules against calls for repeal of the regime; it is specifically to protect the regime from falling into obsolescence in the face of technological change and changing viewing habits.
The aim of the rules is to guarantee that major sporting events are available universally, irrespective of the ability to pay. I hope that we all share that ambition. The current rules express that in statute by restricting what counts as a qualifying service to channels which, first, are free and, secondly, are received on TV sets by 95% or more of the UK population. The problem is that despite the ambition of those rules, the criteria they adopt are becoming outdated as the number of households in which programmes are watched on devices other than TV sets rises. As a result, for the first time, the major free and free-to-air broadcasters share the fear and expectation that before this Parliament is over, no TV channel will qualify for the 95% criterion—not one. That leaves the regulator unable to guarantee the continued availability of listed events to audiences across the UK, and in the long term risks collapsing the credibility of the listed events rules altogether.
The rules for listed events need therefore to be updated. The amendment we propose, backed by all five free-to-air PSB providers, would replace the 95% reception criterion with a requirement that any qualifying service must have had programmes that have reached or been viewed by at least 90% of the public in the last calendar year—where the definition of a “viewing” is at least 15 minutes consecutive viewing a year. That measure would serve as a good proxy for “free to air” continuous availability. It maintains the spirit of the existing regime, is simple to implement, not tied to any particular distribution platform and, crucially, it is open to any service that is free and committed to maximising access.
Of course, there is a genuine debate to be had about the nature of the rule that is introduced to replace the existing rules that are at risk of becoming obsolescent. However, it cannot be right for anyone committed to maintaining the listed events regime to deny that there is a big problem brewing or the need for reform to keep major sporting events universally available. I hope that when the Minister replies he can agree at least with the principle that the rules need to be updated, and suggest a process for taking this revision forward. I beg to move.
Amendment 224A (to Amendment 224)
“(b) that the service is a service which, in the opinion of OFCOM, is capable of reaching the vast majority of the population and likely to achieve a significant audience.”
Lord Gordon of Strathblane
My Lords, Amendment 224A has the same objective as Amendment 224 but takes a marginally different approach. I will not go over the statistics because my noble friend Lord Wood has done that admirably, but I would add that PSBs are responsible for only 5% of sports output on television but 60% of the viewing. Their role in sports coverage is absolutely vital and I fully endorse the need to protect the listed events regime against the risk of becoming obsolete.
I must apologise to the Committee because the language I used in drafting Amendment 224A is more than sloppy. In an age that regards a majority of 52% in the EU referendum as overwhelming and a 55% majority in the Scottish referendum as equally overwhelming, the phrase “vast majority” is wholly inadequate to reflect what I really mean, which is as close to universal coverage as is humanly possible. However, the main point of my amendment is to get rid of fixed targets because they can become obsolete. My noble friend may be right when he says that it might happen to all five PSBs within the next Parliament, so why substitute 95% with 90% which may become equally obsolete in the ensuing two or three years? Why not leave it to the judgment of the regulator, Ofcom? It should reach a decision on which broadcasters could qualify.
The other point on which I slightly disagree with my noble friend is going for 90% in the preceding year. First, that could be overly restrictive, and secondly, it could lead to a situation where an organisation deliberately becomes free to air but hides its main sports coverage behind a paywall. It would be much better to leave this to the judgment of Ofcom. It can determine what coverage is going to be required and who can qualify as a free-to-air broadcaster. Apart from those points, I endorse entirely the need to protect the listed events regime and I beg to move.
Lord Addington (LD)
My Lords, I apologise for not having spoken at Second Reading. Free-to-air broadcasting is something that is very good because it helps the entire sporting structure by encouraging people to watch sports events, which in turn may make them actually get out there and play some sport, a point that has not been mentioned yet. The fact is that if you have not seen something you cannot get involved in it, and equally, unless it is culturally acceptable you do not get involved. This is an odd and imprecise correlation that everyone knows about. The effort to build a healthier nation is helped by broadcasting. Oddly enough, being able to watch sports while sitting on the sofa encourages people to go out and try them, and thus makes them likely to spend slightly less time on that sofa.
The most important part of Amendment 224 moved by the noble Lord, Lord Wood, is that the affirmative procedure would have to be used to make any changes. That, along with a commitment to ensuring that Parliament takes an interest in this issue and monitors it carefully, is probably most important in terms of reflecting the spirit of the amendment. If we were to leave this to some sort of outside structure, as we heard from the noble Lord, Lord Gordon, it is going to be difficult to pin down in a fast-changing world. Unless we have something that states that PSBs must continue with this provision, it will come under pressure and people will always be sniping at it. The fact is that sport seems to be something which people want to pay to access and view, so there will always be pressure. Representatives of the big five who came in to talk to my colleagues about this issue said that they are happy with the situation as it is at the moment, but there will always be someone who will think, “We can get so much more money and could do so many wonderful things if we restricted viewing”. As I say, there is always that bit of pressure.
We owe it to the public to make sure that any change that is made to something like this, which is a very good thing, is done in the full glare of public scrutiny. I hope that my comments are taken in the spirit in which they are intended, which is that this regime is bigger than the sports events themselves. It is part of our current fabric and we should take an interest in it. Whichever criteria are used, making sure that Parliament, to which the public have democratic access, is involved in the discussion is essential. If any changes are made, we will want to know why, because a price will have to be paid no matter what benefits are gained for certain sports.
Lord Wigley (PC)
My Lords, I intervened briefly on these points at Second Reading and I support at least the principle of Amendment 224, although I would like to query some aspects of the detail. However, it was moved very well by the noble Lord, Lord Wood of Anfield, and I welcome the fact that it brings forward an issue related to the listed events regime that most certainly needs our attention at this point; namely, when the situation is changing so rapidly. If we do not adopt a system that is flexible enough, there is no knowing what difficulties we could get into over the coming years. The amendment offers a straightforward solution to a simple problem, which as I understand it is that by the end of this Parliament there is a real possibility that no PSB will meet the qualifying criteria set out in the listed events regime. The solution lies in this amendment which will update those criteria to ensure that the PSBs are still eligible.
It is no secret, notwithstanding our success in the European soccer cup, that the Welsh are still very big rugby fans. Some 1 million of us enjoyed the Wales-England match in 2015 and indeed 1 million of us watched the Welsh beat the Scots last year. No doubt another million people will be watching on Saturday when Wales plays England. The listed events regime, also known as the sporting “crown jewels”, ensures that some of the most high-profile sporting events can be watched by all for free—from rugby finals and highlights of other rugby matches through to football finals and Wimbledon. I have one slight reservation with regard to using 90% of citizens as a criterion. The public broadcasting channel S4C transmits by agreement a number of listed events, but it certainly does not reach 90% of the population. I wish it did, and no doubt we will get there at some point, but not quite yet.
The point is this: should a PSB suddenly become ineligible to bid for the rights to these great sporting events? It is inevitable that millions of people, particularly those on low incomes such as pensioners, will not be able to afford the pay channels. They will be shut out of the shared experiences that mean so much to everyone in all the four nations of these islands. It is an important issue and an amendment along these lines is needed, if not at this stage, then perhaps one could be drafted for the Report stage. Something ought to be forthcoming so that we can safeguard the position of this regime.
Lord Puttnam (Lab)
My Lords, I rise to make two observations, one of which makes me feel very old. I worked with the then Prime Minister, Sir Harold Wilson, on looking at the whole issue of free-to-air sporting events in terms of where they penetrated and where they had to be retained. It is interesting to note that last week it was announced that the Six Nations competition is broadcast free to air not only to all the countries involved, but also has the largest live audience for any sport anywhere in the world. So there is no, as it were, collision between the appeal of a sport, the size of the arenas and the number of people attending the events, and the fact that these events are also available on free-to-air television. I sense that sometimes it feels like it might be a trade-off: you have to get the money in or you will not get a sufficient audience. The Six Nations competition is a classic example of something that succeeds at every level.
Lord Ashton of Hyde
My Lords, I thank the noble Lord, Lord Wood of Anfield, for moving this amendment and I hope that I can provide some reassurance to noble Lords. Indeed, I fear we may all be in danger of violently agreeing with each other. Listed sporting events is an issue we have discussed before. As the Minister for Culture made very clear in the other place, the current listed events regime is not under threat at this time and I confirm that we will not let it be under threat. I hope that that directly answers the question put to me by the noble Lord, Lord Wood, and I therefore do not believe that these amendments are needed at this time.
I submit that it would be particularly undesirable to act in the way that Amendment 224 suggests, because it would lock in the incumbents’ position, since the requirement to be watched by 90% of the population would narrow considerably the number of channels that could ever qualify. It would narrow it to channels which had already achieved mass appeal to audiences—and that is not a step we should take rashly. The requirement in Amendment 224A that channels qualify if they are capable of reaching the vast majority of the population and likely to achieve a significant audience is, I respectfully suggest—I would certainly never use the word “sloppy” of the noble Lord, Lord Gordon—perhaps too vague to provide a workable system. Ofcom would be forever subject to challenge by channels arguing over its assessment. It would create enormous flux in the regime, meaning that sports federations could not be sure whether the channels they were negotiating with met the qualifying conditions.
However, I assure the Committee that we are keeping this area under review and we will consider how we can best ensure that any risks can be managed successfully in future. To that effect, we will consider carefully before Report the issues raised and the contributions made by noble Lords today. With that commitment, I hope that both noble Lords will withdraw their amendments.
Lord Wood of Anfield
My Lords, I thank noble Lords for that excellent short debate. I agree with much of what the noble Lord, Lord Gordon, said about the risks of a target—such risks definitely exist—but I also agree with other noble Lords that leaving it to Ofcom is probably not the best solution. There is definitely a need for some parliamentary clarity. Ofcom wants statutory clarity so that it can be a regulator in virtue of clear rules, rather than be thrown into the contentiousness that the judgments that this would require would embroil it in. So I think that the Ofcom route is not the best route forward.
I also agree with the noble Lord, Lord Wigley, that there are certain tough cases with any rules, in particular with the Welsh and Gaelic language carrying of live sporting events. In response to the Minister, I suppose I am 10% reassured and 90% not reassured at all. To say that noble Lords can be reassured that there is no threat is not really a reassurance, because the threat does not come from the Government’s intentions being in doubt.
Lord Ashton of Hyde
I think the noble Lord misunderstood me. I was trying to reassure him by saying that we will not let it be under threat.
Lord Wood of Anfield
I appreciate that and I am grateful for it, but I fear that it is under threat by virtue of technological change and changes in viewership—not because of changes in government policy. There is a threat emerging—one can see it in the graphs and the numbers—and it requires some pre-emptive thinking. There was a hint that maybe some pre-emptive thinking is going on behind closed doors on this, but it is just not true to say that there is no threat when all five PSB channels line up and say that the numbers suggest that not one of them will qualify under the existing rules by the end of the Parliament. They are either right or they are wrong—and if they are right, there is a problem.
Lord Ashton of Hyde
I am sorry to keep interrupting the noble Lord; what I said was that the regime is not under threat at this time.
Lord Wood of Anfield
Well, I take “this time” to be this Parliament: that is the one I am in, and by the end of it there seems to be a big problem brewing. So I suspect that we will come back to this later. But for the moment I beg leave to withdraw the amendment.
Lord Borwick
“On-demand programme services: accessibility for people with disabilities
(1) The Communications Act 2003 is amended as follows.(2) After section 368BB insert—“Accessibility368BC Accessibility for people with disabilities(1) The Secretary of State may by regulations impose requirements on providers of on-demand programme services for the purpose of ensuring that their services are accessible to people with disabilities affecting their sight or hearing or both.(2) The requirements that may be imposed include—(a) requirements for programmes included in the services to be accompanied by subtitling;(b) requirements for such programmes to be accompanied by audio-description for the blind;(c) requirements for such programmes to be presented in, or translated into, sign language.(3) Before making regulations under this section, the Secretary of State must consult— (a) the appropriate regulatory authority, and(b) (where they are not the appropriate regulatory authority) OFCOM.368BD Enforcement of regulations under section 368BC(1) Where the appropriate regulatory authority determines that a provider of an on-demand programme service is contravening or has contravened regulations under section 368BC, they may do one or both of the following—(a) give the provider an enforcement notification under this section;(b) impose a penalty on the provider in accordance with section 368J.(2) The appropriate regulatory authority must not make a determination as mentioned in subsection (1) unless there are reasonable grounds for believing that a contravention of the regulations is occurring or has occurred and they have allowed the provider an opportunity to make representations about that apparent contravention.(3) An enforcement notification under this section is a notification which specifies the determination made as mentioned in subsection (1) and imposes a requirement on the provider to take all such steps for complying with the regulations and for remedying the consequences of the contravention of the regulations as may be specified in the notification.(4) An enforcement notification must—(a) include reasons for the appropriate regulatory authority’s decision to give the enforcement notification, and(b) fix a reasonable period for taking the steps required by the notification.(5) It is the duty of a provider to whom an enforcement notification is given to comply with it.(6) That duty is enforceable in civil proceedings by the appropriate regulatory authority—(a) for an injunction,(b) for specific performance of a statutory duty under section 45 of the Court of Session Act 1988, or(c) for any other appropriate remedy or relief.(7) If a provider to whom an enforcement notification has been given does not comply with it within the period fixed by the appropriate regulatory authority in that enforcement notification the appropriate regulatory authority may impose a financial penalty on the provider in accordance with section 368J.”(3) In section 368C (duties of the appropriate regulatory authority), omit subsection (2).(4) After that section insert—“368CA Code on accessibility for people with disabilities(1) It is the duty of the appropriate regulatory authority to draw up, and from time to time review and revise, a code giving guidance as to—(a) the steps to be taken by providers of on-demand programme services so as to meet the requirements of regulations under section 368BC, and(b) other steps to be taken by providers who are subject to requirements under the regulations to ensure that their services are made progressively more accessible to people with disabilities affecting their sight or hearing or both.(2) The appropriate regulatory authority must publish the code drawn up under this section, and every revision of it, in such manner as, having regard to the need to make the code or revision accessible to—(a) persons who are deaf or hard of hearing,(b) persons who are blind or partially sighted, and (c) persons with a dual sensory impairment,they consider appropriate.”(5) In section 368J(1)(financial penalties), after “368BB” insert “, 368BD”.(6) In section 368K(1)(suspension or restriction of service for contraventions)—(a) in paragraph (a), after “368D” insert “, or of regulations under section 368BC”,(b) in paragraph (b)—(i) after “368D” insert “or the regulations”, and(ii) for “or 368I” substitute “, 368I or 368BC”.(7) In section 368O(2)(a)(power to demand information), after “368D” insert “, or of regulations under section 368CA,”.”
Lord Borwick (Con)
My Lords, I declare my interests in the register, and as a trustee for more than 20 years of the Ewing Foundation for deaf children. It is a great charity which works in schools to help deaf children make the most of their education; partly by helping the teachers to ensure that their hearing aids and cochlear implants are working well and by giving teachers advice on how to get the most out of the equipment and how to help the children.
Many trends are apparent in the field of deafness, not least the rapid rise of cochlear implants, the rise in literacy rates in children and, of course, the rise in late-onset deafness as the population generally ages. The vast majority of deaf people speak and read perfectly, as most are elderly people who learned their language and how to read as children. I thank Action on Hearing Loss and the Bill team in the Department for Culture, Media and Sport for their help in drafting this amendment and their support in its passage. They have helped to clarify my thinking on this important issue.
This is an enabling amendment, permitting the Secretary of State to bring forward statutory instruments to require those who transmit television programmes to provide subtitles, then audio description for viewers with poor eyesight and, lastly, British Sign Language interpretation for people who find that easier. I am told that all terrestrial television programmes now carry subtitles and a growing number of pay-to-view programmes are already having subtitles added. Sky has told me that about 60% of its entire output will carry subtitles by September this year; it should be applauded for voluntarily doing the right thing. Thank you. However, the advance of audio description and sign language does not seem so good. The latter two aids to understanding are far more expensive than subtitling and it is possible that technological advances will play a part in solving the problem of deaf people who can communicate only with other sign language users.
Already, in America, I have seen demonstrations of software that will enable simultaneous translation from American Sign Language to text. If that is available, translation from text to British Sign Language on an iPhone will not be far behind. When the statutory instruments come through, we must bear in mind the speed of technological change and not be too prescriptive in the manner in which subtitles are delivered. We should instead seek a statutory instrument that merely says that subtitles should be available on all programmes. A swift statutory instrument will serve as encouragement to the broadcasters to continue and expand their good work. If we are in a position where the broadcasters and the Government are competing with one another to seek the broadest and quickest implementation of subtitles across channels and services, I would say that that is great.
We should remember that TV companies are simply responding to demand. It is not just the hard of hearing: think of TVs in noisy venues, football fans who want to read the half-time match analysis over the din in the pub, or people watching television in a noisy gym. All will appreciate this change. This sort of measure will also help to solve the biggest problem of sensory deprivation: that of isolation. If subtitles enable a deaf person to be on an equal footing with those in the hearing world, then we and the Government will have done one more thing to put disabled people in a position to thrive in society. I beg to move.
Lord Clement-Jones
My Lords, I think that many of us responding to the amendment in the name of the noble Lord, Lord Borwick, find ourselves in something of a cleft stick. He has introduced the subject matter superbly, and in principle the amendment is entirely correct. The noble Lord has a very good track record on physical access for the disabled and this is a continuation of that, in a sense, in a different sphere. He also has the courage to wear a House of Lords tie, so he cannot be all bad. The trouble is that this amendment does have flaws. I am sure that the noble Lord, Lord Grantchester, if he speaks on this, will pick up on them. The Delegated Powers and Regulatory Reform Committee has commented on this.
All of us want the amendment to succeed but it does need a further look. We have all had briefings from the public service broadcasters and the platforms, including Sky, who say that they can live with this in principle but are rather concerned about the fact that there is no parliamentary approval built in. There are a number of flaws; they recommend that the affirmative procedure should be applied to the first regulations; they recommend that the appropriate regulatory authority is specified; and they recommend that the Secretary of State should have a duty, before making the regulations, to consult on-demand service providers and other stakeholders—which, of course, would be the platforms. So I am very much in sympathy in spirit, but I hope that we will have a chance before Report to perfect the amendment so that the campaign of the noble Lord, Lord Borwick, will proceed as intended in due course.
Lord Wigley
My Lords, I am delighted to add my support to the amendment, and to thank the noble Lord very much for the work he has put into this. As one who has campaigned on disability issues over the years in another place, alongside certain other colleagues who are in the Chamber tonight, I know that it is vital, in line with the social definition of disability, to make sure that handicap is not caused by the failure of those who can control our environment, whether that be the social, the physical or the psychological environment.
We are talking about creating a social environment in which it is possible for people who could depend so much on, and enjoy so much, the benefits of broadcasting to get that full benefit—provided that the necessary adjustments are made. I was for some years a member of the S4C authority, and I am acutely aware of the challenges of meeting the necessary standards. It is not a cheap option—but, as the noble Lord rightly said, technological changes are taking place that make it possible for translation, both between languages and with sign languages and other means of conveying information, to be done almost automatically, at low cost. Undoubtedly this will be much more available in the future. I hope that we will look at this amendment with an eye to that future, and that we will harness all the technology that may be available, so as to prevent—as I am sure we all wish to do, where we can—a disability becoming a handicap.
Lord Gordon of Strathblane
My Lords, there is a general air of unanimity and approval for this amendment: I think the noble Lord has backed a winner. Any changes that I have in mind I can discuss with him at some point between now and Report, and I am confident that he would probably agree. Reference has already been made to the difference between the linear services—which are already up to speed and are becoming more and more effective, and cost-effective—and some of the online platforms, which are quite complicated. We might need to insert the word “proportionate” into the amendment, but apart from that, I think that everybody in the Committee endorses what the noble Lord is trying to do.
Lord Grantchester (Lab)
I support Amendment 225, tabled by the noble Lord, Lord Borwick, and thank him for introducing it. We on this side of the House would claim that it has our fingerprints all over it, as it was introduced and spoken to in the other place by our honourable friend Louise Haigh MP. We agree that people with hearing or sight disabilities should be able to watch catch-up or on-demand services in the same way as they can watch standard linear TV, whether on a traditional television or on a computer, tablet or mobile phone.
We agree that broadcasters have not made sufficient progress—with the exception of the BBC, which has 98% accessibility on iPlayer. I understand that 76% of the UK’s 90 on-demand providers still offer no subtitles at all, that 85% of Sky’s on-demand content via its set-top box is inaccessible, and that only 5% of Virgin Tivo on-demand services have subtitles. I understand that on linear TV 16% of content is watched with the subtitle option switched on. The noble Lord, Lord Borwick, may well be correct to say that other broadcasters are moving in the same direction as the BBC.
This service provision is critical for people with sight or hearing disabilities, who can feel isolated and socially excluded from family, friends and society in so many ways, especially with this new way of watching TV. In the other place the equivalent amendment was withdrawn following the Minister’s commitment to take action.
We are content that this amendment would enable the Government to introduce a statutory instrument to give Ofcom the powers to fix the exact level of the quota necessary, balancing the need to make content accessible with the cost to the industry. Following consultation, Ofcom can replicate the mechanisms used for linear TV, which works on a sliding scale that requires large broadcasters to provide access services on a higher percentage of their content than the smaller ones. Furthermore, Ofcom may cap the total cost of meeting those requirements at 1% of a broadcaster’s relevant turnover.
Two issues remain, both of which the noble Lord, Lord Clement-Jones, mentioned. Both were also raised by the Delegated Powers and Regulatory Reform Committee. First, the “appropriate regulatory authority” should be named on the face of the Bill. My understanding is that the 2003 Act has Ofcom as the default regulator unless an alternative is specified, and that Ofcom has the power to designate an alternative regulator. If the Minister can confirm that this is the position, and that the custom and practice of most modern enabling legislation is similar, we would understand that the recommendation of the Delegated Powers Committee might fall away.
Secondly, we would support that committee’s recommendation that the statutory instrument should be enacted through affirmative resolution, and not by the negative procedure. There are significant reasons why that should be so, which are not limited to mere detail and technical content.
The appropriate regulatory authority, Ofcom, will have significant powers to impose substantial financial penalties for any contravention. The regulations will impose important new statutory duties on broadcasters, which may be required to increase their provision over time. Of course, all this will attract significant public interest, and the interest of both Houses of Parliament. I am sure the Minister will also confirm that Ofcom will consult widely, most notably with organisations representing people with sight or hearing difficulties.
We understand that the Minister will be minded to accept the amendment, for which we are grateful to him. Has he had discussions with Ofcom, and can he give an indication of when Ofcom might undertake, and conclude, its consultation process? I would be grateful if he could tell us when he might expect that this provision could be enacted.
Lord Ashton of Hyde
My Lords, I too thank my noble friend Lord Borwick for tabling such a worthy amendment, which the Government are pleased to support. I also pass on the Government’s thanks to the Ewing Foundation and Action on Hearing Loss for bringing this important issue to our attention.
In recent years technology has changed the way we do things. Long gone are the days of a fixed phone line being the only way to make or receive a call, or having to sit in front of the square box in the corner to watch your favourite television show. In 2016 Ofcom reported that 93% of UK adults use a mobile phone; similarly, it is quite normal to watch TV at a time and on a device that suits. However, given the limited provision of subtitles, signing and audio description for on-demand services, a significant proportion of society is unfairly excluded from doing so.
The current statutory targets for subtitling, signing and audio description, collectively known as access services, on domestic linear broadcast TV channels cover 83 channels. That is over 90% of the audience share for broadcast TV. However, these targets are not duplicated for on-demand services. Over the years there has been an increase in the provision of access services—most notably, the number of service providers reporting subtitles increased from seven channels in 2013 to 22 channels in 2015—but there is room for improvement. Similarly, provision levels for audio description and sign language have remained disappointingly low, with little increase over the years.
The amendment will address this shortcoming, and the 116 on-demand service providers in the UK will be required to provide access services on their on-demand content. Through consultation with Ofcom, the industry and other stakeholders, the Government will determine the requirements that providers of on-demand programme services will be required to meet. We need to make sure that the requirement maximises the benefits to consumers while not presenting undue burdens to providers of on-demand services. Consultation will enable us to strike the correct balance. I can tell the noble Lord, Lord Grantchester, that officials are engaged in discussions with Ofcom. The aim is for statutory instruments to be put in place later this year.
In reply to the noble Lord, Lord Clement-Jones, I say that the Government have noted the three recommendations of the DPRRC on my noble friend Lord Borwick’s amendment. If the House agrees the amendment, the Government will consider any further changes that are necessary and will respond to the committee in time for Report. We will get back to the DPRRC on the second one on the appropriate regulatory authority to explain that Part 4A of the Communications Act 2003, into which the proposed new sections will be inserted, is already clear that Ofcom is the regulator unless it has appointed a separate body for that purpose. Accordingly, as it has not appointed any other body, it is the regulator, but the original drafting was simply intended to fit in with the existing structure of the Communications Act, which uses the phrase “appropriate regulatory authority” and defines that separately. This maintains consistency across legislation. We are following the advice of parliamentary counsel on that.
I accept that there are two other points. I expect to be able to respond to the committee in time for Report. We commend the amendment to the Committee.
Lord Wood of Anfield
“Public sector broadcasting prominence
(1) The Communications Act 2003 is amended as follows.(2) In the title of section 232, at end insert “and “electronic programme guide””(3) After subsection 232(5) insert—“(5A) In this section “electronic programme guide” means a service which consists of a— (a) linear electronic programme guide; or(b) qualifying connected electronic programme guide.”(4) In subsection 232(6) for “electronic programme guide” substitute “linear electronic programme guide”.(5) In paragraph 232(6)(b) after “for” insert “finding, selecting or”(6) After subsection 232(6) insert—.“(7) In this section “qualifying connected electronic programme guide” means a “connected electronic programming guide” which is used by a significant number of its intended audiences as a means of receiving television programmes or TV-like content.(8) In this section “connected electronic programming guide” means a service which consists of—(a) the listing or promotion, or both the listing and the promotion, of some or all of the programmes included in any one or more programme services the providers of which are or include persons other than the provider of the guide; and(b) the listing or promotion, or both the listing and the promotion, of—(i) some or all of the programmes included in any one or more on-demand programme services, or(ii) some or all of the on-demand programme services, the providers of which are or include persons other than the provider of the guide; and(c) the facility for finding, selecting or obtaining access, in whole or in part, to the programme service or services and the on-demand programme service or services listed or promoted in the guide.(9) The Secretary of State may by order amend the definition of an electronic programme guide in this section.(10) Before making an order under subsection 9 the Secretary of State must consult OFCOM.”(7) In subsection 310(1) for “from time to time” substitute “on 1 December 2017 and at intervals of no more than three years thereafter”.(8) In subsection 310(2) omit “such degree of” and “as OFCOM consider appropriate”.(9) In paragraph 310(4)(a) after “BBC” insert “, including on-demand programme services,”.(10) After paragraph 310(4)(h) insert—“(i) any on-demand programme service provided by a public service broadcaster.(4A) A service is an on-demand programme service provided by a public service broadcaster for the purposes of paragraph 4(i) if it —(a) is provided by any of the following—(i) a person licensed under Part 1 of the 1990 Act to provide a Channel 3 service;(ii) the Channel 4 Corporation;(iii) a person licensed under Part 1 of the 1990 Act to provide Channel 5;(iv) the Welsh Authority; and(b) provides access to programmes broadcast on a licensed public service channel.”(11) In paragraph 310(5)(a) after first “service” insert “, including on-demand programme services,”.(12) After subsection 310(5) insert—“(5A) In making any order under subsection (5) the Secretary of State must have regard for the desirability of investment in original productions.(5B) In this section “original productions” means programmes commissioned by or for the provider of a service for the purposes of subsection (5) with a view to their first showing on television in the United Kingdom on that service.”(13) After paragraph 310(7)(a) insert—“(b) if the service is a public service channel dedicated to children, persons under the age of 16;”(14) Leave out subsection 310(8) and insert—“(8) In this section “electronic programme guide” means a service which consists of the programme service or services listed or promoted in the guide.”(15) In subsection 311(2) for “310” substitute “232(5A)”.”
Lord Wood of Anfield
Once again, I am pretending to be my noble friend Lord Stevenson. Amendment 226A concerns rules ensuring the prominence of public service broadcasting content on on-demand services.
The Communications Act 2003 provides a code of practice to ensure electronic programme guides give priority and prominence to PSB channels. For traditional viewing these rules, in the main, continue to work pretty well. But the Act was passed 14 years ago, before the age of digital switchover, the iPlayer, the iPad, a range of catch-up services and connected TV. Recent data show that 70% of adults in the UK say they have watched programmes via catch-up services. About 15% of total programme viewing is now, to use the horrible jargon, time shifted—more than double the amount from 2010. Yet, at the moment, on-demand menus and connected TV homepages that are portals for TV guides are not within the scope of prominence rules, so there is a pressing need for the rules around PSB prominence to be updated to keep up with new technology. In addition, new services with significant PSB content, such as the new BBC iPlayer Kids, are also out of scope of these rules.
A good example of PSB programming that suffers from the absence of prominence rules for catch-up and on-demand menus is Welsh and Scottish Gaelic language services. With connected TV services it can take a very long time even to find these programmes. More generally, if you have Sky, as I do, and press the programmes button, you will see the programme guide in the top left corner, but in the bottom half of the screen—more than twice the size—you will see a “top picks” box tempting you to delve in. In my experience, you would struggle to find any PSB content in that box. PSBs continue to try to negotiate prominence for their output, but they are increasingly finding themselves outbid and outthought by commercial broadcasters that pay for promotion of their own services.
Guaranteeing the prominence of PSB in this new age is in the interest of licence fee payers, who after all pay for PSB and are therefore entitled to ensure it is accessible across platforms and viewing habits. It is also popular: 70% of the public continue to want BBC channels at the top of their listings. Ten times as many viewers want the TV guide at the top of their screen, rather than platform operators’ recommendations to be prominent.
Both Ofcom and this House’s Communications Committee recommended updating the prominence rules by extending them to on-demand services and online menus. The TV licencing laws were updated to cover BBC on-demand services. The amendment would do the parallel work for PSB prominence rules. In addition, we have a specific reference to strengthen the rules around prominence on programme guides for PSB children’s content. I know that we will discuss quality TV children’s programming later, but, for example, at the moment CBeebies and CBBC—the most trusted children’s channels, whose content is funded by us all—sit behind 12 US network cartoon channels on the Sky platform.
Surely the Government would agree with Ofcom and this House’s Communications Committee that the rules guaranteeing PSB prominence need to be updated. We should not tolerate a situation in which people are paying for PSB content but, as viewing habits change, it is getting harder and harder to find it. I looking forward to hearing from the Minister whether he agrees that there are gaps in the existing rules and what steps he would recommend to fill them. I beg to move.
Baroness Bonham-Carter of Yarnbury
My Lords, I put my name to this very important amendment. The noble Lord, Lord Wood, has said most of what I was going to say, so I will be brief, but I add that we live in such a rapidly changing world, in which the existence and preservation of public service broadcasting is ever more crucial.
As the noble Lord, Lord Gordon, mentioned, we were at a breakfast yesterday hosted by Channel 4. The topic for discussion was fake news—a frightening phenomenon that threatens to undermine democracy as we know it and to distort people’s understanding of the world. It is still the case that the main source of news, and the most trusted, is TV. Given the rise of fake news, PSB content—impartial, well regulated and fact based—is more important than ever.
Alongside being universally available, what is crucial is that PSBs are easy to find. As the noble Lord, Lord Wood, said, this is increasingly difficult—the number of clicks you need to get to BBC Alba is, I believe, 15 on Sky Q. Then there is the specific matter of children—children’s content lurks below numerous foreign cartoon programmes.
Change is needed. Ofcom and the Lords’ Communications Committee have argued it and these amendments provide it. Will the Minister not agree that the Bill offers the opportunity—dare I say an historic one—to ensure changes that are essential if public service broadcasting is to survive, in a time in our history when its survival is more important than ever?
Lord Low of Dalston (CB)
My Lords, I put my name to this amendment, so I shall speak briefly in support of it. It simply seeks to modernise the prominence regime for our digital age, expanding the existing legislation to cover on-demand services, such as catch- up television, on-demand TV menus and electronic programme guides.
At Second Reading, I shared my own and others’ experience of how frustrating electronic programme guides and user interfaces can be. Navigating them and finding a particular channel can be a particular challenge for people with a sensory impairment. Finding BBC News on electronic programme guides or finding the iPlayer on smart and connected televisions can take a considerable time. Likewise, finding BBC Parliament to allow people to take in your Lordships’ proceedings can be quite difficult—I am assured that people do still attempt to do this.
The Commercial Broadcasters Association has argued that giving public service broadcasting children’s channels extra prominence would create problems for investment in UK children’s content by their members. Moving public service broadcasting channels to higher electronic programme guide positions would mean displacing commercial broadcasting channels, with a detrimental impact on audience share and revenues. This, they say, would ultimately damage investment in children’s content. However, I am advised that greater prominence for public service broadcasters’ channels has a cross-promotional value which ultimately redounds also to the benefit of commercial channels. As I see it, there is no real threat to commercial broadcasters from this amendment.
This is a straightforward amendment which simply seeks to update the letter of the legislation for an increasingly digital age and bring it in line with the spirit in which it was originally conceived. I trust that the Government will see their way to accepting it.
Lord Wigley
My Lords, I am delighted to follow the noble Lord, Lord Low, and to support Amendment 226A, relating to public sector broadcasting prominence, about which I spoke during the Second Reading debate. This Bill presents an excellent opportunity to update prominence rules so that they work as they should in our digital world. Given the amenable response from the Minister on earlier amendments, I hope there will be an equally forthcoming response on this one.
The current legislation, from 2003, places a requirement for PSBs to have appropriate prominence to ensure that the flagship PSB channels, such as BBC1 and BBC2, are prominent on electronic programming guides. However, as I raised at Second Reading, the BBC’s children’s channels, referred to earlier, do not enjoy this prominence and sit below 12 commercial children’s channels on some electronic programming guides. As a former member of the S4C Authority, I know from experience that this is a particular issue for both S4C and BBC Alba. S4C is a vital service for hundreds of thousands of people in Wales who speak Welsh and who want to be able to watch programmes in their own language. This content must be easily available on electronic programming guides and—as I will touch on in a moment—on demand. I believe, quite simply, that PSB content must be prominent, whether it is “Y Gwyll”—an excellent Welsh detective drama series known outside Wales as “Hinterland”, which has been sold to almost 200 countries and shows what it is possible to achieve—or great children’s dramas such as “Wizards vs Aliens”, filmed at Roath Lock in Cardiff.
Perhaps a more recent issue, but nevertheless one which must also be tackled, is the need to modernise prominence rules to ensure that they cover on-demand services, such as catch-up TV and connected TV on-demand menus. As I raised at Second Reading, young people in particular are increasingly watching public service content this way and spending less time watching linear TV. At the same time, finding the iPlayer on connected and smart TVs is getting to be a longer and more arduous process, making it harder to watch programmes—including S4C. I am told that there are more than 100,000 requests for S4C programmes on iPlayer every week, showing just how popular this content is.
Both S4C and MG Alba have stated their support for extending prominence to cover on-demand and catch-up TV. They have issued a statement which I should like to quote:
“The extension of the PSB prominence principle to include the PSBs’ on-demand players is of great and growing importance. Its significance is not only for the future of public service media content and how it is consumed by the public, but it is also particularly vital for the availability of Welsh language content as S4C is the only Welsh language PSB available—serving Welsh speakers throughout the UK”.
It also has a considerable following in parts of the UK outside Wales.
Although this is certainly an incredibly technical area of legislation, I see it as another simple problem with a straightforward solution. Had smart TVs and the iPlayer been common when the original legislation was devised, I have no doubt that they would have been included at that stage. We now have an opportunity to do something about this and I hope that the Government will take it.
Viscount Colville of Culross
My Lords, I support Amendment 226A. This is an important attempt to future-proof the prominence of PSB channels on electronic programming guides, which is essential if we are going to bring younger audiences to PSB output. As Sharon White, the chief executive of Ofcom, said:
“Public service broadcasting continues to deliver TV that is enjoyed and valued by millions of viewers across the UK.
More people are watching online or on demand, and this presents challenges as well as opportunities for public service broadcasters. They must continue to find new ways of connecting with audiences, and the PSB system needs to evolve to ensure it remains effective in the digital age”.
The prominence of PSB online services has to be safeguarded in the face of what I see as a determined effort by commercial rivals and some manufacturers to downgrade them. These services need to be easily accessible to viewers and, as many other noble Lords have said, they are not covered by the Communications Act.
I draw your Lordships’ attention to two services provided by the BBC online which show how important it is that they should have prominence on any EPG in the future. BBC iPlayer has been an astonishing success, especially for younger viewers and listeners. In June 2016, there were 290 million requests for radio and television programmes to be downloaded—a 9% increase from the previous year. I know, from when I worked on “Horizon”, the BBC science strand, that the overnight ratings would almost double in the following months from people downloading the programme on iPlayer. At the moment, in some cases, it is hard to find this service on the EPGs.
We also have no idea what other on-demand channels will be launched in future by the PSBs. An example of what these might include is the service that is being mooted by the BBC, which it hopes to be able to launch in 18 months’ time, called BBC Ideas. It will bring together the BBC’s output across all platforms—radio, television and online—in arts, culture, science and history. It will place them alongside interesting new ideas from partners in leading arts, science and cultural institutions. The hope is that the audience will have their minds stretched and even thrilled by the interchange of ideas in a place where art meets medical science or where history meets theatrical performance. As things stand, there are many smart TVs and set-top boxes which will not give prominence to services such as these. In some cases, this is because the platform providers are also the content providers. I am sure that in the fast-growing area of smart televisions there will be relationships between television manufacturers and content providers which will favour the latter.
If public money is being spent on PSB online content provision, we have a duty to ensure that, in future, viewers should be able to access this content easily. I urge the Minister to accept this amendment.
Baroness Benjamin (LD)
My Lords, I support this amendment. I too am concerned that it is becoming more and more difficult to find BBC programmes on new, connected televisions, particularly, as we have heard, programmes for children. On one new platform, it takes 22 clicks on the remote to get to the home screen of CBBC. Parents know that BBC content for children is both high quality and educational but, worryingly, it is not easy to find on many platforms and televisions, especially for new parents. I agree with other noble Lords that the legislation is out of date. On one platform, CBBC and CBeebies, broadcasting UK-produced content, are buried beneath 14 commercial children’s channels in the guide. Many of these show American content. I hope that the Minister will commit to updating the legislation to ensure that children’s BBC content is prominent on all platforms.
Lord Hain (Lab)
My Lords, I appeal for some leeway from the Committee in that I am popping in to support this amendment and then leaving your Lordships to it. I support the spirit of the prominence regime and the amendment in particular, which I hope the Government will accept.
As we have heard, the prominence regime was originally intended to ensure that the high-quality programming of our public service broadcasters was easily accessible to everyone, especially in the case of the BBC, which of course is funded by the licence fee paid by the vast majority of households. Unfortunately, the legislation as it stands is more suited to an analogue age than the digital world in which we now live. Understandably, when the original television legislation was enacted in 2003 we did not imagine how our viewing habits would change over the following decade or how quickly the legislation would fall behind technological progress. Smart and connected televisions, with their instant access to on-demand content, were only a dream in 2003, while the iPlayer would not be launched for another four years.
I am concerned by how increasingly difficult it is, as has been said, to find some content on smart and connected television menus. The iPlayer in particular is watched by millions of people who pay their licence fee and it should be much more easily accessible. As we heard from my noble friend Lord Wigley, S4C produces some outstanding Welsh dramas, watched by people right across Wales, where I still live in the constituency that I once represented. Many viewers watch those Welsh programmes on the iPlayer. I am worried that, as smart and connected television menus increasingly promote their own and other commercial content, people are struggling to access the iPlayer and, therefore, these excellent Welsh programmes, which I find it very difficult to believe will be replicated by any other broadcaster or company. “Hinterland”, which my noble friend mentioned, among others, should be on network BBC. It really is an excellent and gripping drama, equivalent to “Silent Witness” or any of the other excellent network programmes. So I make that appeal to the BBC, if I may.
Even electronic programme guides are becoming harder to find and much harder to navigate. I believe that on one new connected television, getting to S4C takes 10 clicks on the remote control, while finding the BBC’s children’s channels, as the noble Baroness, Lady Benjamin, said, takes more than 20 clicks, forcing parents—and in my case, grandparents—to scroll through roughly a dozen commercial channels; most of them are rubbish, by the way. It is a problem for me to find CBeebies or CBBC when my six grandchildren are over. This surely does not fit within the spirit of the original legislation. Amendment 226A is simply technical in nature. It updates existing legislation for the digital world in which we now live, and I hope the Government will support it.
Lord Puttnam
My Lords, I support the amendment but come at it from a slightly different angle. The noble Baroness, Lady Buscombe, will remember that she and I discussed ad nauseam the issues of the EPG and we were very much on the same side. There is blame on both sides here. We failed at the time to persuade the then Government that common sense should make an organised EPG easy to use and that the public service broadcasters should be high on it. Today, if you go across the top bar, find sport and click on it, you will not find any sport on the BBC. You have to go back to the “all channels” menu. It is an absurdity.
We are here to discuss what will become the Digital Economy Act 2017. The notion that in 2017 we are not able to have a personalised programme guide in the same way as we would have on our iPhones, is daft. I am afraid that the blames lies with the then Government, who were persuaded by Sky that it had invested significantly in the EPG and had the right to amortise its investment. Honeyed words were given from the Front Bench that of course this would be reviewed quite quickly. It never has been reviewed and the absurdity of this so-called amortised investment has gone on now for 14 years. I suggest, and hope the Minister will sympathise, that this is the time to get real with this. It is 2017. An EPG should be able to be personalised very easily by the individual consumer and that is the way it should work.
Lord Foster of Bath
My Lords, clearly there is a lot of agreement about your Lordships’ Communications Committee’s recommendation that we have a new, up-to-date, fit-for-purpose EPG regime, which may also take on board the suggestions of the noble Lord, Lord Puttnam. We desperately need it.
Many examples have already been given: the difficulty of finding CBeebies and CBBC under a large number of cartoons; the difficulty of finding the iPlayer or the ITV Player on the first page of an on-demand screen on a smart TV; the difficulty of finding indigenous language channels such as S4C or BBC Alba; and even not being able to find the EPG itself on a smart TV.
There is very clear evidence that EPG positioning really matters. I will give just one example to illustrate it. If you look at the percentage of viewership of CBeebies on Virgin, where it is high up on the EPG, the share is much higher than the viewership of exactly the same programmes on Sky, where it is much lower on the EPG.
However, the real reason for my intervention is simply, as the Minister is about to respond to the debate, to draw his attention to what one of his right honourable friends—the former Secretary of State for Culture, Media and Sport—said just in 2011:
“Position on the EPG will probably be the Government’s single most important lever in protecting our tradition of public service broadcasting”.—[Official Report, Commons, 8/9/11; col. 543.]
When the Minister responds, I hope he will bear in mind what his right honourable friend said.
Lord Ashton of Hyde
My Lords, I thank all noble Lords who contributed to the debate. I have to warn the noble Lord, Lord Wigley, that despite his very kind remarks I may not be so amenable. My speech may contain some upsetting content—we broadcasters have to issue warnings.
Amendment 226A would extend the prominence provisions that currently exist for linear channels to on-demand electronic programme services, which are the lists of on-demand services available for selection on television interfaces. This issue was debated at length in the other place, although I note that this amendment goes further in integrating new provisions into the existing statutory framework for both EPGs and the PSB prominence regime. But I believe that the key issue remains as it was.
The Minister reassured Members in the other place then—and I reassure the Committee today—that the Government gave this issue considerable thought during last year’s balance of payments consultation, the response to which was published in August last year. Our conclusion was—and we remain of the view—that we have not seen compelling evidence of harm to PSBs to date. Creating a new regulatory regime that defines the user interfaces or submenus that should be caught, particularly in a fast-moving technological landscape, is likely to be complex. At the time of consultation, Ministers were not convinced of the benefit of regulation that might extend to, for instance, smart TV manufacturers’ user interfaces, which are developed with a global market in mind. We therefore decided not to extend the EPG prominence regime for PSBs to on-demand.
When PSBs make excellent content, generally audiences will find that content. This is true of both catch-up and live content. For example, the BBC’s award-winning children’s services are much viewed by children throughout the UK. We do not believe that further protections are necessary to ensure that children find these services. A recurring theme in the debates on the Bill has been how much more competent children are than many adults in the digital world.
Furthermore, acting in this area is extremely complicated and the fact that the amendment spans more than a page demonstrates some of the difficulties inherent in legislating in this area. The technological landscape is shifting quickly and, with it, the business models of those who seek to cater to changing audience tastes. Detailed regulations about how exactly audiences need to be guided through menus cannot be the answer here. Regulations would be outdated as soon as they came into force.
Moreover, this amendment would give prominence to the PSBs’ on-demand programme services, which include not only the PSB content of the commercial PSBs, but also content originating from their non- PSB channels. If the intention was to put on-demand EPG prominence on the same footing as linear EPG prominence, this amendment goes far beyond what we have in place for linear TV. It is therefore, in our view, not justifiable.
With that explanation—and I appreciate that the noble Lord may not be happy—I hope that tonight he will withdraw his amendment.
Lord Puttnam
I am looking at the general duties of Ofcom and I am failing to understand in whose interests the Government are taking this position. It is very clear to me that the general duties of Ofcom are to further the interests of citizens and to further the interests of consumers. They do not include furthering the interests of manufacturers. Is the Minister saying that in fact the interests of manufacturers and suppliers are trumping the interests of the consumer and the citizen?
Lord Ashton of Hyde
No, what I am saying is that we do not see that there is compelling evidence of harm to PSBs.
Lord Wood of Anfield
My Lords, we have had various contributions across the House of excellent quality. We have the noble Lord, Lord Low, and the noble Baroness, Lady Benjamin, talking about children’s content; the noble Lord, Lord Wigley, and my noble friend Lord Hain talking about Welsh language provision; various comments about innovation and the future from the noble Viscount, Lord Colville, and the noble Baroness, Lady Bonham-Carter, and my noble friend Lord Puttnam.
For the sake of brevity, I will respond to the Minister directly. I am slightly confused by the logic of the Minister’s response. Either electronic programming guides work in pointing people towards PSB—and the general view is that they are absolutely crucial for audience share in traditional TV—or they do not. I find it difficult to know why the logic that has traditionally held for intervention to ensure that PSB content paid for by the public has pointers towards it should no longer apply in an age when viewing habits are changing. I totally accept that it is more complicated, but I do not understand why we should throw our hands up and say, “People will find good content”, when up to now, with linear TV, we have taken great strides to ensure that people are pointed towards the content that is funded by licence fee payers. I find that discrepancy between the two worlds quite baffling.
Secondly, it is not a new set of regulations that noble Lords are asking for; it is updating the existing set of regulations—which has pretty much worked okay, with the exception of children’s TV and a few other areas—into a new age. That will require some imagination and collaboration and thinking, but it is not ripping up everything and starting again that it is being asked for. So I am disappointed that the Minister has closed the door on thinking this through further. I will definitely think more about what to do and where to take this, but for the moment I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“Internet filtersInternet filters
(1) A provider of an internet access service to an end-user may prevent or restrict access on the service to information, content, applications or services, for child protection or other purposes, if the action is in accordance with the terms on which the end-user uses the service.(2) This section does not affect whether a provider of an internet access service may prevent or restrict access to anything on the service in other circumstances.(3) In this section—“end-user” means an end-user of a public electronic communications service, within the meaning given by section 151(1) of the Communications Act 2003;“internet access service” has the meaning given by Article 2(2) of Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25th November 2015 laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union.”
Lord Ashton of Hyde
My Lords, my right honourable friend the Minister of State for Digital and Culture announced on Report in the other place that we would bring forward this amendment on internet filters. As noble Lords are aware, EU regulation 2015/2120 on open internet access, or net neutrality, has created some uncertainty as to whether family-friendly filters currently offered by internet service providers and mobile network operators are compliant. The Government are clear that such filters are indeed compliant with EU regulation. However, for the avoidance of doubt, this amendment provides reassurance for UK ISPs and mobile network operators on this matter.
The amendment clarifies that internet service providers may restrict access to information, content, applications or services where that is in accordance with the terms of service agreed by the end user. The approach that the main providers of internet access services have taken towards filtering has been a huge success. The effect of this amendment is to support the current agreements and practice between users and their providers in respect of filtered services, whether at home, on mobile or on public wi-fi.
This amendment will underpin our commitment to keeping children safe online, by providing reassurance to providers that their filters are compliant with the EU regulation. Our objective is to support the current excellent voluntary system for family filters, and to ensure that it can continue in the most effective way to protect minors online. This amendment achieves that aim and I beg to move.
Baroness Benjamin
My Lords, this amendment is of crucial importance because, unlike the age verification provisions that we have considered in Part 3, which provide protection for children only from 18-rated pornographic material, the filtering provisions engaged by this amendment help to protect adult content in the round, including gambling, violence, self-harm and so on.
We should be in no doubt about the importance of adult content filters. However, I have a question for the Minister. This amendment effectively says to an ISP that if it wants to provide adult content filters it can do so legally in the UK. This is helpful for the 88% of the market that is covered by the agreement between the big four ISPs to provide unavoidable choice or default-on adult content options. So what is the Government's policy in relation to the remaining 12%? If it is really important that the big four provide unavoidable choice or default-on adult content options during the set-up, why is it not equally important that the smaller ISPs do the same?
I am not interested in whether or not it is strictly necessary under EU law. I am simply concerned that we should have the best protections in place for all children—those whose parents use one of the four largest ISPs and those whose parents do not.
Baroness Jones of Whitchurch (Lab)
My Lords, I support these two amendments. As the noble Lord knows, they have been the subject of considerable discussion and debate in the past. We all share the objective of allowing family-friendly filters to remain on internet services and mobile networks in the UK. As the noble Lord set out, the arrangements we currently have in the UK were brought into question by the EU net neutrality rules introduced last year, which appeared to ban individual countries from restricting access in this way. Since then, there have been a number of different interpretations of how the EU rules would affect the UK—perhaps complicated by the fact the Ministers themselves were not able to clarify the situation with their usual adeptness. Indeed, it still appears that the EU open access regulations and our commitment to family friendly filters are in some ways in contradiction.
The Minister will know that many of the internet companies have taken the view that the less said about this issue the better. Their argument is that if attention is not drawn to the contradiction, they can carry on with the previous practice—under the wire, so to speak. Of course, for a lot of reasons this is not a very attractive proposition, and we accept that it would make the status of family-friendly filters more vulnerable as time went on.
So, instead we have the amendments tabled by the Minister today. When I asked at a previous meeting with the Minister whether the amendments had been checked out legally, I was assured that this was the case. We have not seen that legal advice and therefore have to take it on trust that what is before us today is legally watertight and does not contravene EU rules.
To some extent we are taking all of this on trust. While it would be easy to demand more evidence, I accept that it would not help the case of those committed to family-friendly filters—I suspect that the more we probe, the more the robustness of the proposals before us could unravel. We support the intent behind these amendments and it is certainly not our intention to bring them into question in any way. I hope that they achieve the outcome to which we are all committed. I hope therefore that noble Lords will support the amendment.
Lord Clement-Jones
My Lords, both my noble friend Lady Benjamin and the noble Baroness, Lady Jones, are far more authoritative on this subject than I could possibly be. I just want to add our support from the Front Bench for these two amendments. The noble Baroness made an important point, which is that we very much hope that the amendments are effective in clarifying the situation. There is no absolute guarantee of that but they have a fair wind because of the nature of the voluntary system of family-friendly filters that they underpin. I very much hope we do not do too much “probing”—I think that is the word that the noble Baroness used—as we are just happy that we can continue with the same system as we had before. I also think my noble friend Lady Benjamin asked an important question regarding where the gaps are in terms of the smaller players.
Lord Ashton of Hyde
My Lords, I am grateful for the support from all noble Lords on this. I assure the noble Lord, Lord Clement-Jones, that I feel well and truly probed after this Committee stage.
We have a voluntary system that is going well, but I accept that the noble Baroness, Lady Benjamin, has a point in asking about the remaining amounts that are not covered. We might query the numbers that she is talking about. My information is that the latest figures from Ofcom and the industry indicate that around 95% of the UK fixed broadband market offers free network-level or device-level parental filters to their customers. The numbers are important but the principle is there—what are we doing about the providers that are not covered?
The remaining 5% are generally small internet service providers offering business-to-business or niche specialist services to more tech-savvy customers. Some small ISPs have a business model based very transparently on not filtering, for open-rights reasons. However, many of them already provide guidance to customers where appropriate on free device-based or network-level filter tools. Still, we recognise the concern to do everything we can to protect children online, and I am happy to say that after discussions with my officials last week or the week before, the Internet Services Providers’ Association has agreed to take further action to encourage its smaller members to consider online safety and filters. It is updating its code of practice and new member sign-up process to ensure that members consider offering filters to their customers, and issuing a guidance note to members on filters, signposting them to further help and support. So we have addressed that point. It is still on a voluntary basis so far, and we will continue to monitor how that is going.
Baroness Buscombe
“Communication devices used for drug dealingPrevention or restriction of use of communication devices for drug dealing
After section 80 of the Serious Crime Act 2015 insert—
“80A Prevention or restriction of use of communication devices for drug dealing(1) Regulations may make provision conferring power on a court to make a drug dealing telecommunications restriction order.(2) “Drug dealing telecommunications restriction order” means an order requiring a communications provider to take whatever action the order specifies for the purpose of preventing or restricting the use of communication devices in connection with drug dealing offences.(3) Without limiting the action that may be specified, it includes—(a) action that relates to a specified device;(b) action that relates to a specified phone number or something else that may be used with a device.(4) In this section “drug dealing offence” means an offence under section 4(3) of the Misuse of Drugs Act 1971 or section 5 of the Psychoactive Substances Act 2016; and a communication device is used in connection with a drug dealing offence if it is used by a person (“the user”) in the course of—(a) the user committing a drug dealing offence,(b) the user facilitating the commission by the user or another person of a drug dealing offence, or(c) conduct of the user that is likely to facilitate the commission by the user or another person of a drug dealing offence (whether or not an offence is committed).(5) Regulations under this section must provide for drug dealing telecommunications restriction orders to be made only on the application of—(a) the Director General or Deputy Director General of the National Crime Agency, or(b) a police officer of the rank of superintendent or above.(6) Regulations under this section must—(a) specify the matters about which the court must be satisfied if it is to make an order;(b) make provision about the duration of orders (which may include provision for orders of indefinite duration);(c) make provision about the giving (by a communications provider or any other person) of notice of the making of an order; (d) make provision about variation (including extension) and discharge of orders;(e) make provision about appeals.(7) Regulations under this section must provide—(a) for applications for drug dealing telecommunications restriction orders to be made and heard without notice of the application or hearing having been given to persons affected (or their legal representatives), subject to subsection (9)(a);(b) for applications to be heard and determined in the absence of persons affected (and their legal representatives), subject to subsection (9)(b);(c) for applications to be heard and determined in private.(8) Regulations under this section must provide for a court hearing an application or an appeal to have power to restrict disclosure of information submitted in connection with the application or appeal if satisfied that it is necessary to do so in the public interest.(9) Regulations under this section may—(a) make provision for a communications provider affected by an application to be given notice of the application or hearing;(b) make provision for a communications provider affected by an application to be present or represented at the hearing and determination of the application;(c) in connection with any provision under paragraph (b), make provision for a communications provider to have a right to make representations;(d) make provision for a drug dealing telecommunications restriction order to specify that a requirement of the order is not to apply in particular circumstances;(e) make provision authorising a court to include in an order a requirement for the person applying for the order to pay any or all of the costs of complying with it;(f) make provision about time limits for complying with orders;(g) make provision about enforcement of orders (which may include provision creating offences);(h) make provision about costs (or, in Scotland, expenses) in respect of legal proceedings;(i) make provision about compensation;(j) make different provision for different purposes or areas;(k) make incidental, consequential, supplementary or transitional provision, including provision applying any enactment (with or without modifications).(10) The power to make regulations under this section is exercisable by statutory instrument made by the Secretary of State.(11) A statutory instrument containing regulations under this section is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(12) In this section—“communication device” means an item specified in section 1(3) of the Prisons (Interference with Wireless Telegraphy) Act 2012 (mobile telephones etc);“communications provider” means a person providing a telecommunications service;“court” means—(a) in relation to England and Wales, the county court;(b) in relation to Scotland, the sheriff;(c) in relation to Northern Ireland, a county court;“enactment” includes— (a) an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;(c) Northern Ireland legislation;“telecommunications service” has the meaning given by section 261 of the Investigatory Powers Act 2016.””
Baroness Buscombe
My Lords, Amendment 228 introduces a new clause with a regulation-making power that will enable the police and the National Crime Agency to apply to the courts for an order compelling communication providers to take whatever action the order specifies to prevent communication devices being used in connection with drug-dealing offences. Such action may include blocking mobile phone handsets and SIM cards and preventing particular phone numbers from porting between networks, as well as preventing access to wi-fi networks. This is an enabling provision that provides for the Secretary of State to set out in regulations details of how applications are to be made and dealt with in the courts. The amendment broadly mirrors Section 80 of the Serious Crime Act 2015, which provides for a similar power to prevent the use of mobile phones in prison.
The amendment responds to an operational requirement of the police, who require support in tackling the issue of county lines—the police term used to describe gangs in large urban areas who supply drugs, especially class A drugs, to suburban areas and market and coastal towns. To support their market expansion, gangs recruit and exploit children and vulnerable adults through deception, intimidation, violence, debt bondage and/or grooming. They are used to carry drugs and money.
County lines gangs’ criminality relies on the unrelenting recruitment, coercion and systematic exploitation of the most vulnerable including looked-after children, young people reported as missing and children from broken homes. Vulnerable adults are also exploited and can lose control of their home to gangs who use it as a base to distribute drugs, in a practice known as cuckooing.
The phone line is central to this model and to the gangs’ ability to deal drugs out of area in this way. When establishing a new county lines market, gangs will promote a number locally as the number to call to buy drugs. That “deal line” is therefore at the very core of this criminal model. Dealing drugs is a serious criminal offence and the police are committed to securing prosecutions wherever possible. However, as the deal line is held well away from local street-level drug-dealing activity and it will be an anonymous pay-as-you-go line, both those factors make it hard for the police to achieve prosecutions against an individual for the activity on that line.
Each deal line has the potential to interact with hundreds of customers and facilitate thousands of deals 24 hours a day. Disrupting these lines will have a significant impact in disrupting the gang-related drug supply and associated exploitation. There is currently no legal power in place to compel communication providers to disconnect phones used in county lines drug-dealing activity. We must ensure that the police have the powers they need to tackle this issue.
This legislation is part of a wider ongoing multiagency response, including safeguarding partners, to tackle county lines gangs, but this new order is a critical tool that will render this operating model ineffective and unattractive through the disruption of it. Amendments 236 and 241 are consequential. I beg to move.
Lord Clement-Jones
My Lords, we are broadly supportive of the amendment. We want to put on record that we have our doubts about the efficacy of the provisions, but obviously if they work then we will be thoroughly delighted. We are slightly doubtful about whether these measures will ultimately be effective, though, and I am sorry that my noble friend Lord Paddick is not here to add his experience to the debate.
Digital Economy Bill
Wednesday 8th February 2017
(7 years, 9 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
Baroness Benjamin
“Original programmes for children and young people
After section 289 of the Communications Act 2003 (regional matters in the public teletext service) insert— “289A Original programmes for children and young people(1) The regulatory regime for every licensed public service channel must include the conditions that OFCOM consider appropriate for securing—(a) that the programmes included in the channel include high quality original programmes for children and young people;(b) that the programmes for children and young people included in the service are of a suitable range;(c) that the programmes for children and young people so included are broadcast for viewing at appropriate times.(2) The regulatory regime must also include conditions that OFCOM consider appropriate for securing that, in each year—(a) the time allocated to the broadcasting of programmes for children included in the service, and(b) the time allocated to the broadcasting of programmes for young people so included,constitute no less than what appears to OFCOM to be an appropriate proportion of the time allocated to the broadcasting of all the programmes included in the channel.(3) Before determining for the purposes of this section the proportionate time to be allocated to the broadcasting of programmes for children and young people, OFCOM must consult the provider of the channel, or, as the case may be, the person who is proposing to provide it.(4) The requirement to consult is satisfied, in the case of the imposition of a condition by way of a variation of a license, by compliance with section 3(4)(b) of the Broadcasting Act 1990 (licences under Part I).””
Baroness Benjamin (LD)
My Lords, I will speak to my Amendment 229, which aims to move children’s content on public service broadcasting from tier 3 back to tier 2. The amendment is also in the names of my noble friend Lady Bonham-Carter and the noble Baroness, Lady Jones. I declare an interest as per the register.
My amendment seeks to underline the fact that we are at a pivotal point in the future of the children’s production industry and quality UK-produced content for our children. This is without doubt the best opportunity in a generation to make a legislative change that could revive and strengthen a successful industry that not only nurtures our nation’s youngsters but projects Britain around the world.
Yes, we have over 30 dedicated children’s channels, but the majority do not show UK-produced programmes. They usually show acquired animated cartoons, made abroad. This means that our UK children’s production industry is in decline. Thank goodness for the BBC, with its successful CBeebies and CBBC channels. However, we cannot expect the BBC to bear the burden of producing the majority of British-made children’s programming. Some might point out that there has been a slight increase in the investment from commercial broadcasters for children’s productions, but it is just a drop in the ocean considering the large profits they have made over the past year.
To be clear, this amendment is not relevant to all commercial broadcasters, such as Disney, Nickelodeon or Cartoon Network. It is relevant only to public service broadcasters, especially commercial broadcasters, which each have been allocated PSB status and the benefits that go with that. Therefore, public service broadcasters should be producing content for everyone, and that includes children.
The amendment I have introduced has cross-party support and is timely. It aims to do two things: first, to give Ofcom the ability to require public service broadcasters to commission more original British-made Nickelodeon children’s content in the future; and, secondly, to give flexibility to the commercial PSBs, in consultation with Ofcom, around the level of their future investment in children’s content. This is a common- sense approach that could easily be embraced.
As I have said many times in this House, PSB investment, in particular from commercial PSBs, has reduced drastically over the past 10 years—by an overwhelming 93% since 2003. This decline started when the Communications Act 2003 reversed the Ofcom requirement for PSBs to commission a certain level of children’s content, by moving it from tier 2 to tier 3. Recent tax reliefs for animation and children’s live action content have provided a welcome boost for the sector, but they have not brought the commercial PSBs back to the table, which was expected. The Government’s pilot contestable fund over the next three years will work only if PSBs are required to commission more content.
The Save Kids’ Content UK campaign, supported by the whole industry and PACT, is very clear that requiring PSBs to commission a certain level of content is the only way to secure the future of this sector and Great British content in the future. All other options proposed are merely a short-term fix. Ofcom has repeatedly reported that it does not have the legislative tools to change the current situation. It pointed out during its last PSB review that there is a substantive risk that PSB requirements in this area will not be met in the future for our children. This is so distressing that it breaks my heart.
I understand that we have to be realistic and not demand that the commercial PSBs commission or compete with what the BBC is already doing. We know that children are viewing content in all sorts of ways, but the important word here is “content”. No matter how children view content, it must be relevant and reflect their culture and surroundings. Having said that, a recent Ofcom review showed that television viewing was still by far the most popular way of watching content.
It is also important to remember that, although investment in original British programming for children is in serious decline, television still remains a huge influence on young people today. According to research by the London School of Economics, 96% of children aged five to 15 use a TV set to watch television and 87% of viewing among 14 to 15 year-olds is on broadcast television. So it is absolutely vital that children have access to UK-made content that is not only entertaining and informative but also that our children can identify with.
As I said before, my amendment is a common-sense approach to the problem. The key element is that broadcasters will be consulted on the level of investment appropriate to each channel. It is definitely not a quota system, nor does it only apply to commercial PSBs; it also applies to the BBC, which already has good levels of investment, but the amendment would ensure that this investment is maintained into the future.
ITV has made recent investments, but what happens if it gets taken over? There is no legislation in place to ensure that new owners should provide any adequate children’s productions at all. Channel 4 has specific obligations for older children. Because of successful lobbying, it has recently committed to invest in children’s. Their production of “We’re Going on a Bear Hunt” was one of the most watched programmes over Christmas, which shows that there is an appetite for that type of content which, I am sure, will be sold worldwide. Channel 5 has “milkshake!”, an established, successful strand for pre-school, but it spends very little on new, original UK content. Most of its programmes are acquired.
All of the commercial PSBs do a bit, but there are areas where children’s provision is lacking, and they all need to do more to serve our children’s cultural appetites. The latest figures from Ofcom show that UK children’s programming decreased yet again in both spend and output in 2015. Spend on first-run UK-originated children’s programming stood at £77 million in 2015, a year-on-year decrease of 13% in real terms. This cannot go on indefinitely.
We understand that PSBs may well have concerns about the imposition of requirements or how the amendment is able to accommodate the changing viewing habits in this digital world. This is why the flexibility that has been built into this amendment is crucial. The amendment strikes a balance between giving Ofcom the muscle to require children’s content from PSBs, which it does not have at the moment, and allowing the level of investment to be determined through consultation between Ofcom and each broadcaster, and coming to a reasonable agreement. The amendment will require a variation of each broadcaster’s licence.
There is also flexibility around the genres that Ofcom could choose to include in any requirements. The amendment refers to a “suitable range” of content. This can be tailored appropriately to each channel and would take into account content broadcast on a main channel, on a subsidiary channel or online. Surely this should allay any fears or doubts. This amendment has deliberately built in the flexibility to allow broadcasters to use digital and interactive content across all platforms. It is not intended to dictate how, where or what children should watch. It is about ensuring that there is a range of quality British content available on all platforms.
Some may say, “How do we know Ofcom will decide what is reasonable?”. I was on the advisory board of Ofcom for three years, and I know from experience that Ofcom has always erred on the side of caution when it comes to avoiding anything that would damage the industry. Over the last 14 years of its history, its reputation has been exemplary.
As I mentioned earlier, the Government have announced the introduction of a contestable fund, and children’s programming will be in line to receive some of the funding. At the moment the fund is time-limited to three years. I strongly believe that my amendment could ensure that that money is used in the most productive and constructive way. The fund could be used to develop programme ideas for children which the PSBs could then commission, having had all the development work funded.
The UK children’s production sector has always had a strong international presence, which adds to the UK’s economy, and it is proud of that. At the moment, however, our UK children’s production sector is facing many challenges because the market for producing children’s UK original content is shrinking rapidly, while the demand for quality children’s programmes remain vigorous. There are many opportunities for global partnerships through co-productions, so we desperately need commissions for those partnerships to work. It would be short-sighted to cut the cord of a continuing British success story, but more importantly we need UK creative original content to be produced to influence our children’s imagination and thinking as well as their emotional, mental and inspirational well-being. We owe it to them and must not let them down, so we must use this opportunity to provide the means to fulfil their needs.
This is why my amendment is asking the Government to take another look at the issues and change legislation to secure the long-term future and sustainability of the UK children’s content production sector. I firmly believe that only a change to primary legislation will give Ofcom the necessary tools to require commercial PSBs to provide British-made children’s programming and give PSBs the opportunity to show their commitment to the nation’s children by saving UK kids production content. We must not let this great opportunity fall by the wayside. The future of Great British content for our children that will last long into the future is now in the hands of the Government. I beg to move.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I support my noble friend Lady Benjamin. It is clearly of paramount importance that our children have access to British-made television content. As I mentioned before when talking about the electronic programme guide—and I am afraid the Minister will have to appreciate that the issue is not going away—easy access is important. As my noble friend said, children need to see programmes that reflect their lives and our diverse, vibrant nation. It is my experience that children do actually watch television, certainly the ones I know. That is one reason why they love their step-grandmother, because she encourages it. Importantly, as my noble friend mentioned, flexibility is built into this amendment. It includes consultation with Ofcom about how it should be implemented in practice and around genres. It is important that this sector is not just left for the BBC to carry.
The Minister recently responded to a Liberal Democrat debate on the importance of the creative industries. That is another reason why the children’s independent television sector should be encouraged. We have only to look at the Harry Potter films to see what the children’s market can contribute to our economy and to Britain’s soft power. Let us support this sector and unlock its great potential and, in particular, not break my noble friend’s heart.
Lord Watson of Invergowrie (Lab)
My Lords, I support Amendment 229 in the name of the noble Baroness, Lady Benjamin, who I congratulate on formulating the amendment and for moving it so comprehensively with her usual chutzpah. I declare an interest on two levels, first as the Opposition Front-Bench spokesman on children and families, although I am clearly not speaking in that role today; and secondly, I have a more direct interest as the parent of a five year-old.
It is a source of both regret and concern that there is a dearth of UK original content in children’s television. Less than 1% of television hours available for UK children are original, first-run British programming. I very much doubt that the average parent would appreciate that, and I suspect that they would be both surprised and disappointed when told. I know that I certainly was. While Ofcom requires public service broadcasters to offer a minimum number of hours of original productions—70% for CBBC, 80% for CBeebies—they can include, and invariably for the most part consist of, repeats and spin-offs. Evidence presented last week on Welsh broadcasting to the Welsh Affairs Committee in another place suggested that the effects were particularly felt by regional public service broadcasters, where the number of repeats broadcast has increased exponentially since the Communications Act 2003. The example was given of the Welsh language channel S4C, where the share of broadcasts comprising repeats has risen to 57%. That decrease in original content threatens seriously to impoverish UK children’s cultural exposure, in particular to local and regional identities and experiences to which they can relate.
Reduced funding has been both a cause and an effect of that. The latest figures from Ofcom show that UK children’s programming decreased again, as the noble Baroness, Lady Benjamin, said, in both spend and output in 2015, the last year for which figures are available. Spend on first-run UK-originated children’s programmes showed a year-on-year decrease of 13% in real terms. That is a real worry. Recent tax reliefs for animation and children’s live-action content have provided a welcome boost for the sector. However, they do not ultimately increase the size of the funding pot available or incentivise the commercial public service broadcasters to return. The Government’s pilot £60 million contestable fund over the next three years will work only if public service broadcasters are compelled to commission more content, but of course the fund is not just restricted to children’s broadcasting; religious and other cultural programming is covered by it as well.
An increasing reliance on licensing revenue means that quality is not being maintained, because it has reduced in importance. Licensing plays a significant part in the commissioning of new children’s shows because so little money comes from broadcasters. The global TV brand licensing industry is reckoned to be worth around $190 billion and the ability of a programme to generate merchandise in the form of DVDs, books, branded clothes and toys now tends to determine its future. That is a concern because it creates a financial incentive to tick all the right boxes to produce a brand that can be easily licensed. As we all know from experience, box-ticking is rarely a positive driver, in any situation. Children are now spending more time online than in front of the television. My son increasingly wants access to the iPad to watch varying content of variable quality on YouTube. Fortunately, his mother is well qualified to ensure that he does so safely, but for his generation, watching a small screen is already second nature.
Although television remains a huge influence on young people, children’s programmes are competing not only with other genres for space on public service broadcasting but with online content for children’s attention. An Ofcom report in 2015 came to that conclusion, and unsurprisingly, online streaming providers such as Netflix are exploiting this market. While support of independent children’s production by online service providers is to be encouraged, public service broadcasters have a responsibility to carry at least equal weight in the provision of enriching children’s programming.
Such original children’s programming has the potential to be a thriving industry and an exporter of high-quality British product. That product in particular is digital, interactive and produces some of the most innovative content, generating huge revenues overseas with many iconic programmes. “Teletubbies”, which first aired on the BBC in 1997, has been shown in 120 countries and in 45 different languages. It generated a reported £200 million in revenue and some £50 million in merchandising. Those are impressive figures by any standard. I have moved through the age-appropriate levels with my son and have enjoyed almost as much as he has CBeebies productions such as “In the Night Garden”, “Show Me Show Me”, “64 Zoo Lane”, “Charlie and Lola”, “Grandpa in My Pocket”, with the inimitable James Bolam, “Octonauts”, “Katie Morag” and “Nina and the Neurons”. Those and many more children’s productions combine entertainment, play and learning; surely one of the fundamental purposes of public service broadcasting. They do so in a manner unimaginable when I watched “Andy Pandy” and “The Flower Pot Men” with my mother a very long time ago.
In the uncertainty of the post-EU world, maintaining and even increasing this strong international presence will be vital to supporting the UK’s economy and cultural currency. As the noble Baroness, Lady Benjamin, said, between 2003 and 2013 commercial public service broadcasting participation plummeted by 93%. Without a vibrant market the industry is in danger of dying out, and without that industry the nation’s children will not grow up with the programmes that the adult population took for granted. That is why, last September, I was one of the signatories to a letter to the Secretary of State for Culture, Media and Sport on behalf of Save Kids’ Content UK, setting out the current position on the decline of the independent children’s TV production industry in the UK and asking what the Government would do to support it. I regret to say that it took five weeks for a reply to arrive, and from a junior Minister at that, which told the sector nothing it did not already know, and concluded with the patronising words:
“Thank you for taking the time to share your views on this issue”.
However, that letter was a cry for help, not a sharing of views. To be dismissed in such a manner was unacceptable. The Government need first of all to understand the nature of the problem—which, as that letter demonstrates, is a position at which they have not yet arrived—and then they need to work with the sector to seek solutions. Amendment 229 would be a first step and I hope that the Minister will take the opportunity offered by this short debate to begin the process, with a sympathetic response and a commitment to return to the issue on Report with a suitable amendment.
Lord Gordon of Strathblane (Lab)
My Lords, I am in the awkward position of being unable to give this my full support, which I very much regret. I am now a grandparent, with four grandchildren who watch children’s programming avidly. Inevitably, I watch it with them; I greatly value the British content and want it increased. The question is, how do we do that? We cannot in fairness ask ITV to do children’s programming while at the same time this Parliament has legislated that no advertising in children’s programming will be allowed. A service that depends on advertising for its funding has been denied funding to do the sort of programming somebody wants to do—so we have got to find another way round it.
That is why the Government have come up with the idea of the contestable fund. I would agree that this is a higher priority than local television, for example. If I were in the Government, I would allocate all the contestable fund to children’s programming. It would then be possible, through contestable funding, to get some programmes made. The difficulty then would be to find a platform that will air them, given that—as has been rightly recognised—nowadays nobody puts children’s programming on their main channel. The BBC does not do it; it is not on BBC1 or BBC2, but CBeebies. If ITV were to do it, it would have to be on CITV. The question is how one gets people willingly to commission children’s programming that is not going to make them any money, unless it is an absolute winner. If there were “Teletubbies” round every corner, everybody would be making children’s programmes every day. The fact is, though, that it is extremely difficult to get right: “Teletubbies” is 20 years old. “In the Night Garden” is wonderful, but children grow out of that quite quickly. Children are quite demanding. It becomes almost a rite of passage; they are almost proud of growing out of things. “That’s for little people; I’m a big boy now”.
We have got to find some way of helping the sector to get the exposure on British television and then launch it internationally. I think one idea might be to invite ITV and Channel 4 to have a say in the selection of the recipients of the contestable fund. If they had helped to commission the programme they would then be in a less strong position to refuse to accept it once it was completed. That might be a way forward. I find it very difficult to find another way, because ITV faces more competition now than it did in 2003, when Ofcom took the decision that it was reasonable to downgrade children’s programming from tier 2 to tier 3. The position has not improved since then. Netflix, Amazon and so on are all producing programmes in a way that was not even thought of in 2003, so the position is even more difficult. We have got to find a way of getting enlightened self-interest to lead broadcasters to do children’s programming and screen it. I think that the contestable fund is a way forward.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very pleased to speak in support of Amendment 229, to which I have added my name, which aims to secure the future and sustainability of original TV children’s programmes. I pay tribute to the campaign Save Kids’ Content for its diligence in championing this issue over a long period. I am sure it will continue to do so. I also pay tribute to the work of the noble Baroness, Lady Benjamin, who has been a great figurehead for this campaign. As the noble Baroness and others have said, it is incredibly frustrating that the quantity and quality of children’s programmes have suffered such a rapid decline over the last 15 years. It feels as though it is the result of policy neglect rather than a deliberate plan to let the provision deteriorate, but whatever the reason, the outcome is still the same. As we have heard, there has been a reduction in spending of more than 50% on children’s programmes, and a drop of 93% by commercial public service broadcasters. As the noble Baroness said, the heroic exception is the BBC, whose investment in CBBC and CBeebies has provided a crucial creative flow for children’s entertainment. But it cannot be right that the responsibility in the longer term remains on the BBC’s shoulders. Ofcom itself recognised in its 2015 review of public service broadcasting that there is an issue:
“In children’s content, there is very limited provision of non-animation programming beyond the BBC”,
and went on to say that this represented a substantial risk to Parliament’s objective of strengthening public service broadcasting to this group. I would argue that we have a responsibility as Parliament to address this shortcoming.
We should all care about what programmes are available for children to watch. They have just as much right as adults to expect high-quality entertainment and the knowledge that will enrich and inspire their lives. In a sense, what people watch as children develops the habits and interests they will have as they move on to programmes and entertainment for teenagers and adults. Our great expectation that public service broadcasters will provide very good quality programming for adults is wasted if we do not provide for the next generation as well, so that it can recognise it and create that demand for it. Children also have as much right to see UK-made content.
We all squirm when we see reality TV programmes in which children have been somehow dumped in front of an endless diet of American cartoons, but we are complicit in making that a reality. It does not need to be like this and our amendment is a practical and balanced approach to reversing the decline. It would introduce powers for Ofcom to set quotas for broadcasting original children’s programmes as a condition of a PSB licence, and it would require PSBs to report to Ofcom annually on how they are meeting those targets.
As has been said, inherent in the proposals is flexibility for Ofcom and the PSBs to agree how the targets can best be met. This would allow each PSB to take a separate approach to delivering the expanded children’s programme output, including access to the contestable fund. I agree with my noble friend Lord Gordon that the money from local TV could be put to much better use by making quality children’s programmes, so perhaps that is one of the factors that could be put in the mix.
Only an initiative on this scale will reverse the decline. We have in the UK the programme makers with the skills and the creativity to produce programmes and build an expanded children’s TV offer. Moreover, the demand is there because each new generation brings with it its own demands, so I do not agree with my noble friend that people pass through and that is the end of the story. New generations come forward and we want them to be able to recognise what quality programming really is, and we will do that only if we reach out to them when they are children.
It was never the intention of Parliament to let children’s TV fall into such disrepair, and this is our chance to do something about it. I hope the Minister will listen to the strong case that has been put forward and that he will see the proportionality of our proposals. I hope also that he will feel able to support the amendment and to work with us to make the changes we are proposing a reality.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, Amendment 229 addresses the important issue of children’s television, something that I know the House and this Committee rightly feel strongly about. I thank noble Lords for their speeches, in particular the noble Lord, Lord Gordon of Strathblane, for pointing out some of the problems, particularly that of advertising revenue for commercial PSBs. Children’s programming has been and remains a very important aspect of the UK’s public service broadcasting system. The provision of a range of high-quality children’s programming must be a priority for public service broadcasting. Ofcom has an oversight role for the system as a whole, and indeed has found that more than eight in 10 people think that the PSB system,
“provides a wide range of high quality and UK made programmes for children”.
The BBC, as has been mentioned by many noble Lords, remains a particularly strong provider of UK-originated children’s content. That is why the new BBC charter and framework agreement make it clear that Ofcom must have particular regard to setting requirements for key public service genres like children’s programming. But as many parents will know, children now consume content via an increasing range of platforms and providers. Ofcom has found that children are watching 25% less broadcast TV than they did five years ago. The Government therefore want to support the provision and plurality of children’s content.
As the noble Baroness, Lady Benjamin, has reminded us, we are going to pilot a contestable fund for underserved public service content, with children’s content a potential key area. We expect to see the commercial public service broadcasters work closely with the contestable fund and commission more children’s content. If this does not happen, the Government will be prepared to consider whether further action is needed. It is a pilot and we will have to see where it goes. Beyond that, the Government have also extended tax relief for animation and high-end TV programmes to UK children’s programmes because, as the noble Baroness, Lady Bonham-Carter, pointed out, we recognise the tremendous benefit to the economy of the creative industries. There are also other positive developments led by the market. An example which has been mentioned is that this year, Netflix will make its first British children’s programmes. I therefore believe that additional regulation in such a fast-developing area at this time is not in the interests of a diverse and vibrant children’s TV landscape in the UK.
With that explanation, I hope the noble Baroness feels able to withdraw her amendment.
Baroness Benjamin
My Lords, I thank the Minister for his response. I also thank all noble Lords who have supported this amendment, or partly supported it. I am especially grateful to my noble friend Lady Bonham-Carter and the noble Baroness, Lady Jones, for putting their names to the amendment and supporting it so strongly. However, I am rather disappointed with the line the Minister has taken, as this is an opportunity to put in place a robust piece of legislation that would guarantee the future of original content made in Britain, not just on the BBC but on commercial PSBs. They are doing their bit, yes; but I want to see that being sustainable and this amendment would ensure that that happens.
We do not need more cartoons and imported programmes, which is what the majority of commercial broadcasters are offering. What we need, what the children need, are quality, UK-produced programmes. Children’s productions have always made a huge contribution to the UK economy from their international sales. We need that to continue. We are not looking for huge amounts of investment from the commercial PSBs, just what the broadcasters feel, after discussion, that they can afford. They are doing so; I want them to continue to feel that they can afford to invest in children. I want a guarantee from them, but there is no guarantee—there is no framework for them to guarantee such a thing. As I said, Ofcom often finds itself in an impossible position on this issue and can sometimes look ineffective and inadequate, because even though it proves through research that more provision for children is needed from commercial PSBs, they cannot do anything about it, as the legislation prevents them doing so.
Throughout the passage of the Bill we have talked about safeguarding and protection. Well, this amendment is about safeguarding and protecting our children’s production sector and ensuring that it continues. The sentiments behind the amendment, which I believe are sensible and reasonable, are transparency and trust—it was in that spirit that I kept the Minister regularly informed. I also engaged with Ofcom and the commercial PSBs to discuss my amendment and I have been waiting anxiously to see how the Government would respond. I am rather disappointed with what the Minister has just said.
We do not know who might own public service companies in the near future or whether they will feel obliged to provide British content for our children. Therefore, I feel that we cannot and must not leave anything to chance. Also we cannot afford to waste precious time waiting to see how the market beds in and develops, as the Minister said, because it is highly unlikely that there will be another opportunity like this to return PSB children’s programming to tier 2 where it belongs and secure homemade programming for our children in the foreseeable future, rather than leave it languishing in tier 3 where we have seen it continue to decline over the past 10 years.
Throughout my 40 years working in children’s television I have personally witnessed the lasting legacy that British-made programmes have had on the nation’s children, who discovered themselves and their world. They knew they were loved, they felt special, because the programmes reflected their lives. We owe it to the generations to come to feel and experience that same thing. I am passionate and determined not to abandon our nation’s children and I hope that the Minister and the Government will walk that path with me by rethinking and reconsidering my amendment in more depth, as I cannot give an undertaking that we will not return to this issue on Report. However, at this stage, with a heavy heart, I beg leave to withdraw the amendment.
Lord Puttnam
“Mergers: specified considerations for mergers involving broadcasting media enterprises
(1) Section 58 of the Enterprise Act 2002 (specified considerations) is amended as follows.(2) After section (2C) insert—“(2D) The need for those who, as a result of a merger, have increased control of media enterprises (excluding newspaper enterprises) which require a broadcasting licence, under section 3(3) of the Broadcasting Act 1990 or the Broadcasting Act 1996, to be fit and proper to hold such a licence having regard in particular to—(a) the extent of any criminal wrongdoing that has taken place by companies and other organisations under their control; and(b) the extent of any failures of corporate governance and management in such companies and organisations.(2E) The need for there to be, in the governance arrangements of any relevant media enterprise (excluding newspaper enterprises), which provides news services, sufficient safeguards for unrestricted editorial freedom in the provision of full and accurate news services by such media enterprises.(2F) The need to prevent a media enterprise (excluding a newspaper enterprise) from—(a) exercising undue influence over distribution of, and access to, rights, talent and other forms of cultural expression;(b) promoting its own business interests through its editorial outlets, to the detriment of competitors where this is against the wider public interest;(c) exercising undue pressure in the regulatory and political environment, to the detriment of competitors where this is against the wider public interest.”
Lord Puttnam (Lab)
My Lords, in speaking to the two amendments that stand in my name, I should first declare my interest both as a content owner and as president of the Film Distributors’ Association. A number of factors encourage me to take up what is in effect the unfinished business of 15 years ago, when I was closely involved in the 2003 Communications Bill. The most recent was something that the noble Baroness, Lady Warsi, said on the “Today” programme 10 days ago. In response to a question regarding the ramifications of the immigration controversy raging across the Atlantic, she said:
“It all comes down to the type of country we want to live in”.
Of course, the noble Baroness was right. Pretty well every decision we make in this House sooner or later comes down to the type of country we want to live in. What we have just heard from the noble Baroness, Lady Benjamin, is about precisely that. What kind of country do we want to live in, and how far are we prepared to push ourselves to get there?
As I am sure the noble Baroness, Lady Buscombe, will confirm, this was repeatedly discussed during the passage of what became the Communications Act 2003. At that time we were by turns both amused and concerned by the antics of the then Italian Prime Minister Silvio Berlusconi and his attempts to muzzle, or better still own, the Italian media. This House was at one in agreeing that the provision of a free, fair and plural media ecology, in all its many and varied forms, was fundamental to the health of any democracy worthy of the name.
