Product Security and Telecommunications Infrastructure Bill (Second sitting)

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

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None Portrait The Chair
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Thank you very much. Members of the Committee will ask you questions in turn, but we will start with the Minister.

Julia Lopez Portrait The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
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Q29 It would be helpful if, for the Committee’s benefit, you could set out your own background and interest in this area. I would specifically like to ask you about how this fits with international regulation of this space. What are other countries doing? Some of the witnesses on the last panel discussed the potential challenges if different countries are doing different types of regulation in this area. How can the UK show leadership in this space and try to minimise the burdens on businesses while protecting, and maximising the protection of, consumers?

Professor Carr: That is a very good question. In terms of international alignment, aligning these kinds of laws across jurisdictions is a challenge. I want to say from the outset that regulating emerging technology is understood to be a deeply problematic and challenging area. It is something that the UK in many ways has led on. A lot of thought leadership has come out of the UK on this. As David said, the work that has led into the Bill has been going on for many years in the UK, and has been funded by the UK Government through universities and industry. A tremendous amount of background work has gone on. There is the PETRAS—privacy, ethics, trust, reliability, accessibility and security—consortium, which was originally the cyber-security of the IoT consortium. We have worked on that for many years with David and others. The UK really has led on this. When we look at what is happening here and now, you would have to say that this is a country that is able to confront those kinds of difficult challenges and think about ways through them. No one is saying that it is easy; it will not be, but this is a very good start.

When it comes to looking at international alignment and the impact on industry, and particularly the manufacturers of these devices, there is already a lot of alignment. I have been doing some work through the World Economic Forum, where I am chair of the Council on the Connected World. On 15 February, we launched a global statement that spoke to the three initiatives that are being considered here, and an additional two in terms of IoT consumer devices. That statement has been endorsed by more than 110 organisations around the world, including Microsoft, Google, Qualcomm, DCMS, RISCS—my institute—and indeed David’s organisation. There is a tremendous amount of international support for these initiatives and more. A lot of them are big industries, so I do not think there is necessarily a disconnect between governance of emerging technology and what is helpful for industry actors; I think there is actually a lot of alignment.

David Rogers: I will just point to some specifics. There is work ongoing in India, Australia, Singapore, Turkey, and the US, and many of those countries—and many I have not listed—base their work on what was originally the UK code of practice. The UK’s code of practice was taken to ETSI, the European telecoms standards body, and was made into a European norm. That really, I think, has given the confidence for other countries to be able to adopt that as a scrutinised and good piece of work.

That is obviously not in isolation. ETSI is an industry-led organisation, and a lot of the work that has gone into that in advance, including through DCMS and NCSC, has been about looking at industry-based best practice. Organisations such as the GSMA worked on this in 2014, and, prior to that, in the smartphone world, have been building in hardware security and other measures, which have hardened connected consumer devices, so that work is certainly not in isolation. We are really standing on the shoulders of giants here, because a lot of the work is done; it is in endorsing good practice, and I think that is what the other countries are seeing, and they really have seen leadership from the UK in this space.

Julia Lopez Portrait Julia Lopez
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Q I wonder if you could set out some of the challenges in this space, in relation to the fact that there is such a breadth of devices that need to be governed, with different vulnerabilities, and how we try to ensure that we keep pace with all of the changes in technology that will be coming down the line. There are also the specific requirements of different types of connected devices, whether watches or fridges.

David Rogers: I will address that. The beauty of the IoT is that there are all these fantastic things being developed. When we started to look at what we could do, and a code of practice, we wanted to ensure that we did not constrain innovation by mandating specific technical measures that might prevent some fantastic product being created. That is why we took quite a high-level outcome-based approach.

That also meant that it was measurable, even by consumers. If you look at the top three guidelines of the code of practice that have made it into the draft legislation, a consumer can look at those things, which I would call “insecurity canaries”. If you see that a manufacturer does not have a vulnerability disclosure policy—so hackers and security researchers, for example, cannot report things to them—that is a big red flag, and I would not be buying that product. It is the same if the product does not have software update support, and so on.

We took a proportionate approach to the code of practice, and I think that that also led to the industry endorsement of it. This morning, I heard the techUK gentleman saying it is not specific enough; well, actually, the ETSI EN 303 645 is quite specific, and the compliance specification that goes with it is even more specific. For some bad practices, I do not think that we could be more specific than saying “Don’t have default universal passwords”. We want to get rid of “admin” and “admin”. That is a ridiculous situation, in some parts of the market, that is unacceptable, and we must eliminate it from the market.

Julia Lopez Portrait Julia Lopez
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Q Do you have anything to add on this, Madeline?

Professor Carr: Just to say that we cannot anticipate all of the new devices that will come on to the market, of course. I think what David is saying is that it is necessary to have that kind of flexibility to adapt and accommodate those, as they come on to the market. However, it is really long overdue that we do something about this.

There are two types of security in these devices that we understand at this point, which need to be taken into account. The first is the security of the data that flows through them. Although they are very different devices, that is, in many ways, a common problem in securing data—particularly, of course, personally identifiable data. The second issue arising from IoT devices is that many of them have an impact in the physical world. That then begins to blur cyber-security with safety, and we have very different ways of approaching cyber-security and safety. What we tend to do with safety is test things, over and over again, until they break; then we know how they need to be built or constructed. That kind of homogeneity in an approach to design is very bad for cyber-security, because that is what gives us vulnerabilities across the whole landscape. Those are the kinds of issues that we need to grapple with. The devices themselves will continue to emerge and evolve, but the problems that we are grappling with now are common across devices, in a way. Legislation such as this will go some way towards addressing those problems.

Julia Lopez Portrait Julia Lopez
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Q David, I was interested to know that you were involved in the kind of practice being drawn up. I would be interested to understand the journey we have been on here; there has been an acknowledgment that a voluntary code of practice is not enough and legislation is required. Can you take us through that journey to legislation?

David Rogers: Yes, originally there was a “secure by design” committee set up with various companies—Madeline and I were on that committee. There were various discussions about the best way forward. I remember one suggestion being that all we needed to do was to educate consumers. After I banged my head on the table quite a lot, I think that in the end we realised that it should not be on consumers. They are not the ones who are creating the insecurity in the product and they are not in a position to do anything about it either—they are mainly victims. It was recognised that a lot of those issues have been in products for many years; I go back to the default password issue, but there are many issues around things such as lack of support for software updates.

I drew up the original code of practice and worked closely with National Cyber Security Centre and the Department for Digital, Culture, Media and Sport. I also worked with academia and the security research community, who are hackers from around the world who have been campaigning for those issues to be dealt with for years, because they are seeing it directly in their work. We spent a lot of time getting it right; we worked at the Information Commissioner’s Office on some of the elements related to GDPR.

A voluntary code was published in 2018. However, manufacturers were put on notice at that point. By 2018, it was made public that this was the expectation; we expected the industry to improve. Some quarters were probably already compliant; you heard from Dave Kleidermacher this morning, who led the way in security improvements on mobile devices—from their perspective a lot of the stuff in the 13 requirements was already done. However, many parts of the industry have done nothing. It seems to me that they are quite happy to sit back and do nothing. That is why I think this work is necessary; there is a need for the big stick of enforcement, to be honest with you. They have been given plenty of chances, and not just since 2018—it is since the 1990s. It seems acceptable to them to carry on doing the same things that they have always done, such as buying in the really cheap software that is completely open and has old protocols and legacy issues that should have gone years ago. I am entirely supportive of taking action now— they have been given enough time. They should not wait for the 12 months—or whatever it is—for certain things to become mandatory. They should be doing this because it is the right thing to do for their customers.

My company carried out some research for the IoT Security Foundation on vulnerability disclosure. Again, that is something that is very visible; you can go to the website and see whether that company is open to security researchers and hackers reporting security issues to them. There is then a process that has been ISO-defined since 2014; it is dealt with and then the issue is made public once it is fixed so that consumers are secure. We discovered that about one in five of the companies that we surveyed—there were about 330 companies from around the world, representing thousands of products—was actually providing that to security researchers. That means that four in five IoT manufacturers did not have any way for security researchers to contact them. That is totally unacceptable, so we do need to take action. The companies have been given enough chances.

Julia Lopez Portrait Julia Lopez
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Q Finally, I just wonder how we use this as a moment to increase consumer awareness. You both suggest that the onus should not be on consumers, but as a Minister I am still concerned that people do not entirely understand what we mean by “internet of things” and the extent to which we will have even more connected devices in the future. Could you set out what the security challenge will be in the future, in your opinion, and how we try to use this to educate consumers so that there is an informed customer base when product decisions are made in this area?

Professor Carr: I think the element that will impact consumer decision making the most will be the length of time for which the product will be supported. I remember having the conversation in a room in DCMS all those years ago about how we could possibly be expected to spend £1,000 on a phone that will not work in 18 months, that the company knows will not work in 18 months—it will not be supported—and to not have access to that knowledge. This is not just about putting labels on things; it is about the fact that we could not find out even as an informed consumer. I think the length of time for which the device is supported will have a major impact on consumer decision making and probably more than the other two things, because a lot of people do not care about passwords and a lot of people do not know what a vulnerability disclosure agreement is or what that means. Knowing for how long the device will be secure is like having an expiry date put on it.

That is an example of where a kind of market driver can impact consumer decision making, but one of the things that we know about cyber-security more generally is that, very often, market drivers do not work in this space. There is not really, to be honest, all that much of a market for cyber-security, as people do not really care about that. That is why we need to think about moving beyond the dominant narrative over the last 50 years that Governments stifle innovation. Even if we go right back to the beginning of digital technologies and the ARPANET and DARPANET, those things were wholly supported by the US Government. They were funded by the US Government; they were invested in by the US Government for decades before the private sector came on board. So there are these points where it is absolutely necessary for Governments to be involved and for governance to happen, because we cannot see the future. If people begin to lose confidence in these devices and they begin to fear—“I don’t want my child to have something like that. I don’t want Alexa in my house. I don’t want people listening to my conversations etc.”—all the incredible benefits that we can extract from those technologies will go by the wayside.

I will give just one very clear example of this. If you think about the huge effort that the banking sector put into making sure that people felt confident about banking online, spending money online and tapping their card—“When something goes wrong, the bank will take care of you”—the reason, the logic, behind that was that if people began to think, “It’s not safe to bank online; it’s not safe to use my card in these little shops,” they would stop doing it. It was that investment in regulating it, locking it down and making sure it was safe that has allowed us to get to this extraordinary situation where you can walk around with no wallet and just a phone. It is that thinking that is important now.

David Rogers: I think the transparency point is fantastic. This work is not done in isolation. There is lots of work going on about lengthening software updates for lots of types of products, and there are different regulations happening in Europe and so on. Consumers should not have to know about the details. Madeline has said this. They have an expectation, a very reasonable expectation, that they will not be arbitrarily hacked into. We have all read the stories about things like baby cams being hacked into. That is totally unacceptable, because at the end of the day the company that created and sold that product that was insecure at the time it was created is responsible for it. Of course, they did not hack into it, but they left all the doors open, and they sold that product and made money and profit from it.

Yes, I believe that consumers should know that they are being looked after, and the length of time that that is provided for helps them to make an informed decision—it is a free market. Also, security should not be a luxury for the rich. You should not be required to replace your iPhone, for example, just because the support ends. At the end of the day, we are all impacted by security issues. The Mirai attack, for example, was an extremely large distributed denial of service attack, which basically took down large parts of the internet. It was all those small IoT devices, routers and things that had been taken over. The attack did not discriminate between who had those devices, those older devices or whatever, but the impact and scale of that attack was the problem.

That is why we need to ensure on an ongoing basis that, as the technology develops, we can put new requirements through the standards bodies and endorse them. This is the start of that lifecycle, to ensure that those products do not enter markets like the UK.

Chris Elmore Portrait Chris Elmore (Ogmore) (Lab)
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Q To keep the conversation on consumers, eBay, Amazon and other platforms are not part of this Bill, but an awful lot of research out there suggests that they do not regulate what they sell. There are an awful lot of suggestions from organisations like Which?, whom we are meeting later, that those platforms’ markets are often flooded with devices that are not secure, but are cheaper. Again, to go back to your comment about how security should not just be for the rich, if someone is looking for a cheaper type of product, they can go there and their thought will not be about security, but about how shiny and new, or refurbished, it is—how it looks very good and the same as what the other child in the class has, and so on. What are your views about looking at the online marketplaces? Is that the next step, through secondary legislation or this Bill? Should they be as responsible as the manufacturers, if they are wilfully selling products that they know are not secure?

In that vein, is there something in the idea of a reporting mechanism—either by the Department or some sort of regulator, annually or however long is appropriate—for whether these organisations and manufacturers are working to the standards that you so strongly set out? They have had years to deal with the standards, but many are still not doing it. I am suggesting naming and shaming, if you will, to give consumers better informed decisions.

A lot of people borrow money to buy these devices. On Second Reading, I expressed a concern that many people will look in a retailer or online, and go, “If that doesn’t exist for this much time—if it only has two years on it and the loan is three years—why am I bothering to purchase it if it is obsolete in that time?” That is a concern that many people have. Consumers potentially do not know what this or that means, but they know what “security” means, and if they think something is not secure, then, as Professor Carr mentioned, they think, “Well, I won’t bother having that product, because it isn’t safe”, because that is how they view the word “security”, which is logical, but not necessarily the best option given what they are looking for. There are several questions in there, forgive me, but they are interconnected with what the Minister was saying.

Professor Carr: I will try to answer as many as I can, as well as I can. I am sure that David has comments as well.

On educating consumers, that question of “Will the loan outlast my device?” is a very astute one, because consumers do not need to understand—they never will—all the ins and outs of phone or device security, but that is a very pragmatic response: “What actually am I buying? I am spending for three years to buy two years of a phone.” That type of consumer education will snowball when people are presented with information on how long the device will last and asked, “Is that what you want?”

I guess online markets are already regulated. There are things that we cannot buy in the UK and that cannot be shipped here. It would certainly have to be a consideration that, ideally, devices that did not meet UK standards were not able to be shipped to the UK, but I guess that is the case with many consumer goods that we cannot buy online. There is a tendency to blame business in this scenario and to see manufacturers as careless or irresponsible, which surely some of them are. However, it is also the reality that businesses have to make a careful calculation on how they invest. If it costs more to produce a product and they are answerable to shareholders, they have to have a conversation about why they are spending more on a device that is already selling well and returning a profit. I am not saying that that is the way it should be, but that is the way the free market works.

Look at what happened with GDPR. In my work, we work a lot with senior business leaders and talk to them about how they respond to cyber-security regulations. They did not push back against GDPR or see it as terribly negative; they saw that it unlocked budget for them to use, because they could quantify what percentage of their global turnover a data breach would cost or what the fine could amount to. They can take that calculation to the board, and say, “Right—we mustn’t have a breach or it would cost this much. How secure do we feel we are?” That is where such regulations can have a very positive effect on industries that would like to comply but cannot just invest in all the different aspects of a device without some justification. This gives that justification. It unlocks that funding in those board conversations about where investment in products should go.

David Rogers: Just to address the Amazon/eBay question, I have seen all this stuff. I have bought some of it to have a look at. A lot of counterfeit and substandard—the Chinese call them Shanzhai—products are available. I have conversations in which people say, “This is about buyer beware. You’d never buy a £9.99 smart watch. You should know that that’s going to be dodgy,” but as you said, people cannot necessarily afford it. There is a peer pressure element to it, and there is a sort of endorsement by the brand. If you go to Amazon, you expect it to be a quality product, so people are lulled into that sense of security that what they are getting is quality. In some cases, that is not the case. I fully agree that the companies that are retailing this stuff cannot just lay the blame at the door of the companies that are stocking and selling it. If it is on Amazon Prime, surely Amazon has a responsibility over that.