As a result, and after a great deal of debate, the general duties of Ofcom in carrying out its functions were finally legislated in this way:
“It shall be the principal duty of OFCOM, in carrying out their functions—
(a) to further the interests of citizens in relation to communications matters; and
(b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.
The wording of those two general duties, and the order in which they fall, along with the public interest test that accompanied them, were hard fought for, and they were won by an overwhelming vote on the Floor of this House—two-thirds to one-third—against the wishes of both Front Benches.
Fifteen years later, we find ourselves looking anxiously across the Atlantic at a new and democratically elected kind of Berlusconi on stilts—and we are jolted into reminding ourselves how very much ownership of both the media and the message matters. The true architect of the public interest test was the noble Lord, Lord Crickhowell, and the engineer who created the double lock that gave it teeth was the now noble Lord, Lord Lansley.
As the House may know, a public interest intervention notice is issued by the Secretary of State, and specifies a media interest. The grounds for referral are listed in Section 58 of the Enterprise Act 2002: the media interest grounds for referral are listed in Section 58 (2A) to (2C). The Secretary of State may specify further grounds for referral by laying an order before Parliament. Ofcom then carries out a report based on the grounds specified by the Secretary of State.
That is what is supposed to happen—but, as we discovered during the misadventures of the then Secretary of State, Jeremy Hunt, there is far too much wriggle room, and a lack of clarity as to the precise grounds on which a referral is based. In this respect, I supplied the Minister with a copy of the five-page letter I sent to Jeremy Hunt on 11 March 2011, setting out the reasons why I believe that the UILs he proposed to set in place prior to waving through the then News Corp—now 21st Century Fox—bid for what was then called BskyB were hopelessly inadequate. Milly Dowler’s death made any response to that letter wholly unnecessary.
Following a meeting that the present Secretary of State kindly agreed to, I recently sent her a copy of that letter, for the consideration of her officials. In my note to her I included a few additional reasons why I felt reference to Ofcom was the only sensible way in which any new bid for Sky could be transparently dealt with. Given that the Government have the world’s most highly regarded media regulator at their service, it is extremely hard to see why they would not be eager to distance themselves from the well-documented suspicions of favours given and favours returned that now, sadly, dog their predecessors.
The purpose of my amendments is to buttress the referral process by adding further and easily understood grounds directly to the Bill. Specifically, they would add a fit and proper persons test, which, somewhat bizarrely, exists only as an ongoing test for licence holders, not bidders, and is thus to be conducted only after the fact of any merger. I say “bizarrely” because I ask: how sensible does it seem to judge the ongoing fitness and propriety of a licence to a higher standard than the one sought at entry? Possibly when she comes to answer the Minister might help me understand what I see as an extraordinary anomaly.
Baroness Bonham-Carter of Yarnbury
My Lords, my name is also attached to these amendments, and I support the noble Lord, Lord Puttnam. They add the necessary extra scrutiny needed for media mergers and ensure that Ofcom’s fit and proper test is effectively applied.
These amendments specify further grounds for the Secretary of State to refer media mergers to Ofcom. As the noble Lord, Lord Puttnam, mentioned, the existing plurality safeguards are no longer adequate. They do not deal with market dominance and they are not sufficient for protecting editorial independence of media outlets. It is vital for the media environment that no company possesses disproportionate power to influence public opinion or the political and policy-making process. Plurality safeguards are an essential part of protecting the public and decision-makers from media organisations which are allowed to expand without proper scrutiny.
Then there is the matter of Ofcom’s fit and proper test. As many noble Lords will know, Ofcom must supply a test of fitness and propriety to owners of broadcast licences. At the moment, this test is not spelled out. What we propose would add definition to the test, using the recommendations of Leveson 2. Taking the current Sky-Fox bid as an example, I believe that this would ensure that the present chief executive of 21st Century Fox, James Murdoch, would undergo proper scrutiny if he were to retain a senior position at Sky.
I echo the noble Lord, Lord Puttnam, in one of the letters to which he referred. How we deal with the concentration of power decides the kind of country we are. I, too, understood that that is what Theresa May said when she became Prime Minister. Now it is for her Government to follow the logic, evidence and facts, and accept these amendments. They do not bind the Government; they simply strengthen the merger and plurality regime already in place. They put appropriate and proportionate power in the hands of an independent regulator, Ofcom, in order to protect the interests of citizens and consumers.
To quote my friend, Sir Vince Cable:
“The public interest centres on plurality and fitness”.
These are beneficial proposals which have been carefully agreed through cross-party consideration. I hope that the Minister will recognise this and respond positively.
Baroness O'Neill of Bengarve (CB)
My Lords, I support this amendment. I remember well—and the noble Lord, Lord Puttnam has reminded us of it—that, in 2003, we had quite dramatic discussions in your Lordships’ House about the dual duties of Ofcom to the citizen and to the consumer. There was a bit of a wobble after Ofcom was set up, but since then it has properly seen itself as defending these two separate interests and not, as was initially suggested, merging them into the interests of a fictitious character called the citizen-consumer. That was an unfortunate, but brief, episode.
I believe the noble Lord, Lord Puttnam, hit the nail on the head when he said that this pair of amendments is highly congruent with the Government’s policy. Not merely has the Prime Minister spoken about acting in the interests of “you rather than the few”, she has also started to refer to “issues of corporate governance”. This is basically what this is about—the standards that we think are relevant in corporate governance.
This has been a very unhappy decade in which there have been failures of corporate governance in many sectors. I am a member of the Banking Standards Board, looking at the culture of the banks. I read every day about this culture and realise how vital is the requirement that only those who have passed fit and proper person tests come into positions of leadership and influence in the banking sector. I realise how important this also is for the media sector—indeed, it is perhaps more important.
As we have seen clearly in the last few weeks, with the presidential campaign in the United States, the media have changed hugely in this decade. We can get spiralling misinformation that is extremely difficult to stem once it gets a hold in social media; once it spreads with the rapidity which the greediest of proprietors could never have imagined. In this world, more than ever, serious corporate governance has to take account of the ethics, as well as the law, of the fitness and propriety of leadership, as well as the adequacy of regulation. I support the proposal that Ofcom get a clear grip on the fitness and propriety of those who lead the broadcasting industries.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very important debate on a very big issue. Its sharpness has been reinforced by the fact that we are currently in a process involving all the issues that have been referred to. Obviously, this will be reflected in the fact that the response will not be made by a Minister in the department which might have to deal with some of the results of the current proposals for a merger, and we respect that and understand the reasons for that.
The wonderful speech by my noble friend Lord Puttnam, which took us back to the origins of the Ofcom regime that we now have and reflected on points along the way, including the dark shadows cast by the events of 2011, gave a texture to this that makes it much more important. The noble Baroness, Lady O’Neill, spoke about the need to think about how all this interfaces into descriptions of the sort of country we want to live in and the sort of society that we can enjoy. The necessary handles on both policy and the implementation of that policy are very important.
At heart, the amendments are simple. They draw out in more detail and focus on issues which have been live ever since they were first introduced. Indeed, I recall discussions in your Lordships’ House on two Bills which dealt with issues that bore on this and for which we had debates of this type. That does not mean to say that this is ground that no longer needs to be tilled. It does, because in thinking about this we have to recognise some of the issues that have already surfaced in Committee today and throughout the Bill—that when we are talking about the media, particularly but not restricted to the digital media, we have to think very carefully about the pace of change and the adjustments that have to be made to the policy framework in order to achieve what will be proportionate and appropriate regulatory functions later on down the line.
The good thing about the amendments is that they make us think about the words that were used, which seemed appropriate at the time, in relation to the twin requirements: that we look at plurality in relation to media but also at control. If this were a simple case of looking at how a monopoly might influence outcomes and how consumers are treated, it would not be necessary, perhaps, to delve so deeply. The issues that are currently addressed by the CMA, for instance, are largely economic. They deal with prices. They deal with the way in which consumers are treated, but they are basically around whether or not the price has been artificially moved in order to favour the producer against the citizen. In that sense, we do not need to think too hard about some of the issues, although we can regret them, as we did in the debate in the dinner hour, which I was able to participate in, which focused almost exclusively on why consumers have disappeared from government, consumer interests are rarely referred to and there are not even consumer panels on the CMA. But that debate can be read in Hansard, and I am sure it will be of much interest to those who are interested in this point.
The amendments would go back over the grounds on which a PIIN is issued and make it clearer than it is currently that simple questions of plurality, which are readily gamed in terms of corporate structures these days—this issue was perhaps not so resonant at the time that the legislation was drafted—need to have a little bit more bite if they are to look at some of the detail that we want in this area. We have to look not just at the question of ownership and control in relation to a market-facing issue but at the way in which such an agglomeration can distort and change that market, which is not in the public interest. It is very important that we do that. There may well be a way of dealing with this under the existing legislation, but it would be so much easier if the amendment was accepted because it would take us down a line that was more focused on the particularity of the media arrangements.
Then there is the question of the fit and proper person test for those who have broadcast licences. The basic structure is there. Again, on reflection, it could be argued—and I think it has been demonstrated today—that without more concern about the issues which arise out of the merger, without more concern about how the operation will work in terms of who activates it, what exactly the issues are that will be looked at, what the proprieties are that we are concerned about, and where the ethical concerns are and all that, then it will not be as effective. I look forward to hearing from the Minister.
Baroness Buscombe (Con)
My Lords, I thank all noble Lords who have taken part in this important debate. It is good to have this debate.
This group of amendments seeks to make extensive changes to the broadcast media public interest considerations that may be relied upon to intervene in certain media merger situations and the fit and proper test that Ofcom has a duty to apply to all those who hold a broadcasting licence in the UK.
Before I get into the detail, the debate has included views from across the House about the parties to the Fox/Sky merger. There is a proposed merger currently in train, which it is very likely the Secretary of State will need to consider under her existing powers. As the Secretary of State noted in her written statement of 10 January, any decision will be a quasi-judicial one. It is important that she is able to act independently and that the process is scrupulously fair and impartial. As a result, neither I nor any Minister can comment on the merits of this specific case. I will have to restrict my comments to the substance of the amendments themselves.
I have noted carefully the views of noble Lords, and of the noble Lord, Lord Puttnam, in particular. I have a transcript here of some of the debate of the then Communications Bill, in 2003. Of course, the noble Baroness, Lady O’Neill, remembered the key issue about citizen and consumer. Indeed, Lord Puttnam and I met outside this Chamber to try to come to terms with our approach to this issue—I was part of Her Majesty’s Opposition in those days. A lot was achieved. Of course, it was a government amendment on Third Reading which created the plurality and public interest test. It was my noble friend Lord Lansley, who is unfortunately unable to be in his place tonight, who sat on the draft legislative committee on that Bill, and who retains that interest.
Drawing all the contributions together brings us to a single question: do the Government believe they have the necessary powers to allow them to deal with complex media mergers and a concentration of ownership that would be damaging to media plurality?
In our view, the tests introduced in 2003 are wide-ranging and provide the Secretary of State for Culture, Media and Sport, who is responsible for media mergers, with a wide discretion to intervene. For example, in cases where there are concerns about media plurality, or where a bidder does not have a genuine commitment to the UK’s well-established rules on content standards and cross-promotion, which are overseen by Ofcom, the Secretary of State can consider those concerns as part of her deliberations as to whether to intervene in the proposed merger.
Turning to the amendments themselves, given the discretion to intervene based on the existing media public interest considerations, we do not believe it is necessary to add the additional requirements set out in Amendment 229ZA and would argue that these are matters that can already be considered under the existing tests. In addition, the matters set out are considered by Ofcom on an ongoing basis in its regulatory role.
There are three existing broadcast media public interest considerations that the Secretary of State can take into account in deciding whether or not to intervene in a merger. The first is the need for a sufficient plurality of persons with control of media enterprises—I stress, plurality of persons. The second is the need for a wide range of broadcasting which is both high quality and appeals to a wide variety of interests. In other words, the focus must be on content and plurality of content. The third is the need for persons carrying on media enterprises to have a genuine commitment to broadcasting standards. Together, these powers give the Secretary of State discretion to consider a wide range of matters in deciding whether the specified public interests may be relevant, and whether or not to intervene in a particular merger.
Amendment 229ZA, which inserts new Section 58(2D) into the Enterprise Act, would allow the Secretary of State to intervene in a media merger based on the need for those holding broadcasting licences to be a fit and proper person, as noble Lords have said today. The issue of who is a fit and proper person to hold a broadcasting licence is a regulatory matter for Ofcom. Ofcom is under an ongoing duty to remain satisfied that those holding broadcasting licences are fit and proper to do so, under Section 3 of the Broadcast Act 1990 and Section 3 of the Broadcast Act 1996. Ofcom’s assessment of these matters will consider the conduct of those who have material influence or control over broadcast licensees and will consider a wide range of factors in assessing who is fit and proper, including the matters set out in the amendment.
The amendment also proposes a new Section 58(2E), which is aimed at allowing intervention on the basis that the governance of broadcast media enterprises providing news needs to include sufficient safeguards for editorial freedom in the provision of full and accurate news services. I entirely accept—and the Government entirely agree with noble Lords on this—that the issue of governance is crucial, although we discussed in earlier debates today that the issue of accurate news is becoming a very difficult one and will exercise all our minds in the coming months. It is a long-established condition of broadcast licences in the UK that news is reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code.
The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test.
Lord Stevenson of Balmacara
I thank the Minister for going through this in so much detail. The issue raised in the first part of the amendment on the fit and proper person test was not whether the powers exist but how they would be triggered. The worry is that they would be triggered post hoc rather than anticipatorily with regard to a merger. Do the Government accept that there is a difficulty here?
Baroness Buscombe
The Government do not accept that there is a difficulty in this. The important issue is that the powers remain broad in their application. To the best of my understanding, though, there is no difficulty regarding when they are triggered.
Lord Puttnam
What I believe the noble Lord, Lord Stevenson, is saying, and it is very important, is that there is an accidental anomaly in the Bill. As someone who, like the Minister, pored over every word of it, I take some responsibility for this, but it is extraordinary— I even referred to it as bizarre—that the bar that is set for an ongoing licensee is higher than the bar for a bidder. Surely common sense requires that someone bidding has to reach the same standards of honesty and probity that are required of an ongoing licensee. There is an anomaly, and I am trying to help the Government to get rid of it because it should not be there. Obviously there should be a bar, but it should apply to anyone applying for a licence just as it does to anyone who has an ongoing licence that is being looked at.
Baroness Buscombe
I am going to wait for a reply on that. I would like to be able to respond tonight, rather than saying that I will write to noble Lords; if the Committee will bear with me, let us just wait and see. I understand what the noble Lord is saying about bidders meeting the same standards as those who already have a licence.
It is a long-established condition of broadcast licences in the UK that news be reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code. The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test. I have been informed that the fit and proper test can be looked at by Ofcom only once they hold a licence, but we believe that the provisions on genuine commitment to broadcasting standards give the Secretary of State the powers she needs in this regard.
Lord Puttnam
I think that we all deserve to be very clear about this: can we be sure that the Secretary of State will apply exactly the same standards to a bidder as she would require of an ongoing licensee?
Baroness Buscombe
There is nothing coming from the Box—I think that I will have to come back to this point.
Ofcom’s role as a regulator is to have ongoing oversight of these matters. The important point, however, is that the Secretary of State’s power to intervene in media mergers provides an additional layer of protection for media plurality in the UK. In the case of Amendment 229ZA, the very fact that these matters are part of the regulatory broadcasting framework with which licence holders must comply means that they can be taken into account by the Secretary of State in deciding whether or not to intervene, particularly in terms of the impact that such matters have on the need for persons holding broadcast licences to have a commitment to broadcasting standards. In addition, any merger must also be judged on competition grounds by the relevant competition authority, and the existing competition law. The Government believe that the existing provisions in the Enterprise Act 2002 already give the Secretary of State wide and proportionate powers in relation to proposed media mergers. While we understand the intent behind this amendment, we do not judge that it is necessary.
Amendment 229ZB would similarly seek to add unlawful acts or corporate governance failures as specific matters that Ofcom could take account of when determining, on an ongoing basis, whether an individual or a corporate body satisfies the fit and proper person test, which will include an assessment of those with material influence or control over such bodies. Ofcom can and does take into account such matters and this amendment is therefore unnecessary. There is also a risk that this amendment may potentially narrow Ofcom’s discretion here, although I acknowledge that that is not the noble Lord’s intention.
From a legal standpoint, there is always a danger in seeking narrowly to define the parameters of the law. Indeed, I sought to do just that during our debates on this issue back in 2003. I was seeking to limit the scope—the boundaries—of the Government’s intended plurality test; I wanted the law to be narrowly defined and to target specific circumstances in which the plurality and public interest test could apply. The noble Lord, Lord Puttnam, disagreed with me, saying that breadth is very important. Of course, it was he who won the day. So I do think it important to take care when trying to narrowly define what does and does not apply, thus narrowing the scope, as that can constrain the whole approach. It is important to take this into account when considering these amendments overall.
The Government therefore believe that the powers introduced in 2003 are sufficiently wide to deal with complex media merger cases which raise public interest concerns and, for this reason, we ask the noble Lord to withdraw his amendments.
Lord Puttnam
I thank the noble Baroness for an extremely full response. Perhaps I may say several things. First—I probably should have made it clearer—the noble Baroness was extraordinarily helpful and generous to me during the very painful passage of that Bill. On every occasion when I sought some form of compromise, she always came up with a constructive solution. She knows I feel this, because we have discussed it, but I am very happy to pay public tribute to her.
I think that some mistakes were made in 2003. We could not look into the future, and there were things that we were not even allowed to do under our terms of reference. However, it is worth recalling that, yes, it was a government amendment that was passed at Third Reading, but it was passed, as the noble Baroness will remember, because of a crushing defeat on Report.
I have no desire whatever to go through that process again, I promise you. On the other hand, I think I have a sufficient understanding of this House to know that when it comes to the issue of media ownership and any suspicion of undue pressure, this House will again vote overwhelmingly in favour should I press these amendments. I do not think that my amendments as they stand are good enough. The noble Lord, Lord Stevenson, has already hinted at that. I would infinitely prefer the Government to come back and offer the sense of security that I seek. I very much liked the Secretary of State on the one occasion I met her. She is clearly an honourable, decent woman. It would be very helpful for her to be able to say that the standards that she would require of a licensee are exactly the same, and as exacting, as those of a bidder. I think it would be good for the Government.
I was not being silly when I discussed Theresa May’s speech. I found it a very remarkable speech from an incoming Prime Minister. I think she did lay out her stall. I think we have every reason to have expectations that are higher than we had of recent predecessor Governments. I am quite ashamed of some of the things that my own Government did in respect of cosying up to and colluding with media owners. That has got to stop.
There is a wonderful line of Mark Twain’s: “A lie can run around the world while the truth is still trying to put its boots on”. We are living in that world. We are living in a post-truth society. We can no longer afford an over-cosy relationship between the Government of the day and media owners whose job is simply to tell the truth as they see it. That is all I am seeking.
I am very grateful to the Committee. I will happily withdraw this amendment, but I am certain that we will be returning to this subject in the hope that the amendments put forward by the Government will be acceptable to the entire House. I beg leave to withdraw.
“OFCOM: regulation of digital publications
Within one year of the passing of this Act, the Secretary of State must report to each House of Parliament on the arrangements that would need to be made by OFCOM if it were to assume the responsibilities of an independent regulator for digital publications.”
Lord Stevenson of Balmacara
My Lords, this amendment deals with the preparations that will need to be made should we be in the unfortunate situation that was animadverted by Sir Brian Leveson when he finished his part 1 report, if the press self-regulation proposals made in it are not fulfilled.
The current situation is complex, and it may be slightly premature to assume that everything is going to fail, but I think that, of the two types of problem that he identified, the first—that no recognised regulator was appointed within a year of the recognition panel’s being established—has not come through. We have a recognised regulator, and it was approved very recently, within a year of the recognition panel’s being established. That is a good thing, and we should bank on that.
The second problem, however, remains. His feeling was that there would be no value in the self-regulatory proposals he was advocating if significant news publishers remained outside the recognised regulator. That has happened in spades. There is a body established by the industry and largely for the industry, IPSO, which is not seeking recognition under the existing procedures. Therefore, that would, I think, represent a failure in terms of Leveson’s original proposal. We also have a situation in which the recognised regulator is not attracting significant support from the press which might be regulated by it, although it does have some support, and that is good, and we support that. It is not, however, operating at the scale or encompassing sufficient of the broad press, which was the focus of the original report, to be considered a success.
We are facing a problem. The problem was anticipated, and the solution proposed by Lord Justice Leveson at that stage was a backstop regulator. Therefore this amendment—which is limited in terms of the exact wording to the digital media, although it could, I think, be read as more appropriate for the wider situation—is almost certainly going to be required because of the situation I have outlined. Obviously, we regret that. We wish, as we always have, that a properly self-regulatory system could be established. However, it is extraordinary that the press, as Lord Justice Leveson says, benefits from considerable support in statute for the activities that it wants, including a provision in an amendment to this Bill to protect journalists who wish to break stories that were in the public interest and who might otherwise be caught by concerns about data leakage. That is an example of the sorts of ways we have often legislated for and supported the press because everybody believes in a free press and believes that the press should be able to operate within the law and without any constraint. However, we also believe—this is particularly true of those who have been victims of press intrusion into their private lives—that the public will not settle for a situation in which the press escapes standards regulation altogether.
We will therefore face a situation within a few months where it is likely that it will not be possible that the Leveson proposals have been brought in and there is a need for a standards regulator. The standards regulator proposed by Leveson in his report is Ofcom, and there is much in the report which shows and explains why that would be a good thing. My amendment, which I hope the Government will accept, says that it is time to start to think about how this will impact on Ofcom’s work and to bring forward proposals under which that should operate. I beg to move.
Lord Foster of Bath (LD)
My Lords, it is four years after the Leveson inquiry, and I certainly believe that Section 40 of the Crime and Courts Act 2013 should be implemented, and should be implemented now. I voted for it in your Lordships’ House last October and I certainly support the amendments today, which have much the same effect. I also support the fail-safe amendment moved by the noble Lord, Lord Stevenson, although I hope that it is not necessary and that Section 40 will be brought in.
Some incredibly misleading statements have been made about the impact of Section 40. Most of the newspapers, as we know, do not support its implementation and have featured some quite amazing one-sided editorials. To the best of my knowledge, none of them has permitted a right of reply. I am the former Member of Parliament for the wonderful city of Bath, which is included in my title, so I am sure that noble Lords will not be surprised that I take a particular interest and am an avid online reader of the Bath Chronicle. Three weeks ago it published one of these anti-Section 40 diatribes. I wrote a rebuttal and asked the Bath Chronicle to publish it. I have not even had an acknowledgement so far—so much for a free press.
Perhaps to explain why I support these amendments, and to ensure it is published—albeit in Hansard rather than in the Bath Chronicle—I will read what I wrote, because it sums up exactly where I stand:
“I am a strong supporter of local newspapers and the Bath Chronicle in particular. But I was surprised by your recent editorial suggesting that measures being considered by parliament will mean that ‘Any investigation in the public interest could be silenced by anyone with a vested interest’. This is a complete misreading of the proposals made by Lord Justice Leveson after the Public Inquiry which followed the appalling phone hacking scandal.
Few could deny that in the past the press had a shocking track record of setting up its own toothless regulators which failed to protect the public. Leveson has proposed that the press should now establish a truly independent regulator whose independence is checked and then ‘recognised’ by a body which is itself impartial and independent from government or the press.
This is what the public want as shown by a YouGov poll just last week. When asked ‘Do you think it is important that any newspaper self-regulator undergoes an audit to ensure it is effective and that it is genuinely independent of both politicians and the press?’ nearly three-quarters (72%) said yes and just 6% said no.
The ‘regulator’ under which the Bath Chronicle operates—called IPSO—doesn’t meet this test. It is not only funded but controlled by the newspapers it regulates.
Were the Chronicle to join a ‘recognised’ regulator, or were IPSO to demonstrate through getting recognised that it met proper standards of independence and effectiveness, the funding issues you describe would not happen. Moreover, the public would be protected and you”—
that is, the Chronicle—
“would receive protection from wealthy and powerful local figures if they tried to bully you into withholding stories about them by threatening you with unaffordable court costs”.
My article ended:
“I hope Parliament will agree to support the public and back Leveson’s proposals”.
I certainly hope the Government will accept the amendments before us today.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I am obliged to the noble Lord, Lord Stevenson, for expressing this amendment and also to the observations of the noble Lord, Lord Foster of Bath. I would say, with respect to his most recent comments, that the test of a free press is not whether or not they publish a letter. Indeed, the fact that they do not publish your letter is itself an expression of freedom.
Amendment 229ZC would require the Government to report to Parliament about the arrangements that would need to be made should Ofcom assume the responsibilities of an independent regulator of digital publications. I acknowledge the care with which the noble Lord, Lord Stevenson, has drafted this amendment. He was quite candid in saying that his real concern is the regulation of the press, but he was equally candid in indicating that, in order to come within scope for the purposes of this Bill, he was not really concerned with all publications by the press but only digital publications.
I see in his amendment an expression of concern—and, indeed, of frustration—over the lack of progress being made towards a viable avenue for press regulation. I am sure that in a sense that, in part, has prompted this amendment. However, he said himself that it might be slightly premature. With respect, I would concur with that observation. It is perhaps too soon—and people will say in response, “Four years after Leveson, is anything too soon?”—but we have to remember that the press landscape has altered quite dramatically over the last four or five years. That is reflected in the fact that certain matters have gone out for consultation—particularly with regard to Section 40, which is going to be raised in a later amendment—albeit that the consultation process has been somewhat stymied by an application for judicial review.
I move on to the core of the present amendment, which is the idea that we should move towards—and this was a backstop of Lord Leveson’s report—Ofcom as a regulator. The idea that Ofcom should regulate digital publications—albeit with “digital publications” not being a defined term, and I make nothing of that—has behind it the real push that Ofcom should become the regulator for the press. As I understand it, that is essentially what lies behind the amendment.
Let us remember that Ofcom already has huge responsibilities as a regulator, many of which we have debated over the last week. Among other things, it has to ensure that we have fast broadband connections, competition decisions, such as the current consideration of the future of Openreach, which has been referred to, and spectrum management, including forthcoming auctions. We have also discussed today its new role in respect of the BBC and its function in managing listed events, and we have heard from my noble friend Lord Borwick in respect of Ofcom’s regulatory functions and in respect of subtitles and the accessibility of on-demand services. There is plenty more, over and above that, that Ofcom does, and that is without even going into the question of postal regulatory functions.
We have the greatest respect for Ofcom as a regulator, but the question arises about how much more we can put on its plate. This amendment seeks to pile on more. For the first time, it would be setting a regulatory requirement on Ofcom, in statute, in relation to internet content, which is not TV-like, if I may use that rather crude term. As my noble friend Lady Buscombe has already made clear, moving to a situation in which Ofcom is a regulator of a broad range of online content would be an enormous undertaking for Ofcom, or indeed for any other regulatory body.
Lord Stevenson of Balmacara
I thank the noble and learned Lord for his full response. I am sorry that he guessed the plot rather early on in the game: I am guilty as charged. It was very hard to get anything on this into the scope of the Bill. There seems to have been a change of management upstairs in the Public Bill Office and they are much tougher than they used to be, and we will have to have a think about that.
Anyway, the reason for including the amendment was to have the debate that we have just had to find out a little more about the Government’s thinking, and to flag up that it is worth thinking about how we can recapture some of the cross-party spirit that informed the process leading up to the original Leveson proposal and, out of that, the statutory position we are now in. However, as the noble and learned Lord says, we may be a bit premature on that. You can never plan too far ahead, but it is cautious optimism to think that the department has begun thinking about these things. That is as far as we want to get on this. Following this good exchange, which can be read in Hansard, and the sense that we are at least on the same page, if not the same sentence, I beg leave to withdraw the amendment.
“Offence of using digital ticket purchasing software to purchase excessive number of tickets
(1) A person commits an offence if he or she utilises digital ticket purchasing software to purchase tickets over and above the number permitted in the condition of sale.(2) A person commits an offence if he or she knowingly resells or offers to resell, or allows to be resold or offered for resale on a secondary ticketing facility, a ticket that the person knows, or could reasonably suspect, was obtained using digital ticket purchasing software and was acting in the course of a business.(3) For the purposes of subsection (2) a person shall be treated as acting in the course of a business if he or she does anything as a result of which he or she makes a profit or aims to make a profit.(4) A person guilty of an offence under this section shall be liable on summary conviction to—(a) imprisonment for a period not exceeding 51 weeks,(b) a fine not exceeding level 5 on the standard scale, or(c) both.(5) In this section—“digital ticket purchasing software” means any machine, device, computer programme or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets;“retail ticket purchasing platform” shall mean a retail ticket purchasing website, application, phone system, or other technology platform used to sell tickets.”
Lord Stevenson of Balmacara
My Lords, before I introduce the amendment, I wonder whether we could reflect on the fact that we are missing rather an important person from the debate. The noble Baroness Heyhoe Flint was a keen and active Member of your Lordships’ House. She had several special interests apart from cricket and a wonderful raconteur’s skill of telling stories of her exploits at the crease. She was rather good at it. Whatever it was, it was always a delight to hear. She had a special interest in secondary ticketing, and in many of the debates held in your Lordships’ House on this issue, she was present and often contributed. She was responsible, along with the noble Lord, Lord Moynihan, whom I see in his place, for getting changes made to the Consumer Rights Act 2015, which brought in the first of what we hope will be a series of measures to improve and clear up this issue.
The amendment to the Consumer Rights Bill that we inserted in 2015 raised from a secondary legislation provision to a primary legislation provision a series of measures to improve and clear up the secondary ticketing market. It was done primarily to ensure that those who buy tickets for sports, arts and music events can do so in the sure and certain knowledge that their tickets are valid, that they will be able to gain access to what they want to see and that they are not being ripped off in the process.
It is fair to say that we got this only after a considerable struggle—and the noble Lord, Lord Moynihan, might wish to share with us some of the difficulties that he experienced—but one of the things that was necessary in order to achieve that victory was to agree to a report on secondary ticketing to be carried out by a distinguished person. That person was Professor Waterson. He has now done that and the report has come out. Those involved are entitled to take a moment to reflect on the fact that what we were saying in Committee on the Bill and what we did in moving amendments and getting them inserted into what became the Act was brought out by the professor’s report, which was a comprehensive piece of work that showed that the scale of the issue was as we described it and that there was a need for further action.
The Bill before us is an opportunity to do more work, and the group of amendments that I am introducing—and for which I am hoping to get support from the noble Lords, Lord Moynihan, Lord Clement-Jones and Lord Foster of Bath, and others as we go through it—is a mixed bag because there are still things that need to be sorted out. An issue that arose in the other place and which was very nearly accepted by the Government was the question of an offence caused by using digital ticket-purchasing software—so-called bots. They are a scourge of many people who organise and run events—particularly in the music industry, but they apply right across the piece. Automated software operated by a number of individuals creates a situation where virtually no tickets are available on the first release of an event, but they then appear very quickly at very much higher prices through secondary ticket outlets. This amendment would, we hope, stamp this out. It has been tried in a number of territories, including New York very recently, and it does seem to work, so we recommend that.
The other amendments deal with changes that we would like to see to improve the broader approach taken in the Consumer Rights Act which, in practice, needs to be taken to another stage. They are basically to do with greater transparency and accountability in how the secondary ticket market works. It is really important, however, that we get clear at the start that nothing in these amendments would stop the resale of tickets once purchased by an individual who wished to sell them because they could not attend the event or that they wanted to sell them on to other people in a closed circle. This is not about private purchases or operations. It is about those who go into the ticket market on a commercial basis, very often making huge amounts of money by exploiting people who do not understand and cannot get to the heart of the issue and therefore pay ridiculous prices. It also would help stamp out what is clearly a fraudulent activity that has been partially stopped by the changes made in 2015 but has not stopped completely. People buy what look on the surface to be valid tickets, but when they turn up at the venue they discover that they are not valid and are refused entry. This is fraud on an industrial scale, and probably the source of much money laundering and illegal activity, which was referred to by the police in their Podium report prior to the 2012 Olympics.
These amendments should be taken as a batch; they build on work in which this House has already been involved and they are the right changes to make this stage. I beg to move.
Lord Moynihan (Con)
My Lords, I support the seven amendments in this group spoken to by the noble Lord, Lord Stevenson. I echo that it is particularly appropriate in many ways, albeit very sad, that we debate the often malicious and pernicious use of bots on the sad day of the funeral of my very close friend Lady Rachael Heyhoe Flint. One afternoon, she was purposefully striding down the Corridor outside the Peers’ Guest Room, and said, “I need you”. I jumped to attention and we headed off to the Department for Business, Innovation and Skills. I was totally unaware of why I was accompanying her on that occasion, or indeed the matter proposed for discussion. Rachael launched into a thinly veiled, front-foot attack on those in and around the secondary market, who fleece consumers to no benefit to cricketers, musicians, sportsmen and sportswomen, who are the ones who entertain them. Through her hard work and persuasive skills, I was galvanised into action. I thank the Government for the progress that we made in the Consumer Rights Bill at the time, as well as the Opposition and noble Lords from all sides of the House.
That was just a first yet important step. Today is the second opportunity to make further progress. I was very sad not to be at Rachael’s funeral today to pay my close personal, political and sporting respects, but she would have been the first to admonish me. She would have said, “Why on earth are you not down in Westminster putting on your pads, your gloves and picking up your bat, and going into the centre of the parliamentary wicket to hit those bots for six?”. I will do my best, captain. I will do my best. In paying tribute to her, because she was absolutely instrumental in the work that we undertook during the passage of that Bill, I must also pay tribute to Nigel Adams, Member of Parliament in another place, who has taken this to his heart and has done so much good work.
The whole issue of bots goes right to the heart of the disappointment of thousands of music and sporting fans who have on occasion faced the reality of having their credit card ready in their hand with minutes to go before the sale of tickets for a particular gig or match but no sooner do they go on sale than they sell out. Minutes later, tickets can be spotted on reselling websites. The new, hidden threat that is snatching tickets from under the noses of genuine fans is ticketing bots.
Music and sports fans have always battled against touts buying up tickets to make a quick buck by selling them on again at inflated prices. But now touts have a new cyberweapon that allows them to step up their game. These ticketing bots are software; they buy up huge numbers of tickets for events as soon as they go on sale. Buyers then use the secondary websites to sell them on. Reg Walker, who has done an enormous amount of good work on this at the O2, stated:
“They then harvest tickets at high speed and that effectively blocks out genuine fans from being able to purchase tickets at face value. These tickets are then immediately resold on secondary ticketing platforms”.
What then happens is that those who are sitting in their garages using bots programmed with all this information press the button immediately and get their 200 tickets, and sell them on to one of the four secondary platforms where nearly 80% to 90% of resale now takes place. In so doing, they do not necessarily always get all the tickets they want. Their preferred status and good relationship with the platform is critical to their next sale. So, if necessary, they will have the income on a very high-price ticket with a high margin to go out and counterfeit tickets to make up the gap between those they have committed to supply and the actual number that they have. That is why the wholesale harvesting of tickets by touts not only incentivises these individuals to create relationships with the main providers of the secondary market tickets, the providers even develop power-seller programmes to encourage the delivery of mass tickets.
This is all at the same time that you are trying to type in your name in order to get a couple of tickets, as the true fan of a music show at the O2 or a sporting event. The reality is that you have no chance. We have all tried it; I have tried it on many occasions and cannot believe that they have sold out before I have got down my name, address, credit card number and so on. It is no surprise, though, when bots are available purely for the benefit of the profit of the individual. No artists, no sportsmen and no fans benefit. That mark- up goes straight into the pocket of the individual who has got the ticket and the secondary sales platforms that provide those tickets at inflated prices to consumers.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Lords, Lord Stevenson and Lord Moynihan. I shall speak to Amendment 231 and express my support for Amendments 230 and 233B to 233E. Despite the lateness of the hour, I hope that the Minister will not mind my adding my tribute to the late Baroness Heyhoe Flint. She will be greatly missed, and it was moving to hear what the noble Lord, Lord Moynihan, had to say. In a sense it is a complete loss not to have her here today to speak to these amendments because we know that she would have made a passionate case for all of them, so we are here to help move forward this campaign. I am a member of the All-Party Parliamentary Group on Ticket Abuse. Together with other noble Lords, I debated these matters on the Consumer Rights Bill and I feel strongly that we must move on from where we are today. I want to make a few comments in connection with the amendments for that reason.
The market in ticket resale is some £1 billion per annum across music, sports, theatre and comedy, and it is a very lucrative business. There is increasing evidence that it is a market manipulated by touts. We have listened to the egregious examples given by the noble Lord, Lord Moynihan. Fans who want to buy tickets for the events that are most highly in demand are systematically directed towards platforms like viagogo, StubHub, Get Me In and Seatwave, where scalpers and bot users are able to operate anonymously and bulk-sell inventory at hyped-up prices. Another example to add to those already given is the latest in a long line of victims: Ed Sheeran fans attempting to buy tickets last week for his upcoming UK arena shows. I looked at the ticket listings for his concert at the O2 on 2 May and counted almost 1,500 tickets for sale across Get Me In, Seatwave, StubHub and viagogo, all for prices way over face value, with service fees in excess of 20%.
Ed Sheeran has publicly condemned ticket touts and before these shows went on sale he carefully communicated to his audience to buy only from authorised ticket agents. He also appointed a resale agent to enable fans to transfer tickets at face value, yet touts still infiltrated the sale. No wonder people are so angry: they feel the system is rigged. An industry campaign, the FanFair Alliance, is fast gathering support, and I am very grateful to it for helping brief us all for this debate. Fans themselves are petitioning the Government. More than 33,000 have signed a parliamentary petition in the last week, begging politicians to tackle this issue. Of course, we have debated this in Parliament. The Culture, Media and Sport Select Committee held a short inquiry which came to the conclusion late last year that action was needed. The committee chair has described ticket touting as “a national scandal” and a massive racket which is making people in the industry millions, while exploiting genuine fans who just want to pay a fair price to attend live events.
The noble Lords, Lord Moynihan and Lord Stevenson, mentioned the report undertaken for the Government by Professor Michael Waterson, which raised major concerns. He made nine recommendations to the Government, yet here we are eight months later and despite some encouraging words in the other place, particularly about bots, the Government have yet to respond. Legislation, even the inadequate legislation we managed to get the Government to agree to on the Consumer Rights Bill, is still not being enforced. All the secondary ticketing sites that I mentioned still operate without a shred of transparency. How many more members of the public will be ripped off before the Government decide to take action? There is clearly an urgent need for government intervention in this market, to push forward the handful of decisive actions which are all reflected in the range of amendments being tabled today.
We know that the amendment on bots is similar to the one put forward in the House of Commons, and I want to add the name of Sharon Hodgson to that of Nigel Adams, because she has played a major role in the campaign in the other place.
Lord Moynihan
I am very grateful to the noble Lord for giving way because it gives me the opportunity of declaring my interest as co-chair with Sharon Hodgson of the all-party group. I echo the view that without her extraordinary energy, a lot of the cross-party support in another place would not have been secured. We should recognise that as an important contribution today.
Lord Clement-Jones
I thank the noble Lord for that. I will not go into the detail—it has been very well described by the two noble Lords—but measures to criminalise the use of bots were implemented last year in New York, and have since been extended to many other states. Why should the US have better legislation that we do? At a minimum, we would like to see similar legislation implemented and enforced in the UK.
I should speak very briefly to Amendment 231, because it is in my name and that of the noble Lord, Lord Foster of Bath. This amendment would give artists and event organisers greater control over who is authorised to resell their tickets. It would add to the Consumer Rights Act 2015 a provision requiring online secondary ticketing platforms to resell tickets only for events where they were the authorised resale agent. I realise, of course, that it needs further work—it probably does not quite deliver the purpose for which it was intended—but it does have very considerable support in principle, particularly, interestingly, from the Society of London Theatre and UK Theatre, both of which have written to express their support. It would place further control on the UK secondary ticketing market, putting the power back into the hands of the promoters of events to control their own ticketing by allowing resale only via authorised secondary ticketing websites, in a similar way to how an event organiser currently appoints a primary ticketing agent or agents. This amendment would allow them, if they chose to, to also appoint a secondary ticketing agent or agents to enable ticket resale. This is an important measure that, if we get the drafting right, could have a major impact.
All the measures contained in these amendments are what most sensible people would view as pragmatic steps that should help protect consumers without any real risk of unintended consequences. The only losers will be the touts. Why should audiences in the UK get anything less than the best protection? I hope that the Government will continue to move forward in this area and listen to the arguments being made. Quite apart from responding to the amendments, I very much hope that the Minister can give us some idea of when the Government will respond on Waterson—it is high time that we had a proper answer on those recommendations. I look forward to hearing what the Minister has to say.
The Earl of Glasgow (LD)
My Lords, I support Amendments 230 and 231, to which my noble friends Lord Clement-Jones and Lord Foster of Bath have put their names. I am very aware of the time, so I am going to be very brief. Most of what I wanted to say has already been said. The intention of the two amendments, as I understand them, is to help prevent fans who are keen to attend a concert, sporting event or popular West End show from being misled or ripped off when they buy their tickets from a secondary market on the internet.
The first choice, of course, is to buy tickets directly from the theatre, sporting venue or event organiser. This is known as the primary market, where people pay the advertised price and there should be no problem. But if someone has trouble getting tickets from a primary source they may find themselves resorting to one of the secondary market websites—StubHub and viagogo are two of the best known. The buyer is now in a sort of digital marketplace where buying and selling is the name of the game. If they are lucky they may find what they are looking for but still have to pay considerably more than the face value of the tickets. If they are very lucky, close to the date of the event, they may even have to pay less than the original price. None the less, they have entered a world where fraudsters and touts thrive.
Tickets for popular events may already have been bought up by groups that are only out to make a profit by reselling them. Sometimes many of the tickets have already been hoovered up by bots and offered at an extortionate price. Of course people can always refuse to buy them, but there are those who are want a ticket at any price. Mark McLaren of FanFair has stated that online event ticketing started as a great idea, has grown into a very big business and has now become no less than a racket.
These important amendments attempt to contain and control that racket. The Consumer Rights Act 2015 addresses the issue and tries to regulate those practices, but as my noble friend Lord Clement-Jones said, we seem to be having trouble in enforcing the law. One of the problems is that many of the secondary ticket websites are registered abroad. The recently commissioned Waterson report has made recommendations that should improve the situation, but even that report had to admit that this is a very complex issue, with a lot of potential loopholes. If my noble friend’s amendments can be agreed, that would be an important step in the right direction.
Lord Ashton of Hyde
My Lords, I too would, of course, like to pay tribute, on behalf of the Government, to Baroness Heyhoe Flint today. I agree that it is particularly appropriate that we should be discussing this subject today.
In 2015 this House acknowledged the complexity of online ticketing by including the requirement for a review of consumer protection measures relating to online secondary ticketing in the Consumer Rights Act 2015. Professor Michael Waterson conducted that review, and his independent report makes a number of points relevant to these amendments. I will come to the specific question asked by the noble Lord, Lord Clement-Jones, in a minute.
First, Professor Waterson does not recommend a ban on the secondary ticketing market, recognising instead its benefit to consumers. Amendment 231, in the name of the noble Lord, Lord Clement-Jones, on the unauthorised resale of tickets, could in effect ban the secondary ticketing market. There would be no obligation for organisers to approve a resale platform, or to accept returns. As a result there would be no outlet to recoup money for those who found they could not attend an event. Consumers could be left unable to sell any tickets they cannot use, other than through the black market. That would expose buyers and sellers to much greater risk of fraud than using the online secondary ticketing market, which has safeguards and guarantees built in.
Significant market intervention should be carefully considered and consistently applied. Professor Waterson calls for the existing provisions of the Consumer Rights Act to be enforced and tested. We should therefore welcome and await the outcome of the recently announced enforcement investigation by the Competition and Markets Authority.
Lord Stevenson of Balmacara
I am glad the Minister has mentioned the work of the CMA, but is he aware, as I hope he is, that the CMA enforcement activity was on the previous Act, not the current one? In other words, the undertakings it obtained related to previous legislation; it specifically did not and could not look at the situation post the Consumer Rights Act 2015 since it was not in force at the time they got those undertakings.
Lord Ashton of Hyde
I agree with the noble Lord on that. The fact is that the enforcement activity is under way. We think it would be the wrong time, but I hope later to be not entirely discouraging.
Lord Clement-Jones
I am sorry to press the Minister further even at this late hour, but I do not quite understand. Presumably there is a conclusion to the review of the enforcement activity by the CMA, saying whether the enforcement activity is adequate, effective or whatever. Is there a timescale associated with this CMA review?
Lord Ashton of Hyde
I am afraid I do not know what the timescale is. Obviously there will be a conclusion, but I do not know at the moment. I will find out and let the noble Lord know if it is possible to know that.
To add to the Act now while the investigation is under way would serve only to undermine it. We must allow the CMA to carry out its investigation without interfering with the law it seeks to enforce. To do so will simply provide further grounds for those being challenged to resist.
I also have some specific grounds on each of the individual amendments, but in view of the hour, if the noble Lord agrees, and in view of what I hope I will say to help him, if I omit those details on the individual ones we can move on. I understand the aim of these amendments—to ensure compliance with the Consumer Rights Act—but this is already under way and we must await the outcome.
On Amendment 230, concerning the use of ticketing bots, the offences set out in the Computer Misuse Act have broad application. Unauthorised use of a computerised ticketing system may give rise to breaches of that Act. We are of the view that it may also constitute an offence under the Fraud Act. Professor Waterson believed that such breaches need to be reported and investigated. He puts the onus on ticket vendors to guard against the harvesting of tickets by persons with no intention of attending the event. He called on the ticketing industry to do more to protect itself and, with government support, the new National Cyber Security Centre is in touch with ticketing organisations on cybersecurity.
Professor Waterson also stressed the importance of having an effective strategy that deters bot usage. For example, paperless options such as mobile phone ticketing, or a bank card doubling up as a ticket, can make it harder to carry out mass ticket purchasing. Notably, this strategy was employed for the sale of tickets to the musical “Hamilton” in London.
The Government understand the spirit in which these amendments are made and the Secretary of State recently held two round tables specifically on the issue of bots. While noting there are a number of industry-led solutions available, we recognise it is hugely frustrating for fans who miss out on tickets sold on the primary market only to see them disappear on the secondary ticketing market at sometimes hugely increased prices. That is why we will continue to reflect on what has been said by all noble Lords regarding the Government’s response to Professor Waterson’s report, which will be published very soon. Furthermore, we will continue to consider the specific issue of bots and whether there is scope for further government intervention in this area. I hope to be able to update your Lordships on this shortly. With that commitment, I hope noble Lords will feel able not to press their amendments.
Lord Stevenson of Balmacara
Glass half full or glass half empty? I am not quite sure what to make of that. Sometimes the Minister’s choice of words is helpful and informative, light is suddenly shone across the Table and we understand where he is going. I was a bit lost on that, but I think he was saying, “Hold on for a bit, and more will be revealed”. That is the first point. Waterson is clearly the key to it and the response will presumably set out some of the agenda we might want to pursue, either with the Government or separately, if we have to come back on Report.
It would be in everyone’s best interest if those key players who have been involved up to now could meet with the Minister, perhaps soon after the Recess, to try to hammer out what is and is not possible. Bills such as this do not come past very often. There is an opportunity to do something that will fit within the strictures of the Public Bill Office and therefore will be allowable. It would be an awful shame not to get the incremental changes that we think are necessary to fulfil the ambition behind the original Consumer Rights Act, the amendments and changes and the report of Professor Waterson. It would be to the benefit of fans who have called for it.
Lord Ashton of Hyde
Of course, as I said right at the beginning on day one, I am always open to meeting the noble Lord and other noble Lords. I am happy to do so. I think Report will be some weeks after the Recess, so we have some time.
Lord Stevenson of Balmacara
I am heartened by that and, on that basis, I beg leave to withdraw the amendment.
“Active consent of online buyers required for retention and use of contact information
(1) A seller of goods or services via the internet must not retain, share or use any contact information provided by buyers for any purpose except directly facilitating the sale of the good or service, unless the buyer has actively consented to the retention, sharing or use of the information. (2) For the condition in subsection (1) to be satisfied, the seller must have specified any purposes to which the buyer is consenting.(3) The condition in subsection (1) may be satisfied by the buyer ticking a box on the seller’s web page, but it may not be satisfied by the buyer failing to untick such a box which has been pre-filled. (4) A seller who contravenes the requirement in subsection (1) is guilty of an offence.(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding 10% of the seller’s annual gross operating profit.”
Baroness Finlay of Llandaff (CB)
My Lords, I will try to be brief because the hour is late. I should also say that this amendment probably has one part missing. In my role as chair of the National Mental Capacity Forum, I have become aware of the large number of people who are subject to fraud through scams and through “suckers lists” which are compiled and which circulate for a great deal of money among criminal gangs. Unfortunately, these have often originated because people have purchased something online, have provided their details and have not opted out of those details being shared with others who may have like-minded sales intentions, partners or whatever.
One of the problems is that, when they are purchasing online, a lot of people really do not understand which boxes they should have clicked on—such as terms and conditions—and which they should have unclicked. So the point of this amendment is to try to require anyone selling any item online to have a box that has to be opted into for a mailing list, rather than the current opting-out system.
Where the amendment is deficient is that it does not stipulate that such permission should be time limited. I hope the Minister will point out to me that it should be time limited for a year, so that the criteria should be even tighter than in my amendment.
I think that enforcement would have to come through the Information Commissioner’s Office, rather than trading standards, but I am grateful to the trading standards workforce for having discussed this issue with me at length, as have social work leaders.
I know that the general data protection regulation will come into force across the European Union on 25 May 2018. This will replace the European data protection directive. It is associated with severe financial penalties for non-compliance. Despite our Brexit arguments, I would expect that, because of this timing, we should also be adopting this data protection regulation. I would be interested to know from the Minister whether that is correct. Coming in with it is law enforcement data protection—directive 2016/680—on protecting personal data processed for law enforcement purposes. This will replace the data protection framework decision 2008. It appears that this directive must be transposed into national law by member states by 6 May 2018. Again, there is a question over whether this will be coming into force. If both of these come into force fully, they may cover this area, although that is unclear and I cannot help feeling that it would be much better for us to get it in our own legislation first.
So that we are aware of the size of the problem, the national scams team has a current database of more than 240,000 people on suckers lists, which is growing all the time because data are intercepted by enforcement bodies and reveal that more and more people have had their data sold on in this way, often by criminal gangs, who then go on to target people and groom them. Many of the people targeted are lonely, isolated citizens who are confused by the opt-in/opt-out. They do not see the small print and they do not understand the significance. The amendment, I hope, would solve the problem. I beg to move.
Baroness Buscombe
My Lords, I begin by apologising to the noble Baroness, Lady Finlay of Llandaff, that she is, for the second time running, almost a tail-end Charlie. It was the same on Monday evening and she was extremely gracious in waiting for so long for us to get to her amendment. I welcome her amendment, which highlights an issue that most of us here are acutely aware of when buying goods and services online; namely, the consequence of not ticking a box or, in some cases, unticking a box.
The proposed new clause imposes a fine not exceeding 10% of a seller’s annual gross operating profit if a seller of goods and services on the internet were to retain, share or use the contact information of a buyer without the buyer’s consent to do so. It also makes it a requirement that websites provide a tick-box which is not pre-filled, as a means by which an individual can demonstrate their acceptance of having their contact information processed by the seller.
Although I accept the spirit of the amendment, I do not believe it is necessary, for the following reasons. Clause 77 already places a statutory duty on the Information Commissioner to publish a direct marketing code of practice. Putting the ICO’s direct marketing code of practice on a statutory footing will make it easier for the Information Commissioner to take enforcement action against those organisations in breach of the direct marketing rules under the Data Protection Act and the Privacy and Electronic Communications Regulations. The current direct marketing rules are also clear, stating as follows:
“Organisations will need to be able to demonstrate that consent was knowingly and freely given, clear and specific, and should keep clear records of consent. The ICO recommends that opt-in boxes are used”.
The general data protection regulation—GDPR—which will come into force in May 2018 will introduce tough new measures on consent and will place obligations on data controllers to demonstrate clearly how they obtained consent when processing personal data, such as contact information. Silence or pre-ticked boxes as a form of consent will not be permitted under the GDPR. The GDPR will also allow tougher penalties to be imposed on organisations in breach of the rules: up to 4% of the organisation’s total global annual turnover, or €20 million.
The noble Baroness also suggested that the time limit for retaining personal information should be limited, for example, to a year. The reality is that time is not specified: one should hold on to the information only as long as is necessary to process payment or whatever the application is made for. For these reasons, I hope the noble Baroness will feel able to withdraw her amendment.
Baroness Finlay of Llandaff
I thank the Minister for that reply and for welcoming the spirit of the amendment. Just for the record, the reason for specifying a year if someone has opted into the mailing list is that over time their circumstances might change. They might want to withdraw their consent but not be clear about how to do it. I hope the Information Commissioner will consider that. People might also lose cognitive function over time and therefore become much more vulnerable to scams than they were when they opted in. So I hope that a time limit is also introduced. However, on the basis of the Government’s response, I beg leave to withdraw the amendment.
Baroness Hollins
“Awards of costs in respect of legal claims made in relation to digitally published news-related material
(1) This section applies where—(a) a relevant claim is made against a person (“the defendant”),(b) the defendant was a relevant publisher at the material time, and(c) the claim is related to the publication of news-related material which is published on a website.(2) If the defendant was a member of an approved regulator at the time when the claim was commenced (or was unable to be a member at that time for reasons beyond the defendant’s control or it would have been unreasonable in the circumstances for the defendant to have been a member at that time), the court must not award costs against the defendant unless satisfied that—(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator, or(b) it is just and equitable in all the circumstances of the case to award costs against the defendant.(3) If the defendant was not a member of an approved regulator at the time when the claim was commenced (but would have been able to be a member at that time and it would have been reasonable in the circumstances for the defendant to have been a member at that time), the court must award costs against the defendant unless satisfied that—(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator (had the defendant been a member), or(b) it is just and equitable in all the circumstances of the case to make a different award of costs or make no award of costs.(4) This section is not to be read as limiting any power to make rules of court.(5) For the purposes of this section—“relevant publisher” has the same meaning as in section 41 of the Crime and Courts Act 2013;“relevant claim”, “news-related material”, “material time” and “approved regulator” have the same meanings as in section 42 of that Act;“publication” has the same meaning as in section 42(9)(a) of that Act.”
Baroness Hollins (CB)
My Lords, I declare an interest as I gave evidence to the Leveson inquiry and my family decided that I should give evidence on their behalf—believing undertakings by the former Prime Minister that Lord Justice Leveson’s recommendations would be implemented. One of those recommendations, as we were all aware, was Section 40 of the Crown and Courts Act 2013, which Parliament enacted with cross-party support, but which the Government have so far failed to commence. This leaves victims of press abuse without affordable access to justice and leaves the royal charter hamstrung with no incentives for its use.
In response to the Government’s failure to follow through on their undertakings, I tabled amendments to the then Investigatory Powers Bill to replace Section 40 of the Crown and Courts Act with a similar provision. Government Ministers and others, in resisting those amendments, suggested that the Digital Economy Bill would be a better vehicle to resolve the matter—particularly because of the urgent nature of the Investigatory Powers Bill. Although my amendments were in scope and the Bill had been amended with a large majority by your Lordships’ House, I agreed to withdraw them when they were returned by the other place.
I will very briefly explain the effect of the amendment I am proposing today. It would make a similar provision to that in Section 40 in the Crime and Courts Act 2013 in so far as is possible within the scope of this Bill. Lord Justice Leveson recommended that all newspapers should join an independently approved regulator that is independent and effective, and that such a regulator would offer guaranteed, low-cost arbitration as a cheap route to justice for the press and free for the public. If a newspaper refused to join a system that Lord Justice Leveson set out and to offer low-cost arbitration, the judge said that, in order to prevent the power and work of newspapers being used to bully and intrude on ordinary members of the public, the newspaper would have to shoulder the court costs of any claim brought successfully against it. To avoid having to meet the costs of claims brought against it, and indeed to benefit from costs protection if sued in court, a publisher need only join a recognised regulator and resolve any claim far more cheaply through that regulator’s arbitration system.
It is this provision that the former Secretary of State decided not to commence. The amendment I am moving today would bring a Section 40 lookalike into effect for online publications. That would include, of course, the major print publishers, which all have significant news websites. Given that it relates only to the online publication of libels or other illegal abuses as they relate to online publication, it is slightly narrower in effect than the provision agreed by Parliament in 2013. It is a weaker substitute for Section 40. But in the absence of any of the access to justice which Section 40 would provide for families and individuals attacked unfairly by the press, it is far better than nothing at all.
The Government may argue that a consultation on these matters is ongoing. Lord Justice Leveson consulted publicly throughout 2011 and 2012. Section 40 was one of his many recommendations. My family and I went through the traumatic process of giving evidence at Leveson because we expected that his recommendations would be taken seriously. The consultation now being considered in private, with a government Minister presiding over it, does not, to be honest, inspire the same confidence.
My second amendment, Amendment 234A, simply provides for immediate commencement for reasons that I do not need to explain. I hope that the Committee will support these probing amendments. I beg to move.
Lord Low of Dalston (CB)
My Lords, I support the amendments because they provide the Government with yet another opportunity to deliver on their commitments to the victims of press abuse and bring this critical access-to-justice measure into force.
Amendment 233F would not bring Section 40 of the Crime and Courts Act into force in full, as we have heard. That is regrettable but it is as much as can be done within the scope of the Bill. However, it will demonstrate to the Government that this matter is not going to go away, and that people like the noble Baroness, Lady Hollins, will keep bringing back amendments such as this and seeking to insert them into any Bill into which they can plausibly be inserted until the Government keep their promises to the victims of press abuse.
It is now almost four years since the cross-party agreement was reached and Section 40 was enacted by Parliament. This House, as the noble Baroness reminded us, voted for it again as an amendment to the Investigatory Powers Bill before Christmas. The press lobby believes that by intimidating the Government with the threat of negative headlines and causing maximum delay, it can prevent it coming into effect. I support the amendment because I do not believe that people such as Mr Murdoch are sovereign and because I do not believe that the Government should override the will of Parliament to placate the interests of newspaper owners.
The consultation that the Government have launched, which has recently ended, is offensive to the victims of press abuse, whose evidence was accepted by Lord Justice Leveson, and should be offensive to Parliament, which enacted this measure in 2013. The former Prime Minister David Cameron, as the noble Baroness, Lady Hollins, has again reminded us, undertook to implement Leveson’s recommendations unless they were “manifestly bonkers”. Retrospective consultations to undermine the recommendations of a public inquiry whose recommendations were not manifestly bonkers, as well as the will of Parliament, are an affront to any understanding of what is meant by “good governance”. It is no wonder that the consultation exercise is facing a legal challenge.
I hope that the Government will keep their promises and implement Section 40 without delay, and I hope that they are under no illusion about the strength of feeling on all sides of the House on this matter. There may not be too many people here at this hour to demonstrate that, but the Government should make no mistake: it is the case. I attended a meeting the other evening where constructive proposals were discussed that seemed to some of us to have the makings of a settlement between those pressing for the implementation of Section 40 and the newspaper editors. Surely the Government should be trying to broker such an agreement instead of just sitting on their hands. Until they do, as I say, amendments such as this will keep coming back.
Lord Prescott (Lab)
My Lords, I support the amendments of the noble Baroness, Lady Hollins. We have been in similar situations on previous legislation regarding the matter of Section 40. The noble Baroness said that she had an interest to declare. I declare that I gave evidence to Leveson about the phone tapping that the police and press did on my phone—so if that is an interest, I record it.
The important point today, though, is that we are not talking about creating a new piece of legislation; we are talking about implementing what both Houses of Parliament agreed is the law of the land. The only thing preventing the implementation of that section of the Crime and Courts Act is the fact that the Government are not prepared to implement the regulation necessary to see it implemented. In earlier debates—I quite understand why—I heard Ministers say, “This isn’t the appropriate piece of legislation”. They were probably right, but the relevant legislation has already been passed. It was agreed unanimously by both Houses of Parliament but for one reason or another the Government are refusing to implement it.
I received a letter today from Christopher Jefferies—now a well-known person to us all—asking if I would be attending this debate. In it he said:
“As you may know, I was a victim of gross press intrusion and libel after my tenant Joanna Yeates’ tragic death in 2010. Some newspapers effectively accused me of her murder, and made other appallingly false allegations and insinuations. I subsequently gave evidence at the Leveson Inquiry”.
He is one of many who cannot understand why—if Parliament has passed this legislation and it was agreed unanimously, by all party leaders and the Prime Minister—we do not implement it, why there is a refusal to do so. I know that I am likely to be told, “We have started a process of consultation; the department is looking at the Leveson proposals”, but I cannot give an answer to Mr Jefferies or any of the others, although I have a suspicion that the influence on the Government is coming from the Murdoch press, which is quite central to all this and which has—as noble Lords will have seen in the papers—many meetings with senior Ministers. A meeting between Murdoch and Thatcher led to his buying the Times, and a recent meeting between Murdoch and May in New York led to the reconsideration of the Leveson proposals that are embodied in the royal charter.
Baroness O'Neill of Bengarve
My Lords, it is late, and I do not want to repeat myself. I am sure that the noble Baroness, the noble Lord and the whole of that long Front Bench—almost as numerous as the rest of the House at this hour—know this issue not going to go away. This retrospective consultation does not do the Government honour. I hope that they will take some action.
Baroness Jones of Whitchurch
My Lords, again, given the lateness of the hour, I simply say that our views are well known, that we have supported the implementation of Section 40 in a number of previous debates in this Chamber, and on that basis we support the amendment.
Lord Keen of Elie
My Lords, I am obliged to the noble Baroness, Lady Hollins. I will address Amendments 233F and 234A together. The amendments, of course, mirror Section 40 of the Crime and Courts Act 2013 but would apply to digitally published news-related material only, as we know. The House has debated the issue of Section 40 on various recent occasions, including during passage of the Investigatory Powers Act and the Policing and Crime Act. There was also a stand-alone debate just before the Christmas Recess.
There is obviously a great strength of feeling about this matter. I realise that some Members of this House are frustrated by what they see as a lack of progress by government on Section 40. However, the Committee should also recall the strength of feeling on the other side of the debate. Many noble Lords have argued passionately in this House against Section 40 and are concerned about its commencement and its impact upon freedom of the press. That is why the Government ran a consultation to consider the matter further.
The press self-regulatory landscape has changed significantly in the past four years since the Leveson inquiry reported. It is right that the Government take stock, look at the changes which have already taken place and seek the views of all interested parties on the most effective way to ensure that the inexcusable practices which led to the Leveson inquiry being established can never happen again.
A consultation was the most appropriate way to ensure that the Government were listening to all views when considering options for the next step in respect of Section 40. Indeed, the consultation closed on 10 January, and it is estimated that we have received more than 140,000 responses. I know that many Members of this House responded to the consultation, and of course we are grateful that they took the time to do that, but many others have responded as well. It will be necessary to consider the many and diverse views that have been expressed with regard to this matter.
As many Members of the Committee will know, and as the noble Lord, Lord Prescott, mentioned, the consultation is now subject to a legal challenge. While I cannot comment on the ongoing legal proceedings, the Government have committed not to take any final decisions on the matters to which the consultation relates until the judicial review application has been determined. As such, it is not possible for me to set out a timetable for when the Government will respond to the consultation. But of course we hope that that judicial review application will be determined much sooner than later.
That brings me on to the amendments from the noble Baroness, Lady Hollins. The issues that she has raised are of critical importance. I appreciate that she and her family were themselves the subject of press abuse, as were other Members of this House. I also recognise the strength of feeling that parties have on the commencement of Section 40. However, with respect, now is not the right time for this House to consider the present amendment.
News consumption is becoming increasingly global and more and more people are reading their news online from a multitude of sources from around the world. Bringing in a law that effectively mirrors Section 40 but for relevant digital publications only would create an incoherent regime applying different rules depending on the mechanism by which an article has been published.
Noble Lords who have supported these amendments have raised the profile of this issue and given a clear signal of their intent—and of their continuing intent. This has not gone unnoticed in government. But we must ensure that we consider this matter properly. As I said before, a free press is an essential component of a fully functioning democracy and we must ensure that we protect that. I note what the noble Lord, Lord Prescott, said about the position in Ireland. I am not in a position to express a view as to the manner in which that operates but I am perfectly content to indicate that we will look at that going forward as well. I hope that that will satisfy the noble Lord. At this stage, however, I urge the noble Baroness, Lady Hollins, to withdraw her amendment.
Baroness Hollins
My Lords, I thank the Minister for his reply. My hope is for a free and responsible press. However, what is most disappointing for the public is that over the last four years of inertia and of the press’s failure to establish a proper regulator, countless more individuals have been affected by press abuse and have no access to redress. They include victims from the Paris Bataclan attack, the Shoreham air disaster, and many more. This issue is still live and is still troubling. All these individuals have been let down by the Government’s decision to renege on their promises and to prevent access to justice for ordinary victims of press abuse. I am disappointed by the Minister’s response and I intend to return to this on Report. I beg leave to withdraw my amendment.
Baroness Buscombe
“( ) section (Prevention or restriction of use of communication devices for drug dealing);”
Baroness Buscombe
“( ) Chapter 5 of Part 5, so far as relating to the disclosure of information by the Welsh Revenue Authority, comes into force on whatever day the Welsh Ministers appoint by regulations made by statutory instrument.”
“( ) Chapter 1 of Part 5, so far as relating to the disclosure of information to or by a water or sewerage undertaker for an area which is wholly or mainly in Wales, comes into force on whatever day the Welsh Minsters appoint by regulations made by statutory instrument.”
Baroness Buscombe
“( ) Sections (Disclosure of information to water and sewerage undertakers) and (Disclosure of information by water and sewerage undertakers) extend to England and Wales only.”
Baroness Buscombe
Digital Economy Bill
Wednesday 22nd February 2017
(7 years, 9 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 102-I(Rev) Revised marshalled list for Report (PDF, 106KB) - (21 Feb 2017)
16:09 - Division on Amendment 1 - Ayes: 250 / Noes: 206 - Amendment 1 agreed.
16:50 - Division on Amendment 5 - Ayes: 244 / Noes: 198 - Amendment 5 agreed.
17:55 - Division on Amendment 20 - Ayes: 133 / Noes: 182 - Amendment 20 disagreed.
Lord Mendelsohn
“(2B) The universal service order must specify that the target for broadband connections and services to be provided before 2020 must have—(a) speeds of 2 gigabits or more;(b) fibre to the premises (FTTP) as a minimum standard;(c) appropriate measures to ensure that internet speed levels are not affected by high contention ratios;(d) appropriate measures to ensure service providers run low latency networks.(2BA) The universal service order must specify as soon as reasonably practicable that, by 2020, the following will be available in every household in the United Kingdom—(a) download speeds of 30 megabits per second;(b) upload speeds of 6 megabits per second;(c) fast response times;(d) committed information rates of 10 megabits per second;(e) an unlimited usage cap.(2BB) In meeting the obligations set out in subsection (1), internet service providers have a duty to ensure that their networks offer at least the minimum standards specified in subsection (2BA) to every household in areas of low population density, before deploying their networks in urban areas.(2BC) The Secretary of State must ensure that—(a) the premises of small and medium-sized enterprises are prioritised in the roll-out of the universal service broadband obligation;(b) rollout of universal service broadband obligations is delivered on a fair and competitive basis.(2BD) The universal service order shall, in particular, say that mobile network coverage must be provided to the whole of the United Kingdom.”
Lord Mendelsohn (Lab)
My Lords, I am pleased to move Amendment 1 in my name and that of my noble friend Lord Stevenson of Balmacara and the noble Lords, Lord Fox and Lord Clement-Jones. I thank Ofcom for its helpful advice and clear and comprehensive responses to our questions, as well as the excellent documents it has published on the matter. I also thank the Minister for his willingness to listen. I hope he appreciates that we have also listened carefully. We have not moved amendments that, while touching on important aspects of broadband policy and its delivery, are not appropriate for the Bill.
These amendments are about making the universal service obligation meet the Government’s objectives and should rightly appear on the face of the Bill. We provide for further definition to be placed as was originally planned in regulations after this Bill, but they provide the correct framework to set them out properly. Placing these limited areas on the Bill ensures that the universal service obligation provides an operable legislative framework and mixes the right amount of direction, constraint and enabling. In short, these amendments set a floor for the USO; they create the means to ensure that progress can be properly monitored and reported, and they provide an aspiration to ensure that the universal service obligation helps to set a direction and does not become a limiting factor.
Amendment 1 makes a series of changes to the Bill. It places the universal service obligation for broadband on the face of the Bill and sets the following conditions: a target for broadband connection speeds of 2 gigabits or more; a minimum standard of 30 megabits download speed; that rollout must be rural and SME-focused; a requirement on the Secretary of State to ensure fair competition; and a universal service obligation for mobile coverage. In proposing the introduction of proposed new subsection (2BA) we ensure an explicit commitment to the initial, universal service obligation download speed of 30 megabits.
The case for this is made most strongly in Ofcom’s technical advice to the Government on the broadband universal service. Its evaluation of three options is carefully written but it essentially puts the Government in a tough spot. It is clear that the only option that meets all the requirements is scenario 3, with download speeds of 30 megabits and upload speeds of 6 megabits, and other aspects which are all in the amendment. But given that it will remain a question of cost it leaves the Government to introduce that constraint. However, here is where the report is most valuable. Detailed work by Ofcom and its consultants suggests that the worst option, scenario 1, will cost £1.1 billion; scenario 2 —which is also 10 megabits, with a couple of frills—will cost £1.6 billion; and scenario 3 will cost £2 billion. Crucially, the costs per household resulting from the economies of scale provided by option 3—the option which provides for 30 megabits download speed and 6 megabits upload speed—move down from scenario 1 and are almost the same as scenario 2. The economic case for an additional £800 million is extraordinarily well justified.
It is also clear that in defining what decent broadband is, the report indicates that 10 megabits will not be sufficient. It argues that this may be sufficient today, but not by the time the USO is proposed to be delivered. Even if it is possible that data usage might not require any more—a point that it says is unlikely, even when the technology gains in compression and transmission techniques—other issues such as contention rates and latency would render 10 megabits unfit for usage in a very short time. The best the report can muster in defence of a 10 megabits download speed is that if it were adopted it would have to be reviewed almost immediately. The case is compelling and it is economically justified—I look forward to the Minister’s agreement on this.
Proposed new subsection (2BB) suggests that the rollout prioritises that the universal service obligation needs to be met in areas of low population density before providers can deploy their networks in urban areas. This ensures that the economic models encompass the entire economics of a rollout rather than cherry picking the most profitable parts, which inherently leads to the outlying parts becoming uneconomic and uncommercial. This also ensures that the government funding is most efficiently employed in meeting the right outcome. During Committee I outlined the well-known German example of how to tender on an outside-in basis in relation to the mobile market, and how companies which said that it was uneconomic here were able to produce and deliver commercial models in Germany. It is not therefore a surprise that this model is used more widely now as a template to modify, and it would improve the universal service obligation for us to do so as well.
Proposed new subsection (2BC) places a duty on the Secretary of State to ensure that the market is sufficiently structured to benefit from all the advantages gained by competition, and to make sure that there is some focus in ensuring that the needs of SMEs are properly addressed. It is clear that while they are demand-led, without some explicit focus, their needs will not be adequately addressed.
Proposed new subsection (2BD) introduces mobile network coverage into the umbrella of the universal service obligation. This reflects the current patterns of consumer and citizen behaviour, and the increasing use of mobiles as the growing means—particularly in younger demographics—of accessing all sorts of digital and other services. Ensuring that social exclusion is properly met requires embracing mobile requirement, and this can be easily met by addressing the 5G tendering through the German process, or even limited forms of roaming.
Lord Fox (LD)
My Lords, I associate myself with, and support, Amendment 1. The noble Lord, Lord Mendelsohn, covered it comprehensively and I do not want to go over the same territory.
In his opening speech in Committee, the Minister correctly hung his hat on delivering world-class digital connectivity. We can all subscribe to that. There was no doubting the mood of noble Lords in Committee, and certainly no doubting the mood of the country given that we are some distance from being world class in that regard. The objective of this amendment is to help move us along that road. At the time, the Minister associated the Government with the gigabit objective of the noble Lord, Lord Mendelsohn, while firmly ruling it out as a USO objective. The Minister has the notion that we should rely on Ofcom to set the target, that we should rely on a public consultation, and that, eventually, a USO will emerge. In the Minister’s view, this House is not expected to advise Ofcom on where that USO should be set. We disagree with that, because, once the USO is established, it will be trimmed, edited and manipulated. Then, no doubt, the debates will begin among the service deliverers about what exactly the USO means.
We have already seen the length and byzantine nature of the debate that can unfold when Openreach and BT start to discuss matters. We have only to look at the protracted ownership debate that continues unabated. That lengthy discourse will lead only one way; it will trim and pull back from whatever USO Ofcom establishes. For this reason we believe that Ofcom’s hand needs to be firmed up. It needs support and we must strengthen its hand in dealing with what is essentially a monopoly and very experienced public sector supplier. Therefore, this amendment is designed to support Ofcom to take the steps needed on the way to delivering the world-class digital network to which we aspire. That is why we think it should be accepted.
Proposed new subsection (2B) in the amendment contains a medium-term objective which the Minister has endorsed. We need to move towards gigabit connectivity. That will drive increased fibre-to-the-premises connection. Proposed new subsection (2BA) sets a difficult yet achievable goal for 2020 which Ofcom itself has modelled, as the noble Lord, Lord Mendelsohn, set out. It is important to have both those objectives because one can be the enemy of the other unless they are both included in the Bill. We cannot second-guess the country’s future need but we can be certain that it will be more than 10 megabits. We must be in a position to assist Ofcom in establishing a USO that can begin to deliver the needs of this country. It is for that reason that we support Amendment 1.
Lord Wigley (PC)
My Lords, I declare an interest immediately, because in both my household and my neighbour’s household we have had immense problems in securing adequate speeds. I referred at earlier stages to some of these difficulties.
I very much support both Amendments. Amendment 1 states that,
“by 2020, the following will be available in every household”,
and the list includes,
“download speeds of 30 megabits per second”.
This is absolutely necessary, because under the present provision, the providers just are not willing to do that. They are willing to rest their case on the fact that it is too expensive to run the necessary connection to a household, not just in far-flung rural areas but in conurbations and villages. I am within half a mile of the main exchange and within 200 metres of a box. However, because of the way they have laid out the connectivity sequence, we cannot get decent speeds. It is irritating that the excuse can be used that it is too expensive to provide a connection.
I assume that if there was a legislative requirement along the lines laid out in the proposed new subsections in Amendments 1 and 2, that would be overcome. If the Government are not willing to accept these amendments, I would be interested to know what response they would give to people who are facing this difficulty. It is not a technical impossibility, just too expensive. I was on the committee which dealt with the privatisation of telephones, with the late John Golding and others—it took a considerable amount of time to go through—and assurances were then given that of course, the responsibilities that had been on public bodies would be continued. I accept that, to a large extent, BT has done that. However, safeguards are needed, particularly in rural areas, and I would be grateful if the Minister said how he will cover that if he cannot accept these amendments.
Lord Maxton (Lab)
My Lords, I fully support these amendments, although they use the term “United Kingdom”. I would like the Minister to say what powers the Scottish Parliament in particular and the other devolved Parliaments have in this matter. BT has a monopoly on laying the cables, but it often has to do it down roads and across private land, particularly if no telephone line already exists. Some 90% of the islands that are a part of the United Kingdom are off Scotland’s shores, and BT has to lay cables right the way across the sea—and at the moment, they are telephone cables, not high-fibre cables. What is the responsibility of the Scottish Parliament and the other devolved Parliaments in all this?
Lord Mitchell (Non-Afl)
My Lords, I too support these amendments. At each stage of the Bill in your Lordships’ House, I felt terribly frustrated by the Government’s lack of ambition. I said in Committee and on Second Reading that the gigabyte should be king. According to something I read a couple of days ago, in 10 years’ time 50 billion devices will be connected to the internet worldwide. This country will account for some 8% to 10% of that—4 billion or 5 billion devices. We have to have the gigabyte capability in this country to deal with such massive growth. The Government’s response to something so crucial to our nation’s development is meagre, and I hope they and the Minister will reconsider.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I thank the noble Lord, Lord Mendelsohn, for his attention and for meeting us. I also thank noble Lords from the Lib Dem Benches. We have had interesting discussions and I think that they have been beneficial on both sides. I will apply that to the rest of the day’s proceedings so that we do not waste time being nice to each other for the rest of the day.
Amendments 1 and 2 seek to include a series of additional specifications on the broadband universal service obligation, all of which were discussed in Committee. Noble Lords, during the course of the Bill and already today, have commented on the Government’s lack of ambition. Let me say straightaway that the Government share the ambition for widespread availability of fibre-to-the-premises connections. More extensive fibre connectivity is crucial to the UK’s future digital economic growth—we agree on that. But the UK’s fibre market is still at an early stage of development. The Government want to encourage the market to do more to deliver fibre as widely as possible and we are already taking steps to drive FTTP deployment. In the Autumn Statement we announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full-fibre connections and future 5G communications. Where we differ crucially is that we believe that it would not be appropriate for the universal service order to include a target for FTTP connections. Let me be absolutely clear why this would be a mistake.
I remind noble Lords that the regulatory regime for electronic communications is shaped by four European directives, adopted in 2002 and implemented in this country through the Communications Act 2003. Amendments 1 and 2, if they are to achieve what the noble Lord, Lord Mendelsohn, and others are seeking, must be consistent with this legal framework: in particular, the universal service directive. I struggle to see how a target for a 2 gigabits per second USO could possibly be compliant with EU law. First, the purpose of universal service requirements in the EU directive is not to force the development of a nascent market, such as the UK’s fibre market, but to ensure that a baseline of services is made available to all users where market forces do not deliver this. The USO is a safety net to prevent social and economic exclusion, not a statement of ambition: we are setting the minimum, not the maximum. This amendment is upside down, placing a ceiling on ambition rather than acting as a safeguard for those less well served by communications providers.
Secondly, the EU directive requires us to consider cost. Universal fibre to everyone’s door will be expensive as FTTP coverage is currently low. According to Ofcom’s latest Connected Nations report, only approximately 1.7% of UK premises have access to FTTP services. So clearly it would be very expensive to address this in the short term.
The recitals to the universal service directive indicate that any change in the scope of universal service,
“should be subject to the twin test of services that become available to a substantial majority of the population, with a consequent risk of social exclusion for those that cannot afford them”.
I have already explained that fibre to the premises is available to less than 2% of UK premises. This is far from a technology available to a “substantial majority” of the population. Furthermore, under the directive, connections provided under a broadband USO should be capable of supporting,
“data communications, at data rates that are sufficient to permit functional Internet access, taking into account prevailing technologies used by the majority of subscribers and technological feasibility”.
It may perhaps be argued that a sensible level of universal service for today should nevertheless be delivered using only fibre to the premises so as to be future- proof. But again, this suggestion would not be compliant with EU law. The directive requires that universal service be implemented using,
“the most efficient and appropriate approach”,
which is also proportionate and minimises market distortions. To require fibre-to-the-premises connections capable of 2 gigabits per second would clearly not be the most efficient way of delivering for today’s needs and would in fact cost many billions of pounds.
Lord Mendelsohn
My Lords, I thank the Minister for this comments at the beginning, although I thought we were nice to each other all the time. I also thank him because I am now slightly encouraged by the strength of our position, due to his retreat towards the idea that it is in some way a contravention of EU law. He has his lawyers, we have ours, and commercial organisations also have lawyers who tend to agree with us that this is an obstacle and that EU directives are against it. This may not be an argument for long, but for now I am encouraged by that being the Minister’s defence.
I thank the noble Lord, Lord Fox, for an excellent speech. I also thank the noble Lord, Lord Mitchell, for his very good point about the number of devices, the consequences of the internet of things and other matters and how they will affect what we are establishing as the USO. I was told a curious fact: there are now more phones in the world than toothbrushes. We are now looking at a world where the importance of providing the right level of capacity is essential.
I thank the Minister for his reply, but I find I am in rather an invidious position. I feel as though I am arguing the Government’s case in the face of determined opposition. The core rationale for the construction of the amendments is based on the Government’s own Broadband Delivery Programme: Delivery Model as published in September 2011, outlining their policy and goals for their operating arm, Broadband Delivery UK. I shall quote one sentence from the report. In relation to what has to be delivered for the customer by 2021, it says:
“Everyone able to access 30Mbps capabilities. 50% to access 100Mbps capability”.
So with one addition—the establishment of a gigabit target, which was not so predictable at that time—the amendments seek no more than the Government’s own targets, which they themselves have given up on. It seems that they are caught by the failures of the market structure and are unable to address those adequately, being somewhat constrained by the pension fund deficit. The amendments are not outlandish; they are a conservative defence of the Government’s goals. They are about making a policy fit for the future, rather than one fit for the past.
The Minister seems to make the case for the future but is not prepared to deal with the consequences by addressing and amending the USO on the face of the Bill. The USO is being established to address the problems of social and economic exclusion, particularly for those in rural areas and those who are vulnerable. The USO’s construction has necessarily been shaped with the imperfections of a market structure that has succeeded in getting us on a journey but is inadequate to address current or future technology. It is consistent with the Government’s desire to propose reasonable rather than wholesale change.
The amendments do not drive market change; they follow it. They would make sure that the current list of proposals did not limit the capacity of the market to constrain predictable and certain changes. They recognise the problem that the UK has with low levels of fibre but would not restrict the market’s capacity to limit competition and distort choice so as to maintain such a low level. At the minimum we would have hoped that the Minister would be forthcoming on the issue of speed.
In view of the certain negative consequences of the Bill as currently drafted, I wish to test the opinion of the House.
Baroness Janke
“(2BA) If the universal service order says that broadband connections and services must be provided to any extent, it must require the provision of a social tariff for broadband services which has the aim of preventing digital exclusion.”
Baroness Janke (LD)
My Lords, on this side of the House we are concerned about the whole issue of affordability. With the universal service obligation, we need to recognise that many people who would very much benefit from having access to broadband will not be able to afford it. I am speaking about low-income communities and communities with interests, such as people on pensions, or those who have a need to use broadband more so than others, such as the disabled. It is important that some form of social tariff is introduced. In Committee, the noble Baroness gave a very encouraging response to this amendment. I think she referred then to a report from Ofcom that recommended the introduction of a social tariff. In moving the amendment again, I would like some assurance that this is a concrete proposal rather than an aspiration. I hope the noble Baroness will be able to assure me of that and I beg to move.
Lord Fox
I shall speak to Amendment 4. When an amendment along similar lines was debated in Committee, the Minister rightly noted that we were in danger of mixing our drinks with some USO and some non-USO measures clustered together. That is why I accepted the Minister’s advice and have separated the USO and left it in the Ofcom section of the Bill. This amendment covers the non-Ofcom measures. I am sure that as I have taken the Minister’s advice to frame the amendment in this way, he will be persuaded that there is something to be gained from the transparency that these measures will give and will back up his relatively supportive comments about the importance of driving public acceptance and helping people to understand what they can get from broadband by measuring those efforts and reporting them to Parliament. On that basis, I am sure the Minister will be only too willing to include this amendment in the Bill.
Lord Ashton of Hyde
My Lords, that was encouragingly short. I thank noble Lords for their amendments. The noble Baroness, Lady Janke, proposed that any broadband USO must require the provision of a social tariff for broadband services. As my noble friend Lady Buscombe noted in the debate in Committee, when Ofcom was commissioned to provide advice to the Government on the design of the broadband USO, we specifically asked it to consider a social tariff to ensure that the USO is affordable for all.
The Government are presently considering Ofcom’s technical analysis, which was published on 16 December, and will publish a consultation on the detailed design of the USO. In relation to a social tariff, Ofcom noted that a social tariff might be appropriate but did not provide any indication of the costs involved and said that more work is needed. I confirm to the noble Baroness that we are sympathetic to the need for a social tariff, but it is absolutely right that further work is done first. I will briefly explain why.
First, we have a highly competitive broadband sector that delivers low prices. Bargain-basement broadband is readily available in the UK, and many people on lower incomes do not use fixed lines for their connectivity needs, preferring to rely on mobile. The ONS reports that more people use mobile phones to access the internet than any other medium.
Secondly, social tariffs work by cross-subsidy. The majority of users who pay the standard rate subsidise the beneficiaries. It would be irresponsible to force these costs on to consumers before we knew how much they are.
Thirdly, if we want a social tariff, do we want to use the USO to deliver it? That would impose the cost on the universal service provider. It might be better, for example, that the social tariff be required from all providers. I would therefore be concerned if we included a specific requirement for this in primary legislation now. However, I hope the noble Baroness will be happy with the assurance that I have given on this. We do not want it to be a source of unnecessary risk at the moment.
I turn to Amendment 4 and the noble Lord’s encouraging words trying to lead me in the direction he wants. I am afraid that at the moment, for a variety of reasons, we do not think that there is a need for such a reporting requirement. In relation to paragraph (a) of his proposed new clause, as I noted in Committee, it will be crucial to monitor progress in implementing the broadband USO. It is an important consumer measure but the reporting requirements should be decided once the design of the USO has been finalised, and not before. That will be done later.
The matters covered in paragraphs (b) and (c), regarding the percentage of premises connected via fibre to the premises, are already reported annually through Ofcom’s Connected Nations report. Paragraph (d) proposes reporting on measures taken to increase take-up of superfast broadband. This would largely repeat current reporting by Ofcom and the DCMS’s annual report.
Paragraph (f) proposes annual reporting on the number of community schemes set up each year and the level of subsidy required to achieve this, but there is no government-led community broadband programme, so we do not think there is any point in this reporting requirement.
On paragraph (g), we agree that it is important to ensure that consumers know their rights, particularly when it comes to switching. The Bill includes a number of provisions aimed at making it easier for consumers to exercise those rights, from making explicit Ofcom’s powers to set switching conditions and to require payment of automatic compensation, through to easier access to the information needed to make better decisions. The Bill’s measures are testament to the Government’s ambition to ensure that consumers are informed and empowered.
Finally, I would add that the Government will be publishing a consumer Green Paper in the spring, which is almost upon us, which will review where markets may not be working for all. With that explanation, I would be grateful if the noble Baroness could withdraw her amendment.
Baroness Janke
I thank the Minister for his response. In relation to the findings of the Ofcom report, I note that he mentioned that many people in poorer communities use mobile phones. In fact, that is much more expensive, and very many of them end up running up large bills and in debt, so I hope that much more work will be done on this project. One of the reasons I am keen on this is the whole area of smart data. My own city is a smart city, and the ability to use energy, for example, at competitive rates and the ability to engage communities with smart energy plans and awareness of the usage and cost of energy seem to me to hinge on the whole issue of affordability. I know people in my city who would be very pleased to work with the Minister on this, and I can provide him with their names and the work that has already been done. I look forward to hearing the outcome of further work, and I hope the Minister will inform me about it.
On behalf of my noble friend Lord Fox, I would say that, again, accountability and transparency are important issues, as is how effectively and efficiently this work will be rolled out, and I hope that ways of measuring and assessing that will also be provided in the light of previous performance. Having said that, I beg leave to withdraw Amendment 3.
Lord Clement-Jones
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract—(a) allow the end-user the opportunity to place a financial cap on the monthly bill under that contract;(b) allow the end-user to switch (at no extra charge) to another provider, which meets the specified standards or obligation as provided for in section 3, or to deem the contract to have been terminated by a consistent breach of the standards or obligation as provided for in section 3;(c) allow the end-user to switch mobile providers according to rules set out by OFCOM in accordance with the following principles— (i) that switching must be free to the consumer, unless the consumer is aware of and has consented to fair and reasonable restrictions and charges to do so;(ii) that the switching process itself must be quick, and on an agreed date;(iii) that consumers must have access to their consumption or transaction data, and this must be in a format that can be easily reused and they must be able to authorise third parties such as comparison sites to access their data to help them to switch;(iv) that sites and tools providing comparisons to consumers that receive payments from suppliers must make clear where the payments affect the presentation of results; and(v) that there must be an effective process for consumers to receive redress if there are any problems with the service.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or(b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”
Lord Clement-Jones (LD)
My Lords, Amendment 5 is an enhanced version of Amendments 14 and 15 in Committee, which the noble Lord, Lord Stevenson of Balmacara, introduced, but it includes additional principles that I raised and which were contained in the Government’s 2016 paper Switching Principles: Government’s Response and Action Plan. It deals with two issues very close to the interests of consumers: billing and switching. As the noble Lord, Lord Stevenson, said in Committee, mobile phone billing is,
“one of the most complicated areas of domestic expenditure”.—[Official Report, 31/1/17; col. 1145.]
There may be, in particular, some danger of vulnerable customers getting into difficulty and it should be possible for a consumer to set a cap on expenditure on their mobile phone.
As my noble friend Lord Foster pointed out in Committee, most mobile phone contracts are similar to credit card contracts, in that,
“they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones”.
He cited evidence from Citizens Advice that,
“in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts”.—[Official Report, 31/1/17; col. 1147.]
He reminded us that Ofcom alerted us to this problem five years ago and proposed that it could be addressed by mobile service providers offering an opt-in cap to their consumers. The remainder of the amendment would give explicit power to Ofcom to set the gaining provider-led switching rules, which we all want to see, and sets out the principles which the rules must follow—the very principles which the Government themselves have set out.
We would like to see both these aspects enshrined in primary legislation. In her reply to these amendments in Committee, I am afraid that the Minister—the noble Baroness, Lady Buscombe—was not convincing when she talked of providers offering apps, warning text messages and the like to manage usage, the Government’s expectations for providers to manage bill shock, and of course the guidance issued by Ofcom, which I am sure every consumer reads avidly. That is not enough in this day and age. This is not a draconian requirement. This is a voluntary, opt-in capping system that is being proposed.
As regards switching, the Minister said that Ofcom was being given the necessary powers by Clause 2 and had an existing overarching duty to consumers. This is a much more explicit duty. It also ensures that the Government’s own principles are enshrined in a duty to make rules, which the Minister, however, could not assure me were the ones in contemplation by Ofcom. I hope that the Government will welcome this carefully thought-through amendment as being very much in the interests of consumers when mobile phone usage is, if anything, even more important than broadband. I beg to move.
Lord Mendelsohn
My Lords, I support the amendment and thank the noble Lord, Lord Clement-Jones, for an outstanding summary. In relation to caps, it is important to understand the consequences of bills which cause stress to people in particular circumstances, and why this is another part of ensuring that we have the right social impact in such policies. Mobile phones are not luxury products. Actually, low-income households are more reliant on their mobile phones than other households: they are five times more likely to be mobile- only—that is, no landline or broadband—than the highest earning groups. The major cause of mobile phone debt is unexpectedly high bills which are usually caused by consumers using services not included in their standard monthly tariffs—very frequently with no real conception about how the complexity of the tariff has an impact on their bills. These unanticipated bills can make it harder for consumers to budget, especially if they are on a low income. Unexpected bills can exacerbate a consumer’s debt problems. Citizens Advice reports that 70% of its clients who receive mobile phone debt service also receive advice on other debts. The consequences are significant and only these measures outlined in this amendment will in our view have the impact to address this problem. In other ways, complicated information and other consequences will limit the capacity of people to manage their debts.
I must confess that I think ensuring roaming capacity —not a national roaming programme—for those people in the absence of service in order to increase their ability to access mobile services is a terrific idea. I thought it was a very good idea when I first heard it, so I got one, and it is outstanding. I have cracked many of the problems of very poor mobile service, including in that far-fetched place, which never seems to have decent service, called Hampstead. I now have perfect service—it is an absolutely terrific system.
I think that there is a very strong case for this. We are not talking about a national programme, but it certainly addresses a large part of the problem about coverage. There seems to be no particular issue: it gives us good customer experience, it is not particularly difficult to roll out, and that is why it is sensible and worth while for it to be in this Bill. Now that I have another phone, I of course endorse the provisions on switching, but I would make this point about switching and compensation. These strengthen and make explicit the powers of Ofcom to require certain changes in relation to compensation to make sure that companies automatically compensate customers who experience poor levels of service. I think there is a very strong consensus, and that Ofcom will come to the conclusion that it is vital that consumers are financially compensated. An automatic compensation scheme will act as an incentive to telecoms companies to improve their performance.
Baroness Buscombe (Con)
My Lords, I am sorry that I was unable to satisfy noble Lords at Committee, so let me try again. Amendment 5 raises important issues for many customers, and we really do appreciate consumer concerns. Following previous debates that we have had on these matters, my officials have spoken with mobile network operators to check progress in this area.
Currently, providers offer consumers various ways to manage their usage, including the use of bill caps. So I say to the noble Lord, Lord Clement-Jones, that it is possible already for a consumer to put a cap on his or her expenditure. Tesco Mobile, for example, already provides capped contracts for the benefit of its customers. This includes a safety buffer which can be set to suit preference. Three allows consumers to block calls that go over their monthly allowance and calls that may be not be included as part of their allowance. Vodafone allows a cap to be set up through an app. Additionally, EE, Virgin Media and O2 offer the facility of notifying customers through warning text message alerts when approaching the limit of their allowances.
The Government expect providers to continue to take steps to minimise bill shock and ensure that their customers are adequately equipped to manage their mobile phone usage. We will underline this further in the forthcoming consumer Green Paper, which will be published in April, a Green Paper that my noble friend Lord Ashton has referenced today. This is an issue that needs careful thought, which is why the Government believe it is only right that we do so in a consultative manner. We need to consider and mitigate unintended consequences in that process.
Universal bill caps do not exist for other utility services for good reason—the essential nature of them. Mobile phone services are indeed an essential service for many; I agree with the noble Lord, Lord Mendelsohn, that they are not a luxury. We need to ensure that the outcome from this debate does not risk putting people in vulnerable situations, whether that is leaving them unable to make a vital call when they break down at the side of the road or having to contact a friend or relative in their hour of need.
I know a number of elderly people living on their own who rely wholly and completely on their ability to use their mobile phone if they are afraid or concerned or have a fall. They may have forgotten to pay their bills and so on. Suppose they did not have that opportunity to contact someone in an emergency. They would be put in a difficult and frightening situation. I know there is a feeling that, “Well, the bill cap is there, but people could still contact the emergency services”. However, we already have an enormous burden on our emergency services, and we fear that this would increase that burden. So would this really be in the interests of consumers, as suggested by the noble Lord, Lord Clement-Jones?
I agree with noble Lords that mobile providers need to take responsibility for looking after their customers. The Government have previously negotiated a voluntary agreement with providers that means there is already a £100 liability cap to cover lost and stolen mobile phone handsets, provided that they are reported as lost or stolen within 24 hours. There was good reason not to put that agreement in primary legislation: it would have been too prescriptive and offered no flexibility as technologies progress. That is an issue that we keep returning to: do we want to be prescriptive in the Bill when we are talking about the digital economy, when we know the technology is constantly changing? So we have considerable concerns with putting such a prescriptive amendment into primary legislation.
It is worth highlighting that Ofcom, as regulator, has a duty to protect the interests of the end-user in the telecom markets. It would therefore seem improper to progress the amendment without due consideration to what the role of government and Ofcom would be regarding enforcement. There is no point putting this in the Bill if there is no practical enforcement. This is yet another reason why the Green Paper will allow us to reach a well thought-out solution to address the concerns that noble Lords have rightly raised.
The switching principles that noble Lords have proposed putting on to the statute book are broadly those on which the Government consulted in an October 2015 call for evidence. Following the end of that consultation, the Government published a response in May 2016, including revised principles based on responses received to the call for evidence. The Government’s response also confirmed our commitment to work with Ofcom to ensure that consumers could switch their telecom services, by legislating through the Digital Economy Bill. However, the Bill does not mandate the switching principles, as this would go against the spirit of them as principles and would not take account of the different characteristics of different sectors and consumer needs. We know that it would risk creating a power that could prove to be, again, too prescriptive for the future needs of consumers as technologies continue to develop.
Lord Clement-Jones
My Lords, I thank the Minister for that response. It was very interesting that we had the full range of ministerial responses: the unintended consequences; the burden on the emergency services; the “too prescriptive” argument; “we are working with Ofcom and getting this very carefully right”; and the “we cannot enshrine principles because they might go against the spirit of the principles” argument. I thought that was a very interesting one.
The Bill is designed to deal with frustrated customers, and, of course, there is a risk of duplication, as the Minister says—which is an interesting one—despite the fact that we are being too prescriptive. I am not sure that I sense the total logic behind the Minister’s response. A number of different barriers have been raised, but I cannot really see great merit in the response in that event.
As regards capping, this is a voluntary system. Raising the question as to whether people are going to put a burden on the emergency services seems to me extraordinary. There are people with pay-as-you-go SIM cards who are in the same position. What we are asking for is for people to be put on the same footing, so that there is a limit to which they are subject, but a voluntary one that they ask to be imposed so they can have better control over their own finances. That seems an eminently sensible and not overly prescriptive measure that we would be asking Ofcom to ensure service providers have in place.
As for switching, I remind the Minister that these are the Government’s own principles. I cannot see how it goes against the principles to include them in the Bill. That is tautologous, and certainly not an attractive argument against including switching rights.
Consumers have been waiting for switching ability for mobile phones for a very long time. I have been corresponding with Ministers for a long time on the subject. I am delighted that we are seeing the beginning of movement, but telling us to wait for an Ofcom paper on next steps for mobile that will be the beginning of a brave new world when in fact, we could be amending the Bill to put duties on Ofcom straightaway, is not very attractive. I want to test the opinion of the House.
Lord Ashton of Hyde
“Code rights and land registration
13A_ Where an enactment requires interests, charges or other obligations affecting land to be registered, the provisions of this code about who is bound by a code right have effect whether or not that right is registered.”
Lord Ashton of Hyde
My Lords, the Committee debates afforded the opportunity to cover many areas of the Electronic Communications Code in detail and I and my officials have reflected further on the points raised. The government amendments tabled following this are intended to provide greater clarity and make it easier for the code to be applied in practice.
Amendment 6 concerns land registration. During the debate, the noble Lord, Lord Foster, drew our attention to the relationship between the code rights and land registration rules and questioned whether the revised code provided adequate clarity on this. Having revisited this area of the revised code as a result of this, and taking into account his helpful comments, we have now tabled Amendment 6. This amendment makes it clear that the code rights will bind site providers whether they are registered as part of an agreement—for example, a lease—with the Land Registry or not. This will ensure certainty for operators and landowners and support continuity of service for consumers.
Amendments 8 to 12 are about valuation. The noble Lord, Lord Grantchester, spoke in Committee of his concerns, and the concerns of stakeholders, that paragraph 23 of the revised code was not clear enough. Paragraph 23 sets out the basis on which the consideration for an agreement to confer code rights is to be assessed. I take this opportunity to thank the noble Lord, Lord Grantchester, for taking the time to meet me and discuss these comments further, and for the effort he has made to get to grips with this complex area. I also acknowledge the contributions made by the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers, which have provided invaluable assistance to officials in developing amendments that will address these concerns.
The Government are clear that landowners should be paid appropriately for allowing code operators to use their land. That is why the revised code requires a price to be paid for that use, rather than creating a system where the landowner solely receives compensation. However, the Government are equally clear that the public need for digital communications services is such that landowners, whoever they are, should not be able to extract additional value from the fact that their land is being used specifically for the provision or use of electronic communications networks. Paragraph 23 therefore introduces a “no scheme” basis of valuation which ensures that any such additional value is not taken into account when the value of a code agreement is assessed. The no scheme basis of valuation is central to the aims of these reforms, which are to deliver improved coverage and connectivity for UK consumers by making it easier and cheaper for digital communications providers to roll out their infrastructure. The amendments tabled here do not change the Government’s policy position.
Amendments 8 to 10, to new paragraph 23 in Schedule 1, provide that the market value of an agreement to confer code rights must be assessed on the basis of four clearly expressed assumptions. Their combined effect will ensure that operators do not pay elevated prices for using land to provide infrastructure and deliver electronic communications networks.
Amendments 11 and 12 make corresponding amendments to new paragraph 63 in Schedule 1, which deals with the valuation of Crown tidal land. This group also contains a number of minor technical amendments. Amendment 8 simply updates and corrects a cross-reference. Amendment 13 recognises that there is no property chamber of the First-tier Tribunal in Wales, so that code disputes in Wales can be dealt with only by the Upper Tribunal.
Finally, Amendments 15 and 16 are consequential on the devolution of the management functions of the Crown Estate commissioners to the Scottish Ministers under the Scotland Act 1998, as amended by the Scotland Act 2016. I will reply to the amendment in the name of the noble Lord, Lord Grantchester, after he has spoken to it, and beg to move Amendment 6.
Lord Grantchester (Lab)
My Lords, I thank the Minister and his team, especially Kellie Hurst, for meeting and looking at the difficulties around the communication code. The meetings were indeed very constructive, focusing on the issue of value. I am grateful to the Minister for his introductions to the amendments today and for his kind words.
In Committee, we wondered how far this code got the balance correct between property rights and the public benefit. We all recognised the public interest in accessing modern communication channels at as low a price as possible. The Government finalised their position, after representations from operators, to a further qualified use of market value, which resulted in a clouded understanding that might not have been helpful but for this clearer use of language now proposed. In references to the new code as being on a no-scheme basis, there had been interpretations that this imported a compulsory purchase compensation basis that gave rise to general misapprehensions about the code by parties with a compulsory purchase experience. The code is now clearer that value is based on agreement as reflected by market value, qualified by the public interest in references to a no scheme basis in that the disregard is of the use of the rights for the electronic communications network.
Amendments 6 and 7 are clarifications to new paragraph 13 in Schedule 1, as prompted by the noble Lord, Lord Foster, and technical corrections are to new paragraph 15.
Amendments 8, 9 and 10 to new paragraph 23 are the pertinent amendments, with further clarifications in Amendments 11 and 12 to new paragraph 63, which now makes clear that the core principle remains that the consideration is to be assessed as the market value of agreement conferring the code rights. It is not compensation for loss. That is then further defined in new paragraph 23(2) in Schedule 1 and interpreted and qualified in proposed new sub-paragraph (3A).
As the Minister said, proposed new sub-paragraph (3A), regarding market value, makes four assumptions that clear up the misapprehensions and misunderstandings brought to us and considered in Committee. Assumption 1 recognises that the code right is within the agreement and that everything under it is relevant, save the intended function for a network. Assumption 2 reflects the Government’s policy that the operator’s freedom to assign the agreement and its qualified freedoms to upgrade or share apparatus are to be disregarded. Following these two disregards, assumption 3 affirms that the code right in question is otherwise to be assessed as it is in the real world and not some hypothetical one. Assumption 4 follows the Law Commission’s report and recent government policy in assuming there is more than one suitable site available as a means to exclude perceptions of ransom value brought forward by operators, even though the definition and interpretation of market value excludes ransom value.
Amendments 11 and 12 translate what I said above to new paragraph 63 in Schedule 1 concerning Crown land, and Amendment 13 is a technical correction of new paragraph 94. We will all be grateful that there has been a lot of proofreading and for Amendments 15 and 16 regarding the transfer of duties to the Scottish Government. We are also very grateful that the Minister listened to the concerns we raised in Committee and, in re-examining the situation, recognised that improvements could be made. We are in agreement with the amendments and, like the Minister, I am grateful to the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers for their technical expertise, which helped to recognise misapprehensions and clarify our drafting. These amendments make a massive improvement.
It could be said that with these improvements there should be fewer disputes and therefore fewer problems concerning the code of practice to be drawn up between operators and site owners. Granted that this may well be the case, and that the Minister said in Committee that the large superstructure of an adjudicator’s office and staffing may be costly, cumbersome and unnecessary, anxieties nevertheless remain. Wide experience in other areas operating under a code of practice is that, where there is a wide disparity between the relative economic strengths of parties involved in an activity, market power tends to lead to abuses against the smaller party with the use of unfair practices and a transfer of business risk. As Ofcom is a regulator with little or no experience or much expertise in this area, Amendment 14 proposes that it appoint an expert independent adjudicator to rule on disputes brought under the code of practice.
It would be an error to assume that the new regime will immediately work without there being a hitch or problem in the operation of the new code. Parties acting under it must recognise that any code of practice has to be abided by and has teeth with which to enforce compliance, and must have confidence that they have recourse should they consider the code to have been breached. I welcome the Minister’s assurance in this respect.
Lord Ashton of Hyde
My Lords, I thank the noble Lord, Lord Grantchester, for explaining his amendment, which seeks to introduce a statutory regulation by Ofcom of the code of practice for the Electronic Communications Code and to create a code adjudicator to examine breaches of the code of practice and impose sanctions. The Government understand the need to ensure that the Ofcom code of practice has real impact on industry behaviour. The Electronic Communications Code will modernise the way digital communications are deployed, and it is essential in this new market that the legitimate interests of all parties are respected.
Under paragraph 102 of the revised Electronic Communications Code, Ofcom has a duty to develop and publish a code of practice. The development of this code must be in consultation with key stakeholders, including both industry representatives and landowner interest groups. This ensures that relevant parties have the opportunity to directly influence industry standards of best practice.
Lord Ashton of Hyde
“(3A) The market value must be assessed on these assumptions—(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;(b) that paragraphs 15 and 16 (assignment, and upgrading and sharing) do not apply to the right or any apparatus to which it could apply;(c) that the right in all other respects corresponds to the code right;(d) that there is more than one site which the buyer could use for the purpose for which the buyer seeks the right.”
“(7A) The market value must be assessed on these assumptions—(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;(b) that the right in all other respects corresponds to the tidal water right;(c) that there is more than one site which the buyer could use for the purpose for which the buyer seeks the right.”
Lord Ashton of Hyde
“( ) In sub-paragraph (6)(a) “relevant person”, in relation to land to which section 90B(5) of the Scotland Act 1998 applies, means the person having the management of that land.”
“OFCOM power to impose caps upon wireless telegraphy licenses
In Schedule 1 to the Wireless Telegraphy Act 2006, for paragraph 3 (information to be provided in connection with applications) substitute—“3 The grounds on which a licence may be refused by OFCOM include—(a) a failure by the applicant to provide information which OFCOM reasonably require in order to satisfy themselves that the applicant is able to comply with terms, provisions or limitations to which the licence may be made subject, or(b) where the applicant owns more than 30% of the total useable mobile phone spectrum in the UK and OFCOM has a reasonable belief that the award of further licences would have a damaging impact upon competition in a given electronic communications market.3A Where an applicant already owns more than 30% of the total usable mobile phone spectrum in the UK, and OFCOM has a reasonable belief that the holding of these licences may have a damaging impact upon competition in a given electronic communications market, OFCOM may request that the holder of the spectrum must divest a proportion of its spectrum holdings until such a competition issue no longer exists.3B Within six months of the day on which the Digital Economy Act 2017 is passed, OFCOM must commission an evaluation of the distribution of radio spectrum suitable for use for the purpose of mobile telephony and present a report to the Secretary of State.3C The evaluation under subsection (3B) must consider—(a) the impact on competition in the mobile telephony market of the current distribution of spectrum;(b) the impact on consumers, both financial and in terms of coverage;(c) the efficiency of current spectrum usage; and(d) the impact of preventing any one licence holder from owning more than 30% of the total spectrum useable for mobile telephony.3D The Secretary of State must lay the report of the review before each House of Parliament by 1 July 2018.””
Lord Stevenson of Balmacara (Lab)
My Lords, we return to an issue which we discussed in Committee. At that time my proposed amendment received support from the noble Lord, Lord Fox, for which I was grateful, and I know that he again supports the amendment today. The reason for returning to this is that I sense that we did not prosecute the amendment to the full extent possible at the time—that may have been our fault, but it was quite late in the evening—and, on reflection, there may be an issue here that needs a little more care and concern from Ministers before we leave it.
To go back over the issue, we are talking about the development of spectrum, which is a valuable national resource that—although there always seems to be more of it—is finite. Therefore, as a national resource, it is important that the Government have a firm grasp on how it should be distributed and the prices that should be paid for it. Currently, it is for Ofcom to introduce the necessary regulatory framework, which it does by considering how and on what basis additional spectrum can be made available and on what basis it can be released to operators who wish to use it. That has taken the form of auctions, which have been of varying types over the years—some have been spectacularly successful and some less so—and have been done under different rules.
The nature of the Government’s engagement with this is through Ofcom, and the amendment in no way aims to make a change to that basic structure. However, there is a question about whether we have reached the point where the Government should pay more attention to the issues concerned in this area than they have in the past. Why is this? It is because we have gone from a situation of having reasonably equitable spectrum holdings to having quite a significant imbalance in spectrum. This is partly because of the growth in one or two of the companies concerned. Some of that has been organic, but one of the main reasons has been the allowing of the merger between BT and EE, which has created a group that has been described as a,
“behemoth in the communications market”.
Therefore, we are not now in a situation where there are four companies competing for customers using broadly the same rates and amounts of spectrum; we are talking about only three companies—and possibly a fourth—and the problem is that two of those are very large indeed compared to the others. For example, BT/EE, the combined behemoth, has the largest proportion of all available spectrum, with 39%, while Vodafone has a significant but smaller 27%, Three has just 14% and O2 has only 13% of available mobile spectrum. In responding to this amendment, could the Minister reflect on whether this situation represents an optimum position for the market and, if it does not, whether the powers that he has are appropriate for how it goes forward?
However, it gets more complicated. There are, as one might expect, different sizes of companies and the individual spectrum bands are also of different value. It is therefore important not to look only at the overall figures but to be concerned with how the bandwidths that have the highest capacity—and therefore the best ability to offer innovative services to consumers—are going to be dealt with.
We have the prospect of a further auction this autumn, for which Ofcom is currently consulting on what will be the rules for auctioning off a total of 190 megahertz of high-capacity spectrum in the 2.3 gigahertz and the 3.4 gigahertz bands, which are particularly suited to higher-speed mobile broadband services—a topic that we have just been discussing. Clearly, for the future of UK plc and for the future of businesses and individuals in this country, how the spectrum is made available, how much of it is made available and on which bandwidths will be a crucial issue that we must get a handle on.
In this amendment we are proposing that more attention should be paid than in the past through a cap of, say, 30% on the individual holdings that any one company may have of the usable mobile phone spectrum. This is a figure which has been broadly discussed, and which Ofcom has been using in some of its discussions and debates around this issue, so it would not represent a very different approach.
However, before we go to the auction for this high-value additional spectrum, which will be crucial for 5G and further services going forward, there must be an evaluation carried out by the Government, not by Ofcom. This should look at: the impact on competition in the mobile telephony market of the current distribution of spectrum; the impact on consumers, who are often neglected, both in financial and coverage terms; the efficiency of the current spectrum usage; and the impact of preventing any one licence holder from owning more than 30% as a broad-brush approach. If this review is to be effective, it must be done quickly and brought to the House. I beg to move.
Lord Maxton
My Lords, I shall be brief. I have in my pocket a mobile phone owned by Virgin Media. Virgin Media uses the EE spectrum. As far as I know, there is no financial connection between Virgin Media and EE, but Virgin uses the EE network. Could the Minister explain that to me?
Lord Fox
My Lords, I am fortunate to follow the noble Lord, Lord Stevenson, whose comprehensive support of his amendment means that I need say very little, but I will make a couple of points.
We have talked in various debates on the digital economy about how wireless and broadband are converging, but there is one area where we do not want them to converge. The paroxysms that we are putting ourselves through around the broadband issue are because of how broken that market is, and there is a firm danger that we may be sending the wireless market down the same route. As the noble Lord, Lord Stevenson, pointed out, we had an equitable spectrum distribution, but there is a clear and present danger that we will move even further from that equity, with two dominant players and two very small players. The purpose of this amendment is to work in advance of that, so that we will not subsequently be debating the brokenness of the wireless market as we have been, from time immemorial, in respect of the broadband market.
When this amendment was debated in Committee, the Minister’s response was very much about leaving Ofcom to choose. He hazarded that, from the Government’s point of view,
“it also strikes us as unlikely that Ofcom, having determined appropriate rules …, would immediately nullify the results”.—[Official Report, 31/1/16; col. 1196]
In other words, it is up to Ofcom to decide, and it is not going to decide on this issue. That actually makes this amendment more important, not less. Ofcom has clearly recognised that there is a potential issue here, and it has gone tentatively down the route of limiting access to the 2.3 gigahertz spectrum while completely ignoring the 3.4 gigahertz spectrum. I think that the case has been made by the noble Lord, Lord Stevenson, for us to take account of that in the Bill and, for that reason, I support the amendment.
Lord Ashton of Hyde
My Lords, I thank all noble Lords who have spoken on this technical but important subject. The intention behind the amendment is that Ofcom is able to ensure competition in the mobile market. It also proposes that the Government commission and evaluate the current usage and allocation of mobile spectrum.
As has been said, Ofcom already has the power to set appropriate rules for its spectrum licensing, taking due account of competition implications. Ofcom must award licences by processes that are open, objective, transparent and proportionate to what they are intended to achieve and not unduly discriminating against particular persons or a particular description of persons. It is important to remind ourselves that Ofcom has been given the position of regulator of the telecommunications market in the United Kingdom. It already has a duty, when carrying out its radio spectrum functions, to have regard to the desirability of promoting both competition in the provision of electromagnetic communications services and the efficient management of radio spectrum for wireless telegraphy.
Reviewing the state of competition in the mobile market falls clearly within Ofcom’s remit. It considered many of the issues outlined in the proposed new clause in its recent consultation on the forthcoming spectrum auction. This included a proposal to apply a cap of 255 megahertz on the amount of immediately useable spectrum that any one operator can buy. Ofcom believes that the UK mobile market is currently working well for consumers and businesses, with strong competition between mobile network operators. It considers it unlikely that any of the four mobile network operators would cease to be credible as a national supplier of mobile services in the next few years, even if they did not obtain any spectrum in the forthcoming auction. Additionally, more useable mobile spectrum, such as the 700 megahertz band, will be available in the future. The reality is that Ofcom has considered the competition issues in some detail. Not everyone agrees with its conclusions, and Ofcom will take that into account as part of its consideration of the consultation responses. However, it is for Ofcom as the regulator to take a view on these issues, and it has already done so.
The noble Lord, Lord Stevenson, asked whether the current divisions are optimum. Ofcom is obviously more expert than I am, and we think it is for Ofcom to opine on that. As I said, Ofcom proposes to set a cap of 255 megahertz on the immediately useable spectrum. It has explained that, as a result of this proposed cap, BT/EE would not be able to bid for spectrum in the 2.3 gigahertz band. The cap will prevent a worsening of the current extent of asymmetry in immediately useable spectrum. I think that that indicates its views and I am not going to contradict it.
In addition, if the Government felt that it was necessary to direct Ofcom to undertake a competition assessment, they could do so under Section 5 of the Wireless Telegraphy Act, and they did so in 2010 ahead of the 4G auction.
The noble Lord, Lord Maxton, asked how Virgin supply a mobile network through EE. I am informed that the answer is that Virgin sublet part of EE’s spectrum access.
Given that Ofcom is already able to, and does, take into account competition issues, I hope that the noble Lord will agree to withdraw this amendment.
Lord Stevenson of Balmacara
I gather that the right way to respond is to say that I am obliged to the Minister for his response. The issue is really about how fair the market is going to be to the three groups concerned. Obviously, the regulator has got to decide to ensure that there is fairness in relation to the individual companies involved; there has to be respect for the overall pricing and impact that it has. But the missing ingredient is the consumers, and how they will be affected by decisions that are taken. I sometimes wonder whether the regulator has the position of the consumer centrally in its focus when it does so.
I am also minded to reflect on the fact that, with the decision of the House to impose a different form of USO within the Bill, there may be implications for how Ofcom might have to operate in this market, and it may be sensible to give time for that to be reflected on and see how it works out as we move forward a little further.
Baroness Buscombe
“Lending of e-books by public libraries
(1) In section 5(2) of the Public Lending Right Act 1979 (interpretation) for the definition of “lent out” substitute—““lent out” means made available to a member of the public for use away from library premises for a limited time (including by being communicated by means of electronic transmission to a place other than library premises) and “loan” and “borrowed” are to be read accordingly;”.(2) Section 40A of the Copyright, Designs and Patents Act 1988 (lending of copies by libraries or archives) is amended as follows.(3) After subsection (1) insert—“(1ZA) Subsection (1) applies to an e-book or an e-audio-book only if— (a) the book has been lawfully acquired by the library, and(b) the lending is in compliance with any purchase or licensing terms to which the book is subject.”(4) In subsection (1A)—(a) for “subsection (1)” substitute “subsections (1) and (1ZA)”;(b) after paragraph (a) insert—“(aa) “e-audio-book” means an audio-book (as defined in paragraph (a)) in a form enabling lending of the book by electronic transmission,”.”
Baroness Buscombe
My Lords, Amendment 19 fulfils a manifesto commitment to enhance the public lending right by extending it so that authors of e-books and audiobooks have the right to receive payment from a government fund for the remote lending of these books from public libraries across the UK. The new clause also amends the Copyright, Designs and Patents Act 1988 to enable rights holders to include appropriate terms in respect of e-books and e-audiobooks to reflect the differences between digital and physical books and ensure that e-lending by public libraries mirrors physical lending. This will mean that current protections for authors, publishers and booksellers can be maintained. The Government have been pressed to make this amendment throughout the passage of the Bill in both Houses. I reassure the House that it has always been our intention to deliver on our commitments to authors as soon as possible.
In preparing this amendment, we have had to await the outcome of litigation, and we have discussed the matter in depth with lenders, publishers and authors. I am pleased that the sector supports our approach; it has also reiterated its shared commitment to support a strong book sector, reading and literacy, including by supporting public access to e-books as well as physical books and audiobooks through libraries. I put on record the Government’s thanks to the sector representatives, and I hope that they will continue to work closely with the Government to successfully implement these changes and support the Government’s manifesto commitment to ensure remote access to e-books for public library users. I also thank all noble Lords who have spoken on this issue. I beg to move.
The Earl of Clancarty (CB)
My Lords, I take this opportunity to congratulate the Government on introducing this amendment, for which authors will be very grateful indeed. Credit should go to the groups and associations that have campaigned for this change, including the Society of Authors and the Authors’ Licensing and Collecting Society, which have both campaigned on this issue for some time.
I have just one issue with the wording of the Government’s amendment. The Society of Authors briefing argues that it would be clearer if the words, “for the purpose of library lending” were added to “lawfully acquired” in line 32. This clarification is in the amendment in the name of the noble Lord, Lord Clement-Jones. The phrase “lawfully acquired” hangs there by itself and although it might be argued that it is implied that the acquisition is for library lending, that is not absolutely clear. It should be stressed that all interested parties were in agreement about this and would be happier if this clarification were made. Will the Minister promise to look at this before Third Reading and see if it can be tweaked?
Lord Clement-Jones
My Lords, I add my voice to the thanks offered to the Minister by the noble Earl, Lord Clancarty, for having now included this amendment, albeit there are some questions to be asked. I hope the Minister will be able to tell us why the wording is rather different from that in the amendment we put down in Committee. Those differences need to be accounted for but this is a good way of delivering on a commitment that the Government made. It is really the final fruits of the Sieghart report and will be strongly welcomed by authors and writers across the country. We all value the public lending right, which makes a small but very significant addition to the income of authors.
Lord Maxton
My Lords, I too welcome the amendment; it is well worth while, but it is worth making a point I made earlier. Of course, there are now books that are written entirely as e-books and not published at all in printed form; they are published for the Kindle or similar devices. Does this amendment cover these as well? Does it give the author of such books exactly the same rights as the author of a book published in printed form?
Of course, e-books are now lent not just by public libraries. Amazon has its own public service—well, a service anyway; it is not public; you pay for it—whereby it can lend you a book that you can read on your Kindle for a limited time and that is available only as an e-book and not in printed or any other form. Do the same rights extend to authors whose books are lent in this form? Are these the same rights you would get through a public library?
My last point is also one I have asked about before. Public libraries in Scotland, of course, come under the local authorities, and local authorities in Scotland come under the Scottish Parliament. Is this a devolved matter or will it now be covered by the UK as a whole?
Lord Stevenson of Balmacara
My Lords, we welcome the Government’s tabling their amendment on this issue, as promised. In Committee, the Minister said she wanted to work with the sector groups involved to support a strong book sector that helps to promote opportunities for the public to read and learn, and she intended to table her own proposals for the necessary legislative changes as soon as possible. We sometimes hear that and then have to wait ages, but this time she has been able to get the Whitehall system to work to her agenda, and I congratulate her on that.
Baroness Buscombe
I thank all noble Lords who have spoken in this short debate. I shall refer to Amendment 23, tabled by the noble Lord, Lord Clement-Jones. When moving this amendment in Committee, the noble Lord explained that interested parties representing the sector had since proposed a different wording from that used in the amendment. The Government have considered the suggested wording from the sector and our amendment seeks to reflect stakeholder views, although we have achieved the intention of enabling terms to be applied by rights holders to e-books and e-audiobooks for lending through an amendment to the Copyright, Designs and Patents Act 1988. Rights holders will therefore be able to make e-books and e-audiobooks available with clear terms about whether these are available for lending and, if so, what conditions on library lending would apply, such as one loan to one user at a time or that the book will be available to lend for a limited overall lifespan.
I am also delighted that the proposed extension of the public lending right to include remote e-lending has cross-party support, as was made clear in Committee. This amendment will maintain protections for rights holders, while enabling authors to rightly receive public lending right payments for the increasing remote lending of their works, as they do for the lending of books from library premises. I hope the noble Lord, Lord Clement-Jones, will therefore not press his amendment but support the Government’s new clause.
In response to the noble Lord, Lord Maxton, I can confirm that, as I think we discussed in Committee, the provision covers all books, including purely online, digital books. It is also UK-wide, so it is not a question of devolved powers. However, it is all to do with public lending rights and lending through public libraries, not with the example he raised regarding Amazon.
“(7) If it appears to the Secretary of State that the extent of the manufacture of unauthorised decoders or similar equipment for sale or hire imported into the United Kingdom (otherwise than for private and domestic use) or distribution otherwise than in the course of a business has reached a level which is likely to affect prejudicially the owners of copyright works, the Secretary of State may bring forward regulations made by statutory instrument which prohibit such activities.(8) A statutory instrument containing regulations made under subsection (7) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
Lord Stevenson of Balmacara
My Lords, when this matter appeared in Committee during our discussions on the intellectual property section of the Bill, I was supported by the noble Lords, Lord Foster of Bath and Lord Clement-Jones. I am grateful to those noble Lords for agreeing to support this amendment this time.
We had quite a good debate on a concern that is relatively new in the sense that we have not seen much evidence of it before. For those who were not involved, the problem involves a small device, such as a USB stick, that is plugged into a TV set using a standard connection. The problem is that the device can be loaded so that it has software and add-ons which are preconfigured to give access to thousands of streams; or that users can purchase boxes of software giving them access to material that would otherwise not be available to them because of copyright. Of course, they do not pay for that material. There will clearly be a threat to rights owners from the impact on their earnings streams if these unauthorised decoders or similar equipment become widely used. The scale of the problem—which the noble Lord, Lord Clement-Jones, illustrated in his speech—is beginning to cause concern for those who have rights that are being abused in this way.
In responding to the debate on this amendment, the Minister said that the matter had registered on the Government’s agenda and that,
“illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners”.
She said that the Government,
“share the wish of those behind these amendments to ensure that this harmful activity is properly tackled”.
However, she also said—quite rightly, I suppose—that we should not,
“jump immediately to introduce new criminal provisions”,
but take time to make sure that the legislation in place is not sufficient and, if it is not, discover what would be the right way forward. She also said that there would be action relatively quickly and that:
“Officials at the Intellectual Property Office are working with the Crown Prosecution Service”,
to develop new guidance, and that they would run,
“a public call for views over the coming … weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed”.—[Official Report, 2/2/17; cols. 1387-88.]
This was action on a scale almost unprecedented in government. I gather that the invitation has already gone out to the bodies I have just referred to, that people are responding and that some action is therefore gathering pace. The problem, I suspect, will be that although the Bill is progressing slowly, it is still on a relatively quick pace and we may reach the conclusion of our proceedings on it before all that discussion and debate has concluded.
It seemed to us that, rather than the very specific offences listed in the original amendment we tabled in Committee, including the particularities of the types of equipment and possible penalties that might apply to them, it might be sensible to equip the Government with powers to bring forward appropriate action if it appeared, after the conclusion of discussions and debates, that it was necessary.
It is unusual for opposition parties to offer Henry VIII powers to Ministers, and I shall probably be struck down as I leave the Chamber this evening for having done so, but on this occasion there is clearly an injustice being perpetrated by manufacturers and distributors of this equipment. It is clearly already affecting rights holders—there are figures to show that that is the case. I suspect that the IPO’s conclusion will be that action is required. If there are not sufficient remedies within the existing statutory framework, clearly the Government will have to seek an opportunity to create them. As we move into the penumbra of Brexit, it seems unlikely that there will be Bills floating around that we can hijack for this purpose, so it seems eminently sensible for the Government to take the power that is offered in Amendment 20. I beg to move.
Lord Clement-Jones
My Lords, there is equal enthusiasm on these Benches for this amendment. The noble Lord, Lord Stevenson, has, as ever, put his finger on the issue. I plead guilty to the same constitutionally improper thoughts as the noble Lord, Lord Stevenson. I cannot see why the Government should not take the powers that are needed in advance simply because this vehicle happens to be passing through and there may not be another suitable vehicle very soon.
On the balance of probabilities, at the very least it seems to us that these powers are needed. Those who have spoken to us have universally said that a new offence is needed and that the existing powers are not adequate. Certainly the Motion Picture Association, Sky and others made the point that enforcement agencies, such as trading standards and PIPCU, are unable to pursue strong cases due to the lack of an appropriate offence. This is all about creating an appropriate offence.
I very much hope that the Government, whether at this stage or the next stage, will take heed of the points being made and will give themselves this enabling power in order to introduce a more specific regulation at a future date. The Government should also consider a point that was strongly made by those organisations and think about the enforcement aspects as well in the call for evidence. I hope they will consider the issue which I will be raising next week in an Oral Question on PIPCU funding, which is an important aspect of this. If a power is created and there is no proper enforcement mechanism, it is not a particularly useful creation. I hope the Government will take heed of the fact that this is thundering down the track at great speed and could, as both these Benches described in Committee, have an extremely harmful impact on the audio-visual industries in future.
Baroness Kidron (CB)
My Lords, I want to reiterate a point I made in Committee about the context in which young people receive this material. Almost 50% of 16 to 17 year-olds are streaming, and along with the streaming comes advertising, pop-ups and adult material. This is a subject that is close to the Government’s heart, as shown by Part 3. This seems a wonderful opportunity to deal with it again in this part. It is not just 16 and 17 year-olds; whole swathes of younger children are getting the habit. As a maker of original IP and as someone who cares very much about the context in which children have their digital diet, this is a very small thing and I support the noble Lords in their amendment.
Lord Inglewood (Con)
My Lords, I understand that the extent of what is happening is such that it is a genuine mischief. It is important that the Government are in a position to deal with it because of the damage that is taking place.
From my perspective, it does not really matter how it is done, provided that it is done, and that “when ‘tis done, ‘tis done quickly”. That is the way we will deal with this. Whatever response the Government may have to the particular amendment being put forward, I hope that they will be able to assure us that they are in a position to deal with the problem and intend to do so, rather than letting it drift on.
Baroness Buscombe
I thank all noble Lords who have taken part in this important debate on an issue that we take extremely seriously. It is very much on the Government’s agenda, and I am happy to confirm that again.
Amendment 20 seeks to provide the Secretary of State with a regulation-making power in order to prohibit the manufacture, sale or hire of unauthorised decoders. We have discussed previously in the House the pressing threat to subscription broadcast services caused by illicit set-top boxes, especially those which provide IPTV functionality. These IPTV boxes can in certain cases be considered unauthorised decoders, although that may vary depending on how they are set up to function.
As noble Lords will be aware, to better understand this area and what new legislation might be needed, the Government have committed to conducting a call for views on IPTV boxes, which I referred to in Committee. When we were last discussing this topic, I promised that the call for views would be published within a few weeks, and I am very pleased to announce that we have secured a publication slot for the document for 23 February—tomorrow. The purpose of the call for views is to help the Government understand where further action is needed to address the problem. If there is evidence to support changes to legislation, then we have promised to bring forward proposals in due course.
This information-gathering exercise will enable us to properly respond to the most pressing current threat caused by IPTV boxes. If there are other issues specific to unauthorised decoders that fall outside of the scope of this work, I would very much welcome details. We can then consider whether we need a further exercise to look at those distinct areas. The call for views runs for six weeks, until 5 April 2017, at which time the Government will assess the responses and determine the best course of action. The Government fully understand the harm done by illegal set-top boxes and IPTV, which is why it is crucial that we have a robust evidence base for effectively tackling this problem.
With regard to the manufacture of the hardware devices specifically, as your Lordships may expect, this usually happens outside the UK. That is why the IPO is working with partners across the world, including the Government’s IP attaché in China, to explore what can be done in source and transit countries.
Having said all that, I very much take on board what noble Lords have said this evening, including the noble Lords, Lord Clement-Jones and Lord Stevenson. The noble Baroness, Lady Kidron, of course has talked, quite rightly, several times in your Lordships’ House now, about young people and their digital habit, which starts frighteningly young. This is something we have to confront, and we sense the urgency with which we have to deal with this very real problem. Although I cannot make any commitment tonight, I hope that noble Lords will allow me to take this back and see if we can think of something more that we might be able to do. On that basis, I would be grateful if the noble Lord would withdraw the amendment.
Lord Stevenson of Balmacara
Before the noble Baroness sits down, could I just tease out what she has just said? Could that be read as a commitment to bring this back at Third Reading, so that we could spend a little time working out exactly what was required?
Baroness Buscombe
I cannot make a commitment that we will bring this back at Third Reading. We would certainly think more about it between now and then, but I can make no commitment that we would bring it back.
Lord Stevenson of Balmacara
I thank the Minister for her comments. I am sorry she is not minded to use the opportunity afforded by the fact that the Bill will go on until the end of March, which seems awfully close to the time by which she was suggesting that responses would be back, to enable us to make some progress on this. The points made by the noble Baroness, Lady Kidron, and the noble Lord, Lord Inglewood, are both right and bear on the same issue. It is clear that something is happening here that we could nip in the bud very quickly if we were able to take the appropriate powers. We are not specifying what those powers have to be, so we are not constraining the Government in how they might wish to take this forward, but quick action might prove more effective in the long run. Shutting this down would save us from the threat of it becoming a pest and a menace across all areas. I think it is worth testing the opinion of the House.
Lord Clement-Jones
“( ) Any creator who has transferred his or her cable retransmission right to a broadcaster shall retain the unwaivable right to receive equitable remuneration for the exercise of the retransmission right.”
Lord Clement-Jones
My Lords, I hope this will be a short debate. I was pleased to see the Government’s response to the technical consultation on transitional arrangements, which in a sense is a quick response to the spirit behind Amendments 21 and 29, which I tabled in Committee. It is another pleasing and welcome indication of the speed with which the Government are responding to some of the arguments being made, such as the call for evidence on IPTV.
An unequivocal statement has been made, which I very much hope the Minister will repeat, to the effect that on the basis of the responses to this consultation, the Government have decided to repeal Section 73 without a transition period. I am assuming that if I get such a pledge from the Government, it will be upheld, and that there is no need to amend the Bill to that effect, but obviously I would very much like those assurances from the Government at this stage.
On the right to equitable remuneration where a creator has transferred his or her cable retransmission rights to a broadcaster, the concern is that if public service broadcasters are going to receive licensing income for carriage of their services on cable networks, those underlying rights holders—such as scriptwriters and directors—should receive an appropriate share of this new revenue. The Government in their new Clause 30 have made clear what happens to performing rights, because they deleted old paragraph 19 of Schedule 2 to the Copyright, Designs and Patent Act 1988. It has not, however, been made absolutely clear what the score is as far as the copyright of creators such as authors is concerned. I do not know whether the IPO has been able to give Ministers guidance on that. However, this is a probing amendment, and I very much hope that the Minister will be able to explain what is contemplated.
The problem is that where creators assigned their rights, that was in the old days. There may be licences in respect of which public service broadcasters attributed a zero value to retransmission rights, but of course, in future, those rights will not necessarily have a zero value. I therefore hope that the Minister can at least give some assurance that this issue is being looked at, and that at least some guidance or encouragement can be given to public service broadcasters to look again, in all equity, at some of their past rights clearances, so that creators will not be disadvantaged in the income they receive from what could be a new income stream for our public service broadcasters. I beg to move.
Viscount Colville of Culross (CB)
My Lords, I voice my admiration for the noble Lord, Lord Clement-Jones, and his dogged determination to get Section 73 of the copyright Act repealed, and I am grateful to the Government for including its repeal in the Bill. Their response to the technical consultation seems to mean that it will be repealed immediately, but I too would like the Minister to assure us that it will be.
Baroness Buscombe
In Committee, and again here today, noble Lords have expressed their desire to see a swift repeal of Section 73. As I set out in Committee, the Government, through the Intellectual Property Office, have consulted on the technical aspects of the repeal, including on the question of a transition period, and committed to returning to this issue on Report following the publication of the government response to the consultation. The IPO published the Government’s response to the technical consultation on 10 February. In summary, the responses did not see the need for creating a new rights clearance mechanism and were in favour of no or a very short transition period in connection with the repeal of Section 73. The Government agree with that view.
I therefore confirm to the House that Section 73 will be repealed without a transitional period and that no compulsory structure for licensing needs to be introduced. In coming to the decision not to have a transition period, the Government considered that the intention to repeal Section 73 was announced in summer 2015. The industry has therefore had plenty of time to prepare for the repeal. There is also the ongoing and pressing issue of online service providers continuing to rely on the Section 73 exception to permit the streaming of PSB content over the internet without seeking the necessary permissions or paying any licence fees. This can impact not only the copyright owners in the broadcast but the underlying copyright owners in the content carried within the broadcast itself. The Government regarded the resulting financial loss to the affected parties as an important driver for a swift repeal. The repeal will become effective on a date to be appointed by statutory instrument after Royal Assent is received for the Bill. I confirm that the Government will commence repeal without delay before the Summer Recess.
On Amendment 21, the IPO consultation also looked into the position of underlying rights holders in PSB content, such as musicians and scriptwriters, and whether new rights clearance mechanisms needed to be introduced. It concluded that there are already extensive commercial rights agreements in place between underlying rights holders, broadcasters and the platforms, and that these will be capable of factoring in the new rights, which will be reactivated following the repeal of Section 73.
Underlying rights holders already contract, on terms acceptable to them, with broadcasters and platforms in respect of rights that are not currently exempted by Section 73, such as underlying rights in non-PSB content and in programmes transmitted on all other non-cable platforms. As such, we do not think that statutory intervention in the manner proposed in the amendment is necessary.
In response to the question put by the noble Lord, Lord Clement-Jones, I want to make it clear that underlying rights holders already have in place rights agreements with broadcasters. Section 73 only ever applied to cable networks, so the value of underlying rights will have been factored in for transmission on all platforms.
I hope this explanation has assured the noble Lords that the purpose behind their amendment has been met. I therefore ask them to withdraw the amendment.
Lord Clement-Jones
My Lords, I thank the Minister for the first half of her reply. She repeated pretty much what was in the response: no transition is envisaged and repeal is effectively to be commenced without delay, before the Summer Recess—I hope I have paraphrased her correctly. I take that very much on board, and I am delighted that the Minister has been able to confirm it.
I am not quite so delighted by the second half of her reply. She says that underlying rights holders’ rights have been factored into existing agreements, but that is just the problem: zero value has probably been attributed to the retransmission rights held by PSBs. Of course, until the repeal of Section 73 they will have zero value. After its repeal, value will be ascribed to them, but that means those who signed agreements in the past will not necessarily get the benefit, hence the reference in the amendment to equity. That is a rather important concept.
I will read carefully what the Minister has said—no doubt following the wonderful advice she has received from the Intellectual Property Office—and will discuss it with the Society of Authors and others who are very concerned about some of these issues. I might return to the matter at another stage of the Bill to tease out a little more information from the Minister. In the meantime, however, I beg leave to withdraw the amendment.
Lord Clement-Jones
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due.(2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”
Lord Clement-Jones
My Lords, in Committee I explained the importance to authors and other creators of transparency, and the significance of the proposed new EU directive. The noble Baroness, Lady Buscombe, got the point entirely, as ever, and said the amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on the use and the revenue they generate, and stated that this obligation could be met by complying with a code of practice determined at sector level, which is entirely correct.
I should add for clarity that, if there is a concern by licensees in those circumstances about the leakage of their commercially sensitive information, the way information is channelled can of course be dictated by a code of conduct through appropriate mechanisms, such as the advisers of creators and so forth. That is could be well catered for if there were concerns among those licensees or assignees.
The Minister confirmed that the Government were already engaged in discussions to address this issue. She said that,
“the UK will actively engage in these debates … before considering the case for domestic intervention”.
She also said,
“it is worth giving careful consideration to the part that these industry-led initiatives can play”,—[Official Report, 6/2/17; col. 1481.]
in terms of a code of conduct and so on. As I said at the time, though, she never actually agreed that the principle of transparency should be incorporated into law, whether directly or by transposition. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. The Minister gave encouragement to the principle but did not say that the Government fully supported that element of the directive. Article 14 of the draft directive is very clear in giving creators those kinds of transparency rights.
So I return to the fray on this occasion, and I hope the Minister can warm her words further in the face of this amendment being retabled. I beg to move.
The Earl of Clancarty (CB)
My Lords, I support the amendment of the noble Lord, Lord Clement-Jones. He talked about the principle of transparency, and that is the nub of it. I shall just give an example: the history of pop music has, in many ways, been the history of exploitation of artists in a bad way. Much of that exploitation was based, in the past, on keeping artists in the dark. I am sure that today many licensees and transferees—some of which are huge companies—behave very well, but there is a systemic imbalance here, which means that there is potential for abuse. Artists have a fundamental right to information about exploitation of their work, which is, in any case, useful for knowing quite simply what has happened to their work when it is pushed out into the world.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for raising this again today. As both previous speakers have said, it is a really important issue for authors, writers and musicians, who are operating in an increasingly complex world where it is very hard to keep tabs on the use that is being put to their own creative work and the way it is being distributed and accessed. As a result, many in the sector feel that they are not properly rewarded for their creative endeavour. It is obviously crucial to us that we encourage them to continue to be creative and help them to be fairly rewarded because, as we increasingly begin to recognise, that creativity is not only important to them but will be an essential bedrock of the UK’s future prosperity in the years to come.
The noble Lord quite rightly raised the issue of the draft directive on copyright, and he quoted the Minister’s reliance on the discussions of that draft in her response in Committee. However, as with other pieces of draft EU legislation, there is now a horrible feeling that the clock is ticking and that time might run out before the directive can be transposed into UK law. Therefore, we very much support the noble Lord in his bid to bring more certainty to the lives, and the incomes, of our much-valued creators.
I would like to raise two further points. First, the amendments as they stand assume that all publishers have the facility to provide regular statements of income outside the normal accounting periods. This is indeed easy for the large publishers, which already have author portals where this kind of detailed information is uploaded in real time and accessible to authors and their agents on a daily basis. However, we should also spare a thought for the smaller publishing houses, whose growth we also want to encourage, and which might not have such sophisticated accounting systems. The wording of the amendments might be rather too prescriptive or open to interpretation in this regard. We do not want to add too much of an extra burden to those smaller organisations.
Secondly, and perhaps more importantly, the amendments do very little to help those authors who are beholden to Amazon, which publishes 90% of e-books and is responsible for a significant proportion of physical book sales. Its behaviour in driving down prices through heavy discounting is seriously damaging the incomes of authors and publishers alike. Therefore, you can have transparency and fairness, but we will not add much more value back into the creative sector unless steps are taken to curb the monopolistic behaviour of Amazon. Perhaps the Minister could advise us as to what steps are being taken to monitor that increasing dominance of Amazon and to look at the impact it is having on the income of people who are trying to be creative and whom we very much want to value. At what stage would the Government take steps to intervene to make sure that those incomes are, in some way, protected for the future?
Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.
As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.
I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.
Lord Clement-Jones
My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.
I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.
“Code of practice on search engines and copyright infringement
(1) The Secretary of State may impose by order a code of practice (“the code”) for search engine providers with the purpose of minimising the availability and promotion of copyright infringing services, including those which facilitate copyright infringement by their users.(2) Any order made under subsection (1) must include appropriate provisions to ensure compliance with the code by the providers.(3) Before imposing the code under subsection (1), the Secretary of State shall publish a draft of the code and consider any representations made to him or her by—(a) search engine providers,(b) rights-holders and their representatives, and(c) any other interested parties.(4) The Secretary of State shall regularly review the code to ensure that it provides the most appropriate mechanism to satisfy the purposes set out in subsection (1).”
Lord Stevenson of Balmacara
My Lords, I move Amendment 25 and am grateful for the support of my noble friend Lady Jones and the noble Lords, Lord Clement-Jones and Lord Foster.
This is a rerun of an amendment that we tabled in Committee. At the time, discussions were in place between rights holders and those who operate the search engines, which are the focus of the amendment, and we were not sure how that would play out. We were promised much, and the Government have again delivered—which is becoming too much of a refrain for my liking. A voluntary code has been agreed between the parties, signed up to and issued—there has been press notification about it, so it must be true. The question is: what will it do? That has not been answered. We have discussed what it might do, but we have not yet seen the wording of the voluntary code. I ask the Minister to circulate to those participating in the debate what is in the much-vaunted code, so that we have a sense of whether it will achieve its purpose.
My concern from what I have heard is in three parts. First, it is large copyright-owners and large inquiry systems such as Google that are involved. That begs the question of whether those who are less able to exercise their rights—particularly those who have individual or small parts of rights in small productions—will have any voice. The reporting that I have read talks about rights holders and search engines working promptly on receiving responses about infringing content to ensure that these things are taken down.
Secondly, there is much talk of expanding efforts,
“to more effectively use such notices to demote domains demonstrated to be dedicated to infringement, and to work collaboratively with rights holders to consider other technically reasonable, scalable avenues empirically demonstrated to help materially reduce the appearance of illegitimate sites in the top search rankings”.
I could read that again, because you would probably need to hear it again to have the faintest idea what we are talking about. I fear that it smacks of either a lowest common denominator approach or some hard arm-wrestling in the corridors where the discussion took place to get something that looks reasonable on paper. It does not smack of a real commitment to scourge out the terrible way in which search engines have referred people who should have known better to material that was not cleared for copyright and should not have been made available to them through that route. There is also talk about,
“work to prevent generation of Autocomplete suggestions which lead consumers towards infringing websites”.
It says that work will be done to prevent it, not that it will be stopped.
“Search engines will provide, or continue to provide, processes to promptly remove advertisements”,
linked to searches. So my second point is that this all looks pretty good on the surface, but will it work in practice? I have my doubts.
Thirdly, it will be run by the Minister of State for Intellectual Property, who,
“will oversee the implementation of this Code of Practice, supported by quarterly meetings of all parties, and set requirements for reporting by search engines and rights holders on any matter herein, including in particular those matters where the Code of Practice calls for ongoing discussion”.
At last, we get it:
“The Minister shall review the effectiveness of the Code with the parties after one year, and ensure continuing progress towards achieving the Shared Objectives”—
which is, rather nicely, in my copy, in capital letters, so they must be really important.
It is easy to lampoon this. I am sure it is a good step forward in the right direction, and we wish it well, but I wonder whether it will take the trick on this issue. As we said in a previous discussion, should there not be a backstop power; should these powers not be taken now by the Government to ensure that they can do something if it does not work, if some people move away from it, or if new entrants to the market feel that they have no responsibility to be part of it? These are open questions. There may be a way through, there may not, but we have no way to resolve that because this is a voluntary process.
It took a long time to get to the voluntary code: the working group has been meeting on and off for three or four years, so we know that this is not an easy nut to crack. It is an issue that causes a lot of annoyance and concern. It also affects the earnings of those who have rights that have been abused in this way. There is a feeling—I put it no stronger than that—among those who perhaps know more about this than I do that the search engines do not want to go any further because they fear statutory provision. In other countries and territories—indeed, in America—there is statutory provision, and that has made the difference over there. Why are we not doing that here?
There are a lot of questions about this. The amendment would give a solution to the Government if they wished to take it. I hope that they will consider it, and I beg to move.
Lord Foster of Bath (LD)
My Lords, I am delighted to support the amendment in the names of the noble Lord, Lord Stevenson, and others. I am sure that all Members of the House recognise that there is a serious problem that needs to be addressed, although fewer people are accessing illegal material on the internet as a result of the growing number of relatively cheap and easily accessible alternatives. We should welcome that and the fact that in this country we probably provide a wider range of alternative legal sources—for the downloading of music, for example—than any other in the world. Nevertheless, there continues to be a problem, with about 15% of UK internet users—about 6.7 million people—continuing to download and access illegal material. I therefore welcome any measures that can be taken to introduce ways to prevent that. Of course I welcome the voluntary agreement that has been reached. I congratulate the Minister for Intellectual Property, who I know has worked very hard with the relevant parties, including the IPO, to secure the voluntary code. As the noble Lord, Lord Stevenson, said, the details have still to be worked on and there will be a review in 2017.
I ask the Minister to reflect seriously on this key point. In opposition, I have spent a lot of time moving amendments to various proposals that the Government “may” do something to delete “may” and insert “must”. On this occasion, I am delighted to support the amendment, which says that the Government may do something, if the need arises.
The Department for Culture, Media and Sport is rarely given credit for the important role it plays in the life of this country. As a result, it rarely has opportunities to have legislation before the House. While the Minister may tell me, as she did in a previous debate, that should the voluntary code not work, the Government will consider taking legal action at some point, she would find it difficult to find a legislative peg on which to hang that action.
The Intellectual Property Alliance and others have suggested that we need a backstop mechanism in the event that the code, which we welcome, is unsuccessful in future. For that reason, I hope that the Government will be willing to accept what is a simple amendment giving them power in future if they need it.
Baroness Buscombe
My Lords, Amendment 25 returns to the topic of search engines and copyright and would give the Government power to impose a code of practice on search engines to minimise the visibility of copyright-infringing websites in search results.
As we have discussed previously, this is an area in which we have been seeking a voluntary agreement between search engines and rights holders, and I am pleased to be able to confirm that we now have that agreement and have finalised the text of a code of practice. This newly agreed code sets out clear targets for reducing the visibility of infringing websites in search results. The code also specifies a number of areas where rights holders and search engines have agreed to work together with the general aim of supporting legitimate content and reducing piracy. We have always been clear that action is needed in this area and it is a manifesto commitment. But we have also been clear that a voluntary agreement would be quicker, more flexible and, most importantly of all, more collaborative than a legislative intervention. We now have that voluntary agreement and the parties to the code are already working to deliver on the commitments it contains. All parties to the agreement have engaged in these negotiations and the work to date in good faith. They are continuing to work in good faith and I am confident that that will also be the case for work going forwards.
The noble Lord, Lord Stevenson, questioned whether it would be possible to have sight of the code. We do not plan to publish the code in full because details about the number of copyright infringement reports a site can receive before it is demoted might allow pirates to game the system. We are, however, very happy to share the commitments in the code in more general terms.
We understand where noble Lords are coming from in seeking a backstop power, but I return to that word “collaborative”. We have come a very long way in what we have achieved thus far. I can remember working and having discussions with search engines in years gone by, trying to encourage them to respect and accept responsibility for what they do and the impact they can have on others. In that sense, we believe very strongly that we should continue with that collaboration and not consider a backstop power. We do not believe it is necessary. With that explanation, I hope the noble Lord will accept that a statutory power is not needed at present and thus feel able to withdraw the amendment.
Lord Stevenson of Balmacara
Although I am grateful to the Minister for her robust comments about our amendment, I profoundly disagree with them. I cannot see this agreement lasting and believe that there will have to be a backstop power at some stage. Surely the truth is that if it was necessary in America to introduce legislation to get that system to work, it is bound to be necessary in other places where those with the large rights holdings may feel they can operate in a way that is not necessarily in the best interests of consumers in the United Kingdom. I still think, as the Minister touched on at the end of her peroration, that this is something that we will have to drag the search engines towards, because it is not their business model. Their concern is to make sure that they get as many people coming to them and through them to other portals in other areas that they can get to. Their interest in engaging in that is something we will return to in future legislative arrangements. I think that they will be unable to sustain a position in which they act as neutral transferors of other people’s issues and wishes, because it does not work. They will have to accept that they have responsibility to work to make sure that the worst excesses at the moment are resolved in a way that does not hurt rights holders.
At the moment, it is a “large copyright holders against large search engines” agreement, and on that level it might operate. I do not think it will be effective. I do not think it is sustainable because there will be new people coming in and business models and practices will change—we cannot foresee that. Power will be necessary. If the Government will not seize a gift that is worth a lot of future pain and help them avoid the difficulties they will face in trying to find the legislative time—as the noble Lord, Lord Foster, said—to put this in, we cannot make them do it. I beg leave to withdraw the amendment.
Baroness Janke
“Review of sale on the internet of counterfeit electrical appliances
(1) Within six months of the coming into force of this Act, the Secretary of State must commission a review of the sale on the internet of counterfeit electrical appliances.(2) The review must consider whether operators of trading websites that allow individual sellers to use those websites to sell electrical items should be required to report to the police and trading standards authorities any instances of the selling of counterfeit electrical appliances which are arranged through their website.(3) The Secretary of State must publish the report of the review, and lay a copy of the report before each House of Parliament.”
Baroness Janke
My Lords, I have resubmitted this amendment because we consider this to be a matter of concern. As I have said, the large majority of these counterfeit goods are sold through internet portals and their sale has often resulted in fires and damage. They undermine well-known brands and are a great danger. It is no surprise that the Electrical Safety Council is drawing attention to this issue and wants the Government to address it.
When I previously raised this issue, the noble Baroness, Lady Buscombe, mentioned Operation Jasper and the trials that are being carried out with counterfeit goods. I have since learned that electrical goods are not included in this project and that is why I have resubmitted the amendment. We need some action on this problem. If the noble Lord or the noble Baroness can assure me that they will take this forward—perhaps meet with the Electrical Safety Council—and look at how progress can be made, I will be happy to withdraw the amendment. But the Government must consider taking action on what is an increasing danger and a growing problem. It is perpetrated through internet portals and the people who provide the online retailing must look at the problem too and take some responsibility. I beg to move.
Lord Ashton of Hyde
My Lords, I am grateful to the noble Baroness for waiting patiently for the last group of amendments. By the standards of our Committee deliberations, this is pretty reasonable—we have done well. I am also surprised that Opposition Members have been longing to give us delegated powers and allowing us to say “may” instead of “must”, which we have nobly resisted. But this amendment has gone back to a more traditional view, which is to make the Government formally review and report on sale of counterfeit electrical goods on the internet. We did, as the noble Baroness said, discuss this very issue in Committee and a similar amendment was withdrawn. Being serious, the sale of any type of counterfeit goods obviously has the potential to harm consumers and the economy and, importantly, damage traders who do business legitimately; and it often supports organised crime. As my noble friend Lady Buscombe said, the Government take this matter very seriously, which is why the Intellectual Property Office is committed to tackling counterfeiting of all kinds.
Since we discussed this issue in Committee, the IPO has continued to push forward with the work outlined in the Government’s IP enforcement strategy. Officials from the IPO have now met with representatives of all the main online sales platforms in the UK to discuss what steps they are taking to tackle the sale of counterfeit goods, as well as devices which may facilitate copyright infringement. I am reassured to hear from those conversations that the main online players in the UK all share our concern about this issue.
We have also made it very clear that we expect these platforms to continue to develop and improve the systems they have in place to tackle counterfeiting. They have given us details of a number of steps they are taking to do just that. This is an evolving area, with criminal behaviour and technology both changing as we go along, so we will continue to engage with those platforms and their equivalents in countries such as China to ensure that IP rights and the safety of consumers remain a priority across the board. As a separate work stream, police, trading standards and industry representatives have continued to work on Operation Jasper, tackling the sale of counterfeit goods via social media. This work has been ongoing for some time and is an excellent example of the value of the collaborative approach in this area.
In addition to this work, the IPO has now started to gather data for the next edition of the annual IP Crime Report. It will be published in September of this year and will contain the best available evidence on the scope and scale of counterfeiting in the UK, and will include material about the sale of electrical goods online. In the light of such work and the other elements of the strategy that we have discussed previously, in the Government’s view it is not necessary to have a statutory commitment to review and report on counterfeit electricals this time. The noble Baroness made a generous offer, and I hope I have done enough to persuade her to withdraw the amendment.
Baroness Janke
I thank the noble Lord for his response. Certainly, his comment that electrical products are specifically being taken into account is reassuring. Will he write to me indicating in what way those goods are being incorporated in the trials, as there is a huge difference between a counterfeit handbag and counterfeit electrical goods? Although the response I received previously stated that trials were going on, it did not deal specifically with electrical goods. If the Minister would be kind enough to provide information on that in a letter, I will happily withdraw the amendment.
Lord Ashton of Hyde
I am certainly happy to do that. I have a note on counterfeit electricals that I cannot read, so I will provide that information in writing.
Baroness Janke
I thank the noble Lord. I beg leave to withdraw the amendment.
Digital Economy Bill
Monday 20th March 2017
(7 years, 8 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 102-III Third marshalled list for Report (PDF, 182KB) - (20 Mar 2017)
17:52 - Division on Amendment 25P - Ayes: 155 / Noes: 209 - Amendment 25P disagreed.
18:12 - Division on Amendment 25YD - Ayes: 46 / Noes: 176 - Amendment 25YD disagreed.
18:43 - Division on Amendment 25YN - Ayes: 74 / Noes: 199 - Amendment 25YN disagreed.
19:25 - Division on Amendment 25YR - Ayes: 203 / Noes: 176 - Amendment 25YR agreed.
19:36 - Division on Amendment 25YW - Ayes: 179 / Noes: 159 - Amendment 25YW agreed.
Lord Ashton of Hyde
“(1) A person contravenes this subsection if the person makes pornographic material available on the internet to persons in the United Kingdom on a commercial basis other than in a way that secures that, at any given time, the material is not normally accessible by persons under the age of 18.”
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, we now move in this wide-ranging Bill from the esoteric delights of the universal service obligation, dynamic spectrum access services and the Electronic Communications Code to a crucial area: namely, seeking to protect children online.
As we have said before, the introduction of a new law requiring appropriate age verification measures for online pornography is a bold new step, with many challenges. It ensures that commercial providers of pornographic material are rightly held responsible for what they provide and profit from. Commercial providers of online pornographic content provide an incredibly large amount of easily accessible content to UK users, with little or no protections to ensure that those accessing it are of an appropriate age. It is imperative that we retain controls on such material and, in this terribly sensitive area, aim to strike a balance between freedom of expression and protection of the young.
Perhaps the most sensitive challenge is how we approach material that would not be classified by the BBFC in the offline world. We have heard concerns from some quarters that the current definition of “prohibited material” may be going too far in the type of material that the regulator is able to sanction above and beyond the age verification requirements. We heard in Committee that this,
“would give the regulator extended powers of censorship beyond that originally envisaged in the Bill”,
that it would potentially set,
“new limits on consenting adults accessing pornography that is not harmful to themselves or others”,
and that,
“this is not the place to resolve these wider debates on adult consensual pornography”.—[Official Report, 2/2/17; cols. 1355-56.]
We agree. Our policy intent is child protection, not censorship. Our amendment redefines the scope, taking an approach based on the definition of an “extreme pornographic image” in the Criminal Justice and Immigration Act 2008. This captures grotesque sexual violence, including rape. We have thought long and hard about where we should draw the line. We have adopted two principles. First, as this measure is about protecting children, we do not want to create a new threshold for what adults can or cannot see. This is not the place for that debate. Secondly, we want to ensure that we do not allow the regulator to step on the toes of others involved in policing this territory.
The definition of an “extreme pornographic image” in the Criminal Justice and Immigration Act provides a good marker. I know that there are also concerns about sexual violence against women and other acts that do not meet the “extreme pornography” definition. We absolutely do not intend to create a regime that unintentionally legitimises all types of sexually explicit content as long as age verification controls are in place. We are most definitely not saying that material not allowed under other legislation is allowed if age verification is in place.
That is why government Amendment 25YV makes it absolutely clear that content behind age verification controls can still be subject to criminal sanctions provided by existing legislation: for example, the Obscene Publications Act. But we concede that there is unfinished business here. Having protected children, we still need to examine other online safety issues. As we will come to later in the debate, my department is leading cross-government work on an internet safety strategy that aims to make the UK the safest place in the world to go online. We want to understand more about the scope of the problem and identify where there are gaps in our current approach to tackling online harms.
We have heard the calls to provide the age verification regulator with powers to block criminal images involving children, as defined by the Coroners and Justice Act 2009. However, at the forefront of cross-government thinking on this was the need not to cut across the excellent work of the Internet Watch Foundation on child sexual abuse content, complicating the landscape and making it harder to effectively and efficiently protect children. It has never been the case that this regime would seek to regulate that child sexual abuse material. Fundamentally, we are dealing with different harms, with different responses, and it is right that they are treated separately.
With child sexual abuse material, the Government seek to ensure that it is eradicated at source: that content is not just blocked but actively taken down from the internet. Providing for the age verification regulator to simply block this material in the course of its work risks this. The BBFC and the IWF are in agreement that they do not wish the BBFC to take on the role of policing child sexual abuse material, or content likely to fall within this classification. The Internet Watch Foundation does a vital and difficult job and we should not seek to complicate that by conflating with age verification.
This is a sensitive subject and we know that we will never satisfy everyone. But I hope that I have convinced noble Lords that the position we have settled on is neither arbitrary nor a sop to one interest group or another. I commend the government amendments in this group.
Baroness Butler-Sloss (CB)
My Lords, I was wondering which of us would go first, so I apologise to the House for being a little slow.
I strongly support the work that the Government aim to do on age verification. It is admirable work and, as a former family judge, it is exactly what I would have hoped that this Government would do. I have therefore had no general involvement in the Bill until this moment—but I am concerned that their admirable work is likely to have the unintended consequences that the Minister says he does not intend to have.
The government amendments deleting “prohibited material” and putting in its place “extreme pornographic material” are giving a message which is of great concern to me. The Prime Minister has gone public, hugely to her credit, in saying that she wishes to eradicate domestic violence. But the impact on the public of a lack of online protection in relation to prohibited materials, by changing the reference to extreme pornography, will inevitably leave a gap. Although the Government say that it will not, it seems obvious that it will leave a gap—which means that serious violent porn will not, if this legislation goes through, be covered in the way that extreme, violent pornographic material will be.
This is an opportunity for those disposed to violence, particularly in the home against spouses and partners, to see it online before they try it out in their own home. Perhaps I may give your Lordships one rather telling example of how this impacts not only on women. Many women out there, some of whom have already been polled, will be absolutely astonished and some, I believe, are outraged by the idea that this degree of violent porn online will not now be part of what is restricted. But I had a case on one occasion of two children, aged about 10 and 11, who kept the television on as loud as they could so that they could not hear their father beating their mother. Day after day they sheltered in the kitchen, away from what was happening in the front room.
The message is what worries me. Perhaps the message is even more important than the wording because the extreme, violent pornography may be identified as something which would not include a great deal of serious, violent porn—whatever the Government might say. This is the matter that has brought me to table an amendment and to speak to your Lordships today. There is some flawed Crown Prosecution Service guidance, but I do not propose to say anything about it as I hope that other noble Lords will do so.
We are facing a vast number of amendments from the Government on the second day of Report, without any prior consultation or any opportunity in Committee for noble Lords to ask rather more about the likely consequences, intended or unintended, of these amendments. So I have tabled Amendment 25YD—I thank noble Lords for telling me which one it is; there are such a lot of Ys—saying that there should be two aspects: first, that the use of the words “extreme pornographic material” in the place of “prohibited materials” should not last for more than three years; and, secondly, that in two years, by regulation, the Government should be looking at, reviewing and reporting on whether this has had any adverse effect. I have to say that I would be very surprised if it had not.
I am grateful to the Secretary of State for a very helpful letter in which he says that the Government are looking at a Green Paper followed by a White Paper. I am also grateful to three Ministers for coming to a meeting. I asked, although it is likely that I already knew the answer, whether, after the White Paper, there would be legislation. However, we have Brexit. I was hearing only this morning how many Bills in addition to the great repeal Bill will need to be brought through this House as well as the other place in the 18 months to two years before we come to the end of Article 50 and leave the EU. The likelihood of getting legislation in the next two years to deal with the sort of violent porn that I am talking about is really remote. I am concerned about the damage that it may do to women and also, inevitably, to children, if the man and the woman have children. However young they are, the children will suffer as well as the women—and, sometimes, the men.
That is the general background to this somewhat elaborate amendment. I hope it may find favour with the House.
Baroness Benjamin (LD)
My Lords, I am very pleased to hear the Minister say that the remit of the IWF is to be extended and that soon it will be able to remove these images wherever in the world we see child abuse images stored. At present the IWF can take down only UK-stored images. Every day that passes sees the increasing abuse of innocent children because of these images. When can we expect to see the IWF given all the necessary powers to take down any child abuse images that are ever seen on the internet, in line with the offline as well as the online policy that the BBFC has? On this International Day of Happiness, I thank the Government for ensuring that children will be safeguarded and will not be able to see abusive pornographic material anywhere, and that as soon as possible the IWF will be given all the powers it needs to make sure that we do not harm children anywhere in the world.
The Lord Bishop of Leeds
My Lords, it seems odd in a society such as ours that we are even thinking about how to give access to violent pornography or trying to mitigate it in some way. It seems clear to me that most of us sitting in this House probably have less idea of how online digital communications work than a five year-old. Children—my grandchildren’s generation —are very adept and almost intuit how to do this stuff. The technology is advancing so quickly—more quickly than we can imagine—and you can bet your life that many of our children will find ways around it more quickly than we can set down laws. What is online ought to be held at least to the standard of what is appropriate for offline, because it is online that children, as well as young people and adults, will access this stuff, and it is too easy. If the higher standard applies to offline, surely it ought to be maintained for online communications. Otherwise, we are saying that this is acceptable for the common good and that it represents an acceptable anthropology—our understanding of what a human being is—in which we are happy to normalise violence, the commodification of people and sex, and even the exploitation, not just for sexual purposes but for commercial profit, of something that ought to be held in higher regard.
Baroness Howe of Idlicote (CB)
My Lords, I spoke on the subject of prohibited material in Committee and I rise to do so again. In Committee, I raised concerns that if the Digital Economy Bill was amended so that prohibited material could be supplied if placed behind age-verification checks, children were still likely to see this material because the Government have made clear that they are expecting a “proportionate enforcement” targeting the biggest pornography sites—likely to be the top 50 to start with—so we are not creating a world in which children are safe from accessing prohibited material. They will be safer, yes, but not completely safe.
That is the sad effect of government amendments to Clause 16. If they are accepted, it will become acceptable for a website to supply any material so long as it is behind age verification, unless it falls within the very narrow definition of extreme pornography. By doing so, we are giving violent and abusive material a large boost of respectability, as we do not allow supply of the same material via DVDs or UK-based video on demand.
In this context, the fact that the legislation defining prohibited material remains in place does not make these amendments more acceptable. It simply presents a very awkward question for the Government. Why do they not want to enforce the standards set by these laws? The decision to go to the lengths of asking us to change the Bill so that most of the laws that make up prohibited material will not be enforced cannot but send the message that in some ways we regard this as acceptable. How does changing the Bill today to allow pornographic violence that allows injury to the breasts, anus and genitals so long as it is not serious, and serious injury to any other body part, do anything other than normalise violence against women? How is this consistent with the Government’s other messaging on violence against women?
The other government argument—that the CPS will still retain the discretion to prosecute—borders on the absurd. As everyone knows, the vast majority of online porn accessed in the UK comes from websites based in other jurisdictions that cannot be easily reached by our courts. That is the whole point of creating an age verification regulator with the enforcement powers in Clauses 22 and 23, which do not depend on getting errant websites in Russia into court. I am especially concerned that this material will include some images of children. The origins of this part of the Bill were, after all, to protect children. I know that the Internet Watch Foundation has a very effective role in working with internet service providers on photographs and pseudo-photographs of children. However, I am troubled because there is no agreement around the world about the ethics of animated pornographic images of children. The IWF’s role on animated images is restricted to images hosted in the UK.
Lord Gordon of Strathblane (Lab)
My Lords, I make the same point I made in Committee, which is that offline and online should be aligned. I am relatively agnostic as to exactly where the line is drawn, but it should be consistent across offline and online. Otherwise, I invite the Minister to confirm that under the government amendments, material it is prohibited to see offline, in that it is refused any form of certification by the BBFC, will now be available online. If the answer is that it will not, I cannot see why the Government do not maintain the original position in the Bill. If, on the other hand, it will be available online, does the Minister recognise that—unfortunately and, I fully recognise, unintentionally—the Government may subvert the efficacy of the offline legislation? The internet is recognised not merely as a method of disseminating information. People frequently do not buy music in the form of CDs; they download it. They do not buy videos; they download them. If we do not do something about this, we will unintentionally subvert the offline legislation.
Lord McColl of Dulwich (Con)
My Lords, I rise to support Amendment 25YD. I find myself very surprised by Amendments 25H, 25W and 25YC. I appreciate that in some technical sense these amendments may not jeopardise the principle that what is illegal offline is also illegal online, but as a matter of practice and enforcement, they most certainly do jeopardise the spirit of the principle.
The Bill is very clear that the age verification regulator must enforce the law with respect to illegal pornography to the same standard that exists offline. These amendments, however, deliberately change this and thereby, albeit without perhaps making significant amounts of illegal pornography legal, certainly ask us to support the proposition that our law should instruct the regulator to make space for all but the most violent, illegal pornography. What kind of message are we sending to society? If we vote for these amendments today we will be giving the wrong message. We cannot go to the length of using valuable parliamentary time to change the Bill as it stands through these amendments, which as a matter of practice make space for violent pornography, without sending a message that violence against women is in at least some sense acceptable.
The definition of extreme pornography and material is an inadequate replacement for the prohibited material category which the amendments seek to remove. It will cover only the explicit and realistic portrayal of violence which is life-threatening or likely to result in serious injury to just a few specific parts of the body—breast, anus and genitals. This leaves a range of violent acts and behaviour which we would be saying, courtesy of amendment to Clause 16, is acceptable to be portrayed in online pornography but which would not be granted an R18 certificate, or indeed any other certificate by the British Board of Film Classification for distribution in other ways.
The British Board of Film Classification guidelines state that material to which it refuses to give a certificate includes depictions of the infliction of pain or acts that may cause lasting physical harm; sexual threats, humiliation or abuse; and material, including dialogue, likely to encourage an interest in sexually abusive activity which may include adults role playing as non-adults. I believe that if such material is to be included in the new standard for the acceptable level of violence and abuse in pornography online, we are setting the standards in the wrong place. It puts a sheen of acceptability on materials portraying violent and abusive actions and, in doing so, communicates to the viewer that such attitudes and behaviour towards women are permissible.
In the light of what is already known about the overlap between the use of violent pornography and the development of attitudes which condone violence against women, and sexual aggression, this is deeply concerning. The government Amendment 25H to the definition of pornographic material, and what material can be blocked by the regulator, also places question marks over the standards applied to other formats, by which I mean DVDs and video-on-demand services. I recognise that the internet is a vast place, but simply because there might be different values reflected in different corners of the web, should we capitulate and reduce our standards? I would say not.
The Government have tried to protect the application of different standards set out in other legislation with Amendment 25YU to Clause 27. While the actual legislation may not be changing today for DVDs and video on demand, the pressure to adjust how that legislation will be enforced will be hard to resist. Furthermore, Amendment 25YV implicitly recognises that there are different standards applying in other formats that will no longer apply to the internet, breaking the premise that what is illegal offline is illegal online. This not only disproportionate but extremely risky.
I understand that there are concerns about the original definition of prohibited material, which is being removed by Amendment 25W because of out-of-date CPS guidance, but surely that is a temporary state that will in time be remedied. Making a permanent change to the definition of what pornography is acceptable to supply behind age verification goes beyond addressing the issues on which the CPS guidance needs updating. On touching on the CPS point, I must engage with the argument made by some that the Government are compelled to make these changes because the CPS guidance on the Obscene Publications Act is out of date. As the noble and learned Lord, Lord Mackay, has pointed out, that argument is absurd. If the CPS guidance is out of date, it should update it; it is ridiculous to argue that Parliament, which is sovereign, should have its freedom to do the right thing fettered by the fact that CPS guidance has been allowed to get out of date.
Anyone voting for Amendments 25H, 25W and 25YC will be voting to make space for violent pornography online which the Bill as currently defined does not do. If there is a Division, I shall be duty bound to vote against, because I could not possibly associate myself with an attempt to make violent pornography more available than this Bill currently suggests that it should be, respecting as it does the offline enforcement standards. A vote for these amendments must inevitably have the effect of conferring some level of approval and some measure of normalisation of violence against women. If there is a Division, I shall vote against.
In the unfortunate event of the amendments passing, I shall vote for the excellent Amendment 25YD proposed by the noble and learned Baroness, Lady Butler-Sloss, to which I have added my name. The amendment allows for the definitions of extreme pornography to revert to the current definition of prohibited material in three years’ time, subject to a review in two years. It future-proofs the Bill and provides a means of dealing with this problem without needing to bring forward new legislation and take up valuable amounts of parliamentary time. The three years will provide ample time for the CPS to update the guidance that it should never have allowed to get out of date and provide time for proper public debate.
The internet is a wonderful invention in many ways, but it can be used for ill. Standards on harmful material and pornography have been honed and developed in relation to videos and DVDs in the offline world over many years. It would be ill advised permanently to establish a separate and lower set of standards for the internet. Amendment 25YD will allow the Government’s amendments to address out-of-date guidance but restore consistency in the approach to pornography across all media after an appropriate time. I commend it to the House.
Lord Alton of Liverpool (CB)
I support Amendment 25YD in the name of my noble and learned friend, to which she spoke so well earlier on, and the comments of other noble Lords in the debate so far. The problem with coming to this point in legislation, which has proceeded all the way through the other place and is now on Report in your Lordships’ House, on a day when some 174 government amendments have been laid, is that it is very hard to do justice to genuine discussion or indeed scrutiny, which is what this House is supposed to do with these measures. Although I welcome the measured way in which the Minister, the noble Lord, Lord Ashton of Hyde, introduced the amendment today and his assurance that there will be a Green Paper, I was also very taken by my noble and learned friend’s comment about the difficulties there would then subsequently be in having legislation. That is all the more reason not to legislate in haste, lest we end up repenting at leisure.