Earlier, Dave mentioned different regulatory regimes and that there may be some fragmentation around the world. I actually think that there is probably a lot of alignment and harmony. There has been a lot of work between DCMS and the National Institute of Standards and Technology in the US, so there is a broad understanding of what good looks like. If, either through some self-declaratory measure or by some endorsed mechanism of compliance, those companies are told to come up with a compliance statement, that helps the likes of Amazon and eBay to select their suppliers appropriately and then to remove them from their stores more easily. At the moment, it is kind of a wild west. They do not have any questions or answers.

--- Later in debate ---
None Portrait The Chair
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Good afternoon. We will now hear oral evidence from Catherine Colloms, MD for corporate affairs at Openreach; Simon Holden, the group chief operating officer at CityFibre; Mark Bartlett, director of operations at Cellnex UK, appearing on behalf of Speed Up Britain; and Juliette Wallace, also of Speed Up Britain.

We have until 3.40 pm for this session. Will the witnesses introduce themselves briefly for the record, please, before I turn to the Minister? We will go left to right.

Simon Holden: I am Simon Holden. I am the group chief operating officer of CityFibre.

Catherine Colloms: I am Catherine Colloms. I am the corporate affairs director at Openreach.

Mark Bartlett: My name is Mark Bartlett. I am the operations director at Cellnex UK, representing Speed Up Britain.

Juliette Wallace: I am Juliette Wallace. I am the property director at MBNL, which is a joint venture between EE and Three. I also represent Speed Up Britain.

Julia Lopez Portrait Julia Lopez
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Q Thank you for attending the session. I do not know whether you watched this morning’s session, but Protect and Connect and other witnesses put it that, since 2017 and the changes to the electronic communications code, roll-out has been even more difficult and slow, and that no progress has been made as a result. What is your response, as providers, to those concerns? Do you believe that the approach by operators has been too heavy-handed in the negotiations with landowners?

Mark Bartlett: On behalf of Speed Up Britain, we very much believe that the changes proposed in the Bill are needed to speed up the roll-out of digital connectivity across the country. Therefore, we believe that changes are required.

In that sense, though, we need to look back to before 2017 to understand the policy behind the changes originally made, and to understand that those were made in order to achieve the outcomes that the Government were already trying to establish. Without the changes in the policy of 2017, this ambition will not be met. Speed Up Britain continues to support the policy ambitions as laid out in 2017, but the fact is that the law as put down at the time is not working and created loopholes, which have been exploited, and that has meant that we have been unable to proceed at the pace we wanted.

Catherine Colloms: To give you a bit of context, Openreach is the national broadband network. We are in the process of upgrading the existing network, which is a hybrid copper-fibre network, to a new full-fibre network. The ambition is to build 25 million full-fibre homes and businesses by the end of 2026. That is a hugely ambitious target. It underpins the Government’s 85% manifesto commitment, but we have to get to a ramp of building 4 million premises a year.

We are currently building at 50,000 premises a week, so we are heading up towards the 3 million a year kind of ramp, but from pretty much a standing start in about 2017, as there was very limited full fibre in the UK at that stage. We had finished building the old network and had not transitioned through. It is a really serious challenge. If you think about the pace of build and what we are trying to achieve, being able to do things really rapidly and operationally simply becomes incredibly important.

For us, the two big pieces that the Bill can potentially help us with enormously and help supercharge that fibre build is around access, that is access to multi-dwelling units—the approximately 6.1 million blocks of flats in the UK—and access to rural parts of the UK. There are some urban as well, but if you think about how we build, we have a duct infrastructure but we also have a very extensive pole infrastructure. For most of our rural build—we have committed to building 6.2 million commercial rural, which goes beyond the Project Gigabit programme that the Government are talking about to the hardest-to-reach areas—we are going to have to do most of that over our existing pole network. At the moment, the Bill makes some changes that are helpful and which progress us forward by allowing us access to upgrade our current infrastructure on underground ducts. What it does not do is allow us to upgrade the infrastructure we have in place, either over the pole network or in those blocks of flats.

If you think about what we have in place today, we have our existing network, so we have the ubiquitous either copper or hybrid copper network that is there today in pretty much all of these premises, all across our poles. We are trying to upgrade that network to full fibre as rapidly as possible and to do so, it would be incredibly helpful if we were able to upgrade our existing infrastructure. The Bill at the moment allows us, as I said, to do that through underground ducts. It is not going to allow us to get into either MDUs to upgrade more rapidly—we estimate that something like 1.5 million MDUs could be at risk based on our experience of unresponsive landlords and our inability to get in—and it also does not allow us to automatically upgrade our property and the infrastructure that we have over the pole network.

To give you a bit of context, we have 1 billion metres of cable over poling at the moment. The vast majority of the rural network is served over poles, so for us it is really important to be able to deliver those 6.2 million commercial rural, but also potentially the Project Gigabit programme. We have been working in Scotland on the R100 programme—the “Reaching 100%” Scottish Government programme. We need one wayleave for every 16 premises, to give you the sense of scale. We are finding the ramp very challenging and because of the scale and pace that we are trying to build at, what we really need is ease of access, ease of upgrade and that is the opportunity we think with the Bill.

Simon Holden: I think we are talking about two different sets of infrastructure here, which is worth explaining. We are talking about mobile and then we are talking about fixed-line fibre access. CityFibre is rolling out a fibre access network, mostly to consumers in the home. We are doing that across a footprint of 8 million households in the UK. The reason I wanted Catherine to go first is because we are utilising Openreach’s duct and pole infrastructure for three reasons. First, because it will allow us to go faster because we do not have to dig up the streets and lay ducts ourselves or put many more telegraph poles down. Secondly, because we are reusing and so can lower our cost, which means ultimately lower prices for the consumer. Thirdly, because it is just much more environmentally friendly if we can reuse those assets.

We are in favour of that, but at the moment we have this split between pre and post-2017 access. Our view at the time was that that made a lot of sense. Five years on from that now, it is a somewhat arbitrary split. So we think dealing with that is the right thing to do. In particular, the draft Bill’s proposals on ducts look fine to us. We would echo the point about poles. For us, poles are really important in rural, but also in Scotland. It turns out that in Scotland there are a lot of poles sitting in people’s backyards and just being able to access those to put our infrastructure on means that we can accelerate getting fibre access to all those homes. In our footprint, there are probably up to about 200,000 homes that we can access quickly if we can get that right, so we think that there is a real advantage to doing that.

For us rolling out fibre, there is a balance that you have to have here between access all the way through into the home, back to the public domain where, as a code operator, we can build in the public domain. I think we would say that our experience of getting landlords to come to the table is mixed and that the alternative dispute resolution mechanism proposed here is a good one to push that timetable down, so we can get to an answer.

I would also say, however, that when we get into the home, into a block of flats, the tenants really want the service. We have found that, once we have got the landlord and the landlord has given us the wayleave so we can connect into the front door of the block of flats, then wiring up inside is not particularly an issue. We are concerned a little with somehow grandfathering old wayleaves inside buildings, first because it does not seem balanced, but also because it will entrench the people who have those, which I would say is mostly Openreach.

In trying to promote competition and accelerate growth—to your question earlier, Minister, about whether growth has accelerated—the answer is that growth has clearly accelerated in rolling out fibre. That is absolutely happening. We have vibrant competition now, with billions of pounds being invested in this sector. Here is an opportunity to make it go faster, for us all to benefit with a frankly lower-cost solution.

We feel that what is on the table with that landlord dispute resolution mechanism is good. We do not feel that we need to go inside the building, frankly because once tenants have access to it, landlords are more than willing to give that connectivity, because they have happier tenants as a result. We have not found that that is a real impediment to us.

Julia Lopez Portrait Julia Lopez
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Juliette, did you want to add anything? You do not have to.

Juliette Wallace: I was not going to add any more to what Mark said on behalf of mobile.

Julia Lopez Portrait Julia Lopez
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Q This morning, a rather unflattering depiction was created of the behaviour of operators towards landowners. “David and Goliath” was a term that was used: using financial might to bully landowners. Do you accept that characterisation of operators’ behaviour? It was also suggested that people might be disincentivised to have any infrastructure on their land, because of low rents, and that that will therefore slow roll-out to the detriment of everybody who shares our aim of better digital connectivity. It would be helpful to have your response to some of those assertions.

Mark Bartlett: Speed Up Britain represents the MNOs: Cornerstone, MBNL, Cellnex, which is a towerco, and DMSL, WIG and the industry as a whole. I will put some facts, some numbers, on the table to help us understand what we are doing.

Since 2017, we have completed about 1,000 agreements, of which 85% have been consensual and reached without any recourse to any of the processes associated with the legislation. Over and above that, 14.5% approximately required some form of exchange of letters of notice, but then moved quickly to agreement, and only 0.5% of any of those discussions ended up in the tribunal. In my experience, those that ended up in the tribunal have been the industry—us—versus the industry, or land aggregators, to be blunt.

The facts speak for themselves. In the main, as an industry, we run over 30,000 towers, which are visited frequently in order to upgrade, to maintain and to support the connectivity of the country. We do not see a landowner community, a landlord community, our partners as such, in a wall of non-co-operation, but almost the opposite. We speak to our landlords very frequently, we interact with our landlords very frequently, and therefore I do not recognise the characterisation as stated this morning.

Catherine Colloms: I am happy to talk from a fixed perspective. Generally, we have pretty good relationships with a large number of our landowners. Fibre and the copper and duct infrastructure we have is not a revenue generator for most landlords. You will have heard Charles Trotman this morning, from the CLA. We have agreements and rate cards, which were negotiated with the CLA and the NFU. We work closely in particular with those kinds of rural players to ensure that we have those in place. They are very effective and seem to work very well.

Just to give some kind of context for fixed, we do not tend to have these kinds of disputes, to the extent that you are not going to make a ton of money, frankly, by having a few poles on your land. A pole rental is between £10 and £20 a year, so even if you had a couple hundred poles, which would be unusual, that would mean only a couple of grand. If you think about ducting and cabling going through, that is anything from 19p to 49p a metre, so it is not a revenue generator per se. For us, the conversation with landowners is predominantly about access.

To Simon’s point, we find that we do have quite a lot of issues when it comes to MDU access, especially given the scale at which we are trying to build. We obviously have a machine of people who sit behind to try to negotiate, wherever possible, consensual agreements or wayleaves, but we would genuinely need an army of people to try to get stuff done.

For example, some of you will know that a couple of years ago we fully fibred Salisbury, which became one of the first full-fibre cities in the UK. We tried experimenting to test the limits of access and find out what would or would not be a problem with the roll-out. After two or three years of really concerted effort, including with John Glen, the local MP, being super-supportive and with loads of local PR, we could still get into only about 79% of MDUs, because of non-responsive and non-communicative landlords. If we were to scale the MDU team that we had for dealing with the amount of time it would have taken to tackle those unresponsive landlords, we would effectively be scaling from a team of about 17 to over 300.

As Simon says, the ADR processes are helpful predominantly when there are larger landowners, such as housing associations or local authorities. They are less helpful when it comes to the hundreds of thousands of wayleaves that we need in order to get into all the individual MDUs. That is why we think that the ability to upgrade the existing infrastructure, and therefore to give tenants the connectivity they deserve, is still the right mechanism to try to ensure that we can get the upgrade as quickly as possible.

Juliette Wallace: We do recognise, as the operator side of the industry, that in the very early days of the code—early 2018, for instance—the interpretation that we were trying to explore may have been a little too over-enthusiastic, shall we say. A lot of time has passed and we have learnt from that. I think that a lot of the examples that are provided to try to support the allegation of a David and Goliath approach are from very early in 2018, and they do not exist today. I think that we have moved on a lot, but we cannot be stuck with all the allegations of the past as well.

I do not agree that the David and Goliath approach is correct. As Mark said, to the extent that it is, what we are finding with the tribunal element of the approach is that it is actually industry arguing with industry; it is not small farmers, necessarily, who are behind that negativity. It is not David and Goliath; it is Goliath and Goliath.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q Catherine, you set out some ambitions on roll-out. Were those ambitions based on the presumption that this legislation will go through, or were they based on the status quo? What would be the impact on the ambitions of your members and your company if the legislation did not go through? What would be the impact on rural connectivity, in particular?

Catherine Colloms: The current target of 25 million full-fibre premises by 2026 did bake in some assumptions about access, particularly in relation to the upgrade rights in clauses 59 and 60, through MDU and through poles. On the impact of not having it, I think there is a kind of overarching impact. If you think of the challenges of the build and the scale of what we are trying to do, the harder it is to build and the slower it is, the less we can do. We are having to re-phase and re-look at the build that we are currently targeting, as a result of potentially not getting some of the elements in the legislation.

If I take the MDU point in particular, we have re-phased some of our MDU work to the back end of the 2026 target, the reason being that at the moment we just feel we are not going to get the access. As I said, our experience is that up to 1.5 million of those total 6.1 million MDU premises will be at risk. We are seeing that in a day-to-day aspect as we build, so we have re-phased 300,000. That will go to the end of the build, which means it does not count towards the 2025 manifesto target. It will still be planned within our build, but I think what will happen is we will just have to build different bits.

When we are building this rapidly, we cannot afford to sit and wait—wait to negotiate a wayleave, wait for an unresponsive landlord to come back, wait for an ADR process. Even though we have some of these mechanisms in place, we frankly do not use them, because there is not the time and we do not have the scalability to be able to wait for all these landlords, so while we are trying to build at such pace and scale, we effectively move on. What will happen in the short term is that we will still aim for our big 25 million target, but you will get a different mix, and we are already seeing that you will have less MDU in the mix. Obviously, the concern with that is that MDU is often urban and is often local housing or in more deprived areas, so there is a risk of creating a new digital divide—in particular, if you happen to live in a block of flats versus not—because of the access issues.

On rural land, we have this ambition to get to 6.2 million. Effectively, the way that we plan and build the network is we will pick an exchange, and we will survey that area and have a plan to build, but if we cannot get the wayleave, we will not build to the village that is beyond the wayleave. We will still get to our target, but you will get more pockets left behind in different places as we build, because instead of being able to build to 80% or 85% of an exchange area, one landlord might potentially be blocking the access that gets you to the village that is over there. If you cannot cross the land, the expense of having to circumvent it and go all the way around it means that that village build is prohibitive.

None Portrait The Chair
- Hansard -

Can I ask witnesses to please keep their answers shorter? I have had a number of Back-Bench Members already indicate that they want to come in.

Catherine Colloms: Sorry. I think it just changes the mix, effectively.

Simon Holden: I might just add that if Openreach is the Goliath and CityFibre is the David—certainly in rural—we would like to go into rural. This would be really helpful for us in order to make sure we can move at speed and at a sensible cost, and take advantage of the opportunities the Government are providing to accelerate growth there, so we would be in favour of that.

Juliette Wallace: On the mobile side, you asked about rural connectivity. Predominantly, that is going to come from new sites, and the code is actually working quite well with new sites—new land build-out. Our biggest challenges come from renewing the agreements that have expired on existing sites. That is where we need the changes in the code that this Bill addresses, and also the amendments to how the Bill is drafted so that it actually addresses the Government’s ambitions that came out as a response to the consultation.

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None Portrait The Chair
- Hansard -

Thank you. We will return to that at the end of the questions, please.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q It would be helpful to know how your members believe they stand to benefit from the Bill. You say that there is a strange degree of unity among them on this legislation, but in so far as there is any disparity of view among your members, it would be helpful if you could characterise that for us, so that we have an understanding of where commercial interest sits for different types of internet providers here.

Till Sommer: Yes, sure. The Bill basically does three different things: it is access to third-party land in rural areas; it is the alternative dispute resolution mechanism on a voluntary basis; and the third area is upgrade rights. Upgrade rights, as you heard from the previous panel, is one area where there is slight disagreement because, depending on how you fix that, it might give one set of providers a competitive advantage over the others. For that reason, I do not want to go into too much detail there.