Lord Mackay of Clashfern (Con)
My Lords, my name has been mentioned in connection with something that I said on this issue. I had understood that the Government’s reason for widening the scope of permissible pornography from prohibited material to exceptional pornography was to do with standing CPS guidance, which is supposed to be out of date. I said that it certainly does not require an Act of Parliament to bring prosecutorial directions up to date: if the judges have changed the rules, the prescription should be changed immediately. When I was told about this matter, I raised it with the Minister, from whom I understood that that was not the reason for this change, so my point about bringing the guidelines up to date does not really matter. There is a different reason for making this change, but I am not sure that I understand it and it will be for the Minister to explain it now. When he introduced these amendments, I did not understand him to say exactly what the reason was for wanting to make the change, but it is clear that there is a substantial change allowing pornography which is not permitted as prohibited material to be allowed now. I am not sure what the basis for that is and why it is being done.
I am extremely sorry that I have an appointment in connection with another Bill with which I am involved, so I will have to leave. However, as my name was mentioned, I thought that I should say exactly what my position is. I do not understand the justification for this change and it is for your Lordships to say whether it is justified.
Baroness Kidron (CB)
My Lords, I find myself very much in the same school as the right reverend Prelate in not understanding how we can justify a form of sexual violence by one group towards another. It is very upsetting. However, I want to raise a slightly different issue that I tried to raise in Committee. I suppose that it is covered by government Amendment 25B in that it refers to commercial providers. I keep feeling that we are missing the point here—missing the business model that is fuelling all this pornography. If the amendment were to refer to those who monetise pornography—that is, those who receive money from pornography—we could make a much cleaner sweep of this issue. I think that many noble Lords will have noticed this morning—
Lord Ashton of Hyde
My Lords, would it help the noble Baroness if I mentioned that later in the debate we will be talking about the definition of commercial providers?
Lord Farmer (Con)
My Lords, I wish to speak in support of Amendment 25YD, tabled in the name of the noble and learned Baroness, Lady Butler-Sloss. It would have the effect of requiring a review of the use of the term “extreme pornography” after two years and provide the opportunity to replace it after three years with a broader standard of protection enforced offline. I shall also speak against the Government’s amendments to Clauses 22 and 23. They would water down the Bill by deeming only the narrow category of “extreme pornographic material” unacceptable and not the wider category of prohibited material.
I understand that Part 3 of the Bill is primarily about protecting children and that the Opposition Front Benches do not want to provoke a discussion about adult access to porn. However, by asserting that adults should have online access to what is prohibited offline, it is they who have opened up this debate.
I also understand that the Government have legally founded reasons for their amendments. As we have heard, they are concerned, for example, about the mismatch between the Crown Prosecution Service guidance and what is actually prosecutable following developments in case law. Amendment 25YD would create a window of time in which to deal with this.
Standing back for a minute, it seems incomprehensible to a non-lawyer like myself that juries can determine that henceforth something is now acceptable that would, until fairly recently, have been considered obscene under law, and yet they bear no responsibility for meeting the societal costs that accrue when such lines of acceptability are moved.
The Earl of Erroll (CB)
The noble Lord, Lord Farmer, is right about the huge dangers in viewing much of this pornography online but I do not think this Bill is the right place to deal with it—that is the challenge—because we are confusing two issues. This Bill is about protecting children—that is what was originally intended—and the idea is to have age verification to stop children watching any sexually explicit material online regardless of how bad or innocent it is. If it is sexually explicit, it has got to be hidden behind age verification.
The challenge is that we have now introduced into the Bill the concept of protecting adults. However, there is other legislation that already does that. If it is not working properly, we should cure that legislation. I agree that we should bring the CPS guidelines into line with what is going on and probably review the Obscene Publications Act. The Criminal Justice and Immigration Act also deals with issues around this problem. It is covered in lots of places.
However, inserting a blanket cover in the Bill is dangerous because suddenly the BBFC will act on its own initiative to close down websites, which will then be appealed against and cause chaos to the system while the law courts are possibly doing something else. Once it is appealed to the law courts you will have a problem because two sets of measures will be fighting each other. We need to keep it consistent. Yes, we should have protection for adults, but let us do it properly and in the right place.
I support the Government on these amendments for that reason because it brings the Bill back to where we can protect children against watching anything unsuitable. The government amendments align what is in the Bill with the Visa and MasterCard standards, which helps with the enforcement measures in the Bill. They will apply internationally and this will help the ASPs—the ancillary service providers—to comply with the Bill and help to enforce measures against websites that do not have age verification in place. They will align the Bill with the Criminal Justice and Immigration Act as well, which, again, will mean that there are no other loopholes by using one Act against the other. I have already spoken about the CPS guidance.
I understand that the topical Fifty Shades of Grey—I do not know anything about it because I have never read the book nor seen the film—involves bondage, pain and S&M. Should that book be allowed or should it have been banned? Should the film have been allowed for general release or not? It is those kinds of issues that cause confusion and we need to realise that.
The Bill does not legitimise what is behind the age verification. That is for other Bills to do. This Bill seeks to make sure that children cannot get at anything that is sexualised. Let us not cause confusion. Let us stick to one thing in one place and one thing in another place. I support the Government on this.
Lord Elton (Con)
My Lords, I cannot support the noble Earl. I follow most of his argument, but when we are considering legislation in one area we have to take into account its effect in other areas. What we have here is a proposal to narrow a definition of maximum control and to place anything that is not within that narrow definition in an area of less control where a larger population is affected by it.
I do not apologise for coming to this very late because Her Majesty’s Government are doing the same. In 1985 I was in the unfortunate position of taking through this House the Bill to abolish the GLC. After it had gone through the Commons and just before the Report stage here, the then Leader of the House, Willie Whitelaw, said, “My friends down the Corridor want me to abolish the Inner London Education Authority as well”. Noble Lords can see what political dynamite that was. To bring forward proposals at the second stage in the second House without wide consultation with those concerned seems to me pretty late in the day, so we are right to look at this closely.
I view it in a simple way. Powerful arguments have been put by the noble and learned Baroness and others in favour of her amendment, which I warmly support. The central issue is a simple one. If you take the least harmful of a bunch of very harmful material out of control, you may make the control of the remainder more effective but you also release more harmful material to less strict control. That must be wrong. Other noble Lords have spoken much more academically and legalistically than I am able to do. I merely wish to say that I have listened with my heart and my head and I stand entirely behind the noble and learned Baroness’s amendment.
Lord Browne of Belmont (DUP)
My Lords, I support Amendment 25YD. In Committee I set out in detail all the reasons why I thought that the Government should not do what they have done in this series of amendments. They will remove “prohibited material” and replace it with “extreme pornographic material” and put the remainder of the prohibited material category behind age verification. I concluded my speech by saying:
“The Bill takes significant strides in the cause of child protection. It would be a shame if we in this House took steps to undermine this”.—[Official Report, 2/2/17; col. 1359.]
I start my speech today with the same sentiment and by quoting the Minister whose comments at Second Reading agreed with the sentiment that I set out in Committee:
“It is a complicated area. Free speech is vital but we must protect children from harm online as well as offline. We must do more to ensure that children cannot easily access sexual content which will distress them or harm their development, as has been mentioned. We do not allow children to buy pornographic material offline, and this material would not be classified for hard-copy distribution. The BBFC has a well-understood harm test and would not classify material that, for example, depicts non-consensual violent abuse against women, and it may not classify material which is in breach of the Obscene Publications Act, as clarified in guidance by the CPS. Prohibited material has always been within the regulatory framework of this Bill. We consider that having a lesser regime for prohibited material than lawful material would be unsustainable and undermine the age-verification regime”.—[Official Report, 13/12/16; cols. 1228-29.]
I want to repeat that final sentence:
“We consider that having a lesser regime for prohibited material than lawful material would be unsustainable and undermine the age-verification regime”.
The general public agree with that principle. ComRes polling from last weekend and published today shows that 82% of the public think that the online standards for regulating internet pornography should either be the same as those for offline or be stronger. Yet contrary to public opinion, the Government have turned on their head and performed a major U-turn on the basis of mumblings about the Obscene Publications Act.
First, the Government are trying to convince us with an amendment to Clause 27, government Amendment 25YV, that this situation will be sustainable. Just last week the noble Baroness, Lady Shields, said in answer to a question from the noble Lord, Lord Elton:
“I should say to my noble friend that we are clear that what is illegal offline is also illegal online. Legislation is in place to deal with internet trolls, cyberstalking, harassment, revenge porn and the perpetrators of grossly offensive, obscene or menacing behaviour”.—[Official Report, 15/3/17; col. 1861.]
But she did not add, “From next week, when we pass amendments on Report, not for pornography”. We are bringing in different rules about what can be supplied online and offline. If you are a retailer of DVDs you cannot sell an unclassified work. If you are a UK-based video-on-demand service you cannot have a programme service that includes prohibitive material. But if you are a website you can supply all of this material to the UK as long as it is behind age verification, unless it is extreme pornographic material. I cannot see how this position can be sustainable. Therefore, in the longer term we are changing the rules about how we approve or supply this material. I argued in Committee that such sweeping changes to long-standing arrangements should be made only with a full and public consultation. We have not had that. It has been slipped in at the end of the Bill’s parliamentary scrutiny.
The Earl of Listowel (CB)
My Lords, I offer my strongest support to my noble and learned friend Lady Butler-Sloss in her Amendment 25YD. She is of course a former president of the family courts and a chair of the adoption Select Committee which recommended additional support for adoptive families, a recommendation which has now been implemented. She has a long record in protecting vulnerable children.
I apologise for rising for the first time at this late stage in proceedings on the Bill. I felt bound to do so because I am vice-chair of the parliamentary group for young people in local authority care. On my noble and learned friend’s concern that the relaxing of the regime might to some degree encourage an increase in the level of domestic violence, many young people coming into care come from backgrounds where there is domestic violence. I agree with her entirely that we need a review to make sure that such a change does not contribute towards violence towards women.
I thank the Minister for the additional protections in the Bill for children accessing pornography; they are very welcome indeed. I extend my thanks to his colleagues in the other place for introducing a statutory requirement for personal, social, health and economic education, which will ensure that all children receive high-quality sex and relationship education. I heard from Professor Sue Berelowitz last night, an academic who has produced a number of reports on child sexual exploitation. She highlighted to me the correlation between violent pornography and domestic violence. It is only a correlation, but because there is such a correlation, we should give it careful attention. I support my noble and learned friend’s amendment and I hope that your Lordships will choose to do so.
Lord Morrow (DUP)
My Lords, I support Amendment 25YD in the name of the noble and learned Baroness, Lady Butler-Sloss. I fully support powers to block the supply of damaging pornography both to support the requirement for age verification and to prevent the distribution of material that is harmful even for adult viewing. I support the Government’s intention announced last month for a,
“major new drive on internet safety”.
I support the Prime Minister’s launch of a plan to,
“transform the way we tackle domestic violence and abuse”.
But the principle of joined-up government seems to be lacking as we review the Government’s amendments to Clauses 16 and 22 and the new clause defining extreme pornographic material.
The Government have recognised that the internet with its many amazing facets can also be extremely detrimental to the well-being of our young people if they are accessing pornography. That fact no longer seems to be in dispute. We recognise its impact on young people’s self-perceptions and relationships. I hope your Lordships will bear with me as I quote from the 2013 report prepared for the Children’s Commissioner for England. It concluded:
“Access and exposure to pornography affect children and young people’s sexual beliefs … maladaptive attitudes about relationships; more sexually permissive attitudes; greater acceptance of casual sex; beliefs that women are sex objects; more frequent thoughts about sex … Pornography has been linked to sexually coercive behaviour among young people, and, for young women, viewing pornography is linked with higher rates of sexual harassment and forced sex”.
This is why we want to protect children and I fully support the Government’s intentions.
I find myself perplexed as to why we think this material has no impact on a person when they turn 18. I accept that being an adult brings certain freedoms, but they are not infinite. I accept that we have laws that make it an offence to possess certain types of material and that that position remains, as set out in government Amendment 25YV, but at the same time government Amendment 25H is saying, “It is okay for a person running a website to supply that very same material into the UK as long as it is behind age verification”, with an exception for a very small number of very realistic images. I hope that the Government will reassure us that there are, indeed, a significant number of prosecutions for those offences, but I have my doubts. Even if there are cases that come to court in the coming years, are we going to be hearing, “This material was behind age verification systems, which the Government have said are what is needed. Therefore I thought material X and Y was within the law”? We are sending very mixed messages to the public about violent pornography.
I am particularly concerned about animated images of child sexual abuse, which would be against the law to possess in the UK and would be considered “prohibited material” under the present definition but will not be caught by the definition of “extreme pornography” the Minister intends to replace it with.
I greatly value the work of the Internet Watch Foundation in taking down online child abuse images, but it does not have the remit to cover animated or drawn images if the websites on which they are found are hosted outside the UK. This limitation is compounded when we understand that 99% of criminal content is hosted outside the UK. It disturbs me greatly that we are being asked to purposefully amend the Bill to remove from the regulator the power to prevent those images being made available in the UK via the internet when there is no other body able to fulfil that role. I cannot agree to changing a definition to one that will class such images as acceptable behind age verification. Therefore I will not be supporting the government amendments in this group.
I am not alone in my concerns about the kind of pornography these amendments would make permissible. Polling undertaken by ComRes over the weekend and published today—my colleague has made reference to it already—asked more than 2,000 adults what sorts of violent acts should be allowed in pornography online. In responding to different forms of content against which the age verification regulator would not have the power to act if the government amendments pass today, public opposition to allowing access to that material varied from 74% to 81%. Not surprisingly, these figures were bigger among women, who clearly feel particularly worried about these changes. Whatever pressure the Government may have been under to make the changes proposed today, the great majority of the general public do not want the material described as “prohibited” to be accessible.
I have consulted John Larkin QC, the Northern Ireland Attorney-General, about how the Bill will impact Northern Ireland and he advises me that he can “see no good reason for a change from the prohibited material category to the extreme pornography category.” Noble Lords will understand that I am inclined to agree with him. I am not convinced by the Government’s arguments that such a wholesale change of approach is needed and do not support the government amendments. As someone who took Northern Ireland’s equivalent of the Modern Slavery Bill through the Northern Ireland Assembly, I am particularly alive to the reality of violence against women. I find it very surprising that a Government led by a female Prime Minister who took the Modern Slavery Bill through Westminster should countenance the amendments before us today. I wonder whether she has been properly briefed on their consequence.
If there is a Division on the government amendments, I will vote against. In the unfortunate event that the amendments pass, I will vote for Amendment 25YD in the name of the noble and learned Baroness, Lady Butler-Sloss, and other members of your Lordships’ House. It proposes that there should be a review of the effect of this change and a sunset clause that would revert the effect of the Bill back to that in Committee, because it is time we looked at the evidence for how this material is impacting adults as well as young people. We are a digitally connected people—for good and ill. I am not suggesting that every violent sex crime is fuelled by pornography but it is time we had an open discussion about the impact of this material on violence against women and children, so that there can be reasoned policy responses.
The Relate counselling service has indicated that counsellors are increasingly seeing problems with “relationships and sexual functioning” as a result of internet pornography. In The Way We Are Now: The State of the UK’s Relationships 2015, Relate reported that 23% of 16 to 34 year-olds in a relationship reported an “overall negative impact” on their relationship from use of online pornography. The report said that pornography use is,
“an increasingly common topic in the counselling room”.
Last year, a journal article reported, based on interviews with 55 women in rural Ohio, all of whom were trying to leave their male partner, that,
“pornography is a major component of the problem of rural woman abuse”.
I hope Amendment 25YD will get overwhelming support from your Lordships that there needs to be a careful review of this change and the brakes put on, if necessary.
The Lord Bishop of Chester
My Lords, I know we want to get to the Front-Bench speakers so I shall be very brief and, like the contestant on “Just a Minute”, not repeat anything that has been said so far in the debate. I will say just two things.
First, virtually the only defence of the Government was from the noble Earl. He is half right and half wrong, in my view. The problem is that the Bill is not about the regulation of what adults should be watching, but changing the designation of pornographic material does just that. That is the internal problem in the Bill.
Secondly, there seems to be an agreement between the Government Front Bench and the Opposition Front Bench that the government amendments are going to go through. Then we have the amendment in the name of the noble and learned Baroness, Lady Butler-Sloss. When he replies, I would like the Minister to speak about the White Paper and the further review that is in prospect. What are its terms of reference? If the Bill goes through in the form in which the Government now want it to go through, it will leave a very unsatisfactory state of affairs in terms of how adult pornography is dealt with in our country, with the distinction between offline and online, and all the questions about the actual impact of what will be accessible. It would be helpful to me if the Minister would say a little more about what the review that the Government have in mind is intended to cover.
Lord Framlingham (Con)
My Lords, I, too, shall be extremely brief because this matter has now been dealt with in great detail by a number of speakers. Few issues that come before your Lordships’ House make me quite as angry and distressed as this. Given the role that Parliament plays in the welfare of our nation and our children, it saddens me hugely that we are even debating it as we are. I understand why we have to but it is an enormous comment on the state of our country. It took me a while to realise that we now accept pornography as an industry. It is an acceptable industry—not quite like motor cars or other things but it has become acceptable—and I think that says an awful lot about the state of our nation today.
I have spoken before in this House about how many thousands of primary school children watch hardcore porn on a regular basis. That should be cause for concern for us all. The noble Earl made the point about Fifty Shades of Grey—which I have to say immediately that I have neither read nor seen—but that makes the point for us, does it not? We are talking about a medium into which our young children slip away from us—we do not know where they have gone. It is a world we cannot join them in. I think it is a dreadful world—interesting, fascinating, fun, in some ways; but in other ways, absolutely dreadful. Those primary school children are not going to go out to Waterstones and buy Fifty Shades of Grey or pay for a ticket to go the cinema to watch the film of it. They are going to their bedrooms to slip into this other world and watch all these horrible things we are talking about.
How often have I heard us say in this House that the welfare of the child is paramount? We say it time after time, relating to one Bill after another. If we really mean it when we say it, we should be much tougher on issues such as this. That should be reflected in how we vote today. I do not know what will happen to the government amendments but if we divide on them, I shall vote against them. I shall certainly support Amendment 25YD, in the name of the noble and learned Baroness, Lady Butler-Sloss. I hope very much that the House will show what it really thinks about these issues and support that amendment as well.
Lord Paddick (LD)
My Lords, the debate this afternoon shows the importance of noble Lords participating in every stage of the Bill. My understanding of what has happened here is that the Bill was never intended by the Government to deal with protecting adults from pornography; it was to fulfil a manifesto commitment to protect children from accessing pornography. At a very late stage in the other place, a Conservative Back-Bencher brought protection against adult pornography into the Bill. The mess that we are currently in is completely down to the Government accepting that amendment.
The current law does not allow anybody to take down either prohibited material or extreme pornography from the internet with the exception of child pornography, which is dealt with separately through the Internet Watch Foundation and so forth. The Government’s problem, having accepted that amendment in the other place to do with prohibited material, is that people are losing confidence in such a definition of pornography. While prohibited material is not allowed in films and DVDs classified by the BBFC, that material is not prosecuted as obscene by the Crown Prosecution Service. The law on what is and is not obscene—on what it is lawful to have and not lawful to see and possess—is in a mess. That is why we are in this situation.
The Government have tried to remedy the situation by picking on something that is not disputed: a definition of obscenity that is a concrete foundation on which to build for the future. They have therefore decided to replace this definition of prohibited material that is falling into disrepute—
Lord Gordon of Strathblane
Can the noble Lord produce a shred of evidence to say that this definition has fallen into disrepute? I see no evidence of it in the yearly polling done by the BBFC on its classifications.
Lord Paddick
I will try to say it again more clearly. It is the fact that the Crown Prosecution Service is not prosecuting people for possessing prohibited material. That brings the definition of prohibited material into disrepute, as far as the law is concerned. I am not quite sure what it is that the noble Lord does not understand about it being brought into disrepute in that respect.
Lord Paddick
Indeed. What the Minister said backed up what the noble Lord, Lord Browne of Belmont, said about the criticism of there being no public consultation. There has been no public consultation about introducing adult pornography into the Bill, in the form of prohibited material. There needs to be a public debate on this to decide whether the British Board of Film Classification’s operation, where it does not issue certificates for prohibited material, is the right standard or whether the CPS standard is right. There has not been a public debate about that, and we need one.
Having said all that, I entirely agree with the noble and learned Baroness, Lady Butler-Sloss, about the impact that gratuitous violent pornography can have in terms of domestic violence and the impact that it then has on children in those families. That needs to be debated and addressed. However, that is not what the Bill was primarily intended to do. Contrary to what the noble Lord, Lord Farmer, suggests, this is not some deal that has been done between the opposition parties and the Government over keeping age verification. A Conservative Back-Bench amendment was introduced in the other place at a late stage, which is why there has not been sufficient time to debate the subject in this place either, and certainly not enough public consultation on the issue. In accepting that amendment, the Government introduced this complication.
Many noble Lords around the Chamber today have said, although I do not know if they realised this, that the definition of prohibited material does not go far enough either. You can get the sort of things that they want banned from the internet on a DVD, albeit an R18, bought from a shop. The noble Lord, Lord Farmer, gave examples of the sort of sexual activity that he disapproves of. I do not know whether he knows that some of the activity that he talks about is legal to buy in a shop on a DVD. We are getting into a mess here because there is no agreement generally about what should and should not be allowed to be seen.
Lord Farmer
I made the point about the medical ramifications of certain practices. That is the point I was making about that.
Lord Paddick
Forgive me if I misunderstood the noble Lord. I thought he was using that as an argument for why that sort of activity should not be allowed to be seen by anyone, but I could be wrong.
The Earl of Erroll
This may assist the noble Lord and the rest of the House—
The Earl of Erroll
Very quickly, for clarification, the problem is that some material is regulated by ATVOD, some by the BBFC and some by Ofcom. That is where the noble Lord’s problems are coming from when he talks about “prohibited material”.
Lord Paddick
I am grateful for the noble Earl’s intervention, but for clarity I will stick to what I was saying. The noble Lord, Lord Alton of Liverpool, talked about the harm test that was introduced in 1994. I challenge anyone to suggest that some of the things that are not allowed in R18 videos cause harm to anyone. They might be unpleasant or, in some people’s eyes, morally reprehensible, but certainly there are things that are not allowed because of the definition of prohibited material but cause harm to no one. That is an illustration, without going into specific gory details about what is and what is not allowed. That is why we are in the mess that we are in.
Clearly the question of what is and is not acceptable pornography needs to be reviewed, and my understanding is that that is what the Minister has said will happen as part of an online safety review. Were the House to divide, we on these Benches would prefer Amendment 25YW from the Labour Front Bench, under which a review would take place but without specifying what the outcome of that review should be—that is, a reversion to the discredited definition of prohibited material.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to the Minister for introducing his amendments today. I am also grateful to the noble Lord, Lord Paddick, for bringing some clarity to what has been quite a complicated and emotional debate this afternoon. I urge noble Lords to look at Amendment 25YW in this group, which is in my name, because I believe that would take us some way through some of the dilemmas that we face this afternoon.
As has been said, these amendments arise from a dialogue we have been having over the last few weeks about the definition of “prohibited material” and “extreme pornography”. That arose as a result of late additions to the enforcement measures in the Commons, which meant that the Bill did not receive the scrutiny it deserved at that stage. Hence we have been scrambling to understand and to consider the new requirement for internet service providers not only to block sites that do not have age verification filters in place for children but also to block access to other illegal pornographic material. I agree with other noble Lords that it is very unfortunate that this has come at such a late stage and that we are trying to deal with this important issue so late in the process. We are all at a loss and have lacked something because of it.
Since then, several variations of wording have been taken from Acts that already exist and put forward as the best way of defining the new obligation. We find ourselves having to take a significant decision on which of these various options would best benefit the law going forward. All of them would benefit from further debate.
In this context, and given the sensitivities involved, we welcome the Government’s attempt to strike the right balance on this issue. Government Amendment 25YV is crucial in this regard. It is a short amendment that says:
“Nothing in this Part affects any prohibition or restriction in relation to pornographic material or extreme pornographic material, or powers in relation to such material, under another enactment or a rule of law”.
In other words, if pornographic material is illegal offline, it would also be illegal online. The amendment underlines that point. This is the parity between offline and online that many people have sought, and it echoes the position that the Minister spelled out when we met him recently. We support this approach because we believe that any definition of illegal material transposed into the Bill at this late stage should be based on current statutory definitions.
We also recognise the added challenge that the current legal definitions are not being applied consistently, and that the Crown Prosecution Service guidelines need to be updated—which is another issue that we have been debating this afternoon. Only then will we achieve that true parity in removing offline and online material. But we are firmly of the view that this disparity should be addressed separately, and thoroughly, in conjunction with the Home Office. We are also firmly of the view that today we should focus on the intent of this Bill, which is to introduce age verification processes to stop children under 18 from accessing pornography. The debate this afternoon has muddied the water, because that is very clearly the intent of this part of the Bill, and the way that the government amendments are set out achieves that very important aim.
This is a huge step forward and a key policy prize. It is something that not just the Government but all the main political parties have been committed to. There is no doubt that if it is implemented successfully—although that is a huge ask—there will not be the opportunities for children to access the illegal material that is concerning noble Lords today. I accept of course the point made by the noble Lord, Lord Browne, that this cannot be 100% watertight—none of these things can be. We are on a journey. I think it was one of the right reverend Prelates who said that children are very tech-savvy and we have to keep up with them. Of course we do, so this will not be 100%. But it is a massive step on a journey that will stop an awful lot of casual viewing by children of internet pornography.
That is why we believe that we should retain our focus on children—to prevent all damage to their relationships, self-esteem and mental health, and all the issues which, we understand, result from underage viewing of pornography, which we have debated repeatedly during the course of the Bill.
Of course, that is not to say that there are not other huge social issues about adults viewing violent or degrading pornography—and we all have our views on the level of acceptability of that. I resent the fact that some people think that I am in favour of a free for all, because that is certainly not my position. Some of the issues have been raised by noble Lords today, and of course it is right that they are debated and resolved in the public realm. I agree with the noble Lord, Lord Alton, that there needs to be a public debate. It has been lacking until this debate today, which I believe is the beginning rather than the end of a debate which should take place.
We welcome that debate, but we do not feel that amendments to change the definition of illegal pornographic material which adults can access online is appropriate for a part of a Bill that is intended for another purpose. We believe that this should be part of a wider debate which factors in such matters as our traditional tolerance towards consenting adults and the potential consequence of more online material being driven out of reach on to the unregulated dark web if we do not get the regulation right. In this context, we appreciate the opportunity which the Minister has proposed for a wider round-table debate on internet safety and will happily work with colleagues away from the Bill on how we can best deliver solutions to some of the wider concerns that have been expressed today.
In the meantime, we recognise that the definition of extreme pornography now proposed by the Government is not ideal. It may be only a backstop pending a fuller review of more appropriate wording. That is why our Amendment 25YW would require consultation on the definitions used in this part of the Bill and a report from the Secretary of State back to Parliament within 18 months. We think that that would be a real step forward.
Although we have sympathy with the amendment in the name of the noble and learned Baroness, Lady Butler-Sloss, we are concerned about the more prescriptive end of her review. We agree that there should be a review, but the very fact that she has already spelled out what the outcome should be causes us concern.
Our view remains that we should be looking for an updated definition based on something deliverable online and offline with equal strength. A number of definitions are out there—not just the definition of extreme pornography that we have been debating today. In other pieces of legislation there are other definitions. We need to do a job of work which is more than we can do today to consider all those definitions, consider what the Crown Prosecution Service can deliver in terms of taking action against people, and work on that basis.
I really hope that we can work together on this, because this has felt like a very divided debate. It is not; there is an enormous amount that we agree on. It is the tactics of how we go forward that we are struggling with.
In conclusion, we support the government amendments, as far as they go, but I hope that the Minister will be able to commit to a wider review with a deadline for reform—in conjunction with his Home Office colleagues, because we recognise that this goes wider than his department’s remit. I hope that noble Lords will look at our amendment and support it. I look forward to the Minister’s response.
Lord Ashton of Hyde
My Lords, this has been a wide-ranging debate and I find myself in a slightly uncomfortable position: I am taking issue with several of my noble friends but I very much agree with the noble Baroness, Lady Jones, and the noble Lord, Lord Paddick. If I may, I shall start with the amendments tabled by the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Jones, and then move on to our amendments and reply to some of the points that noble Lords have made.
Obviously, Amendment 25YD, in the name of the noble and learned Baroness, Lady Butler-Sloss, is dependent on the preceding government amendments being passed. It provides that, three years after the Act passes, the definition of “extreme pornographic material” will cease to have effect and will be replaced by a definition of material which would not be classified—in effect, the current definition of “prohibited material”.
The debate on this has been strong on both sides, and it is an interesting idea that we have considered. However, our aim with this Bill, as has been said by several noble Lords, is to protect children from accessing pornographic material. We are creating parity between the offline and the online worlds in protecting children from being able to access pornographic material. These are different and incomparable places, and this is the closest we can get on parity of content through the age verification regime. Subject to the Bill shortly gaining Royal Assent, to specify that this should happen in spring 2020 unless a review finds otherwise by spring 2019 is in our view unnecessarily restrictive. It presents a binary choice that predetermines the outcome of any review. We know this is a fast-moving environment, and we do not know what the landscape will look like in two years’ time. Forcing the legislation into doing something which restricts the response to how children are protected online could have unintended consequences.
What we are doing now is: through the guidance to the regulator, we are providing for the regulator to report annually on the effectiveness of the regime. This will provide the opportunity to review the regime and take any necessary action. This is a big step forward without precedent, and to focus on this one issue, which is undoubtedly important, risks being able to ensure that the regime as a whole is as effective as possible in the future at preventing children from accessing pornography online.
The amendment in the name of the noble Baroness, Lady Jones, seeks to introduce that the Secretary of State must produce a report on the impact and effectiveness of the regulatory framework provided for in this part and must consult on the definitions used within this part. The report must be laid 12 to 18 months after the powers come into force. We must aim to lay the groundwork for success before the powers are introduced, and the regulatory framework we are providing will do that. However, this will be a bold new regime with many challenges and it is right that the effectiveness of the regime is reviewed. That is why, as I have just said, through the guidance to the regulator we are providing for the regulator to report annually to the Secretary of State on the impact and effectiveness of the regime. Placing a formal requirement on the Secretary of State to do this is, in our opinion, unnecessary.
The Bill is neither the end nor the extent of our interest in child internet safety. The implementation of age verification will be watched closely from day one. We have consistently recognised the need to be flexible in our approach and this will remain the case in addressing any issues that may arise. This work forms part of our wider response to online safety, and the work that has begun in the internet safety strategy demonstrates our clear commitment to ensuring that people in the UK have a positive experience online. I shall come to that a bit later. With that explanation I hope noble Lords will not press their amendments in due course.
I turn now to replies to some of the points noble Lords made about the government amendments. I echo very much the remarks of the noble Lord, Lord Paddick. For those who have not participated before in this Bill’s process, it would be helpful to repeat some of the things he said about how we got here. In some ways it is a mischaracterisation—not malicious, I hasten to add, and maybe “misunderstanding” is a better word—that we are watering down the controls, as my noble friend Lord Farmer said, or that we slipped this in at the last minute.
As the noble Lord, Lord Paddick, said, the position we are in is because we have accepted amendments through the course of the Bill. It is a bit unfair of the noble and learned Baroness, Lady Butler-Sloss, to criticise the fact that this debate is happening so late in the day when the only reason we are having it is because we accepted the amendment in the House of Commons. The issues about where we go on what is effectively internet censorship were raised in Committee in this House. So we are discussing these things because noble Lords and Members of Parliament have changed the Bill as we went on. The one thing on which we all agree—and this has been confirmed all around the House—is that we want to address child online safety. One of the big advantages from this Bill is that, by getting effective age verification in place, we have made a huge step forward.
Lord Mackay of Clashfern
The noble Lord, Lord Paddick, said that the definition of prohibited material had become somewhat “suspect”—I think that was his word. Why is that? Is it a legal definition and why has it become suspect?
Lord Ashton of Hyde
The reason is that the CPS decides whether to prosecute on offences as it sees them. It has guidance, which has been around for some time. The fact is—and some noble Lords may not agree with this—that views have changed and the CPS does not always prosecute in line with its own guidance.
Lord Ashton of Hyde
The reason it does not is because it has discretion in individual cases. Sometimes it thinks it is in the public interest to prosecute and sometimes it does not. When the noble Lord said that it is discredited, I think he means that the CPS does not always prosecute every situation in line with its own guidance. If I have misinterpreted what he said, I am sure he will be able to tell us.
Lord Paddick
The noble and learned Lord asked a good question. My understanding is that the definition of prohibited material which the British Board of Film Classification uses is supposed to incorporate all the different definitions in different laws about what is obscene and not acceptable. The fact is that, in regard to a number of elements of those laws, the Crown Prosecution Service no longer prosecutes people for possession of that material. The definition of prohibited material therefore includes material for which someone would never be prosecuted. To that extent, the definition of prohibited material has fallen into disrepute.
Lord Ashton of Hyde
Lord Ashton of Hyde
My Lords, these government amendments are primarily designed to address the concerns of the Delegated Powers and Regulatory Reform Committee. The committee’s first challenge is defining who exactly is in scope of the new age verification regime. Amendment 25D provides for the Secretary of State to make regulations on the circumstances in which persons should or should not be treated as making pornographic material available on a commercial basis. We have provided these in draft to aid understanding of how this power will be used and welcome views before a final version is subject to affirmative parliamentary procedure. The intention of the regulations is primarily to capture those who make money or benefit from making pornography available online, including making it available free of charge. It is not the intention to capture those sites, for example, that mostly contain non-pornographic content. However, it is the intention to cover those who, for example, market themselves as making available pornographic material and who may benefit from it.
Questions have rightly been asked about pornography on social media and our approach has been to not rule out specific platforms. In the regulations we are suggesting the scope should not include sites where an overwhelming majority of users are clearly not accessing to view pornography or where an overwhelming majority of the content is not pornographic in nature. We do not want to let anyone off the hook and where pornographic material is available but not within scope, it may be that the site will be enabling and facilitating the availability of commercial pornography and subject to an ancillary service provider notification. It will depend on the facts of any given case. Many social media sites already act responsibly. We will also look at the issue further as part of the cross-government work on the internet safety strategy that my department is leading. I will say more about this later.
We accept the committee’s argument for greater parliamentary scrutiny of who the regulator is. Amendment 25R would ensure that the first designation to be made for any given function is by the affirmative parliamentary process. As noble Lords will be aware, we have been working closely with the British Board of Film Classification as the intended regulator for much of the regulatory framework, including directing ISPs to block sites. We will come back to this in a later group, but let me say now that we have absolute confidence in the BBFC and will strongly resist anything that endangers the introduction of these important measures to protect children.
We have also addressed concerns that the regulator has too much flexibility in setting its own guidance. Amendment 25YQ provides for the Secretary of State to issue guidance to which the regulator must have regard, as is standard practice for statutory guidance. The regulator cannot choose to ignore this guidance. It provides direction to the regulator in a number of areas, including the important power of internet service provider level blocking. ISPs will be expected to take all reasonable steps to enact a notice from the regulator. We have circulated this guidance in draft. It is based on the many discussions and debates that have taken place over the previous months, but I stress that this is a draft, and we are now seeking views from parliamentarians and others before a final version is laid in Parliament.
In addition to the guidance to the regulator, we have also strengthened the requirements on the regulator in relation to the guidance it issues in Amendments 25YM and 25YA. The age verification regulator must publish guidance about the types of arrangements for making pornographic material available that the regulator will treat as being compliant and guidance about the circumstances in which it will treat services provided in the course of a business as enabling or facilitating the making available of pornographic material or prohibited material. Government believe that internet sites, including social media, can be classified by the regulator as an ancillary service provider, where they are enabling or facilitating the making available of pornographic or prohibited material. This would mean they could be notified of pornographers to whom they provide a service. This guidance will now be subject to an affirmative parliamentary procedure the first time that it is made, providing further opportunity for scrutiny.
Amendment 25M requires the Secretary of State to be satisfied that the intended appeals arrangements are “sufficiently independent” as part of the designation process and we provide further details on this issue in the draft guidance to the regulator, on which I will say more in a moment. Again, we will come back to this in a later group, but we are confident that further parliamentary scrutiny at the time of designation provides an appropriate time to ensure that the arrangements are right. I beg to move.
Lord Paddick
My Lords, my noble friend Lord Clement-Jones and I have Amendment 25N in this group. It is a probing amendment to test whether a “sufficiently independent” appeal mechanism against a decision of the age verification regulator is good enough. Government Amendment 25M, regarding appeals against a decision of the age verification regulator, describes the arrangements as “sufficiently” independent of the age verification regulator. Our amendment would remove the word “sufficiently” so that the amendment read: “any person hearing an appeal under those arrangements will be independent of the age-verification regulator”.
The British Board of Film Classification currently operates its own appeal mechanism against its decisions either to classify a film or DVD with a particular age classification or to refuse to grant a classification at all. That appeal mechanism is operated by the BBFC but by a panel that is independent of those who made the initial classification. To that extent, it is not wholly independent of the BBFC but it is arguably sufficiently independent to command the confidence of those seeking classification for their films and DVDs—that is, the industry can have confidence in the process.
Although this works well in practice with the proposed age regulation regulator, what if that regulator changes? This “sufficiently” independent arrangement appears to be designed around the proposed age verification regulator, the British Board of Film Classification, in a counterintuitive way—that is, not having an appeal mechanism that is totally or completely independent seems counterintuitive—because of the reputation that the BBFC has, which might not be the case were the age verification regulator to change. The wording “sufficiently independent” appears to be BBFC-specific in a way that might not be acceptable were any other regulator to be chosen. Perhaps the Minister can reassure the House on that point.
The Earl of Erroll
My Lords, I want to comment on Amendment 25D and to thank the Government for proposing new subsection (2B). One thing that worried those of us who had been thinking about how to make age verification work was the definition of “commercial basis”, which was a potential loophole for some websites to get round the provision. This proposed new subsection seems to close that loophole in that, even if material is free, it can still be provided on a commercial basis. Therefore, I congratulate the Government and support this amendment.
Baroness Jones of Whitchurch
My Lords, I am grateful to the Minister for explaining the thinking behind these many amendments. I have read them and think that I understand them but I am sure that he will correct me if my interpretation is wrong. They underline the considerable amount of additional work that is still to be done if we are to get a comprehensive age verification scheme properly up and running.
The Minister will know that the Delegated Powers and Regulatory Reform Committee was of the view that many of the details should be spelled out on the face of the Bill. For example, it expected details such as the definition of “commercial basis” and the identity of the regulator or regulators to be specified at this stage. However, the provision of this information, like many other details, has been put off by the Government to a later date, to be included in the guidelines to which the noble Lord has referred and to be discussed in further debates that will be taken under their auspices.
The DPRRC also requested that guidelines on how the financial penalties should operate should be brought before this House as an affirmative resolution. I remind the House of a particularly stark criticism that it wrote at the time. It said:
“We consider it objectionable as a matter of principle that a regulator, who is to be clothed with extensive powers to impose fines and take other enforcement action, should itself be able to specify how key concepts used in clause 15(1) are to be interpreted”.
I would be grateful if the Minister could justify why what seems to be a rather straightforward piece of advice from that committee has once again been rejected. As I understand the noble Lord’s amendment, it is the offer of a negative procedure that is now being put before us, which of course does not carry the same weight.
The amendments deal also with the provision for appeals, which again were debated at length in Committee. The Minister will know that the DPRRC recommended that a statutory right of appeal should be placed in the Bill. Again this advice seems to have been rejected by the Government and, instead, they are relying on a new formulation of words specifying that those hearing any appeal should be “sufficiently independent” of the age verification regulator. As we have heard, the detail of this “sufficiently independent” regime is spelled out in the draft guidance.
I have to say that we share the view of the noble Lord, Lord Paddick, that this really is not good enough. The guidelines specify that the independent appeals panel will effectively be appointed and funded by the regulator. However, we have tabled a separate amendment—Amendment 25P, which will come up in a later group—that specifies our belief that the appeals process should indeed be fully independent of the regulator. We believe that our amendment is more appropriate than that of the noble Lord, Lord Paddick. It would be helpful if the Minister could explain why the DPRRC’s advice on this matter has been rejected.
I return now to the overall package of government amendments in the group. As I have said, they seem to flag up a great deal of further work that will need to carry on outside the Bill. As it is worded, the Secretary of State will issue guidance to the regulator and the regulator will, in turn, issue guidance for approval to the Secretary of State. That seems a rather cosy arrangement of swapping guidelines back and forth, but it is not quite clear to me at what point Parliament will have the final say in all these matters.
Some of the outcomes will come before the House in the form of affirmative regulations but others will not. We do not yet know who the regulators will be, how the age verification regime will work, how the privacy checks will work, what the definition of “commercial activities” will be, how ancillary services will be defined and, crucially, we do not know how the internet service blocking system will work or what kind of fines will be imposed on those who fail to comply. Without wishing to overlay this, it all feels like a rather unsatisfactory piece of legislation. The amendments before us today and the guidelines that have recently been issued do little to reassure us that the Government really have got the detail of this in hand.
Regrettably, we feel that the Government are in danger of delegating far too many powers to the as yet unspecified regulator. This is an issue that we will return to in the next group of amendments. In the meantime, I look forward to hearing the Minister’s response on the points I have raised.
Lord Ashton of Hyde
My Lords, Amendment 25N in the name of the noble Lord, Lord Paddick, seeks to remove the word “sufficiently” from the appeals guidance. I will explain why we do not think that that is necessary.
The draft guidance to the regulator specifies that an appointments board engaged by the regulator must appoint an independent appeals board—independent of the regulator, government and the industries that are most likely to submit an appeal. The draft guidance explains that the members of the independent appeals board, appointed by the appointments board, should be appointed on terms and conditions that ensure their independence. Members should represent a broad spectrum of opinion and experience and be respected in their field. They should also be able to demonstrate a commitment to the standards of conduct set out in the Committee on Standards in Public Life’s The 7 Principles of Public Life. We agree that it is important that there is an independent, open, fair and transparent appeals process. Our amendment to the designation and guidance achieves this. It will deliver an appeals process that gives those affected recourse to an independent appeals panel which is not part of the regulatory body, and where the regulator has no say on who is a member and has no role in making the appeal decision.
Further parliamentary scrutiny at the time of designation will provide an opportunity to ensure that the arrangements are right. As part of the designation process, government Amendment 25Q requires the Secretary of State to lay before Parliament a statement of the reasons why she is satisfied that, for example, any person hearing an appeal will be sufficiently independent. Parliament will then have an opportunity to scrutinise this. In this case, “sufficiently independent” is an adequate description of a most robust appeals process. On that basis, I invite the noble Lord not to move his amendment.
I was somewhat taken aback by the noble Baroness’s criticism of our response to the DPRRC. We thought we had addressed—
Lord Framlingham
I hope I am right. I think Amendment 25N is in the next group.
Lord Ashton of Hyde
I am sorry, that has rather thrown me. I was saying that I was surprised by the noble Baroness. We think that we have agreed to the spirit of nearly all of the DPRRC amendments. We have not done everything to the letter but we have agreed to the spirit of its amendments. However, we have written back to the DPRRC about the classification of a regulator—which we will come to later—but that is purely because we are following other legislation.
Baroness Jones of Whitchurch
I specifically asked about the ability to impose fines and so on. That appears to be under a negative resolution in the government amendments.
Lord Ashton of Hyde
We have not designated the financial regulator. We will have to do that. I will check if it is under a negative resolution and undertake to write to the noble Baroness and talk to her about it. I cannot remember what it is, to be quite honest.
The point about the financial regulator—we will come to this in a later amendment—is that we have a disagreement about the extent to which the BBFC should carry out functions. The one thing that we are agreed on is that it should not carry out financial enforcement. We will talk later about what exactly it should and should not do. We have not yet designated who the financial enforcement regulator is—we will do that later—but we want to get the regime up and running before we decide.
The government amendments have addressed many of the points raised today and by other noble Lords during the passage of the Bill. They provide for greater parliamentary scrutiny, include affirmative procedures where there were none and provide greater clarity and direction to the regulator. The direction to the regulator will be laid before Parliament and we have invited noble Lords to contribute to that draft guidance. In all, that will give greater confidence that the measures will be in the best place possible to be successful. I beg to move.
Lord Ashton of Hyde
“(2A) The Secretary of State may make regulations specifying, for the purposes of this Part, circumstances in which material is or is not to be regarded as made available on a commercial basis.(2B) The regulations may, among other things, prescribe circumstances in which material made available free of charge is, or is not, to be regarded as made available on a commercial basis.(2C) Regulations under subsection (2A) may provide for circumstances to be treated as existing where it is reasonable to assume that they exist.”
“( ) Regulations under subsection (2A) may make different provision for different purposes.( ) Regulations under subsection (2A) are to be made by statutory instrument.( ) A statutory instrument containing regulations under subsection (2A) is subject to annulment in pursuance of a resolution of either House of Parliament.( ) But a statutory instrument containing the first regulations under that subsection may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Lord Ashton of Hyde
“(g) a video work that the video works authority has determined not to be suitable for a classification certificate to be issued in respect of it, if—(i) it includes material (other than extreme pornographic material) that it is reasonable to assume from its nature was produced solely or principally for the purposes of sexual arousal, and(ii) it is reasonable to assume from the nature of that material that its inclusion was among the reasons why the video works authority made that determination;(h) material (other than extreme pornographic material) that was included in a video work that the video works authority has determined not to be suitable for a classification certificate to be issued in respect of it, if it is reasonable to assume from the nature of the material—(i) that it was produced solely or principally for the purposes of sexual arousal, and(ii) that its inclusion was among the reasons why the video works authority made that determination;(i) any other material (other than extreme pornographic material) if it is reasonable to assume from the nature of the material—(i) that it was produced solely or principally for the purposes of sexual arousal, and(ii) that the video works authority would determine that a video work including it was not suitable for a classification certificate to be issued in respect of it.”
Baroness Jones of Whitchurch
My Lords, in moving Amendment 25J I shall speak also to Amendments 25K and 25P. They tackle three key aspects of the regulation regime as set out in Part 3. First, as we have said, we believe that a great deal more work needs to be done on the detail of the Bill, specifically on the functions of the regulators. It is important to get this right.
For example, potentially huge new powers will be available in Part 3, underpinned by large fines and considerable and as yet untested obligations laid on internet service providers, banks and advertisers. The core expectation is that these large institutions are going to help us to police pornography sites, but for this to work there has to be confidence in the competence of the regulators and that their judgments will be proportionate and legally watertight.
From our discussions so far with these groups, I do not think that we have quite reached that point. Like most people, they have sympathy with the aim of protecting children, but they remain somewhat confused about how this is going to work in practice and what their role will be. This is why we suggest in proposed new subsection (14) set out in Amendment 25P that there should be further widespread consultation about the designated functions and powers of the regulators before they are laid down in statute.
Secondly, there is the issue of who the regulator or regulators might be. As noble Lords will recall, the lack of detail about the roles that they are to perform was discussed at length by both the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, which fed their comments through during the Committee stage. I will not rehearse all the arguments again because they have been spelled out, but as an example, the DPRCC concluded:
“We think it inappropriate to delegate to the Secretary of State, with only a modest level of Parliamentary scrutiny, the decision on whom to designate as the regulator”.
The truth is that the Government have not been clear on this issue, and indeed they seem to have changed their position as the Bill has progressed without a legitimate explanation for doing so. The original letter of intent, which was sent by DCMS to the BBFC last year, made it clear that it would carry out the front end of the regulatory framework with a different, unnamed regulator of equal status carrying out the enforcement functions set out in Clauses 20 and 21. This position was maintained by the Government throughout the Commons debates on the Bill. Thereafter, in the Lords Committee stage debate, the Minister said:
“We propose that the BBFC should carry out the initial monitoring, assessing and notification work, and we are carefully considering alongside this the option for an enforcement regulator”.—[Official Report, 2/2/17; col. 1297.]
Our amendment is consistent with that position.
However, the Government’s view has changed again. In a more recent letter to the DPRRC, they say that it is intended that the BBFC should carry out all the functions apart from issuing financial penalties. Finally, at a recent meeting the Minister, Matt Hancock, began to speculate that the BBFC could in fact carry out all the functions in the Bill and that a second regulator was not really necessary. This is confirmed in the draft guidance that was produced last week. It is clear that a degree of mission creep is taking place here without an adequate explanation. That underlines our concerns that the Government have not really thought this through. It is not clear why there has been a change of heart. It might be purely pragmatic because, as we understand it, Ofcom has shown a reluctance to take on the enforcement role, but that is not a good enough reason to load all of the powers on to one body with little experience of the scale of enforcement that is spelled out in the Bill.
We continue to be clear that there are two separate regulatory functions, both with considerable responsibilities and heavy resource commitments. They are, first, identifying persons who contravene the requirement to provide age verification filters or who display extreme pornography—it may well be that the BBFC is qualified to do that—and, secondly, taking the widespread range of enforcement actions, including imposing fines, cutting off payments and advertising revenue, and blocking sites as specified in Clauses 20 to 23. This is how the Government originally intended the system to work, and it is a mark of good governance that the two roles should be kept separate.
Our amendment would remove the option of having just one regulator and specifies that there should be two or more. The relationship between the two bodies is set out so that appropriate checks and balances are in place.
The amendment also specifies that the appeals mechanism for decisions by the regulator should be fully independent and not appointed, overseen and funded by the regulator. Again, this is an issue that we have debated previously. We do not believe that the measures set out in the draft guidance address our concerns about appeals, and I hope that even now the Minister will concede that the Government need to revisit the level of independence of the appeals mechanism and to reassure us on that matter.
Finally, our amendment specifies the need for the regulators to have the status of a body corporate, independent of the Government and with all appointments made openly and transparently. Compelling arguments on this matter were put forward in Committee by my noble friend Lord Stevenson, and we continue to believe that they should be addressed before any regulator is appointed. Unlike most regulators, the BBFC is a private company with private arrangements for board appointments. It lacks the transparency and accountability of most organisations operating in this public sphere. It is to be appointed to a role where it will take on considerable extra functions that will be funded by the Government and with complex moral responsibilities at their heart, as we have heard in the earlier debates. We need a reassurance that its governance is of the highest standard, in keeping with the Nolan principles and open to scrutiny.
We believe that our amendments cover the essential factors which underpin a solid and credible regulatory structure. The Government should take time to make the appointments of regulators and they should think again about the drift towards one regulator, which was never originally envisaged. It is important to ensure that all the parties that will play a role in this new regime have confidence in the competence and authority of the regulators, and we believe that this can be achieved only if we consult further and widely about the functions as set out in our amendments. On that basis, I beg to move.
Lord Paddick
My Lords, I shared some of the concerns that the noble Baroness has just articulated about the role of the BBFC as both the group that will reach these decisions and the one to enforce them. However, having met with representatives of the BBFC, I have to say that I do not agree with the noble Baroness about heavy resource commitments. The BBFC is content that it should be able to carry out these roles with a minimal increase in resources. Also, bearing in mind the confidence that the industry currently has in the BBFC around classification and the awarding of certificates for films and DVDs, we are confident that were the BBFC to become the regulator, it could carry out both roles.
At the end of the day, the BBFC is not at all confident about how effective the financial penalty elements of the Bill will be, bearing in mind that the overwhelming majority of pornographic websites are hosted in other countries. In its view, the enforcement of financial penalties will be almost impossible, but it is confident that it could quickly and easily ask internet service providers to block websites that fail to provide adequate age verification. In these circumstances, we do not believe that we can support the amendments.
The Earl of Erroll
My Lords, this is an important point. Without enforcement, nothing will work. If you do not enforce age verification, no one will bother with it. For exactly the same reasons as the noble Lord, Lord Paddick, gave, I think that the notice and take-down—the blocking—is the only thing that will work. Fines will not work; it is probably a waste of time even trying them. The only thing that might work is to ask the credit card companies not to take payments for those sites, because they like to observe the law. I am concerned that the BBFC will not have resources to do this properly, but even if it goes elsewhere the BBFC should still be able to notify ISPs to block sites. That bit must certainly be enforced.
Lord Ashton of Hyde
My Lords, I am grateful to everyone who has spoken in this brief debate. The introduction of a new law requiring appropriate age verification measures for online pornography will help protect young people and children from potential harms from online pornography. It will also rightly hold commercial providers of online pornography responsible for the material they provide and profit from.
The Government of course take the protection of children and young people very seriously. To provide effective protection it is important that we have a robust regulatory system in place. These amendments seek to limit the scope of the regulatory functions that may be fulfilled by the BBFC by seeking the requirement that the same regulator must not be responsible for both identifying a non-compliant site and taking enforcement action against it. I shall first explain why, in identifying the BBFC as the preferred regulator, we think we have made the right choice.
The Government’s intention is that, subject to parliamentary approval, the BBFC will be the regulator responsible for identifying websites that do not have adequate age verification or are hosting extreme pornography, and then to give notice to the appropriate persons, be they payment service providers, ancillary service providers or ISPs. It is not intended that the BBFC will be designated as the regulator responsible for issuing financial penalties. That will be a role for a separate body, yet to be determined, but which will be approved by Parliament.
We are pleased to be working with the British Board of Film Classification as the intended age verification regulator, again subject to parliamentary approval. To respond to the remarks of the noble Baroness, Lady Jones, on structure, the BBFC is an independent, not-for-profit company that has a proven track record of interpreting and implementing legislation as the statutory authority for age rating videos under the Video Recordings Act. It has unparalleled expertise in classifying content and it is committed to delivering the aims of age verification. It is the expert on editorial judgments over pornographic and other content.
The BBFC has been classifying cinema films since it was set up in 1912 and videos and DVDs since the Video Recordings Act was passed in 1984. It continuously has to make judgments on classification, openly and transparently. These decisions relate to a multimillion-pound industry and are subject to challenge. The BBFC’s work with mobile network operators on the self-regulatory regime for mobile content is a good example of where it successfully sets content standards, implements them and adjudicates transparently and accountably.
The BBFC will not operate without oversight. It must have regard to the statutory guidance from the Secretary of State to the regulator. This will provide a further opportunity to ensure that the regulator fulfils its duties in the way Parliament sees fit. As I said earlier, we are seeking views on this guidance before a final version is laid. Ultimately, the regulator’s decision-making process will be subject to oversight by the courts as there is the possibility of challenge by way of judicial review. This prevents it acting arbitrarily.
In our view, these amendments are unnecessary for the following reasons. First, Clause 17 already enables the Government to designate a person, or any two persons or more jointly, as age verification regulators. The importance of getting this measure right means that the Government remain open-minded and retain flexibility as to how best to respond to changing circumstances. If the BBFC is proven to be unable to deliver certain regulatory functions the legislation has the flexibility to overcome these problems.
Secondly, splitting the regulatory functions in the Bill so that the same regulator cannot identify non-compliant sites and enforce against them unnecessarily creates a middleman in the process. The BBFC will have to give notice to a second regulator, which will then pass that notice on to an ISP or other appropriate body. This is just red tape for no benefit. It makes sense that the body that makes the original determination should also be responsible for notifying relevant parties affected by that determination and for ensuring that that notification action is effective in achieving compliance.
Thirdly, our ambition is to have the age verification regime in place by spring 2018. We are determined to stick to that timetable. The NSPCC has set out the scale of the problem we face and we need to get on with protecting children as quickly as we can. If we need to invent an additional regulator that can only delay the result.
Baroness Jones of Whitchurch
My Lords, I am grateful to the noble Lords who contributed to the debate. Of course I accept that the BBFC has considerable experience of dealing with classification. I will not rehearse the arguments that noble Lords put forward: it is of course the case. It is well known and well documented. The part of the Bill that we are concerned with concerns the enforcement role, which goes into uncharted waters.
The noble Earl, Lord Erroll, is quite right that the idea of notice and take-down is a very different way of operating and achieving your end goals. It is quite a novel way, and I am sure we all look forward to finding out whether it will work. The idea that to get pornographers to play ball, if you like, we will cut off their advertising or their money is a great initiative, but we do not know whether it will work. More importantly, I do not know whether the BBFC has any experience of trying to oversee a regime that operates on this basis.
As I said in an earlier debate, I have spoken to some of the internet service providers, and all of the organisations we are talking about here have every sympathy with what we are trying to achieve. However, they have a huge number of questions about how this will work in practice. It is very easy to say that we should block access to the sites, but it is much more difficult technically to implement and to oversee.
We could get carried away with the BBFC being in a position to take all of these functions over. I recall that when the BBFC gave evidence in the Commons before debate on the Bill started there it had much more modest ambitions about what it was able to do. It is interesting that it has been persuaded during the past few months that it should expand its horizons, but I have seen no evidence of it having been tested whether it has the staffing, the expertise or the funding in place, or whether it has the confidence of those whom they will regulate to carry out this role. It is with the back end of all this that we are concerned.
The Minister has implied that the Government’s thinking is the same, but if we look at what was said in the Commons, more latterly in debate here and now in writing, we see that the Government’s position on this has changed as well. I do not know that there has been an adequate explanation. As I said originally, I suspect that they do not have another obvious person lined up, so the people at the BBFC are the only ones volunteering to do it. I am not sure that that is the best basis on which to try out something which I believe could be an exciting way of achieving our aims. I am not convinced that we have yet seen the evidence that the BBFC has the skills to do it.
The Minister may not be surprised that I do not accept what he had to say. There is an issue about subcontracting all this work to a private company that is not properly overseen and regulated in the way that we would want. I beg leave to withdraw Amendment 25J but will seek to test the opinion of the House on Amendment 25P.
Lord Ashton of Hyde
(a) all of the functions of the age-verification regulator under this Part, or(b) any of those functions specified in the notice by which the designation is made.( ) Different persons may be designated for the purposes of different functions.”
Lord Ashton of Hyde
(a) arrangements will be maintained by the age-verification regulator for appeals to which subsection (4A) applies, and(b) any person hearing an appeal under those arrangements will be sufficiently independent of the age-verification regulator.(4A) This subsection applies to appeals—”
“(8) In designating two or more persons under subsection (1), the Secretary of State must specify that the same persons may not carry out functions under the sections specified in subsection (9), and the functions specified in subsection (10). (9) The functions specified in this subsection are the steps taken by the age verification regulator to identify that a person is—(a) contravening section 15(1);(b) making extreme pornographic material available on the internet to persons in the United Kingdom.(10) The functions specified in this subsection are the enforcement powers under sections 20 to 23.(11) The person or persons carrying out the age verification functions under subsection (9) must notify the person or persons carrying out the enforcement functions under subsection (10) of an identification under subsection (9), to enable that person or persons to take the necessary enforcement action.(12) Appeals procedures must be carried out by a body that is fully independent of the regulator responsible for the functions set out in subsection (9).(13) The regulator assuming the duties specified in subsection (9) is to be a body corporate which is independent from the Government and all appointments to the regulator are to be subject to fair and open competition.(14) No designation shall be made under this section until the Secretary of State consults all such persons as he or she considers appropriate on the role of the age-verification regulator for the purposes of this Part.”
Baroness Jones of Whitchurch
My Lords, for the reasons that I have just outlined, I wish to test the opinion of the House on this amendment.
Lord Ashton of Hyde
“(1) Where the Secretary of State proposes to make a designation under section 17, the Secretary of State must lay before both Houses of Parliament—(a) particulars of that proposed designation, and(b) a statement of the reasons why the Secretary of State is satisfied about the matters mentioned in section 17(4).”
“(3A) But subsection (3B) applies, instead of subsections (2) and (3), where the proposed designation would be—(a) the first to be made under section 17 , or(b) the first to be made under that section for the purposes of a particular function.(3B) The Secretary of State may not make the designation unless it has been approved by a resolution of each House of Parliament.”
Lord Ashton of Hyde
“( ) The Secretary of State must lay before both Houses of Parliament the guidelines, and any revised guidelines, published under this section.”
Lord Ashton of Hyde
“(b) state whether it is subsection (1)(a) that applies or subsection (1)(b) or both;”
Lord Ashton of Hyde
“Meaning of extreme pornographic material
(1) In this Part “extreme pornographic material” means (subject to subsection (3)) material—(a) whose nature is such that it is reasonable to assume that it was produced solely or principally for the purposes of sexual arousal, and(b) which is extreme.(2) For the purposes of subsection (1)(b), material is extreme if—(a) its content is as described in section 63(7) or (7A) of the Criminal Justice and Immigration Act 2008, and(b) it is grossly offensive, disgusting or otherwise of an obscene character.(3) Material to which paragraphs (a) and (b) of subsection (1) apply is not “extreme pornographic material” if it is or was included in a classified video work, unless it is material to which subsection (4) applies.(4) This subsection applies to material—(a) which has been extracted from a classified video work, and(b) whose nature is such that it is reasonable to assume that it was extracted (with or without other material) solely or principally for the purposes of sexual arousal.(5) In this section—“classified video work” means a video work in respect of which the video works authority has issued a classification certificate;“video work” means a video work within the meaning of the Video Recordings Act 1984;“the video works authority” has the meaning given in section 16 ;“classification certificate” has the same meaning as in the Video Recordings Act 1984 (see section 7 of that Act);“material” means—(a) a still image or series of still images, with or without sound; or(b) a series of visual images shown as a moving picture, with or without sound.”
Baroness Butler-Sloss
“Extreme pornographic material: review and repeal
(1) Subject to subsections (2) to (6) at the end of the period of three years beginning with the day on which this Act is passed—(a) section 16(1)(g) to (i) ceases to have effect;(b) section (meaning of extreme pornographic material) (1) and (2) ceases to have effect, and is substituted with the following, which comes into force on that day—“(1) In this section “extreme pornographic material” means either of the following—(a) the whole or part of a video work— (i) if it is reasonable to assume from its nature that the video work was produced solely or principally for the purposes of sexual arousal, and (ii) if the video works authority has determined the video work not to be suitable for a classification certificate to be issued in respect of it;(b) material whose nature is such that it is reasonable to assume—(i) that it was produced solely or principally for the purposes of sexual arousal, and(ii) that the video works authority would determine that a video work including it was not suitable for a classification certificate to be issued in respect of it.”(2) Following the publication of a report under subsection (3) the Secretary of State may by regulations made by statutory instrument provide that the provisions of this Act do not cease to have effect in accordance with this section but are to continue in force indefinitely or for a specified period of time.(3) The Secretary of State must, within a period of two years beginning with the day on which this Act is passed, review and prepare a report on the operation of the provisions mentioned in subsection (6).(4) The review and report must consider the effect of the introduction of the definition of “extreme pornographic material” on the regulation of pornographic material under this Act and other enactments.(5) The Secretary of State must lay a copy of the report before each House of Parliament.(6) The sections are—(a) section 16,(b) section 22,(c) section (meaning of extreme pornographic material),(d) section 23,(e) section 25,(f) section 27.”(7) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by, a resolution of each House of Parliament.”
Baroness Butler-Sloss
My Lords, I shall make a few points, although this was discussed in rather greater detail a little earlier. I start with the use of the word, “suspect” in relation to prohibited materials. It seems to me that it is suspect with the Crown Prosecution Service; it is an odd definition and does not mean that it is generally applicable. The words, “prohibited materials” were removed from the Bill as a result of the Perry amendment in the Commons: they were in the Bill anyway. It is important that that point is known. I have to say to the Minister that the move by the Government from children to adults in the amendments is due to the government amendments, which have been picked up by myself and other noble Lords. We would not have raised these issues without the government amendments. It is important to say that because I have no desire whatever to frustrate or inhibit the excellent work on age verification to be found in the Bill.
I think everybody agrees that this is now a mess. There is need for a proper debate on internet safety strategy, but it needs, if I may say so, a review with some teeth and pressure on the Government because of all the other government work there will be in the light of Brexit. The otherwise admirable amendment of the Labour Front Bench is, in my view, insufficiently strong because it has no teeth.
My amendment is not, despite what has been said, unduly prescriptive. If one looks with some care at the wording, which I am glad to say someone else drafted, subsection (1)(a) of the proposed new clause says that,
“section 16(1)(g) to (i) ceases to have effect”,
but that is a fallback position. It is there to require the Government, under proposed new subsections (2) to (6), to have a review and to draft a report which will be laid before Parliament. It applies only if that is not achieved within two years, and since the Government are offering at least a Green Paper by June it should not be all that difficult to have a review and a report. Consequently, the work that is suggested in this amendment meets what is needed, which is two things: that the mess should be reviewed; and that the Government should be under a degree of pressure to make sure they get on with it and do not put it into the long grass, not because they want to do so but because of the pressure of other government business. I beg to move and, if no one else wishes to speak, I should like to test the opinion of the House.
Lord Ashton of Hyde
“(b) state whether it is subsection (1)(a) that applies or subsection (1)(b) or both;”
Lord Ashton of Hyde
“Guidance to be published by age-verification regulator
(1) Subject to the following provisions of this section, the age-verification regulator must publish, and revise from time to time—(a) guidance about the types of arrangements for making pornographic material available that the regulator will treat as complying with section 15(1); and(b) guidance for the purposes of section 22(1) and (6) about the circumstances in which it will treat services provided in the course of a business as enabling or facilitating the making available of pornographic material or extreme pornographic material.(2) Once the regulator has prepared a draft of guidance it proposes to publish under subsection (1)(a), it must submit the draft to the Secretary of State.(3) When draft guidance is submitted to the Secretary of State under subsection (2), the Secretary of State must lay that draft guidance before both Houses of Parliament.(4) Once the regulator has prepared a draft of guidance it proposes to publish under subsection (1)(b), it must submit the draft to the Secretary of State for approval.(5) When draft guidance is submitted to the Secretary of State under subsection (4), the Secretary of State may approve it either without modification or with such modifications as the Secretary of State decides should be made to it.(6) Once the Secretary of State has approved draft guidance under subsection (5), the Secretary of State must lay the following before both Houses of Parliament—(a) the draft guidance, incorporating any modifications the Secretary of State has decided should be made to it under that subsection, and(b) if the draft incorporates such modifications, a statement of the Secretary of State’s reasons for deciding that those modifications should be made. (7) If, within the period of 40 days beginning with the day on which draft guidance is laid before Parliament under subsection (3) or (6), either House resolves not to approve that draft guidance, the age-verification regulator must not publish guidance in the form of that draft.(8) If no such resolution is made within that period, the age-verification regulator must publish the guidance in the form of the draft laid before Parliament.(9) But subsection (11) applies, instead of subsections (7) and (8), in a case falling within subsection (10).(10) The cases falling within this subsection are—(a) the case where draft guidance is laid before Parliament under subsection (3) and no previous guidance has been published under subsection (1)(a) by the age-verification regulator; and(b) he case where draft guidance is laid before Parliament under subsection (6) and no previous guidance has been published under subsection (1)(b) by the age-verification regulator.(11) The regulator must not publish guidance in the form of the draft laid before Parliament unless the draft has been approved by a resolution of each House of Parliament.(12) Subsections (7) and (11) do not prevent new draft guidance from being laid before Parliament.(13) For the purposes of subsection (7)—(a) where draft guidance is laid before each House of Parliament on different days, the later day is to be taken as the day on which it was laid before both Houses, and(b) in reckoning any period of 40 days, no account is to be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.(14) References in this section to guidance and draft guidance include references to revised guidance and draft revised guidance.”
Lord Paddick
“Anonymity
(1) Age-verification providers must be approved by the age-verification regulator.(2) In this section an “age-verification provider” means a person who appears to the age-verification regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.(3) The age-verification regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.(4) The Code must include provisions to ensure that age-verification providers—(a) perform a Data Protection Impact Assessment and make this publicly available,(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,(c) minimise the processing of personal information to that which is necessary for the purposes of age verification,(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet, (e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,(f) do not create security risks for third parties or adversely impact security systems or cyber security,(g) comply with a set standard of accuracy in verifying the age of users.(5) The code must include provisions to ensure that publishers of pornographic material take full and appropriate measures to allow their users to choose the age-verification provider of their preference.(6) Age-verification providers and publishers of pornographic material must comply with the code of practice.(7) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the code, that term is unenforceable.”
Lord Paddick
My Lords, Amendment 25YN is in my name and that of my noble friend Lord Clement-Jones. This is a retabling of the amendment that we tabled in Committee to ensure that the details of those applying to have their age verified in order to access adult material on the internet remain anonymous.
I will not repeat at length the arguments I made in Committee. The Government are going to force individuals to go through an age verification process which they did not have to engage in before. To do that, they will have to prove their age by providing sensitive personal information to an organisation. Many of those organisations will create databases containing that sensitive personal information, which could become the target for hackers and criminals. As I said in Committee, there have been some high-profile cases of such unauthorised access to sensitive information in relation to porn sites and other similar sites in the past, with devastating consequences for those exposed. This amendment seeks to guarantee that age verification solutions ensure that the identities of those seeking to do the right thing and to have their age verified, rather than getting around the regulations by using for example a VPN, are protected. It would require the age verification regulator to approve age verification solutions and ensure that, as part of that, anonymity is protected.
Rather than accepting the amendment, the Government appear to be moving in the opposite direction. On page 6 of their draft guidance to the age verification regulator, the Government state in paragraph 5:
“There are various ways to age verify online and the industry is developing at pace. Providers are innovating and providing choice to consumers. The Regulator will not be required to approve individual age verification solutions”.
Whatever your Lordships may think of anonymity, the first and most obvious question is: how will the age verification regulator know whether the solution will effectively verify age if it does not have to approve that solution? At paragraph 6, the draft guidance goes on to say:
“The privacy of adult users of pornographic sites should be maintained and the potential for fraud or misuse should be safeguarded”.
The draft guidance talks about not duplicating the role of the Information Commissioner’s Office and says that the focus of the age verification regulator should be on age verification.
In my discussions with the British Board of Film Classification, it has said that it has no particular interest or expertise in the area of data protection in relation to keeping confidential the details of those seeking age verification. We will end up with an age verification regulator that forces users of adult material on the internet to use an age verification solution but has no responsibility for approving such solutions.
In any event, the draft guidance is something to which the regulator has only to have regard to. We believe that if UK users of online adult material are to be forced to verify their age—it is only UK users, as those in other countries will not have to do this—the Government have a particular responsibility to ensure that their sensitive personal data, which they would not otherwise have to put at risk, does not get into the wrong hands. That is what this amendment seeks to achieve and I beg to move.
The Earl of Erroll
My Lords, I will say a few words on this very quickly. I thoroughly approve of the premise of the amendment, which is to ensure that some websites do not try to cheat; in fact it would not be a bad idea to put it in the Bill.
I ought to declare an interest: I have been chairing a steering group working on British Standards Institute Publicly Available Specification 1296 on age checking. The whole idea is that this could be used in order to test the procedures and organisations doing age checking. One of the things that it mandates is privacy; it mandates that age checking must be general data protection regulation compliant. The real purpose behind this is that at the point when someone thinks of visiting a pornographic website there should be no requirement for that person to identify themselves to that website. It is perfectly possible at that point to bounce off the website with a token from that website to someone outside who may know about the person and can check their age, and then they can send back an encrypted token that can be stored saying, “This person, whose name I am not going to reveal to you, is over 18”. That is all it does. That can then be data checked and unwound by someone with proper judicial authorisation, if something goes wrong. However, it could be that some websites will try to get around that. That is why the amendment is good: they would have to comply. I do not know whether that is somewhere else in the regulations, but having it in the Bill would be a good thing.
Some people say, “How can you stay anonymous?”. The simple answer is that if you then wish to subscribe to the website and buy some of its product, and you freely give up your credit card, I am afraid that you will not be anonymous. However, that is your choice once you are in. The initial stage of just wanting to view the site should be anonymous, and we should reinforce that.
Baroness Jones of Whitchurch
My Lords, I echo many of the concerns raised by the noble Lord, Lord Paddick. We added our name to a similar amendment in Committee and there was a broad degree of support for the principles that were expressed. The amendment returns to the essential need to protect the identity of those who are over 18 and legitimately want to access pornographic sites without having their personal details compromised in the age verification process.
The noble Earl, Lord Erroll, has been very helpful in explaining how the privacy systems would work, using a two-stage process to prove someone’s age and then giving them an encrypted token to use on adult sites. We agree with this model and would like to see it widely adopted. It assumes that age verification would be carried out by a separate age verification provider who has the specific technical skills to carry out these checks securely. However, we also agree that technology is moving on apace and that it would be a mistake to be too prescriptive. We believe that a code of practice, as set out in the amendment, would deliver the protections while allowing that to happen.
That brings us to the draft guidance on the regulator, which the Government published last week and which addresses the issue of privacy. We believe that of all the parts of the draft guidance, the section on privacy is indeed a step forward. It puts the onus on the regulator to work with the Information Commissioner’s Office to ensure that systems are in place to check a user’s privacy while having regard to the Data Protection Act. While we welcome that, we would also like it to address the need for users to have a choice of provider. Again, that is something that we debated at an earlier stage.
In addition, we have a continuing concern that the only provision for data protection breaches is for the ICO to be informed, rather than necessarily for it to act. I hope that the Minister will be able to reassure us that, if there are such breaches, they will indeed be followed up by action.
I hope that the Minister will be able to reassure us on these points. However, we feel that progress is being made on this subject. Depending on what the Minister is able to say in response, it may well be that we will ask the noble Lord, Lord Paddick, not to press the issue at this time.
Lord Ashton of Hyde
My Lords, I thank the noble Lord, Lord Paddick, and the noble Baroness, Lady Jones, and I thank the noble Earl, Lord Erroll, for his expertise in this area—age verification, I am talking about.
I have some sympathy with the noble Lord and the noble Baroness on this because we, too, have absolute desire for anonymity in these matters. So the Government have sympathy for the intention behind the amendments, but we feel that they go too far and that this amendment is therefore unnecessary. We have already made provisions to cover these concerns under government Amendment 25YQ, which provides that the Secretary of State may issue guidance to the regulator. I assure noble Lords that we approach this issue with the utmost seriousness. We have set out the draft guidance, which noble Lords have mentioned. It is of course draft guidance and, as we say at the beginning of it, we welcome comments—so perhaps some of the comments from today’s debate can be incorporated.
A person making pornographic material available on a commercial basis to persons in the United Kingdom must have an effective process in place to verify that a user is over 18. This age verification already takes place online, from the gambling industry to mobile phone content to purchasing age-protected goods. There are various ways to age-verify online, as the noble Earl explained, and, as the industry is developing rapidly, it is expected that new age verification technologies will develop over time.
Providers are innovating and providing choice to customers. We agree that the process of age verifying for adults should rightly be focused on the need to establish that the user is aged 18 or above, rather than seeking to identify the user. As I have said, age verification controls are already in place without the approval of the age verification providers. For example, licensed gambling sites are required to have age verification controls that are not subject to pre-approval by the regulator but must take account of data protection laws.
We recognise that pornography provides a unique challenge in this space, which is why we are ensuring that the measures in place are stronger than currently exist. As such, the draft guidance to the regulator—I am pleased that in this area at least the noble Baroness, Lady Jones, gave her qualified approval—sets out the detail of how this should be done. Rather than setting out a closed list of age verification arrangements, the regulator’s guidance should specify how it will assess in any given case that the requirements have been met.
The draft guidance, which was published last week, is clear that the process of age verifying for adults should be concerned only with the need to establish that the user is aged 18 or above, rather than seeking to identify the user. The privacy of adult users of pornographic sites must be maintained. We do not want the regulator to duplicate the role of the Information Commissioner’s Office, the UK’s independent body set up to uphold information rights. The draft guidance states:
“The process of age verifying for adults should be concerned only with the need to establish that the user is aged 18 or above, rather than seeking to identify the user. The privacy of adult users of pornographic sites should be maintained and the potential for fraud or misuse of personal data should be safeguarded … The role of the Regulator should be to focus on the ability of arrangements to verify whether someone is over 18 and should be assured that age verification arrangements will protect a user’s privacy”.
That is pretty clear, I think.
As also set out in our draft guidance, the age verification regulator should work with the ICO. The regulator should be clear in its guidance on the requirements that age verification services and online pornography providers will have regard to under data protection legislation and, furthermore, that a privacy-by-design approach should be taken, as recommended by the ICO.
It is right that we do not seek here to duplicate the existing legislative and regulatory framework, but we must ensure that they are built into the age verification process in a meaningful way. We have always been clear that adults should be able to access legal pornographic content and individuals should rightly be protected from unintended consequences when doing so. As I said, we have produced a draft of the Secretary of State’s guidance and are certainly happy to have further discussions ahead of the final version being laid.
Baroness Thornton (Lab)
Could I invite the Minister to be slightly less gentle with those supporting this amendment by saying not that it goes too far but that it is a wrecking amendment? It would drive a coach and horses through this legislation.
Lord Ashton of Hyde
I had not thought of that. I am absolutely sure that that was not the intention. However, in the meantime, I would like the noble Lord to withdraw his amendment.
Lord Paddick
My Lords, I thank in particular the noble Earl, Lord Erroll, for his support on this amendment and acknowledge the work that he is doing in this field. The noble Baroness, Lady Jones of Whitchurch, said she echoed many of our concerns—and in Committee, Labour Peers added their names to the amendment. It proposes a code of practice, the content of which would be specified in the Bill, but it would provide flexibility, in that it sets out only the minimum requirements of such a code.
The Minister said that the Information Commissioner’s Office is responsible for data protection, but the Information Commissioner’s Office is designed to ensure that people who voluntarily put their personal information into the internet are protected—and this is not a voluntary process. This is making it compulsory for anybody who wants to access adult material to give their personal data, which they would not otherwise have to do. We therefore think that the protections should be greater than those provided by the Information Commissioner’s Office.
As the Minister himself said, privacy is more important when it comes to accessing pornography than it is when accessing, for example, gambling sites. We are not reassured. The draft guidance that the Government have issued is only guidance that a regulator should have regard to; it does not have teeth at all. We therefore find both the draft guidance and the explanation given by the Minister inadequate for protecting the identities of those who seek age verification. I therefore wish to test the opinion of the House.
Baroness Buscombe
Baroness Buscombe
“Guidance by Secretary of State to regulator
(1) The Secretary of State may issue guidance to the age-ve regulator in relation to the exercise of the regulator’s functions, and may from time to time revise that guidance.(2) The guidance may cover (among other things) the following matters—(a) considerations to be applied in determining—(i) whether arrangements for making pornographic material available comply with section 15(1);(ii) whether a person is an ancillary service provider, for the purposes of section 22;(b) the approach to be taken by the regulator to the exercise of its powers to give notices under sections 20 , 22 and 23;(c) the preparation and publication of guidance and reports by the regulator and the content of such guidance and reports;(d) the maintenance by the regulator of arrangements meeting the requirements of section 17(4)(a) and (b).(3) The regulator must have regard to the guidance.(4) The Secretary of State must lay before both Houses of Parliament the guidance, and any revised guidance, issued under this section.”
“Code of practice for commercial social media platform providers on online abuse
(1) Within six months of the passing of this Act, the Secretary of State must publish a code of practice about the responsibilities of social media platform providers to protect children and young people from online abuse and bullying.(2) The Secretary of State may bring the code of practice into force by regulations made by statutory instrument.(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(3) The code of practice must include—(a) the overarching duty of care of internet service providers and social media platform providers to ensure the safety of a child or young person involved in any activity or interaction for which that service provider is responsible;(b) the obligation to inform the police with immediate effect if notified that content on social media sites contravene existing legislation;(c) the obligation to remove content with immediate effect if notified that posts on social media sites contravene existing legislation;(d) the obligation to have specific terms of use that prohibit cyber-bullying and provide a mechanism for complaints of cyber bullying to be received and for the offending content to be removed; and(e) their responsibility to work with education professionals, parents and charities to give young people the skills to use social media safely.(4) Commercial social media platform providers must comply with the code of practice, once it is in force.(5) The Secretary of State may from time to time revise and re-publish the code of practice. (6) The Secretary of State may bring into force a revised and re-published code of practice by regulations made by statutory instrument.(7) In this section—“commercial social media platform provider” means a person who operates on a commercial basis an internet site on which people can interact;“cyber-bullying” means material that has the effect of seriously threatening, intimidating, harassing or humiliating children and young people.”
Baroness Jones of Whitchurch
My Lords, I beg to move Amendment 25YR and support Amendment 33A in this group.
Our amendment requires the Secretary of State to publish, within six months of the Bill being passed, a code of practice for all social media sites obliging them to put in place mechanisms to prevent children from being abused and bullied online. In the context of the rest of Part 3, we have specifically focused the amendment on the protection of children and young people, although we would expect such a code to have a wider benefit for adults suffering abuse. The amendment would require both Houses to approve the code and, once in place, it would be a statutory requirement on social media sites to comply. Although the full detail of the code is not spelled out, it would include requirements to inform the police if advised of illegal posts, and to take them down with immediate effect. In addition, it would require social media sites to have terms of use to prevent cyberbullying and abuse, including clearly spelled-out mechanisms for taking down the offending material.
We believe that these measures will ensure, finally, that the social media companies begin to take their responsibilities seriously. Action is overdue, which is why we have inserted a relatively tight but achievable timetable—and we make no apologies for that.
We have rehearsed in Committee many of the arguments why this intervention is crucial. I will not repeat them all, but we believe that the case for action to rein in the social media sites is now compelling. The charity Childnet has reported that one in four teenagers suffered hate incidents online last year, and that figure continues to rise. The NSPCC has reported that two-thirds of young people want social media sites to do more to protect them, with exposure to hate messages, pro-anorexia sites, self-harm sites and cyberbullying all on the increase.
Girlguiding revealed in a survey last year that 20% of girls were sent unwanted pornographic films or images without their consent. When I met a delegation of Girl Guides last week, they described how the bombardment of sexualised images was creating huge body-confidence issues and normalising sexist behaviour in schools.
I could go on, but the point is that all these statistics are going in the wrong direction. There is no culture of safeguarding children’s safety and well-being online. As a result, children are being frightened, intimidated, bullied and coerced on social media sites.
Since our last debate in Committee, we have received further evidence of the failure of the social media sites to act when illegal material is brought to their attention. If anyone is in any doubt about the need for our amendment, they have only to recall the example of Facebook, which, on being informed by the BBC that obscene images of children were being posted on its site, failed to remove the vast majority of those posts and then had the audacity to report the BBC to the police when it was sent further examples for it to follow up. Similarly, at the Home Affairs Select Committee, Google’s vice-president admitted that it had allowed a video entitled “Jews admit to organising white genocide” to remain on its site despite admitting that it was anti-Semitic, deeply offensive and shocking. This latest evidence underlines why we feel that action is needed now.
When we debated this issue in Committee, the Minister gave what I felt to be a rather complacent response. He argued that a statutory code was unnecessary and that the onus should be on companies to develop their own in-house processes to deal with the issue. Of course, shortly after that, the Secretary of State decided that leaving it to the companies to sort out on their own was not really good enough after all, and that a new internet safety strategy would be launched, including round tables with the media companies and, as we have heard, a Green Paper in the summer. That is okay as far as it goes, but it does not go far enough. We believe that we have left it to the social media companies to change their behaviours on a voluntary basis for far too long. That is why our amendment has a timetable and a requirement for the eventual code to be placed on a statutory basis.
Baroness Janke (LD)
My Lords, I support Amendment 25YR and will speak to Amendment 33A, which is in my name. We certainly need to look much more closely at the duty of online providers and their responsibilities. Amendment 25YR refers to the overarching duty of care that agencies must have to children. Both amendments address the need to oblige these online providers to report incidents on content that are likely to contravene existing regulations and likely to come up to the criminal test as used in prosecutions.
The obligations also include that the content should be removed with immediate effect. As we have already heard, this has proved difficult in many cases and very many people say that they have tried to have offensive material removed unsuccessfully. Amendment 25YR refers to a code of practice, and mentions that it needs specific terms that prohibit cyberbullying and provide a mechanism for complaints, as well as for the removal of the offending material. The other thing I particularly welcome about this amendment is the obligation to work with educators, technical professionals and parents to ensure that young people have safe use of the internet.
Amendment 33A would extend this principle rather wider. I am sure we all support measures to prevent cyberbullying of children. It is also fair to say that it is not just children who suffer in this way. Many members of minority groups, disabled people and people with learning difficulties—in fact, people who are in some way different—come in for regular forms of abuse. People just like you and me, having disagreed with somebody, come in for torrents of vile, unpleasant and absolutely unacceptable bullying on the internet. I believe that this would not be allowed in newspapers. Somebody would not be allowed to abuse someone else in a pub. The landlord would be responsible and I believe that it is time we took the online providers to task and made them take some responsibility for what appears and what they allow.
The Minister, in replying to my amendment last time mentioned the fact that existing legislation already provides the means to do this. In fact, I think over 30 statutes refer to these measures and have not yet been consolidated—added to which, there are laws coming online that will make it even more difficult to have a consolidated approach, such as the revenge porn legislation and law on streaming of child abuse. It is becoming increasingly complex and we need a much firmer approach.
It was also mentioned that the Home Office had £4.5 million to address this issue; I understand that this was largely for the measures and resources that the police needed to prosecute criminal acts in this way. The last thing the Minister referred to was that the Law Commission was consulting on this issue. My understanding of that consultation is that it is about improving people’s behaviour on the internet. It does not at all address the online providers. This Bill offers an opportunity to address an appalling practice that is becoming even more prevalent, and I hope that the Minister will agree to incorporate these amendments in the Bill.
Baroness Howe of Idlicote
My Lords, I am very happy to support the amendment—to which I have added my name—which would bring in a statutory code of practice for media platforms with the important aim of preventing online abuse.
As I said earlier, Part 3 is a child protection measure. Young people use social media. The 2016 Ofcom children and media report devoted an entire chapter to YouTube, social media and online gaming. Around 72% of 12 to 15 year-olds have a social media profile, with Facebook being their main social media profile, and three in 10 of these 12 to 15 year-olds visit their social media account more than 10 times a day. In the last few weeks we have heard about Facebook not taking down child sexual abuse images. Last week, the Home Affairs Select Committee in the other place grilled representatives of Google, Facebook and Twitter on their response to online abuse and hate crime as part of their inquiry into hate crime and its violent consequences.
This amendment is in line with the Government’s objectives to keep children safe. I am expecting the Government to come back and tell us that the UK Council for Child Internet Safety produced guidance for social media sites in 2015, entitled Child Safety Online: A Practical Guide for Providers of Social Media and Interactive Services, and that therefore this code of practice is just not needed. While I commend the good work of UKCCIS, the news of the last few weeks leaves me convinced that without a statutory code we are not doing enough to protect children and to support parents. Parents have to navigate completely new technological terrains. They have no reassurance that there are consistent standards across social media sites, nor what they are. Last year a third of parents said they were concerned about their child being the subject of cyberbullying. Part of the requirements of the code would ensure that social media sites worked with,
“education professionals, parents and charities to give young people the skills to use social media safely”.
I fully support this initiative. Ofcom reports that 52% of parents of eight to 11 year-olds and 66% of parents of 12 to 15 year-olds talked to their children about cyberbullying. This is encouraging, but how much more encouraging if parents know that if they talk to their child about Facebook, the same rules apply on other social media sites and vice versa.
We expect to make our children safe in the physical spaces they occupy every day and have no hesitation in using the law to do so. We need to be doing the same online so I fully support Amendment 25YR to introduce a statutory code of practice for social media platforms.
Lord Alton of Liverpool
My Lords, I support the amendment proposed by the noble Baronesses, Lady Jones and Lady Janke, but also the remarks of my noble friend Lady Howe. I want to ask the Minister, when he comes to reply, about an issue that I raised in your Lordships’ House previously, and that is the issue of suicide sites on the internet. It concerns me that young people can be encouraged to visit those sites and take their own lives. Only a year ago I attended a school prize giving in a north-west school, and the headmaster told me when I arrived how a child in that school had taken their own life only the day before. As noble Lords can imagine, that was a terrible tragedy not only for the family but for the whole school, and it rather changed the atmosphere on that occasion. That child had been visiting one of the suicide sites on the internet, and the headmaster discovered that several other children had been doing the same.
It can be revenge porn or the kind of trolling to which the noble Baroness referred, the harassment of young women in particular, or the whipping up of xenophobia, racism or anti-Semitism, but it is right that there should be a code of practice, and we should get on with it. I hope that the Minister will tell us more about the Green Paper, what the framework will be for it and when we are going to start to look at these issues seriously.
Lord Ashton of Hyde
My Lords, I am grateful to all contributors on this important subject. We take the harm caused by online abuse and harassment very seriously. The measures that we have introduced in this Bill show that the Government are taking this seriously. I hope that I can offer some comfort in this area since we last discussed these two amendments in Committee.
Amendment 25YR seeks to require Ministers to issue a mandatory code of practice to ensure that commercial social media platform providers show a duty of care to ensure the safety of a child or young person using their service; to report and remove illegal posts on social media; prohibit and remove cyberbullying; and to undertake to work with the education profession and charities to provide children with digital safety skills. Amendment 33A seeks to impose a duty on “social media services” to respond to reports posted on their site of material which passes the “criminal test”, being that the content would, if published by other means or communicated in person, cause a criminal offence to be committed. I have two responses to these amendments—first, an explanation of the work that this Government have started to address these issues through our internet safety strategy; and, secondly, some fundamental concerns about their drafting.
The UK is leading the way in online safety, and will continue to do so, with the support of industry, parents, charities, academics, and other experts, and this is a firm priority for this Government. We have been absolutely clear that abusive and threatening behaviour is totally unacceptable in any form, online or offline. On 27 February, my department announced that it is leading cross-government work on an internet safety strategy which aims to make the UK the safest place in the world to go online for children and young people. This work will also address the abuse that women suffer online, as we look at trolling and other aggressive behaviour, including rape threats. We will ask experts, social media companies, tech firms, charities and young people themselves about online safety during a series of round tables later this month, and we will use these discussions to understand more about the scope of the problem and identify where there are gaps in our current approach to tackling online harms.
We will continue to consult closely with interested parties throughout the spring, including Members of this House with expertise in this area. Indeed, we have already invited several noble Lords to take part. A key part of this work will be to clearly set out the responsibilities of social media in respect of online safety as part of a Green Paper which will be published in June. Other priorities will include: how to help young people to avoid risks online; helping parents to face up to the dangers and discuss them with their children; and how technology can help provide solutions.
We have not ruled anything out at this stage, including a code of practice, but this is a complex field and to find the right solution we need to take the time to have a proper conversation with all the leading stakeholders. We would not want anything to prejudge the outcome of these discussions. We believe that this will result in a properly considered, comprehensive approach to online safety which stakeholders are fully signed up to, and one that will deliver the long-lasting protections that these amendments are seeking to secure.
Baroness Jones of Whitchurch
My Lords, I am grateful to the Minister. We support and agree with many of the initiatives that he has outlined. As has been said before, there are opportunities for us to participate in discussions on the Green Paper and the wider issues of internet safety. We welcome all those initiatives, but the list which the Minister gave very much puts the onus on parents, children and everyone else in society to behave well, be better educated and have the proper tools to navigate the internet safely. It did not put so much of an onus on the actual problem, which is that social media sites are encouraging and facilitating this bad behaviour.
Although we do not want to take anything away from the Government, there is still a major problem. The voluntary initiatives that we have so far required social media sites to take have not come up with the goods. The Minister said that things were getting better. I disagree; things are getting worse. We have heard examples from around the Chamber that children are feeling more intimidated and bullied; they are accessing suicide sites in a quite unacceptable way. Sites are not taking down this material when it is drawn to their attention. There continues to be a rather urgent challenge. Without wishing to overplay the Australian model, one can put systems in place to make this happen. It is not beyond their technical capacity to put the measures in place—they just need the proper encouragement. I do not want to take anything away from what the Government have said, but there is a level of urgency with this particular problem about social media sites.
The Minister also said that he had a problem with the wording of the amendment. I do not see what is wrong with an “overarching duty of care” for young people. It is all encompassing and I would hope that any responsible social media site would broadly welcome that initiative. He also said that it was not clear how the sites would make reference to the police. In the Australian system there is an e-safety commissioner through whom complaints are made. If the Government did not like our wording, I would have hoped that they would have come back with something better; we might have withdrawn our wording in favour of theirs if it achieved the same measure.
We still believe that social media sites will change their behaviour only when there is the very particular threat of a statutory obligation being placed on them at a set point in time. I am sorry to say that the Minister’s response has not been sufficient on this occasion, and I would like to test the opinion of the House.
Baroness Buscombe
““extreme pornographic material” has the meaning given in section (Meaning of “extreme pornographic material”);”
““pornographic material” has the meaning given in section 16 ;”
“(2) Section 22(3) of the Video Recordings Act 1984 (effect of alterations) applies for the purposes of this Part as it applies for the purposes of that Act.”
“( ) Nothing in this Part affects any prohibition or restriction in relation to pornographic material or extreme pornographic material, or powers in relation to such material, under another enactment or a rule of law.”
“Report on this Part
(1) Within 18 months, but not before 12 months, of the coming into force of this Part the Secretary of State must produce a report on the impact and effectiveness of the regulatory framework provided for in this Part.(2) Before publishing this report, the Secretary of State must consult on the definitions used within this Part.(3) The report must be laid before each House of Parliament.”
Baroness Jones of Whitchurch
My Lords, I do not intend to reopen the debate but we were not reassured by what the Minister had to say at the time. Therefore, we wish to test the opinion of the House on this matter.
Digital Economy Bill
Monday 20th March 2017
(7 years, 8 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 102-III Third marshalled list for Report (PDF, 182KB) - (20 Mar 2017)
Baroness Hamwee
Baroness Hamwee (LD)
My Lords, on behalf of my noble friend Lord Clement-Jones and myself I beg to move Amendment 25YX and will speak to the other amendments in this group, which are all about limiting disclosure—but, I want to stress, limiting it in what we regard as an appropriate way, accepting that there are benefits in information sharing but perhaps with more of an eye to privacy considerations than are in the Bill.
The first of the amendments would provide that disclosure of information should be only to the extent necessary and proportionate in connection with public service delivery. This is both because we regard “no more disclosure than is necessary and proportionate” as being important but also, in this context, because disclosure goes outside and beyond public authorities. We have tabled similar amendments to clauses dealing with debt, fraud and research.
In evidence to the Public Bill Committee, the Information Commissioner wrote:
“Proportionality and necessity are key to ensuring data sharing complies with data protection and human rights law”,
and that,
“the Bill does not directly correlate with these concepts”.
Our amendments would put these notions in the Bill. The ICO also commented on bulk data sharing. She wrote:
“As more data is shared ever more widely … big data analytics are used in complex and unexpected ways”.
Our Amendment 28CB would require the civil registration official to be satisfied that disclosure is proportionate to the recipient’s requirement.
Bulk data sharing is so significant that we think it should be reviewed after three years. Amendment 28CF refers particularly to the review covering public attitudes, the use of the powers, the availability of alternative mechanisms, and security considerations.
Amendment 26A takes us to a point that I raised in Committee. We would like to understand what is meant by individuals’ and households’ contribution to society in the context of improving their well-being. This is a condition for disclosure. What is additional in this phrase to the health and social and economic well-being provided for elsewhere in the clause? The expression is paternalistic and judgmental—and, probably more importantly for this purpose, it suggests a concern more for an advantage to society than to the individual or household. That goes against the thrust of the data sharing for public services, which is framed as being for the benefit of individuals and households.
We are also concerned that the exceptions to the protections include the prevention of anti-social behaviour. In Committee, the Minister said that people have a right to be protected against such behaviour. We would not argue against that, but “balance” is a term often used from that Dispatch Box and we think that the balance here is right out of kilter. Protection against anti-social behaviour is very different from protection against serious physical harm and so on. By definition—the definition being that there is a provision elsewhere—anti-social behaviour is not criminal behaviour.
The Government have explained this, as I said at the previous stage, but we do not believe that they have justified it. Nor have they justified exceptions for any crime, which is why our amendments would limit crime here to serious crime, which we have defined using the definition used in the Investigatory Powers Act. I have to say that not a lot of Clause 36 would fall within the DPA “vital interests” provision.
Next, in Committee we asked about the use of the definition of personal information rather than building on the DPA’s personal data. The Minister told the Committee that to the extent that personal information is not governed by the DPA,
“we still expect that information will be handled in accordance with that framework because of the requirements of the codes of practice”.—[Official Report, 6/2/17; col. 1259.]
Indeed, it would be the codes of practice, not the statute. Our Amendment 28AU is an opportunity for the Minister to answer the Information Commissioner’s observation that there is a gap here. There are compensatory safeguards under the DPA—they apply under the DPA but seem not to apply under the Bill.
We remain concerned that an individual whose information is disclosed should be informed. My noble friend Lady Janke referred to the transparency that is necessary for public trust in the process. I completely agree with that. The Minister was concerned that, if a fraud were being investigated, you would not go out and tell the alleged fraudster what you were doing. I hope that the amendment answers that point, because it is a relatively narrow situation that should not preclude doing what is right more generally.
Amendment 28BM has been tabled to seek an explanation of Clause 40(4), in particular its wording,
“similar to that made by section 38”.
Clause 38 gives powers to HMRC and, as I read it, HMRC will have powers to lift restrictions on disclosure. So, under Clause 40, does this mean that a specified person has a power to lift the restrictions? That does not seem right to me. I have undoubtedly misunderstood it—but, if I have done so, perhaps one or two other people would misunderstand it, too.
Amendment 39 is rather different: a sunrise clause—it could have been a sunset—to explore further how all this fits with the new rules that will come into effect in May 2018, when we will still be in the EU, under the EU general data protection regulation and the law enforcement directive. The GDPR will strengthen provisions on processing only the minimum data, on privacy notices with explicit requirements for data protection by design and default, and on data protection impact assessments.
We were assured in Committee that Part 5 is “compatible”—that was the word used—with the GDPR. Thinking about that afterwards, I wondered whether that meant that Part 5 was not inconsistent but possibly not as wide as the GDPR. We were told:
“When the regulation comes into direct force, we”—
that is, the Government—
“will look at the provisions of the Act and the codes of practice to ensure that they are consistent with it”.—[Official Report, 6/2/17; col. 1490.]
Given that there will be a need to share certain data with other EU states after the date when we leave, how will all this be done? I hope that the Minister can share with the House the Government’s proposals for checking that there is more than just consistency and that, more particularly, nothing is left out. I beg to move.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I am obliged to the noble Baroness, Lady Hamwee. Amendment 25YX and the related Amendments 28CB, 28CG, 28DV and 28FD seek to impose an express requirement that the public service delivery power may be used to share information only to the extent that it is necessary and proportionate to do so. That covers the changes to debt fraud research and similar civil registration provisions in the Bill. With respect, the amendments are unnecessary as the powers will need to be exercised in line with the Data Protection Act and the codes of practice, which already require that only the minimum data necessary to fulfil the particular objective may be shared. It is therefore unnecessary to amend in accordance with this proposal.
The effect of Amendment 25YYD would be that the list of specified persons permitted to use the public service delivery power could be amended only to add or remove bodies. The removal of the word “modify” would affect the way that minor amendments could be made. I do not believe that the noble Baroness, Lady Hamwee, expressly referred to this amendment, but as it is listed in this group as her amendment I just mention the point because clearly it is necessary that there should be a degree of flexibility in how that provision operates.
Baroness Hamwee
I apologise; I thought that was in another group, though I received a note later. I would like to understand how extensive a modification might be.
Lord Keen of Elie
I am obliged to the noble Baroness. I am happy to explain within this group, where I understand the amendment remains. The removal of the word “modify” would affect the way in which minor amendments could be made. For example, where a body changes its name or the description of the category of a body needs to be adjusted, you would then want to modify rather than delete and start again.
Amendment 26A seeks to remove reference to,
“the contribution made by individuals or households to society”,
from the public service delivery chapter. Again, I venture that the amendment is unnecessary because subsection (10) gives examples of “well-being” but does not provide an exhaustive list. Therefore we have three categories by way of example—but only by way of example. In response to the specific observation made by the noble Baroness, Lady Hamwee, I respectfully suggest that there is nothing paternalistic or judgmental about any of the examples given in the Bill. Indeed, where a party makes a contribution to society, that benefits the contributor as well as society, which is why it is appropriate that it should be given as an example in this context.
Amendment 28AU would provide a new definition of “personal information” for the purposes of the public service delivery power. This point was raised in Committee as well. The amendment expressly incorporates the definition of “personal data” under the Data Protection Act 1998 into the definition of personal information for the purposes of these powers, as well as making clear that the Bill’s extended definition also includes deceased individuals and companies. We consider that the existing provisions set out the same position, albeit in slightly different words. I note that reference was made to the issue in Committee, and to the provision of codes of practice in that context.
The intention of Amendment 28AY seems to be to provide greater transparency by ensuring that individuals would know when information about them has been shared. Existing provisions in the Bill already require those using the powers to comply with Data Protection Act requirements as to the information that people are given about the usage of their personal data. This, supplemented by the requirements imposed by applicable codes of practice, ensures that the use of these powers will be as transparent as it can be.
Amendments 28AR and related amendments seek to narrow the exceptions to the general rule in Clause 36(1) that personal information received under the public service delivery powers may be used only for the purpose for which it was shared, to the effect that such information may not be shared for the purpose of preventing anti-social behaviour, and to restrict the exception permitting disclosure for the purpose of preventing or detecting crime to “serious” crime, as indicated by the noble Baroness. These amendments would also bring in an offence of disclosing personal information for the purposes of anti-social behaviour. The prevention of anti-social behaviour and the prevention or detection of crime are matters of significant public interest. If information sharing indicates potential criminal activity, public authorities should be able to take action. Similarly, if information received under the powers indicates that anti-social behaviour is occurring or is likely, we consider that this information should be disclosable to maintain public order. Anti-social behaviour may itself be seriously harmful to those who become its victims.
Amendment 28BM seeks to remove the power given by Clause 40(4), which allows regulations to make disclosures by newly specified persons subject to the same conditions that apply to disclosures of information provided by HMRC. That power would be used to require the consent of the original provider to any subsequent disclosures of particularly sensitive information, as is the case for information provided by HMRC under Clause 38. The amendment is undesirable, as it would remove flexibility to give enhanced protection to information from certain sources. I do not believe the noble Baroness read the provision in that form, but it is there so that enhanced protection may be given in a particular circumstance.
Amendment 28CF would impose a duty on the Secretary of State to review the civil registration power after three years, akin to the powers already provided in the debt and fraud powers. This duty was included in the debt and fraud powers to assess whether the powers deliver demonstrable benefit via an initial piloting process. The information gathered in the course of the pilot process will provide evidence for the review. It is our view that a similar duty to review the civil registration power would not be appropriate. First, civil registration information is already a matter of public record. Secondly, the powers are simply looking to update outmoded legislation to simplify and provide the flexibility to share civil registration data within the public sector to avoid the need to enact specific powers whenever a new need arises. The power has been developed to support a range of public authorities at national and local government level to transform the services that they can provide to citizens.
Finally, Amendment 39 is intended to ensure that Part 5 could not be brought into force until after the GDPR comes into effect, which would be in May 2018. This would prevent the use of the powers until that date, which would be unhelpful given that a number of bodies are keen to use the powers to achieve particular objectives, such as extending the warm home discount scheme. As we have said before, we consider that the present provisions are compatible with the GDPR—compliant, therefore, in that context—and we are committed to revisiting the codes of practice before May 2018 to ensure that they reflect the latest best practice of compliance with the GDPR.
In those circumstances, I invite the noble Baroness to withdraw her amendment.
Baroness Hamwee
My Lords, I thank the Minister, but all that will bear some reading. We felt it important to extend some of the comments that we made in Committee to get a more extended response. Noble Lords will be pleased to know that I shall not respond to all those points. On the Minister’s first point about “necessary or proportionate”, I do not know whether he means that I misread the ICO’s comments, that the Government disagree with the ICO, or whether some of the changes to the Bill since its initial form have dealt with them. Perhaps I should just leave that hanging.
The fact that the “contribution to society” is an example does not answer our concerns. I remain anxious about it, as I do about “anti-social behaviour”, which the Minister described as being a matter of significant public interest. I do not dispute that, but data sharing is a matter of significant public interest—I suggest, possibly greater. We are told that anti-social behaviour may be seriously harmful, but it is not criminal in this context, because we have other provisions to deal with crime.
I was indeed confused about the application of the HMRC powers to other bodies, and I remain confused about whether that extension is appropriate.
Finally, of course civil registration information is a matter of public record, but the updating takes us into a very different regime. The ability to share information in bulk is very different from that to look up individual pieces of information. Can the Minister tell the House today whether the consultation to which he referred extended beyond the sharing organisations to the sort of bodies concerned with privacy? He may not know, and I may be quite out of order in asking this on Report. I do not think he is going to leap to his feet—pause—no, he is not. I do not hold that against him. It is probably not in his brief. If there was not such consultation, that answers my point.
However, clearly, I should beg leave to withdraw the amendment.
Lord Keen of Elie
Lord Keen of Elie
My Lords, the Delegated Powers and Regulatory Reform Committee made a number of recommendations on Part 5 of the Bill. The Government developed the information-sharing powers through consultation and partnership over a process that started over three years ago. These measures are about improving the way the Government operate for the public benefit. Of course, data sharing must be done with transparency, safeguards and oversight. It is in that spirit that we have accepted the bulk of the committee’s recommendations. The way in which Part 5 is structured in seven chapters to deal with different data-sharing powers has meant that it has taken nearly 100 amendments to implement the recommendations, so I will spare the House from referring to every one in turn. I believe that my noble friend Lord Ashton has written previously setting out all that detail.
Our amendments place the lists of specified persons able to disclose and use information under the public service delivery, debt and fraud powers on the face of the Bill rather than in regulations. We then also narrow the powers to amend the lists. For public service delivery, specified persons will be permitted to share information only for the purposes of an objective which has been expressly specified as applicable to that person, rather than any specified objective. We have also narrowed the ability to set and amend data-sharing objectives for public service delivery, so that any specified objective must support the delivery of a specified public authority’s functions.
For water and fuel poverty, we have restricted the powers to amend the list of support measures and to add to the list of permitted recipients of information under the clause, as the DPRRC recommended. Finally, we have adopted the committee’s recommendations to remove Henry VIII powers to make consequential amendments to primary legislation, as well as to narrow the powers to review and amend the fraud and debt powers. We have ensured that any amendments can be only to improve the operation of the fraud and debt powers and there will be no way to use these powers to undo the safeguards that the Bill provides.
In addition to the DPRRC’s recommendations, the Government have tabled amendments on the following matters. Amendments 28FE and 28FF remove repetition in Clause 60(5) relating to the criminal offences which protect personal information originating from HMRC, Revenue Scotland and the Welsh Revenue Authority. By removing this repetition, the amendments avoid any confusion which might otherwise be caused.
Amendments 28FG to 28FN correct an unintended consequence of measures that were agreed during Lords Committee stage to prevent disclosures by journalists in the public interest being caught by the anti-disclosure offences in Chapter 5. The unintended effect is that the criminal offence which protects personal information disclosed under Clause 60(1), and which originates from one of the tax authorities, now applies only to disclosures made by the person who first receives the information but not those within the accreditation system who subsequently receive the information—for example, to undertake peer review or via intermediaries. These amendments therefore restore a key safeguard to the research power, which ensures that information is protected in all parts of the process.
Amendments 28FW, 28FX, 37 and 38 provide new data-sharing powers for Scottish Revenue and the Welsh Revenue Authority. Clause 70 provides the power for HMRC to share de-identified data, allowing HMRC to share aggregate and general information more widely, for purposes in the public interest. Following discussions with the Welsh Government and the Scottish Government, as requested by them, we are providing equivalent powers for devolved tax-raising bodies.
Amendment 28FY, tabled by my noble friend Lord Hunt, is supported by the Government. There is a recognised sound public policy argument for supporting the more effective operation of the Employers’ Liability Tracing Office, referred to as ELTO. The discussions at Lords Committee sparked further conversations between HMRC and ELTO officials, resulting in an agreement to take this amendment forward. This Bill has offered a timely opportunity therefore to legislate. The current clause meets the objective of helping ELTO improve its records of employers’ liability insurance policies, making it easier to identify insurers and so enable claimants to pursue compensation. Both parties recognise that there remains some work to do and it is currently unclear as to how effective HMRC data may be in helping to populate missing data. However, an enabling provision would allow more robust testing of the possibilities, with the opportunity to take these forward.
Amendments 40 and 41 enable commencement of measures by area so that the Government can ensure that measures are not commenced for Northern Ireland in the event that the Northern Ireland Assembly has not given legislative consent. Consent from the Northern Ireland Assembly is required on a number of measures, including the extension of public lending right to e-book loans, Part 5 of the Bill on digital government, the Northern Ireland provision in relation to Ofcom and, should the government amendment be agreed, the offence of breaching limits on ticket sales.
In consequence of the potential need to commence the Bill by area, these amendments also provide the power to make necessary transitional provision. The transitional powers will also be used to define small businesses in the statistics chapter of Part 5 until definitions in the Small Business, Enterprise and Employment Act 2015 come into force. I beg to move.
Lord Hunt of Wirral (Con)
I declare my interest as a partner in the global law firm DAC Beachcroft, and other interests set out in the register, including chairing the British Insurance Brokers’ Association and being president of the All-Party Parliamentary Group on Occupational Safety and Health. Taken at face value, Amendment 28FY would appear somewhat technical, but the Employers’ Liability Tracing Office is working well, but it could work better, and this amendment would help to facilitate that.
I am so grateful to the Minister and his colleagues for the support that they have given to this amendment, which could make a substantial difference to the capacity of the office to help to secure compensation, expeditiously and effectively, for those afflicted by industrial illnesses. When someone faces a reduced quality of life and possibly an avoidably and unnecessarily early death because of an industrial illness innocently contracted, the least that we can do is to deliver compensation as quickly as possible in the hope that the individual with the illness can enjoy at least some benefit from it. I believe that in some small way the amendment will serve to make this a more civilised and compassionate country.
Baroness Hamwee
My Lords, we have two amendments in this group. The Minister was just a little previous in answering Amendment 25YYD on modification, so we do not need to go back to that. Amendment 33ZYD would remove several organisations from the list of specified persons for the purposes of fraud provisions, and the amendment is here to enable us to ask whether all these require the data-sharing gateway or, conversely, whether there are many other government-related organisations; I am not quite sure what the correct term might be for organisations such as the National Lottery or the British Council, but I shall use the term government-related organisations tonight. Are there not others that might use the power? What were the criteria used to select the ones that are in the schedule?
Lord Keen of Elie
I am obliged to my noble friend Lord Hunt and note what he said with regard to the amendment. On the amendment proposed by the noble Baroness, Lady Hamwee, Amendment 33ZYD, which seeks to remove a number of non-departmental public bodies listed in the schedule for the fraud power, I accept that the list in the schedule is long but the fact is that many public authorities are at serious risk of fraud. Each of the bodies was considered individually before being added to the schedule, and the NDPBs have been included because they each administer many millions of pounds in grant expenditure each year, which exposes them to a significant risk of fraud.
Baroness Hamwee
Were any organisations considered and discarded for that purpose?
Lord Keen of Elie
I am not in a position to say what number of bodies were considered and discarded, but I will undertake to write to the noble Baroness on that point. All the public bodies included in the schedule must, of course, comply with the data-sharing safeguards in the Bill. Clearly, public authorities may not enter into data sharing lightly. They will have to follow the codes of practice, comply with the Information Commissioner’s requirements on data sharing and privacy and have in place all necessary protections to prevent unlawful disclosure.
The list of public bodies in the government amendments is shorter than the lists we have previously published in draft regulations although, as I indicated to the noble Baroness a moment ago, I do not know how many bodies were considered and removed before the process of listing them in the draft regulations took place. Care has been given to ensuring that we share only where there is a clear benefit, as required by the legislation. I hope that, with that explanation, the noble Baroness will withdraw her amendment.
Lord Collins of Highbury (Lab)
My Lords, I will take this opportunity to briefly comment on this group of amendments. These Benches did submit a series of amendments in Committee. The Minister responded that the Government were giving due consideration to the Delegated Powers Committee report, so there was no opportunity to go through some of those issues in detail. We welcome the Government’s amendments and the fact that they have responded to the Delegated Powers Committee. I have read the Information Commissioner’s briefing for Report, and I welcome the fact that she strongly supports the Government’s adoption of these amendments, which she believes will strengthen parliamentary scrutiny and government accountability.
The next group of amendments deals with the code of practice, on which we had lengthy debates in Committee, but I believe that the Government are now striking the right proportional balance between improving public and government services and the need to protect data.
Lord Ashton of Hyde
Lord Ashton of Hyde
“(3) The appropriate national authority may by regulations amend Schedule (Public service delivery: specified persons for the purposes of section 31) so as to add, remove or modify an entry relating to a person or description of person.(3A) Regulations under subsection (3) may add an entry relating to a person or a description of person to Schedule (Public service delivery: specified persons for the purposes of section 31) only if—(a) the person is a public authority or (as the case may be) each person of that description is a public authority, or(b) the person provides services to a public authority or (as the case may be) each person of that description provides services to a public authority.”
Lord Ashton of Hyde
Baroness Hamwee
Baroness Hamwee
My Lords, the published groupings include Amendment 28CY, which should not have been tabled. I apologise to the House; it was a hangover from drafting before the Government tabled their amendments, which we have just dealt with, in response to the Delegated Powers and Regulatory Reform Committee. I will not be speaking to it and am sorry for the confusion. Similarly, Amendment 28CUA, published on the supplementary list, should not have been tabled—it was drafted a while ago but somebody panicked late on Friday afternoon and thought it had better be published.
Lord Collins of Highbury
My Lords, in Committee I had my name to an amendment regarding the status of the codes of practice. At that time, the noble and learned Lord referred to the appropriate level of legal obligation. He certainly persuaded me that the wording “having regard to” or “complying with” did not relate to whether a public authority could ignore a code, but whether there were reasons for doing so. I was persuaded about that level of flexibility.
Of course, we were really concerned about what the codes of practice would ultimately look like, what the engagement of the Information Commissioner would be and what the Information Commissioner’s view was. On these Benches we were pleased to see not only the Government’s amendments but the Information Commissioner saying that she was extremely pleased that the Government had accepted her recommendations on there being references in the Bill to codes of practice and the privacy impact assessments.
In the light of the Information Commissioner’s overall comments and the fact that the Government have responded, we certainly welcome these amendments. However, I give notice that—the noble Baroness, Lady Hamwee, referred to this—what is in the codes and how public authorities operate them will be very important, and parliamentary scrutiny of and engagement in them will be critical in the future. I hope that we will see further drafts of the codes before they are ultimately laid before Parliament. It is really important not only that there is the highest level of consultation on them but that Members of Parliament are properly engaged in them.
Lord Keen of Elie
I thank noble Lords for their observations on these matters. There are of course government amendments in this group as well and perhaps I may begin with those.
This group of amendments concerns the codes of practice issued under Part 5 and those issued by the Information Commissioner’s Office. It includes the government amendments that implement the recommendations of the Delegated Powers and Regulatory Reform Committee and, as the noble Lord, Lord Collins, observed, the recommendations of the Information Commissioner’s Office. In addition, there are some opposition amendments on similar points.
We have already published draft codes of practice on data sharing. The Delegated Powers and Regulatory Reform Committee recommended that the first codes of practice and the UK Statistics Authority’s statement of principles should be laid before Parliament in draft and should not be brought into force until they had been approved under the affirmative procedure. Revisions were to follow the draft negative procedure. We agree and have tabled amendments to achieve this, and it is intended that Parliament should have a suitable opportunity to consider these drafts and any amendments thereto in due course.
A further series of government amendments will require persons disclosing personal information under relevant chapters of Part 5 to have regard to the Information Commissioner’s codes of practice on privacy impact assessments and privacy notices, transparency and control in so far as they apply to information which is being shared. As the noble Lord, Lord Collins, observed, the Information Commissioner called for explicit reference to these two codes to be made on the face of the Bill. We have worked with her office to develop these amendments, which supplement the existing requirement that the codes of practice prepared under the Bill must be consistent with the commissioner’s own code on data sharing, and I understand that she is satisfied with the steps we have taken in that regard. I hope that this will provide further assurance to noble Lords that we are committed to ensuring that best practice concerning compliance with data protection and transparency will be applied to the exercise of powers under Part 5 of the Bill.
I now turn to the opposition amendments in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Clement-Jones. I hope I can persuade them that their amendments are no longer necessary, as the government amendments fully address the concerns of both the Information Commissioner’s Office and the DPRRC.
As the noble Baroness has explained, the amendments in their names seek to ensure further consistency with the ICO’s codes and to strengthen the role of those codes in the regime set up by Part 5, as well as providing for greater parliamentary oversight of the Government’s codes, and I believe that we are now there. The Bill already requires that codes of practice issued under Part 5 of the Bill must be consistent with the ICO’s data-sharing code of practice. The government amendments further require persons to have regard to the ICO’s codes on privacy impact assessments and privacy notices, transparency and control when exercising relevant powers under Part 5. So we are now referencing all the codes which the ICO felt were critical for the operation of Part 5.
Of course, this is not the first time we have discussed amendments that seek to strengthen enforcement of the codes of practice by requiring authorities that use the powers of determined specified bodies to “comply with” rather than “have regard to” these codes. The Government’s position remains that “have regard to” is the right weight to give to codes of this type. That is itself a legal obligation, as the noble Lord, Lord Collins, noted. Moreover, the public law will expect those who are subject to the codes to follow their stipulations unless there are cogent reasons why they should not. We note that the Information Commissioner’s own codes are themselves advisory. A requirement to “comply with” the codes could lead to their being applied in a tick-box fashion, without due regard to whether the recommendations are actually applicable to and desirable in the context of the specific data share.
On the issue of adding additional persons to the consultation obligations for the codes, since Ministers have committed before Parliament to consult publicly on the Part 5 codes of practice, we suggest that such a requirement is unnecessary. The present provisions reflect what the noble Baroness noted to be the normal position.
Finally, on parliamentary oversight, the Government’s amendments fully implement the DPRRC’s recommendations, including, exceptionally, the use of the affirmative procedure for the first codes and the draft negative procedure thereafter. They go further than the noble Baroness’s amendment, and I hope that that will be welcomed by all noble Lords. I therefore invite the noble Baroness not to press her amendments.
Baroness Hamwee
My Lords, I thank the Minister for that response. I had forgotten to say that I was glad to see the government amendments about the affirmative procedure—it was because of looking at those that we got those two stray amendments that were tabled in error.
The noble Lord, Lord Collins, is absolutely right about the codes of practice. I simply say, before begging leave to withdraw, that it will not be possible for amendments to be made once the codes are put formally to Parliament. That is why wide consultation and—I do not like the term—an iterative process is very important on what will be significant documents. I beg leave to withdraw my amendment.
Lord Keen of Elie
Lord Whitty
“( ) the facilitation of improvements in health conditions which could be exacerbated by living in a cold home.”
Lord Whitty (Lab)
My Lords, I raised this issue in Committee. It concerns one of the major justifications for data sharing that was proclaimed by the Government in their original justification for this Bill, which relates to dealing with fuel poverty. I first record my appreciation for the fact that both the noble and learned Lord, Lord Keen, and the noble Lord, Lord Ashton of Hyde, met me last week to discuss these amendments, which may well shorten proceedings this evening.
My main concern is that all public authorities should interact in order to deal with the problem of fuel poverty. Take, for example, the support that the fuel poor get from the warm home discount. There is a certain group, mainly the elderly that is automatically subject to the provisions of the warm home discount. However, there are other groups—in particular vulnerable families or families that are subject to certain illnesses—that have to be referred specifically in order to gain that benefit. They also, in those areas where there is still some local authority provision for intervention on fuel poverty, have to get through that hoop in order to qualify. As we know, there is no nationally financed fuel poverty eradication programme any more in England; there is, however, in Scotland and Wales, and there are a number of local authorities that do intervene in these matters.
Baroness Finlay of Llandaff (CB)
My Lords, I have tabled amendments in this group. I start by thanking the noble and learned Lord, Lord Keen of Elie, and his Bill team for having met with me and for dealing patiently with my queries. I know from that meeting that the Government are not minded to accept my amendments, but I would like the arguments to be put on the record.
I have listened carefully to the noble Lord, Lord Whitty. While I do not dispute at all that his amendments are well intentioned, I can see enormous difficulties arising in determining the threshold of the condition—how severe it has to be, which co-morbidities might be aggravating one another, which members of the family would be involved and so on. I am not sure from the way he argued for his amendment whether an email notification system against a set of clear criteria that had been pre-negotiated with the consent of the patient or family would meet the needs and be simple and straightforward. Would it be a communication system free from the risk of mining the patient’s clinical records? The reason I ask is that at the moment health bodies are not specified in the Bill, but if they were included, that would certainly need legislation because in effect it would override the common-law duty of confidentiality.
I know that at the previous stage the noble and learned Lord, Lord Keen, said that the Government were minded to consider bringing health and social care bodies within the scope of these powers in the future and that that would be done using a statutory instrument passed by the affirmative procedure. I appreciate that the Minister said that there would be wide consultation before that happened.
The difficulty is that in Clause 36(7) it appears that the duty of confidence, which could apply to the duty of medical confidentiality, could be removed if health is brought within the scope of the Bill. It could provide a legal gateway for sharing medical records for purposes that are not currently specified among a wide range of government departments and public service providers. The concern is that to date a special legal status has been afforded to health data in the common-law duty of medical confidentiality due to its sensitivity and the importance to the public of a confidential health service. This common-law duty of confidentiality protects health data over and above the safeguards provided by the Data Protection Act, so simply referring to the Bill’s requirement to comply with that Act when making disclosures does not maintain the current level of protection.
If the Bill proceeds unamended and the Government include health bodies in the list of specified bodies, which they could do by statutory instrument, I think that would be viewed as a serious assault on medical confidentiality because it would open up the power to share confidential information. Indeed, problems with the failure of the current safeguards in the system were aired this weekend over TPP, the IT system that many general practitioners use. In a way, that demonstrated that the current safeguards in place around the IT systems are, frankly, inadequate.
NHS Digital could be drawn into the Bill’s information-sharing powers. It holds vast quantities of confidential data, which would mean that the Bill could give the Government direct access to them without consent, because the process would override the current common-law duty. This needs to be considered in the context of the National Data Guardian, who has spoken about the need to build trust in the health system’s ability to handle data, and a real concern among many patient groups of the general mistrust that their very confidential data could be shared.
I believe that my amendments will not be accepted, but if they are not I hope the Government will be able to reassure me that if health data were to be brought into the Bill’s information-sharing powers they will not just be added to the current framework created by the Bill and then the duty of medical confidentiality deemed to be protected, but that there will be full public engagement and full parliamentary scrutiny prior to proceeding, and that the protections in place would include independent oversight and real-time monitoring of the data sharing. In Wales, the IT system overseeing NHS Wales has instituted real-time monitoring because there was concern that staff could have used their access rights to unprofessionally access healthcare records of people with whom they did not have a direct care relationship. I am afraid that human nature is that people are rather inquisitive about what may be happening to people they know, but those may be very sensitive and very private data. Therefore, they need the highest safeguards around them.
The problem is that once there is a data leak it really cannot be pulled back and closed. I hope the Government will provide the reassurance that, as well as the other aspects, there will be real-time monitoring and independent oversight of the whole process, with additional sanctions that will be of a high enough level to, I hope, act as a major deterrent for any breaches of any data-sharing agreement.
Baroness Hamwee
My Lords, we have Amendment 28AV in this group, which is also about the common-law duty of confidentiality. Obviously that includes doctor-patient confidentiality. We are with the noble Baroness in her concerns. Apart from wanting to see that duty preserved, the reason for the amendment is to seek confirmation that it is to be overwritten rather than preserved. I found subsection (7) quite difficult. When we were contacted by a member of the public who was clearly qualified to read the legislation with a query about it, it seemed appropriate to raise this because it is quite difficult to follow. Clearly, one should be quite certain about what we are doing.
Lord Collins of Highbury
My Lords, I hesitate before intervening in this group of amendments because, the last time I intervened, my noble friend said that I must be slightly confused, as I was talking about electoral rolls, bread rolls and toilet rolls. We are, of course, conflating a number of issues in this group, but I think that there is a really good point. My noble friend has raised an important area where the public good can be served not by sharing confidential information but by ensuring the availability of information that will serve a specific purpose in relation to fuel poverty. We on these Benches are very sympathetic on that point. In Committee we tabled amendments on the common-law duty of confidentiality, and the noble and learned Lord responded to those amendments. The only point I would make now is that it is vital that medical records remain confidential. They contain information that can affect not only people’s health but their access to jobs and to insurance. Access to a whole range of things is at risk if it is felt that this information will not remain confidential. Of course, the consequence of that is another public health issue, because if people do not have confidence that their records will remain confidential, they will not go to their doctor, they will not tell their doctor and they will not seek the treatment that they perhaps should. So there is a very strong case here.
One other point—it is not related to this group of amendments so I ask for forgiveness—is that there is a balance between maintaining confidentiality and security. Many of the problems in the health service, and why people lack confidence in it, are not about policies and procedures but about the health service’s ability to maintain a secure IT system. I hope the noble and learned Lord will be able to address those issues. The assurances that my noble friend has sought about future ability are really important. The ability to communicate—not the details of people’s confidential records but one government department to another and one public agency to another, to serve a very clear public need—is vital.
Lord Keen of Elie
I am obliged to noble Lords, and in particular I thank the noble Lord, Lord Whitty, for his continued interest in this area and for taking the time to meet and discuss this matter at some length with me and the Bill team. Clearly, as the noble Lord, Lord Collins, observed, this is an important part of the fuel poverty agenda. That is why it takes on such considerable importance even when faced with issues such as medical confidentiality.
On the point about common-law confidentiality, and medical confidentiality in particular, it is not an absolute; there are already statutory gateways through which information can and must flow on occasions, and therefore one must not take it that medical confidentiality is somehow completely ring-fenced and separate from the world that we actually live in. There are circumstances where there should be, has to be and is disclosure. It may be possible—I put it no higher in terms of this Bill—to address a further gateway. However, one should not confuse any mechanism within the Bill with the consequences of human or IT failure, however regrettable they may be. I agree with the noble Lord, Lord Collins, that one has to have regard not only to the structure within which information is shared but to the need to ensure that the sharing process is itself secure. But they are separate issues.
The noble Lord, Lord Whitty, acknowledges that some parts of his amendment may not be necessary. Amendments 27 and 28 would provide that information can be shared with licensed electricity and gas distributors for the provision of fuel poverty assistance. They can already be added to the data-sharing arrangements in Clause 32 by regulations. The Government will consider whether to exercise this power in the context of considering the future role of electricity and gas distributors in delivering fuel poverty schemes. I reassure the noble Lord that the provision made by Amendment 26 is already covered by Clause 31, which provides powers to share information for,
“the improvement of the well-being of individuals or households”.
Of course, this includes,
“their physical and mental health and emotional well-being”.
While we do not consider the noble Lord’s amendment necessary in this instance, the objectives that he highlights are an example of how in appropriate circumstances information held by healthcare providers could, in future, be valuable to support the more effective delivery of public services to those in need. It underlines why the Government are unable to accept Amendments 28AV, 28AW and 28AX, tabled by the noble Baronesses, Lady Finlay and Lady Hamwee.
The Government do recognise the particular sensitivities with identifiable health information, as highlighted in the National Data Guardian for Health and Social Care’s recent review of data security, consent and opt-outs. Health bodies in England are therefore not included in the list of bodies now in the Bill that will be permitted to use these powers. However, as the noble Lord, Lord Whitty, noted, health issues are a key factor in the complex social problems faced by people, whom we are aiming to support with these powers. Excluding the use of identifiable health information altogether would remove the possibility of including such information in the future without amending legislation. It would be premature to take this step in advance of the implementation of the National Data Guardian’s review and the public consultation that that will engage.
An amendment to maintain the common-law duty of medical confidentiality is not considered necessary. Those powers enable information to be shared only where it is already held by specified persons, acquired in a different context from the patient-doctor relationship. Any information that would have been subject to medical confidentiality would have found its way into a specified person’s hands only through an existing gateway. As I indicated earlier, there are already statutory gateways through which such information can move. Of course, we are dealing with permissive powers.
At this late hour, I will attempt the impossible: to satisfy the interests of all parties in the context of these provisions. Beginning with the inquiry from the noble Lord, Lord Whitty, health bodies are not presently included in the schedules. As drafted, it would be possible for health bodies to be added to the schedules at a future date but—and I emphasise this—no decision will be taken until, first, the Government publish their response to the Caldicott review and any recommendations have been embedded and assessed; secondly, there has been a public consultation on the issue and the views of the National Data Guardian and appropriate representative health bodies such as the GMC and BMA have been sought; and, thirdly, there has been a debate in both Houses pursuant to the affirmative procedure required to add bodies to the schedule. I hope that that reassures the noble Lord, Lord Whitty, that it can be done, although it has yet to be done, and that there are steps that we will take to reassure the noble Baronesses, Lady Finlay and Lady Hamwee, before any such step is implemented.
If health bodies or information were to be expressly excluded in the Bill, it would require primary legislation to enable those bodies to share information under the powers. If and when we decide that it would be helpful to have those powers—in implementing the fuel poverty initiative, for example—it would be most unfortunate if we were delayed by literally years before we could actually achieve the objective, when in fact there is provision here to do it by way of the affirmative procedure so that both Houses have ample opportunity for debate.
If we take those steps, there will be safeguards. When considering whether to add any health bodies to the schedules in the public service delivery, debt and fraud chapters, clear safeguards will apply. First, before a new body may be added to the schedule, it must show that it fulfils the relevant criteria relating to that specific power designed to ensure that only bodies with relevant functions for holding or requiring information relevant to that particular power may be added. The Minister must consider the procedures in place for secure handling of information before any new body can be added to the schedule—a point raised by the noble Lord, Lord Collins. A decision will be taken on whether it is in the public interest and proportionate to share identifying health information in order to achieve a specified objective. There would be no question of simply sharing this information more widely. The powers must be exercised in accordance with the Data Protection Act, which requires that only the minimum information necessary to achieve the objective may be shared. Under the Bill—and under the Data Protection Act—personal information may be used only for the purpose for which it was shared and data must be stored securely to ensure compliance with that Act. Again, this point was raised a moment ago.
Identifying health information will constitute sensitive personal data and so to ensure fair and lawful processing, it must fulfil one of the more onerous Schedule 3 conditions as well as the Schedule 2 condition under the Bill. In addition, new criminal sanctions have been included for wrongful disclosure with a maximum penalty of up two years’ imprisonment, a heavy fine or both. Further steps can of course also be taken to remove a body from the schedule if it does not comply with the requirements of the Act.
I do not suppose that I have satisfied anyone with that explanation at the end of the day. But, if nothing else, I hope that it has assisted in informing your Lordships as to why we consider that these amendments are not appropriate and that it would be appropriate to retain the ability to introduce health bodies by way of appropriate regulation. We feel that there will be appropriate safeguards and extensive consultation before any such step is taken, so I invite the noble Lord to withdraw his amendment.
Baroness Finlay of Llandaff
May I ask for clarification over one issue? Would a statutory instrument, when brought forward, envisage adding health bodies to the Bill in a blanket way, or would it be envisaged that there would be statutory instruments for specific purposes, such as health bodies for the purposes of identifying fuel poverty, and that when something else emerged it would require a separate statutory instrument so as to keep that gateway as narrow as possible?
Lord Keen of Elie
With respect, we clearly intend to maintain any gateway in as narrow a manner as is reasonable. The point that the noble Baroness raises is really a question for another day. We are not there yet; health bodies are not included in the schedule. If and when it is contemplated that they will be, there will be extensive consultations on the very issues that she raises.
Lord Whitty
My Lords, I thank the Minister for his ability to deliver a compromise position between what appeared to be diametrically opposed attacks in this group of amendments. He has done very well and almost satisfied me—I thank him for that and for his previous discussions.
Clearly, my amendments envisage a fairly narrow gateway, and in her latest remarks the noble Baroness, Lady Finlay, was responding to that. I am very grateful to the Minister for his assurance that the procedure could add health authorities and health bodies to the list in specific circumstances. When we come to the statutory instrument phase, I am arguing for only a relatively narrow inclusion, which may well be carried by the form of the statutory instrument which we eventually have to consider. I also recognise that the Minister has to await the outcome of these other considerations.
On the other hand, I would impress on the Minister that fuel poverty is a really big issue and that the lack of communication between the health and social security sides, and the other interventions, has proved a major inhibition in tackling fuel poverty. The information to be shared is in two directions. It would also allow a medical GP, for example, to access DWP information as to whether people in a household qualified for help. It is not simply a matter of disclosing medical information; it is one of ensuring that the medics actually understand the broader context of the household with which they are concerned.
I thank the Minister for his help in this direction. We will no doubt return to this at some subsequent stage but in the meantime, I beg leave to withdraw.
Lord Ashton of Hyde
“( ) The third condition is that the objective has as its purpose the supporting of—(a) the delivery of a specified person’s functions, or(b) the administration, monitoring or enforcement of a specified person’s functions.”
Lord Ashton of Hyde
“( ) In this section and section 33 “specified person” means a person specified, or of a description specified, in Schedule (Public service delivery: specified persons for the purposes of sections 32 and 33).”
“(za) amend Schedule (Public service delivery: specified persons for the purposes of sections 32 and 33) so as to add, remove or modify an entry relating to a person or description of person;”
“( ) Regulations under subsection (4)(za) may add an entry relating to a person or a description of person to Schedule (Public service delivery: specified persons for the purposes of sections 32 and 33) only if—(a) the person is a public authority or (as the case may be) each person of that description is a public authority, or(b) the person provides services to a public authority or (as the case may be) each person of that description provides services to a public authority.”
“( ) Regulations under subsection (4)(a) may add a person or a description of person to subsection (1) only if the person or (as the case may be) each person of that description—(a) provides assistance of a kind mentioned in subsection (2) to people living in fuel poverty,(b) monitors or enforces the provision of such assistance to such people,(c) administers a fuel poverty measure, or(d) provides services to a person within paragraph (a), (b) or (c).”
“““fuel poverty measure” means—(a) a scheme, arrangement or set of arrangements, or(b) a function or set of functions,which has as its purpose (or one of its purposes) the provision of assistance of a kind mentioned in subsection (2) to people living in fuel poverty;”
Lord Ashton of Hyde
“( ) In this section and section 35 “specified person” means a person specified, or of a description specified, in Schedule (Public service delivery: specified persons for the purposes of sections 34 and 35).”
“(3A) The appropriate national authority may by regulations—(a) amend Schedule (Public service delivery: specified persons for the purposes of sections 34 and 35) so as to add, remove or modify an entry relating to a person or description of person;(b) amend subsection (1) so as to add or remove a person or description of person to whom information may be disclosed;(c) amend subsection (3) so as to add, modify or remove a reference to a water poverty measure.”
“( ) Regulations under subsection (3A)(a) may add an entry relating to a person or a description of person to Schedule (Public service delivery: specified persons for the purposes of sections 34 and 35) only if—(a) the person is a public authority or (as the case may be) each person of that description is a public authority, or(b) the person provides services to a public authority or (as the case may be) each person of that description provides services to a public authority.”
“( ) Regulations under subsection (3A)(b) may add a person or a description of person to subsection (1) only if the person or (as the case may be) each person of that description—(a) provides assistance of a kind mentioned in subsection (2) to people living in water poverty,(b) monitors or enforces the provision of such assistance to such people,(c) administers a water poverty measure, or(d) provides services to a person within paragraph (a), (b) or (c).”
“( ) In determining whether to make regulations under subsection (3A)(a) or (b) in relation to a person or description of person the appropriate national authority must have regard, in particular, to—(a) the systems and procedures for the secure handling of information by that person or persons of that description, and(b) in the case of regulations which remove a person from Schedule (Public service delivery: specified persons for the purposes of sections 34 and 35) or subsection (1), whether that person, or any person providing services to that person, has had regard to the code of practice under section 39 as required by that section.”
“( ) In this section “water poverty measure” means—(a) a scheme, arrangement or set of arrangements, or(b) a function or set of functions,which has as its purpose (or one of its purposes) the provision of assistance of a kind mentioned in subsection (2) to people living in water poverty.”
Lord Ashton of Hyde
“(6A) The relevant Minister may not issue the code of practice unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(6B) Before reissuing the code the relevant Minister must lay a draft of the code as proposed to be reissued before Parliament.(6C) The relevant Minister may not reissue the code if, within the 40-day period, either House of Parliament resolves not to approve it.(6D) In subsection (6C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(6E) For the purposes of subsection (6D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
Lord Ashton of Hyde
“(8) In disclosing information under any of sections 31 to 35 , a person must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(9) The duty in subsection (8) does not affect any other requirement for the person to have regard to a code of practice in disclosing the information.”
Lord Ashton of Hyde
Lord Ashton of Hyde
( ) regulations under section 31 (3) which amend Schedule (Public service delivery: specified persons for the purposes of section 31) so as to add an entry relating to a person or description of person,( ) regulations under section 32 (4)(za) which amend Schedule (Public service delivery: specified persons for the purposes of sections 32 and 33) so as to add an entry relating to a person or description of person, or( ) regulations under section 34 (3A)(a) which amend Schedule (Public service delivery: specified persons for the purposes of sections 34 and 35) so as to add an entry relating to a person or description of person,”
Lord Ashton of Hyde
“( ) The power of the Secretary of State in section 69(2) of the Wales Act 2017 to amend an enactment contained in primary legislation in consequence of any provision of that Act includes power to amend this Chapter, and section 97 so far as relating to this Chapter, in consequence of section 48 (water and sewerage) of that Act.”
Lord Ashton of Hyde
“(6) The Registrar General may not issue the code of practice unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(7) Before reissuing the code the Registrar General must lay a draft of the code as proposed to be reissued before Parliament.(8) The Registrar General may not reissue the code if, within the 40-day period, either House of Parliament resolves not to approve it.(9) In subsection (8)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(10) For the purposes of subsection (9) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
Lord Ashton of Hyde
“(7) In disclosing information under section 19AA, a civil registration official must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(8) The duty in subsection (7) does not affect any other requirement for the civil registration official to have regard to a code of practice in disclosing the information.””
Lord Ashton of Hyde
“(5) The appropriate national authority may by regulations amend Schedule (Specified persons for purposes of the debt provisions) so as to add, remove or modify an entry relating to a person or description of person.(5A) Regulations under subsection (5) may add an entry relating to a person or a description of person to Schedule (Specified persons for purposes of the debt provisions) only if the following conditions are satisfied.(5B) The first condition is that—(a) the person is a public authority or (as the case may be) each person of that description is a public authority, or(b) the person provides services to a public authority or (as the case may be) each person of that description provides services to a public authority.(5C) The second condition is that the person or (as the case may be) a person of that description (“P” in either case)—(a) requires information from a public authority or a person providing services to a public authority to improve P’s ability to identify, manage or recover debt owed to a public authority or to the Crown,(b) has information which, if shared with a public authority or a person providing services to a public authority, has the potential to improve that authority’s or that person’s ability to identify, manage or recover such debt, or(c) has functions relating to the management or recovery of such debt the exercise of which may be improved by the disclosure of information by or to P.”
Lord Ashton of Hyde
“(6A) The relevant Minister may not issue the code of practice unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(6B) Before reissuing the code the relevant Minister must lay a draft of the code as proposed to be reissued before Parliament. (6C) The relevant Minister may not reissue the code if, within the 40-day period, either House of Parliament resolves not to approve it.(6D) In subsection (6C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(6E) For the purposes of subsection (6D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
“(8) In disclosing information under section 44 , a person must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(9) The duty in subsection (8) does not affect any other requirement for the person to have regard to a code of practice in disclosing the information.”
“( ) The power in subsection (5) to amend this Chapter—(a) may be exercised for the purposes only of improving the effectiveness of the operation of the power in section 44 (1), and(b) may not be used to remove any of the safeguards relating to the use or disclosure of information in section 45, 46 or 47 .”
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
“(6) The appropriate national authority may by regulations amend Schedule (Specified persons for purposes of the fraud provisions) so as to add, remove or modify an entry relating to a person or description of person.(6A) Regulations under subsection (6) may add an entry relating to a person or a description of person to Schedule (Specified persons for purposes of the fraud provisions) only if the following conditions are satisfied.(6B) The first condition is that—(a) the person is a public authority or (as the case may be) each person of that description is a public authority, or(b) the person provides services to a public authority or (as the case may be) each person of that description provides services to a public authority.(6C) The second condition is that the person or (as the case may be) a person of that description (“P” in either case)—(a) requires information from a public authority or a person providing services to a public authority to improve P’s ability to identify or reduce the risk of fraud against P or a public authority to which P provides services,(b) has information which, if shared with a public authority or a person providing services to a public authority, has the potential to improve that authority’s or that person’s ability to identify or reduce the risk of fraud against that authority, or (c) has functions of taking action in connection with fraud against a public authority, the exercise of which may be improved by the disclosure of information by or to P.”
Lord Ashton of Hyde
“(6A) The relevant Minister may not issue the code of practice unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(6B) Before reissuing the code the relevant Minister must lay a draft of the code as proposed to be reissued before Parliament.(6C) The relevant Minister may not reissue the code if, within the 40-day period, either House of Parliament resolves not to approve it.(6D) In subsection (6C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(6E) For the purposes of subsection (6D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
“(8) In disclosing information under section 52, a person must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(9) The duty in subsection (8) does not affect any other requirement for the person to have regard to a code of practice in disclosing the information.”
Lord Ashton of Hyde
“( ) The power in subsection (5) to amend this Chapter— (a) may be exercised for the purposes only of improving the effectiveness of the operation of the power in section 52 (1), and(b) may not be used to remove any of the safeguards relating to the use or disclosure of information in section 53 , 54 or 55 .”
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, where the disclosure is made to a person who is accredited under section 67 as a person to whom such information may be disclosed for that purpose”
Lord Ashton of Hyde
( ) by a person to whom the information is disclosed by virtue of subsection (3).”
“( ) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, where the disclosure is made to a person who is accredited under section 67 as a person to whom such information may be disclosed for that purpose”
Lord Ashton of Hyde
( ) by a person to whom the information is disclosed by virtue of subsection (3).”
“( ) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, where the disclosure is made to a person who is accredited under section 67 as a person to whom such information may be disclosed for that purpose”
Lord Ashton of Hyde
( ) by a person to whom the information is disclosed by virtue of subsection (3).”
“( ) for the purposes of enabling anything that is to be published as a result of the research to be reviewed before publication, where the disclosure is made to a person who is accredited under section 67 as a person to whom such information may be disclosed for that purpose”
Lord Ashton of Hyde
“(8A) The Statistics Board may not issue the code of practice unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(8B) Before reissuing the code the Statistics Board must lay a draft of the code as proposed to be reissued before Parliament.(8C) The Statistics Board may not reissue the code if, within the 40-day period, either House of Parliament resolves not to approve it.(8D) In subsection (8C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(8E) For the purposes of subsection (8D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
“(10) In disclosing information under section 60, a person must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(11) The duty in subsection (10) does not affect any other requirement for the person to have regard to a code of practice in disclosing the information.”
Lord Ashton of Hyde
“Disclosure of non-identifying information by the Welsh Revenue Authority
(1) A relevant official of the Welsh Revenue Authority may disclose relevant information to any person if— (a) the information is non-identifying information, and(b) the official thinks that the disclosure would be in the public interest.(2) Information is non-identifying information for the purposes of this section if—(a) it is not, and has never been, identifying information, or(b) it has been created by combining identifying information, but is not itself identifying information.(3) Information is identifying information for the purposes of this section if it relates to a person whose identity—(a) is specified in the information,(b) can be deduced from the information, or(c) can be deduced from the information taken together with any other information.(4) In this section—(a) “relevant official of the Welsh Revenue Authority” means a person within any of paragraphs (a) to (d) of section 17(2) of the Tax Collection and Management (Wales) Act 2016, and(b) “relevant information” means information which—(i) is held by the Welsh Revenue Authority in connection with its functions, or(ii) is held by a person to whom any of the functions of the Welsh Revenue Authority have been delegated in connection with those functions.”
“Disclosure of non-identifying information by Revenue Scotland
(1) A relevant official of Revenue Scotland may disclose to any person information held by a relevant person in connection with a relevant function if—(a) the information is non-identifying information, and(b) the official thinks that the disclosure would be in the public interest.(2) Information is non-identifying information for the purposes of this section if—(a) it is not, and has never been, identifying information, or(b) it has been created by combining identifying information, but is not itself identifying information.(3) Information is identifying information for the purposes of this section if it relates to a person whose identity—(a) is specified in the information,(b) can be deduced from the information, or(c) can be deduced from the information taken together with any other information.(4) In this section—(a) “relevant official of Revenue Scotland” means a relevant official as defined by section 15(2) of the Revenue Scotland and Tax Powers Act 2014,(b) “relevant person” has the meaning given by section 13(2) of that Act, and(c) “relevant function” means a function mentioned in section 13(3)(a), (b)(i) or (c)(i) of that Act.”
“Disclosure of employer reference information by HMRC
(1) A Revenue and Customs official may disclose employer reference information held by the Revenue and Customs to the Employers’ Liability Tracing Office for use by it for the permitted purpose.(2) The Employers’ Liability Tracing Office is the company registered in England and Wales with the company registration number 06964651.(3) The permitted purpose is the purpose of providing assistance in connection with— (a) claims against an employer, or an employer’s insurer, arising from personal injury or death that occurred, or is alleged to have occurred, in the course of a person’s employment by that employer, or(b) applications for a payment under the Diffuse Mesothelioma Payment Scheme established under the Mesothelioma Act 2014.(4) “Employer reference information” means any of the following information relating to an employer—(a) the employer’s name and address;(b) any combination of numbers, letters or characters that is uniquely associated with the employer and used by Revenue and Customs to identify or refer to the employer, whether generally or for particular purposes.(5) References in this section to an employer include references to a person who has at any time been an employer.(6) In this section—“employer” and “employment” have the same meaning as in the employment income Parts of the Income Tax (Earnings and Pensions) Act 2003;“Revenue and Customs official” has the meaning given by section 18(4)(a) of the Commissioners for Revenue and Customs Act 2005;“the Revenue and Customs” has the meaning given by section 17(3) of that Act.”
Lord Ashton of Hyde
“( ) After subsection (4) insert—“(4A) In disclosing information under subsection (1), the Commissioners or an officer of Revenue and Customs must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(4B) The duty in subsection (4A) to have regard to a code of practice does not affect any other requirement for the Commissioners or an officer of Revenue and Customs to have regard to a code of practice under the Data Protection Act 1998 in disclosing the information.(4C) In determining how to comply with the duty in subsection (4A) the Commissioners or the officer of Revenue and Customs must have regard to any views of the Board which are communicated to the Commissioners or the officer.”
Lord Ashton of Hyde
“(7A) In disclosing information under subsection (1), a public authority must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(7B) The duty in subsection (7A) to have regard to a code of practice does not affect any other requirement for the public authority to have regard to a code of practice under the Data Protection Act 1998 in disclosing the information.(7C) In determining how to comply with the duty in subsection (4A) the public authority must have regard to any views of the Board which are communicated to the authority.”
Lord Ashton of Hyde
“(9A) The Board may not publish the original statement under this section unless a draft of the statement has been laid before, and approved by a resolution of, each House of Parliament.(9B) Before publishing a revised statement under this section the Board must lay a draft of the statement as proposed to be published before Parliament.(9C) The Board may not publish the revised statement if, within the 40-day period, either House of Parliament resolves not to approve it.(9D) In subsection (9C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(9E) For the purposes of subsection (9D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
Lord Ashton of Hyde
“(11) In exercising any of its functions under section 45B, 45C or 45D to require the disclosure of information, the Board must have regard to any code of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998 which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information, so far as the code applies to the information in question.(12) The duty in subsection (11) to have regard to a code of practice does not affect any other requirement for the Board to have regard to a code of practice under the Data Protection Act 1998 in exercising the function.”
Lord Ashton of Hyde
“(5A) The Board may not publish the original code of practice under this section unless a draft of the code has been laid before, and approved by a resolution of, each House of Parliament.(5B) Before publishing a revised code of practice under this section the Board must lay a draft of the code as proposed to be published before Parliament.(5C) The Board may not publish the revised code of practice if, within the 40-day period, either House of Parliament resolves not to approve it.(5D) In subsection (5C)“the 40 day period” means—(a) the period of 40 days beginning with the day on which the draft is laid before Parliament, or(b) if the draft is not laid before each House on the same day, the period of 40 days beginning with the later of the days on which it is laid before Parliament.(5E) For the purposes of subsection (5D) no account is to be taken of any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.”
Lord Ashton of Hyde
“(8A) In disclosing information under subsection (1), the Board must have regard to the following codes of practice issued by the Information Commissioner under section 51(3) of the Data Protection Act 1998, so far as they apply to the information in question—(a) any code which makes provision about the identification and reduction of the risks to privacy of a proposal to disclose information;(b) any code which makes provision about the information to be provided to data subjects (within the meaning of that Act) about the use to be made of information collected from them.(8B) The duty in subsection (8A) to have regard to a code of practice does not affect any other requirement for the Board to have regard to a code of practice under the Data Protection Act 1998 in disclosing the information.”
Lord Foster of Bath
Lord Foster of Bath (LD)
Wow, my Lords, what a tour de force.
Some time ago, we were debating the last string of amendments, during which the Minister sought to achieve the impossible and, according to the noble Lord, Lord Whitty, almost succeeded. In moving Amendment 29A, which is in my name and that of my noble friend Lord Clement-Jones, I am going to ask the Minister not to achieve the impossible, but merely to give a very clear statement to the House at the end of the debate, with which I hope we will then be satisfied, so that we can move on.
In Clause 80 at the moment, the Government seek to change the regime for appeals from Ofcom decisions from an appeal on the merits to one which follows a judicial review standard. As the Minister is well aware, the move is opposed by the vast majority of the telecoms industry, including the most significant investors in telecoms infrastructure. It is also opposed by many smaller players, by new entrants and by the industry bodies, the CBI and techUK.
Ofcom is an immensely powerful regulator which can make life-or-death decisions for these companies and their investors. The industry players feel that it is only fair that they should have the protection of due process. They believe that changing the appeals regime in the way proposed introduces significant regulatory uncertainty into the UK investment environment.
There is no evidence that has convinced us that Clause 80 is necessary, let alone desirable. Many claims have been made to support the need for a change that have transpired to be simply wrong. For example, it was initially claimed that it would bring Ofcom appeals into line with other sectors, but that point has now been dropped. The Minister made that very clear at col. 1737 in our deliberations in Committee on 8 February. It was also claimed that the new approach would be quicker, but evidence clearly shows that judicial reviews can take at least as long as current telecoms appeals. Many other claims were made which were effectively debunked in Committee by my noble friend Lord Clement-Jones.
Despite all that, in Committee, the Minister refused to accept an amendment which would have done no more than duplicate the wording of the EU directive, which implements the right to appeal under consideration. Rather strangely, the Minister said:
“I acknowledge that the amendment essentially replicates the wording of Article 4 of the EU framework directive, albeit it is not identical to it. While this would in one view remove the gold-plating of the existing standard in a technical sense, the Government consider that it would not lead to any substantive change in approach”.—[Official Report, 8/2/17; col 1739.]
In that statement, he seems to indicate a lack of faith in the judicial bodies responsible for hearing appeals, almost implying that they are not capable of applying the law properly. I say that because the only alternative interpretation of what he said is that the Government now intend to underimplement the framework directive and put in place a standard which does not meet the European requirements.
On the one hand, we are assured by the Government that the words in Clause 80 will allow appeal bodies to take due account of the merits, but the noble and learned Lord, Lord Keen, by saying that a substantive change of approach was required, implied something different. After all, the language of Clause 80 plainly refers only to judicial review. As traditionally understood, this would absolutely not encompass consideration of “merits”.
I argue that there is a real risk of ambiguity that could cause confusion when the first cases are taken under the provision. I hope that the noble and learned Lord will not only respond to the general point but give a clear statement about what exactly is intended by Clause 80 and whether the appeal bodies will be allowed to do what the framework directive says, which is to ensure that,
“the merits of the case are duly taken into account”.
Just before I finish, I ask the Minister to give one more clarification on an issue about which there is confusion. He will recall that during debate in Committee, my noble friend Lord Lester raised with him the point that judicial review in cases that do not relate to European directives do not have merits taken into account, whereas in relation to European directives they do. The debate was about proportionality. The Minister was very clear when he said,
“here we are dealing with judicial review in the context of the EU framework directive, which requires that the merits of the case are duly taken into account in any appeal”.—[Official Report, 8/2/17; col 1738.]
That is the sort of clear statement that I hope that he will repeat today. I hope that he can go further and explain what will happen post Brexit—although I assume that the entire EU directive will be transposed into UK law. Then, perhaps we will maintain the proportionality to which he referred and the merits will continue to be taken into account. I hope that he can clarify that for me, as well as give that clear statement—not an impossible task—and we can then quickly move on.
Lord Aberdare (CB)
My Lords, I should like to speak briefly in support of Amendment 29A. Removing merit-based appeals, as Clause 80 would do, seems both unfair to appellants in cases where Ofcom may make decisions that are materially wrong even if they reflect due process, as will inevitably occur on occasion, and undesirable, potentially harming consumers and deterring investment. This seems precisely the opposite of what is needed in such an important, strategic, high-value, fast-changing, innovative and growth-oriented sector.
I will not try to restate the arguments made in Committee, or those made by the noble Lord, Lord Foster. I just make two points in response to the helpful letter from the noble Lord, Lord Ashton, on 14 March. The letter describes the merits appeal as,
“akin to a retaking of the whole decision”,
but an appeal will normally be made only on specific grounds where an appellant believes there is a clear error. So the amendment would not require whole decisions to be re-examined, only those aspects specified in the notice of appeal.
Secondly, I accept that the judicial review process is,
“perfectly able to meet the current EU law requirement that the merits of the case are duly taken into account”
if the judges so decide in a given case. Rather than leaving it to judicial discretion, however, why not spell out in the Bill that they should be taken into account even after they are no longer banned by the EU framework directive, thereby future-proofing it for the post-Brexit world?
Ofcom decisions are of crucial importance for both consumers and telecom providers, and indeed for investors. As we have heard, the change to a judicial review standard is strongly opposed by the great majority of industry participants, from the major incumbents such as BT and Virgin to much smaller, newer market entrants, such as CityFibre, along with the CBI and techUK, the latter representing 900 tech sector companies, the majority of them SMEs.
I claim no specific expertise on judicial review, and I am no great fan of BT, but it is important that the relatively modest requirement set out in Amendment 29A should be incorporated into the Bill.
Lord Stevenson of Balmacara (Lab)
Briefly, the ground has been well covered by the noble Lords, Lord Foster and Lord Aberdare, and I have little to add. Three things strike me. I recalled in Committee that this was one of the areas where we had received the most external notifications and correspondence. It is still something that we need to take carefully. As has just been said, it is surprising that almost the entirety of the industry affected by the judgments of Ofcom have joined up to make the case.
Following on from both speeches, what is required is a statement from the noble and learned Lord. I am sure he is straining at the leash to give us all another compromise solution that will do the trick. He is shaking his head; maybe there are other things he has to cover as well. However, the situation seems to hinge on whether Article 4 of the EU directive applies sufficiently well after this Bill goes through, as before. Yet, as has been mentioned, there will be an opportunity, presumably in the great repeal Bill, to cover exactly this point. So what is the hurry?
Lord Keen of Elie
My Lords, I am obliged to noble Lords. As the noble Lord, Lord Stevenson, observed, there have been quite a lot of external communications on this. Indeed, I notice that the quotation that the noble Lord, Lord Foster, gave on my observations in Committee was identical to that quoted in a letter from Towerhouse LLP to the Department for Culture, Media and Sport on 17 March. Everybody seems to be singing from the same hymn book.
At present, Section 195 of the Communications Act 2003 requires that appeals against Ofcom’s regulatory decisions are decided by the Competition Appeal Tribunal on the merits. I shall come back to “on the merits” in more detail in a moment.
Appellants argue that appeals “on the merits” should allow for a bottom-up review of the decision, inviting the tribunal to substitute its own view for that of the regulator—in effect, two tiers doing the same thing. Appeals are therefore seen as an opportunity to rerun arguments that were considered and rejected by Ofcom in reaching its decision, or to put forward swathes of new evidence to persuade the tribunal to reach a different decision. Such appeals can lead to extremely lengthy and costly litigation, with extensive cross-examination of experts and witnesses. This depletes the regulator’s resources and means that other regulatory action by Ofcom is inevitably delayed, allowing for the potential for providers to frustrate the regulator with speculative or even spurious appeals, causing considerable uncertainty in the market and delay to other regulatory decisions.
The Government consider that appeals in the communications sector need to be rebalanced to ensure that Ofcom is held properly to account for its decisions, but also enabled to regulate in an effective and timely manner in the interests of citizens and consumers, as it is required to do. Clause 80 does just that; it requires that instead of merits appeals, the tribunal must decide appeals against Ofcom’s decisions by applying the same principles as would be applied by a court on a judicial review. Judicial review is generally a well-understood standard of review against which very significant decisions made by most public bodies are tested. Importantly, this will ensure that appeals are focused on identifying errors in Ofcom’s decisions, rather than simply seeking to persuade the tribunal to reach a different conclusion.
Those affected by Ofcom’s decisions will remain able to challenge them effectively. In Committee, the noble Lord, Lord Clement-Jones, said that judicial review was,
“solely concerned with whether the decision is unlawful in a technical sense—that is, was the correct process followed?”.—[Official Report, 8/2/17; col. 1734.]
I hope I can reassure him that this is simply not the case. First, appellants are able to argue that Ofcom’s decisions are based on material errors of fact or law. Material errors will therefore be identified and corrected in a judicial review process. Secondly, judicial review is a flexible standard of review, which allows the court to decide on the appropriate intensity of review according to the individual circumstances of the case. For example, there may be more intensive review processes in the context of matters pertaining to human rights. In particular, Ofcom has various statutory duties to ensure that its decisions are proportionate—in other words, that they go no further than is appropriate and necessary to attain a legitimate aim. In reviewing whether a decision is proportionate, the courts can carry out a closer and more rigorous review of the decision.
Of course, appeals in the communications sector are required to ensure that,
“the merits of the case are duly taken into account”,
as a matter of EU law under Article 4 of the EU framework directive. That will remain the case under a judicial review standard. I understand that there is uncertainty about the extent to which requirements in EU law may become a part of UK law after the United Kingdom leaves the EU, but that will be a matter for Parliament to determine when the great repeal Bill is introduced, as the noble Lord, Lord Stevenson, observed, and will be looked at in the context of the overall future regulatory framework for electronic communications, including the appeals regime, once the UK has left the EU.
A number of Ofcom’s regulatory decisions are already appealable only by way of judicial review, and the Court of Appeal confirmed as long ago as 2008 that judicial review is capable of taking account of the merits of the case, as required by EU law and, in particular, by Article 4 of the EU directive. Lord Justice Jacob in the Court of Appeal in the T-Mobile case in 2008 said that it,
“is inconceivable that Art. 4 in requiring an appeal which can duly take into account the merits, requires Member States to have in effect a fully equipped duplicate regulatory body waiting in the wings just for appeals. What is called for is an appeal body and no more, a body which can look into whether the regulator had got something material wrong”.
He also held that,
“there can be no doubt that just as JR was adapted because the Human Rights Act so required, so it can and must be adapted to comply with EU law and in particular Article 4 of the Directive”.
Indeed, in a more recent case involving judicial review and Article 4 in 2016, Mr Justice Cranston observed that, as the Competition Appeal Tribunal had said:
“Ofcom enjoys a margin of appreciation on issues which entail the exercise of its judgment”,
and that,
“the Tribunal should apply appropriate restraint”.
It is not a second-tier regulator, and the fact that it might have preferred to give different weight to various factors in the exercise of a regulatory judgment would not in itself provide a sufficient basis to set aside Ofcom’s determination. It should not interfere with Ofcom’s exercise of a judgment unless satisfied that it was wrong.
These are the relevant judicial review standards that will be applied in these circumstances. We do not want a complete retrial—if I can call it that—or a situation in which, at two levels, we begin at the beginning and end at the end with an entirely different opinion and approach to the evidence, and, perhaps, entirely new arguments being advanced evidentially in support of the merits of a case. That is a never-ending process and is not common to any other area of regulation by a public authority.
The judgments I have referred to have been considered in a number of subsequent cases and it is clear that a judicial review standard is consistent with the requirements of Article 4 of the framework directive. In these circumstances, it is not considered that there is any real need for this amendment. It is appropriate that we proceed with Clause 80 and I therefore invite the noble Lord to withdraw the amendment.
Lord Foster of Bath
My Lords, it is late but I would love to rebut some of the Minister’s remarks about rerunning arguments, swathes of evidence, frustrating delays, uncertainty and so on. If he looks at the Ministry of Justice’s own figures over the last 10 years, judicial review took on average between 9.3 and 13 months. I can compare that with many merits-based cases that have taken considerably less time under the current Ofcom regime. He talked about no other regulators operating in that way: I point out that the water, electricity, health, aviation and post sectors all currently face scrutiny under regimes that do require consideration of merits.
However, I do not want to go into all those details. I thank the Minister because he has, in effect, said what I wanted him to say. It was half put on the record on 8 February when he talked about the requirement for the merits of a case to be,
“duly taken into account in any appeal”.—[Official Report, 8/2/17; col. 1737.]
That has been repeated today. Disappointingly, the Minister said no more about what will happen post Brexit, other than that it is a matter we will consider in due course. Nevertheless, I thank the Minister for at least going some way to providing what I asked for and beg leave to withdraw.
Lord Inglewood
“The independence and funding of the BBC
(1) The Communications Act 2003 is amended as follows.(2) After section 198ZA (inserted by section 81 of this Act) insert—“198ZB The independence and funding of the BBC(1) The BBC is to be independent in all matters concerning the content of its output, the times and manner in which its output is supplied, and the governance and management of its affairs.(2) The Prime Minister, the Secretary of State, the BBC, OFCOM, and all other persons and bodies with responsibility for matters relating to the governance and establishment of the BBC must ensure that the BBC is able to operate independently from Ministers and other public authorities in the United Kingdom.(3) The licence fee is to be for the exclusive benefit of and use by the BBC to fund the performance of the BBC’s functions and public purposes.(4) Subject to sections 365 and 365A, the Secretary of State may not transfer to the BBC responsibility, including liability and costs, for any public expenditure.””
Lord Inglewood (Con)
My Lords, in the absence of two of the United Kingdom’s leading courtroom advocates, it is left to me to make the case for Amendment 31. The rationale for the amendment—and for a number of others to which I and other noble Lords put our name—is very simple. It is based on the fact that we have here, as your Lordships all know, a state-funded broadcaster: the BBC. It seems to us to follow that, in a democracy subject to the rule of law, its independence from government must be honoured and seen to be respected. At the same time, for very obvious reasons, they have got to have a relationship with each other, and it seems to us that the nature of that relationship is not properly defined.
With many others, not least the Lord Speaker in his previous incarnation, I have felt that establishing the BBC by royal charter, using the royal prerogative, is, in the reality of the world we live in, no guarantee of its independence. Indeed, it is rather the opposite, since we all know that, over the years, there has been a whole series of deals completed in smoke-filled rooms—not least in the case of money, where Governments of all persuasions have seemed to take Dick Turpin as their role model.
Lord Wood of Anfield (Lab)
I thank the noble Lord, Lord Inglewood. I think the principle of maintaining the independence of the BBC unites virtually everyone in this House. However, the question is: do we agree on what constitutes a challenge to that independence, and do we agree to provide extra protection to the BBC when the independence is under threat?
This amendment sets out concerns about three kinds of independence being compromised: editorial independence, operational independence and financial independence. As the debate in Committee showed, there are widespread concerns about independence of these three varieties being challenged in different ways. Therefore, I think the statements of intent and principles in the amendment of the noble Lord, Lord Inglewood, enjoy widespread support. I think most people would agree that they should govern the approach of the legislature and the Executive to the BBC. However, I wish to bring a couple of issues to the surface. Although the amendment raises these crucial principles, it also suggests the difficulty of using the power of the state to protect bodies outside the state against interference from the state.
I have two concerns in particular. First, there is a larger principle here of putting the independence of a major institution of British public life on a statutory footing. I am personally sympathetic towards that but it is a principle which deserves debate on its own terms, both as a principle and as applied to specific cases such as the NHS, which has been debated before, or the BBC. Secondly, what exactly constitutes independence—not simply politically but legally—needs clarification and precision. Imposing a duty on Ministers and other bodies to ensure that the BBC can operate independently opens the question of how that can be defined, both so that we can recognise it in the observance and the breach, and enforce it. Again, this is something that needs further debate and discussion.
The amendment touches on a cornerstone issue for the BBC and broadcasting policy and the ethos and integrity of public life more generally. However, it raises a broader issue which deserves a more lengthy proper scrutiny in future.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I am grateful to noble Lords for their remarks. In returning to this issue, I am sorry that the noble Lord, Lord Lester, is not here to speak to his amendment as we have debated this issue at length with him as part of the recent discussions on the BBC’s royal charter. We have debated it at Second Reading, in Committee and in other debates and Questions. The amendments that the noble Lord, Lord Lester, has tabled, and my noble friend Lord Inglewood has proposed, seek to constrain future royal charters for the BBC through statute. I should have said that I hope the noble Lord, Lord Lester, makes a speedy recovery and returns not to bring this subject up again but other subjects.
I note that, following the discussion we had in Committee, the noble Lord, Lord Lester, made a number of changes to his amendments proposed tonight in the areas of governance and funding. I appreciate the thought that he put into this and the dialogue that we have had on this so far. However, we still maintain that very serious risks are associated with the amendments and therefore we cannot support them.
As noble Lords will by now appreciate, the disagreement between the Government and those who tabled this amendment comes down, as the noble Lord, Lord Wood, said, to a matter of principle. Is the BBC best governed and protected through a charter or through a charter underpinned by legislation? I accept that there are instances where it is desirable and appropriate for a charter to be underpinned in statute but it is the Government’s view that this does not apply to the BBC.
Noble Lords may be interested to know that this is a discussion as old as the BBC itself—indeed, it is almost exactly 10 years older than the noble Lord, Lord Lester. When the then Postmaster-General announced in July 1926 that the BBC would be established through its first royal charter, he remarked that the new corporation would derive its authority from royal charter rather than from statute to make it clear to the public that it was not,
“a creature of Parliament and connected with political activity”.
In practical terms, noble Lords will appreciate that there is little difference between the effect of the BBC’s charter and its accompanying framework agreement and an Act of Parliament. Both are binding on the BBC and on Ministers. Article 3 of the current charter provides:
“The BBC must be independent in all matters concerning the fulfilment of its Mission and the promotion of the Public Purposes, particularly as regards editorial and creative decisions, the times and manner in which its output and services are supplied, and in the management of its affairs”.
That carries the same weight in a charter as it does in primary legislation, but in my view the latter option carries unacceptable risks to the independence of the BBC. From a practical point of view, amending an Act of Parliament in the event that a change is required—with all the party-political debate and pressure that that would entail and the uncertain legislative timetable—is not the right vehicle to make sure that the BBC can be governed effectively. Who can tell what political pressures will exist entirely unconnected to the detail of the BBC charter when the charter comes up for renewal?
Charter review remains the right vehicle. It affords an ample opportunity for debate and consultation but also allows for full consideration of all the connected and complex key issues, for effective decision-making and, crucially, for a negotiated agreement with the BBC.
Incidentally, I cannot resist mentioning that my noble friend Lord Inglewood referred to the Government as Dick Turpin in this case. I may be entirely unfamiliar with the story of Dick Turpin but I did not realise that he gave £3.7 billion annually to his victims.
Therefore, I submit that a statutory underpinning will leave the BBC under constant threat of change and monitoring what the Parliament of the day sees as the national interest. I fear that fellow parliamentarians, some of whom may not have my noble friend’s pure motives, will find it an irresistible temptation to tweak here and there, and, even with the best of intentions, we cannot expect the BBC to operate effectively and plan for its future in such circumstances.
I believe that this should be a matter for the Government of the day to decide ahead of the next charter review. The charter model has stood the test of time since 1926—through economic depressions, world war and huge technological change—to achieve what has been praised throughout the passage of this Bill as the BBC we have today. Given your Lordships’ ongoing interest and informed views, I am confident that the Government of the day will be minded to consider this carefully. With that explanation, I hope my noble friend will be able to withdraw his amendment.
Lord Inglewood
My Lords, I am very grateful to my noble friend for his very full response to the remarks that have been made on this amendment. He went to the heart of it at the outset when he said that he was opposed to the suggestion in the amendment because it would constrain the royal charter in the future. But that is precisely the reason why we moved the amendment. The mechanism of the royal charter enables the Government, in practice, to have a huge and relatively unscrutinised and uncontrolled ability to adapt and adjust the framework for the relationship they have with the BBC to their own preferred ends.
As I listened to my noble friend, it occurred to me that it was about 25 years ago that I stood at the Dispatch Box at which he was standing a moment ago, discussing the same issues. It crossed my mind—ignoble though it may be to say it—that almost the same speech could have been given to me to deliver all those years ago.
It is perhaps a mistake to simply assume that because something gives the impression of having worked reasonably well for 70 years—it may or may not have—it will continue to work equally well in the years to come. I look around the Chamber this evening and see that some of us are perhaps not quite yet 70 years old but heading that way—and that some may even have passed it. I am afraid that it is the nature of the human condition that when you get to 70 years old, you may not be as fit, spry and sharp as you were in years gone by. So it is not good enough to say that because it has worked well in the past—and it has worked only moderately well—it therefore follows, as night follows day, that you can extrapolate that it will work well indefinitely.
However, I was encouraged by the concluding remarks of my noble friend. He said that he was confident that Governments in the future would seriously consider the point that was being made. I think that is important. On any measure, we have just started a BBC charter and there is a bit of time until the next one comes into effect. While I think that it would have been desirable to have placed in the Bill the statutory provisions that are contained in the amendment, not to do so may not be fatal to the underlying project. Certainly this is something we ought to think carefully about in the hours and days to come—not least the noble Lords, Lord Lester and Lord Pannick, who have not had the advantage of listening to the remarks of my noble friend. Against that background, I beg leave to withdraw the amendment.
Digital Economy Bill
Wednesday 29th March 2017
(7 years, 8 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 102-III(Further Rev) Further revised third marshalled list for Report (PDF, 183KB) - (27 Mar 2017)
17:22 - Division on Amendment 32A - Ayes: 268 / Noes: 201 - Amendment 32A agreed.
18:41 - Division on Amendment 33ZG - Ayes: 217 / Noes: 188 - Amendment 33ZG agreed.
19:33 - Division on Amendment 33ZLZA - Ayes: 180 / Noes: 157 - Amendment 33ZLZA agreed.