At the basic level, we want more upgrade rights, because it helps to use the infrastructure that is already there, rather than digging up the road again, putting up new telegraph poles or, as was said, just not doing something at all because the money is not there to build in that area if you cannot reuse the infrastructure. Beyond that, I do not want to go into too much detail, or I will get into trouble with my members and they will all talk to you separately.

I will take the other two areas, including access to third-party land. We have a few members who are specifically focused on rural areas. They are effectively going at the moment where Openreach does not have a strong build. They are very ambitious. They have told us quite early on that this Bill is game-changing for them. Access to third-party land in rural areas is simply the one thing that will unlock additional properties in their roll-out plans.

The reason for that is that this part of the Bill effectively mirrors something that was done a year ago for multi-dwelling units in urban areas, because it looks at a problem that our members face; I will use a very simple example. Let us say they want to reach a rural hamlet and there are three routes to it—one across a farmer’s field, one across a railway line and one across a hilly area. The most economical route is across the farmer’s field, but that field might be owned by someone who is not living in the UK, or who does not look at their emails or their post; that farmer just does not respond. At the moment, there is no mechanism to get any sort of forward movement in that situation.

So, what happens is that the provider either moves on, because they decide that it is not economically viable to take one of the other routes to that hamlet, or they say, “Actually, no, we do go across the railway line, but we descope parts of the hamlet. The money just isn’t there any more to connect every single house. It’s still economically viable to go there, round the field, but it doesn’t quite reach the whole village.”

Third-party land access provides a mechanism to get access to wayleaves, or access to land, for a limited period in those very limited circumstances. That will unlock those properties that at the moment are at risk of missing out. I am sure some of you will have seen in the past an announcement from a broadband provider—you might have even done a press release with them—saying that they are building out to x number of houses in the constituency. Then, after two years—after the roll-out programme is done—the number is not quite there. Quite often the reason for that is because the build has been more difficult than expected, there have been unresponsive landlords and the money that was allocated for that area does not quite match the ambitions.

It is worthwhile keeping in mind that roll-out is privately funded. There is Government support for the hardest-to-reach areas and we appreciate that, but outside of that it is privately funded infrastructure, with a return on investment over 20 or 30 years. We need to make an investment case. The companies, our members, need to make the investment case for their investors, for their shareholders and for their owners, that they will at some point get that money back. That is why we sometimes need to make those difficult decisions where stuff is being descoped. That is why the Bill is so important; it helps avoid those areas and unlock that bottleneck.

I mentioned alternative dispute resolution; some of our members are a bit sceptical about it, and that is largely because they roll out on a very large scale. Having to deal with thousands and thousands of ADR processes can be quite daunting, time-intensive and costly. For that reason, we believe it is good that it is done on voluntary basis, with the clear incentive provided in the Bill that the tribunal will take ADR into account. It will help a lot when it comes to negotiations with large landowners; that can include local authorities, where our members often have to negotiate a headlease or a head wayleave agreement. That can be super-complicated, because there is part of the local authority that is really keen on getting broadband, but the people dealing with the wayleave stuff do not really care because it is not in their portfolio. There are then mixed messages coming from the local authority. On the one hand they are saying, “Can you please roll out broadband as quickly as possible,” but on the other hand there are people saying, “It takes another year to negotiate the agreement.” ADR will be really useful to make progress in those very large wayleave cases.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q The legislation will make it easier to share infrastructure. What is your analysis of how that will change the economics of roll-out, but also reduce visual impairment from having new infrastructure in post? As MPs, we are all familiar with some of the concerns that constituents have about that kind of infrastructure in their vicinity. Will this help maximise the existing networks, such that we do not see more masts and so on?

Till Sommer: Yes, that is exactly right. If you cannot use existing infrastructure but you are still going to roll out the network, you need to dig up the roads. I assume you have all received lots of letters about roadworks and the problems that they cause. You either dig up the roads or put up new telegraph poles, which is more expensive and is another element of visual impairment and disruption. For that reason it is much more economical—and from a visual aspect, less intrusive—to reuse existing infrastructure.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q Do your members have any views on the cyber-security aspects of the legislation?

Till Sommer: We do. Basically, a key bit that our members provide to your constituents—their customers—is a router, plus other equipment, that is classed as an internet-connected device under part 1 of the Bill. We are in regular contact with your civil servants on that, to clarify timelines and how the Bill might bite. We do not have any concerns about the idea. We support the idea of the Bill; it is more about the implementation, and ensuring that the supply chain is aware of the new provisions that are coming in.

I have heard from a lot of our members that they have started to talk to their supply chain to say, “By the way, in a year, or in one and a half years, depending on when the Bill will be done, we need to ensure that your products comply with these rules.” Because a lot of the manufacturers are overseas, they are not yet aware of them. Anything that can be done to raise awareness among consumer product providers would be welcome. There are a couple of other bits that go very much into the detail around associated software, when it comes to parental controls, which could be affected. I am happy to write to you on that if you want, but we will talk with the Department about it anyway. It is very much nitty-gritty stuff.

Chris Elmore Portrait Chris Elmore
- Hansard - - - Excerpts

The Minister took my last question on part 1, so I am happy to give my time to Back Benchers.

--- Later in debate ---
None Portrait The Chair
- Hansard -

Good afternoon. We will now hear oral evidence from Rocio Concha, director of policy and advocacy at Which? and Jessica Eagleton, senior policy and public affairs officer at Refuge. We have until 5 o’clock for this session if needed, but as we have started ahead of time I am sure that nobody will mind if we finish ahead of time. Please could the witnesses introduce themselves for the record? Then I will turn to the Minister to ask the first question.

Rocio Concha: I am Rocio Concha, director of policy and advocacy and chief economist at the consumer group, Which? Thank you for the invitation to provide evidence. The Bill is quite important for consumers. We have been very supportive of the work that DCMS has done in the Bill. That is very good, and I hope that I will have the opportunity to explain how the Bill can be improved to achieve its objectives.

Jessica Eagleton: Good afternoon, everyone. Thank you for inviting me to give evidence. I am Jess Eagleton, senior policy and public affairs officer at Refuge, which is the country’s largest specialist provider of gender-based violence services. We provide a host of services including refuges, community outreach and a specialist tech abuse team. I am here today to speak to you about technology-facilitated domestic abuse.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q Thank you both for attending. As a Minister, I am concerned about the general lack of awareness of the risks and vulnerabilities when it comes to internet of things devices. To what extent do you believe that the legislation will help to stimulate a consumer discussion about how we best protect ourselves against some of the threats that are emerging as the technology develops? It would be helpful, Ms Eagleton, if you could set out your own interests in terms of Refuge and the vulnerabilities that have been highlighted in your work when it comes to the impact that an insecure connected device can have on an individual.

Jessica Eagleton: Of course. The first thing to say is that we are seeing technology-facilitated domestic abuse becoming ever more prevailing. Technology in all its varieties is providing domestic abusers with a host of new means and methods to perpetrate abuse—to monitor survivors, track their whereabouts, harass them and stalk them—so much so that, as I said, we set up a tech abuse specialist team a couple of years ago. Of the women and children who we supported last year, 59% said that they experienced abuse involving technology, so we are seeing a growing threat.

The specific devices that we are talking about, which are covered by part 1 of the Bill, offer a whole host of ways for abusers to abuse. I am thinking about home security cameras and home security devices such as doorbells, which provide almost 24/7 oversight of a survivor’s movements in the home. Camera and microphone functions can be used to listen in on survivors and capture intimate images without consent, which can then be used later to threaten and coerce the survivor. There are also things such as smart plugs and smart thermostats, which can be remotely accessed and used to frighten survivors—for example, by turning alarm systems on, or putting blaring music on, in the middle of the night. That is happening in the relationship and after it as well, so we are seeing remote access being used in that way.

Some of our concerns about devices relate to access. Thinking about the power imbalance in a domestic abuse relationship, it is the perpetrator who often sets up such devices. They have the password and full admin access, which means that the survivor therefore has limited ways to access a device. We have had some difficulty when talking to companies to try to support survivors to take back control of devices, particularly once a relationship has ended and a survivor has fled. Where they have devices in their home to which the perpetrator still has full admin access, it is particularly difficult to get companies to override that. That is something that we would welcome further work on, in terms of companies taking steps to support survivors to make changes to settings.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Do you have anything to add?

Rocio Concha: Your question was on whether the Bill will help consumers to understand these issues, and it will. As you know, one of the principles in the Bill is transparency—when you buy these products, you will know for how long they will be supported. That will help with awareness. There is a lot more that can be done to raise awareness of these issues. There is a limit on what consumers will know about how to protect themselves, so the direction in the Bill about banning default passwords is quite important, as is the point of contact for security vulnerabilities.

Jessica has explained very clearly the harms. There is an opportunity for the Bill to be more assertive. At the moment, the Bill says that the Secretary of State “may” include baseline security requirements. We know that these are not the right baseline security requirements, so the Bill should be clearer that they will be included. We also think that the Bill needs to list the three security requirements, which would give a clear steer to the industry that they are to be introduced. We are worried that the Bill as drafted could lead to more delays in introducing things.

If we want the Bill to achieve its objective, we must be careful to ensure that online marketplaces are within scope. I would argue that they have to be because, as a consumer, it makes no difference whether you buy your smart product on the high street or from Amazon, eBay or AliExpress; you assume that the product is compliant with the regulations in the UK, so it is important that the Bill also covers that area. Otherwise, you know where the bad actors will go—they will be selling insecure products on those online platforms.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Q Do you have any view on the enforcement powers in the legislation? Do you think that they are sufficient to deal with non-compliance?

Rocio Concha: On enforceability, if you do not include online marketplaces, you are leaving a big gap, because these products can come from any country in the world when they are being sold in these online marketplaces.

Another area that is not clear in the Bill is how consumers can get redress. As part of the transparency requirement, suppose that you buy a product that says that it will be supported with security updates for four years, but two years down the line, the manufacturer decides to change its mind and to support the product for only two years. Where would the consumer go in that instance? They bought the product on the basis that it would be supported for a set amount of years.

The other thing that is not clear is who the regulator enforcing this will be. Obviously, we need to make sure that the regulator has the skills, powers and resources to enforce it.

Chris Elmore Portrait Chris Elmore
- Hansard - - - Excerpts

Q My first question, for Ms Eagleton, is on tech and some of the work that Refuge has done to highlight the fact that, as you said, 50% of all cases of violence against women and girls now involve some sort of device. What conversations are you having with the Government on funding and advertising to try to show that these devices have an impact? On new technology, such as AirTags, we have seen some very good pieces from journalists explaining how that is increasing the options for people to stalk, follow and track others, with terrible cases of people who have been victims of domestic abuses historically finding them in their cars. I am wondering how all that links into the work of the Bill, about areas where you would like to see improvements to acknowledge the fact that technology is moving so quickly, and whether we can do something in the Bill to introduce meaningful support for women and girls who are victims of violence.

Jessica Eagleton: Perhaps I can take your second question first. You are right that we are seeing concerns about these types of products being used to stalk and to monitor. In terms of concrete measures and what the Bill can do in this respect, we welcome some of the security requirements, particularly around the vulnerability disclosure scheme, as a step forward. For example, in the work that we do to support survivors, having that public point of contact and an easily contactable place for a company to go, when we are reviewing these products and putting forward recommendations to companies, is definitely a step forward.

We would have some concerns about situations where companies might publicly disclose security flaws and perhaps not take steps first to address them. We have that concern because that could, in essence, alert an abuser to a new way to abuse a victim. It could alert them to a device that they could purchase or that is already in their home that would provide a new way of compromising, so we would like to see companies taking all reasonable steps to address and action some of these security flaws before there is that public disclosure.

On your second point about services, our tech abuse team is a unique service in the country in providing specialist frontline support to tech abuse survivors, but it is a chronically under-resourced service. Perhaps in the context of this Bill, we would really like to see thought given to a percentage of the fines that the regulators collect for non-compliance by companies going, for example, to fund some specialist support services. I think that would fit within the wider ecosystem of enforcement as well. If we have specialist services that survivors can go to and ensure that they are sustainably funded and able to support survivors, that would contribute to the wider enforcement regime and awareness.

Product Security and Telecommunications Infrastructure Bill (Fourth sitting)

(Limited Text - Ministerial Extracts only)

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Kevin Brennan Portrait Kevin Brennan (Cardiff West) (Lab)
- Hansard - - - Excerpts

I rise briefly to support my hon. Friend in pushing the amendment, in order to hear what the Minister has to say in response. The amendment goes to the heart of what a lot of the Bill is about: balancing the rights of private property owners and the policy requirement to speed up the roll-out of digital infrastructure.

This morning we debated an instance in which there would be no real financial cost to the private property owners from doing the right thing. In that instance, the state was ensuring that their properties could be accessed to put in the necessary infrastructure to roll out digital infrastructure in an urban setting—big blocks of flats, where lots of people might not have very good access to the internet and so on. In that instance, the Government were not prepared to accept our amendment, even though it would not have had any significant detrimental impact on the private property owners. In other words, they took the view that in that instance the private property owners, even if they would be only marginally inconvenienced, had to have their property rights protected, because this was a retrospective imposition and they would not have given permission.

In this instance—in fairness, I think this was not intended in 2017—private property owners have suffered, or might suffer, significant detriment to the income they can acquire through somebody else’s use of their land with the state’s assistance. In those circumstances, it is not unreasonable to say that the balance should be to ensure that they are not affected in a way that causes a massive reduction in the income they can earn from the use of their land.

If that was not a strong enough argument in itself, which perhaps it is not, the way the market has reacted to what happened after 2017 and the problems that there have undoubtedly been, with people reluctant to get involved with rolling out the infrastructure we need for the future, which we all want to achieve through the Bill and by other means, is further evidence that an adjustment perhaps needs to be made. The Minister could discuss with the Committee whether that adjustment is exactly what is contained in the amendment, but whether something should be done to address the arguments and concerns that have been expressed to us by those who own land on which such infrastructure is sited is certainly worth further consideration.

Julia Lopez Portrait The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
- Hansard - - - Excerpts

I thank the hon. Members for Ogmore and for Cardiff West for their contributions and for the amendment. I acknowledge that this is a tricky issue. There have been problems between both parties since the 2017 reforms, but we maintain that the 2017 valuation provisions created the right balance between the public need for digital communications and landowner rights. I think there is agreement that the prices being paid for rights to install communications apparatus before that date were simply too high. With digital communications becoming an increasingly critical part of our daily lives, that needed to be addressed.

The new pricing regime is more closely aligned to those for utilities such as water, electricity and gas. We think that that is the correct position. As I said earlier today, we are not seeking to take sides. We are on the side of good digital connectivity for our constituents, and we firmly believe that landowners should still receive fair payments that, among other things, take into account any alternative uses that the land may have and any losses or damages that may be incurred. I was alive to the concerns expressed to me by the Protect and Connect campaign, but also to those raised by individual Members about tricky constituency cases. When I came into my role in September, I met individual Members to discuss those cases. I also met Protect and Connect.

I tested the cases that were brought to my attention and asked for further details, which often were not forthcoming. There was a catch-all excuse that a lot of them were under non-disclosure agreements and the precise amount of rents settled at could not be disclosed. My broad view is that there were initial concerns and difficult cases where the mobile network operators were too aggressive in their negotiations—I think that was effectively acknowledged in the panel discussions earlier in the week—but we seem to have found an equilibrium now, helped partly by some of the cases that have gone through the courts.

We now have a body of case law that can be referred to in some of these tricky negotiations. We are also trying to deter people from going to the courts in the first place, by introducing more alternative dispute resolution mechanisms. I say that to reassure Members. There were problems initially. As far as I can tell from my case load, the correspondence coming in, the discussions that I have had with Members and the lack of additional noise on the subject in the Chamber, a better equilibrium has now been found between the mobile network operators and the landowners. If that is not the case, I am happy to look at those cases again, and we are introducing mechanisms to provide better negotiations between parties via the legislation.