“BBC Licence Fee Commission
(1) The Secretary of State must, by regulations made by statutory instrument, set up an independent body (“the BBC Licence Fee Commission”).(2) It is to be the duty of the BBC Licence Fee Commission to make a recommendation to the Secretary of State regarding the level of licence fee required to fund the BBC for the purposes set out in the Royal Charter and Agreement in respect of the settlement from 1 April 2022, and for each successive settlement thereafter.”
Lord Best (CB)
My Lords, I shall speak also to Amendments 32B and 32C, which are also in the names of the noble Lords, Lord Inglewood and Lord Stevenson of Balmacara, and the noble Baroness, Lady Bonham-Carter of Yarnbury.
In Committee we discussed several amendments from different parts of the House which all aimed to secure an improved process for setting the BBC licence fee. Those amendments were a response to the universal condemnation of the way the licence fee was settled in 2010 and 2015. The problem has not been simply about the so-called “raids” on the BBC’s revenue to pay for other government priorities such as broadband rollout or free licences for the over-75s. Nor has the problem even been about the decisions reached, such as the seven-year freeze on the licence fee, which is now, thankfully, coming to an end. The problem is more fundamental. It is about the process itself.
This process has been variously described as “clandestine”, “behind locked doors”, “frantic”, “purely political” and “fixed over a weekend”. It gives the Secretary of State the power to impose a funding settlement on the BBC following secret talks and without any external checks and balances. No one believes that this is the best way to come to a considered, evidence-based, sensible decision on the vital question of a licence fee that millions of citizens will pay.
As the Culture, Media and Sport Committee in the other place, then chaired by John Whittingdale, MP, said:
“The 2010 settlement demonstrated that the BBC’s independence can be compromised by negotiations with the government of the day that lack transparency and public consultation”.
Your Lordships’ Select Committee on Communications, which I have the honour to chair, condemned the process in its well-received report for the BBC’s charter review, Reith not Revolution. Our report drew on the earlier work of the CMS Committee in the other place, which had concluded:
“No future licence fee negotiation must be conducted in the way of the 2010 settlement”.
However, the process remained unchanged and we noted, in respect of the 2015 settlement, that Rona Fairhead, the well-regarded chair of the BBC Trust, found it equally unsatisfactory. Indeed, I note that Ms Fairhead spoke in support of the amendments before us today in her speech at the Oxford Media Convention earlier this month.
So what form should a more transparent and informed process take? Amendments 32A, 32B and 32C bring together the earlier versions and provide the package of measures to achieve this. On a technical note, when the Minister responds, will he kindly indicate that he accepts that the amendments are in a linked group? That is, if the first goes to a vote, then, irrespective of the outcome of the vote, the next two amendments will be treated as consequential and will not be subject to further Divisions but will be accepted “in the voices”, as we say.
Amendment 32B proposes proper public consultation and debate by both Houses of Parliament. This sounds pretty uncontentious. However, we are told that, because the licence fee is regarded as a hypothecated tax, it cannot be subject to consultation: levels of tax, it is said, must be left to the Chancellor, who in this case delegates to the Secretary of State for Culture, Media and Sport. I note in passing that Chancellors can run into problems in setting taxes without prior consultation with interested parties—but, recent events aside, it is surely the case that when the licence fee is reset in 2020, the Secretary of State would be much helped by getting feedback from the wider public, as was the case with the helpful White Paper consultation on the charter itself. Certainly the organisation, Voice of the Listener and Viewer, which works in the interest of the public at large, favours this amendment. Whether a licence fee is a hypothecated tax or not, it seems sensible, when deciding on the tricky question of the licence fee, to know what those who will actually pay the fee think about it.
The other two amendments here, Amendments 32A and 32C, address the question of providing the Secretary of State with some clear, impartial and expert guidance. My committee proposed earlier that Ofcom should be given the responsibility to draw up a clear recommendation on the licence fee. The Secretary of State could reject it, but, if so, would be required to publish the reasons. In our Reith not Revolution report, the Communications Committee suggested that Ofcom should then reconsider the position and, if necessary, offer a second recommendation. After that, the Secretary of State’s decision would be final.
Several Members of your Lordships’ House, including the Minister, pointed to the weakness of asking Ofcom to take on this role. This excellent organisation already has a huge workload and will now be extending its regulatory duties in relation to the BBC. Moreover, the Minister pointed out that it is unusual—although, I would say, not unknown—for a regulator to express an opinion on the price to be paid by the consumer for the service being regulated. In response to these comments, the amendments before us do not impose another duty on Ofcom, but instead adopt the approach first mooted by the Opposition Benches for a new, independent body: a BBC licence fee commission.
This body would not decide on the licence fee—that task would remain squarely with the Secretary of State—but the Secretary of State would have to look carefully at a recommendation from the new commission and give clear reasons for rejecting it, if that was what the Secretary of State decided to do. The licence fee commission would be able to draw upon a comprehensive range of financial and professional expertise to provide the basis for sound judgment. It would consider carefully the costs involved for public service broadcasters in fulfilling their obligations—and, most particularly, for the BBC in fulfilling its own very special public service role. Drawing on this input would surely help the Government avoid accusations either of undermining the BBC by setting the licence fee too low or of failing to control wasteful spending by setting it too high.
Importantly, bringing these matters into the open, creating a proper, transparent process, would moderate the unfettered life-or-death authority of the Secretary of State over the BBC’s funding and therefore over its future. In doing so, the new process would reduce the chilling effect on the freedom of the BBC to act independently of government, which otherwise remains while the Secretary of State holds this sword of Damocles over the BBC’s board and management. The only argument I can see against the establishment of an independent new body with this single task is that it will cost more than if the Secretary of State simply relied on the Government’s own judgment. But the cost of a commission is surely insignificant when it is set against the several billions of pounds that the licence fee will raise over the years that follow this decision.
Indeed, I was heartened in our Committee debate by the Minister drawing attention to the commitment in the Government’s BBC White Paper last year to,
“consider taking independent advice at the next settlement”.—[Official Report, 8/2/17; col. 1757.]
The aim of these amendments is to put some flesh on the bones of that commitment. I hope therefore that the Minister will respond positively to the constructive proposals in these amendments, which are supported by a range of organisations, from the Voice of the Listener and Viewer to the National Union of Journalists, and clearly commend themselves to all sides of the House. I beg to move.
Lord Lester of Herne Hill (LD)
My Lords, I regret that my ill health prevented me from being present on Monday 20 March, when the noble Lord, Lord Inglewood, moved the amendment on the BBC’s independence and funding late that evening. I am grateful to him for doing so, and I have read the speech by the noble Lord, Lord Wood of Anfield, and the Minister’s reply. I agree with the critique of the noble Lord, Lord Best, but I will confine myself to Amendment 32E, included in this group. It is supported by the noble Lords, Lord Inglewood, Lord Pannick and Lord Alli, to whom I am grateful.
The noble Lord, Lord Ashton, accepted in his reply on 20 March that there are instances where it is desirable and appropriate for a charter to be underpinned by statute, but he said that the Government’s view is that that does not apply to the BBC. He also said, intriguingly, that in practical terms there is little difference between the effect of the BBC’s charter and accompanying framework agreement and an Act of Parliament because both are binding on the BBC and Ministers.
The modest purpose of Amendment 32E is to create a link between the BBC’s charter and the Bill. It requires the Secretary of State to ensure, in accordance with the BBC’s mission and purposes under the charter, that the BBC is funded so as to be able to function independently and effectively as a public service broadcaster. Unlike the amendment moved on 20 March by the noble Lord, Lord Inglewood, supported by the noble Lords, Lord Stevenson of Balmacara and Lord Pannick, and by me, Amendment 32E does not refer specifically to the licence fee. That is in the hope that being less prescriptive will be more acceptable to the Government. I see the Minister smile wanly, as he knows that I am an optimist.
Do the Government accept that they have the duty to ensure, in accordance with the BBC’s mission and purposes under the charter, that the Secretary of State must ensure that the BBC is funded so as to be able to function independently and effectively as a public service broadcaster? If not—if the answer is no—what do they accept as their duty in this respect? Remembering that on 20 March the Minister said that in practical terms there is not much difference between a charter and legislation, I ask this question irrespective of whether there is a charter or legislation. I repeat: do the Government accept that the Secretary of State has that obligation, whether under the charter or otherwise?
The amendments made to the Bill in this House will need to be considered by the House of Commons after it leaves here. I hope that at that stage, if not now—I would prefer now—the Government will respond positively with an amendment on the lines of Amendment 32E. I have in mind that by that time we will be coming near to the end of the Session, the Government will want the Bill to go through and that this will at the least be something that needs to be considered then, if not now.
I am grateful to the noble Lord, Lord Ashton, for having met me informally and suggesting that I might usefully meet the Culture Secretary. I would welcome that opportunity and would be grateful if the Minister could say whether that would be acceptable.
Lord Inglewood (Con)
I refer briefly to our previous debate when the House was considering the Bill, when I raised my concern about the independence of the BBC and its relationship with the Government of the day, because there must be a relationship and it is important that it is both transparent and rules-based. That is why I have added my name to a number of the amendments; I do not want to elaborate further than that to explain clearly why I have done so.
I also owe an apology to my noble friend, because on that occasion I referred to the Government as behaving like Dick Turpin in respect of the licence fee. He picked me up on that point and said he thought that it was very wrong because a lot of money was being given back, so I apologise for suggesting that; instead, I should have said Robin Hood.
Baroness Bonham-Carter of Yarnbury (LD)
I support the amendments. As I mentioned in Committee, I am a Member of the House of Lords Communications Committee, so ably chaired by the noble Lord, Lord Best, and I stand by our report, Reith not Revolution, although I accept the slight change in who should oversee the setting of the licence fee, as the noble Lord, Lord Best, mentioned.
The Minister referred more than once in Committee to the licence fee as a tax. As the noble Lord, Lord Best, said, it is a hypothecated tax, paid by the public to fund the BBC. As such, it is surely correct that in future there is clarity and public scrutiny and no more midnight raids, and that the licence fee is used to fund the BBC’s functions and public services, not those of the Government. These proposals would, rightly, leave an elected Government with the final say in determining the BBC’s revenue but would introduce an important element of accountability in the process, which is surely appropriate.
Lord Pannick (CB)
I have added my name to Amendment 32E from the noble Lord, Lord Lester, and I agree with all the speeches that have been made in this debate. The process for setting the licence fee is manifestly inadequate; it lacks transparency, fails to identify—far less promote—any coherent principle, and allows and indeed encourages a last-minute political fix. Does the Minister really think that this is a satisfactory means of promoting the independence and efficacy of the BBC?
Baroness Kidron (CB)
I am also a member of the Communications Committee. My noble friend Lord Best set out our position so well that I shall not repeat it, but I wanted to add one thing. I could not possibly exaggerate the feeling of those who came before us giving evidence that the BBC must not only be independent from the Government of the day but must be seen to be independent. That is really what these amendments are struggling to insist on—that it is truly seen by all parties as independent.
On a secondary point, while we did our review I was struck by the huge number of duties that the BBC was given, many of which were very right-minded, about regions and nations and the types of programming that it must do, as well as about training. Those are all things with a cost, and a subset of the amendments is the suggestion that somebody independent gets to look at the duties of the BBC and set them against the cost of doing those duties. Perhaps we will have more reasonable conversations about what those duties ultimately are when we understand what they cost.
Lord Maxton (Lab)
Can I just be marginally controversial? I accept the first amendment, which would establish a BBC licence fee commission, but the time has come when we have to look at the licence fee itself. We should remember that the licence fee was established way back in the days of Lord Reith—an awful man, but that is beside the point—based on the fact that you had one broadcasting unit in your house. The licence fee is for the house, not the individual, yet I stand here today with at least three devices in my pockets which allow me to view or listen to broadcasts by the BBC or, in fact, by any other organisation that cares to broadcast.
The time has really come when we must look at whether or not we have one licence fee for one household, which could include the very poorest single woman or man living alone in their house with one television or one radio to listen to. They pay exactly the same sum of money as another household with five people in it, all of whom have different devices. There are now four of us living in my household and each room has a television in it and a radio, we have radio in the cars, television on iPads and phones, radio on this, television on that—we have too many, maybe. But the same licence fee covers everything. It is the same licence fee for everybody, whatever—and I am not even talking about hotels or boarding houses or whatever else we can include with them. It is interesting to note that the Government themselves, when they looked at the licence fee, changed it to a live or nearly live licence fee. It is nearly live of course because if you watch television on your iPad, it is about 30 seconds behind, so it is not directly live. So this is the first thing that has to be said: it is time that this commission looked at the whole of the licence fee, not just the level of it.
Secondly, and lastly, this is a tax imposed upon everybody and we are entitled to know exactly how that money is spent by the BBC. I notice that an ex-director of the BBC is hoping to get into this debate —we know what his salary is and we know the salaries of every member of staff on the managerial side, but we do not know how much is paid to Mr John Humphrys, for instance, or to anybody else on the news side of it. I think that the BBC ought to be completely covered by the Freedom of Information Act, which is something that the commission could look at.
Lord Birt (CB)
My Lords, it is hard to improve on the excellent summary by the noble Lord, Lord Best, of the glaring inadequacies of the last two licence fee settlements—the infamous midnight raids. I would add only one thing: it is important to recognise that in neither instance was the motive of the Government to do down the BBC, rather it was simply unscrupulous pragmatism, switching responsibility to the BBC for paying for services that had previously been funded by government. In both instances, the Government did this because they did not want to take the political hit of taking something away—the ill-considered gift of a previous Government of free licences for the over-75s, might I say—nor did they want to take the financial hit of continuing to fund the services for which they were switching responsibility.
In both instances, the Government were completely oblivious to the consequences for the funding of the BBC and the knock-on consequences for every kind of service. This is government at its worst, frankly. We all understand how it happened, but it was ill considered and Britain deserves better. There needs to be a proper, considered process to set the licence fee which takes, as others have said, every kind of circumstance into account before the licence fee is set. I strongly support this amendment.
Viscount Colville of Culross (CB)
My Lords, my media interests can be found in the register. As many other noble Lords have said, it seems to me that the run-up to the next licence fee deal must be the time to take politics out of the corporation’s funding arrangements. This amendment is very welcome in creating a body that will do just that. The criticism of similar sorts of bodies is that they have been ignored by successive Ministers. However, the noble Lord, Lord Best, has dealt with this by recommending that the proposed commission should be considered by the Secretary of State, who should then explain his reasons if he is going to ignore it. That would provide a gold standard against which the public and politicians can measure any discussions and subsequent spin on the BBC’s funding settlement. I ask the Minister to consider the idea very favourably.
As regards Amendment 32E, I add my admiration for the tenacity of the noble Lord, Lord Lester, in trying to put the BBC on a more independent footing. In Committee, I spoke in favour of statutory underpinning for the BBC. As the noble Lord said, this amendment is a watered-down version of that discussion. I understand that it will not be put to a vote but I hope that it will stir the Government to start a debate to free the corporation from ministerial diktat. That debate must involve all the stakeholders. I hope that the result will guarantee the corporation’s future. Its position as one of the most effective public service broadcasters in the world has never been more important at a time when “fake news” threatens to suffocate the truth.
Lord Berkeley of Knighton (CB)
My Lords, in supporting my noble friend Lord Best, I point out that the reprehensible situation in which we found ourselves the last time that the licence fee was discussed discredited not only the Government but managed to discredit the BBC as it put the director-general in a very difficult position for which he received a great deal of criticism. Nobody came out of that process very well. We must be able to find a better system that is more transparent and gives the BBC the possibility to plan ahead, but it has to be one that is fair to all parties.
Viscount Waverley (CB)
My Lords, I observe only that if you wish to access the BBC on iPlayer, for example, when you live outside the United Kingdom, you are asked whether you have a television licence. If you do not, you cannot access it. That seems an opportunity for revenue for the BBC to consider in the future.
Lord Wood of Anfield (Lab)
My Lords, I express the support of these Benches for the amendments of the noble Lord, Lord Best. I also support the intention behind the amendment of the noble Lord, Lord Lester.
It sounds obvious that the process of negotiating a charter and the process of setting a licence fee should be separated so that the licence fee is set at a level to ensure the BBC has the resources to do what the charter asks of it. However, those of us who have had some involvement in the process in the past know that this is not quite how it works. The connection between the two processes is indirect and shrouded in political pressures. As a result, the process of setting the licence fee is far too little about matching the funding of the BBC to its functions in the charter, and far too much about balancing a range of other considerations: the politics around the licence fee rate, interests of other broadcasters, and the temptation to smuggle government policy on to the BBC’s books—midnight raids et cetera. Governments of all varieties—Labour, Conservative, whatever—like to play the game of pumping up the tasks that go into the charter and clamping down on the licence fee needed to fund it. The result of all this is bad not just for the BBC but for all parties concerned. It is a bad deal for the BBC because it faces increasingly intolerable pressures to deliver what is expected of it, and threats to its operational autonomy and independence. It is bad for the Government because of a growing suspicion of unwarranted political interference in the BBC, and it is bad for licence fee payers because the process of allocating funds to charter functions is surrounded in opaqueness and devoid of transparency.
Therefore, we support the amendments of the noble Lord, Lord Best. We think they are based on sound principles—the independence of the process, consultation with the public, transparency of the contents of the deal and requiring the Secretary of State to be accountable for turning his back on or challenging the express will that comes out of consultation. We think this is a way of restoring the functionality and transparency of the licence fee setting process, and ensuring that the BBC can be funded to do what we all expect the foremost public service broadcaster to do.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, we return to an issue that I know interests a great many noble Lords: the funding of the BBC. I take this opportunity to remind noble Lords of what the Government have already committed to do to increase the transparency of the process whereby the funding of the BBC is decided. The BBC’s new charter regularises, for the first time, the timing of the BBC’s next financial settlement, which will be in five years’ time. The BBC has certainty over its funding for the next five years, having agreed a settlement with the Government whereby the licence fee will rise with inflation each and every year for the next five years.
On the amendment in the name of the noble Lord, Lord Best—in answer to his question, I accept that Amendments 32B and 32C are, if not consequential, linked—I make clear to the House how grateful the Government are for the contribution of the noble Lord and of your Lordships’ Communications Committee, which he chairs, throughout the charter review. Indeed, the Government accepted most of the committee’s recommendations for the new charter, such as making the next charter for a period of 11 years and the scope of the mid-term review.
The charter states that, in determining the funding settlement, the Secretary of State must assess the level of funding required for the effective fulfilment of the BBC’s mission and promotion of its public purposes, consider an assessment of the BBC’s commercial income and activities, and consult the BBC. For its part, the BBC is required to provide information and assistance to the Secretary of State ahead of the next licence fee settlement to inform the Secretary of State’s determination of that settlement. It is therefore explicit that the BBC will be able to make its case and the Government of the day will have to consider that case.
However, the Government also stated in their White Paper, published last May, that they would consider taking independent advice at the next settlement should it be appropriate. While that will be a matter for the Government of the day, the sentiment behind it is right and sensible. In answer to the noble Lord, Lord Maxton, the licence fee itself may well be a question for the next charter renewal—in which I think I can say I will not be involved. Taking independent advice is an important factor, and I take this opportunity to set out what this may include. The Government may, for example, wish to seek independent advice to inform their assessment of the data the BBC will provide. They may commission experts to consider the BBC’s likely commercial income for the coming years; the effect of population growth on licence fee revenue; the impact of sector changes on BBC funding needs; and, in turn, the impact of BBC funding on the wider sector.
The noble Lord, Lord Best, suggests that there should be a BBC licence fee commission. This is a departure from his amendment in Committee, which sought to give Ofcom a similar power, and I appreciate the thought he and other noble Lords have given this. However, at the risk of repeating myself, the licence fee is a tax, and the Government do not seek advice in this way for any other type of taxation. On the question of the licence fee being a tax, I know that not all noble Lords like this designation. However, we rely on the definition provided by the European System of Accounts, which is the system of national accounts used by the European Union. I will spare your Lordships more detail on this, which I could give. I reiterate that taxation is a matter for the elected Government. Only the Government have oversight of the balance of taxes from different sources; rates of tax are set, taking into consideration a range of factors, including wider economic considerations and spending decisions. It would therefore not be possible for an independent body to have oversight of the interaction between this tax rate and other tax burdens that the same group face.
Next, on public consultation on the appropriate level of funding for the BBC, I have already made my reservations clear on this aspect of the noble Lord’s amendments in Committee. Funding a public service is not a straightforward topic for public consultation. The BBC’s funding needs are a complicated and technical issue, as we have seen at every licence fee settlement—
Lord Maxton
Can the Minister tell the House what other form of taxation—I accept his definition that the licence fee is a tax—is not covered by the Freedom of Information Act?
Lord Ashton of Hyde
I do not quite know what the noble Lord means by taxes being covered by the Freedom of Information Act, but the BBC, as a public authority, is covered by that Act.
Lord Maxton
With all respect to the Minister, the BBC is not covered entirely by the Freedom of Information Act. The managerial side of it is covered by the Act but the part that concerns putting out programmes is not.
Lord Ashton of Hyde
I take the noble Lord’s word for that because he knows more about it than I do.
Lord Inglewood
The Minister said that the Government did not consult on taxes in the way that has been suggested. I put it to my noble friend that there is not another hypothecated tax like this, so there is no precedent one way or another for this set of circumstances.
Lord Ashton of Hyde
The point that I made was that, when setting taxes, the Government have to take account of the overall revenue raising, and this is just one element of revenue raising. I agree that whether it is a hypothecated tax is another question, but the point is that it is a tax and the Government do not consult on taxes.
Perhaps I may continue. I was talking about public consultation. The BBC’s funding needs are complicated and technical, as we have seen with every licence fee settlement, and agreeing the overall package is a finely balanced act. The requirement to ask the BBC for information and seek external advice is a sensible way of ensuring that Ministers’ decisions are well informed.
Despite what the noble Lord, Lord Best, said about consultations, the recent charter review found that, although almost 75% of the public consider the BBC’s programming to be high-quality, just 20% said that they would like to see the licence fee rise even in line with inflation, thereby helping the BBC to maintain those high standards. At the same time, the BBC also needs to become more efficient from reducing layers of management and property costs.
Public consultation needs to be approached with due sensitivity. It is right that decisions that balance the funding needs of the BBC and pressures on family budgets are taken by Ministers, who are accountable for those decisions, and that they are not decisions strongly influenced by an unelected new body. In answer to the noble Lord, Lord Pannick, the Government’s view is that it should therefore remain for the elected Government of the day to decide how to approach reaching an appropriate level of BBC funding in a detailed and extensive negotiation with the BBC. Despite the difficulties associated with the last licence fee settlement, as I have said, it resulted in what the noble Lord, Lord Hall, has said is a strong deal for the BBC, giving it financial stability, and we can see that the licence fee will rise for the next five years.
The noble Lord, Lord Lester, has tabled an amendment to put a duty on the Secretary of State to ensure that the BBC is funded to function effectively and independently as a public service broadcaster. I am pleased to see the noble Lord in the Chamber today—it was unfortunate that he was not able to participate in last week’s debate on his previous amendment. Without repeating myself unduly, I remind noble Lords that the Government remain of the view that the BBC is best governed through a royal charter. A statutory underpinning, however limited initially, would leave the BBC under a constant threat of change from what parliamentarians of the day might see as the “national interest”. Where a change might be genuinely required, the uncertain legislative timetable, party-political debate and pressure could all militate against resolving the issue at hand in an efficient manner.
Lord Lester of Herne Hill
The Minister has not answered my question, which was, quite simply, whether this Government—not one in five years’ time—accept that the Secretary of State has a duty, whether under the charter or otherwise, to ensure that the BBC is so funded as to function independently and effectively as a public service broadcaster.
Lord Ashton of Hyde
I was aware of the noble Lord’s question and was just about to come to it. The BBC charter already provides that the Secretary of State, in determining the funding settlement, must assess the level of funding required for the effective fulfilment of the mission and public purposes.
Lord Lester of Herne Hill
What does that answer mean? The charter does not say what I have just asked the Minister. Is he saying that, in looking at the charter, the Government accept this obligation and that it is embodied in the charter? If so, I welcome that. However, I am not clear whether the Government accept this duty or not. My final question, which no doubt he will come to, is this: please can I come and see the Culture Secretary with him?
Lord Ashton of Hyde
I think I can answer that to the noble Lord’s satisfaction. Yes, I will certainly talk to the Secretary of State and ask that the noble Lord can come and see him—with or without me, depending on his choice.
I do not want to dwell on this too much, but when we talk about sufficient funding and what the Secretary of State has a duty to do, of course the Secretary of State has a duty to abide by the royal charter in the same way that the BBC, the new unitary board and Ofcom do. I said:
“The Secretary of State, in determining a funding settlement, must … assess the level of funding required for effective fulfilment of the Mission and promotion of the Public Purposes”—
which is what the charter says. I agree that the Secretary of State must do what the charter says. I hope that answers the noble Lord’s question.
I will go further. The noble Lord’s amendment talks about the independence of the BBC, but Article 3 of the BBC’s charter already states:
“The BBC must be independent in all matters concerning the fulfilment of its Mission and the promotion of the Public Purposes, particularly as regards editorial and creative decisions, the times and manner in which its output and services are supplied, and in the management of its affairs”.
The question of enshrining parts of the BBC’s royal charter in statute should be a matter for the Government of the day to decide ahead of the next charter review. Given noble Lords’ ongoing interest and informed views, I am confident that the Government of the day will be minded to consider this carefully.
In summary, the Government have already increased the transparency of the way in which the BBC’s funding settlements are agreed. We have given the BBC stability by regularising the settlement period, which is now removed from the election cycle. The BBC will be required to provide information to the Secretary of State on its funding needs, and the Government of the day will consider taking independent advice. The licence fee is a tax and the Government do not consult on taxes. The amendments could have unintentional consequences in constraining the ability of the Government—
Lord Pannick
I am puzzled by what the Minister has said, because he is saying two incompatible things. He is telling the House that the Government are going to take advice, but on the other hand he is telling the House that, because this is a tax, it is not possible for the Government to take advice.
Lord Ashton of Hyde
With respect, I did not say that. I said that the Government would not consult on taxes. Of course the Government can take advice. The Government take advice on taxes every day, whether they have asked for it or not.
Lord Birt
The Minister said a moment ago that the Minister—in this case, the Secretary of State—must do as the charter says. I remind him that the charter before last said explicitly that the licence fee may not be used to fund the World Service. After the famous “night raid”, where the BBC was required to fund the World Service from the licence fee, the Secretary of State simply went to the Privy Council and changed the charter. He manifestly did not do what the charter required.
Lord Ashton of Hyde
I do not completely follow the noble Lord. If the charter was changed, presumably the Secretary of State did follow the charter.
Lord Ashton of Hyde
I agree that a retrospective change in legislation of the charter is never a happy process—but, in a purely technical sense, if the charter was changed then it was being followed. But I take the noble Lord’s point about that—and we will move on.
I have summarised the way that the funding deal has been changed to increase stability for the BBC. In light of all my remarks, I hope that noble Lords will allow the BBC to get on with its job under the agreed royal charter and therefore that the noble Lord will withdraw his amendment.
Lord Best
My Lords, I am grateful to the 10 noble Lords who spoke in support of my amendment. The only moderating voice was from the noble Lord, Lord Maxton—but even that, I think, was with approval as well. I will not reiterate the arguments that everybody brought forward. I thank the Minister for his response and accept that most of the recommendations from your Lordships’ Select Committee on Communications were adopted by the Government, which we were pleased about, including the 11-year period for the charter. But there is only a five-year period for the funding of the BBC, and, although there is certainty for five years, this is not entirely new. We had certainty over the freeze in the BBC licence fee for seven years prior to that.
The Minister stressed that the Government will “consider taking advice” and “may consult experts” on the various aspects of this. I had hoped that the Minister might pull the rabbit out of the hat and that we might have something more to show for the debate tonight than we have. I understand that the Government do not consult on taxes—although, as the noble Lord, Lord Inglewood, said, this is a particularly obscure kind of tax. It is 100% hypothecated and we do not have many of those. The Minister mentioned that it was a complicated issue. That is why an expert commission could be so useful. Public consultation might well produce an answer that there would be reluctance to increase the licence fee, but there would be better understanding if these matters were all out in the open and transparent before the public came to that view.
Although I am grateful to the Minister for explaining the position as is, it is not the position that these amendments would establish in the Bill and I would like to test the opinion of the House.
Baroness Benjamin
“Provision of children’s programmes
After section 289 of the Communications Act 2003 insert—
“Provision of children’s programmes289A Provision of children’s programmes(1) OFCOM may, if they think fit, publish criteria to be applied in accordance with this section to the provision of children’s programmes.(2) Where criteria are published by OFCOM, the regulatory regime for every licensed public service channel includes the conditions that OFCOM consider appropriate for securing that the provision of children’s programmes meets the criteria.(3) Any condition imposed by virtue of this section—(a) must relate only to the provision of children’s programmes on the licensed public service channel concerned;(b) must take into account OFCOM’s assessment of the provision of children’s programmes on all related services.(4) “Related services” in relation to a Channel 3 service means—(a) that service,(b) all other Channel 3 services, and(c) all services within subsection (6) that appear to OFCOM to have a sufficient connection with any Channel 3 service.(5) “Related services” in relation to any other licensed public service channel means—(a) that channel, and (b) all services within subsection (6) that appear to OFCOM to have a sufficient connection with that channel.(6) A service is within this subsection if—(a) it is available for reception in the United Kingdom, and(b) it is provided without any consideration being required for its reception, disregarding any requirement to pay sums in accordance with regulations under section 365.(7) For the purposes of an assessment under subsection (3)(b) no account is to be taken of whether a programme is provided on a licensed public service channel or on another service.(8) Any condition imposed by virtue of this section must be the same for all regional Channel 3 services.(9) Any criteria published under this section must be published by OFCOM in a statement setting out the criteria and how they propose to apply them.(10) OFCOM may from time to time review and revise or withdraw the criteria by publishing a further statement.(11) Where OFCOM revise or withdraw criteria, they must take any steps they consider necessary in consequence in relation to conditions imposed by virtue of this section.(12) OFCOM must—(a) carry out a public consultation for the purposes of any review under subsection (10);(b) where there are no published criteria for the time being, carry out a public consultation before publishing criteria under this section.(13) In this section “children’s programme” means a programme made—(a) for a television programme service or for an on-demand programme service, and(b) for viewing primarily by persons under the age of sixteen.””
Baroness Benjamin (LD)
My Lords, I declare an interest as per the register as I rise to speak to my Amendment 33ZZA, which is also in the names of the noble Lords, Lord Ashton and Lord Collins of Highbury, and my noble friend Lady Bonham-Carter.
This is an amendment to secure and protect the future of quality children’s television. It is a safeguarding measure for years to come, which makes me so happy, as it is a legacy. I moved a similar amendment in Committee and since then, I have spent considerable time talking to the Government, the DCMS, broadcasters —including ITV and Channel 4—Ofcom and many noble Lords across this House. I am very grateful for the support that I have received in drawing attention to this vital issue, an issue which I have been highlighting for several years. I want especially to thank the Producers Alliance for Cinema and Television, or PACT, and the Save Kids’ Content campaign for the enormous pressure that they have applied in this important matter.
I am also grateful for the support of the Government, the Secretary of State, the Minister and the Bill team in producing and agreeing today’s amendment. I thank them for recognising the importance of the amendment and for realising that it was an issue that needed to be dealt with at this point. They should be congratulated on having the vision to do so, because this is a moment of great importance for the future of the children’s production industry and of quality British content for our children and our grandchildren. This amendment has the potential to revitalise the production sector and increase the amount of children’s content which can be exported globally, which Britain has been known for over the years.
As I have said in this House many times, children’s programming is in serious decline. Yes, some new platforms are coming to the marketplace and investing, but spending on the production of new British children’s programming has declined by almost half since 2003, with spending by the commercial public service broadcasters falling by a staggering 93%. Quite shockingly, less than 1% of television hours available for our children are new, first-run British programmes; the rest are imports and repeats. It is our responsibility to make sure that this does not continue. Our children and our grandchildren are entitled to the provision of quality programming that was there for us. In many ways, that is even more crucial for children today, as television has the power to educate and inspire them for the future. As I always say, childhood lasts a lifetime. Instead of driving children towards watching unsuitable and inappropriate adult content, we need to ensure that appropriate content is available for them to identify with and to help shape their development and their imaginations.
Ofcom has recognised that there is a problem. In its last review of PSBs, it was clear that there is a “substantive risk” that PSB requirements for children’s programming in this area will not be met. Despite this risk, Ofcom has repeatedly reported that it does not have the legislative tools to make changes.
We must recognise that nothing other than legislative change will lead public service broadcasters to commission more new British children’s content. Therefore, we need to give Ofcom the tools to require new children’s content to be commissioned and produced by public service broadcasters.
However, I have always understood and recognised throughout this process that PSBs may well have concerns about a legislative change. Through my many discussions, I also became aware that broadcasters had some reservations about the amendment that I tabled in Committee. I have also always been clear that my intention is not to place a huge additional burden on broadcasters. I know that there are pressures on PSBs for a variety of reasons and I understand that it is only by collaboration between all parts of the industry that we will achieve the change necessary to ensure that the level of new British children’s content does not reduce further and indeed increases.
It is in the spirit of collaboration that my amendment today has been arrived at. It will give Ofcom the power to issue criteria addressing the provision of children’s programming by broadcasters. It also allows Ofcom to take into account content broadcast on a main channel, a subsidiary channel or online. It gives flexibility. I do not want to dictate how, where or what programming children should watch. All I want, passionately, is to ensure that there is a range of quality British content available on all platforms that reflects our country’s diversity and the diversity of our children so that they grow up happy and contented, knowing they belong to a great nation.
Baroness Howe of Idlicote (CB)
My Lords, briefly, I very much support this amendment and above all salute the work of the noble Baroness, Lady Benjamin, for all she has done over many years in making the case for the production of more and very much better-quality television programmes for children, whether by the BBC or other programme-makers. It is very good to see the name of the Minister on this amendment and I hope I am not wrong that as a result the Government fully support it. I hope we shall hear that soon.
Baroness Jones of Whitchurch (Lab)
My Lords, I congratulate the noble Baroness, Lady Benjamin, on her continuous hard work on this issue. We also added a name to the amendment in Committee and here today. I very much share in her delight and happiness that progress has finally been made. As the noble Baroness said, this is effectively an enabling amendment for Ofcom. I hope that it will not just sit on the statute book; we look now for action to follow it through. As the noble Baroness said, there is already sufficient evidence, which Ofcom has, of the huge decline and reduction in children’s TV. There is no need for a pause while Ofcom finds evidence as to whether it needs to act. The evidence is already there. I hope that when Ofcom comes to consider the new powers we are providing, it will feel able to act straightaway. I hope that the Minister can reassure us that she will encourage Ofcom to do just that, and that this will not just sit there as an enabling power but is something the Government will encourage Ofcom to act upon. Again, I look forward to the Minister’s response.
Baroness Buscombe (Con)
My Lords, Amendments 33ZZA and 35A concern the important issue of children’s television, which I know this House, rightly, feels strongly about. I thank the noble Baroness, Lady Benjamin, in particular for her passion and enthusiasm—and a great deal of energy—on this subject. I also thank the noble Baroness, Lady Howe of Idlicote, who is always so strong on these issues and has been for many years.
The provision of a range of high-quality children’s programming must be a priority for the UK’s public service broadcasting system. The BBC remains a particularly strong provider of UK-originated children’s content. The new BBC charter requires the BBC to support learning for children, and the framework agreement makes it clear that Ofcom must have particular regard to setting requirements for key public service genres such as children’s programming.
However, the commercial public service broadcasters —ITV, Channel 4 and Channel 5—have collectively been doing less and less since the Labour Government’s removal of children’s quotas in the Communications Act 2003. By 2014 the BBC accounted for 97% of total spending by PSB channels on children’s programmes. Clearly, this does not suggest a healthy market.
The Government share the view that this problem should be tackled, and we are committed to supporting the provision and plurality of children’s content to meet young audiences’ needs. To do this, the Government have extended the tax relief for animation and high-end TV programmes to UK children’s programmes. We have also consulted on a pilot contestable fund for underserved public service content, with children’s content as a potential area of focus. The consultation closed in February and we will publish our response in due course.
The Government hope that with this government support, the problem that the noble Baroness has identified over the past weeks and months will be resolved. Furthermore, we support the proposal to give Ofcom the power to look at this issue and, as a backstop, to introduce quotas on the commercial PSBs if it deems it necessary. The noble Baroness’s Amendment 33ZZA gives Ofcom the power to look at the provision of children’s content and impose quotas only if it believes there is inadequate provision. But, crucially, it does this in a way that works with PSBs’ commercial realities, and younger audiences’ needs.
As many parents will know, children now consume content on an increasing range of platforms, not just on the traditional PSB channels. Indeed, Ofcom has found that children watch a quarter less broadcast TV than they did five years ago, and that more than a quarter of children watch free on-demand services in a typical week. As a result, in giving Ofcom the power to consider imposing children’s quotas on the main PSB channels via their broadcasting licences, the amendment requires Ofcom to consider the provision of content across a PSB’s free-to-view UK portfolio, not just on its main channel. This means that Ofcom should consider children’s programming on a PSB’s main channel and its other UK free-to-view channels equally when assessing whether a quota may be necessary. Ofcom will also be able to take into account content on PSBs’ on-demand players.
Indeed, while the BBC is rightly considered to be the market leader in children’s TV content, its output is shown on its dedicated children’s channels: CBBC and CBeebies. Therefore, while the amendment does not apply to the BBC, we think it is right that any assessment of children’s TV provision by the commercial public service broadcasters is likewise able to take into account the provision on not only the main channels but their wider services, reflecting the changing nature of TV consumption for our young people and changing TV market dynamics.
Crucially, Ofcom will also be able to consider whichever criteria it deems appropriate in coming to a view on the provision of children’s content. Those criteria will be drawn up, where Ofcom deems them necessary, following public consultation. For example, Ofcom may choose to set as one of its criteria that an appropriate level of new UK children’s programming is available across the PSBs and their related services. This would help drive UK investment and ensure that younger audiences see themselves reflected in the programming that they watch.
It is the policy intention that Amendment 33ZZA will also work with Section 3 of the Broadcasting Act 1990. Under that section, Ofcom must allow a PSB,
“a reasonable opportunity of making representations”,
about a proposed variation of its broadcasting licence. It is also the policy intention that the amendment requires Ofcom to set the same licence condition in each of the Channel 3 regional licences to ensure that the regime does not impose disproportionate burdens on ITV.
We will gladly support amendments that protect and enhance the UK’s public service broadcasting system. That commitment from the Government will echo through this evening’s debate, with support for the BBC and commitments on listed events and children’s television. Again, I thank the noble Baroness for her vital contributions on this subject. The Government will support her amendments.
The noble Baroness asked about timings and content. It is very important that we leave the timings up to Ofcom. The content criteria are also a matter for Ofcom, subject to consultation, as I think I have already made clear. I agree with the noble Baroness, Lady Jones, that we hope that this will not just sit on the statute book. We hope that Ofcom has heard the message loud and clear but the onus is on Ofcom to take this further.
I should also say that Amendment 35A provides for commencement so that the Government cannot block Ofcom from acting. On that basis, we are pleased to accept Amendment 33ZZA.
Baroness Benjamin
My Lords, it is moments such as this that demonstrate the importance of this House, with everyone working together for the good of the nation, in this case especially our children. I thank the Minister for her support for the amendment, and all noble Lords who have taken part in this debate—especially the noble Baroness, Lady Howe, who I greatly admire—and previous debates. In particular, I am extremely grateful to my noble friend Lady Bonham-Carter and the noble Lord, Lord Collins, for putting their names to the amendment. I also thank the noble Baroness, Lady Jones of Whitchurch, for her support both in Committee and today, and the noble Lord, Lord Stevenson of Balmacara, for his support to date.
As I mentioned in my opening speech, this is a crucial moment for the future of British children’s television. If used properly, the amendment has the potential to halt and steadily reverse the decline of the children’s production sector. It has been a long journey of persuasion, perseverance and determination so I am thrilled that we have reached a consensus that it is vital for Ofcom to urgently use the powers that the amendment will give it to deliver real change and to focus on the production of imaginative and creative new British programming for our children and grandchildren. I and others will be keeping a very close eye on the use of these powers to make sure that real change is achieved. I thank the Minister for her assurance on this point.
I feel so optimistic about the future of our children’s programming industry, which I am so passionate about, and I look forward to seeing this industry deliver even more of the world-renowned programming it is capable of. I believe that if there are good programmes on PSBs, children will watch loyally and will not be driven away to other places. Content matters for children and they will stay with a channel and watch it. I hope that all the broadcasters will take ownership of this gift to our children and embrace this new legislation graciously and wholeheartedly. So it is with a joyful heart and a huge smile that I beg to move.
Lord Clement-Jones
Lord Clement-Jones (LD)
My Lords, I apologise on behalf of the noble Lord, Lord Gordon of Strathblane, and my noble friend Lord Foster of Bath. Neither noble Lord can make today’s proceedings, so I have been asked, as their inadequate first reserve, to move this amendment and to speak to the other amendments in this group.
The Minister will no doubt remember that in Committee the noble Lord, Lord Gordon, and I raised certain issues surrounding the amendment moved by the noble Lord, Lord Borwick, which is now incorporated in the Bill as Clause 85. We supported it, and that broadly is the position of the broadcasters. However, they have certain issues surrounding the wording of the clause. I am delighted to see that the Government have taken on board the Delegated Powers and Regulatory Reform Committee’s points and that the government amendments incorporate a number of changes to the clause to reflect what the DPRRC had to say.
The broadcasters wish certain other aspects to be aired today. It is a question of the difference between delivering access services on on-demand services and delivering them on linear. Virtually all programmes are now subtitled on the main linear channels. Our public service broadcasters more than exceed the targets set for access services by Ofcom. Linear broadcasting is a mature market with standardised technologies, and it is relatively straightforward and economic to provide access services, but there is a big contrast with delivering services on demand. On-demand is much more challenging and fragmented, and there is a huge array of different online platforms. Each platform has its own technological underpinning, and there is no common standard for delivering access services. Accordingly, if this clause is interpreted too broadly there is a danger that a one-size-fits-all approach which takes no account of the revenue, size, usage or length of establishment of a service or online platform would result in fewer online services for everyone because of the disproportionate cost of requiring access services to be rolled out across every platform, regardless of how practical or economic that is.
With the current wording, it is possible for the Government to put in place somewhat disproportionate and onerous regulations that could inhibit the development of services for everyone. The broadcasters are calling for an amendment to the wording to reflect the need for proportionate and progressive measures that take account of factors such as revenue, size, usage and length of establishment in setting obligations on content services or online platforms. I hope that the Minister will agree, whether at this stage or at a subsequent stage, to review the wording so that a degree of proportionality is introduced into this clause. I beg to move.
Lord Borwick (Con)
My Lords, I thank the noble Lord, Lord Clement-Jones, for his comments on the amendment I moved in Committee. The trouble with his amendment is in the meaning of “proportionate”. There will be quite a lot of consultation between all the parties about what will be required before the regulations are finally drafted, and adding “proportionate” would effectively add an extra layer of consultation in which people argue with each other about exactly what “proportionate” means in these circumstances. It would be much better if the clause was left as it is to make certain that, whatever the rules are, they are clear, having been discussed in the consultation. I must express my thanks to the originator of this clause as it came from a Labour Party proposal in another place, but we all support the right idea here, and I am sure it will help deaf people and blind people understand what is on television. This amendment, although no doubt worthy, is not necessary and will in practice get in the way of getting this change into law.
Lord Wood of Anfield
My Lords, I shall focus briefly on the principles shared by the amendments proposed by noble Lords and those suggested by the Government. They take a long-standing commitment to ensure accessibility and update the relevant rules for an age in which on-demand services are becoming more essential to viewers. It is an approach we can all endorse, and I am sure the Government will be keen to take these principles forward when it comes to other issues, such as ensuring PSB prominence in on-demand services, which is in the next group.
I turn to another element of this group, which is the Government’s concession on listed events, Amendments 33ZH and 36. This is another example of taking a long-standing commitment to ensuring access and taking steps to update regulations to respond to changing viewing habits. We are delighted that the Government have responded to the concerns we and other noble Lords raised in Committee. Lowering the threshold for qualification for screening listed events below the current standard is crucial if we are to prevent the development of the extraordinary situation forecast by all PSB broadcasters of not one channel qualifying on existing criteria in the listed events regime by the end of this Parliament. Giving the Secretary of State power to respond seems a very sensible move to allow the Government to respond in the light of the evidence in a quick and minimally disruptive way.
Without being churlish, I hope the Government will bear two considerations in mind as they think further about how to develop the new criteria for the existing regime. First, we need to bear in mind that the threshold must be lowered enough to enable channels to continue to qualify, but not so much as to threaten the idea that events that bring the country together should be available to as wide an audience as possible. Secondly, I hope the Government remain open to the idea discussed extensively in Committee that alternative measures of reach and access may be appropriate in an age in which increasing numbers of viewers access programmes online. Having an open mind about regulatory flexibility in this area, as in other areas, is crucial to achieve the purpose of the listed events rules, which are supported by us all.
Lord Addington (LD)
I shall be very brief. I thank the Government about listed events. They are important for sporting culture and sharing sport. Taking that on board and making sure that we maintain the link in a manageable way is important, not only because it builds a sense of community but because it is an important link with the casual observer of sport, which helps in encouraging people to take part, mass participation and all those things. It is an important link in that chain, and if we lose it, we will damage part of our sporting culture.
Lord Borwick
My Lords, I apologise to the House: I should have declared my interest as a long-standing trustee of the Ewing Foundation for deaf children, which is relevant to my speech earlier.
Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in the debate. Government Amendments 33ZD and 33ZF relate to the Delegated Powers and Regulatory Reform Committee recommendations on the accessibility of on-demand programme services for people with disabilities. I once again thank the DPRRC for its recommendations. We have accepted the recommendation that the affirmative resolution procedure should be used instead of the negative procedure for regulations made under the clause, and Amendment 33ZF actions this.
With regard to the second recommendation, we have shared with the DPRRC the rationale for not identifying the appropriate regulatory authority in the Bill. We hope it is reassured by the explanation I have provided that we are following the existing drafting in Part 4A of the Communications Act 2003, which uses the phrase “appropriate regulatory authority”, and defines that as Ofcom unless it has appointed another body as regulator. Ofcom has not currently appointed any such body and accordingly is the regulator of on-demand programme services in the UK. I am happy to clarify that to the House.
On the third recommendation, that the Government consult with on-demand programme services providers and other stakeholders, Amendment 33ZD places a duty on the appropriate regulatory authority—Ofcom—to undertake this consultation and then report to the Secretary of State on the outcome, along with any other matters it thinks the Secretary of State should take into account in drafting the regulations.
At both Second Reading and in Committee we heard concerns from a number of noble Lords that the listed events regime is under threat. I am pleased that noble Lords have welcomed government Amendment 33ZH, which will confer a power on the Secretary of State to amend the qualifying conditions for television programme services to which rights to broadcast listed events are made available. In the UK, the listed events regime operates to protect free-to-view access to the coverage of sports events with a national significance. Sport is a key element in our national identity, part of the glue that binds us together as a society, and we want to ensure that as far as possible everyone across the country is able to watch live broadcasts of the sporting events that matter most to society.
To be clear, the listed events regime is not under any immediate threat. However, modern viewing trends mean that the requirement for a television service to be received by at least 95% of the population may, depending on how this is interpreted in the future, become increasingly hard to meet—the noble Lord, Lord Wood, just alluded to this in his comments. With everyone’s changing viewing habits, this has to remain under review and as flexible as possible. As more people, especially the young—and the noble Lord, Lord Maxton, of course—watch television content on phones and other streaming services, this could put the regime at risk in the future.
We want to safeguard against this and ensure the ongoing viability of the listed events regime. This clause will confer a power on the Secretary of State to ensure that, as media consumption habits change, the Government’s policy objective to ensure that listed events are widely available on free-to-view services continues to be met. The clause confers a power on the Secretary of State to amend the percentage of the population by which a channel must be received in order to qualify. I hope that answers the questions of a number of noble Lords on this. It will enable the Secretary of State to lower the relevant percentage to ensure that there continues to be a list of channels which meet the qualifying conditions. It also provides that any amendment to the percentage does not affect the validity of any existing contract to broadcast a listed event. Any amendment is not intended to invalidate existing agreements to broadcast listed events, which can last for a number of years. There is no intention at this stage to review or revise the list of events itself.
I thank the noble Lord, Lord Gordon of Strathblane, in his absence, for his amendments on the proportionality of accessibility requirements for on-demand programme services. I am sympathetic to their aims. I also assure noble Lords that the Secretary of State will already be considering the proportionality of the requirements that will be placed on such providers. The consultation that Ofcom is required to complete will provide the opportunity to ascertain the proportionality of the provision of accessible services and then report this back to the Secretary of State, so it can be considered when imposing requirements on providers. Furthermore, the SI will contain a review clause on the burdens on business, which will allow a post-implementation analysis of the burdens imposed, to assess whether they are proportionate.
The Government recognise that a balance must be struck between the interests of on-demand services and the interests of those with disabilities that affect hearing and sight being able to enjoy as much content on demand as possible. Achieving this balance will be at the heart of Ofcom’s consultation. Service providers will be able to set out what they consider proportionate. I thank my noble friend Lord Borwick for his contribution to the effect that we should leave this part of the Bill alone. I also reassure the House that Ofcom has a good deal of experience now in the area of accessibility of services. It already publishes a code of practice for such services on linear channels and has a good record in ensuring requirements are ambitious yet not unduly burdensome.
I hope with that explanation that the noble Lord, Lord Clement-Jones, on behalf of the noble Lord, Lord Gordon, will kindly withdraw his amendment. I will move government Amendments 33ZD, 33ZF and 33ZH when the time comes.
Lord Clement-Jones
My Lords, I thank the Minister, first, for the introduction to her very welcome amendments. I join the noble Lord, Lord Wood, and my noble friend Lord Addington in welcoming in particular the new ability to adjust the listing requirements, because that builds in, as the noble Lord, Lord Wood, said, the flexibility for the future that is very much needed, and may be needed rather more quickly than many of us anticipate.
I particularly thank the Minister for her very careful reply to the amendments in the name of the noble Lord, Lord Gordon, on proportionality. She gave a very full answer to the amendments, particularly on how Ofcom will consult and in saying that balance will be at the heart of its consultation and that the SI will contain a review clause on burdens on business. I do not think one can say fairer than that and, in the circumstances, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“(3) The steps set out in subsections (4) to (6) must be taken before regulations are made under this section.(4) The Secretary of State must ask the appropriate regulatory authority to consult such persons as appear to the authority likely to be affected by regulations under this section, including—(a) providers of on-demand programme services, and(b) representatives of people with disabilities affecting their sight or hearing or both.(5) The appropriate regulatory authority must inform the Secretary of State of—(a) the outcome of the consultation, and(b) any other matters that they think should be taken into account by the Secretary of State for the purposes of the regulations.(6) Where OFCOM are not the appropriate regulatory authority, the Secretary of State must consult OFCOM.(7) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Lord Ashton of Hyde
“( ) In section 402(2)(a) (procedure for statutory instruments) after “411” insert “or regulations under section 368BC”.”
Lord Wood of Anfield
“Public sector broadcasting prominence
(1) The Communications Act 2003 is amended as follows.(2) In the title of section 232, at end insert “and “electronic programme guide””.(3) After section 232(5) insert—“(5A) In this section “electronic programme guide” means a service which consists of a—(a) linear electronic programme guide; or(b) qualifying connected electronic programme guide.”(4) In section 232(6) before “electronic” insert “linear”.(5) In section 232(6)(b) after “for” insert “finding, selecting or”.(6) After section 232(6) insert— “(7) In this section “qualifying connected electronic programme guide” means a “connected electronic programming guide” which is used by a significant number of its intended audiences as a means of receiving television programmes or TV-like content.(8) In this section “connected electronic programming guide” means a service which consists of—(a) the listing or promotion, or both the listing and the promotion, of some or all of the programmes included in any one or more programme services the providers of which are or include persons other than the provider of the guide; and(b) the listing or promotion, or both the listing and the promotion, of—(i) some or all of the programmes included in any one or more on-demand programme services, or(ii) some or all of the on-demand programme services, the providers of which are or include persons other than the provider of the guide; and(c) the facility for finding, selecting or obtaining access, in whole or in part, to the programme service or services and the on-demand programme service or services listed or promoted in the guide.(9) The Secretary of State may by order amend the definition of an electronic programme guide in this section.(10) Before making an order under subsection 9 the Secretary of State must consult OFCOM.”(7) In section 310(1) for “from time to time” substitute “on 1 December 2017 and at intervals of no more than three years thereafter”.(8) In section 310(2) omit “such degree of” and “as OFCOM consider appropriate”.(9) In section 310(4)(a) after “BBC” insert “, including on-demand programme services,”.(10) After section 310(4)(h) insert—“(i) any on-demand programme service provided by a public service broadcaster.(4A) A service is an on-demand programme service provided by a public service broadcaster for the purposes of subsection (4)(i) if it —(a) is provided by any of the following—(i) a person licensed under Part 1 of the 1990 Act to provide a Channel 3 service;(ii) the Channel 4 Corporation;(iii) a person licensed under Part 1 of the 1990 Act to provide Channel 5;(iv) the Welsh Authority; and(b) provides access to programmes broadcast on a licensed public service channel.”(11) In section 310(5)(a) after first “service” insert “, including on-demand programme services,”.(12) After section 310(5) insert—“(5A) In making any order under subsection (5) the Secretary of State must have regard to the desirability of investment in original productions.(5B) In this section “original productions” means programmes commissioned by or for the provider of a service for the purposes of subsection (5) with a view to their first showing on television in the United Kingdom on that service.”(13) After section 310(7)(a) insert—“(b) if the service is a public service channel dedicated to children, persons under the age of 16;”.(14) For section 310(8)substitute— “(8) In this section “electronic programme guide” means a service which consists of the programme service or services listed or promoted in the guide.”(15) In section 311(2) for “310” substitute “232(5A)”.”
Lord Wood of Anfield
My Lords, Amendment 33ZG has a simple purpose: to ensure that high-quality public service broadcasting content, paid for by licence fee payers, continues to be accessible and prominent to viewers as viewing habits change. PSB programming is not only a staple of cultural life in our country but one of the jewels of our world-leading creative industries. A crucial component of the regime surrounding PSB is the regulations to ensure that these programmes are widely available and easy to find. The current rules, established over a decade ago in a code of practice, ensure this by requiring that the main PSB channels—BBC1, BBC2, ITV1, Channel 4 and Channel 5—appear at the top of channel listings or electronic programme guides, EPGs, on all TV platforms. The code works well for traditional TV viewing, where it is watched in real time, but we live in a world in which viewing habits are rapidly changing and the platforms for providing programmes to viewers are multiplying and diversifying.
In the past decade, digital channels have proliferated, and viewing habits have moved on towards on-demand and online viewing. Three-quarters of adults now watch programmes through catch-up services, and about 16% of all programme watching is now time shifted rather than in real time. The problem is that in the face of this behavioural and technological change, it is becoming much harder to find the PSB content that viewers both like and pay for. On-demand players such as BBC iPlayer and All 4 are outside the scope of the prominence rules. New means for accessing these programmes apart from traditional channel listings, such as menus for catch-up and on-demand TV, are also not covered by the rules. In newer TV platforms, the prominence of PSB channels is being marginalised by new graphics and menus. On the new Sky box, Sky Q, you are greeted, when you turn your telly on, by a large box advertising top picks chosen by Sky, more than three-quarters of which is content broadcast by Sky channels.
What is the result of this failure of regulation surrounding PSB prominence to keep up with changing technological developments and viewer behaviour? It means that programmes such as Welsh and Gaelic language programmes are hidden in the digital weeds, often requiring many more than 10 clicks and a sophisticated knowledge of online platforms to reach. It means that the world-leading BBC children’s channels, CBeebies and CBBC, are now below 12 US channels in the channel listing of the leading pay-TV platform, Sky. It means that viewers are increasingly being led to programmes whose prominence is paid for by commercial competitors to PSB channels rather than to PSB content.
Yet viewers’ preference for PSB remains incredibly strong. Ten times more viewers want the TV guide at the top of their screen, in which PSB has preferred prominence, rather than the recommendations of the platform operator. More and more, viewers are not getting what they want.
There is widespread recognition that the rules need updating. In its 2015 PSB review, Ofcom concluded unambiguously:
“The current rules on schedule prominence for the PSBs were designed for an analogue broadcasting era. They need to be reformed to match changes in technology and ensure that public service content remains available and easy to find, in whatever way it is viewed”.
This House’s Communications Committee suggested extending the prominence rules to on-demand services and online menus. The TV licensing laws have already been updated to cover BBC on-demand services; the amendment simply demands that the same work be done for PSB prominence rules.
The amendment responds to the holes in the code in four ways: first, by adding PSB on-demand services to the list of services entitled to prominence; secondly, by extending the definition of an EPG beyond traditional channel listings to include connected and on-demand menus used by a significant number of consumers to access TV content. Note that the concept of “a significant number” is a robust one already in use under the 2003 Act, serving as a threshold test applying to Ofcom’s powers under the must-carry regime, so it has precedent, it is workable and means that it would apply to a few major platforms and not serve as an impediment to emerging innovators in the TV platform market.
Thirdly, it strengthens the requirement for prominence of PSB children’s channels specifically, so that parents and children can find the content they like and trust the most more easily, however they watch television. Fourthly, rather than seeking a legislative definition of prominence, it enables Ofcom to set prominence principles which the platforms would adapt as appropriate to their EPGs.
Some have argued that this proposal is unnecessary because the programmes and on-demand platforms that carry them prominently, such as BBC iPlayer, are thriving. This would be complacency of a high order, as well as ignoring the evidence of changes over time. Usage of iPlayer is indeed growing, but iPlayer’s market share is reducing: Netflix and YouTube are now the market leaders. Pressure on iPlayer and All 4 will increase in line with the amount that US companies are increasingly prepared to pay to support prominence for their commercial product on UK TV platforms. Similarly, children’s PSB programmes are indeed trusted and popular, but we know that platforms that display them prominently generate greater audiences than those, such as Sky, that do so less, so ensuring that the prominence rules cover those platforms is crucial to their sustainability.
What is at stake with the amendment is not an optional add-on to the regulatory regime around PSB, it is an updating of the prominence rules that is indispensable to the long-term sustainability of PSB in the face of changing technology. It is not just what consumers want, it is doing justice to the millions spent by licence fee payers on quality programming, to ensure that these programmes are not just made but watched.
Public service broadcasting cannot fulfil a public service if it is impossible to find or if it is crowded out by the sponsored content of wealthy and powerful commercial rivals. The amendment extends a principle that enjoys universal support for traditional TV viewing of the 2003 era, when the most recent Communications Act was written, to the more exciting, varied and complex world of TV viewing of 2017 and the years ahead. If we want PSB to flourish and remain at the centre of our national cultural life, rather than withering on the vine, we should support the amendment. I beg to move.
Baroness Bonham-Carter of Yarnbury
I support this important amendment. In Committee, the Minister rejected the need for change. He said,
“we have not seen compelling evidence of harm to PSBs to date”.—[Official Report, 8/2/17; col. 1783.]
“To date”: key words. What is needed is for them to be made up to date, to ensure that public service content will continue to be available and easy to find in whatever way it is viewed in a future-proofed way. The current rules on the prominence of PSBs have not kept pace with technological and market development. I shall be very brief because, as usual, the noble Lord, Lord Wood, has said all that I was going to say, and I do not want to be a parrot. The impact of PSB depends not just on producing high-quality, distinctive UK content but on providing easy access for people to consume it. It is still the case, as mentioned by the noble Viscount, Lord Colville, that the main and most trusted source of news is on TV. Given the rise of fake news, PSB content—impartial, well regulated, fact based—is more important than ever.
Prominence is one of the few sources of regulatory benefit to PSB providers, and we believe that in an increasingly complicated and fragmented digital world, its importance increases. As viewing habits change, reform is critical to preserve PSB in a digital age and sustain the creative powerhouse and global success that is UK broadcasting.
Viscount Colville of Culross
My Lords, I have added my name to the amendment because it is important to future-proof the prominence on the EPG of our public service broadcasters at a time, as the noble Lord, Lord Wood, said, of extraordinary change in the media.
In Committee, the Minister said that anybody could find the PSB digitally connected channels if they wanted to: the channels’ very success showed that they did not need any boost to their prominence. However, one of the aims of the amendment is to push back on BSkyB’s unique position in our media environment of being both a content provider and, via its satellite and broadcast services, a distributor. This means that it is in its interest to ensure that its content is more easily accessible than other companies’ content. As the noble Lord, Lord Wood, said, on many of the new Sky boxes, its content is made as prominent as possible, while making the PSB channels—in particular the BBC’s children’s channels—more difficult to find. After the great success of the amendment of the noble Baroness, Lady Benjamin, we should do everything we can to encourage access to PSB children’s channels.
The Minister said that children can easily find their way around the channel controller—we all know how adept children are with technology—but I hope that he is not suggesting that children are given free rein with the channel controller to access anything they want. It needs to be carefully controlled and, I thought, given top prominence.
It is also clear from research by BARB, the audience research company, that prominence—or lack of it—affects consumption of programs. A like-for-like comparison shows that CBeebies secures a lower target audience share on Sky, at 28%, where it is more difficult to find, than on Virgin, at 33%, where it is listed in the top three children’s channels.
I also understand that some noble Lords believe that an unintended consequence of the amendment will be to stop the prominence of the existing linear PSB channels: BBC1, BBC2, ITV and Channel 4. I assure noble Lords that this will not be the case. In subsection (3), the amendment confirms Ofcom’s power to review the main linear channels and extends it to the new connected, or internet, channels. In subsection (8), it further strengthens Ofcom’s power of review by omitting “such degree of” appropriate prominence. It simplifies and strengthens the duty on Ofcom to secure prominence, which will apply to both the main PSB channels on EPGs and the new PSB internet channels. It therefore gives Ofcom more rather than less scope to require prominence for all PSB services within the EPG.
Surely your Lordships’ House will want to ensure a balanced broadcasting environment with a wide range of content on offer. I ask the Minister why he would not want to allow Ofcom, our world-class media regulator, to review this issue.
Baroness Young of Old Scone (Lab)
My Lords, I declare an interest as a past deputy chairman of the BBC. Public service broadcasting has been vital to our national broadcasting ecosystem in terms of raising quality and sustaining the mixed economy that has made our public service broadcasting admired across the world and indeed a player across the world. The amendment is important in particular for children’s programmes, which sometimes lurk in the weeds, as I think my noble friend said. I do not think that some of these programmes lurk in the weeds at all; you have to scroll through vast quantities of channels that want to flog you jewellery or soft porn before you can get to some of them, on some of the platforms. It is interesting to see that both the BBC and the commercial public service broadcasters are of the same mind, as is Ofcom, and we owe it to them and to the public investment that the licence fee represents that they are given prominence on all platforms. I hope that the Government will seriously consider the amendment.
Lord Birt
My Lords, some time in the mid-1990s, I drove to west London to Sky’s warehouse-style offices to be given the first privileged sighting to an outsider of the then embryonic Sky guide and set-top box. I was enormously impressed. In simpler times, it was very innovative and very helpful to the television viewer. Some decades later, not only Sky’s but other guides appear frankly antiquated, and the whole EPG needs modernising very fundamentally. It is not of the digital age; it is hard to navigate and is miserably slow to search. You cannot personalise it, and the Channel 4 and ITV channels are not bundled together conveniently. I have tried very hard to remember where BBC1 HD is, but I have completely failed; I search for it endlessly and spend many wasteful minutes before I find it.
In an ideal world, we would have competing EPGs, and we would have contemporary innovation if we did. We need a much faster user interface than the clunky one that we have now. Plainly, it is no longer right to have EPG providers also being the main channel and service providers themselves. There is a conflict of interest; others have spoken of this. It is not right and at some point it should be ended. I favour a much more fundamental review of EPGs than is being discussed now—but, in this less than ideal world, we simply must protect the PSBs, and I support the amendment.
Lord Wigley (PC)
I shall not repeat the comments that I made in Committee on this matter. I thank the noble Lord, Lord Wood, for introducing the amendment, which I certainly support. Two areas have been touched on already. The first is very close to my heart—the position of S4C in Wales and the Gaelic channel in Scotland. It is enough of a fight to try to ensure that there is language promotion and continuation without the struggles of going through reams of channels before reaching them. I accept entirely that some channels, such as Virgin, give the viewer an option to create their own priorities, but many viewers will either not have the drive or sometimes even the ability to use that facility in the way that it should be used. It may interest noble Lords to know that more people watch the Welsh language news on S4C than watch “Newsnight” in Wales. The language is thriving, but it needs to be equally accessible to the prime channels that are available on a UK basis.
My second point is on children. As a grandfather with five young grandchildren, I was amazed at the speed with which they could navigate their way to where the channels they wanted were located. But in doing so, they went through a whole plethora of other channels, which I was very glad that they skipped over quickly. We need to be able to help parents who need to safeguard their children from matters that they are too young to watch. For both those reasons, I very much support the amendment.
Lord Ashton of Hyde
My Lords, public service broadcasting prominence on the EPG is an issue that has come up at every stage of the Bill in this House, and Amendment 33ZG does so for this stage. The Government recognise the high-quality programming of our PSBs and their importance for maintaining the thriving and healthy UK broadcasting sector. We also recognise the strength of a mixed broadcasting ecology that features commercial broadcasters as well as commercial and non-commercial PSBs. We are showing our support for them in two ways that we have already debated: first, in the government amendment on listed events and, secondly, in our support of the noble Baroness, Lady Benjamin, in respect of children’s television. Thirdly, although this is not in the Bill, we have announced that Channel 4 will not be privatised.
Our clear policy of supporting PSBs is why the Government gave considerable thought to the issue of the EPG prominence regime during the balance of payments consultation, the response to which was published last year, before this Bill reached this House. Our conclusion was that we had not seen compelling evidence of harm to PSBs to date and we decided not to extend the EPG prominence regime for PSBs to their on-demand services. This absolutely remains our view, and is supported by evidence, such as the success and continued growth in the popularity of the BBC iPlayer, which has no prominence at all and saw a record 304.2 million requests for TV programmes in January 2017—double the rate of five years ago. After the iPlayer, what are the most watched on-demand services in the UK? The answer is the ITV Hub and All 4, neither of which are currently subject to prominence requirements.
Additionally, PSB on-demand players already occupy the most prominent positions in the on-demand sections of major TV platforms such as Sky and Virgin. Why is that? Platforms make them prominent because they need to react to viewers’ preferences. It takes, for example, a mere four clicks to get to the iPlayer from Sky Q’s home page. As I stated during the last debate, when PSBs make excellent content, audiences will find it, whether it be catch-up or live content. A good example is children’s PSB channels, of which many noble Lords have spoken. CBeebies and CBBC are the most watched children’s channels by a considerable distance—which shows that there are no problems for audiences in finding these channels. The content is easily accessible on demand within the iPlayer itself.
Micromanagement of how audiences need to be guided through menus and sub-menus cannot be the answer when the technological landscape is shifting quickly. The fact is that platform operators respond to consumer feedback and needs in developing their products; therefore future developments in the EPG will be customer driven, not driven through legislative change. Further, it has been suggested by technology companies that, if this requirement was enforced, it would create a need for bespoke products in the UK. For example, smart TV manufacturers’ user interfaces are developed with a global market in mind, but a separate product would need to be developed for the UK market.
Rather perversely, the amendment goes far beyond the prominence which Parliament has afforded to linear PSB channels, because it would give prominence to the PSBs’ on-demand programme services, which include not only PSB content from commercial PSBs but also content originating from their non-PSB portfolio channels. We do not think that that is justifiable.
I confirm to noble Lords and to viewers who have found the BBC Parliament channel—the noble Viscount, Lord Colville, mentioned this, too—that, if this amendment is not agreed, the existing PSB regime will remain as it is today. People will still be able to switch on their ordinary TVs and find BBC1 and BBC2 at the top. But, if it is agreed by the House, it will remove Ofcom’s discretion to require the prominence it considers appropriate for the linear regime; it will micromanage Ofcom’s guidance; it will extend PSB privileges to non-PSB content; and it will affect worldwide manufacturers, many of whom operate in the UK, putting up prices for UK consumers—all against a background where iPlayer, ITV Hub and All 4 are already the most watched on-demand services. I therefore hope that the noble Lord will withdraw his amendment.
Lord Wood of Anfield
I thank all noble Lords for an excellent short debate; I will respond very briefly. I thank the Minister for his response but I am afraid that it has made me even more determined to push this amendment through, because his response seemed to be based on the premise that supporting prominence for traditional linear TV watching is a principle that the Government support more strongly than ever, but that somehow the principle falls into abeyance when viewing habits and technology change; and that, in the new future, there will be no need for further prominence rules because the choice of consumers will somehow magically replace the need for the current PSB protections in the prominence rules for linear TV.
I do not understand why the emphasis on prominence, which has been a cross-party principle for a long time, is suddenly thrown out of the window when on-demand and more sophisticated technologies develop. So I am afraid that I do not find the Minister’s response at all satisfactory—and nor do I think that the threat of losing Ofcom’s existing powers has any empirical basis whatever, by the way. So I would like to test the opinion of the House.
Lord Ashton of Hyde
“Televising events of national interestTelevising events of national interest: power to amend qualifying conditions
In section 98 of the Broadcasting Act 1996 (categories of service), after subsection (5) insert—
“(5A) The Secretary of State may, by regulations made by statutory instrument, amend the percentage figure specified for the time being in subsection (2)(b).(5B) An amendment made by regulations under this section does not affect—(a) the validity of any contract entered into before the regulations came into force, or(b) the exercise of any rights acquired under such a contract.(5C) Regulations under subsection (5A) may make transitional, transitory or saving provision.(5D) A statutory instrument containing regulations under subsection (5A) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Lord Ashton of Hyde
“Strategic priorities and provision of information
(1) After section 2 of the Communications Act 2003 insert—“Strategic priorities2A Statement of strategic priorities(1) The Secretary of State may designate a statement for the purposes of this section if the requirements set out in section 2C (consultation and parliamentary procedure) are satisfied. (2) The statement is a statement prepared by the Secretary of State that sets out strategic priorities of Her Majesty’s Government in the United Kingdom relating to—(a) telecommunications,(b) the management of the radio spectrum, and(c) postal services.(3) The statement may, among other things, set out particular outcomes identified with a view to achieving the strategic priorities.(4) This section does not restrict the Secretary of State’s powers under any other provision of this Act or any other enactment.(5) A statement designated under subsection (1) must be published in such manner as the Secretary of State considers appropriate.(6) A statement designated under subsection (1) may be amended (including by replacing the whole or a part of the statement with new content) by a subsequent statement designated under that subsection, and this section and sections 2B and 2C apply in relation to any such subsequent statement as in relation to the original statement.(7) Except as provided by subsection (8), no amendment may be made under subsection (6) within the period of 5 years beginning with the day on which a statement was most recently designated under subsection (1).(8) An earlier amendment may be made under subsection (6) if—(a) since that day—(i) a Parliamentary general election has taken place, or(ii) there has been a significant change in the policy of Her Majesty’s government affecting any matter mentioned in subsection (2)(a), (b) or (c), or(b) the Secretary of State considers that the statement, or any part of it, conflicts with any of OFCOM’s general duties (within the meaning of section 3).2B Duties of OFCOM in relation to strategic priorities(1) This section applies where a statement has been designated under section 2A(1).(2) OFCOM must have regard to the statement when carrying out—(a) their functions relating to telecommunications,(b) their functions under the enactments relating to the management of the radio spectrum, and(c) their functions relating to postal services.(3) OFCOM must within the period of 40 days beginning with the day on which the statement is designated, or such longer period as the Secretary of State may allow—(a) explain in writing what they propose to do in consequence of the statement, and(b) publish a copy of that explanation in such manner as OFCOM consider appropriate.(4) OFCOM must, as soon as practicable after the end of—(a) the period of 12 months beginning with the day on which the first statement is designated under section 2A(1), and(b) every subsequent period of 12 months,publish a review of what they have done during the period in question in consequence of the statement.2C Consultation and parliamentary procedure(1) This section sets out the requirements that must be satisfied in relation to a statement before the Secretary of State may designate it under section 2A. (2) The Secretary of State must consult the following on a draft of the statement—(a) OFCOM, and(b) such other persons as the Secretary of State considers appropriate.(3) The Secretary of State must allow OFCOM a period of at least 40 days to respond to any consultation under subsection (2)(a).(4) After that period has ended the Secretary of State—(a) must make any changes to the draft that appear to the Secretary of State to be necessary in view of responses to the consultation, and(b) must then lay the draft before Parliament.(5) The Secretary of State must then wait until the end of the 40-day period and may not designate the statement if, within that period, either House of Parliament resolves not to approve it.(6) “The 40-day period” is the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House on the same day, the later of the days on which it is laid).(7) When calculating the 40-day period, ignore any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.”(2) After section 24 of that Act insert—“24A Provision of information before publication(1) OFCOM must provide the Secretary of State, at least 24 hours before publication, with any information that they propose to publish.(2) If exceptional circumstances make it impracticable to provide the information to the Secretary of State 24 hours before publication it must instead be provided to the Secretary of State as long before publication as is practicable.(3) Subsections (1) and (2) have effect in any particular case subject to any agreement made between the Secretary of State and OFCOM in that case.(4) The Secretary of State may by regulations specify descriptions of information in relation to which the duty under subsection (1) does not apply.(5) Before making regulations under subsection (4), the Secretary of State must consult OFCOM.(6) Information provided to the Secretary of State under this section may not be disclosed by the Secretary of State during the protected period, except to another Minister of the Crown.(7) A Minister of the Crown to whom the information is disclosed under subsection (6) may not disclose the information during the protected period to any other person.(8) A Minister of the Crown may not make any representations to OFCOM during the protected period that specify or describe changes that the Minister considers should be made to information that has been provided under this section when it is published.(9) In this section—“the protected period”, in relation to information provided to the Secretary of State under this section, means the period beginning with the provision of the information and ending when either of the following occurs—(a) OFCOM publish the information;(b) OFCOM inform the Secretary of State that they consent to the disclosure of the information; “Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.24B Provision of information to assist in formulation of policy(1) OFCOM may provide the Secretary of State with any information that they consider may assist the Secretary of State in the formulation of policy.(2) Information with respect to a particular business that has been obtained in the exercise of a power conferred by—(a) this Act,(b) the 1990 Act,(c) the 1996 Act,(d) the Wireless Telegraphy Act 2006, or(e) Part 3 of the Postal Services Act 2011,is not, so long as the business continues to be carried on, to be provided to the Secretary of State under this section without the consent of the person for the time being carrying on that business.”(3) The duty under subsection (1) of section 24A of that Act does not have effect until the day on which regulations made under subsection (4) of that section first come into force.(4) In section 393(6) of that Act (general restrictions on disclosure of information), after paragraph (a) insert—“(za) prevents the disclosure of information under section 24A or 24B;”.(5) In section 111(7) of the Wireless Telegraphy Act 2006 (general restrictions on disclosure of information), after paragraph (a) insert—“(aa) prevents the disclosure of information under section 24A or 24B of that Act;”.(6) In section 56 of the Postal Services Act 2011 (general restrictions on disclosure of information), after subsection (6) insert—“(6A) Nothing in this section prevents the disclosure of information under section 24A or 24B of the Communications Act 2003.”
Lord Ashton of Hyde
My Lords, during the passage of this Bill there has been debate on the state of the UK’s fibre networks, the ability to switch communication provider, the quality of business connectivity and other matters vital to our economic future such as the new broadband universal service obligation. These issues rely on the Government’s ability to formulate and implement policies effectively.
Amendment 33ZJ creates a new power for the Secretary of State to set a strategy and policy statement relating to telecommunications, the management of radio spectrum and postal services to which Ofcom, as the regulator, will have regard when carrying out its statutory duties. Ofcom’s media and broadcasting functions are not included in this power, which recognises the importance of media independence from government. This measure will allow the Government to establish a clear policy direction to ensure greater coherence in an increasingly complex and interlinked environment. These changes also strengthen the already strong existing partnership between Ofcom and the Government. Introducing a strategy and policy statement for Ofcom’s sectors brings it in line with the other regulators, Ofwat and Ofgem, and fulfils the Government’s commitments to better establish the policy framework for regulators, as laid out in the Principles for Economic Regulation 2011.
This new clause also provides for Ofcom to disclose information to the Secretary of State at least 24 hours in advance of publication where appropriate, and improves Ofcom’s general information-sharing powers. The new clause provides restrictions on disclosure to other persons, and representations cannot be made to Ofcom specifying changes to be made to any information provided.
The Government’s ability to create and deliver effective policies is supported by Ofcom’s expertise and research. In the past, even when it would have been beneficial for Ofcom to provide information, and it wanted to, it has been restricted by its existing statutory framework. This new clause supports the partnership between government and regulator by enabling early access to certain publications where that would be appropriate, and improving Ofcom’s ability to share information where it deems it to be supportive of policy development.
This amendment therefore improves the policy-making process while also introducing greater transparency in the working relationship between government and Ofcom by giving clarity to the respective roles and responsibilities. This will ensure that policy decisions are taken by government—accountable to Parliament—and Ofcom, independently of government, undertakes the detailed application of regulation.
Should this amendment be agreed, existing Clause 9, which provides for a statement of strategic priorities relating exclusively to the management of spectrum, will no longer be necessary and the Government will table an amendment at Third Reading to remove it. I beg to move.
Lord Fox (LD)
My Lords, as someone who has proposed amendments that go some way in this direction, I welcome this move, which in some part meets what we propose elsewhere. I have one question around the wording:
“OFCOM must have regard to the statement when carrying out”,
its related functions. What exactly does that mean? Is that language replicated exactly for Ofwat and Ofgem? How should that regard be manifested by Ofcom?
Lord Stevenson of Balmacara (Lab)
My Lords, rather like the last speaker, I welcome this measure but am a bit nervous about it. The idea that the Government of the day should be able to set out their forward thinking in a way which is helpful to the regulatory functions is a good one. However, as other external viewers have sought to point out, it raises worries about whether the regulator is truly independent of government in that mode, and whether the Government might be accused of setting an agenda which would then be imposed through a well-respected regulator which everyone thinks is doing a good job in a way that might not have been the case had the process of primary legislation followed by regulations been the approach taken. I hope that when the Minister responds he will confirm that there is no intention for this measure to circumvent the clearly established arm’s-length relationships between the regulator and government. It would be helpful if he could do so.
In another Bill—I sometimes get confused, so I hope that I am discussing the right one—we talked about how the Secretary of State for Education has responsibilities in relation to the new body that is to be set up in higher education, the Office for Students. However, we think that it should be called the Office for Higher Education. In that Bill, the words “have regard to” the instructions given by the Minister are very much part of the way in which that system operates. However, that situation is different in the sense that the measure replaces an existing arrangement for a body which was not a regulator—HEFCE—and for which the only mechanism whereby higher education policy could be created was by letters of instruction. That usually takes the form of an annual letter to HEFCE which sets out the Government’s wishes for the future year, sometimes for several years ahead. I make that point simply because it would be helpful if the Minister could make it very clear that the model here is one of improving an arrangement which will be for the benefit of the exercise of the powers that already exist, and does not add new layers of bureaucracy or new powers, and that the intention is not to set an agenda or to curtail the independence of Ofcom, as I think the system would not work without it. Otherwise, I welcome what is proposed.
Lord Ashton of Hyde
My Lords, I thank both noble Lords for their qualified support; I hope that by the time I have finished, it will be unambiguous. I anticipate that from the noble Lord, Lord Fox, in particular, because of course these were the principles for economic regulation introduced by Vince Cable when he was Secretary of State. I can confirm to both noble Lords that there is nothing sinister here. Of course, when we talk about the fact that Ofcom must have regard to a strategic policy statement when carrying out its duties, it absolutely does not override any of Ofcom’s existing general duties. It will continue to take decisions independently of government.
To allay any fears, there are further safeguards in this. A prior consultation must be run on the content of the SPS, which must include Ofcom and then be subject to parliamentary oversight. The implementation of a strategic policy statement does not change Ofcom’s statutory duties at all—it is just one of a number of things that Ofcom has already taken into account when exercising its duties. I therefore hope that the safeguards and my assurance give some comfort to noble Lords.
Lord Ashton of Hyde
“Offence of breaching limits on ticket salesPower to create offence of breaching limits on internet and other ticket sales
(1) The Secretary of State may make regulations providing that it is an offence for a person in circumstances within subsection (2) to do an act within subsection (3). (2) Circumstances are within this subsection if each of the following applies—(a) tickets for a recreational, sporting or cultural event in the United Kingdom are offered for sale,(b) a purchase may be made wholly or partly by a process that the purchaser completes using an electronic communications network or an electronic communications service, and(c) the offer is subject to conditions that limit the number of tickets a purchaser may buy.(3) An act is within this subsection if it consists in using anything that enables or facilitates completion of any part of a process within subsection (2)(b) with intent to obtain tickets in excess of a limit imposed by conditions within subsection (2)(c).(4) The regulations may apply whether the offer is made, or anything is done to obtain tickets, in or outside the United Kingdom.(5) The regulations—(a) may be limited to particular circumstances within subsection (2), and to particular acts within subsection (3);(b) may provide for an offence to be subject to an exception or defence;(c) may make different provision for different areas.(6) The regulations must provide in England and Wales and Scotland for an offence to be triable only summarily.(7) The regulations may not provide for an offence to be punishable—(a) with imprisonment,(b) in Scotland, with a fine exceeding £50,000, or(c) in Northern Ireland, if tried summarily, with a fine exceeding the statutory maximum.(8) The power to make regulations under this section is exercisable by statutory instrument.(9) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(10) In this section “electronic communications network” and “electronic communications service” have the meaning given by section 32 of the Communications Act 2003.”
Lord Ashton of Hyde
My Lords, I am grateful to the noble Lord, Lord Stevenson, for adding his name to this government amendment.
For many years this House has rightly been concerned about the operation of the secondary ticketing market. In 2015, as well as placing new rules in the Consumer Rights Act, noble Lords acknowledged the complexity of online ticketing by requiring a review of consumer protection measures relating to online secondary ticketing. Professor Michael Waterson conducted that review, which was published last year, and two weeks ago the Government published their response, accepting his recommendations in full. The report was warmly welcomed by both Houses, by industry and by consumer representatives, so we should not rush to lightly dismiss the specific recommendations it makes.
Since the review was published, the Competition and Markets Authority has launched an enforcement investigation into suspected breaches of consumer protection law in the online secondary ticket market. The Government have also encouraged the event ticketing industry to set up a project group to take forward the review’s recommendations, and have facilitated the sector’s participation in the joint industry-government Cyber-security Information Sharing Partnership. In addition, we will ensure that resources are made available to National Trading Standards and Trading Standards Scotland to support the upcoming enforcement work on secondary ticketing. We are also working with industry to raise consumer understanding of the ticketing market.
Government Amendment 33ZL forms a key element of our response to the Waterson review, and is intended to address an issue within the ticketing market about which there is widespread support for further action, including from Professor Waterson. The amendment will provide the power for government to introduce a criminal offence to address the use of bots to purchase tickets for a recreational, sporting or cultural event in excess of the maximum specified. The intended offence will apply only to tickets for events in the UK, although it will cover activity to obtain tickets that occurs outside the UK. We believe that the amendment is needed to clarify the law and put beyond doubt the illegality of this practice and the need to report it.
Further, with the new offence on the statute book, the Government will work with industry to enforce it. An offence is only worth having if criminal acts are reported. We have industry groups in place that are now willing and able to take action in partnership with our law enforcement agencies. I hope that this amendment will find favour with the House, and I beg to move.
Lord Moynihan (Con)
My Lords, I will speak to Amendments 33ZLZA, 33ZLZB, and 33ZLZC, which stand in my name.
I immediately thank the Minister for responding to a long-running campaign on the question of bots. I will say nothing further on that except that I am looking forward to the secondary legislation. His and the Government’s decision to bring forward action against bots is important and necessary. These are the modern-day ticket touts which sweep the market by using software when the likes of noble Lords and their families are trying to obtain tickets to go to an event. That is unethical and should be illegal, and I welcome the Government’s action on that. We need to make sure that we have good secondary legislation, and we look forward to it coming before the House.
On Amendment 33ZLZC, I will simply say that the reason I tabled this amendment is that it is important to respond to what the Minister said about the lack of enforcement. One way of dealing with the lack of enforcement in this area is to give event organisers the right to enforce the Act through civil action in the courts. This has the benefit of reducing the resources call on the police and/or trading standards, and it should be welcomed. It has certainly been called for by governing bodies of sport and promoters so that they can take action—because it is not in their interest, either, for people to be turned away because they have bought through the secondary market tickets that are counterfeit or illegal. I am unlikely to press that amendment to a vote, but I will be interested to see what the Minister says in response, because it seems to be a helpful suggestion by the governing bodies of sport to respond to this heinous issue.
The most important amendment that I am speaking to is Amendment 33ZLZA, which is fairly straightforward and common sense. Ed Sheeran’s manager appeared before the DCMS Select Committee last week, in the absence of one of the four major secondary market platforms, viagogo, which just did not show. He made the clear and important point that neither Ed Sheeran nor any of the top artists, nor any of the major sports events, all of which are heavily in demand, want to see their tickets counterfeited and people turned away at the door.