Turning to the amendment, I am not sure why the hon. Member for Ogmore thinks that a specific limit should be imposed on the percentage by which rent can be reduced when the rental payment is determined by a court. Further, it is unclear why he has chosen arbitrarily to apply a figure of 40%. We have strongly resisted specifically regulating the amount of rent payable under a code agreement. Our preference has been to allow the parties to freely negotiate the amount payable under an agreement, based on a statutory framework either in the code, the Landlord and Tenant Act 1954 or the Business Tenancies (Northern Ireland) Order 1996. Even where the parties cannot reach an agreement and the court has to impose its terms, including the rent to be paid, the court has the freedom to reach its own conclusions using that framework, rather than having its discretion restricted by statutory rent controls. As I said, my understanding is that we now have a much better equilibrium, in that we have amounts of rent that both parties are much more content with.

I understand the concerns about whether this has stymied roll-out. If operators cannot get their infrastructure on to land, I imagine that they would start paying more to try to incentivise landowners to take it on. I think we have also seen cases where it has been in the landowner’s interests to try to drag the process out so that they are on the old rents, rather than the reduced, new rents. I think that has also contributed to some of the delays.

If the amount of rent is controlled in the way suggested in this amendment, we will be heading closer to a regime that will apply reductions on a blanket basis, rather than take into account the broader range of relevant circumstances, as permitted by the legal framework. I suspect that that is something that both site providers and operators would be keen to avoid.

I am aware that it has been alleged that the Government expected rents to fall by in the region of 40% following the 2017 reforms. It is unclear whether it is on that basis that the hon. Member for Ogmore chose the statutory cap of 40% in his amendment. At the time of the 2017 reforms, which I confess predate me, the fact is that the Government were unsure what the level of rent reductions would be. We were clear that that was the case. Independent analysis contained in the impact assessment that accompanied those reforms predicted that reductions could be 40%, but that was never a Government prediction nor a target.

Chris Elmore Portrait Chris Elmore
- Hansard - - - Excerpts

I did say in my opening remarks where the 40% comes from. Just to help the Minister, it does relate to the 2017 change, but also the Government’s own analysis from the time. I do of course accept that she was not the Minister, but her party was in government, and those are her own Government’s figures.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

That certainly is a fair point to make, and I apologise for not picking that up in the hon. Member’s comments.

A cap is likely to be even more detrimental to constituents in rural communities, who will benefit from the increased connectivity and reliability that we hope the Bill will bring.

As I have explained, agreements to which the code applies can currently be renewed in various ways, depending on the type of agreement and where in the UK it was entered into. The intention of clause 61, along with clause 62, is to create a clearer and more consistent legislative framework under which agreements are renewed. Central to that is ensuring that, no matter where in the UK an agreement is renewed, the financial terms are calculated in the same way. That will help to ensure that there is not a digital divide across the UK, with one country receiving additional investment at the expense of others because operating costs are cheaper.

The amendment suggests limiting any reduction in rent that may be imposed by the court when agreements are renewed under the 1954 Act. While that proposal is well intentioned, we do not believe that it should be allowed to proceed. It is vital that there is fairness throughout the UK. The Bill as drafted provides a clear framework, which will not only result in all payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We think that will expand the digital network.

Kevin Brennan Portrait Kevin Brennan
- Hansard - - - Excerpts

I take what the Minister said about the figure of 40%, but it was contained, as my hon. Friend the Member for Ogmore said, in a previous Government’s impact assessment. I remind her that, when Ministers issue impact assessments, they sign them, as she did with this one, saying:

“I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.”

When her predecessor signed the impact assessment on behalf of the Government to say, “This is the Government’s official view of what is likely to happen,” their official view was that rents would drop, probably by 40%.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

I accept the point that the hon. Gentleman is making. I also accept that in some cases rent reductions were much greater than expected. As we discussed earlier in the week, some of those were the result of overly aggressive behaviour by mobile network operators. We need to address some of the challenges that were raised by some of the changes that were made. In the body of case law, we now have a better equilibrium between landowners and operators, which should help to address some of those cases.

On some of the more emotive cases that have been raised with me over my tenure, I have sought to understand the details. Those cases are not always as has been presented, and I am led to believe that, in terms of a lot of the initially very difficult cases that came after the 2017 reforms were initially introduced, we are now in a very different place.

It is vital that there is fairness throughout the UK. As drafted, the Bill provides a clear framework that will not only result in all rental payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We hope that will help us expand the digital network across the whole of our country. In those circumstances, I ask the hon. Member for Ogmore to withdraw his amendment.

I will now turn to clauses 61 to 65, which deal with the renewal of agreements to which the code applies that have expired or are about to expire. There are several ways in which such agreements can be renewed, depending on the type of agreement and where in the UK it was entered into. The aim of the clauses is to make all the routes to renewal as clear and consistent as possible, so that the process is the same across the UK.

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0

Division 6

Ayes: 4


Labour: 4

Noes: 7


Conservative: 7

Clause 61 ordered to stand part of the Bill.
--- Later in debate ---
None Portrait The Chair
- Hansard -

With this it will be convenient to discuss the following:

Government amendments 2 to 4.

That the schedule be the schedule to the Bill.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

I am afraid I have to tell the Committee that this does not get any more inspiring.

The clause creates a bespoke process for telecoms operators to seek access to certain types of land where a person repeatedly fails to respond to requests for access to install apparatus under or over land for the purposes of providing an electronic communications service. The clause sets out that process by inserting into the electronic communications code new part 4ZA, which makes provision for a court to impose an agreement where the operator needs that person, “the landowner”, to confer or be bound by code rights. Part 4ZA will apply in situations where an operator intends to provide an electronic communications service and to achieve that must install electronic communications apparatus under or over, but not on, relevant land. “Relevant land” is defined as land that is not covered by buildings, and that is neither a garden, a park nor a recreational area. The provision also takes a power for the Secretary of State to specify through regulations further types of land that may be “relevant land”, but may only do so following consultation.

The provisions will require an operator to have given two warning notices, followed by a final notice. Those three notices all follow an initial request notice, giving a total of four. The Bill sets out that there must be a period of 14 days between the giving of each notice. For the landowner to fall out of scope of proposed new part 4ZA, all that is required of them is to respond to any of these notices in writing, before the operator applies to the court under part 4ZA. If any response is received, the operator will no longer be able to apply for a part 4ZA order and must either negotiate for a code agreement or apply for rights to be imposed by the courts in the normal way.

If granted, a part 4ZA order will impose an agreement between a landowner and an operator, conferring the rights requested in the initial notice. The terms of that agreement are to be specified in regulations. It may reassure the Committee that those regulations will be subject to the affirmative procedure. Furthermore, before the regulations are made, the Bill expressly obliges the Secretary of State to consult with a range of parties.

Importantly, the provisions impose a six-year maximum time limit on the period for which rights conferred under a part 4ZA order may last. I emphasise that detail, because it forms an important part of the Bill’s safeguards for landowners’ property rights. This clause provides a much needed process that will play a large part in ensuring that homes and businesses benefit from the national gigabit broadband upgrade and are not left behind.

I will now turn to the amendments tabled in relation to clause 66, all of which are technical amendments. Amendments 2 and 3 have been tabled in order to make a minor clarification to the text of the electronic communications code, to avoid any possible unintended interpretation of the legislation. Amendments 2 and 3 clarify that the right mentioned in paragraph 26(8) and paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land. By inserting the words “under or over” into paragraph 26(8) and paragraph 27G(4) of the code, these amendments clarify that part 6 of the code may be used by a landowner to require the operator to remove apparatus installed “under or over”, as well as on, the land.

Without amendments 2 and 3, paragraph 26(8) and 27G(4) as currently worded may be interpreted to mean that while equipment installed on land under the “interim rights” or “unresponsive occupier” process could be removed via the part 6 process, equipment installed under or over land under these processes might not. That is not the policy intention, and as such this amendment is being introduced to clarify the policy position.

Amendment 4 makes a minor amendment to remove a provision which has been found to have no effect. The provision in question—paragraph 3(9) of the schedule to clause 66 in the Bill—was intended to ensure that part 5 of the code does not apply to the process created by clause 66 in the Bill. Part 5 of the code sets out that code rights may persist even after the agreement which underpins them expires. It was never intended that part 5 should apply to rights gained through part 4ZA, due to the importance of the time limits I have mentioned. The Bill provision that this amendment removes was intended to ensure that part 5 did not apply to rights gained through part 4ZA. However, we are satisfied a different part in the code already ensures this. As such, paragraph 3(9) in the schedule of the Bill has no real effect and ought to be removed.

In practical terms, there is no legal or policy change effected through this amendment, beyond increasing the clarity of legislation. This amendment simply removes a provision which had no effect in the first place, and thus tidies the legislation. I hope that everyone will accept that that is beneficial.

Chris Elmore Portrait Chris Elmore
- Hansard - - - Excerpts

I want to make clear the Opposition’s support for clause 66. From all my conversations with industry, it is quite clear that where there is an unresponsive landowner, it is extremely complicated to then meet the public’s demands. If the Bill is about improving digital activity for all our constituents, particularly in some of the most rural and hard to reach communities—I find it hard to believe that includes my own constituency, but it does—then this is an important and welcome change.

Kevin Brennan Portrait Kevin Brennan
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Despite the very thorough explanation that the Minister gave of what is a technical clause, I understand what the difference is between something being placed over or under land, but I am not sure what the difference is between something placed over or on land. There must be a technical reason why it is there; does she know the answer to that?

Julia Lopez Portrait Julia Lopez
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I think it being on land is a much more intrusive process. For instance, we could be talking about a cable that happens to be going over somebody’s land, and therefore to do something to it would not require a great deal of intrusion. Similarly, if it was the matter of being able to dig at the side of a road, it is technically access land, but only underneath the surface of the land—I hope this makes sense. It is much less intrusive process. I think it is a process that could be objected to far less by a landowner; they are not being asked if somebody can drive over their land, put something unattractive on it or inconvenience them in any way. We are talking about underground works and cabling works that objectively would have no real impact on their land.

Question put and agreed to.

Clause 66 accordingly ordered to stand part of the Bill.

Schedule

Unresponsive occupiers: consequential amendments

Amendments made: 2, in the schedule, page 66, line 17, at end insert—

“(c) in sub-paragraph (8), after “placed on” insert “, under or over”.”

This amendment clarifies that the right mentioned in paragraph 26(8) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.

Amendment 3, in schedule, page 66, line 18, after “sub-paragraph (4)” insert—

“(a) after “placed on” insert “, under or over”;

(b) ”

This amendment clarifies that the right mentioned in paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.

Amendment 4, in the schedule, page 66, line 20, leave out sub-paragraph (9).—(Julia Lopez.)

This amendment removes the amendment to paragraph 30(3) of the electronic communications code. The amendment to paragraph 30(3) is unnecessary because paragraph 30(2) would not in any event apply to a code right conferred by virtue of an order under new paragraph 27ZE of the code.

Schedule, as amended, agreed to.

Clause 67

Arrangements pending determination of certain applications under code

Question proposed, That the clause stand part of the Bill.

Julia Lopez Portrait Julia Lopez
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The clause deals with situations where once an agreement to which part 5 of the code applies has run its initially agreed course, one of the parties wants it to be terminated, modified or replaced by an agreement with different terms. In those circumstances, the matter can be referred to a tribunal if the parties cannot resolve matters themselves. It can take time for such disputes to be dealt with, and paragraph 35 of the code deals with the circumstances in which an interim order can be requested, which will apply until the full dispute is heard.

Our policy intention for interim orders is to allow any specific priority aspect of a dispute to be looked at, so that temporary arrangements can be imposed where appropriate. At present, however, paragraph 35 of the code is restricted, so that only a site provider can ask for an interim order, and they can do so only in relation to the consideration paid by an operator. The clause widens that provision so that either party can ask for an interim order and can do so in relation to any term of the former agreement. That will enable specific issues to be dealt with at a much earlier stage of the dispute. In particular, it will mean that operators are given the same opportunity as site providers have to ask for the financial terms of an agreement to be reviewed on an interim basis. This will help ensure that once an agreement to which part 5 of the code applies has run its initially agreed course, there are no unnecessary delays to the valuation framework of the code being applied to new financial arrangements.

It will also provide the courts with greater flexibility to look at situations where a party needs an urgent change to any term of their agreement. We think that will be particularly helpful where an operator needs urgent changes to terms so that they can upgrade or continue using an existing site. There are likely to be situations where this will also benefit site providers. However, the clause is not to be used as a way of circumventing the usual negotiation process. Parties will be expected to negotiate in the usual way before making an application to the court, and to comply with the ADR requirements that the Bill introduces.

We think the clause will help many operators benefit from the full code framework at a much earlier stage, which will allow them to take advantage of provisions to upgrade and share apparatus and the code valuation framework as introduced in 2017. That will result in more investment in the expansion and upgrading of digital networks, ensuring that consumers receive the best coverage and connectivity possible.

Question put and agreed to.

Clause 67 accordingly ordered to stand part of the Bill.

Clause 68

Use of alternative dispute resolution

Question proposed, That the clause stand part of the Bill.

None Portrait The Chair
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With this it will be convenient to discuss clause 69 stand part.

Julia Lopez Portrait Julia Lopez
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I will now speak to clauses 68 and 69, which introduce measures on alternative dispute resolution and complaints relating to the conduct of operators. The purpose is to encourage more collaborative discussions between landowners and telecoms operators, and to ensure that litigation is used only as a last resort where an agreement cannot be reached.

Clause 68 sets out two new requirements for operators and one new requirement for courts. Together, they will encourage the greater use of alternative dispute resolution processes. The requirements are as follows. First, when a request notice is sent for access to land or other rights under the electronic communications code, all operators must inform the landowner of the availability of ADR processes if the landowner is unhappy with the offer made. Secondly, in cases where an agreement cannot be reached operators must consider using ADR processes before applying to the courts. If the matter relates to modification of an expired agreement, either party must consider ADR before applying to the court. Finally, when awarding costs, the courts will be required to take into account any unreasonable refusal to engage in ADR by either party.

Some landowners and their representatives have told us that they find negotiations for code rights difficult. In some cases, landowners have felt pressured to accept any terms offered, to avoid the risk of being taken to court—this relates to the David and Goliath situation that we discussed earlier in the week. The measures in clause 68 address this issue by encouraging the use of ADR in order to minimise the risk of landowners feeling such pressure, and to facilitate co-operative discussions between landowners and telecoms.

Clause 69 inserts new subsection (ca) into paragraph 103 of the electronic communications code, which lists the issues that Ofcom’s code of practice must deal with. Subsection (ca) adds to the list

“the handling by operators of complaints relating to the failure of operators to comply with the code of practice”.

Landowners and their representatives have reported to the Government that, in some cases, they are reluctant to enter into code agreements because they are concerned about how the operator or their contractors will behave when they access the relevant land. The clause works to address the issue by requiring Ofcom to prepare guidance, following consultation, regarding operators’ handling of conduct. To complement that, we will bring forward secondary legislation to introduce a new statutory requirement for operators to have a complaints process for code matters, enforced by Ofcom.

Question put and agreed to.

Clause 68 accordingly ordered to stand part of the Bill.

Clause 69 ordered to stand part of the Bill.

Clause 70

Power to impose time limits on the determination of code proceedings

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

I beg to move amendment 5, in clause 70, page 60, line 15, at end insert—

“, and

(b) amend or repeal any of the following provisions (which provide signposts to those regulations)—

(i) paragraph 2A of Schedule 3 to the New Roads and Street Works Act 1991;

(ii) section 107(1A) of this Act;

(iii) paragraph 97 of Schedule 3A to this Act;

(iv) section 69(5A) of the Marine and Coastal Access Act 2009;

(v) section 27(6A) of the Marine (Scotland) Act 2010.”.

This amendment ensures that the power conferred by the new section 119A of the 2003 Act includes power to amend or revoke certain signposts in primary legislation which might otherwise be rendered otiose by the exercise of that power.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss clause stand part.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

It is clearly desirable that legal disputes relating to code rights be dealt with as quickly as possible; that will minimise delays to network deployment and expansion in a number of ways.

Fast dispute resolution will make sure that, where the public interest test is satisfied, operators can get the rights they need for network deployment and expansion as soon as possible. It also means that where that test is not satisfied, that is identified promptly, so that operators know they have to explore different options. Finally, fast dispute resolution is in the best interests of all parties. Protracted legal proceedings take time, cost money and harm ongoing stakeholder relationships.

However, while we recognise that fast dispute resolution has a lot of benefit, it is important that there be no undue interference with the judicial process and the ability of courts to deal with cases justly. Time limits should not, for example, interfere with a court’s ability to provide the parties with sufficient opportunities to identify, locate or produce evidence. Any statutory provisions relating to the time within which disputes must be determined therefore require careful consideration and close scrutiny.

Legislation already makes limited provision for certain applications relating to new code rights to be heard within six months, but this provision sits outside the code; it is in the Electronic Communications and Wireless Telegraphy Regulations 2011. It was introduced in the course of our transposing European legislation, rather than as a specific element of the domestic code framework.

The new power in clause 70 will enable the Secretary of State to make regulations that are broader in scope, and can specify a period within which a full range of code-related disputes must be determined. As the clause makes clear, regulations made under it may amend or revoke provisions made under the 2011 regulations. That gives the Secretary of State flexibility to consider a full range of approaches, including having no time-limited period at all, if appropriate.

Other, wider measures that we are introducing in the Bill, and potentially in subsequent secondary legislation, will affect court resources. In many cases, the changes will ensure that caseloads are more evenly distributed, particularly between the first-tier and upper-tier tribunals. Rather than seeking to make changes relating to dispute time limits now, we are therefore putting in clause 70 a power permitting the Secretary of State to make regulations on this issue in future. That will enable the Government to revisit the measures as a whole, once the other measures in the Bill come into force, so that their overall impact can be assessed when considering whether changes are appropriate. We will, of course, work closely with the Ministry of Justice and the Northern Ireland and Scotland Governments before making any further proposals on this issue.

Amendment 5 provides a very limited power for the Secretary of State to amend a specified list of provisions in primary legislation. The provisions signpost to regulations about time limits for disputes on code rights. It is clearly desirable that legal disputes relating to code rights be dealt with very quickly. Any statutory provision relating to the time within which disputes must be determined requires careful consideration. The amendment ensures that, if changes are made to the existing regulations, corresponding amendments can be made to legislation that signposts those regulations.

Chris Elmore Portrait Chris Elmore
- Hansard - - - Excerpts

This point also relates to previous clauses, but I think links best to clause 70. The Minister mentioned that the Secretary of State would review dispute resolution at a later date. Throughout the oral evidence sessions, there were calls from the NFU, Protect and Connect and other organisations for the dispute resolution to become compulsory. If resolutions were slowing down, and decisions were not being reached, would the Minister consider introducing, through secondary legislation, a compulsory element, so that we can avoid some of the concerns raised by the witnesses, particularly those representing landowner and club groups and so on?

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

I think it is implicit in what I said that we will keep all of this under close review, because we do not want any of the changes we make to slow the roll-out. We hope that the changes have their intended effect, which is ultimately not about any particular group’s interests, beyond their getting better digital connectivity. We are always happy to keep this under close review. We do not think a mandatory ADR would serve our overall goal. If problems come up over the next few years, these powers will enable us to make changes.

Amendment 5 agreed to.

Clause 70, as amended, ordered to stand part of the Bill.

Clause 71

Rights of network providers in relation to infrastructure

Question proposed, That the clause stand part of the Bill.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Sharing infrastructure in the roll-out of gigabit-capable networks can greatly reduce the cost of deploying networks, increase the pace of roll-out and reduce the frustrating need to dig up streets, preventing unnecessary disruption to the local populations we represent and reducing carbon emissions. The Communications (Access to Infrastructure) Regulations 2016 enable sharing of information about access to physical infrastructure across the utility, transport and communications sectors. They include the right to access that infrastructure on fair and reasonable commercial terms and conditions. The 2016 regulations were implemented in the UK, following the European broadband cost reduction directive, to reduce the cost of deploying high-speed electronic communications networks.

We recently published our response to a call for evidence on a review of those regulations. We set out that there may be areas where the 2016 regulations could be made easier to understand and use. We said we would legislate to allow future changes to the 2016 regulations via secondary legislation, rather than having to rely on primary legislation. This legislation would be subject to a further consultation with Ofcom and such other persons the Secretary of State considers appropriate. It would also be scrutinised in the Parliament through the affirmative procedure.

Clause 71 grants the Secretary of State the power to make provisions, through regulations, conferring rights on network providers in relation to infrastructure for the purpose of developing communications networks. These provisions include the power to amend, revoke or replace the 2016 regulations. The clause details the areas in which provisions may be made by the Secretary of State through regulations. These areas include: provisions relating to grants of access to relevant infrastructure; the carrying out of work as specified; procedures and forms of request by network providers for rights conferred by the regulations; and disputes under the regulations.

Question put and agreed to.

Clause 71 accordingly ordered to stand part of the Bill.

Clause 72

Power to make consequential amendments

Question proposed, That the clause stand part of the Bill.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss clause 73 stand part.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Clause 72 confers on the Secretary of State a power to make any changes to other legislation that are required as a consequence of part 2 of the Bill coming into force. By way of example, changes may be needed to ensure that legislation that references the electronic communications code continues to work correctly after the Bill is passed. The power can be used to amend any legislation. In the case of primary legislation, it is limited to legislation passed or made before the end of the parliamentary Session in which the Bill is passed.

Clause 72 requires that any regulations made using this power that amend or repeal primary legislation be subject to the affirmative procedure. The negative procedure will apply to any other regulations made using this power. Where any changes are required to devolved legislation, the UK Government will work with the devolved Administrations to ensure that the wider legislative framework operates as intended. Clause 73 provides a straightforward explanation regarding references in this Bill to the electronic communications code.

Kevin Brennan Portrait Kevin Brennan
- Hansard - - - Excerpts

As the clause impacts the devolved Administrations and gives Ministers the right to interfere with primary legislation that is being passed by the devolved Governments, what consultation there has been with the Senedd, Scottish Parliament and Northern Ireland Assembly about this power of the UK Government?

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

We have official-level contact frequently, in case something has to be changed. I would like to reassure the hon. Gentleman that I have met my counter-parts in the Scottish and Welsh Administrations, including one of his colleagues in the Labour Administration. I will continue to have those meetings, in case changes that would have any meaningful impact are required as a result of the legislation.

Question put and agreed to.

Clause 72 accordingly ordered to stand part of the Bill.

Clause 73 ordered to stand part of the Bill.

Clause 74

Power to make transitional or saving provision

Question proposed, That the clause stand part of the Bill.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss clauses 75 to 78 stand part.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Clause 74 allows the Secretary of State to make transitional or saving provisions. This is required to provide for a smooth introduction of the new legal framework by, for example, specifying grace periods before the legislation comes into force. Clause 75 makes provision about a number of technical matters that regulations made under the Bill address, and enables such regulations to be exercisable by statutory instrument.

Clause 76 sets out the extent of the provisions of the Bill. Both cyber-security and telecommunications are reserved matters, and, for the most part, the Bill extends across the UK. Clause 77 sets out the commencement. Clause 27, on matters of enforcement, comes into force on Royal Assent, and the remaining clauses come into force via commencement regulations made by the Secretary of State. Clause 78 is the short title of the Bill.

Question put and agreed to.

Clause 74 accordingly ordered to stand part of the Bill.

Clauses 75 to 78 ordered to stand part of the Bill.

Ordered, that further consideration be now adjourned.—(Steve Double.)

Product Security and Telecommunications Infrastructure Bill

(Limited Text - Ministerial Extracts only)

Read Full debate

This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Julia Lopez Portrait The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
- Hansard - - - Excerpts

I beg to move, That the clause be read a Second time.

Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
- Hansard - - - Excerpts

With this it will be convenient to discuss the following:

Government new clause 2—Jurisdiction of First-tier Tribunal in relation to code proceedings in Wales.

Government amendments 1 to 3.

Amendment 14, in clause 59, page 42, line 11, after “agreement”, insert

“other than with a private landlord”.

This amendment, together with Amendments 15, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.

Amendment 15, page 43, line 39, at end insert—

“(5B) Paragraph 17 of the new code (power for operator to upgrade or share apparatus) applies in relation to an operator who is a party to a subsisting agreement with a private landlord, but as if for sub-paragraphs (1) to (6) there were substituted—

‘(1) This paragraph applies where—

(a) an operator (“the main operator”) keeps electronic communications apparatus installed on, under or over land, and

(b) the main operator is a party to a subsisting agreement in relation to the electronic communications apparatus.

(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—

(a) upgrade the electronic communications apparatus, or

(b) share the use of the electronic communications apparatus with another operator.

(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which the agreement relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.

(4) The second condition is that the upgrading or sharing imposes no additional burden on the other party to the agreement.

(5) For the purposes of sub-paragraph (4) a burden includes anything that—

(a) has an adverse effect on the person’s enjoyment of the land, or

(b) causes loss, damage or expense to the person.

(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.

(7) A notice attached for the purposes of sub-paragraph (6) must—

(a) be attached in a position where it is reasonably legible,

(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,

(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,

(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and

(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.

(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).

(9) Any agreement under Part 2 of this code is void to the extent that—

(a) it prevents or limits the upgrading or sharing, in a case where the conditions mentioned in sub-paragraphs (3), (4) and (6) are met, of any electronic communications apparatus to which the agreement relates that is installed on, over or under land, or

(b) it makes upgrading or sharing of such electronic communications apparatus subject to conditions to be met by the operator (including a condition requiring the payment of money).

(10) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.

(11) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.

(12) In this paragraph—

“the relevant land” means—

(a) in a case where the main operator has a right to enter the land, that land;

(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out;

“subsisting agreement” has the meaning given by paragraph 1(4) of Schedule 2 to the Digital Economy Act 2017.’”

This amendment, together with Amendments 14, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.

Amendment 16, in clause 60, page 44, line 4, after “land”, insert

“not owned by a private landlord”.

This amendment, together with Amendments 14, 15 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.

Amendment 17, page 45, line 14, at end insert—

“17B (1) This paragraph applies where—

(a) an operator (‘the main operator’) keeps electronic communications apparatus installed on, under or over land owned by a private landlord,

(b) the main operator is not a party to an agreement under Part 2 of this code in relation to the electronic communications apparatus, and

(c) the electronic communications apparatus was installed before 29 December 2003.

(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—

(a) upgrade the electronic communications apparatus, or

(b) share the use of the electronic communications apparatus with another operator.

(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which any existing agreement between the operator and the landlord relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.

(4) The second condition is that the upgrading or sharing imposes no additional burden on the landlord.

(5) For the purposes of sub-paragraph (4) a burden includes anything that—

(a) has an adverse effect on the person’s enjoyment of the land, or

(b) causes loss, damage or expense to the person.

(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.

(7) A notice attached for the purposes of sub-paragraph (6) must—

(a) be attached in a position where it is reasonably legible,

(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,

(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,

(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and

(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.

(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).

(9) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.

(10) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.

(11) In this paragraph ‘the relevant land’ means—

(a) in a case where the main operator has a right to enter the land, that land;

(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out.”

This amendment, together with Amendments 14, 15 and 16, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.

Amendment 12, page 45, line 18, leave out clause 61.

This amendment removes clause 61 of the Bill, which gives operators the ability to calculate rent based on ‘land value’ rather than ‘market value’ when renewing tenancies to host digital infrastructure on private land.

Amendment 13, page 46, line 42, leave out clause 62.

This amendment removes clause 62 of the Bill, which gives operators the ability to calculate rent based on ‘land value’ rather than ‘market value’ when renewing tenancies to host digital infrastructure on private land in Northern Ireland.

Amendment 9, in clause 68, page 58, line 38, leave out from “must” to “one” in line 39 and insert “use”.

This amendment, along with Amendments 10 and 11, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.

Government amendments 4 to 7.

Amendment 10, in clause 68, page 59, line 12, leave out from “must” to “one” in line 13 and insert “use”.

This amendment, along with Amendments 9 and 11, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.

Amendment 11, page 59, line 34, leave out from “must” to “one” in line 35 and insert “use”.

This amendment, along with Amendments 9 and 10, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.

Government amendment 8.

Julia Lopez Portrait Julia Lopez
- Parliament Live - Hansard - - - Excerpts

It is a pleasure to be making such good progress on this Bill, which seeks to deliver world-class connectivity to our constituents and to improve the security of the devices that we all rely on. I will start by explaining the need for the Government amendments tabled in the name of the Secretary of State, as those amendments are relatively straightforward. I will then move on to the more substantial matter of the remaining amendments, which I suspect right hon. and hon. Members are keener to discuss.

Beginning with new clause 1, as I explained on Second Reading, some operators with apparatus on land are currently unable to follow an existing statutory process to renew their agreement once it comes to an end. These operators also cannot use the code to get an entirely new agreement, because only the occupier of land can grant code rights. An operator already occupying land clearly cannot enter into an agreement with itself. Clause 57 was intended to ensure that operators could obtain code rights from another party in these circumstances, but subsequent engagement with stakeholders has made it clear that the clause as drafted would not cover all scenarios and that a more focused approach is required. Some operators would still find themselves effectively stuck once their agreements ended, with no means of renewing their agreement and no reasonable or practical means of obtaining a new code agreement. This can have negative consequences for consumers, and as such it is unacceptable. New clause 1 therefore replaces clause 57.

The new clause will ensure that all operators in exclusive occupation of land who do not have a statutory renewal option can still seek a code agreement. The person who can grant those code rights will usually be the owner of the land, although the new drafting makes provision for less straightforward situations. As well as resolving the problem of “stuck” operators, new clause 1 also assists operators with an existing, ongoing agreement. Where such operators need additional code rights that are not already provided by their current agreement, the new clause ensures they can seek such rights. Currently, some such operators are unable to do so because they are in occupation of the land.

John Redwood Portrait John Redwood (Wokingham) (Con)
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Will my hon. Friend confirm that operators still need to get the agreement of the landowner or someone else who is empowered to grant that right, so that there is no muddle or confusion?

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Yes. They will be allowed to take out a new agreements, but they still have to be under the existing regime.

To be clear, this will not let an operator unilaterally change, or ask the court to impose a change to, the terms or duration of their current agreement. It allows an additional code right to be conferred on the operator via a new, separate code agreement.

Dave Doogan Portrait Dave Doogan (Angus) (SNP)
- Hansard - - - Excerpts

I think we all accept the need to be able to protect continuity of service, but my constituent, Mr Ramsay, is on the receiving end of some very strong tactics by Telefonica, which is looking to reduce the value of his lease agreement by about 90%, by £5,000 from about £7,000. What does the Minister suggest my constituent do under the weight of that corporate might? It is a David and Goliath situation.

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

I thank the hon. Gentleman for raising the case of his constituent. I would be grateful if he took it up with my officials, as I am keen to look into it. Throughout the passage of the Bill, individuals have raised cases with me. It is fair to say that the number of cases has declined substantially as the Bill has progressed through the House, so I am content that the position is getting much better, but if there are outstanding cases of situations that any MP feels is unfair, I will be grateful if they are brought to my attention.

To return to the case I was making for new clause 1, as with an initial agreement, if a consensual agreement cannot be reached about the additional right needed, operators will be able to ask the court to impose an additional agreement conferring the additional right. Of course, in those circumstances an operator would still have to satisfy the court that its application meets the requirements of part 4 of the code, including the public interest test.