We did work on the Consumer Rights Bill to make sure that you got a ticket number, a row number, and a seat number, and to make sure that there were clear terms of reference on the face of the ticket. That should have been achieved and should be deliverable. We fought for but failed to get the ticket number—at the time we got the seat number, the row number and the block. The tickets for Ed Sheeran at the front do not have a block, a seat number or a row, because they are for the standing areas at the front of the concert. But if you have come down a long way and have brought your family down for this one event, you may be turned away at the door because you have no way of checking as a consumer that a ticket is valid.
The only way you can do it is to make sure that there is a unique reference number, which was originally printed on the ticket but has to be on the secondary market platform. It is not an unreasonable request—it does not say that the Horsham Dramatic Society has to put a unique reference number on the ticket. It simply says that where there originally was one, and where Ed Sheeran’s management team wanted one to protect loyal fans of Ed Sheeran who turn up, they should have the ability either to go online or to phone up and say, “Does this reference number accurately relate to a proper ticket and not a counterfeit ticket?”.
A number of these mass, modern-day touts sweep the market and say, as they do online for Ed Sheeran, “Your seat number is between 1 and 20”, and therefore they think that they have answered the question about the seat number. But the one thing they do not want is the honest supporter of a sporting event or a music fan having the ability to check whether their ticket is valid. This is the one amendment that would achieve that—and there would be no cost or difficulty. As far as the promoter of a sporting or music event is concerned, they are putting the seat number, the row number, the date and the event on the ticket. If there is an original, unique reference number, why not put that on as well to allow the true fan to check that it is not a counterfeit ticket before he spends a lot of money travelling to London with his family, for the sake of argument, to go to the O2?
The Minister said that he was concerned about this on three very simple grounds—but I think that there are answers to all three points. First, we obviously welcome the Waterson report, but Waterson stated, as did my noble friend, that he does not support any further significant changes to legislation at this time. However, by his own definition, these amendments are not significant. They do not ban or impose controls on the price; they merely tidy up gaps in the Consumer Rights Act regime, which Waterson endorses. So I believe it would be reasonable to suggest that the Government do, too, with their proposals for greater enforcement.
Secondly, the CMA review is under way but it is not about what might happen in this House tonight or in another place next week. The review and its inquiries are about the enforcement of existing legislation; they are not about possible changes in the future. If there were problems in the future, no doubt the CMA would consider having a further review. It is interesting that it would, by implication, support the measure this evening because it states:
“We also think that it is essential that those consumers who buy tickets from the secondary market are made aware if there is a risk that they will be turned away at the door”.
So, by implication, the CMA is in any event supportive of this proposal. However, that is not the point; the point is that, under statute and under its terms of reference, it is looking at existing legislation and not at new legislation.
Thirdly, when we debated this issue before, the European Union directive was much quoted as a reason for not being able to move forward—because we would be outside the scope of the European Union directive on consumer rights. I wrote to Brussels—not a usual habit of mine—in the following terms:
“Whether it would be in accordance with the EU Consumer Rights Directive for both primary and secondary market ticket sellers to have to provide a unique reference number on the tickets so that event organisers could track sales of tickets”.
The response was:
“Providing a unique reference number on the tickets is not regulated under the Consumer Rights Directive; therefore the Directive does not prevent this practice. National legislation could be relevant to this regard”.
Therefore, on all three grounds, I believe that common sense should prevail. We should look after the interests of the many people who are being ripped off by modern-day ticket touts and enable those individuals to have the right to enjoy a concert because they love either the music they want to listen to or the sporting event that they want to go to.
Lord Clement-Jones
My Lords, as the noble Lord, Lord Moynihan, has spoken extremely eloquently in support of his amendments, I wish to add very little to what he had to say.
On these Benches we strongly welcome government Amendment 33ZL banning the bulk purchase of tickets, but we believe that it will not solve the problems entirely by itself. There are certain questions about enforcement, which the noble Lord, Lord Moynihan, raised. The Minister used the expression “partnership with law enforcement agencies”. Perhaps when he responds, he could say in a little more detail how that will work. As the Computer Misuse Act has not been effectively enforced by the police to date, the question is: who will enforce it and what budget will they have to enforce it with?
We strongly support Amendment 33ZLZA, proposed by the noble Lord, Lord Moynihan. We believe it is very important to include the booking reference where one exists. It is important as many tickets do not have a seat or row number because they are standing tickets or for unreserved seating. Some venues have 100% standing or unreserved places, while others sometimes have a significant number of standing areas. Other events, such as major golf, horseracing and motor sports events, as well as festivals, may also have unseated areas, and that has consequences. If there is no seat number, that enables secondary ticket websites to declare, “The full seat information is not available” or is “not applicable”, so sellers may be able to avoid identification and undermine the existing provisions, which were pretty hard fought for under Section 90 of the Consumer Rights Act 2015.
The second part of the amendment is also very important. It requires the ticketing website to provide information if there is a resale restriction. This is key information for a potential buyer so that they do not purchase a ticket which is in fact invalid. That was noted by the Competition and Markets Authority when it launched its investigation last December into breaches of consumer law. Even at this late stage, I very much hope that the Minister will accept that amendment.
Lord Pendry (Lab)
My Lords, many of us have been around this block many times before, and here we are again discussing the negative impact that secondary ticketing has on the sport and entertainment sectors. I therefore willingly support the amendments standing in the name of the noble Lord, Lord Moynihan, who, as we have all heard, has so ably spelled out his reasons for tabling them.
It is a particular pleasure for me that these amendments carry his name because many years ago we were old sparring partners in the days when he was Minister for Sport and—if noble Lords can believe it—I was his shadow. I could not keep up with all the Ministers for Sport whom I shadowed but certain names spring to mind: Atkins, Tracey, Key, Sproat and Spring. I wrestled with them all but, a priori, the best by far was Colin Moynihan MP, who now carries a different hat in tabling this amendment. However, because his tenure in office was a short one before he moved onwards and upwards to become a Minister in the Department of Energy, I did not receive his wise words on the vexed question of ticket touting at that time. I did, however, receive volumes of advice from other Ministers, telling me that it was not the time to enact legislation to curb the touters. Even as early as 28 September 1992, the then Prime Minister, John Major, wrote to me:
“Although committed to give effect to the recommendations of Lord Justice Taylor … because of the lack of parliamentary time”,
it was not the time to proceed with legislation on ticketing.
So progress has been slow. With the exception of legislation on football, not much has been achieved in the field of eliminating ticket touting. However, progress now seems to be at hand, thanks to the noble Lord and his colleagues, who I am sure will be the first to recognise the work of the late and lamented Lady Heyhoe Flint, who worked alongside them and did so much to give us the opportunity to debate the issue this evening. They are giving the Government the opportunity to embrace the need to protect consumers’ rights and to call for a thorough study into secondary ticketing. These are important measures.
I am sure that, by now, noble Lords will have recognised why I am adamant that these amendments should be passed. As shadow Minister for Sport from 1992 to 1997, I worked on a blueprint for sport for the Labour Party which was brought together for the 1997 general election. That manifesto, Labour’s Sporting Nation, was endorsed by the then Prime Minister-elect, Tony Blair. Of course it was an important time for me personally, as the one who wrote that document, as I believed that we were in sight of ensuring a breakthrough in this ticket touting problem. In particular, the passage on touting concluded with these words:
“A New Labour Government will make touting at all major sporting events illegal and therefore eliminate it”.
I do not want noble Lords to bring out their handkerchiefs and tissues in sympathy for me at this moment but, as the House knows, as the author of that dictum I was not given the opportunity to bring that commitment into legislative form. But seriously, the then intention was to introduce explicit legislation that directly dealt with the problem of ticket touting. But the world has moved on, as we all recognise, and we are in a different age. One has to recognise that the world of 1997 is not the world of 2017. A lot has happened since, which has been acknowledged by the noble Lord, Lord Moynihan, and his colleagues who submitted these amendments. We must also acknowledge the way that they have gone about that in the months preceding this debate.
By supporting these measures we will be giving further power to protecting consumers and ensuring that effective enforcement takes place. This will give greater choice and information to sports fans and help in the fight against those who commit fraud and seek to exploit the pockets of hard-working families. Like others, I have received correspondence from a number of bodies which usually support what we are doing this evening. The UK stages some of the world’s greatest sporting events. If we want them to flourish and for the country to continue to be open for business, we must protect those events from the profiteering of those committing fraud.
Organisations involved in rugby—both rugby league and rugby union—tennis, and cricket in England and Wales already do good work. We need to empower them to do more. The amendments before us give us that opportunity. They would give them the right to take civil action in a court if they so wished. The Minister will no doubt tell us when he replies about the importance of enforcement. I would like him, ideally, to accept the amendment before us. By accepting that progress has been slow, we have arrived at an important time when this House can endorse the amendment before us and people such as Lord Justice Taylor, Professor Waterson and those who have done so much in the past will, I am sure, benefit from what we do today.
Lord Stevenson of Balmacara
My Lords, I have been following the progress of this arrangement between all sides because the noble Lord, Lord Moynihan, and Lady Heyhoe Flint—who is terribly missed—the noble Lord, Lord Clement-Jones, and I have been doing this for about four years now. We are reaching the next stage. I do not think we are at the end of the track yet—there are still things that we would like to do—but we have reached an important stage and I should like to support what we are doing.
The issue is all about the rights of the promoters to organise the events that they want to and have control of them, and the rights of consumers who sign up to see these events to do so with the security and certainty that they will be able to see what they have paid for at reasonable prices. The Minister has said that what he has done with the bots amendment is to try to modernise the modern-day ticket touts. I absolutely agree with that. That is why I have signed up to his amendment. There were real difficulties getting this through, which I know because I have talked with the Bill team and the Minister about this. It is really good to see the amendment here today. We will support it and wish it well on its way.
However, the other amendments in this group, which we also support, should not be lost sight of and I hope very much that we will get some movement today. They stem from recommendations 4 and 5 of the Waterson review. They are in keeping with those and try to establish further what the Minister articulated when he introduced the original amendment: as well as having a good partnership with primary ticket sellers and the secondary market, it is really important that the law has a good relationship with consumers and event promoters. Only by providing additional transparency, which was requested in Amendment 33ZLZA—and possibly in the good suggestion that governing bodies get more power in Amendment 33ZLZC—will we begin to take the steps that will clean up this act.
We know from the police reports, from those who are active in this area and from talking to promoters that there is huge criminality and money laundering. There are issues that we really have to investigate. But at the heart of it stand consumers who cannot rely on the market providing them with the right choice and a fair one. This must stop. If the noble Lord wishes to take his amendment to a vote we will support him in the Lobby.
Lord Ashton of Hyde
My Lords, I am grateful to all noble Lords and I will try to be quick because I want to move on to the dinner break business. I pay tribute to my noble friend Lord Moynihan for his persistent campaigning on the subject. His work has influenced today’s government amendment, as has the work of other parliamentarians and particularly Nigel Adams MP and Sharon Hodgson MP.
Amendment 33ZLZA would amend the Consumer Rights Act 2015, by inserting a duty to provide the ticket reference or booking number when reselling tickets. This was specifically considered by Professor Waterson in his report. So I start by reminding noble Lords of the reasons that Professor Waterson gave for rejecting the same proposal that we now have before us in Amendment 33ZLZA. I refer to page 170 of his 226-page report. The first was cost. The amendment would require a system for the potential buyer to check a reference number, and in a manner that could be done quickly enough to facilitate internet sales. That requires infrastructure changes in both the primary and secondary market. The primary market would be asked to pay for changes to allow customers to authenticate tickets on the secondary market, for which they receive no additional income. Ultimately, the cost will be added to ticket prices.
Secondly, there is practicality. The secondary ticketing industry would need to establish a standard interface to enable cross-checking. There is strong competition between the platforms and no appropriate industry body to help bring such a system about. In such circumstances, it may be easier and possibly more productive for the secondary platforms simply to chase more exclusive authorised resale deals. Further, there is little evidence of there being the trust between the primary and secondary markets necessary to enable such verification.
Thirdly, my noble friend has mentioned the legal reasons. The EU consumer rights directive, which is the basis of the secondary ticketing information requirements in the Consumer Rights Act, prohibits member states going further in national law than the directive requires. My noble friend mentioned his telephone conversation with the European Commission. There are differences of opinion on the legal interpretation and clearly, at the very least, there may be litigation ahead if we go down this road.
The Government agree with Professor Waterson. We cannot see how Amendment 33ZLZA would actually benefit anyone. Even if those problems were overcome and the primary sellers would offer a consumer confirmation that a reference number was real, how do we know that the real ticket is available for sale? Might it have already been resold? Consumers who buy tickets online, only to be disappointed, will be even angrier having gone to the effort to “verify” yet still being left in the lurch.
Professor Waterson preaches caution in further legislating with good reason. Amendment 33ZLZA is untested and offers false hope. While ticket reference numbers do not offer a solution, we agree with the proposal to require consumers to be informed of the terms of resale. Indeed, we have already legislated to do just that in Section 90(3)(b) of the Consumer Rights Act. Rather than amending the Consumer Rights Act, we believe that the existing law should be tested.
The need for better enforcement was also the overwhelming view of those who gave evidence to the Culture, Media and Sport Select Committee last week, and the Competition and Markets Authority’s enforcement investigation is ongoing. In addition, National Trading Standards and Trading Standards Scotland have been tasked with investigating potential enforcement cases against sellers on secondary ticketing websites that do not comply with the legislation.
I turn to Amendment 33ZLZC. While injunctions are already possible, the amendment would introduce a new element into consumer law by seeking to shift the responsibility for enforcement to the primary ticket seller. This could risk putting an undue onus on event organisers regardless of their capacity to act because public enforcement bodies could use it as grounds to prioritise other areas for enforcement action. The amendment also requires us to trust primary sellers to self-regulate and self-enforce, yet to date the sector has often been too unwilling or unable to take action. There have been notable exceptions, but the strides that we are making, as I set out at the start of the debate, have been achieved by bringing together the parties, including law enforcement agencies, and we need to build on that.
Although Amendment 33ZLZB is similar to the one the Government have tabled on the use of bots, it goes further by attempting to ban the resale of tickets purchased by bots. I acknowledge my noble friend’s kind remarks along with those of the noble Lord, Lord Stevenson, so to save time I will not comment in detail as I understand that my noble friend is content with the government amendment.
In conclusion, the Government recognise that it is hugely frustrating for fans who miss out on tickets sold on the primary market only to see them appear on the secondary ticketing market at increased prices. The Government are acting—working with industry and law enforcement agencies. We need to let these developments grow and allow time to harvest the results of the legislation that we agreed in this House only two years ago. I would respectfully ask my noble friend to withdraw his amendments and noble Lords to support government Amendment 33ZL in their place.
Lord Moynihan
“Duty to provide information about tickets
In section 90 of the Consumer Rights Act 2015 (duty to provide information about tickets), after subsection (4)(d) insert—“(e) the ticket reference or booking number;(f) any specific condition attached to the resale of the ticket.””
Lord Moynihan
My Lords, I am grateful to the Minister and all noble Lords who have participated in this debate. I should say to my noble friend that I did not telephone Brussels, which has put it in black and white that the directive does not prevent this practice, so they would be suing themselves, which would be fairly unwise.
I should also mention to the Minister that, in his report, Professor Waterson does not support further significant changes to the legislation, but makes it clear on page 22 that he is talking about a ban on the secondary ticketing market, which we are not in favour of. We do not want to ban the market, although noble Lords did so for the Olympic Games in London 2012. Similarly, this is not about a cap on resale prices. It is perfectly within the conclusions, and the Government’s response to the Waterson report, to move ahead with this simple but effective remedy. It is not costly; it is about the cost of a phone call to the RFU to say, “Your original ticket had a unique reference number on it. I want to check that the one I have bought from StubHub or one of the other secondary sites is for real. Can you tell me whether that same number, which does not exist on there—or they have put another number on it—is for real before I incur a lot of costs?”. It is a simple additional consumer protection measure which does not cost anything. It would look after consumers—in this context, particularly fans of sport and fans of music—which is what we should be all about. I beg to move the amendment and I should like to test the will of the House on it.
Digital Economy Bill
Wednesday 29th March 2017
(7 years, 8 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 102-III(Further Rev) Further revised third marshalled list for Report (PDF, 183KB) - (27 Mar 2017)
Baroness Howe of Idlicote
“Duty on Ofcom to report on filtering by internet access providers
(1) Ofcom must prepare a report for the Secretary of State, every two years from the date on which this Act is passed—(a) on the number of providers of an internet access service who are preventing or restricting access on the service to information, content, applications or services, for child protection purposes;(b) on the number of providers of an internet access service who are not preventing or restricting access on the service to information, content, applications or services, for child protection services; and(c) describing the actions that are being taken by providers of an internet access service to—(i) prevent or restrict access on the service to information, content, applications or services, for child protection purposes;(ii) provide and improve child protection via other means other than those listed in sub-paragraph (i); and(iii) provide relevant information to parents.(2) The report produced under subsection (1) must be laid before each House of Parliament.(3) In this section “internet access service” has the same meaning as in section 91.”
Baroness Howe of Idlicote (CB)
My Lords, I rise to speak to my Amendment 33ZLA on adult content filters. After all the lengthy discussions about age verification, some might be tempted to think that filters have been overtaken and eclipsed by age verification checks. However, that is not the case. The age verification checks in Part 3 relate narrowly to pornography and not to other non-pornographic adult content. This leaves out any protections in Part 3 on violence, self-harm, gambling and so on. In another place there was a debate about extending age verification checks to other forms of adult content and this is something that I think is worthy of further consideration, perhaps in the forthcoming Green Paper on internet safety.
In the short term, however, it seems to me that we should make better use of adult content filters. The Government have asked Ofcom to produce a series of reports on the filtering provisions and practices of the four largest ISPs. These reports have helpfully provided objective analysis of the way each of the four ISPs have approached adult content filters, the standards to which they have subscribed and the extent to which customers have used them. This information has been very useful for policymakers and parents. If we concede that it is important to understand what ISPs are doing in relation to adult content filters, however, it simply makes no sense to look only at the conduct of some ISPs. Indeed, if Ofcom was only going to look at the conduct of some ISPs, it would make more sense for it to shine the spotlight on the conduct of the smaller ISPs as they are not party to the family-friendly filtering agreement between the big four ISPs.
There is no public clarity about the conduct of smaller ISPs in terms of whether or not they provide adult content filtering options, how they provide these options or what filtering standards they apply. Far from making for transparency, this generates confusion for both parents and policymakers. My amendment would end this very unsatisfactory state of affairs and require Ofcom to assess the conduct of all ISPs in relation to adult content filters.
In making this argument, I am mindful that some have suggested that the smaller ISPs primarily service businesses rather than homes, which might cause them to conclude that it is not relevant to assess their conduct in relation to adult content filters. In the first instance, even if it were true that the smaller ISPs primarily service businesses, to the degree that they would not do this exclusively and would also service homes, there would be a clear need to assess their conduct in relation to adult content filters. After all, every child matters.
Secondly, and more importantly, while I certainly acknowledge that some small ISPs such as Claranet focus only on business customers, that is not the case for others such as KCOM, the Post Office and Plusnet. There is a sense in which the different assessment as to whether the smaller ISPs service businesses or homes highlights all too well the lack of clarity about the smaller ISPs, demonstrating the need to ask Ofcom to review their conduct in relation to adult content filters, as well as that of TalkTalk, Sky, Virgin and BT. I believe in transparency, and that we particularly need greater transparency in relation to the conduct of the smaller ISPs. This will serve two important ends. In the first instance, it will help service a clearer public policy debate about child safety online and on the role of filters, which I believe would greatly assist the Green Paper process. In the second instance, the data gathered could be made available to help parents wanting to have a good objective understanding from an official source of the kind of filtering options that an ISP provides and of the filtering standards to which it subscribes. This would help empower parents as they seek to rise to the challenge of helping to keep their children safer in a digital age.
In closing, I thank the Minister for meeting me to discuss the conduct of the smaller ISPs and for the conversations that he had subsequently about the approach of smaller ISPs with the Internet Service Providers’ Association. I very much welcome the fact that ISPA has now agreed to introduce a new step in its members’ sign-up process, which requires members to consider whether online safety tools are suitable for their customers. This provision, together with my amendment, would certainly help to move things forward. I beg to move.
Lord McColl of Dulwich (Con)
My Lords, I am very pleased to have been able to put my name to this amendment, which is also in the names of the noble Baroness, Lady Howe, and the noble Lord, Lord Collins. I commend the noble Baroness, Lady Howe, for all the work she has done in this important area and for her persistence in ensuring that we have the best internet filtering options available.
The noble Baroness’s amendment comes only a week after the House of Lords Communications Select Committee published its report, Growing up with the Internet. Most of us will need to read it carefully, as it has some important things to say about internet filtering which I hope the Government will consider as they put together their promised Green Paper on internet safety. I am concerned that the committee’s report says on page 3 that,
“self-regulation by industry is failing”.
Indeed, it makes me wonder whether we will need to revisit Clause 91 at some point so that it goes further in mandating all internet service providers to provide filtering.
For the time being, I am glad that the Government have taken measures to ensure that family-friendly filtering can continue to operate under the EU rules on net neutrality for both internet service providers and mobile phone operators. I am also glad that they will be hosting conversations which will be influenced by the noble Lords’ report on what is needed to ensure the best interests of children.
The internet, mobile phones and young people go together. If they did not, we would not have needed the age verification plans that the Government have introduced under Part 3. Last year, Ofcom’s annual report on children’s media use showed that, for the first time, children’s internet use overtook their use of TV. Some 79% of 12 to 15 year-olds own a smartphone. This is technology in our teens’ pockets with no 9 pm watershed. While there is an automatic adult bar in place on smartphones, 46% of parents of 12 to 15 year- olds do not know whether it is in place or not.
Internet network filtering is another option for parents as they raise digital natives. While Part 3 seeks to tackle children’s access to pornography, filters on both mobile phones and home broadband can target other adult content, including violence and drugs. The ISPs offer customised filtering and different variations of the filtering options. When the big four ISPs agreed to provide family-friendly filtering, the Government asked Ofcom to produce a series of reports on how their commitment was progressing. Amendment 33ZLA is an extension of that requirement and would apply to all ISPs for the first time—big and small—and to mobile phone operators.
My noble friend Lady Shields described internet filters as,
“a vital tool for parents”.—[Official Report, 5/11/15; col. 1799.]
I agree, but I am concerned about the transparency of options for parents, especially in relation to the smaller ISPs. A mystery shopper exercise revealed that, when asked on the phone about filtering provision, some smaller ISPs were able to say whether filtering was offered, but seven were unable to confirm either way.
In this context it seems to me that, having conceded that Ofcom should report on some of the filtering policies of some ISPs, it makes no sense not to cover the smaller providers. Indeed, it is in respect of them that the need for a review is greatest—although the review of the four larger providers is vital and must continue. The findings of the last report were very useful.
These options need to be clearly set out to parents, and I support the requirement in Amendment 33ZLA that Ofcom should produce a report every two years setting out what all the mobile phone operators and ISPs are doing—or not doing—on internet filtering. This state-of-the-nation filtering report would serve two key purposes. First, it would help to bring greater clarity and transparency, which would be invaluable for policymakers, especially in the context of the Green Paper and beyond. Secondly, the data could also help inform parents of their options for filtering, so that they would not have to go to multiple websites, with differing levels of transparency, and try to work out the differing options.
I hope that, if this information is more accessible to parents, it will empower them to make the right ISP choice for their family and will increase their take-up of filters. The use of home network filters has been increasing over the last few years but they are still used by only about a third of parents. There are 7.96 million families with dependent children in the UK, and 99% of these households have fixed broadband. By my calculations, that means that 5.25 million households do not use internet filtering. Some parents have deliberately chosen not to use filtering, but 42% of parents of 12 to 15 year-olds do not know about internet filters. I hope that our Amendment 33ZLA will help provide the support and information they need.
This proposal is quite modest and fully in line with the intentions of the Government’s Green Paper on internet safety, which has as an objective,
“helping parents face up to the dangers and discuss them with children”.
Indeed, it is difficult for the Government to argue against this, given that they have established the relevant precedent by helpfully asking Ofcom to review some of the ISPs’ filtering practices. I hope that the House will support Amendment 33ZLA to ensure that Ofcom reports on all ISPs, big and small.
Baroness Benjamin (LD)
My Lords, I support Amendment 33ZLA, which would require Ofcom to report on internet filtering. I, too, thank the noble Baroness, Lady Howe, for persistently raising this issue in the House, and I welcomed the Government’s proposal at Second Reading to bring forward an amendment on filtering.
As we have already heard, last week the Communications Select Committee, on which I sit, published its report, Growing up with the Internet, which covered the important subject of internet filters.
We should not be lulled into complacency by Part 3 of the Bill. Although it is very welcome, it deals only with children’s access to pornography and not to any of the other subjects covered by internet filtering. The Select Committee heard of a,
“worrying rise in unhappy and anxious children emerging alongside the upward trend of childhood internet use”.
This is a sobering reminder that there are many challenges ahead of us.
I hope that the Government will read our report carefully as they prepare their Green Paper on internet safety. In doing so, I particularly hope that they will review the committee’s two recommendations on internet filters. On page 60, the report recommends that,
“all ISPs and mobile network operators should be required not only to offer child-friendly content control filters, but also for those filters to be ‘on’ by default for all customers. Adult customers should be able to switch off such filters”.
We also recommend:
“Filter systems should be designed to an agreed minimum standard”.
In this context, while the Government’s Committee stage amendment, which basically says to ISPs, “You may provide filtering if you want to, but, equally, you don’t have to if you don’t want to”, is clearly problematic. As we move towards the Green Paper we must look to require all ISPs that service homes among their customer base to provide unavoidable choice—or, better still, default-on adult-content filtering options.
I know that the Minister gave us assurances that the Internet Service Providers’ Association was going to encourage its members to consider what was appropriate for their customer base. But, given the strong messages in our report for child-centred design, I am not convinced that that is enough—unless an ISP is solely for businesses.
I hope that the Government will review their position on internet filtering in the light of our report and that, in the meantime, they will support this modest but important amendment. It will give policymakers a clear picture of the landscape of what is and is not being provided by ISPs. Having conceded that it is appropriate to ask Ofcom to review the approach of some ISPs to adult-content filters, logically they should be looking at the conduct of all ISPs that service homes. This is especially important in relation to smaller ISPs whose practices and standards are often less accessible. This will really help the preparation for the Green Paper.
The information should also be provided to consumers on the Ofcom website on the web page Advice for Consumers. We need to put as many tools as we can in the hands of parents to help them navigate the complexities of filters. Of course, if the Government adopted the committee’s recommendation that there should be minimum standards for filtering, we would make parents’ lives much easier. I look forward to discussing this further with the Minister in one of his round tables on the Green Paper and I very much hope that noble Lords will support Amendment 33ZLA. It is a vital step towards greater industry transparency with respect to child protection online.
Lord Collins of Highbury (Lab)
My Lords, I too thank the noble Baroness, Lady Howe, for this amendment. I added my name to it and support very much the principles contained in it. As she said in her introduction, this is not simply about pornography or about age verification, where we have addressed those issues. It is about giving parents the tools for the job so that they can be sure that their children are accessing the internet in a responsible way. That is a key issue because we have just had an hour-long debate on gambling; we know that access to gambling is on the internet nowadays. We have controls in casinos and age limits in betting shops, but we also know that someone can bet huge amounts on mobile phones using the internet. We need to give parents those tools. That is what the House of Lords Communications Committee resolved. The report is excellent and I welcome noble Lords’ references to it.
The Minister will no doubt reassure the House about what we are doing with the major ISPs and how Ofcom will be reviewing that, but if, as the noble Baroness said, 10% or potentially even 15% of the market is not covered by that review, we are not addressing the full picture. What we need to aim for in this highly competitive market is an industry standard so that consumers understand that, wherever they go to get the best price for access to the internet, the whole industry will be applying the same standards in terms of the ability of parents to ensure that their children are accessing the internet in a responsible way.
Reference has been made in this discussion to the review being conducted by Ofcom. Will the Minister consider whether that review could be extended to all ISPs? He has the authority and he does not need this amendment to be approved, but he could reassure us that we will not simply rely on the letter from the industry saying, “we will approach the other ISPs and seek their co-operation”. He can ask Ofcom to do this and I urge him to give noble Lords that reassurance.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I thank all noble Lords who have contributed to the debate. I will start by saying that the noble Baroness, Lady Howe, has been a consistently strong voice in this House in favour of protecting children online and we pay tribute to that. As noble Lords know, we introduced Clause 91 in Committee on the provision of family-friendly filters, clarifying that internet service providers may restrict access to information, content, applications or services where that is in accordance with the terms of service agreed by the end user. That clause gives a reassurance to providers that such filters are compliant with EU net neutrality regulations, so the debate on that has been had in this Bill.
The noble Lord, Lord Collins, my noble friend Lord McColl and the noble Baroness, Lady Benjamin, referred to the report of the House of Lords Communications Committee, Growing up with the internet, which was published on 21 March. The noble Baroness, Lady Benjamin, hopes that we will take careful note of it. She knows that we listen to her—she had an amendment accepted. Among the many recommendations in the report, there is a call for a mandatory default on filters set to a minimum standard to be a requirement made of all ISPs and mobile network operators. Of course I can confirm that we will consider the recommendations in the report carefully as part of our developing work on the new internet safety strategy, and we will respond to it formally in due course.
However, we believe that the current voluntary approach on filters works well and that a mandatory approach would run the risk of replacing the current user-friendly parental control tools with a more inflexible top-down system. As has been noted by several noble Lords, the Internet Service Providers’ Association, the trade body for the industry, is taking further action to encourage smaller ISPs to consider online safety issues and parental control filters for their customers where appropriate. But having said that, I can make the commitment that we will listen to what the committee has said on this subject and, as I say, we will respond in due course. This amendment would require Ofcom to report to the Secretary of State every two years on the number of internet access providers which do or do not offer filters and to describe the actions being undertaken by them in relation to child protection.
As noble Lords will know, in 2013 the previous Prime Minister announced our agreement with the big four ISPs—Sky, Virgin Media, BT and TalkTalk—that they would offer network-level family filters to all customers by the end of December 2014. Ofcom was asked to produce reports on this rollout and did so in four reports issued between January 2014 and December 2015 covering the detail on the provision of filters and child protection measures by the big four ISPs, covering 88% of the fixed broadband market. The vast majority of consumer-focused broadband is therefore a matter of public record. The Ofcom reports also cover data on take-up and usage by parents of these filters. The data are now updated annually in Ofcom’s Children and Parents: Media Use and Attitudes reports, which provide statistics on parental usage and awareness of filters and experience of online safety. In respect of ISPs other than the big four, which run into hundreds, the vast majority of these are SMEs and micro-businesses, as noble Lords may be aware, offering niche, specialist and business-to-business services to small subscriber bases.
With that in mind, it is not clear from the amendment how Ofcom would gather the information it would need to prepare the statutory reports. It is likely that Ofcom would need to identify and ask providers for this information. This would be a very big task for Ofcom as ISPs enter and leave the market constantly and there is no requirement for them to register with Ofcom. It would also be disproportionate for the majority of ISPs, most of which are not focused on the mainstream consumer market, to be asked to provide this information.
The information covered by the existing Ofcom reporting ensures that the most relevant data are sourced on the actual usage of filters by parents, without disproportionate costs or impact on SMEs and micro-businesses. A statutory approach could also unnecessarily limit the scope and focus of reporting moving forward, as technology and the market changes.
On that basis, we consider it more appropriate for Ofcom’s reporting to be on a non-statutory basis to allow greater flexibility. Therefore, I hope that in light of that the noble Baroness will withdraw her amendment.
Baroness Howe of Idlicote
My Lords, I am most grateful to all noble Lords who have taken part in this debate and raised all these extremely important issues, and to the Minister for setting out his views on what has been achieved and some of what he considers the danger of asking Ofcom to do rather more than at present, therefore perhaps limiting some of the other work. I would certainly like to see rather more progress being achieved, but on the other hand I understand the extent to which steps have been taken. In the circumstances I will not press the amendment further, but I hope that the Minister will keep the whole issue under review and let us know as and when he becomes even more satisfied with what has been achieved, remembering that at the back of all this it is the small users, such as the parents and children, who we are really concerned about protecting. Having said that, I will withdraw my amendment.
Lord Ashton of Hyde
“Regulations about charges payable to the Information Commissioner
(1) The Secretary of State may by regulations require data controllers to pay charges of an amount specified in the regulations to the Information Commissioner.(2) Regulations under subsection (1) may require a data controller to pay a charge regardless of whether the Information Commissioner has provided, or proposes to provide, a service to the data controller.(3) Regulations under subsection (1) may make provision about the time or times at which, or period or periods within which, a charge must be paid.(4) Regulations under subsection (1) may make provision—(a) for different charges to be payable in different cases;(b) for cases in which a discounted charge is payable;(c) for cases in which no charge is payable;(d) for cases in which a charge which has been paid is to be refunded.(5) The Secretary of State may by regulations make provision—(a) requiring a data controller to provide information to the Information Commissioner, or(b) enabling the Commissioner to require a data controller to provide information to the Commissioner,for either or both of the purposes mentioned in subsection (6).(6) Those purposes are—(a) determining whether a charge is payable by the data controller under regulations under subsection (1);(b) determining the amount of a charge payable by the data controller.(7) The provision that may be made under subsection (5)(a) includes, in particular, provision requiring a data controller to notify the Information Commissioner of a change in the data controller’s circumstances of a kind specified in the regulations. (8) In this section “data controller” means a person who, alone or jointly with others, determines the purposes and means of the processing of personal data.(9) In subsection (8) “personal data” means any information relating to an identified or identifiable individual.(10) For this purpose an individual is “identifiable” if the individual can be identified, directly or indirectly, in particular by reference to—(a) an identifier such as a name, an identification number, location data or an online identifier, or(b) one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of the individual.(11) Where the purposes and means of the processing of personal data are determined by or on behalf of the House of Commons or House of Lords, other than where they are determined by or on behalf of the Intelligence and Security Committee of Parliament, the data controller in respect of those data for the purposes of this section is the Corporate Officer of that House.”
Lord Ashton of Hyde
My Lords, the government amendments in this group seek to give the Secretary of State the power to make regulations introducing new charges to fund the regulatory functions of the Information Commissioner for data protection. The charges will replace the existing notification fees set out in regulations made under Sections 18 and 26 of the Data Protection Act 1998.
The amendments will also repeal Part 3 of the Data Protection Act, which imposes an obligation on data controllers to notify the Information Commissioner of certain types of data processing. The commissioner maintains a register of all data controllers. The General Data Protection Regulation removes the obligation on data controllers to notify the Commissioner, so it is necessary to repeal Part 3. The GDPR will become part of UK law on 25 May 2018.
The amendments seek to replicate the substance of the fee-raising powers in the Data Protection Act 1998. I can confirm that charges will continue to be based on the principle of full cost recovery and, in line with the current model, fee levels will be determined on size and turnover of organisation, but will also take account of the volume of personal data being processed by organisations to recognise the additional risk of a breach occurring when an organisation processes large volumes of sensitive personal data.
Although organisations will no longer be required to notify the Information Commissioner that they are processing personal data, they will continue to receive a range of services from the Information Commissioner’s Office in return for the charge. This includes good practice guidance on organisations’ obligations under the data protection framework and how to comply; online training videos; free voluntary audits of organisations’ data protection practices to support improved compliance; and advisory visits.
The Government have considered the DPRRC’s recommendations on these clauses and have responded. We agree with the committee that regulations made under the new charging powers should be subject to appropriate external consultation and parliamentary oversight. We will therefore bring forward an amendment at Third Reading to require the Secretary of State to consult,
“such representatives of persons likely to be affected by the regulations as the Secretary of State thinks appropriate and such other persons as the Secretary of State thinks appropriate”,
in addition to the Information Commissioner. We will also bring forward an amendment to require the Secretary of State to use the affirmative procedure when making regulations under the new power, except in the case of purely inflationary increases, where the negative procedure will apply.
We have considered carefully the committee’s recommendation to require the Secretary of State to ensure that the income from the charges does not exceed the reasonably anticipated costs of discharging the specified functions of the Information Commissioner and Secretary of State related to data protection. It is the Government’s view that the limited flexibility given in the government amendments is necessary, given rapid developments in the digital economy and to manage the inevitable period of transition as the ICO takes on additional responsibilities under the forthcoming general data protection regulation. The language used in the Government’s amendment mirrors that in the existing Data Protection Act. Parliament has not expressed any concerns about how the existing powers have been exercised and we believe that by subjecting each exercise of the power to the affirmative procedure, we are putting in place sufficient parliamentary safeguards to ensure the powers will be exercised in a rational and responsible way in the future. We therefore do not intend to table an amendment to address this recommendation. I beg to move.
Amendment 33ZN (to Amendment 33ZM)
Lord Clement-Jones
Lord Clement-Jones (LD)
My Lords, I thank the Minister for that introduction but I must confess to being somewhat baffled by it. I am very happy that he has taken on board some of the Delegated Powers and Regulatory Reform Committee’s recommendations. However, he read out word for word from his letter to us of 22 March why he is not agreeing to table an amendment similar to Amendment 33ZP, which is in my name and that of my noble friend Lady Hamwee, yet in his introduction, he assured us that the actual charges would be no more than full cost recovery. I therefore do not really understand what his objection is to enshrining that in primary legislation. I certainly do not understand the paragraph that begins:
“It is the Government’s view that the limited flexibility given in the Government’s amendments is necessary given rapid developments in the digital economy and to manage the inevitable period of transition”.
Full cost recovery is full cost recovery—I cannot see any ambiguity or any need to be particularly flexible going forward. Just because the language used in the Government’s amendment mirrors the existing Data Protection Act does not mean that we cannot improve on it.
This is a bit of a curate’s egg. Although I am of course pleased that the Minister is responding to two-thirds of the committee’s report, the really important bit—making sure that the ICO does not overcharge— is not catered for. A bit more explanation from the Minister is needed as to why he cannot simply enshrine that in a third amendment at Third Reading.
Lord Collins of Highbury
I have tabled Amendment 33ZPA, which deals explicitly with the Delegated Powers Committee’s recommendation. As the Minister will know, immediately on seeing the government amendments I approached him and wanted a discussion, because I was anxious that items were suddenly being put in the Bill of which no mention had been made before. We had had amendments relating to the Government’s willingness to implement the GDPR and they were reluctant to address that issue in the Bill, but suddenly the GDPR was to come into force on 18 May and we needed time to ensure that charges could be properly accommodated. I was concerned that suddenly all this was happening. The Minister wrote to me after our meeting and I was happy to learn that the Delegated Powers Committee had come up with the same concerns as me.
I want to be clear that my amendment specifically picks up the words of the committee. This is not simply about covering costs—I am sure that the Minister will reassure us about that; it is also about creep. It is about whether the Government will ask the ICO to undertake other things for which charges will suddenly become applicable, as was referenced in the report. It cited,
“broadly similar legislation enabling the Government to prescribe enhanced court fees, which they are relying on to introduce large increases in probate fees”.
We know that the ICO wants to extend its powers—quite rightly in some respects—but it should not do so without proper parliamentary scrutiny. I want the Minister to give me a clear assurance that the specific example given by the committee will not be applicable in relation to these charges. The “limited flexibility” of which he spoke gives the Government much wider powers. Why do they need limited flexibility when they are introducing a charging regime to meet the requirements of the GDPR and the specified responsibilities of the ICO? If they are to go beyond that and say that they need wriggle room in the form of what are described as limited powers, Parliament deserves the opportunity properly to scrutinise such changes. I reserve the option of tabling amendments at Third Reading that bring forward the recommendations of the Delegated Powers Committee. I hope that the Minister can reassure me about the limited power or wriggle room that he says the Government need. I want to know why they need it.
Lord Ashton of Hyde
My Lords, I listened with interest and a certain amount of apprehension to this debate and the contributions made by noble Lords. As I said in my opening remarks, the Government intend to bring forward at Third Reading amendments to address the intentions of Amendments 33ZR, 33ZS, 33ZT and 33ZV tabled by the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Hamwee.
I listened to the arguments in support of Amendments 33ZN, 33ZP and 33ZPA. However, we need the existing flexibility in the government amendments because there is rapid development in the digital economy. That means that the role of the data protection regulator is continually evolving. We want to allow flexibility to manage the period of transition as the ICO takes on additional responsibilities under the forthcoming GDPR. For example, in our amendment we specifically refer to discounts to certain organisations.
I understand why noble Lords are worried about giving additional powers to the ICO. The noble Lord, Lord Collins, talked about “creep” on this. I reassure noble Lords that this will be on a full cost recovery basis and it is in line with the current charging regime, so the fees will be determined by the size and turnover of the organisation, as I said at the beginning. We will consult data controllers on the shape of the new regime before laying regulations to introduce new charges. I repeat that the new model will continue to be based on the full cost recovery principle. On parliamentary scrutiny, the affirmative procedure will allow that scrutiny in Parliament.
The other reason for this is that the ICO fees regime needs to be in place by 1 April, ahead of the GDPR. In advance of this, it will be necessary to consult organisations on the proposed fees levels and lay the fees regulations in sufficient time for the start of the 2018-19 financial year. We would not be able to do that in the third Session.
To answer the noble Lord, Lord Clement-Jones, on the language in the proposed new section, the nature of the ICO role is changing with the changes in electronic communications—for example, in the regulation on cookies. We need some flexibility without the restrictive language of the noble Lord’s amendment.
I hope noble Lords will agree that subjecting regulations made under these powers to consultation and the affirmative procedure offers the necessary safeguards to ensure the powers are used proportionately. I therefore respectfully ask that the noble Lord withdraws the amendment.
Lord Collins of Highbury
Bearing in mind the comments I made, would the Minister take the opportunity to meet me and other interested Peers before Third Reading so that we can be clear and reassured that those points are covered by the government amendments?
Lord Ashton of Hyde
It is always a pleasure to meet the noble Lord and I give that undertaking.
Lord Clement-Jones
My Lords, I thank the Minister for that undertaking, which would be extremely helpful and sensible in the circumstances. We will have rather a limited amount of business at Third Reading, no doubt in prime time. We might well want to take this issue forward if we have not had satisfactory discussions in the meantime. No doubt, that can take place early next week if Third Reading takes place on Wednesday.
Lord Ashton of Hyde
I am very happy to meet. Obviously, I make no commitments as to what will emerge from that meeting.
Lord Clement-Jones
My Lords, I would not expect the Minister to make commitments at this stage, just to listen to the arguments that we have already made and will no doubt make again in the meeting. I am very grateful to the Minister. We have Third Reading where we can—
Lord Stevenson of Balmacara (Lab)
I am abusing the system. I apologise for interrupting. I am grateful to the noble Lord for giving way. My question is directed at the Minister through the noble Lord, to maintain some semblance of protocol. I think the question my noble friend was trying to ask was, given that the Minister has committed to bringing back an amendment which covers much of the ground that has been discussed today, because there are issues he wishes to solidify, the assumption is that the points that have been raised may be raised again at Third Reading. He is not asking him to concede any additional work. I make it absolutely clear, because of the need for the clerks to be sure about this, that there will be a discussion at Third Reading on the substantive points that have been made so far.
Lord Ashton of Hyde
What the noble Lord, Lord Collins, asked me to do was to meet to discuss these issues before Third Reading. I agreed to meet him and the noble Lord, Lord Clement-Jones, if he wants to do that. I said that we were going to bring forward two amendments and we will continue to do that. I think it is the other one, where we have agreed not to do that, that he wants to talk about, but I am happy to talk about all of them. We will bring forward the two amendments at Third Reading. Obviously, I can make no commitment about any extra amendments but I am happy to talk about it.
Lord Clement-Jones
I completely understand that but, as the Minister is fully aware, because it is Third Reading, our ability to discuss is limited by the rules. But we could do it by way of an amendment to the Minister’s amendment. That is our assumption, I think, in the circumstances. On that basis, I am happy to withdraw Amendment 33ZN.
Lord Ashton of Hyde
“Functions relating to regulations under section (Regulations about charges payable to the Information Commissioner)
(1) Before making regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) the Secretary of State must consult the Information Commissioner.(2) In making regulations under section (Regulations about charges payable to the Information Commissioner)(1), the Secretary of State must have regard to the desirability of securing that the charges payable to the Information Commissioner under such regulations are sufficient to offset—(a) expenses incurred by the Commissioner in discharging the Commissioner’s functions— (i) under the Data Protection Act 1998,(ii) under or by virtue of the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2003/2426),(iii) under the General Data Protection Regulation,(iv) under regulations which implement the General Data Protection Regulation or the Criminal Data Directive,(v) by virtue of section (Regulations about charges payable to the Information Commissioner), and(vi) under this section,(b) any expenses of the Secretary of State in respect of the Commissioner so far as attributable to those functions,(c) to the extent that the Secretary of State considers appropriate, any deficit previously incurred (whether before or after the passing of this Act) in respect of the expenses mentioned in paragraph (a), and(d) to the extent that the Secretary of State considers appropriate, expenses incurred by the Secretary of State in respect of the inclusion of any officers or staff of the Commissioner in any scheme under section 1 of the Superannuation Act 1972.(3) In subsection (2)—“the Criminal Data Directive” means Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA;“the General Data Protection Regulation” means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).(4) The Secretary of State may from time to time require the Information Commissioner to provide information about the expenses referred to in subsection (2)(a).(5) The Information Commissioner must keep under review the working of regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) and may from time to time submit proposals to the Secretary of State for amendments to be made to the regulations.(6) The Secretary of State must review the working of regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5)—(a) at the end of the period of five years beginning with the making of the first set of regulations under that section, and(b) at the end of each subsequent five year period.”
Lord Ashton of Hyde
“Supplementary provision relating to section (Regulations about charges payable to the Information Commissioner)
(1) Regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) are to be made by statutory instrument.(2) A statutory instrument containing regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) is to be laid before Parliament after being made.(3) Regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5)—(a) may make different provision for different purposes;(b) may make transitional, transitory or saving provision;(c) may make incidental, supplemental or consequential provision.(4) Regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) may bind the Crown.(5) But regulations under section (Regulations about charges payable to the Information Commissioner)(1) or (5) may not apply to—(a) Her Majesty in Her private capacity,(b) Her Majesty in right of the Duchy of Lancaster, or(c) the Duke of Cornwall.(6) For the purposes of section (Regulations about charges payable to the Information Commissioner) each government department is to be treated as a person separate from any other government department.(7) In subsection (6)“government department” includes—(a) any part of the Scottish Administration;(b) a Northern Ireland department;(c) the Welsh Government;(d) any body or authority exercising statutory functions on behalf of the Crown.”
Lord Ashton of Hyde
“Amendments relating to section (Regulations about charges payable to the Information Commissioner)
(1) The Data Protection Act 1998 is amended in accordance with subsections (2) to (7).(2) Omit Part 3 (notification by data controllers).(3) In section 33A(1)(manual data held by public authorities) omit paragraph (e)(but not the “and” following that paragraph).(4) In section 71 (index of defined expressions) omit the entries relating to “address”, “fees regulations”, “notification requirements”, “prescribed” and “registrable particulars”.(5) In Part 2 of Schedule 1 (interpretation of the data protection principles) in paragraph 5 omit paragraph (b) and the “or” preceding that paragraph.(6) In Part 1 of Schedule 5 (the Information Commissioner) in paragraph 9(1)(destination of fees etc) after “the Freedom of Information Act 2000” insert “and all charges received by the Commissioner under regulations under section (Regulations about charges payable to the Information Commissioner) (1) of the Digital Economy Act 2017”.(7) In Schedule 14 (transitional provisions and savings) omit paragraph 2 (registration under Part 2 of the Data Protection Act 1984).(8) In regulation 5(3)(b) of the High Court Enforcement Officers Regulations 2004 (SI 2004/400)(application procedure) omit paragraph (iii). (9) In consequence of the repeal in subsection (2) the following are repealed or revoked—(a) section 71 of the Freedom of Information Act 2000;(b) in paragraph 6 of Schedule 2 to the Transfer of Functions (Miscellaneous) Order 2001 (SI 2001/3500)—(i) in sub-paragraph (1), paragraphs (h) to (m), and(ii) sub-paragraph (2);(c) in paragraph 9(1)(a) of Schedule 2 to the Secretary of State for Constitutional Affairs Order 2003 (SI 2003/1887), the words “16, 17, 22, 23, 25, 26,”;(d) Part 1 of Schedule 20 to the Coroners and Justice Act 2009;(e) paragraph 26 of Schedule 2 to the Transfer of Tribunal Functions Order 2010 (SI 2010/22).”
Lord Ashton of Hyde
“PUBLIC SERVICE DELIVERY: SPECIFIED PERSONS FOR THE PURPOSES OF SECTION 311_ The Secretary of State for the Home Department.2_ The Secretary of State for Defence.3_ The Lord Chancellor.4_ The Secretary of State for Justice.5_ The Secretary of State for Education.6_ The Secretary of State for Business, Energy and Industrial Strategy.7_ The Secretary of State for Work and Pensions.8_ The Secretary of State for Communities and Local Government.9_ The Secretary of State for Culture, Media and Sport.10_ Her Majesty’s Revenue and Customs.11_ A county council in England.12_ A district council in England.13_ A London borough council.14_ A combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009.15_ The Common Council of the City of London in its capacity as a local authority.16_ The Council of the Isles of Scilly.17_ The Greater London Authority.18_ A metropolitan county fire and rescue authority.19_ The London Fire Commissioner.20_ A fire and rescue authority in England constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies.21_ A fire and rescue authority created by a scheme under section 4A of the Fire and Rescue Services Act 2004.22_ A chief officer of police for a police area in England and Wales.23_ The proprietor of a school within the meaning of the Education Act 1996.24_ The proprietor of an Academy within the meaning of that Act.25_ The responsible person in relation to an educational institution as defined by section 72(5) of the Education and Skills Act 2008 (other than a person within paragraph 23 or 24). 26_ The Gas and Electricity Markets Authority.27_ The Chief Land Registrar.28_ A person providing services in connection with a specified objective (within the meaning of section 31) to a specified person who is a public authority.”
“PUBLIC SERVICE DELIVERY: SPECIFIED PERSONS FOR THE PURPOSES OF SECTIONS 32 AND 331_ The Secretary of State for Business, Energy and Industrial Strategy.2_ The Secretary of State for Work and Pensions.3_ The Secretary of State for Communities and Local Government.4_ Her Majesty’s Revenue and Customs.5_ A county council in England.6_ A district council in England.7_ A London borough council.8_ A combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009.9_ The Common Council of the City of London in its capacity as a local authority.10_ The Council of the Isles of Scilly.11_ The Greater London Authority.12_ A metropolitan county fire and rescue authority.13_ The London Fire Commissioner.14_ A fire and rescue authority in England constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies.15_ A fire and rescue authority created by a scheme under section 4A of the Fire and Rescue Services Act 2004.16_ The Gas and Electricity Markets Authority.17_ The Chief Land Registrar.18_ A person providing services in connection with a fuel poverty measure (within the meaning of section 32) to a specified person who is a public authority.”
“PUBLIC SERVICE DELIVERY: SPECIFIED PERSONS FOR THE PURPOSES OF SECTIONS 34 AND 351_ The Secretary of State for Work and Pensions.2_ The Secretary of State for Communities and Local Government.3_ Her Majesty’s Revenue and Customs.4_ A county council in England.5_ A district council in England.6_ A London borough council.7_ A combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009.8_ The Common Council of the City of London in its capacity as a local authority.9_ The Council of the Isles of Scilly.10_ The Greater London Authority.11_ The Chief Land Registrar.12_ A person providing services in connection with a water poverty measure (within the meaning of section 34) to a specified person who is a public authority.”
“SPECIFIED PERSONS FOR THE PURPOSES OF THE DEBT PROVISIONS1_ The Secretary of State for the Home Department.2_ The Lord Chancellor. 3_ The Secretary of State for Justice.4_ The Secretary of State for Education.5_ The Secretary of State for Business, Energy and Industrial Strategy.6_ The Secretary of State for Work and Pensions.7_ The Secretary of State for Transport.8_ Her Majesty’s Revenue and Customs.9_ The Minister for the Cabinet Office.10_ A county council in England.11_ A district council in England.12_ A London borough council.13_ The Common Council of the City of London in its capacity as a local authority.14_ The Council of the Isles of Scilly.15_ The Greater London Authority.16_ The Student Loans Company.17_ A person providing services to a specified person who is a public authority in respect of the taking of action in connection with debt owed to a public authority or to the Crown.”
Lord Ashton of Hyde
“SPECIFIED PERSONS FOR THE PURPOSES OF THE FRAUD PROVISIONS1_ The Secretary of State for the Home Department.2_ The Secretary of State for Defence.3_ The Lord Chancellor.4_ The Secretary of State for Justice.5_ The Secretary of State for Education.6_ The Secretary of State for Business, Energy and Industrial Strategy.7_ The Secretary of State for Work and Pensions.8_ The Secretary of State for Transport.9_ The Secretary of State for Communities and Local Government.10_ The Secretary of State for the Environment, Food and Rural Affairs.11_ The Secretary of State for International Development.12_ The Secretary of State for Culture, Media and Sport.13_ The Minister for the Cabinet Office.14_ Her Majesty’s Revenue and Customs.15_ The Export Credits Guarantee Department.16_ A county council in England.17_ A district council in England.18_ A London borough council.19_ The Common Council of the City of London in its capacity as a local authority.20_ The Council of the Isles of Scilly.21_ The Greater London Authority.22_ The Chief Land Registrar.23_ The Big Lottery Fund.24_ The Nuclear Decommissioning Authority.25_ The Environment Agency.26_ The Homes and Communities Agency.27_ The Higher Education Funding Council for England. 28_ The Historic Buildings and Monuments Commission for England.29_ The Student Loans Company.30_ The British Council.31_ The Arts Council of England.32_ The English Sports Council.33_ The Technology Strategy Board.34_ The Arts and Humanities Research Council.35_ The Medical Research Council.36_ The Natural Environment Research Council.37_ The Biotechnology and Biological Sciences Research Council.38_ The Economic and Social Research Council.39_ The Engineering and Physical Sciences Research Council.40_ The Science and Technology Facilities Council.41_ A person providing services to a specified person who is a public authority in respect of the taking of action in connection with fraud against a public authority.”
Lord Ashton of Hyde
“Guarantee of pension liabilities under Telecommunications Act 1984Guarantee of pension liabilities under Telecommunications Act 1984
(1) The Secretary of State may make regulations modifying or supplementing section 68 of the Telecommunications Act 1984 (liability of Secretary of State in respect of British Telecommunications public limited company’s liabilities as successor for payment of pensions) in accordance with subsection (4).(2) Subsection (4) applies in relation to relevant employees of British Telecommunications public limited company (“BTplc”) becoming employees of another company (a “transferee”) in connection with any part of the undertaking of BTplc being transferred or outsourced (whether or not to the transferee).(3) Employees are relevant if the liability of BTplc for the payment of pensions which vested in it by virtue of section 60 of the Telecommunications Act 1984 included, immediately before the employees ceased to be employees of BTplc, liability for the payment of pensions to or in respect of those employees.(4) The regulations may provide for the Secretary of State (in addition to any liability apart from the regulations) to become liable—(a) on the winding up of BTplc, to discharge any outstanding liability of BTplc for the payment of pensions to or in respect of relevant employees of the transferee or a successor;(b) on the winding up of the transferee or a successor, to discharge any outstanding liability of the transferee or successor for the payment of pensions to or in respect of relevant employees.(5) The regulations may provide for any liability that the Secretary of State is liable to discharge under the regulations not to include liability arising by virtue of a person’s employment on or after a specified date, or by virtue of anything else occurring on or after a specified date. (6) The specified date must be not earlier than the date on which the regulations come into force.(7) The power to make regulations under this section is exercisable so as to—(a) make provision in relation to all cases or circumstances to which the power extends or in relation to specified cases or circumstances;(b) in particular, make provision in relation to all employees to whom the power extends or in relation to employees of a specified description;(c) make different provision for different purposes.(8) The regulations may—(a) amend section 68 of the Telecommunications Act 1984;(b) re-enact any provision of that section with or without modifications.(9) In this section references to the winding up of a company are references to—(a) the passing of a resolution, in accordance with the Insolvency Act 1986, for the voluntary winding up of the company, or(b) the making of an order for the winding up of the company by the court under that Act.(10) In this section—“specified” means specified in regulations under this section;“successor” means—(a) where relevant employees of a transferee become employees of another person, that person, and(b) where relevant employees of a successor within paragraph (a) or this paragraph become employees of another person, that person.”
Lord Ashton of Hyde
My Lords, Amendments 33ZYE and 33ZYF confer a power on the Secretary of State to modify Section 68 of the Telecommunications Act 1984, which put in place a Crown guarantee covering the BT pension scheme when BT was privatised. This is essential so that the Government can continue to guarantee the BT pension scheme liabilities relating to employees transferred to a separate Openreach.
This amendment is necessary following the announcement on 10 March of a voluntary deal between BT and Ofcom legally to separate BT and Openreach, making Openreach a wholly-owned subsidiary of BT. Ofcom has identified an issue concerning the Crown guarantee as a barrier to the implementation of that deal. This amendment removes that barrier.
When BT was privatised in 1984, the Government legislated that BT plc’s pension liabilities were subject to a Crown guarantee. This meant that government would stand behind the BT pension scheme if BT entered insolvent winding-up. However, if that legislation were to remain unamended, the protection of the Crown guarantee would be removed from BT pension scheme members who transferred to a separate Openreach.
The welfare of BT pension scheme members is a critical consideration for the separation deal. That is why this amendment will enable the Secretary of State to ensure that the Crown guarantee can continue to apply to the pensions of all the staff who benefited from it before separation. The Government are clear that maintaining existing pension protections for BT and Openreach employees is vital. We intend to use the power to do that. Dialogue and consultation with the trustee on the exact exercise of this power will therefore be crucial, and we will engage with it before and during the creation of the implementing regulations.
This power also ensures that the Government can respond to a range of potential outcomes. It would not be right to amend the Telecommunications Act 1984 directly at this stage, when many technical details of the transfer of employment to Openreach and the management of the BT pension scheme after separation are unknown or unclear. That is why we need to take a power so that we can get the detailed secondary legislation on the Crown guarantee right.
The power taken under this amendment has a comprehensive set of safeguards on its use, including a duty to consult appropriate stakeholders: the trustee of the BT pension scheme, the Pensions Regulator and the companies involved. The power may be exercised only with the consent of the Treasury, and a draft of the instrument must be laid before, and approved by resolutions in, both Houses of Parliament.
The separation of BT and Openreach lays the ground for a more competitive broadband market that will improve the speed and reliability of our nation’s broadband services to the benefit of businesses and consumers. Ofcom has also stated that separation will promote investment in next-generation full-fibre infrastructure, and I hope that noble Lords will join me in calling on BT to make that a reality and deliver the connectivity that our nation needs. Further, I hope noble Lords will support this necessary amendment so that Ofcom can implement a more separate Openreach without delay, and so that the welfare of all BT pension scheme members may be safeguarded. I beg to move.
Amendment 33ZYEA (to Amendment 33ZYE)
Baroness Drake
Baroness Drake (Lab)
My Lords, Amendments 33ZYEA and 33ZYEB, which are in my name and that of my noble friend Lord Mendelsohn, amend the Government’s Amendment 33ZYE on the Crown guarantee for pensions liabilities in BT plc. I am not a member of the BT pension scheme, but for some years as a trade union official I represented the majority of BT employees, including on pension matters. In March this year, BT and Ofcom announced agreement on a regulatory settlement that would see Openreach become a distinct, legally separate company within the BT group. Once the agreement is implemented, around 32,000 employees will transfer to the new Openreach Ltd, following TUPE consultation and once pension arrangements are in place. This transfer is expected to be the largest TUPE transfer in UK corporate history and is an important pillar of the agreement between BT and Ofcom.
My amendments seek to address causes of concern for employees who will be transferred and to seek assurances that they and the BT pension scheme trustees need. As the noble Lord mentioned, the BT pension scheme currently has a Crown guarantee of BT’s obligations to the liabilities of the scheme provided for in the Telecommunications Act 1984. The implementation of the agreement between BT and Ofcom is subject to the satisfaction of certain conditions, which include new legislation providing for Openreach pension liabilities to be covered by the maintenance or equivalence of the current BT plc Crown guarantee, so ensuring that employees who are BT pension scheme members will not lose that protection on transfer to Openreach—in effect, ensuring maintenance of the existing Crown guarantee for both BT plc and the new Openreach Ltd pension liabilities.
I believe government Amendment 33ZYE does not make explicit provision for Openreach pension liabilities to be covered by the maintenance or equivalence of the current Crown guarantee for two reasons. The purpose of my two amendments is to address each of those two reasons. Amendment 33ZYEB addresses the first reason, which goes to the future scope and operation of the Crown guarantee covering Openreach pension liabilities, which I believe is of material concern to the scheme members and the trustee.
New subsection (5) proposed in the Government’s amendment—which my amendment would delete—sets out that any regulations made under the proposed new clause may provide for the Secretary of State’s liabilities to be limited so that the Crown guarantee does not cover pension liabilities arising in Openreach Ltd after a future date, whether such liabilities arise because of a person’s continuing employment or indeed from anything else occurring. The Crown guarantee covering Openreach Ltd would be more restricted than the current Crown guarantee covering BT plc—they would not be equivalent.
The trustee’s engagement in the Ofcom review was on the understood basis that affected employees of BT plc who transfer to Openreach will continue to benefit from the same Crown guarantee protections as they would have done with BT plc—that the guarantee in respect of Openreach pension liabilities would be,
“equivalent in operation and scope”,
to the current Crown guarantee. The DCMS press release of 15 March states that the Government’s intention in bringing forward this amendment is to,
“maintain pension protections for BT Pension Scheme members … and provide peace of mind to affected workers”.
The power to restrict the guarantee to exclude Openreach pension liabilities arising after a future date is problematic for several reasons. First, it does not maintain equivalent Crown guarantee protection, as there is no provision in legislation for the current Crown guarantee to be so curtailed. Secondly, restricting the Crown guarantee will cause significant concern to the trustees and employees affected. It would not maintain existing pension protections and is outside the understood implementation of Openreach Ltd.
If Ofcom has reserved revisiting full separation of Openreach from BT if it considers functional separation not to be working appropriately, the implications of full separation would need to be addressed at that time. BT workers who are members of the BT pension scheme have the security of a Crown guarantee to all their service. These rights were confirmed by the Court of Appeal. To remove them is wrong and in no way required by this regulatory settlement between Ofcom and BT plc.
For the Government to give themselves, through proposed new subsection (5) in their amendment, a power now to limit the Crown guarantee adds to the trustees’ uncertainty, fails to reassure employees and provides an unhelpful backdrop to the scheme’s 2017 triennial valuation. Proposed new subsection (5) seems to allow regulations that enable the Secretary of State to turn off the tap of the Crown guarantee to Openreach from a future date. That would not be maintenance of the Crown guarantee or provide peace of mind to affected workers—the Government’s promised intention. Proposed new subsection (5) could also inhibit employees moving freely between employment with BT and with Openreach, because the security of their pensions could be prejudiced, and deny Openreach access to skilled people in BT plc.
My amendment deletes proposed new subsection (5) in the government amendment, which is not required to implement the Ofcom-BT agreement on Openreach. Proposed new subsection (5) has also caused lingering anxiety about the Crown guarantee for BT plc pension liabilities. The Government have said that they intend to maintain the Crown guarantee for BT pension scheme members who transfer from BT plc to the new Openreach company and those whose employment may move in future between the two companies, but their amendment does not expressly commit them to maintain the current Crown guarantee to cover Openreach pension liabilities.
Will the Minister give a categorical assurance that relevant employees can move over to Openreach knowing that the pension liabilities, including those arising from future service of Openreach—a legal entity created as a result of the new regulatory settlement between BT plc and Ofcom—will continue to be covered by the current Crown guarantee, maintained for all members of the BT plc pension scheme?
The Minister will be aware of the extensive litigation on the interpretation of the Crown guarantee and will understand that members of the BT pension scheme will be anxious to ensure that no changes could be made to the Crown guarantee which, whether deliberately or inadvertently, might reduce or alter its scope or coverage in so far as it relates to the pension liabilities of BT plc. My understanding is that the amendment is not intended to have that effect. There are circa 330,000 members of the BT pension scheme. Many are pensioners. Will the Minister confirm that my understanding is correct and that it is not possible for any regulations made under the powers arising from the government amendment to disturb or reduce the scope for effect of the Crown guarantee as it applies to the pension liabilities of BT plc in any way?
My Amendment 33ZEA addresses my second reason for concern. Proposed new subsection (2) in the Government’s amendment sets out the circumstances in which regulations may extend the coverage of the Crown guarantee. It states that the relevant circumstance is one where relevant BT plc employees become employees of another company,
“in connection with any part of the undertaking of BTplc being transferred or outsourced”.
Proposed new subsection (2) is important because how existing BT plc employees switch to become employees of the new Openreach Ltd needs to fall within the circumstances set out in that subsection.
Lord Clement-Jones
The noble Baroness, Lady Drake, has asked a number of very pertinent questions, but I have one question—probably because I am a bear of small brain in these circumstances. Would the new section apply on full structural separation of Openreach from BT, if that were to arise in future?
Lord Mendelsohn (Lab)
My Lords, this group of amendments addresses two crucial issues—first, the Crown guarantee on BT pensions and, secondly, the relationship between Openreach and BT. In relation to the Crown guarantee, I have added my name to Amendments 33ZYEA and 33ZYEB in the name of my noble friend Lady Drake. These Benches support her arguments completely, and I hope that the clear, comprehensive and compelling case that she made will receive a good reception across the whole House. I thank her for her excellent and assiduous work on this matter.
It is clear that these government amendments do not yet have the robustness that assures this House, and I think that my noble friend’s unequalled expertise has come up with an impressive formulation. I look forward to hearing the Minister respond to these issues and would wish to hear some specific reassurances, if he is not minded to accept her amendments. It is important that nothing weakens the covenant on pensions; it is extremely important that the Crown guarantee is carried across and that nothing undermines the responsibilities of the trustees in exercising their duties properly. It is a colossal task. BT has the second-worst-funded pension scheme in the world, according to the MSCI survey of 5,000 company pensions, second only to Du Pont, which is the subject of a merger which will make it better funded, so BT will become the worst-funded pension scheme in the world. In addition to uncertainties about the Crown guarantee, that will put trustees in an impossible position, if these amendments are not addressed as my noble friend suggested. The Government and all those concerned in this discussion should be in a position to confirm—as indeed Matthew Hancock, the Minister responsible, did in a meeting with Members of this House—that the proposed arrangements for the pension scheme should ensure long-term assurance to pension holders whether Openreach is legally or structurally separated.
This brings us to Amendment 33M in my name and that of my noble friend Lord Stevenson of Balmacara, which proposes the structural separation of Openreach. I will make a few very brief points to support this view. This is not a negative statement about BT, which is an excellent British company and one that we hope will continue to grow and thrive. There are many keen to criticise BT’s behaviour in relation to the supply of broadband but this must be properly balanced by the realities of the regulatory framework and policy context it was given to operate in and which has incentivised and guided its approach. It is slightly unfair to create such arrangements and then criticise someone for following them, and many of the criticisms of BT have been unfair and misdirected.
The differences between the benefits of legal and structural separation are important to note. Legal separation, which has been proposed by Ofcom, is where the upstream business is established as a separate legal entity within the wider group but remains under BT’s complete ownership. It includes functional separation with independent governance. There is a clear benefit to a regulator that would lend itself to suggesting this approach. It certainly makes the regulatory task of overseeing this arrangement much more economic. But having one place to look at is a benefit only for the regulator. The alternative is structural separation, where the vertically integrated operation is split with no significant common ownership and “line of business” restrictions to prevent them re-entering each other’s markets. There are some issues that people think are reasons to achieve separation, such as improvements to service levels, broadband speeds and end-customer services, but these are not dependent on separation.
BT has contributed massively to getting us to where we are now, where we have—in relative terms to international peers—availability of superfast average speeds and lowish prices. But the challenge is the future, and this is where investment needs to be higher. Crucially the UK is lagging in fibre to the premises; the majority of the network is either fibre to the cabinet or cable. The future will require us to commit to FTTP. Other solutions such as G.fast will not keep us as a leading nation. Structural separation is the only mechanism that can sufficiently address the investment issues, and this was the matter that Ofcom did not adequately address in its proposal. The legal separation does not address the problem that strategic decisions on investment will still be dependent on BT, even though I hope that it takes note of the Minister’s exhortation for it to do better.
Ofcom’s statement of reasons for its approach says that this will provide improved investment outcomes from new models of investment such as co-investment and risk sharing. But BT has never lacked access to capital, which is why even Ofcom acknowledges that this model will be reviewed in order to ensure that the new structure achieves its objectives. This is not an equivocal “may” or “could”, but an emphatic “must” and “should” be reviewed. I hope that the Minister can confirm that this will be done and a broad timetable for it.
Our concern is that policy is drifting and opportunities to ensure that we maintain a leading position in the new communications technologies are being weighed down by compromise, confusion and a terrible lack of clarity. It is surely better to provide leadership and certainty by choosing the only arrangement that will ensure the necessary level of investment to make our broadband fit for the future.
Lord Ashton of Hyde
My Lords, I thank the noble Baroness, Lady Drake, for the time and effort that she has put into examining this matter and meeting with me and my officials to explore the details. The noble Baroness is an expert in pension matters and we have all benefited from her advice, and I am very grateful. Government Amendment 33ZYE is explicitly designed to ensure the continuation of the Crown guarantee for those transferees from BT plc to a future Openreach or other successor company. Amendment 33ZYEA is a technical point and concerns the adequacy of the word “undertakings”. I believe that our existing wording on undertakings is sufficient and would cover any transfer of staff, including one that was consequential on the application of the TUPE regulations about the movement of activities from one company to another. The “activities”, suggested by the noble Baroness, if moved to another company, are part of the undertaking of BT.
We agree with the noble Baroness on the policy intent. We intend to cover all ways by which BT staff might be transferred to the new Openreach company, but technical detail is important here, and I will table a technical clarification for Third Reading.
Amendment 33ZYEB seeks to delete a subsection of the Government’s amendment that provides a power to vary the Crown guarantee. I understand the reasoning behind this amendment but want to remind noble Lords that the Government have been clear that we are providing a power to ensure that, following Openreach’s separation, the extent of protection afforded by the Crown guarantee is no less and no more than at present. I reassure noble Lords that nothing in the Bill or in the delegated powers it gives to the Secretary of State will change or alter the Crown guarantee to BT plc pension liabilities.
We have seen the documents published by BT and Ofcom that outline plans for a legally separate Openreach Ltd. On the basis of those, the Government fully intend to ensure that the Crown guarantee protection continues to be maintained for all current members of the BT pension scheme, including those who will become part of the wholly owned subsidiary Openreach Ltd. So, our clear intention is that the protection of the guarantee provided to BT pension scheme members should be maintained. That is why the power includes an ability to define that protection in secondary legislation so that it may be neither wider nor narrower than existing protections. However, until we see the detail of the agreement on Openreach separation, and how the liability for payments to the BT pension scheme will be divided between BT plc and the new Openreach, we cannot say that the power defined in new subsection (5) will not be required. In applying the Crown guarantee to the pension liabilities of the new company, we are creating new risks. There is the potential for unintended consequences, which concerns us particularly. This power helps guard against them, while enabling the Government to maintain Crown guarantee protections for pension scheme members in line with our clearly stated intention to do so.
New subsection (5) gives the power for the Secretary of State to consider whether to maintain the Crown guarantee for any staff who then move on to spin-off companies: for example, if part or all of Openreach were sold. I believe that the need for this power is clear. I reiterate that it is the Government’s intention to ensure that current members of the scheme who transfer to Openreach are certain that their pension rights will continue to be safeguarded by a Crown guarantee.
I turn now to Amendment 33M, which seeks to place obligations on the Secretary of State to direct Ofcom to begin the process of “legal and functional separation” of Openreach from BT plc. Functional separation of Openreach and BT has been in place since 2006 by means of undertakings that BT gave to Ofcom pursuant to the Enterprise Act 2002. On 10 March 2017, Ofcom and BT announced that they had agreed on a legal separation. By the end of this year “legal and functional separation”, as required by the noble Lord’s amendment, should have been achieved, according to Ofcom. On that basis, if the timetable set out in Amendment 33M were to be followed, separation would take much longer. Ofcom is currently consulting on the details of the transition to a legally separate Openreach. This consultation closes on 14 April and the timetable for completion should be achievable. Moreover, if Ofcom had to impose its decision on BT rather than having a voluntary agreement as now, the decision would have to be referred to the European Commission under the electronic communications framework directive. The remedy of separation has never been used before, so the timetable for a response from the Commission is unknown. It could be nine months or more. It is also possible that BT would appeal against forced separation, further delaying the process. A long delay would be likely to inhibit investment in the sector at a time when we all want to see great strides being made in the UK’s broadband coverage and quality.
The purpose of having our independent communications regulator, Ofcom, is to make exactly these assessments. It is Ofcom’s duty and role to take decisions and regulatory interventions on the strength of its expert analysis of competition in the market. As such, it is our view that it would not be appropriate for the Government to legislate in this way in view of the independence of Ofcom from government. It is therefore not necessary or right for government to legislate on this matter both because Ofcom can take such decisions and because it has already done so, specifically in respect of the separation of Openreach. With that explanation, I hope that the noble Baroness will withdraw the amendment.
Baroness Drake
My Lords, amendments on the matter of Openreach and the Crown guarantee were not tabled until Report—which is understandable, given the timing of the discussions with Ofcom. I was therefore unable to have the benefit of being able to probe in Committee, so I ask noble Lords to forgive me for taking some time now. I also thank the Minister for his courtesy in meeting me and for his consideration of my concerns, and I thank the civil servants in the DCMS, who were so patient in dealing with my questions and queries.
I welcome the Minister’s statement that there will be a technical amendment at Third Reading to remove any ambiguity about what is covered under any transfer of undertaking under proposed new subsection (2). I also welcome the unequivocal assurance that the powers arising from the amendments to the Bill will not disturb the existing Crown guarantee relating to BT plc pension liabilities.
On the issue of the protection of the pension liabilities on behalf of those members transferred into Openreach —the Openreach created as a result of the regulatory settlement—obviously I will read the detail in Hansard, because I was trying to take all the words in. That provides quite a lot of assurance to the members and the trustees, but I would like to read it and, if I may, reserve any concern I may have in that reading. However on first hearing it seems to confirm that the Government’s intention is that the existing Crown guarantee will be applied in all respects to those people transferred to Openreach under the regulatory settlement agreed with Ofcom. On that basis, I beg leave to withdraw the amendment.
Lord Ashton of Hyde
“Regulations under section (Guarantee of pension liabilities under Telecommunications Act 1984)
(1) The power to make regulations under section (Guarantee of pension liabilities under Telecommunications Act 1984) is exercisable by statutory instrument.(2) That power is exercisable by the Secretary of State only with the consent of the Treasury.(3) A statutory instrument containing regulations under that section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(4) Before making regulations under that section the Secretary of State must consult—(a) the Pensions Regulator;(b) BT plc;(c) the trustees of the BT Pensions Scheme;(d) any transferee or successor to which the regulations apply;(e) any other persons the Secretary of State considers it appropriate to consult.”
Baroness Janke
“Duties on providers of social media services
After section 131 of the Communications Act 2003 (statement of policy on persistent misuse) insert—“131A Duties on providers of social media services(1) In this section “social media service” means a website or application that enables users to create and share content, to communicate publicly and privately with other users, and to participate in social networking.(2) Social media services have a general duty to respond to reports of material shared or communicated via their website or application (“the content”) that passes the “criminal test” set out in subsection (3).(3) The criminal test is whether the content would, if published by other means, or communicated in person, cause a criminal offence to be committed.(4) Social media services have a duty to provide a means for users to report content which, in the view of the user, meets the criminal test.(5) Social media services have a duty to remove content which demonstrably meets the criminal test within the prescribed period, and to inform the police.(6) The prescribed period must be set out in regulations made by the Secretary of State within 120 days of the commencement of this section.(7) Regulations under subsection (6) may prescribe different periods for different categories of social media services, to be determined by the number of users that service has at the time a report is made under the provisions of subsection (4).(8) Regulations made under this section must be made by statutory instrument, and may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
Baroness Janke
My Lords, this amendment has already been debated. Although the assurances the Minister gave in the previous debate were very interesting and will bring forward some new issues and some reassurances, this is a very urgent matter and I would like to hear what he has to say. I therefore beg to move.
Lord Ashton of Hyde
My Lords, as the noble Baroness said, this has been debated. However, I will respond briefly. First, on 27 February the Government announced work on an internet safety strategy which aims to make the UK the safest place in the world for children and young people to go online. With the help of experts, social media companies, tech firms, charities and young people, we aim to publish a Green Paper in June. We need the time to do this.
Secondly, on 20 March this House agreed the amendment in the name of the noble Baroness, Lady Jones, on a code of practice for social media. The House has already debated this issue. To accept Amendment 33A would create overlap and duplication between the two amendments. It simply does not make sense to have agreement to both amendments.
Thirdly, defining “social media service” is difficult, but I regret that the noble Baroness’s definition is very wide, and therefore unworkable and disproportionate.
Finally, and perhaps most importantly, it should not be left to social media companies or their users to judge whether or not content is criminal.
However, we know that there is more to do and I give a firm commitment to the House that we will consider all available options through our internet safety strategy, which will be published in June, and that we will implement its proposals as quickly as possible.
Baroness Janke
I thank the Minister for his comments. The difference between this amendment and the one that he mentioned is that the previous amendment referred to children, whereas this amendment covers a much wider range of adults, particularly vulnerable adults and adults who are subject to bullying, criticism and unfair treatment on the internet.
Having heard what the Minister said, I look forward to the Green Paper and to participating in discussions on it. I hope that the Government see this as a very serious issue and that they are committed to doing something about it. Having said that, I beg leave to withdraw the amendment.
Lord Lansley
“Definition of media enterprise
(1) The Enterprise Act 2002 is amended as follows.(2) In section 58A(1) (construction of consideration specified in section 58(2C)) for “broadcasting” substitute “the provision of television, radio and other services through which audio-visual content is made generally available to the public, whether by subscription, for payment or otherwise”.”
Lord Lansley (Con)
My Lords, as we turn the final bend, I hope that this group of amendments will be worthy of your Lordships’ patience. This group of five amendments in my name and those of my noble friends Lord Puttnam and Lord McNally all concern aspects of the public interest test on media mergers.
My co-signatories to these amendments and I worked together during the passage of the Communications Act 2003, when your Lordships successfully put the public interest test for media mergers into statute. That has proved a necessary and valuable intervention. Fourteen years on, the media landscape has greatly changed and with it, in our view, has come the need to review, strengthen and future-proof this important legislative measure. I am very grateful to my noble friend Lord Puttnam, who initiated this debate in Committee. Your Lordships who were present will recall that debate, which has permitted us to refine the amendments for Report and, indeed, has led to a positive and constructive engagement with the Secretary of State, the Minister and officials. I am very grateful, as I know my colleagues are, for all that engagement and discussion.
I should emphasise that the amendments are not occasioned by, nor intended directly to affect, the current intervention notice and review by Ofcom, which is expected to be considered under existing legislation. Our concern is to strengthen and future-proof the legislation.
So what is the purpose and effect of the amendments? Amendment 33F would widen the definition of “media enterprises”, to which the public interest test refers. Currently the definition is that,
“an enterprise is a media enterprise if it consists in or involves broadcasting”.
Broadcasting, as one will see under the Broadcasting Act, means television and radio services, and therefore does not include enterprises such as Google, including YouTube, Facebook, Twitter, Snap and many others, which are, as Martin Sorrell said the weekend before last, not technology enterprises but media enterprises.
Many people take more of their audio-visual content off YouTube than off conventional broadcast channels, or they seek their news through Twitter or take their news from apps on smartphones, not necessarily through broadcast platforms or channels. If a public interest can be engaged by the dominance or inappropriate control of a broadcast channel, why not therefore of a platform or channel through which social media is offered, delivering large-scale news-related and other material to the whole population? Therefore, this amendment widens the definition of a media enterprise to include those which involve the control of audio-visual content made generally available to the public.
Amendment 33G would give Ofcom the same powers—that is, powers when carrying out an Enterprise Act competition function—as would be available to the Competition and Markets Authority, and most specifically the power to require the attendance of witnesses and the production of documents as specified under Section 109 of the Enterprise Act 2002.
Amendment 33H relates to one of the existing grounds for a public interest intervention notice—namely that of the,
“commitment to the attainment in relation to broadcasting of the standards objectives”.
The standards referred to are broadcasting-related standards: they relate to television and radio services. The amendment therefore enables further standards to be prescribed that may relate to media extending beyond television and radio. The amendment therefore also refers to the commitment to the attainment of standards as evidenced through the control of media enterprises, linking back to Amendment 33F. Media enterprises in that context would be more widely construed. This test therefore, suitably widened in scope, would give a clearer basis for examining the behaviour of a person and their commitment to standards across media more generally. It would eliminate the risk that behaviour outside the scope of television and radio and beyond the specifics of the broadcasting standards code would not be able to be drawn in aid in determining whether the grounds for an intervention are met.
Amendment 33J adds to the reasons why a public interest intervention notice on a media merger may be issued by reference to three additional grounds. The first is that the control of a media enterprise which includes a Broadcasting Act licence should be exercised by someone who is a fit and proper person to hold such a licence. In the current media merger referral, Ofcom has chosen to conduct a fit and proper person test under the Broadcasting Act alongside the review of the Enterprise Act and including therefore the actions in corporate governance. It was not required to do so and it is possible that control of a media enterprise may therefore be disassociated from the fit and proper person test relating to the holding of a Broadcasting Act licence. The amendment is designed to align the public interest test under the Enterprise Act with the Broadcasting Act test at the point at which control may be acquired over a regulated broadcaster. To that extent, it is intended to be necessarily proactive in relation to the control of enterprises and not necessarily reactive.
Amendment 33L in the name of the noble Lord, Lord Stevenson of Balmacara, introduces a further limb to the question of what “fit and proper” means in this context. In our amendment, we propose to specify to some extent what it means beyond the tests already included in the media merger public interest test. What the noble Lord says in his amendment is reminiscent of what the Financial Conduct Authority says in relation to its fit and proper person test. He may not have intended it to be, but it is very similar. Indeed, other economic regulators, when they apply a fit and proper person test, have in a number of instances been more specific than Ofcom has about what it means by a fit and proper person. The time may well have come—it is implied by our amendment and that of the noble Lord, Lord Stevenson of Balmacara—when we need to be more specific about what “fit and proper person” means in relation to the control of media enterprises. This is a helpful way of stimulating that debate and potentially, if not putting it in statute, clearly putting it in guidance from Ofcom.
The second limb of Amendment 33J is to protect the editorial freedom of the news services of media enterprises and see that safeguards are in place. In a nutshell, media plurality—the plurality of ownership—does not necessarily mean that in relation to that ownership editorial freedom is protected and safeguarded. That is what the amendment is directed to achieve.
The third limb would extend that plurality test beyond television and radio and therefore beyond the platforms, channels and the plurality of news, which the test is currently focused on, to the plurality of control of rights, talent and cultural assets. On the principle that content is king, this would give the power to intervene where an unwarranted and undesirable dominance would otherwise be created in relation to any significant category of cultural assets.
We had a useful and full debate in Committee. I hope that we have made explicit in these amendments the kind of questions that changes to the legislation now need to answer. First, how do we protect the public interest in media plurality rather than just news plurality, given the emergence of new dominant social media platforms and channels? Secondly, how do we ensure that those with control of the media, especially news media, are committed to high standards across all media and in their wider business dealings? Thirdly, how do we ensure that plurality is maintained in the control not only of news content, but of significant content of a cultural nature relating to both rights and assets? Lastly, how can we ensure not only the plurality of news but the editorial freedom applying to news?
We have greatly appreciated the engagement of Ministers and officials and I look forward to a positive response. I hope that we may be able to see a positive answer to these questions incorporated into legislation very soon. I beg to move.
Lord McNally (LD)
My Lords, earlier today we had a Question on divorce. Sir James Munby, the president of the Family Division, was quoted as saying that the law that he had to administer and make judgments on showed hypocrisy and a lack of intellectual honesty. That is a good example of what happens when, as in this case, a 44 year-old law does not reflect the society and the social mores that now exist. In a way, what we are doing here is similar. In 2003 we tried to persuade the then Government—with partial success—to give Ofcom some teeth in terms of the fit and proper person test. Our allies included the Minister herself: she was in that fray, as were the noble Lords, Lord Crickhowell, Lord Lansley and Lord Puttnam. I think that we can be proud of our work at that time.
Earlier today the noble Viscount, Lord Colville, referred to Ofcom as a world-class media regulator, and I think that that is true. The debates at the time reflected a degree of uncertainty about whether Ofcom would prove to be up to the job. Would it not be swamped by the massed ranks of corporate lawyers from the big media companies? In fact, at the time we did not want to give the BBC to Ofcom because we thought, again, that that would be too big a burden for it. Now there is general agreement that it is a very satisfactory place to put the BBC in terms of regulation —so it has done a good job.
What these amendments are about, as the noble Lord, Lord Lansley, explained so ably, is trying to make our current laws ready to give Ofcom powers that are clear, robust and wide-ranging. In terms of what we gave Ofcom in 2003, one former CEO of Ofcom was quoted as saying that somebody would have to commit a murder before he would fail the fit and proper person test. That is the problem. The Secretary of State very correctly clings to her quasi-judicial responsibilities. She does not want to be seen to be making political judgments, but we cannot escape entirely from doing that in carrying out our responsibilities. I think it was the noble Lord, Lord Saatchi, who said that media companies are not like tins of beans. That reminds us that they are an integral part of the social, political and cultural life of our country. Government has a duty to protect the ecology of our media to ensure that diversity of service and plurality of ownership are encouraged and sustained.