Let me give an example of how the Government intend this to work. An operator may have an existing agreement which contains a code right to install a 3 metre high mast. Subsequently, the operator realises that it needs to install a 5-metre high mast on the same piece of land. That could enable the operator to install 5G technology or to improve or expand its network. The original agreement allowing the 3-metre mast will continue to run for its remaining term, and the operator will ask the site provider to enter into a second agreement, which contains a code right allowing it to install the 5-metre high mast.

Advances in technology occur at pace, whereas a code agreement can last for a number of years. If an operator has to wait until the term of its code agreement is about to expire before being able to obtain additional code rights, it will be unable to install the latest technology on its apparatus, meaning our constituents will be deprived of faster, more reliable services such as 5G and, in time, 6G. We think that the new clause is also vital to give UK businesses access to the technology they need, enabling our economy to thrive. I hope Members will therefore agree that it must be made.

Turning to new clause 2, we want to ensure that disputes relating to the electronic communications code can be dealt with as quickly and efficiently as possible. Currently, paragraph 95 of the code allows the Secretary of State to make regulations that confer jurisdiction on either the first-tier tribunal or upper tribunal in relation to England, but only the upper tribunal in relation to Wales. The current regulations made under paragraph 95 state that all code disputes must commence in the upper tribunal, although in England, appropriate cases may then be handed down to the first-tier tribunal. The first-tier tribunal has greater administrative resources and more judges than the upper tribunal, meaning that code disputes can be processed and heard more quickly.

Moving forward, the Government are therefore considering a greater role for the first-tier tribunal in hearing code disputes, including making further regulations using the power in paragraph 95 of the code where appropriate. The new clause provides the necessary powers so that we can do just that. In future, the Secretary of State will be able to make regulations conferring jurisdiction on both the upper tribunal and the first-tier tribunal in Wales.

The final set of Government amendments is amendments 4 to 7. They have been tabled to make a minor clarification to the text of clause 68 to avoid any unintended interpretation of the legislation. Clause 68 currently makes it clear that an operator can, at any time, give notice in writing to a person from whom they are seeking code rights, stating that the operator wishes to engage in alternative dispute resolution, often known as ADR. However, nowhere is it set out that such a notice can be sent from that person to the operator. The amendments clarify that when an operator seeks code rights from a person, either the operator or that person may give notice to the other expressing a wish to engage in ADR at any time.

Desmond Swayne Portrait Sir Desmond Swayne (New Forest West) (Con)
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I certainly welcome the movement that the Minister has made. I went to table exactly those amendments and was pleased to find that she had beaten me to it. Can I tempt her to go further with respect to my amendment and amendment 4 and require the operator, which has such disproportionate power against the landowner, to engage as a requirement in the alternative dispute procedure from the outset?

Julia Lopez Portrait Julia Lopez
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I am afraid that my right hon. Friend cannot tempt me, and I will say why shortly.

I thank the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) for bringing forward amendments 14 to 17 to clauses 59 and 60. They would expand retrospective rights to upgrade and share apparatus in buildings owned by private landlords, such as blocks of flats, also known as multiple dwelling units or MDUs. I begin by saying that I have considered this issue carefully. I have been lobbied extremely heavily on it by one operator in particular, and I have tested the proposition with my officials, legal advisers and other operators.

I would not like to pre-empt what the hon. Lady might say as to why she tabled the amendments and their perceived need. However, I reassure her, and any others considering supporting them, that as a fellow London MP with many MDUs in my seat I am concerned about the dangers of a digital divide emerging, and I am doing what I can to avoid that circumstance. If I thought that the amendments genuinely helped on that front, I would do all I could to incorporate them, but there is a glaring lack of consensus among the telecoms industry about their need. Indeed, only one operator has contacted me in support of them, while four separate operators and representative bodies have strongly opposed the amendments, arguing that they are anti-competitive. I will talk a little more about that in a minute.

Andrew Percy Portrait Andrew Percy (Brigg and Goole) (Con)
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I welcome the Minister’s rejection of those amendments. In my area, we have KCOM, which is a strong local performer. Had it not been for KCOM, most of my constituents, who are on the dual network, where it can be KCOM or Openreach, would not be anywhere near to getting gigabit broadband. We therefore do not want to see any changes that will give BT Openreach an advantage or preference over other providers, such as KCOM, which have got their acts together and got gigabit broadband delivered to our homes.

Julia Lopez Portrait Julia Lopez
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I thank my hon. Friend for raising the great work of KCOM and the importance of competition and how it is driving roll-out. It is changing the dynamic in the market, very much for the better. I am mindful of how we drive extra competitiveness in this field, because that is what is getting us the roll-out and the digital connectivity that our constituents need and demand.

Amendments 14 to 17 are, I think, identical to the proposals tabled in Committee. As I explained then, upgrading and sharing electronic communications apparatus offers substantial benefits. We specifically recognised that in our 2017 reforms and in the new upgrading and sharing rights that clauses 59 and 60 will create. However, as I also explained, any legislation concerning work affecting private land has to take careful care to strike the right balance between public benefit and individual rights. The automatic rights introduced in 2017 were developed to maintain that balance.

Even more careful consideration is needed for legislation that applies retrospectively. It is for that reason that clauses 59 and 60, which have retrospective effect, include tighter restrictions on the rights they confer on operators. Under those clauses, operators will have automatic rights to carry out only limited activities that will not have adverse impacts on the land in question or impose any burden on anyone with an interest in the land. However, conferring these rights will facilitate activities such as crucial upgrading work on cables installed underneath land. Industry stakeholders have confirmed that this has significant potential to provide homes and communities with gigabit-capable connections at pace. The public benefits are therefore substantial, with little to no impact on private individuals.

Further expanding these retrospective measures, as proposed by the amendments, would require us to revisit two fundamental points: first, what would the public benefit be, and, secondly, what would the impact be on individual landowners’ rights? We have considered that carefully, and we do not think that the case has been made for the changes that the amendments propose.

Looking first at the impact on landowners’ rights, if apparatus can be upgraded or shared without material alteration to land or property—for example, if works are carried out solely on or within apparatus, such as a duct—impact on the land can be negligible. Upgrading equipment in a building almost always involves some direct impact, however small, on the building. We think that works that have an impact on property should require either agreement from the landlord or imposition by the courts through the processes provided for in the code.

In any event, if an automatic right of the kind envisaged was introduced, operators would still have to successfully engage with the landlords for logistical purposes, such as to arrange access to the property or to discuss any potential health and safety issues or need for repairs. If these conversations must take place, and we think that they should, it seems sensible that the operator should at the same time ask permission to carry out the works. That brings us again to the question of whether the expanded automatic rights, as proposed by the amendments, would be proportionate. There are other ways that operators can upgrade equipment in multi-dwelling units. They can already ask for the rights to do so, and measures are being introduced that will enable them to resolve matters quickly and cheaply.

Finally, what of the public benefit? Members made the point in Committee that residents in blocks of flats urgently need gigabit-capable connections, particularly if we are to meet our levelling-up ambitions in urban areas, as well as in rural communities. I have explained that the code already contains provisions that would enable operators to seek rights to upgrade apparatus in buildings. In contrast, an automatic right could have adverse impacts that have perhaps not been fully explored. Members suggest that there is consensus in industry that these changes are needed, but that is not the case. I have received direct representations from many fibre providers that strongly oppose these proposals. They say that the proposals would create an unfair advantage for operators with equipment inside buildings, with potentially anti-competitive effects.

I hope that gives the hon. Member for Hackney South and Shoreditch assurance that the provisions in the Bill on retrospective rights to upgrade and share represent a balanced approach, and that there are substantial measures in place and under way to connect residents of multi-dwelling units. I therefore hope that she will not press her amendments to a Division.

Finally, I will address the amendments tabled by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). First, amendments 12 and 13 seek to remove clauses 61 and 62 from the Bill. This is another matter that I am familiar with. Indeed, as I suggested in response to an intervention, I have had conversations with him and other hon. Members about particular cases, as well as with the campaign group that represents landowners on the issue.

The Government recognise that, since 2017, there have been problems between some landowners and telecoms operators, and a level of discontent about the result of the valuation regime change, but we want to bring that regime more in line with that of other utilities, and we believe there are significant benefits to doing so. I must say that I have found little evidence in recent weeks and months to suggest that the regime requires a radical overhaul.

I have encouraged more collaborative discussions between operators and landowners. I have looked into specific cases, and concluded that the measures that we are introducing to encourage more collaborative negotiations will help to tackle many of the problems that I have seen. Significant information about cases has not always been forthcoming when asked for, but if hon. Members would like to discuss constituency cases, I am always happy to receive the details. Fundamentally, we need a legislative framework that keeps costs low, so that we can encourage investment and protect consumers from price increases. The code valuation framework to calculate the sums payable to landowners by operators, which was introduced in 2017, aimed to achieve that. We maintain that the overall framework creates the right balance between the public need for fantastic digital infrastructure and making sure that landowners receive a fair payment for allowing their land to be used. The purpose of clauses 61 and 62 is to make sure that the valuation framework applies consistently across the UK and to all agreements the code applies to.

John Redwood Portrait John Redwood
- Hansard - - - Excerpts

I certainly support the Minister in the belief that the more competitive the industry, the better the results that we will get. Has she had representations from people who would like to enter the market about whether the change would make them more likely to do so?

Julia Lopez Portrait Julia Lopez
- Hansard - - - Excerpts

Most of the people I have spoken to are already in the market and believe that the change will make a big difference to how they roll out. It is a very competitive market with many new entrants. I am not aware of anybody who is just dipping their toe in the water; because it is so competitive, people are already aggressively in the market. We think that the change will really help to accelerate the roll-out to our constituents of fantastic digital infrastructure of the kind that we all understand is fundamental to driving productivity gains, and to reducing the divide between areas that do and do not have that connectivity.

From the contribution of my right hon. Friend the Member for New Forest West on Second Reading, I understand that his concern relates to the effect of clauses 61 and 62 on landowners who already host telecoms apparatus on their land. I recognise that, ultimately, these changes are likely to lead to reductions in the rent received by landowners with a tenancy protected by the Landlord and Tenant Act 1954 or the Business Tenancies (Northern Ireland) Order 1996. I appreciate that that might not have been expected by those entering into such tenancies at the time they were created, but it is also fair to say that market values change over time, and there is never any guarantee that rents received by a landlord will remain constant or increase.

We have also given careful consideration to the effect of clauses 61 and 62, and have balanced the impact that they might have on landowners with the wider, substantial public benefits that we are pursuing. It is also important to recognise that the changes will not happen until any ongoing agreement expires and comes to be renewed. Furthermore, clauses 63 and 64 introduce separate provisions allowing the landowner to recover compensation for any damage to their land, reduction in its value or reasonable expenses resulting from an operator exercising their code rights.

Clauses 61 to 64 ensure that the 2017 framework will apply to all future agreements. It must be remembered that the code has an underlying purpose, which is to support the delivery of robust digital networks. Our constituents increasingly rely on those networks for critical digital services. Only recently, the National Farmers Union’s digital technology survey found that poor mobile signal and unreliable internet access are hampering farming businesses. We know that rural connectivity is a problem for many organisations, and addressing it is one of our priorities as a Government. The Bill, including clauses 61 and 62, aims to address those issues.

I am sure that my right hon. Friend had only noble intentions when tabling his amendments, but although they may benefit some landowners, they have the potential to penalise entire communities by keeping network costs unacceptably high. Clauses 61 and 62 will help to reduce the digital divide between different parts of the country, as they will help to prevent deployment being cheaper in one area than another.

Finally, I turn to amendments 9 to 11 tabled by my right hon. Friend, which would require a party to use alternative dispute resolution processes before making certain applications to a court under the electronic communications code, including where an agreement granting rights under the code is being sought. The provisions on ADR processes in the Bill aim to create more collaborative discussions between landowners and telecoms operators to ensure that litigation is used only as a last resort. I suspect that that is what the amendments seek to ensure as well. Although I sympathise with the intention behind these amendments, the Government oppose them—first, because they are unnecessary; secondly, because ADR is not appropriate in every situation; and thirdly, because they would be counterproductive to the amendments’ overall intentions.

The Bill requires operators, when requesting rights under the code, to inform the landowners of the availability of ADR. Crucially, it also creates a requirement that if an application is made to a court, the court will be required to take into account any unreasonable refusal to engage in ADR when awarding costs. Those requirements strongly incentivise the use of ADR without the need to make it mandatory. The Government therefore believe the amendments to be unnecessary.

It is also important to note that ADR may not be suitable in certain cases, such as where a disagreement is based on differing interpretations of the law. Such points of law must be resolved in the courts, and mandatory ADR would add cost and time to that process without offering any benefit.

The Government also believe that the amendments would be counterproductive to their own goals. If ADR were compulsory, some parties would be compelled to participate in an ADR process they do not want to be involved in, and so would be less inclined to actively engage in the process. That would increase the risk that ADR would fail, which would mean that parties would have to go to court anyway. If that were the case, all that compulsory ADR would have achieved is to add an additional layer of time and costs for landowners, such as charities, sports clubs and farmers. It should also be noted that, when consulted, a clear majority of stakeholders were not in favour of compulsory ADR. I hope that I have given my right hon. Friend assurance that the provisions regarding ADR in the Bill already represent the most effective way of encouraging its use, and I hope that he will not press his amendments to a Division.

Chris Elmore Portrait Chris Elmore (Ogmore) (Lab)
- Parliament Live - Hansard - - - Excerpts

You will be aware, Madam Deputy Speaker, that I have spent at least the last five and a half years as an Opposition Whip encouraging brevity, so I do not intend to keep the House too long. I will keep my remarks short and hopefully to the point. As I said on Second Reading and in Committee, I will not pretend that the Opposition do not support the wider principles of the Bill. I thank the Minister for the constructive way in which she has engaged on it with me from the outset.

I turn to the new clauses and amendments. New clause 1 is an improvement on the Government’s first attempt to change the definition of “occupier”, but the changes put forward are still not watertight when it comes to preventing unintended consequences. The new clause does not address the underlying issue that operators could theoretically use it in situations other than when existing agreements have expired, which could lead to financial consequences for small site providers who have been hard done by since the electronic communications code review in 2017. More work is needed when the Bill moves to the other place to ensure it does not unintentionally punish site providers further. We have no issue with the proposal in new clause 2 that grants the Secretary of State power to make regulations that provide for a function conferred by the code on the court to be exercisable in relation to Wales by the first-tier tribunal.

I will speak to amendment 14 on behalf of my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier). She sends her apologies to the House; she is chairing the Public Accounts Committee. We have checked with the Clerks and the Speaker’s Office to check that that is appropriate. That amendment, and the consequential amendments 15, 16 and 17, seek to apply a different regime under the electronic communications code to private landlords. They would give operators automatic upgrade rights in respect of properties owned by private landlords, subject to the strict condition that the upgrading imposes no additional burden on the other party to the agreement.

The growing digital divide in our towns and cities has only been exacerbated by the pandemic. The Government’s broadband target has been downgraded twice, and the Digital, Culture, Media and Sport Committee doubts that the current 85% gigabit target will be met. The backlog is due to the difficulty in accessing a high number of properties, a disproportionate number of which are flats, whose absentee landlords have little to no incentive to respond to requests to upgrade and improve connectivity.

--- Later in debate ---
Andrew Percy Portrait Andrew Percy
- Hansard - - - Excerpts

Indeed, but as my right hon. Friend will know, Brigg and Goole is of course the most important place in this country, and I am therefore particularly exercised by what happens there. He is absolutely right, though: that competition, which is also seeing the KCOM network expanded and rolled out in his constituency in the northern bit of East Yorkshire, is really very important. That is not to say that BT Openreach does not have an incredibly important role to play—of course it does, and I praise it for its work in getting gigabit broadband expanded across the country, but some of its behaviour raises questions.

The shadow Minister, the hon. Member for Ogmore (Chris Elmore), who moved amendment 14 and spoke to the group I am referring to, brushed aside concerns about private property rights and the claims that BT Openreach and others will potentially have greater powers than the police to enter private property. He said that that would all be on the basis of no loss or damage. Well, that is all fine, but it is a fairly high bar in loss of personal property rights—or a low bar, depending on how you want to think of it. I was not exactly comforted by his dismissal of people’s legitimate concerns around one provider having particular rights to access property that others would not have. On that basis, I urge the Government to reject and oppose those amendments.