We enjoy many benefits from our sharing of the English language with the United States, but it also makes us particularly vulnerable to predatory activity by companies whose ethos and cultural values are embedded in the United States. This is particularly so when there is no reciprocity in terms of a two-way street in media ownership.
When I questioned the noble and learned Lord, Lord Keen, on these matters a week or so ago, I cited the support of those great standbys of our law—the man and woman on the Clapham omnibus. They will make short shrift of politicians hiding behind quasi-judicial status, pleading that rules and regulations are so tightly drawn that they are impotent and then allowing organisations or individuals into our media who threaten the ecology, diversity and quality. Nye Bevan’s great advice, “Why look into the crystal ball when you can read the book?”, is apposite here. We see constant attempts to intimidate the BBC. Although this does not affect the present problem, the Murdochs are an ever-incoming tide—as the noble Lord, Lord Lansley, referred to it. As he also said, there are possibly even bigger fish in the pool now.
So there is a need to pass the Clapham omnibus test and to strengthen and future-proof the legislation. The intention is to protect the integrity of our media ecology, but we must give the regulator the power and teeth to be able to do that.
Lord Puttnam (Lab)
My Lords, I am very happy to add my name to the amendments set out so ably by the noble Lord, Lord Lansley. I will build on what has been said by the noble Lord, Lord McNally. Today of all days it cannot be an overstatement to claim that these amendments go somewhat to the heart of a fundamental question: what kind of society do we wish to become, or, more importantly, what kind of society do we wish to leave to our children and our grandchildren? Is it one that is well informed, thoughtful and compassionate? Or, as an alternative, is it one that is easily manipulated, fearful and grasping at simple answers to ever more complex questions?
In answering that, I will quote at some length from a speech by the noble Lord, Lord Crickhowell, who I am delighted to see in his place this evening. He made it in this House on 2 July 2003 and it can be found in Hansard. He was speaking to an amendment on so-called foreign ownership, which he had co-signed with the now Lord Speaker, the noble Lord, Lord Fowler. The purpose of their amendment was to place a pause on the possibility of UK broadcasting assets being bought by foreign media owners, at least until a proper assessment of the impact of such ownership changes could be investigated and reported on by the then newly created regulator, Ofcom.
In this speech I believe that he nailed the issue that has bedevilled the creation of good legislation on this. Towards the end of his speech the noble Lord said:
“Public service broadcasting is now comprehensively defined … in legislative language. We are talking about creativity, diversity and standards … When my noble friend the Chief Whip circulates a note saying that we are being watched closely—minute by minute and in detail—by the media and that the most careful consideration has been given to the issues by senior colleagues in both Houses, I know that those who tell me that heavy pressure has been applied by media moguls are right. My reaction is not to climb down in the face of such pressure but to feel even more strongly that the Bill needs strengthening, not weakening”.
He concluded by saying:
“I hope that there will be many in all parts of the House, and a substantial number in my party, who will feel as I do and will insist on retaining effective … standards that are immensely valuable and need our protection”.—[Official Report, 2/7/03; cols. 928-29.]
Fourteen years later, that is essentially the purpose of these amendments: to strengthen and, as noble Lords have heard, future-proof the legislation, along with the definitions that drive it, in such a way as to enhance the clarity and conviction with which Ofcom can make its judgments. This in turn should have the effect of helping depoliticise the position of this or any other Secretary of State in making a final quasi-judicial decision on mergers and takeovers.
The word “sovereignty” has rippled around this Chamber more in the past few weeks than at possibly any time in living memory. One of the underpinnings of sovereignty is the integrity of our media, through which we see a daily reflection of ourselves at our best—and sometimes, I am afraid, at our very worst. We are at present a nation at odds with one another, to a greater degree than I can ever remember. As the Prime Minister stressed in her Statement to the House today, the need to focus on the things that bind us, the values we share and a belief in a future that is better and fairer than the past has surely never been more important.
Without confidence in an honest and truthful media, how can we ever develop sufficient trust in each other to help steer society towards a sustainable, let alone successful, post-Brexit future? Only Parliament, through its statutory regulatory bodies, can insist on a commitment to the standards that the noble Lord, Lord Crickhowell, referred to 14 years ago: those of truthfulness, justice, compassion and tolerance—values which I suspect all believe to be an essential aspect of a truly civilised society. The very idea of licensing any broadcast media organisation that does not demonstrably embrace and adhere to those values would in my judgment be an act of wilful national self-harm. These amendments, set out in the names of the noble Lords, Lord Lansley and Lord McNally, and myself, are intended to make any such act of self-harm that much more unlikely.
Lord Crickhowell (Con)
My Lords, I have not taken any part in the debates on this Bill, but in view of the fact that a speech I delivered 14 years ago and which I had entirely forgotten has been quoted at some length today, I hope I may be allowed to say that, on having reread it, I am rather proud of it and stand by every single word I said on that occasion. For that reason, I wholly support the general principles being advanced by my noble friend Lord Lansley and others who support the amendment. If it cannot be accepted tonight, I hope the Minister will at least indicate that the Government will follow this up with some very serious consideration indeed of the principles being advanced.
Viscount Colville of Culross (CB)
I too rise to support these very well-crafted amendments, particularly Amendments 33J and 33L, which are crucial in ensuring that Ofcom’s fit and proper test is extended to not just existing licence holders but prospective ones.
The amendments come as the proposed 21st Century Fox merger with BSkyB goes for the Ofcom fit and proper review. At the moment, I fear that the regulator can look only at the present situation, with Fox holding a 39% stake in BSkyB. Surely, that test should concentrate on what would happen if the merger went ahead and Fox took 100% control of BSkyB. Such a test would look at the assessment of James Murdoch. I refer your Lordships to the 2012 Ofcom report on “fit and proper assessment of Sky”. It said:
“In our view, James Murdoch’s conduct in relation to events at NGN repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman”.
At the time, Murdoch was not chairman of BSkyB, merely a non-executive director, and therefore junior enough for Ofcom to conclude that the finding did not affect BSkyB as a fit and proper licence holder. But last year, he was appointed chairman of BSkyB. The prospective merger with 21st Century Fox would give him massively increased power, with the full backing of a 21st Century Fox-appointed board. Ofcom surely should have the power to investigate what would happen in mergers such as these.
I am also concerned by developments with the federal grand jury sitting in Manhattan which is investigating the business practices of Fox News and claims by the Attorney’s Office that Fox News violated securities laws by not reporting to the Securities and Exchange Commission a series of massive settlements to employees. If Fox News is found guilty, there will be an American investigation into whether it is fit to hold a broadcasting licence. I ask the Minister, would it not be strange if the UK Government went ahead and granted 21st Century Fox a merger with BSkyB in this country, at a time when the sword of Damocles hangs over Fox News in America?
I look forward to the Minister reassuring me on these matters.
Lord Stevenson of Balmacara
My Lords, it is clear that we have saved the best till last. It has been a terrific debate. The hour is late and I shall not delay the House too long, but it is worth reflecting that a 14 year-old speech can be brought out, dusted down, given the once-over and realised to be fit for purpose and continue to have relevance today.
I support the amendments tabled by the noble Lords, Lord Lansley, Lord Puttnam and Lord McNally. They are absolutely right; they are on the mark. They are matters that need to be addressed now but also for the long term. The Government need to take them away and come back with some proposals as soon as possible.
The noble Lord, Lord Lansley, was right that the existing legislation, stemming from a variety of sources but crystallising around the Enterprise Act 2002, is strong, but it needs to be looked at in light of technological change, of developments and of the new way in which the world receives its information. Many things have not changed. We want to be sure that by moving around some of the architecture, we do not lose something, but it is clear that we need to widen the definition of a media enterprise—as the noble Lord said, broadcasting is far too narrow a definition for the way in which we consume and rebroadcast our information today. Ofcom needs powers equal to those of the CMA, in terms of getting papers and material in front of it so that it can have exactly the same authority in its work. It is not clear that it has those at the moment.
We need to think about the term “broadcasting standards” and make sure that it is fit for purpose in respect of the various companies now operating, which are definitely media companies and not technology companies, as many would argue. Certainly, all those involved in the current merger arrangements need to be considered closely in terms of the impact both of individuals and of the corporate structures which they employ.
The questions raised in our amendments to Amendment 33J, as was picked up by the noble Lord, Lord Lansley, are based closely on the model offered by the FCA in its fit and proper person test. If the noble Lord detected a similarity, it is because 90% of the words are the same—and well spotted. However, it shows that there is a commonality of approach which would repay some discussion and debate. Everyone will say that it is different in financial regulation, but some of the words copied out in Amendment 33L, for instance, which are taken straight from the FCA with only a couple of points lost, are appropriate. There are other examples and I commend them to the Minister when she comes to consider this matter, perhaps away from this sitting.
A point well made by the noble Lord, Lord Lansley, was that the work done in 2010 and 2011 is worth revisiting in some detail. In particular, a section on page 15 of the Report on Public Interest Test produced by Ofcom and published in 2011—to no significant media comment at that time because, by that stage, the Milly Dowler case had broken and the merger then in proposal had gone, so the public’s attention moved away—deals with:
“Concerns about wider market developments and sufficient plurality”.
It is incredibly relevant for today—I shall not read it all; I want to touch on just a few things. The point is made that,
“the current statutory framework may no longer be equipped to achieve Parliament’s policy objective of ensuring sufficient plurality of media ownership”.
The market developments have changed so much and some consideration of that broader issue must be given. The report identifies the problem that, at present, the regulations require that,
“a public interest consideration can only be triggered by a specific corporate transaction”,
such as merger proposals, but that can be done by organic growth and change. It is important that we have something in the regulations which allows Ofcom to use judgment over whether it is time to intervene, particularly on the fit and proper person test.
The report expresses concern about the differential arrangements for remedying competition concerns. Such concerns are not carried forward into considerations about whether transactions are operating in the public interest depending on plurality. In other words, the narrow competition concerns largely operated through the CMA are on one side of the calculation, but those that deal with media mergers are not given the same weight. Therefore, there is a discrepancy of approach.
Finally, the point is made that,
“a more fundamental review and possible reform of the current … framework”,
is probably necessary. This was said in 2010 and published in 2011. I do not think much work has been done on this since then. It is overdue time for us to look at it.
Specifically on Amendment 33L and the questions it raises, it is important that we think harder about what this phrase, a “fit and proper person”, should aim for. As I said, the wording of Amendment 33L is not necessarily perfect but it points us further down this track. I have heard it said that the problem with the fit and proper person test and the work operated under Ofcom is that precedents in relation to media come from earlier times under earlier regimes, such as the old ITC regime, which must be nearly 30 years old. Since it is not used very often, there are only occasional examples of it. We have a problem in ensuring there is a join-up between the considerations that should be brought into play today and what happened in the past. It was said—perhaps slightly light-heartedly but it makes the point—that it would be difficult in today’s world if one were using the tests provided by the ITC in the early 1980s and 1990s, as you would be able to prove that someone was not a fit and proper person to hold a broadcasting licence only if they had been not only charged with a crime of murder but also put away for it. That is probably too high a standard. Generally, most people would accept that. If it is true, there is a bigger question here.
It may be that the territory is such that we must be a bit more concerned about fit and proper persons in a more generic sense. In a time of fake news and with what is happening across America, we have difficulties enough coming our way. We also read in today’s papers that Andy Coulson, no less, is about to be hired as the PR consultant for a well-known daily newspaper on the very far right of the political spectrum. If it is right that his brief is to make people believe that the paper is authoritative and truthful, we have problems.
Baroness Buscombe
My Lords, I agree that the best is left until last. I start by thanking my noble friend, Lord Lansley, and the noble Lords, Lord Puttnam and Lord McNally, for the constructive way they engaged in discussions with the Secretary of State and me, and with the department’s officials, on seeking a common understanding on the very important issues raised in this debate.
As noble Lords said, in particular the noble Viscount, Lord Colville, the Secretary of State issued a European intervention notice in relation to the Fox/Sky merger on 16 March. She did so on two grounds: media plurality and commitment to broadcasting standards. Ofcom also announced on 16 March that it will conduct its fit and proper assessment at the same time as it will consider the public interest considerations raised in the intervention notice.
It is now time to leave the independent regulators, Ofcom and the Competition and Markets Authority, to carry out their reviews as set out in legislation. Under the terms of the intervention notice, both will report back to the Secretary of State within 40 working days—by 16 May. For the avoidance of doubt, the Secretary of State’s quasi-judicial role in respect of that merger continues and it would therefore be inappropriate for me to comment on the merits of that case. I am able to address the important issues raised by these amendments on future mergers.
As my noble friend Lord Lansley made clear, the purpose of these amendments is to future-proof the issue when it comes to media mergers. I listened carefully to the noble Lord, Lord McNally, talk about the changes over the past 14 years in terms of social mores and societal changes. The noble Lord, Lord Puttnam, referenced the need to talk about trust in each other, truthfulness, justice, compassion and tolerance. Of course, there was the reference to my noble friend Lord Crickhowell, whom I well remember speaking in those debates on foreign ownership. They were controversial at the time. There were some real difficulties in accepting what my noble friend sought to achieve but times have changed. We have moved on and learned a lot, and we have built a great deal of trust in the ability of Ofcom to do its work and do it well.
The first point I want to deal with is the amendment on Ofcom’s powers. In a phase 1 assessment of any media merger, Ofcom’s role is not to conclusively decide whether concerns about the merger have been established but rather to advise on whether or not they warrant a more thorough, phase 2 review. In our view, the timing and nature of Ofcom’s phase 1 review simply do not necessitate the powers that Amendment 33G is proposing. Phase 2, if this is needed, is a more in-depth review that the CMA carries out over a longer period of 24 weeks. At this stage in the process, the CMA does need more extensive powers and this is already provided for under the Enterprise Act 2002. It is at the end of this review that a decision is made by the relevant Secretary of State on whether the merger operates against the public interest and whether it should be able to proceed.
If a party to a merger does not co-operate with Ofcom in its phase 1 review, Ofcom can, and indeed should, draw out that point—and the behaviour of the parties—in its report and conclusions, which will be published. The provision of false or misleading information by anyone to Ofcom or the CMA is a criminal offence under Section 117 of the Enterprise Act. Our conclusion, therefore, is that extending the powers to Ofcom in phase 1, as Amendment 33G seeks to do, is not necessary and indeed changes the nature of what is a first-phase review to decide whether a fuller, much more thorough investigation is warranted.
As noble Lords have said, the media landscape is changing at a faster and faster rate and the tests set down in 2003 may no longer fully cover all the public interest considerations needed in media mergers. We have heard arguments throughout the passage of the Bill that the fit and proper assessment needs to be baked into the media public interest test. As the Secretary of State made clear in her Statement of 16 March, Parliament has given Ofcom a duty to assess on an ongoing basis the question of fit and proper for all organisations applying for broadcast licences. For corporate bodies, Ofcom’s assessment will cover controlling directors and shareholders.
Both the Secretary of State and Ofcom have said that while many of the same issues will be relevant to both the assessment of the commitment to broadcasting standards’ public interest ground and to an assessment of the fitness and propriety of licence holders, it is right that the latter—the fit and proper test—sits with an independent regulator. The current grounds for intervention in media mergers are all linked to the important public interest consideration of media plurality: plurality of ownership, plurality of content, and a commitment to standards that support plurality of views and content.
Although I acknowledge that, in a quasi-judicial role, political considerations do not come into play, adding fit and proper as a ground of intervention goes beyond the plurality test into questions of character and fitness, and puts the ultimate decision on those questions in the hands of a politician. Notwithstanding what the noble Lord, Lord McNally, said about the Government having a duty to protect the ecology of our media, this is a different position. We are very clear that the decision on fit and proper should be made by an independent authority; that is, Ofcom. This cuts entirely across what is generally the role of an independent regulator and, in my view, takes the grounds of intervention a step too far.
On the general premise that the media merger public interest consideration may not fully capture future shifts, we agree that it is time to consider this. Amendment 33F seeks to broaden the definition of media enterprise to take account of new forms of delivery and distribution. Amendment 33J, although introducing a media public interest test around fit and proper in proposed new subsection (2CC), adds a new media public interest test to cover access to cultural and performing rights, talent and other expression available to UK audiences in terms of media plurality.
Lord Lansley
My Lords, I am very grateful to all noble Lords who have participated in this debate. Every contributor added something of significant value to the debate as a whole. It is a very good debate with which to conclude—practically conclude—our proceedings. I am sure noble Lords will forgive me if I say a special thank you to my noble friend Lord Crickhowell for coming and reiterating his remarks of 14 years ago. I, too, remember them very well, even if I was in another place at the time.
I am very grateful for the engagement of the Secretary of State, the Minister and officials and for the Minister’s response tonight. On Report, one is often pressing very hard because the window of opportunity is about to slam shut. As the Minister quite rightly said, in relation to some of the very important issues that we are putting forward relating to the definition of media enterprises and the nature of the grounds on which a public interest test can be triggered under the specified considerations in the Enterprise Act 2002, there is a power in Sections 58(3) and 58A(9) for those specified considerations to be amended by order.
The debate that has been given life during the passage of the Bill does not stop with the passage of the Bill, and I am therefore very grateful for the way in which the Minister has said that she and her Secretary of State and colleagues are going to take these issues forward and look at how they may be given life beyond here, in orders or in future primary legislation. The point about competition is important.
I neglected to refer to Amendment 33K, which was tabled by the noble Lord, Lord Stevenson of Balmacara. He illustrated very well what he was about. I am sure he will accept that inserting “any other reason” into merger control would be a jarring legislative intervention into a merger regime, but the point he makes is a very good one. When one is looking at the abuse of a dominant position under competition legislation, the nature of the abuse is not necessarily simply that there is consumer detriment. There may be wider detriments to the public interest which are not necessarily reflected in the nature of that abuse of the dominant position, so it is a very proper issue to be further considered.
Given what my noble friend the Minister said, and the ability to engage with her and the Government in looking at this in the months rather than years ahead, I hope that colleagues will accept that I should at this stage beg leave to withdraw the amendment.
Lord Ashton of Hyde
“( ) sections (Guarantee of pension liabilities under Telecommunications Act 1984) and (Regulations under section (Guarantee of pension liabilities under Telecommunications Act 1984));”
Lord Ashton of Hyde
“( ) section (Provision of children’s programmes);”
“( ) section (Televising events of national interest: power to amend qualifying conditions);”
“( ) The provisions mentioned in subsection (4)(a) and (c) come into force on whatever day the Welsh Ministers appoint by regulations made by statutory instrument.”
Lord Ashton of Hyde
“(9) The appropriate authority may by regulations made by statutory instrument make transitional, transitory or saving provision in connection with the coming into force of any provision of this Act.(10) Subsection (9) does not apply to section 4 or Schedule 1 (for which see section 5).(11) The appropriate authority, subject to subsection (12), is the Secretary of State.(12) The appropriate authority in relation to Part 5 is—(a) the Secretary of State, in relation to Chapter 2;(b) the Welsh Ministers, in relation to— (i) Chapter 1 so far as relating to the disclosure of information to or by a water or sewerage undertaker for an area which is wholly or mainly in Wales, and(ii) Chapters 5 and 6 so far as relating to the disclosure of information by the Welsh Revenue Authority;(c) otherwise, the Secretary of State or the Minister for the Cabinet Office.”
Lord Ashton of Hyde
Digital Economy Bill
Wednesday 5th April 2017
(7 years, 8 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 122-I Marshalled list for Third Reading (PDF, 67KB) - (4 Apr 2017)
Lord Taylor of Holbeach (Con)
My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Digital Economy Bill, have consented to place their interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Clause 3: Bill limits for mobile phone contracts
Amendment 1
Lord Stevenson of Balmacara (Lab)
My Lords, this is a technical amendment in the sense that it seeks to correct an error which seems to have been made inadvertently in the run-up to Report. As a result— for no particular purpose, these things just happen— Clause 3(1)(b) states,
“allow the end-user to switch (at no extra charge) to another provider”,
whereas it should state,
“allow the end-user to roam (at no extra charge) to another provider”.
Those noble Lords who are not conversant with the Bill may find these words rather strange and may feel that we are making a mountain out of a molehill. However, I assure the House that this is a significant change. The issue that we are trying to address—and the reason that I am spending a little time on this, although it is a technical amendment, and I know that the Minister would like to make a few remarks in response—is that there are in this country, despite the considerable investment, care and concern of those responsible for the infrastructure, a large number of what are called not-spots. These are places within which one’s mobile phone dies and one is unable to access anything, let alone the emergency services. The reasons for this are probably more complex than I need to go into at this stage, but in essence our amendment seeks to suggest that in areas of not-spots—not across the whole country—it might be feasible for those who have mobile phones with one provider to hook on to the signal provided by another, which would provide the roaming commonly found when one goes abroad but not in the UK. The counter-argument I am sure we will hear from the Minister is that this would interfere with the current arrangements for good competition which will drive forward much better and quicker coverage of the whole country, and that therefore our proposal is the wrong way to go. However, we beg to differ.
The wording of our previous amendment may have been deficient but, given the brilliant arguments put forward by my noble friend Lord Mendelsohn and our colleague on the Liberal Benches, the noble Lord, Lord Fox, we won a vote on this issue. We therefore seek to change “switch” to “roam”, as I said. I hope this will be accepted as a technical change and that the Government will accept the amendment. However, I have just been alerted to the possibility that the current wording may still be deficient and may require further action following Third Reading. Having had a quick word with the clerks, I am pretty confident that a simple cross-referencing issue is involved, and that that can be picked up as we go forward. However, we may have to return to that if we have ping-pong on the Bill. I beg to move.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I have just been informed by my noble and learned friend that all amendments lead to Rome. We accept that a genuine mistake was made in tabling the original amendment. Therefore, we will accept this amendment today. However, the Government have set out the arguments against requiring network operators to offer domestic roaming before, and I will try to be clearer this time as we did not have the opportunity to address those on Report. I will try to be brief.
First, domestic roaming is not mandated but it is not prohibited. Mobile networks could voluntarily enter into agreements with each other but they do not because it is costly and prevents them differentiating from competitors on the basis of coverage. As the noble Lord, Lord Stevenson, reminded us, the noble Lord, Lord Mendelsohn, told us on Report about the benefits he receives from his chosen provider, which permits roaming. This is, of course, a provider based outside the UK and the EU. However, he did not highlight the cost of that. The advertised price is £100 for one gigabyte of data and voice calls are £100 for 1,000 minutes, which is 10 times more expensive than the going rate for a standard domestic contract. That premium arises because operators have to pay other operators network access charges. Networks should be entitled to recover the cost of their investment. If one relies on another to provide coverage, it is only reasonable that fees should be paid, and those fees are of course passed on to the consumer.
Secondly, as the noble Lord, Lord Stevenson, anticipated, there is the question of the impact on investment. Our strategy has been to grow investment in infrastructure, and that has worked. It has locked in £5 billion of investment since 2014. Some 89% of UK premises are now covered by all four operators, and that percentage is growing. More importantly, this investment is closing not-spots. Ofcom forecasts that by the end of this year the number of not-spots will have more than halved since 2014. Roaming might make it easier for some people where only a single operator exists, subject to cost, but it does not do anything for those in not-spots. Extending coverage remains our priority and that needs investment.
Lord Stevenson of Balmacara
I am very grateful to the Minister for that response. I sense that we may be seeing this issue again, so I will not delay the House further. I just want to put on the record that, if there has been a reduction in the number of not-spots, it must have taken place in every conceivable part of the United Kingdom apart from the ones I travel to, because I have not noticed anything.
Lord Ashton of Hyde
Lord Ashton of Hyde
My Lords, this is a group of technical amendments to ensure that the legislation is as clear and consistent as possible.
Amendment 2 removes Clause 10, which creates a new power for the Secretary of State to set a statement of strategic priorities relating to the management of radio spectrum. On Report, Clause 104 was introduced, expanding this power to cover telecommunications and postal services, in addition to the management of radio spectrum. The introduction of this new provision means that Clause 10 is no longer necessary. I promised on Report to introduce this amendment at Third Reading.
Amendments 3 to 8 relate to the measures for age verification for online pornography. Amendments 3 and 6 remove clarificatory wording on,
“a means of accessing the internet”,
from Clause 16 and put it in Clause 23. Due to an earlier amendment, that phrase is no longer used in Clause 16 but it is still used in Clause 23, so the definition is moved to Clause 23.
Amendment 4 is one for aficionados of parliamentary drafting. It ensures that the Bill is consistent by aligning the wording of Clause 19(7)(a), which refers to,
“the House of Commons and the House of Lords”,
with the wording of Clause 27(13)(a), which refers to “each House of Parliament”. I think we will all sleep easier at night if that is consistent.
Amendment 5 clarifies that the regulator’s power to require information can be from internet service providers and any other person that the age-verification regulator believes to be involved, or to have been involved, in making pornographic material available on the internet on a commercial basis to persons in the United Kingdom.
Amendments 7 and 8 amend the definition of “video works authority” for the purposes of Clause 24, so that this includes the authority designated in respect of video games. This follows the approach to the extreme pornographic material provisions of the Criminal Justice and Immigration Act 2008.
Amendment 9 removes the provision for transitional, transitory and saving provisions in relation to the repeal of Section 73 of the Copyright, Designs and Patents Act 1988. This is a technical drafting amendment to ensure consistency between this clause and Clause 122 on commencement. I can confirm again to the House that Section 73 will be repealed without a transition period and that the Government will commence repeal without delay.
Turning to Amendment 12, I am very grateful to the noble Baroness, Lady Drake, for drawing my attention on Report to the need for complete clarity as to whom the Government are referring in the undertaking to be transferred from BT plc to a future Openreach Ltd. I accepted that a clear definition of the term “undertaking” was necessary and offered to come back with a government amendment at Third Reading to address this issue. Government Amendment 12 does this, making it clear that we define the term “undertaking” to include anything that may be the subject of a transfer or service provision change, whether or not the Transfer of Undertakings (Protection of Employment) Regulations —TUPE—apply. The intention is that all employees currently benefiting from the Crown guarantee will continue to do so if they transfer to Openreach Ltd. The Government consulted on the wording in advance of laying this technical amendment. I am grateful to the noble Baroness for assisting us, and to both BT plc and the trustee for confirming that this definition was satisfactory.
Amendments 13 to 17 relate to the Electronic Communications Code. Under the new code, an owner or occupier whose access to their land is obstructed by electronic communications apparatus without their agreement has the right to require the removal of that apparatus. Amendments 13 and 14 make it clear that this right arises only where the apparatus itself interferes with access, as opposed, for example, to a temporary obstruction by a vehicle.
Amendments 15, 16 and 17 merely correct minor omissions and referencing errors. I beg to move.
Baroness Howe of Idlicote (CB)
My Lords, I welcome these tidying-up amendments. I want to take the opportunity provided by this Third Reading debate to congratulate the Government once again on taking action to protect children from pornography on the internet through age verification. I shall be watching the implementation of Part 3 of the Bill closely. I would like also to put on record my thanks to the Minister for meeting with me to discuss adult content filters. I am very grateful also to noble Lords who supported my amendment at an earlier stage, highlighting the need to get a better understanding of the adult-content filtering approaches adopted by smaller ISPs that service homes with children: the noble Lords, Lord Collins of Highbury and Lord McColl of Dulwich, and the noble Baroness, Lady Benjamin.
Turning to the future, I am very much looking forward to the discussions on the Government’s Green Paper on internet safety and to their response to the Communications Committee’s report, Growing up with the Internet. Part 3 of this Bill is not the end of the story on children and internet safety.
Despite many positives, in comparing and contrasting the Bill that entered your Lordships’ House with the Bill as it now leaves, my response is one of sadness. The underlying principle of parity of content has been removed and the Bill is, in this respect, unquestionably weaker as a result.
In the first instance, the Bill entered your Lordships’ House properly applying the same adult content standard online as applied offline. It leaves your Lordships’ House saying that most material that the law does not accommodate for adults offline will be accommodated online behind age verification. Only the most violent pornography—that which is life-threatening or likely to result in severe injury to breast, anus and genitals—will be caught. Injury or severe injury to other parts of the body appear to be fine as long as they are not life-threatening. As the Bill leaves us, the message goes out loud and clear that violence against women—unless it is “grotesque”, to quote what the Minister said on Report—is, in some senses, acceptable.
In the second instance, the Bill entered your Lordships’ House properly applying the standard of zero tolerance to child sex abuse images, including non-photographic and animated child sex abuse images. Today it leaves your Lordship’s House with the relevant powers of the regulator deleted so that it can no longer take enforcement action against animated child sex abuse images that fall under the Coroners and Justice Act 2009. As such, the Bill goes out from us today proclaiming that non-photographic images of child sex abuse, including animated images, are worthy of accommodation as long as they are behind age verification.
As agreed, Third Reading is a time for tidying up. However, Part 3 of the Bill clearly requires further amendment so that the message can go out once again—as it did in the other place—that there is no place for normalising violence against women and no place for accommodating any form of child sex abuse. I hope that the other place will now rise to that challenge.
Lord Clement-Jones (LD)
My Lords, I do not wish to detain the House unduly on these amendments. I welcome, in particular, Amendment 9 as it is the fulfilment of a pledge made by the Minister on Report. I am delighted that Section 73 of the Copyright, Designs and Patents Act will be no more as soon as the Bill comes into effect. I am delighted that the Minister has fulfilled his undertaking.
Baroness Drake (Lab)
My Lords, I, too, thank the noble Lord, Lord Ashton, for tabling Amendment 12, which gives greater clarity to the BT and Openreach employees covered by the provisions of Clause 119. The Government have also made clear their intention to engage fully with the BT pension scheme trustee and for that I am also grateful. I hope their discussions go well.
Lord Ashton of Hyde
My Lords, I am grateful for those comments. I take the point of the noble Baroness, Lady Howe, that there is still work to do. As she mentioned, the internet safety strategy Green Paper will be with us in June.
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
“(6) For the purposes of subsection (5)(b), a means of accessing the internet does not include a device or other equipment for doing so.”
Lord Ashton of Hyde
““video works authority” means a person designated under section 4(1) of the Video Recordings Act 1984;”
Lord Ashton of Hyde
Lord Ashton of Hyde
“( ) such representatives of persons likely to be affected by the regulations as the Secretary of State thinks appropriate, and( ) such other persons as the Secretary of State thinks appropriate.”
Lord Ashton of Hyde
My Lords, the Government’s Amendments 10 and 11 acknowledge the DPRRC’s recommendations in relation to improved safeguards for the proposed charging regulations for the Information Commissioner. I committed to making these amendments on Report.
Amendment 10 will make it a requirement for the Secretary of State to consult,
“such representatives of persons likely to be affected by the regulations as the Secretary of State thinks appropriate, and … such other persons as the Secretary of State thinks appropriate”.
Amendment 11 will make it a requirement for the Secretary of State to use the affirmative procedure when making regulations under the new charging power, except for in cases of inflation increases, when the negative procedure will apply.
Lord Clement-Jones
My Lords, I thank the Minister for his introduction to Amendment 10. This amendment may not be the full loaf, but it certainly is three-quarters of a loaf in terms of an assurance on the two matters which gave us concern, the first of which was the extent to which the charges might exceed the costs incurred by the ICO. The Minister’s assurance is very helpful in terms of the operation of Clause 113, as is his assurance on mission creep, which is something that the noble Lord, Lord Collins, was particularly concerned about. Again, I am grateful to the Minister for his two assurances.
Lord Collins of Highbury (Lab)
My Lords, I too am grateful for the assurances that the Minister has given us and I thank the Delegated Powers Committee for its excellent report which drew specific attention to this issue. The committee’s concern was not without evidence and it gave an example in relation to probate—I notice that the noble and learned Lord, Lord Keen, is in his place—so it is an issue that was very much in people’s minds when considering this part of the Bill. However, the assurances given by the Minister are clear and concise. We have protections in terms of parliamentary scrutiny, in particular in relation to the element of function creep where there is a requirement for primary legislation. I welcome and support the amendment.
Lord Ashton of Hyde
“(2) A statutory instrument containing regulations under section 112(1) or (5) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament. (2A) Subsection (2) does not apply to a statutory instrument containing regulations which—(a) only make provision increasing a charge for which provision is made by previous regulations under section 112(1), and(b) do so to take account of an increase in the retail prices index since the previous regulations were made.(2B) Such a statutory instrument is subject to annulment in pursuance of a resolution of either House of Parliament.(2C) In subsection (2A) “the retail prices index” means—(a) the general index of retail prices (for all items) published by the Statistics Board, or(b) where that index is not published for a month, any substituted index or figures published by the Board.”
Lord Ashton of Hyde
““undertaking” includes anything that may be the subject of a transfer or service provision change, whether or not the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246) apply.”
Lord Ashton of Hyde
Lord Ashton of Hyde
Lord Ashton of Hyde
My Lords, in moving this Motion, I express grateful thanks to all noble Lords who have contributed to the Bill’s passage and shared their knowledge on the wide variety of subjects covered by it. It seems a long time since December, when we referred to Christmas tree Bills. As we now approach Easter, I express my gratitude to both Opposition Front Benches for their openness and co-operation, especially to the two ringmasters, if I may call them that, the noble Lords, Lord Stevenson and Lord Clement-Jones, but also to the other noble Lords: the noble Baronesses, Lady Jones, Lady Bonham-Carter and Lady Hamwee, and the noble Lords, Lord Mendelsohn, Lord Collins, Lord Grantchester, Lord Wood, Lord Foster, Lord Fox and Lord Paddick, all of whom have led on various parts of the Bill. I am very grateful to them.
Most importantly, I pay tribute to and thank Andrew Elliot, Patrick Whitehead and all the other members of the Bill team, and to my private office, Matt Hiorns and Martha London, who have shown tremendous resilience, patience and humour over the last four months while the Bill was in this House. I am very grateful to all of them. I beg to move.
Lord Stevenson of Balmacara
My Lords, a few years ago I used to complain to my colleagues that I had drawn a short straw in the sense that many of my other colleagues were in departments that were constantly dealing with meaty legislation, while we shadowing the DCMS had to make do with the occasional debate and even sometimes a rather thin Question, usually organised by the indefatigable noble Earl, Lord Clancarty, from the Cross Benches. Is it a coincidence, I asked myself, that since the Minister took over the brief we have had not only the BBC royal charter to deal with, but three and a half Bills? The half was the Law Commission’s Intellectual Property (Unjustified Threats) Bill, which was a bit of a mixed bag between the DCMS and BEIS. It was really introduced under the last regime, but we have had to keep a close watching eye on it and on the other place, even though it was a Law Commission Bill. It is of course exhilarating to be at the very heart of public policy-making and it has been great fun, but it is also absolutely exhausting.
At pride of place in this canon of interesting Bills is the Digital Economy Bill. As the Minister said, it has generated a considerable amount of interest across the House. With its many disparate parts, it allowed the House to play a very full and important role as it scrutinised every clause and virtually every line, as it should. It is what we do and we do it well.
I thank the Minister, the noble Baroness, Lady Buscombe, and the noble and learned Lord, Lord Keen, for their very full participation in the Bill. They were engaged on all the issues. We were able to get hearings and discussions with them when we wanted them. I am only sorry that they had to stand down the Deputy Leader of the House on one amendment that was not moved. I am sure that he would have added considerably to the debate and given us a full hand of stars. The tone throughout has been one of unfailing courtesy. While the willingness to write to us on matters of detail was not up to the high standards set by the noble Viscount, Lord Younger, who is in his place—how could it be?—it is much appreciated. We also appreciated the direct involvement of the Minister in the other place, particularly on Part 3.
I believe the House should be willing to put on record exemplary service when it comes across it. I award this year’s prize for Bill support, if there is any justice in this world, to the Digital Economy Bill team, whose opening gambit of a neatly bound and very substantial pack of all the documents you could possibly want set the gold standard for work of this type. They were very helpful in letting us know what was going on, even when I suspect they would have rather remained silent. We appreciate that they were always willing to organise meetings, even on occasion tracking down Ministers who had gone AWOL.
My Front Bench team has been superb. I am very grateful to my noble friend Lady Jones of Whitchurch, who led on the difficult and ongoing work to do with age verification. My noble friend Lord Collins of Highbury relished the chance to lead on an issue—horseracing—unrelated to his usual stomping grounds, and coined the phrase “function creep”, which I am sure will be adorning your Lordships’ debates in years to come. My noble friend Lord Grantchester led on the rather dull, but it turns out rather rewarding, area of the electronic communications accord, which paid dividends in a number of amendments that we were able to secure. My noble friend Lord Mendelsohn, who I am sorry is not with us today, dealt very capably with the USO and related issues. My noble friend Lord Wood helped us with the amendments consequent on the BBC charter renewal.
Our legislative assistant, Nicola Jayawickreme, has been a class act and has kept us going with the background material so necessary for effective observation as well as dealing with the Public Bill Office and drafting so many amendments, even one on the day her flat was flooded and she had to move out all her belongings.
As I approach the end of my active Front-Bench responsibilities in your Lordships’ House, working on this Bill will be one of the memories I most cherish.
Lord Ashton of Hyde
My Lords, I should feel awful, but I neglected to mention my noble friend Lady Buscombe and my noble and learned friend Lord Keen, who helped enormously. I had written it down on my notes, but, as usual, I did not pay any attention to them. I want to pay tribute to them and thank them very much.
Lord Clement-Jones
My Lords, I am sure that they would have been mentioned fulsomely by other Benches as well. I have not laboured in the vineyard quite as much as the noble Lord, Lord Stevenson. I have not had multiple Bills simultaneously to deal with—and one can only admire that kind of stamina—but, still, the passing of this Bill carries a sense of relief given the variety of subject matter that we have had to deal with during the past few months. The Minister said that it was from Christmas to Easter; these Bills are seasonal in their nature.
We certainly have not achieved everything that we wanted, but I believe that the Bill is leaving this House in much better shape than that in which it arrived. As the noble Lord, Lord Stevenson, implied, it is certainly a very meaty Bill. It is also a disparate Bill, covering a huge range of issues most of which are unified only by the word “digital”. That was quite a challenge for all those who were trying to cover the whole subject matter of the Bill.
I want to thank my own colleagues, particularly my noble friends Lord Paddick, Lord Fox, Lord Foster, Lord Lester, Lord Storey, Lord Addington, Lady Bonham-Carter, Lady Hamwee, Lady Janke, Lady Benjamin and Lady Grender. I thank our adviser team, particularly Elizabeth Plummer, Rosie Shimell and Vinous Ali. I want also to thank the Opposition Front Bench—the indefatigable noble Lord, Lord Stevenson, the noble Baroness, Lady Jones, and the noble Lords, Lord Collins, Lord Wood and Lord Grantchester—for their collaborative approach. Of course, I thank many others on the Cross Benches, including the noble Lord, Lord Best, with his successful amendment, the noble Viscount, Lord Colville, and the noble Baroness, Lady Howe—indefatigable is too small a word for her.
Lord Clement-Jones
“Indestructible” is suggested to me by the Opposition Front Bench.
Finally and very sincerely, I thank the noble Lord, Lord Ashton, the noble and learned Lord, Lord Keen, the noble Baroness, Lady Buscombe, and the Bill team. I echo what the noble Lord, Lord Stevenson, had to say about the Bill team for their willingness to engage constructively, explain, amend and give what assurances they could throughout the passage of the Bill. We welcomed considerable movement during that time: changes in definition of “extreme pornographic material”, appeals on site blocking, the incorporation of many of the DPRRC amendments and new Ofcom powers—my noble friend Lady Benjamin is not in her place; she is probably celebrating somewhere the fact that Ofcom has new powers in respect of children’s programmes. There were amendments on remote e-book lending and listed events—the list goes on, which demonstrates that the Government were listening.
Of course, we anticipate ping-pong with great delight. I think that some six amendments to the Bill were passed. I hope that the Government will give consideration to them and not just bat them back to this House. They were all carefully thought through. I hope that we will see some changes as a result of those amendments in this House.
Of course, we did not get everything on our shopping list as the Bill went through. On Ofcom appeals, the noble and learned Lord, Lord Keen, stood fast on Clause 85. I hope that in the future we might find some change on compulsory anonymisation for age verification, and I think that IPTV is something that may come back to haunt us. I hope that the consultation will demonstrate the absolute need for amendments in the future. I am sure that my noble friend Lord Lester will also be returning by popular demand to the question of the statutory underpinning of the BBC charter. In the meantime, I thank the Minister and look forward to the passing of the Bill.
The Earl of Erroll (CB)
My Lords, I add my great thanks to the Minister, on behalf of all the people I was talking to, for his intelligent and sensitive handling of the rather difficult, tortuous, twisting turns which were confusing what we saw as the perceived prime purpose of Part 3. I think we got there and have something that is going to be workable. I just hope that the regulator, when it gets operational, will find that what is coming out of the British Standards Institution PAS 1296 will be helpful in trying to make sure that age verification works in protecting children from accessing all the adult content online, which was the only bit that I was dealing with. Thank you very much indeed.
Lord Lester of Herne Hill (LD)
My Lords, I suspect that this is au revoir and not adieu to the Bill, if one is still allowed to use French in this House. I thank the Minister for putting up with endless conversations with me about statutory underpinning or something instead. I thank him for arranging for me to see the Culture Secretary, which I look forward to doing if she is free to do so before the Bill comes back. I make it clear that I am agnostic about how to achieve the protection of the BBC’s independence and viability—whether in the charter, in statutory underpinning or in undertakings given by Ministers. My difficulty at the moment is that we have still not had those undertakings, but I look forward to future debates.
Digital Economy Bill
Thursday 27th April 2017
(7 years, 7 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 Read Hansard Text Amendment Paper: HL Bill 130-I Marshalled list for consideration of Commons reason and amendments (PDF, 100KB) - (26 Apr 2017)
Lord Ashton of Hyde
That this House do not insist on its Amendment 1 and do agree with the Commons in their Amendments 1A, 1B and 1C in lieu.
Commons Amendments in lieu
(a) it specifies the minimum download speed that must be provided by those connections and services, and
(b) the speed so specified is at least 10 megabits per second.”
“72B Broadband download speeds: duty to give direction under section 72A
(1) The Secretary of State must give OFCOM a direction under section 72A if—
(a) the universal service order specifies a minimum download speed for broadband connections and services and the speed so specified is less than 30 megabits per second, and
(b) it appears to the Secretary of State, on the basis of information published by OFCOM, that broadband connections or services that provide a minimum download speed of at least 30 megabits per second are subscribed to for use in at least 75% of premises in the United Kingdom.
(2) The direction—
(a) must require OFCOM to review and report to the Secretary of State on whether it would be appropriate for the universal service order to specify a higher minimum download speed, and
(b) may also require OFCOM to review and report to the Secretary of State on any other matter falling within section 72A(1).”
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, this Motion covers two areas where the other place has offered amendments in lieu of your Lordships’ amendments. Lords Amendment 1 on the universal service obligation challenged the Government to be more ambitious on universal digital connectivity. A broadband USO, set initially at 10 megabits per second, forms part of our plans to make sure nobody is digitally excluded. Lords Amendment 1 would have disrupted those plans. In our view, it would make the USO unworkable and, because of the risk of legal challenge, would lead to delays in implementation.
The USO can work only if it is legally robust and enforceable. EU law requires it to take into account technologies used by the majority of subscribers. Today, 30 megabits per second is enjoyed by fewer than 30%. Two gigabits per second is enjoyed by fewer than 1%. While we may have a majority taking up 30 megabits per second in a few years’ time, the Government want to implement the USO now and the Lords amendment would make this difficult to achieve.
I know that a key concern for many is that the whole country should be able to access superfast speeds of 30 megabits per second. We share that ambition. We have therefore proposed an amendment in lieu that a superfast USO will be reconsidered by Ofcom once 75% of premises across the UK subscribe to superfast broadband.
On Lords Amendment 2, the other place agreed with your Lordships’ concerns in relation to bill capping and proposed Amendment 2A in lieu. As with the Lords amendment, we provide that mobile phone service customers must have the opportunity to place a limit on their bill. Any limit set cannot be exceeded unless the customer agrees to this. Ofcom is given enforcement powers. The requirement placed on providers to ensure that customers can contact the emergency services will be unaffected.
The Government also reflected on the switching and roaming elements of Lords Amendment 2, but were not convinced of their merits. While it appears to be attractive, we do not believe that roaming is the right solution. I set out our reasons at Third Reading. With regards to switching, the Bill already goes further than the proposed amendment. The provision in the Bill, confirming Ofcom’s power to set a condition about switching, relates to operators of all telecom services, including fixed line, broadband and pay TV, not just mobile phones. I beg to move.
Lord Fox (LD)
My Lords, as someone who has renovated a Victorian house, I know one thing to be true. It is all very well stripping off the anaglypta and the woodchip, slapping on some Farrow & Ball, improving the coving and putting up a dado rail, but if you do not tackle the fundamentals you are pretty soon raising the floorboards again. It is the roof, the electricals and the plumbing that call you out. I had hoped that the Bill would tackle the fundamentals of the nation’s digital plumbing. I hoped that it would put in train a really revolutionary revolution for our digital network and enable the whole country to participate in the digital economy I believe the Bill sets out to achieve. I still hope that is true, but I have my doubts.
Without a requirement for a fast digital delivery and a date for the arrival of that fast digital network, we will struggle. The notion of having a 75% threshold of subscription is a tricky way of going about this. We will have to use the reporting requirements that Ofcom is now obliged to follow—that is a move forward—to get it to report on how it is driving broadband usage. We are using the commercial arms of the same companies being asked to deliver broadband to promote the use of broadband itself. We have a closed loop that does not necessarily have an incentive to drive up to the 75% threshold. I would be more confident in the progress of this country in delivering this network if there was not a dominant player that sits on a Victorian asset of copper wire which it wants to sweat, and quite understandably. It has to be up to the Government and Ofcom to drive their desire to really move forward. We are closing the door on a fresh, shiny new Bill which still smells of new paint, but, just as with my house, I cannot help thinking that we will be raising the floorboards on this issue time and again in Parliaments to come.
Lord Stevenson of Balmacara (Lab)
My Lords, we welcome the amendments in lieu in the Motion moved by the Minister. Having said that, I think we are at liberty also to regret that they do not go further.
The issue that we are dealing with here, which I think has been well picked up by the noble Lord who has just spoken, is that 59% of rural Britain has no proper access to the internet and large parts of the country have not-spots. It is a cause for major concern. The root of the problem is that, while a USO sounds good and is an effective way of getting across the argument that the service should be for everyone, the reality is that, unless there are sanctions to make sure that it happens and an incentive in terms of investment to make sure that the funding is available for it to take place at an appropriate time, it will never happen. It is therefore only part of the story.
The narrative that we are unfortunately locked into appears to be one where the Government were initially unwilling even to have anything in statute which provided a floor for the activity here—we now have that with this amendment, although it is a very low floor—but they do not yet have the aspiration, embodied in amendments that this House agreed, to get the speeds up and widen the coverage as quickly as they can. We are stuck in a situation where the spirit may be willing but the flesh is certainly very weak. We are not in a position where we can say that we will be able to look forward to this in an immediate future.
The root of the problem has another source, which is the reliance on the European Commission’s requirements in this area. The Government have made great play of this, but the only legislative framework under which Europe is operating here, which will fall away in 2019 if the new Government get their way, is that there should be non-binding guidance on what constitutes a universal service, yet the Government have chosen to interpret that as a limit on what they do rather than an opportunity to go further. While we welcome what is here, we do not think that the mechanics chosen will do the trick, particularly when Ofcom has recommended a faster basic speed and a cheaper way of doing it, which would be at 30 megabits per second. As we have just heard, we may be back looking at this in very short order.
On mobile bill capping, which will help consumers who get themselves in trouble with their bills, we are delighted that the Government have accepted the amendment made by the Lords at an earlier stage.
Lord Ashton of Hyde
My Lords, I am grateful for those remarks by noble Lords. The noble Lord, Lord Fox, talked about the fundamentals. They are what we have tried to address in this Bill to increase digital connectivity in the country. Measures in the Bill which have been accepted, on the Electronic Communications Code and those relating to spectrum, are part of that. The USO is slightly different. It was never intended to drive increased speeds. We have said separately that we share the ambition of the noble Lord to increase those and stated that we see fibre to the premises as the way forward, but the USO is there to tackle to social exclusion. I can reassure noble Lords that the response to Lords Amendment 1 is not about delaying superfast connectivity or pandering to the communications providers. To the contrary, it is because we do not want to be involved in protracted legal disputes. The fact is that the House can legislate for whatever speed it likes, but it will make a difference to people up and down the country only if it is implemented properly. That means that the Bill must be legally watertight and realistic.
Government Amendment 1A will put our money where our mouth is. As the noble Lord, Lord Stevenson, mentioned, we have now put in legislation that the broadband USO will be set at a minimum of 10 megabits per second and we will ensure that if the minimum has not already been raised to 30 megabits per second by the time take-up of superfast broadband has reached 75% of premises a review must be triggered. That is practical and, interestingly, will give this country the fastest USO in Europe. I hope we concentrate on the benefits we receive from this.
Lord Ashton of Hyde
That this House do not insist on its Amendment 2 and do agree with the Commons in their Amendment 2A in lieu.
Commons Amendment in lieu
“Billing limits for mobile phones
Billing limits for mobile phones
In Chapter 1 of Part 2 of the Communications Act 2003 (electronic communications networks and services) after section 124R insert—
“Billing limits for mobile phones
124S Mobile phone providers’ duty to enable billing limits to be applied
(1) The provider of a mobile phone service must not enter into a contract to provide the service unless the customer has been given an opportunity to specify a billing limit in the contract.
(2) In relation to a contract to provide a mobile phone service—
(a) a billing limit is a limit on the amount the customer may be charged for provision of the service in respect of each billing period, and
(b) a billing period is one of successive periods specified in the contract and together making up the period for which the contract remains in force.
(3) A contract to provide a mobile phone service must provide for the customer on reasonable notice at any time—
(a) to specify a billing limit if none is specified for the time being,
(b) to amend or remove a limit in respect of all billing periods or a specified billing period.
(4) In any billing period the provider must—
(a) so far as practicable, notify the customer in reasonable time if a limit is likely to be reached before the end of the period, and
(b) notify the customer as soon as practicable if a limit is reached before the end of the period.
(5) A limit may be exceeded in relation to a billing period only if the customer agrees after a notification under subsection (4)(a) or (b).
(6) If the provider continues to provide the service after a limit is reached, the customer’s use of the service does not constitute agreement to the limit being exceeded.
(7) The provider must give the customer confirmation in writing of—
(a) the decision made by the customer in accordance with subsection (1),
(b) any decision of the customer under provision made in accordance with subsection (3), and
(c) any agreement by the customer in accordance with subsection (5).
(8) This section applies to agreeing to extend a contract as it applies to entering into a contract, and in that case the reference in subsection (2)(b) to the period for which the contract remains in force is a reference to the period of the extension.
(9) Nothing in this section affects a provider’s duty to comply with requirements to enable calls to emergency services.
(10) In this section—
“customer” does not include a person who is a customer as a communications provider;
“mobile phone service” means an electronic communications service which is provided in the course of a business wholly or mainly so as to be available to members of the public for the purpose of communicating with others, or accessing data, by mobile phone.
124T Enforcement of duty to enable billing limits to be applied
(1) Sections 96A to 96C apply in relation to a contravention of a requirement under section 124S as they apply in relation to a contravention of a condition set under section 45, with the following modifications.
(2) Section 96A(2)(f) and (g) (OFCOM directions) do not apply.
(3) Section 96A(5) to (7) (action under the Competition Act 1998) do not apply.
(4) The amount of a penalty imposed under sections 96A to 96C, as applied by this section, other than a penalty falling within section 96B(4), is to be such amount not exceeding £2 million as OFCOM determine to be—
(a) appropriate; and
(b) proportionate to the contravention in respect of which it is imposed.””
Lord Ashton of Hyde
That this House do not insist on its Amendment 40 and do agree with the Commons in their Amendments 40A and 40B in lieu.
Commons Amendments in lieu
“Code of practice for providers of online social media platforms
Code of practice for providers of online social media platforms
(1) The Secretary of State must issue a code of practice giving guidance to persons who provide online social media platforms for use by persons in the United Kingdom (“social media providers”).
(2) The guidance to be given is guidance about action it may be appropriate for providers to take against the use of the platforms they provide for conduct to which subsection (3) applies.
(3) This subsection applies to conduct which—
(a) is engaged in by a person online,
(b) is directed at an individual, and
(c) involves bullying or insulting the individual, or other behaviour likely to intimidate or humiliate the individual.
(4) But guidance under this section is not to affect how unlawful conduct is dealt with.
(5) A code of practice under this section must (subject to subsection (4)) include guidance to social media providers about the following action—
(a) maintaining arrangements to enable individuals to notify providers of the use of their platforms for conduct to which subsection (3) applies;
(b) maintaining processes for dealing with notifications;
(c) including provision on matters within paragraphs (a) and (b) in terms and conditions for using platforms;
(d) giving information to the public about action providers take against the use of their platforms for conduct to which subsection (3) applies.
(6) Before issuing a code of practice under this section, the Secretary of State must consult—
(a) those social media providers to whom the code is intended to give guidance, and
(b) such other persons as the Secretary of State considers it appropriate to consult.
(7) The Secretary of State must publish any code of practice issued under this section.
(8) A code of practice issued under this section may be revised from time to time by the Secretary of State, and references in this section to a code of practice include such a revised code.”
“( ) section (code of practice for providers of online social media platforms);”
Lord Ashton of Hyde
My Lords, I want again to start by saying that the Government accept and agree with the spirit of Lords Amendment 40, but, as drafted, it poses difficulties and risks unintended consequences. For example, it is not clear who would notify social media providers that content contravened existing legislation. The requirement to inform the police if notified that content contravenes any existing legislation could lead to unmanageable volumes of referrals to law enforcement. This would do little to increase public protection, making the code of practice unworkable.
The other place has offered Amendment 40A, which we believe will achieve a similar outcome by setting out the behaviour expected of social media companies while protecting users. As explained in the other place by my right honourable friend the Minister of State for Digital and Culture, good work is being done by some companies to prevent the use of platforms for illegal purposes, but we agree that more can be done by social media to tackle harmful conduct online, particularly bullying behaviour, which can have serious consequences.
Our intention is that the code will set out guidance on what social media providers should do in relation to conduct that is lawful but that is none the less distressing or upsetting. The intention is that the guidance in the legislation addresses companies proportionately. We believe that this code, together with the internet safety strategy, will result in a properly considered, comprehensive approach to online safety and deliver the long-lasting protections that this amendment seeks to secure. I beg to move.
Lord Clement-Jones (LD)
My Lords, I have no doubt that the noble Lord, Lord Stevenson, will want to give a more substantive response since this was fundamentally an opposition amendment, but it was supported strongly on these Benches. I accept that the Minister has tried to incorporate the spirit of the original amendment in this amendment coming from the Commons. He made a number of detailed points about objections to the drafting of the original amendment, but there is one thundering great hole in the amendment as brought forward by him, which is that there is no obligation on providers to comply with the code of practice once it comes into force. It is nakedly a voluntary code rather than any code that is able to be enforced by the Secretary of State. That is the major difference between the amendment that this House passed and that which has now come forward.
The Minister mentioned the internet safety strategy and the work being done on it. Many of us are convinced that when the work on that is done the need for an enforcement power in such a code of conduct will become clear. Will the Minister assure us that enforcement will be considered as part of the internet safety strategy and that, if the overwhelming body of evidence is that such a form of compliance is needed, the Government will come forward with amendments?
Lord Collins of Highbury (Lab)
My Lords, I will not delay the House but I want to repeat what the noble Lord, Lord Clement-Jones, has just said because the point about no enforcement and no sanctions is important. I recognise the words of the Minister in terms of reflecting the spirit and intent of our original amendment, and I think that that is what the government Motion now seeks to do. It will give notice to the social networks that failure to comply will result in further government action. Like the noble Lord, Lord Clement-Jones, I hope that the Minister will be able to respond positively, in particular on the internet strategy review.
In conclusion, our examination of these issues has been extremely good in the Lords both in Committee and on Report. We now have a clear policy which gives notice to the social networks that we want to ensure that proper standards are maintained and that action will be taken when evidence of abuse is found. It should not be a matter of days or weeks, which has been the case, before offensive material is taken down. We have seen evidence of the horrendous things that have been put up on social networks in the US and Thailand, so we want to ensure that the networks understand fully the gravity of the situation.
Lord Ashton of Hyde
My Lords, I am grateful for the remarks of noble Lords and I shall start by responding to the last comments made by the noble Lord, Lord Collins. I think that the social media companies are in absolutely no doubt about the Government’s determination to review what they do and make sure that they live up to their responsibilities. We are all agreed on that and we realise that even when something is technically lawful, it can be very damaging and unpleasant. Anything that sets out to humiliate people has no place in our society. I of course understand why some noble Lords are disappointed that the code of practice is not mandatory, but we should have confidence that it will make a difference if, as I have suggested, both we and the social media companies take it seriously. The code of practice will clearly set out our expectations of social media providers and it is in the interests of a site to be responsible with regard to online safety. It is critical for the future of sites that their users should trust them and that they protect the health of their brand.
I accept that there has been a lot of talk about the internet safety strategy. We have not ruled anything out of the strategy and we have heard the clear views of the House. I can say that we will consider carefully the points which have been raised in the development of the strategy and we will welcome contributions from noble Lords and other interested parties. I shall repeat: my department has absolutely taken on board the views of the House along with those of many other stakeholders in relation to social media companies and we will see what comes of that. The fact is that if this amendment is accepted, the code must and will be produced, and I am convinced that it will have a beneficial effect.
Lord Ashton of Hyde
That this House do not insist on its Amendments 237, 238 and 239, to which the Commons have disagreed for their Reason 237A.
Commons Reason
Lord Ashton of Hyde
My Lords, we return yet again to the issue of BBC funding, having debated it at length in Committee and on Report. Honourable Members in the other place have disagreed with the amendments that noble Lords inserted into the Bill at Report stage which sought to establish a BBC licence fee commission. The Government remain clear that they must have a free hand in determining the BBC’s overall funding deals and the level of the licence fee following negotiation with the BBC itself.
Noble Lords will appreciate that decisions on the level of the licence fee are a matter for the elected Government. Similarly, we are not convinced that consulting the public on the level of BBC funding is the right approach to determining its funding settlements. The BBC’s funding needs are a complicated and technical issue, and not one that lends itself easily to public consultation. Although the Government have persuaded honourable Members in the other place, we have listened to the concerns expressed by noble Lords about the process for setting the BBC’s funding settlement and about ensuring that the BBC has an appropriate level of funding. The new charter endorses the BBC’s mission and reaffirms the role and independence of the BBC in a much-changed and fast-changing media landscape.
The specific provisions in the BBC charter for setting the next funding settlement should also give some comfort to noble Lords who have concerns. We know exactly when the next funding period will commence. The Government will allow the BBC to make its case and will consider taking independent advice before reaching a final decision. Therefore in moving this Motion, I hope that those noble Lords who supported the noble Lord, Lord Best, at earlier stages will recognise that their efforts and their arguments on this matter have not been wasted. The Government are under no illusion that the next BBC funding settlement must be one that is carefully considered. There is no question of any so-called midnight raids when a five-year settlement which is inflation-protected has been agreed and everyone knows when the next settlement will begin.
I turn now to Motion E, relating to public service broadcasting prominence on the electronic programme guide, an issue which was much debated both in this House and in the other place. The Government have heard the strength of feeling on this issue. Although we have concluded that we can see no compelling evidence of harm to the PSBs, we recognise that this is a fast-moving technological landscape which needs to be kept under review, a point made clearly by the noble Lord, Lord Wood of Anfield, at Report stage. Amendment 242A will therefore place a new requirement on Ofcom to publish a report which looks at the ease of finding and accessing PSB content across all television platforms on both the linear and on-demand basis. The report will focus consumer pressure on the platform providers and TV manufacturers to improve the prominence of PSB on-demand services where this has been identified as an issue. We know that platform providers and TV manufacturers respond most strongly to consumer needs in developing their products and therefore developments in the EPG should be customer-driven.
The new duty will also impose an ongoing obligation on Ofcom to report and require it to review its EPG code by 1 December 2020, and to publish its first report on the ease of accessing and finding PSB content before then. As my right honourable friend the Minister of State for Digital and Culture made clear yesterday, if Ofcom’s report makes it clear that there is a problem in this area, one that can be fixed only by legislation, and assuming that the Government are returned in June, we will bring forward that legislation as soon as possible. That, I think, is why the Labour Front-Bench spokesman said that she was happy to support the government amendment. I beg to move.
Lord Best (CB)
My Lords, the three amendments which are the subject of Motion D came before your Lordships in the names of myself, the noble Baroness, Lady Bonham-Carter, and the noble Lords, Lord Inglewood and Lord Stevenson. They were passed by noble Lords with a thumping majority but they are now to be rejected with no alternative amendments in lieu.
The issue here concerns the process by which the BBC licence fee is determined. There has been extensive condemnation of the current process from the right honourable John Whittingdale when chairing the CMS Select Committee in the other place and Rona Fairhead, the chair of the BBC Trust, as well as from a range of organisations including the Voice of the Listener and Viewer, the NUJ, and of course our own Select Committee on Communications, which I have the honour of chairing, at least until the Dissolution of Parliament.
What everyone agrees is that the current process has meant the Secretary of State deciding on this vital matter in a most unsatisfactory way, behind locked doors and in secret, on a basis that has on the last two occasions involved freezing the fee for many years and the allocation of portions of it to a range of other purposes—so-called midnight raids—from broadband rollout to free licences for the over-75s. The amendments now to be rejected would not tie the hands of the Secretary of State, who would still make the determination, but the revised process would involve public and parliamentary consultation and expert advice from a specialist BBC licence fee commission.
Lord Lester of Herne Hill (LD)
My Lords, about a year ago I introduced a Private Member’s Bill that was too low in the ballot to have any chance of being debated or passed. When that became evident, I decided instead to use this Bill as a vehicle to protect the independence and funding of the BBC. As the Minister will, I am afraid, recall painfully, we debated these issues as a result throughout most of the last year.
The first problem that we debated was whether it was proper to have legislation and a charter. The Government originally took the position that they were inconsistent. I am grateful that eventually, having listened to the authority of the noble Lords, Lord Inglewood, Lord Fowler—while he was a free man—and Lord Best, about how a charter is nothing more than what Ministers desire and is not like legislation, the Government eventually concluded that there was nothing incompatible between having a charter and statutory underpinning, too.
The next question was why any statutory underpinning is needed. The answer, if you read the current charter, is that there is no obligation in it upon the Government to provide sufficient funding or even to respect the independence of the BBC. I made it clear before the Bill left the House for the other place that I was not wedded to any particular solution to the problem of ensuring that the Government would provide sufficient funding and respect the independence of the BBC, and would do anything in their power to secure that. As the noble Lord, Lord Best, indicated, one way this House expressed our view was by adopting his rather more moderate approach than mine. His commission would not bind the Government to anything in particular other than to consider the outcome of the review commission. My approach would create an obligation upon the Government as regards funding and a prohibition against top-slicing, the transfer to the BBC of matters that were the obligation of the Department for Work and Pensions, to ensure that that never happened again.
As I understand it, we are now in a position, before we finally approve this Motion, where the Government do not accept any obligations on them with regard to the sufficiency of funding or respecting the independence of the BBC. I asked this of the Minister the last time and he could not answer. I ask him this time please to assure the House that the Government accept that there is an obligation to provide sufficient funds to the BBC, whether through the licence fee or otherwise, to ensure that it can fulfil the public purposes as an independent public service broadcaster that are enunciated in the charter. Do they also accept the obligation to ensure that the independence of the BBC is guaranteed and that there will be no further raids upon it through top-slicing? If the Minister can give those assurances today, I will not feel that I have wasted the best part of the last year in these debates. If he cannot do so—I very much hope that he will—I am afraid that I will have to bring in another Private Member’s Bill at the ballot.
Viscount Colville of Culross (CB)
I regret that the Government decided not to accept Lords Amendment 242. The Minister in the other place said in his speech yesterday that the technology of broadcasting and internet-based on-demand viewing are completely different. I am afraid that that is not right. The two technologies are merging as television sets become multipurpose computers. We are seeing convergence between television and the internet increasing at a massively rapid pace. It is crucial that the prominence regime should keep pace with changing viewing habits.
However, the response from the other place gives me some heart. At least there is to be an Ofcom review of the PSB prominence guidelines in the internet age. I urge the Minister to ensure that Ofcom starts that review as soon as possible and not allow it to put that off until 2020. Every month, we see PSB on demand and digital services become more important for broadcasters. I am sure that your Lordships would like viewers to have easy access to programmes that in the BBC’s case are funded by public money and in Channel Four’s case are publicly owned.
Lord Clement-Jones
My Lords, I very much hope that the Minister will take the threat from my noble friend Lord Lester extremely seriously and will rise to the challenges that he put to the Minister on the questions of funding, independence and carrying out the activities of the BBC.
I agree in particular with the noble Lord, Lord Best, in his disappointment with the Minister’s Motion today. As the noble Lord mentioned, my noble friend Lady Bonham-Carter added her name to what we saw as a very important amendment in this House. That was the product of the report of the Communications Select Committee, Reith Not Revolution, which urged a much greater level of transparency and independent oversight in the setting of the licence fee. Of course, the Minister pushed back in Committee, on Report and at Third Reading by talking about the licence fee being a tax. However, it is a rather exceptional one: a hypothecated tax paid by the public to fund the BBC. So it is entirely correct that there should be a different mechanism for the setting of that licence fee. This arises because of the midnight raids—the hijacking—by the Treasury of the licence fee process on at least two occasions recently. One of the worrying phrases that the Minister used was that the Government want a free hand following negotiations with the BBC. That is exactly what the original amendment was designed to prevent.
The nub of the concern is about assurances. The Minister gave assurances and used new language on this. However, we have seen what assurances given by the Government are worth when it comes to snap elections. Assurances can be given by government one minute and broken the next. However carefully we scrutinise the Minister’s wording today, if his Government are in a position in future to negotiate the licence fee, we have no absolute assurance that those words will be followed. I share the deep disappointment that I am sure is felt all around the House.
In many ways, Motion E is even more disappointing. It was perfectly valid for the noble Viscount, Lord Colville, to express some support for the Ofcom review, but given that the Government could say that whether or not to have a BBC licence fee commission is a political decision, this is much more a question of the facts and perception. On at least two occasions we have had Secretaries of State for Culture, Media and Sport—Jeremy Hunt and Maria Miller—saying that the position of the public service broadcasters is very important and EPG position is a very important way of safeguarding it. The Minister has said that a review will be undertaken by Ofcom, but Ofcom already knows that there is a problem. It recommended in its 2015 PSB review that policymakers should reform the rules for on-demand. Why are we asking Ofcom to do the work all over again? That does not seem a particularly constructive way forward, despite appearances.
A number of questions arise from Motion E. Can the Minister confirm that statutory change will be necessary to bring on-demand PSB content and the connected EPGs, where they are found, into the scope of Ofcom’s EPG code? In conversations, the Minister has claimed that it is not possible to have a Henry VIII power that would implement Ofcom’s recommendations for on-demand, so I assume that there is no current statutory power and that therefore we would be talking about primary legislation in that respect, but it would be helpful to have that confirmation.
Will the Minister give us an assurance that the Government will act on those Ofcom recommendations? We would not have tabled amendments on EPGs unless we thought that this was a real and present issue that needed to be tackled. This was not a frivolous amendment, but the Government seem to have a completely different view. The earnest of their intentions on this provision is rather important. The amendment sets a 1 December 2020 statutory deadline for the review and the revision of the EPG code, but does the Minister not agree that actually it would be desirable to commence work rather earlier, given the need for statutory changes beforehand, probably, to bring on-demand content into scope?
Finally, it appears that there is a statutory power to ensure the prominence of PSB children’s channels on EPGs. Does the Minister agree with that? Does he agree that if Ofcom so recommends, that could be brought in at a much earlier date than the on-demand provision? I very much hope that the Minister can answer those questions.
Lord Stevenson of Balmacara
My Lords, taken together, these two amendments were traps for the Government and, with predictable certainty, they have fallen into both of them.
The amendment that has just been spoken to by the noble Lord, Lord Clement-Jones, on the need for Ofcom to have powers to make sure there is a proper rule about prominence that applies not only to the linear but to the offline world of iPlayer and others, was a test of whether or not the Government believed in public sector broadcasting, in that if they believed in public sector broadcasting they needed to come forward with proposals that allowed the channels that were funded by the public or in a not-for-profit way to have access on a fair and equal basis to commercial channels. By tabling an amendment that is for just a report, without the requirement that there should be legislation in three primary legislative areas, which I think we agree needs to happen, I think they have failed this test.
However, we welcome where they have got to. I support the idea of a further review. I hope it will bring out the complexity of this issue—the changing technology and the difficulties of assessing this—in a way that will make it easier for the Government to honour their commitment given in the other place and repeated here today that if the report does make it clear that there is a problem in this area and it can be fixed only by legislation, the Government will bring that legislation forward as soon as possible. I give the commitment from this side of the House that, if elected, we will do the same.
Lord Ashton of Hyde
My Lords, I am grateful for all noble Lords’ contributions. I will start with the noble Lord, Lord Best. I am grateful for the limited thanks he gave me. I give him unqualified thanks in return. We have talked about this for a long time, both in and out of the Chamber. The one thing I can say about the Government’s view on the BBC licence fee is that we have been entirely consistent.
I say to the noble Lord, Lord Lester, that in conversations over a period of time, both in and out of the Chamber, I have never given him any reason to expect that we would change our view on this. He said he was pathetically optimistic. I hope he remains optimistic in other things but we have been entirely consistent on this matter. As I explained at length, we do not believe that it is right for a tax to be consulted on.
I understand the issues and the strength of feeling in this House. That is why we have made some changes during the charter renewal process. We have outlined, as I said, that we have protected the funding for five years so that we will not have any so-called midnight raids. It is also protected from inflation, which it was not before. We have agreed that we will take in information and expert advice before the process goes ahead in five years’ time. I of course take the threat from the noble Lord, Lord Lester, about a Private Member’s Bill extremely seriously. I must assume that there is a possibility it will be forthcoming and I look forward to debating it with him. At the moment, I do not believe that our situation is likely to change but of course in 11 years’ time, it might. I do not think I will be involved in it at that time.
The noble Lord asked a number of questions about whether the Government will guarantee the independence of the BBC, agree not to top-slice the licence fee and adequately fund the BBC. The new charter endorses the role and independence of the BBC—and increases that independence in a number of ways—and this Government will of course live by the provisions of the royal charter, as far as the independence of the BBC is concerned. On funding, we have agreed to give it a five-year period and will ensure that it is properly funded for the future but a negotiation will take place at that time.
As for the point made by the noble Viscount, Lord Colville, about timing, Ofcom will get going when it feels it necessary. What we have done is to put an end date on that in our amendment, so that it will have to produce its report in about two and a half years’ time. That is a great advantage.
Lord Lester of Herne Hill
Did I understand the Minister to have given an assurance to the House just now that the Government regard themselves as under a duty to respect the independence of the BBC, and to provide sufficient funding to pursue its purposes as an independent public service broadcaster? If the answer to those questions is yes, I am extremely grateful and if the answer is no then I say to the Minister: power is delightful and absolute power is absolutely delightful but that should not be his motto.
Lord Ashton of Hyde
What I said was that we of course abide by what we have put in the royal charter, which mentions the independence of the BBC and enhances that independence from what came before. As far as funding is concerned, we have a five-year deal and the funding negotiation will go on but it is clearly not the Government’s desire to prevent the BBC carrying out its purposes. There will be a negotiation—this is a tax to provide for the BBC—and each five-year period will be taken on a separate basis.
The noble Lord, Lord Stevenson, referred to the next funding period and the election cycle. An 11-year cycle was carefully chosen to remove funding from the electoral cycle, I think at the suggestion of this House among others, and it is of course unfortunate that it has been changed by the absence of the fixed term. But the Fixed-term Parliaments Act is not a guarantee of a five-year Parliament—the provisions were written into the Act to make sure that that was the case. The new five-year settlement will be reached before the next election while the funding settlement is based on an 18-month to 24-month negotiation so, assuming the Parliament goes to the full five-year term, it would be in place before the election.
Fundamentally, a long charter allows the BBC to operate with greater certainty and with the freedom and confidence to deliver its objectives. It is also worth remembering that in the course of the BBC’s 100-year history, the charter renewal process has coincided with the electoral cycle on a number of occasions. Yet the process has always managed to conclude successfully, to ensure that the BBC can continue to thrive.
Moving on to the EPG, there was a suggestion that we should take a broad Henry VIII power. I think that the noble Lords, Lord Clement-Jones and Lord Stevenson, both mentioned this. It is an unusual situation where both Opposition Front Benches are asking—almost demanding—the Government to take a broad Henry VIII power. I would normally say that I probably agreed but in this case, the problem is that the power would have to be very broad and wide-ranging. Amendments could be necessary to the Communications Act 2003 and the Broadcasting Acts of 1990 and 1996. Depending on what Ofcom recommended, a wider amendment might be needed beyond traditional broadcasting legislation to other areas which we would not necessarily wish to capture, such as other online services. We think this is the best way forward.
The noble Lord, Lord Stevenson, also asked about our belief in public sector broadcasting. We have accepted the arguments from your Lordships’ House on listed events, to maintain them on our free-to-air channels, and from the noble Baroness, Lady Benjamin, on children’s TV to ensure the adequacy of provision. These are evidence of our support for PSBs.
I know that noble Lords were disappointed about the BBC licence fee. As I said, we were entirely consistent on this. The commitment that we and the Minister in the other place have made on EPG should be some comfort to those who were disappointed with our answers on this. As a result, I hope that they will be able to accept this amendment.
Lord Ashton of Hyde
That this House do not insist on its Amendment 242 and do agree with the Commons in their Amendment 242A in lieu.
Commons Amendment in lieu
“Electronic programme guides and public service channels
(1) After section 311 of the Communications Act 2003 insert—
“311A Report on electronic programme guides and public service channels
(1) It is the duty of OFCOM from time to time to prepare and publish a report dealing with—
(a) the provision by electronic programme guides of information about programmes—
(i) included in public service channels, or
(ii) provided by means of on-demand programme services by persons who also provide public service channels, and
(b) the facilities provided by such guides for the selection of, and access to, such programmes.
(2) When preparing the report OFCOM must consult such persons as appear to them appropriate.
(3) In this section “electronic programme guide” and “public service channel” have the same meanings as in section 310.”
(2) After publishing the first report under section 311A of the Communications Act 2003 OFCOM must review and revise the code drawn up by them under section 310 of that Act (code of practice for electronic programme guides).
(3) The revision of the code must be completed before 1 December 2020.
(4) Subsections (2) and (3) do not affect OFCOM’s duty under section 310 of that Act to review and revise the code from time to time.
(5) In this section “OFCOM” means the Office of Communications.””
Lord Ashton of Hyde
That this House do agree with the Commons in their Amendment 246A.
Lords Amendment 246
“Duty to provide information about tickets
Duty to provide information about tickets
In section 90 of the Consumer Rights Act 2015 (duty to provide information about tickets), after subsection (4)(d) insert—
“(e) the ticket reference or booking number;
(f) any specific condition attached to the resale of the ticket.””
(e) any unique ticket number that may help the buyer to identify the seat or standing area or its location.””
Lord Ashton of Hyde
My Lords, we recognise the good intentions behind the original amendment of the noble Lord, Lord Moynihan, and have accepted it, but we need to make some technical amendments. That is the purpose of Amendment 246A. The Government’s amendment clarifies that the reference number provided should refer to the unique ticket put up for resale and enable the buyer to identify the location of the ticket within the venue.
Our amendment also removes the provision requiring ticket sellers to provide,
“any specific condition attached to the resale of the ticket”.
Many noble Lords have asked me about this, so I want to put on record why. The Government are firmly of the view that, when a secondary ticket seller offers a ticket for sale, they must already give the buyer clear information about certain conditions attached to the ticket concerning resale. This provision is in Section 90(3)(b) of the Consumer Rights Act 2015. Duplication can add only confusion, whereas we want secondary ticket sellers to be absolutely clear on this point. This amendment is of course in addition to the government amendment which made buying tickets in excess of the maximum amount, using an automated bot, illegal. I beg to move.
Lord Moynihan (Con)
My Lords, I begin by declaring an interest as co-chair of the All-Party Parliamentary Group on Ticket Abuse and paying tribute to my co-chair Sharon Hodgson in another place for the outstanding work she has done on this subject.
In brief, I welcome the Government’s amendment in lieu and the response by the Government to the Waterson review and their acceptance of the recommendations in full, including introducing a criminal offence to stop the use of bots to purchase tickets and the provision of funding to the National Trading Standards Board for enforcement action. Enforcement is weak, and I hope a future Government will work diligently to strengthen enforcement. I also look forward to the outcome of the Competition and Markets Authority’s enforcement investigation into suspected breaches of consumer protection law in the online secondary ticketing market. That is very important because the evidence of the secondary ticketing market consistently flouting the law on a daily basis is clear for all to see on many of the online sites.
I welcome the Minister’s comment that a ticket should have a unique reference number that people can see on the ticket when they purchase it. That will make it easier to identify the reseller. That has all-party support in this House and is an important step forward.
However, I would like further assurance from the Minister. He said that the original amendment I put forward was not necessary in whole because it included the addition of a requirement for the seller to list any terms and conditions associated with the resale of a ticket. The Government have deleted that provision, contending that it is already covered under Section 90(3)(b) of the Consumer Rights Act. It is important to have absolute clarity on this issue. The Government have argued that Section 90(3)(b) of the Consumer Rights Act 2015, which requires online secondary ticketing websites to provide,
“information about any restriction which limits use of the ticket to persons of a particular description”,
effectively means that my amendment was unnecessary and duplicative. Many people understand that Section 90(3)(b) was designed to ensure transparency about any ticket which was for a child or a disabled person or had a restricted view or other similar restrictions and was not about resale terms and conditions, which were not subject to debate in this context when the Consumer Rights Bill was before Parliament.
It may assist the House if I briefly give an example to demonstrate this important point. Metallica have an upcoming UK tour which offers a very strong example of why the scope of the Consumer Rights Act to require secondary ticketing websites to be obligated beyond doubt to provide information about any specific conditions attached to the resale of a ticket is necessary. Metallica are obviously well known to many Members of your Lordships’ House. There are strict conditions in place to mitigate ticket touting. Names are printed on tickets to prevent their resale, the photo ID of the lead booker must be presented to gain entry to the venue, accompanying guests must enter at the same time and tickets are limited to four per credit card. This is all made clear when you buy a ticket, and authorised primary ticket sellers have made that clear on their websites.
Do I understand absolutely categorically and without doubt that the Minister is saying that making those terms and conditions clear is mandatory on secondary ticketing market sites and is fully covered by the existing law? I think that is exactly what he said, but it would be very useful if he could confirm that, not least because it would be of assistance to the CMA in its inquiry and to trading standards because it would support and protect the interests of fans of Metallica and of “Hamilton”, which will face the same challenges when that show comes on this autumn. With that requirement for a final assurance from the Minister, I conclude by thanking noble Lords on all sides of the House for their support on this and thanking the Minister for the hard work he has undertaken to ensure that we have made progress.
Lord Clement-Jones
My Lords, I join the noble Lord, Lord Moynihan, in welcoming the government amendment. I want to make only a very brief intervention to congratulate the noble Lord, Lord Moynihan, and Sharon Hodgson on their persistence in achieving what we have achieved so far, which is considerable. A great deal of progress has been made in restricting the activities of secondary ticketing sites. We all look forward to the Competition and Market Authority’s report, which may well suggest further changes to legislation and will certainly give us a very good idea of whether the provisions of the Consumer Rights Act are being properly enforced. That will be extremely illuminating. I hope the Minister will be able to answer the question asked by the noble Lord, Lord Moynihan, about whether it is really duplication or whether we have thrown something out with the Commons amendment.
Let me end by saying that in the Digital Economy Bill we have not, in the words of my noble friend, taken up the floorboards today, but we have certainly given it a decent lick of paint in the process. It is not a very ambitious Bill, and many of us could argue at length about what other aspects it should have covered, but I thank the Minister for his unfailing helpfulness throughout the course of the Bill and I thank the Bill team. I very much welcome not only the movement today, which is perceptible—that is not always the case with wash-up or ping-pong—but some of the movement that was made in the course of the Bill. The noble Lord, Lord Moynihan, talked about the outlawing of mass online purchasing with bots, which is a very significant change, as are the site-blocking appeals, the new Ofcom powers in respect of children’s programmes, which are particularly welcome to my noble friend Lady Benjamin, remote e-book lending and the amendment on listed events. There has been movement in this House as a result of amendments in this House and the discussions we have had. I am grateful, and I look forward to a new digital economy Bill before too long.
Lord Stevenson of Balmacara
My Lords, this marks another stage in the campaign led by the noble Lord, Lord Moynihan. It was led until her death by Lady Heyhoe Flint whom we all want to recognise because she played a huge part in this and her memory is still fresh today. Wherever she is playing cricket, I am sure she is scoring a hundred as we speak.
The noble Lord, Lord Clement-Jones, and the Minister mentioned bots. We should not ignore the fact that that will make a huge change to the secondary ticketing market. The solution the Bill team came up with is very creative, and I hope it works as well as they intend it to. A first step has been taken, and this will crack down on the worst excesses of secondary ticketing.
I hope the Minister will answer directly the question asked by the noble Lord, Lord Moynihan, about whether the conditions apply because they are not drafted quite like that in the original legislation.
In its original formulation, Amendment 246 simply inserted the words,
“and any unique ticket number”.
The final version before us states,
“any unique ticket number that may help the buyer to identify the seat or standing area or its location”.
That raises the question of what “may” means. Does it in some sense imply a voluntary obligation? If it does, it would be very unfortunate. Could somebody argue that they did not include the unique ticket number specified because in their view it did not help the buyer identify a seat or a standing area or its location? Or is it a variation on the word “must” so that it is a requirement that a ticket number that could help a buyer identify seats or standing areas or their location must be included? I will be grateful if when the Minister responds he will mention that.
Lord Ashton of Hyde
My Lords, I am very grateful to, especially, my noble friend Lord Moynihan and other noble Lords. We have to some extent overcome the great disappointment of the noble Lord, Lord Clement-Jones, on the previous group.
Noble Lords have been very clear in this debate that they want to see tougher action to deal with the serious problems in the secondary ticketing market, and the Government are taking action. That is why we have provided funding for National Trading Standards to take further enforcement action, as the noble Lord, Lord Clement-Jones, mentioned. We have facilitated the ticketing industry’s participation in joint industry-government cybersecurity networks, and the CMA has launched an enforcement investigation into suspected breaches of consumer protection law in the online secondary ticketing market. I am sure that the noble Lord, Lord Moynihan, and other noble Lords will continue to keep this issue under the spotlight, and we will make progress together on protecting consumers and supporting our national sporting and cultural assets.
The noble Lord, Lord Moynihan, asked a specific question about that. As my right honourable friend the Minister in the other place made clear, the Government are firmly of the view that, under the Consumer Rights Act, when a secondary ticket seller offers a ticket for sale they must give the buyer clear information about certain conditions attached to the ticket. We said the proposal was duplicative because that is what our advice told us. I would say in particular to my noble friend Lord Moynihan that the Explanatory Notes to the Consumer Rights Act 2015, referring to Section 90(3)(b), make clear that,
“the buyer must be given information about any restrictions that apply to the ticket”.
In respect of the following wording in the amendment,
“any unique ticket number that may help the buyer to identify the seat or standing area or its location”,
the noble Lord, Lord Stevenson, asked whether the “may” makes this voluntary. The answer is no, it is mandatory. This is technical language to link this to the previous subsection in Section 90 of the Consumer Rights Act. We have merely used the same language that was in there before. I hope that answers the question.
I reiterate what the noble Lord, Lord Clement-Jones, said about some of the advantages and gains that the Bill has had from your Lordships’ House and indeed from the opposition amendments and suggestions in the other place as well. I say this to acknowledge their input into it but also to show that we have been flexible in many things. We have made progress in areas suggested by the Opposition in both Houses: on the extension of public lending rights to e-books; on children’s television, as the noble Lord mentioned and as was proposed by the noble Baroness, Lady Benjamin; on the accessibility of on-demand services, including subtitles; on maintaining the capability to retain listed events, which was first tabled in the Commons; on bill limits for mobile phones, as we talked about earlier; on the code of practice for social media; on supporting the separation of BT from Openreach with the Crown guarantee amendment; on internet filters, which protect children; and on the review of the electronic programme guide, although not quite to the extent that some noble Lords wanted.
The Opposition have also supported things that will allow great advances in the digital economy, such as: the Electronic Communications Code, which is very technical but a crucial change; age verification for online pornography, where we listened and adjusted the regime to address the concerns of the Opposition; the extension of age verification for pornography on on-demand television, so that 18-certificate material is kept away from children; government data sharing, which will enable us to deliver better services to the vulnerable; and the repeal of Section 73 of the Copyright, Designs and Patents Act, which I think was accepted all round the House as a very good thing.
I mentioned my thanks to many noble Lords at Third Reading, and I repeat those, especially to the noble Lords, Lord Stevenson and Lord Clement-Jones, who headed their various and quite large teams in the House. I am very grateful to all those noble Lords.
Royal Assent
Thursday 27th April 2017
(7 years, 7 months ago)
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