Julia Lopez Portrait Julia Lopez
- Parliament Live - Hansard - - - Excerpts

I am grateful to all Members who have spoken in this debate, to the Opposition for their support for the Bill, and to the hon. Member for Ogmore (Chris Elmore) in particular for the very collaborative approach he has taken throughout and his acknowledgement of the improvements we have made. I shall test officials on the further points he makes. I am also grateful to the hon. Member for Midlothian (Owen Thompson) for highlighting the product security parts of the Bill. Some of the detail he seeks will be in secondary legislation. Goods sold in online marketplaces, for instance, are not out of scope, because manufacturers, importers and distributors are covered. I would be happy to come back to him on some of the other points he raised.

On criticism of our roll-out, we are making substantial progress on our gigabit roll-out. We are now up to 68% coverage, up from 9% in 2019. I am open to any proposal to make roll-out go even faster. I have set out why competition is so important to that dynamic and why I think the amendments on MDUs are not the right way to go and could even slow the roll-out. I note the comments on BT Openreach. Other providers tell me that they have great teams negotiating wayleaves, that this is a straightforward process and that extra help on MDUs of the kind envisaged is simply not needed. I am grateful to my hon. Friend the Member for Brigg and Goole (Andrew Percy) for using KCOM as a great example of that, and for highlighting not only some of the good work that Openreach does, but the interesting example of his town deal, which I shall take away with me.

My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) made a typically fruity and passionate speech. We believe our legislation incentivises greater collaboration. I set out in detail earlier why that is the case. We believe that rents were too high. As the need for digital infrastructure increases, we think rents need to become more akin to those for utilities. I should never wish to be accused of seeing property as theft. Indeed, I confess to taking umbrage at my right hon. Friend’s assertion on Second Reading. That is why I have tested his proposition—

Julia Lopez Portrait Julia Lopez
- Parliament Live - Hansard - - - Excerpts

I thank my right hon. Friend. I am glad that I have convinced him of the case. [Laughter.] As I say, I tested his proposition to death and concluded that there may be a case of creative hyperbole. I am glad he has also acknowledged that.

Question put and agreed to.

New clause 1 accordingly read a Second time, and added to the Bill.

New Clause 2

Jurisdiction of First-tier Tribunal in relation to code proceedings in Wales

In paragraph 95(1) of the electronic communications code (power to confer jurisdiction on other tribunals)—

(a) in paragraph (a), at the end insert “or the Upper Tribunal”;

(b) in paragraph (aa), for the words from “, but only” to the end substitute “or the Upper Tribunal”;

(c) omit paragraph (b).”—(Julia Lopez.)

This new clause gives the Secretary of State power to make regulations providing for a function conferred by the code on the court to be exercisable in relation to Wales by the First-tier Tribunal.

Brought up, read the First and Second time, and added to the Bill.

Clause 57

Meaning of “occupier” in relation to land occupied by an operator

Amendment made: 1, page 40, line 11, leave out Clause 57.—(Julia Lopez.)

This amendment is consequential on NC1.

Clause 58

Rights under the electronic communications code to share apparatus

Amendments made: 2, page 41, leave out lines 23 to 25 and insert—

‘(4) In paragraph 9 (conferral of code rights), after sub-paragraph (2) (as inserted by section (Persons able to confer code rights on operators in exclusive occupation)) insert—”

This amendment is consequential on NC1.

Amendment 3, page 41, line 26, leave out “But”—(Julia Lopez.)

This amendment is consequential on NC1.

Clause 59

Upgrading and sharing of apparatus: subsisting agreements

Amendment proposed: 14, page 42, line 11, after “agreement”, insert

“other than with a private landlord”.—(Chris Elmore.)

This amendment, together with amendments 15, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.

Question put, That the amendment be made.

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14:57

Division 9

Ayes: 163


Labour: 148
Liberal Democrat: 9
Independent: 2
Plaid Cymru: 2
Alliance: 1
Social Democratic & Labour Party: 1

Noes: 280


Conservative: 272
Democratic Unionist Party: 4

Clause 68
--- Later in debate ---
Julia Lopez Portrait Julia Lopez
- Parliament Live - Hansard - - - Excerpts

I beg to move, That the Bill be now read the Third time.

The Romans built the roads, the Victorians built our canals and railways, and our generational challenge is to make sure that the UK has world-class digital infrastructure. That is not just about the needs of today, when we depend on reliable connections for online meetings, television streaming or calling friends and family. We are rolling out, at breakneck speed, full-fibre networks that will last for decades and cater for tomorrow’s needs, alongside more extensive wireless infrastructure to end the frustration of terrible signal and slow downloads.

The Bill is one tool that we need to deliver great connectivity for everyone, and I am grateful for the cross-party recognition of the importance of our task. The Government also recognise that greater connectivity brings the greater threat of harm to individuals, organisations and networks through an increased risk of cyber-attack. If networks and devices are not secure or trusted, we undermine their potential benefit to people and businesses.

I thank the consumer group, Which?, for its campaign that supported the development of our Bill. Not only are our measures important to protect people’s online security when enjoying the benefits of technology, but they will help to protect people’s personal safety. I particularly thank Jessica Eagleton of the domestic violence charity, Refuge, for her compelling evidence at the Public Bill Committee. The Bill is backed by industry experts and I thank them for their input. Other countries are already following suit, and with this Bill, the first domestic piece of legislation in the world to introduce security requirements of connected products, we are global leaders in the cyber-security landscape.

In short, this Bill is vital to the success of our digital economy in the decades ahead. Once passed, its measures will make the UK a better connected place and more resilient against cyber-attacks. Before it moves to the other place, I extend my thanks to the departmental officials for their work preparing the Bill; to the Opposition for their pragmatic and collaborative approach; to the members of the Bill Committee and the witnesses for their commitment; to the parliamentary Clerks, without whose efforts we would not be attending this debate; and to Members from across the House, including my Parliamentary Private Secretary, my hon. Friend the Member for Clwyd South (Simon Baynes), for the scrutiny and support they have provided. I look forward to seeing this important piece of legislation come into force. I commend the Bill to the House.

Product Security and Telecommunications Infrastructure Bill

(Limited Text - Ministerial Extracts only)

Read Full debate

This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay
- Hansard - - - Excerpts

That the Bill be now read a second time.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
- Hansard - - - Excerpts

My Lords, Her Majesty’s Government want the UK to be a science superpower. Two key planks in achieving this are security and digital connectivity. The UK already influences and shapes global cyber standards and we have committed huge investment to counter cyber threats and to meet our digital infrastructure targets. Back in 2016, we invested £1.9 billion to bolster our cybersecurity, setting up the National Cyber Security Centre and investing in economic resilience, innovation and skills. Now we have gone further, with an additional £2.6 billion being invested over the next three years. The National Cyber Security Centre has stopped 2.7 million online scams in the past year alone, and the new National Cyber Force will proactively counter cyber threats that we face.

Our investment in innovation has seen more than 40 tech unicorns—that is, start-up businesses now valued at over $1 billion—grow outside London, with 100 more in the pipeline. We have invested significantly in superfast broadband, bringing it to 97% of premises, and are now driving investment in gigabit broadband, with over 68% of premises now able to access this technology. But we need to keep investing in emerging technologies to secure ourselves against future threats and realise the opportunities of a digital economy. Monthly broadband use has doubled in four years and continues to rise every year. Cyber threats are proliferating and technology is not always secure by design. That is why we have introduced this Bill.

We want to fulfil our commitment to delivering faster digital connectivity and to ensure that, as we grow, our technology is secure. The Bill will facilitate the extension of futureproofed gigabit-capable broadband and 5G networks, and improve the protection of people, networks and infrastructure from the harms caused by insecure consumer-connectable products. I will start with the telecommunications measures, explaining why they are necessary and what their intended effect is. Following this, I will turn to the product security measures and outline why it is important to consider digital infrastructure and cybersecurity in conjunction.

The Government are committed to delivering digital growth by building a stronger, more connected and more secure UK. This is even more vital as we build back from the pandemic. We have seen rapid growth in the availability of gigabit broadband, from less than 11% of homes and businesses at the end of 2019 to more than 68% today, but, to deliver much-needed connectivity, we must have a legal framework which encourages and enables the deployment of digital networks.

To that end, we are making good progress through a package of measures. Last year we passed the Telecommunications Infrastructure (Leasehold Property) Act to address one of the key barriers to the deployment of gigabit-capable broadband in blocks of flats. We have also committed to legislate to mandate gigabit connectivity in new-build homes. These regulations will be laid as soon as parliamentary time allows. We continue to work closely with the Department for Transport to ensure that street works support deployment of broadband while protecting the road network.

We are working with industry to support its investment and have committed £5 billion of public funding to ensure that no part of the United Kingdom is left behind. We aim to reach a minimum of 85% gigabit-capable broadband coverage by 2025 and to get as close to 100% as soon as possible. We have also agreed a £1 billion deal with the industry to deliver the shared rural network, which is already delivering improved 4G coverage across the UK. The operators and the rest of the industry remain confident that their combined coverage is expected to be delivered to 95% by the end of 2025. We also aim for the majority of the population to have 5G coverage by 2027.

To improve connectivity, in 2017 we implemented reforms to the Electronic Communications Code, which regulates installation agreements between landowners and telecommunications operators. Some noble Lords here today will have been involved in the scrutiny of that legislation. The aim was to make it easier and more cost effective for digital networks to be installed, maintained and upgraded. However, there is still more to be done. We need to go further to realise the Government’s ambitions for digital connectivity and levelling up.

The Bill before us will update the Electronic Communications Code, among other pieces of connected legislation, to deliver these ambitions. Specifically, the Bill aims to optimise the use of existing infrastructure. It encourages collaborative relationships between telecommunications operators and site providers. It gives operators the ability to obtain new rights, which will enable them to take advantage of new technologies and pass the benefits on to customers. It builds on previous measures to tackle the issue of unresponsive landowners and ensures that the price paid to host telecoms apparatus is calculated in a consistent way across the country, preventing a digital divide.

Making optimum use of existing cable and fibre networks has a key role to play in upgrading services and increasing competition. The Bill introduces a new automatic right for operators to upgrade or share apparatus installed before the 2017 reforms. This will be subject to specific conditions to ensure that it will not adversely affect landowners. The measures have been considered carefully to deliver significant benefits to the public while ensuring that there will be little impact on landowners.

Furthermore, the Bill rationalises the way in which expired code agreements are renewed. Currently, an operator has to use one of three different statutory renewal routes. The Bill ensures that, whichever route an operator uses, the terms of the renewed agreement will more closely align with the code as it was reformed in 2017. As a result, there will be greater consistency in how agreements are renewed across the UK.

Making better use of existing infrastructure through upgrading and sharing, and a more consistent and efficient renewal process, will not only improve digital services but reduce the need for new installations. This means less disruption from street works and fewer mast installations in both rural and urban settings, which I am sure will be welcomed in all parts of your Lordships’ House.

We are also introducing measures to facilitate greater use of alternative dispute resolution when parties are negotiating the terms of an agreement to install telecommunications apparatus. This is to ensure that disputes are resolved more quickly and cost-effectively, and that litigation is used only where absolutely necessary. We anticipate that this will encourage constructive dialogue between network operators and potential and existing site providers. It will address situations where landowners may feel compelled to accept terms offered by operators by giving them alternative means of resolving disputes without the need for lengthy and costly litigation.

Finally, in situations where landowners are not responsive, we are creating a new court process. This process will provide a quick and inexpensive route for operators to gain time-limited rights to access certain types of land. Again, these measures have been developed to strike the balance between protecting landowners and ensuring that everyone across the UK has access to reliable and quick digital infrastructure.

I turn now to the product security provisions in the Bill, since the demand for faster broadband is driven by the increasing number of devices we are all installing in our homes. Increasingly, we are streaming more programmes on smart televisions and using telephones and tablets for video calling; half of all homes have a smart speaker, smart watches continue to rise in popularity and smart doorbells and cameras are appearing on every street. The average UK household now has nine internet-connected devices, and over 50% of all UK households purchased an additional consumer connectable product during the pandemic.

With this increased ownership and use of consumer connectable products, there comes a heightened risk of cyberattacks. Cybercriminals have taken advantage of consumer vulnerability during the pandemic, and increasingly target consumer connectable products. In the first half of last year alone, we saw 1.5 billion attacks on connectable products—double the figure of the year before. Thousands of people in the UK have been victims of cyberattacks, leaving many with significant losses of money or private data. As we have seen recently, cybercriminals can now use compromised connectable products to attack large infrastructure. In 2016, the Mirai attack disabled internet access across much of the east coast of the United States of America; we still see variants of Mirai-using botnets attacking businesses and infrastructure today. We have made significant progress to develop the UK’s cybersecurity to tackle threats such as these. In 2018, the Government published a code of practice for manufacturers to improve the security of consumer devices. The UK is a world leader in this area, and our code has since been used by Australia and India, among other countries.

Of course, this progress needs to keep up with the ever-evolving cyber landscape—hence the need to legislate now to ensure that our people and networks are better protected. Taken together, the telecoms and product security measures in the Bill work to create a reliable fast broadband network, and to support the growth of more secure consumer connectable products. The Bill will enable the Government to specify mandatory security requirements to ensure that manufacturers, importers and distributors of smart devices work harder to protect consumers from cyber risks. These requirements will be set out in regulations and are supported by experts, industry and our international partners, with whom we continue to work closely to ensure that everyone is well aware of the initial three requirements.

The first is a ban on universal default passwords. Too often, consumer connectable products come with an easy-to-guess password; this makes them vulnerable and risks compromising a user’s privacy and security. The second is that a manufacturer of consumer connectable products must have and maintain an accessible vulnerability policy, obliging them, as a minimum, to receive and respond to reports of security issues in their products. This is important to ensure that manufacturers can be made aware of, and quickly address, any shortcomings in their products, and to foster good practice to protect society as a whole. Finally, manufacturers will be required to be transparent about the minimum length of time for which a product will receive security updates. This should enhance consumers’ awareness, enabling them to consider the security of products before they purchase them and, in so doing, foster market competition towards enhanced security update periods. Where those three security requirements have not been complied with, businesses will not be allowed to make these products available in the UK. We will be able to monitor, investigate and take enforcement action where necessary.

These are the first steps towards a change in the security landscape for consumer connectable products. We have created this Bill to reflect the need for resilient and adaptive measures to protect consumers and our vital infrastructure. Both the product security and telecoms infrastructure measures in the Bill will be of benefit to the public. We have brought the Bill forward to ensure that, as our digital infrastructure evolves and as we become more connected to the internet, we protect consumers from the dangers which come with this. I hope that noble Lords from across your Lordships’ House will support the Bill, and I look forward to discussing it in detail as we scrutinise it.

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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, I am very grateful to all noble Lords for their contributions to what I agree has been a very enjoyable debate this afternoon. I am sure these contributions will form a prelude to some further interesting and enjoyable debates in Committee and later stages of the Bill. I am grateful, too, for the excessively generous compliments from my noble friends behind me, which I am sure are an illustration of the great harmony and mutual affection for which the Conservative Party is, today of all days, renowned.

As my noble friend Lady Harding of Winscombe rightly said, this is a technical but important Bill, and I am pleased that all noble Lords from all parts of your Lordships’ House are in agreement that people from across the country should be able to benefit from faster digital connectivity and the assurance that their technology is secure. The Bill therefore comes at an opportune time, when cyberattacks are on the rise and when digital connectivity is increasingly important for all the reasons that my noble friend Lady Hodgson of Abinger and other noble Lords set out. We have heard examples in today’s debate of the benefits which will accrue to communities, urban and rural, right across the country.

I am conscious that in Committee we will go into greater detail in some of the areas which noble Lords have alluded to, but I want to respond to some of the points which they have raised in today’s debate. The noble Lord, Lord Fox, began in general terms by asking whether we ought to set out a clear explanation in the Bill of what consumers can expect in terms of product security. The fundamental purpose of the Bill, as set out in its first clause, is to embed security requirements to protect and enhance the security of connectable products and their users. That is the measuring stick against which the impact of the Bill and future regulations will be assessed.

As I alluded to in my opening remarks, there are no silver bullets in cybersecurity. Thousands of people in the UK have been victims of cyberattacks, and cybercriminals are using connectable products to attack large infrastructure as well. Our approach to connectable products lies in both the UK and wider international expertise. Our own 2018 code of practice is the foundation of the first international standard for consumer security and there is an international consensus behind this standard. We are also, through the Bill, the first to embed these protections in legislation. At the moment, some security-conscious manufacturers address these threats, but through the Bill we will now make sure that all manufacturers follow best practice in future.

The noble Earl, Lord Devon, rightly spoke of our international standing. The UK has established global leadership in this area. We have worked closely with our international partners and have seen evidence of other countries and organisations embedding the approach that we have taken in their own codes. In my opening remarks I mentioned Australia and India, which have published codes of practice with the same 13 principles which we published in 2018, but Singapore, Germany and Finland among others have made their own domestic interventions which also align with the UK’s code of practice. The European Commission has also published its intention to explore regulation for connected devices through the cyber resilience Act.

On Part 2, the noble Lord, Lord Fox, in general terms asked why we were revisiting and changing the code again. As noble Lords noted, it was substantially reformed in 2017, following the important and substantial work undertaken by my noble friend Lord Vaizey of Didcot when he was the responsible Minister. A key aim of those reforms was to make it cheaper and easier for digital infrastructure to be deployed, maintained and upgraded. The Government recognised that this would mean telecommunications site providers receiving lower payments than had previously been the case. However, those changes were introduced only following an extensive period of consultation and research and were considered necessary to reduce operator costs and to encourage the industry investment required for the UK to get the digital communications infrastructure that it needs.

The Government intended that the 2017 reforms would speed up deployment and reduce operator costs, and indeed the changes have borne fruit. However, since the changes have come into force we have also received feedback about how they have worked in practice and about some of the ongoing challenges which people face. The Bill aims to tackle those problems and to ensure that the aim and the ambition of the 2017 reforms is realised. To give an example, both operators and landowners have pointed to problems regarding negotiations, with operators saying that they take too long and landowners saying that they face too much pressure to accept certain terms. This is one of the areas we will address through the Bill.

A number of noble Lords spoke about the valuation work which came from the 2017 reforms. The new pricing regime is more closely aligned to those for utilities such as water, electricity and gas, and we think that is the correct position. Landowners should still receive fair payments which, among other things, take into account any alternative uses that the land may have and any losses or damages that may be incurred. We think that the measures in the Bill will support greater collaboration between operators and landowners and help agreements to be completed more swiftly.

The prices being paid for rights to install communications apparatus before 2017 were too high and reflected the rapid explosion that was taking place in demand for digital services; it was right that they were addressed. The 2017 reforms were intended to strike a balance between ensuring that individual landowners are not left out of pocket and making network deployment and maintenance more cost-effective.

The noble Earl, Lord Devon, and others asked about reviewing the impact of the reforms made in 2017. We recognised when the 2017 reforms were introduced that the market would need time to adapt and settle, and it would be premature to carry out a full assessment of the 2017 reforms at this time. There is not enough evidence about agreements which were completed after they came into force for a properly robust and comprehensive analysis to be made—not least, of course, because of the impact of the pandemic. However, the evidence and feedback we have received provides a compelling case that the changes we are making in this Bill will ensure that the 2017 reforms have their intended effect. Making these changes now will help to deliver the Government’s 2025 connectivity target of at least 85% of homes and businesses having access to gigabit broadband. That is not to say that we think the 2017 reforms failed. Much progress has been made. We simply think that more can and must be done to maximise their impact.

The noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Merron, asked about impact assessments. The impact assessments which accompanied the 2017 reforms did not state that the Government would undertake a full economic review of the code’s impact on rents, but in that document the Government committed to reviewing the 2017 reforms as a whole by June 2022—this month. The Government have met this commitment through their continuing engagement with interested parties, including holding monthly access to land workshops. This engagement and the issues which have been highlighted through it prompted the 2021 consultation and the measures in the Bill, which we think are needed for the aims of the 2017 reforms to be fully realised.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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That sounds a bit feeble. DCMS has had workshops but has not produced a review. That does not sound like any sort of review.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The noble Lord perhaps thinks we committed to more in 2017 than we did. We have met the commitments we made in 2017 through our engagement with the industry. The points it made have informed the Bill before us. I am sure we will debate—

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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May I suggest that if the passage of the Bill is to be smooth, any information the Minister is able to provide about the impact, past or expected, would be extremely helpful? Otherwise, we are all going to be arguing about suppositions.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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Certainly. I pointed out that the time that has elapsed since 2017 has perhaps not given us as much real data as we would have had, were it not for the pandemic, but of course we will be influenced by what have seen as we scrutinise the Bill in Committee and later.

We have heard a range of views on multiple dwelling units. The Government are aware of calls from parts of the industry for greater automatic rights to upgrade existing infrastructure in multiple dwelling units. The Government are not convinced that granting those rights is proportionate, because we must strike the right balance between private property rights and public benefits. There are other ways that operators can arrange to upgrade equipment in multiple dwelling units. They can ask for those rights and if landlords fail to reply, they will be able to use the process created through the Telecoms Infrastructure (Leasehold Property) Act 2021. If landlords refuse, operators can ask the courts to impose additional rights to upgrade existing equipment if their agreement with the landlord does not already provide them with those rights.

Other measures in the Bill encourage the use of alternative dispute resolution to support more collaborative negotiations. The Government are also considering further changes through regulations to help code disputes be dealt with more quickly. Finally, it is important to stress that there is no consensus from the industry on this issue, just as there was no consensus in our debate today. In fact, many operators have opposed the proposal on the grounds that it would create an unfair advantage for operators who already have equipment inside buildings and could therefore have anti-competitive effects.

My noble friend Lady Harding of Winscombe asked about telegraph poles. It is important that any automatic rights in relation to apparatus on, under or over private land strike a fair balance between any interference with private property rights and any public benefits that can be delivered. We think that the measures in this Bill on rights to upgrade and share apparatus under land achieve that balance. However, we have seen some evidence that further public benefits might be achieved if telecommunications poles sited on private land could be upgraded and shared more easily. Operators already have statutory rights to fly wires between these poles and it is obviously important that the legislative framework supports the effective use of these rights; we are looking into this matter closely.

A number of noble Lords touched on what is and is not in scope of Part 1 of the Bill. The Bill sets out what types of products should be treated as “consumer connectable”. This includes products that can be connected to the internet, such as routers, smart TVs, smart home products and connectable toys. I can tell my noble friend Lord Arbuthnot of Edrom that toasters are indeed in scope, although the idea of an internet-connected toaster makes me think of Wallace and Gromit. I share his bafflement at why people might want to do it, but they are in scope.

The powers in the Bill will allow the Government to update products that are in scope where changes to the wider regulatory, technological or threat landscape render this appropriate. The Government also intend to remove some products from scope where their inclusion would subject them to double regulation or where that would be disproportionate to the level of security risk. An example of such an exception is automotive vehicles, which I can tell my noble friend Lord Vaizey of Didcot include e-scooters; other examples are medical devices and smart charging points.

My noble friend Lord Arbuthnot talked about the vulnerability disclosure process. Of course, manufacturers will not see every vulnerability in their own products. Increasingly, the people best placed to spot them are everyday users and designated security researchers; but the potential point of failure here is the process for reporting those vulnerabilities to the manufacturer, which is often difficult to navigate. The security requirement will mandate a clear point of contact and the policy for the manufacturer to receive such reports and take meaningful action to address them. That is an important step forward, which, I am pleased to say, has widespread industry and expert support.

The noble Lords, Lord Clement-Jones and Lord Bassam of Brighton, the noble Baroness, Lady Merron, and others asked about future-proofing. There is a common notion that Governments are behind the curve when it comes to regulating technology, but not in this case. As well as setting the stage to introduce the regulations to which we have already committed, this Bill establishes a flexible and future-proof regulatory framework so the Government can be agile and proactive in amending and introducing security requirements in step with technological innovation. That is exactly why we have not included the three security requirements on the face of the Bill. By design, the Bill not only addresses the current problem but looks beyond it to ensure that UK consumers can be protected no matter how technologies and threats change and emerge.

My noble friend Lord Holmes of Richmond asked about the Computer Misuse Act. Colleagues at the Home Office are currently taking forward work to identify whether the proposals made in response to the review of that Act, which was launched in May last year, will assist in helping to protect the UK from cybercrime, or whether they are addressed under other programmes of work. We will provide an update to your Lordships’ House in due course, but this Bill will enhance protection for consumers and networks from the range of harms associated with cyberattacks. It equips the Government with the necessary powers to set and update security requirements within a fast-growing area of emerging technologies.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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I am sorry to interrupt the Minister again, but I am frightened that he is not going to tell us who the regulator will be, explain why we are covering only three of the many principles covered in legislation in other territories, or provide us with a glimpse of the secondary legislation.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The noble Lord is eager to hear answers to questions to which I may yet turn; on some of them I will write. Work has been done to identify the regulator, but it would not be right to refer to that person at this stage and ahead of Royal Assent. I will write to the noble Lord on the other points he mentioned. I talked just now about our approach, through secondary legislation, to future-proofing and the reasons for not setting out the first three principles in the Bill. We have set out what those standards will be up front.

My noble friend Lord Holmes of Richmond spoke about the important issue of digital inclusion and skills. We run programmes to give young people the opportunity to learn digital skills and to improve their cybersecurity. More than 100,000 young people have participated in these programmes. We have expanded that with a new online training platform, Cyber Explorers, which aims to engage 30,000 young people, and DCMS funded the creation of the UK Cyber Security Council to create professional standards and pathways for cybersecurity.

The noble Lord, Lord Fox, asked about Huawei equipment in our infrastructure. The Government have undertaken a consultation with the industry on the designation of Huawei as a high-risk vendor and proposed directions relating to Huawei goods and services. The responses we receive will inform any final post-consultation decision on whether to issue the designation notice and direction. The Government have also undertaken a public consultation on a set of draft electronic communications security measures regulations and a draft code of practice, the outcome of which will be published in due course.

Lord Fox Portrait Lord Fox (LD)
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It was the “in due course” bit that I was interested in. In other words, what is “in due course” in this case—months, weeks, days, years?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am afraid I am not able to elaborate further than “in due course” at this point, but if I am able to before Committee I will come back with more particulars. The final regulations and code of practice will be laid in Parliament later this year using the negative procedure, as required by the Telecommunications (Security) Act.

The noble Baroness, Lady Merron, asked about the knock-on effect of telecoms operators’ reduced rental payments on the funding of community organisations. It is important to note that the funding for such organisations should not be reliant on telecommunications. There are many funding streams, not least from the Government, to support them and their important work. The National Lottery Community Fund is the largest non-government funder of community activity in the UK and one of the largest arm’s-length bodies that DCMS sponsors. Officials at the department work closely with the National Lottery Community Fund to ensure that it continues to support the evolving needs of civil society organisations. Over the last five years, the fund has distributed £3.4 billion.

The noble Baroness talked particularly about sports clubs. The Government very much agree that sports and physical activity are critical for our mental and physical health, which is why we provided an unprecedented £1 billion of financial support to sport and leisure organisations during the pandemic. We will ensure that community groups continue to get the support they need.

I shall write to the noble Lord, Lord Clement-Jones, on the points that he highlighted that I have not addressed today. I would, of course, be very happy to speak to any noble Lords who would like to talk about any of the issues in the Bill in further detail. I am very grateful to my noble friend Lord Hunt of Wirral and to the noble Baroness, Lady Merron, and the noble Lord, Lord Bassam of Brighton, as well as the noble Lords, Lord Fox and Lord Clement-Jones, for the engagement that we have had in detail already. I would be more than happy to hold further discussions and talk in greater detail between now and Committee.

My noble friend Lady McIntosh of Pickering offered to furnish me with the details of some of the unused masts in North Yorkshire, and I would be very glad to receive them and take them forward to discuss with officials.

Bill read a second time and committed to a Committee of the Whole House.

Product Security and Telecommunications Infrastructure Bill

(Limited Text - Ministerial Extracts only)

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Earl of Erroll Portrait The Earl of Erroll (CB)
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My Lords, I want to say just a couple of words because, having read this and listened, I think the amendment has a very good point. I like the concept of a duty of care, because if we do not have that, who are we worrying about? In fact, Clause 7, on “Relevant persons”, is all about the manufacturers, importers, distributors, et cetera, with nothing about the customer, the poor person who is going to get hit by it. It is a very good idea to put that in at the beginning, setting down some principles and duties, because the other trouble is that by the time that we have done all these bits and pieces, made the regulations and the provisions, we are always acting after the event. What we need is a bit of proactivity, and we get that in this suggested new clause, because manufacturers, importers and distributors would have to make sure that products met certain minimum requirements. They would need to understand what “emerging security threats” there were; in other words, thinking ahead to the next stage and not just saying, “Oh, well, it complied with those things last year”, by which time the horse has bolted and we are far too late. So, I like it.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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I am grateful to the noble Lord, Lord Fox, and, in his absence, the noble Lord, Lord Clement-Jones, for their Amendment 1 and for the wholly positive intention with which it has been tabled. I was grateful to have had the opportunity to talk to them about it before Second Reading as well. As the noble Lord set out today, he has argued that customers deserve some high-level principles setting out the security protections they should expect when purchasing consumer-connectable technology. In fact, Amendment 1 goes further, as noble Lords have noted, and would require manufacturers to owe their customers a “duty of care” to protect them. We are not as keen as the noble Earl, Lord Erroll, on that.

The first problem we have with a duty of care is that it could give consumers a false sense of security. If consumers buy well-designed technology products which meet the best standards, it considerably lowers risk, but with cybersecurity there is no such thing as zero risk: the most aggressive and well-resourced hacker will find a way. Somebody may have a quality product, but have they secured their wi-fi router? Do they have some legacy technology on their network? Manufacturers of a single device do not control the whole range of apparatus which constitutes the attack surface so cannot always provide an absolute security warranty, and they cannot always predict the next attack vector.

The second problem we have is that we have learned that the security of devices is best served by standards rather than principles. If one sets standards, one can send a device to a laboratory and assure oneself that those standards have been met. If one sets principles, that does not apply. That is why the Bill is designed to give force to standards. Those standards, developed here in the UK and now adopted by Governments and jurisdictions across the globe as well as by international standards bodies, are widely recognised significantly to lower risk for consumers.

Of course, we believe that the responsibility for the security of connectable products most effectively lies with the manufacturer. We expect manufacturers to take security seriously, to implement measures to develop and maintain an awareness of the security of their products, and to be up front with customers about the security support they can expect. We have tried voluntary compliance, with our code of practice which was published in 2018. We now need mandatory requirements, and that needs specific security requirements that can be independently assessed. The legislation must enable the Government to keep pace with market dynamics and the changing technological landscape—as the noble Baroness, Lady Merron, said, it is important that we move with the times. The flexibility to be able to set different security requirements for manufacturers, for importers and for distributors is key to this.

Amendment 1 in the form drafted would place an equal weight on the duties of each of these three groups to secure products. Compelling the Secretary of State to have regard to this general duty could constrain the Government’s ability to set specific security requirements in the future. Crucially, these principles could restrict the use of powers in this part of the Bill, working against the Government’s ability to bring this regime into force and impeding our ability to keep that regime future-proof. I should also say to noble Lords that industry and consumer groups have not raised the need for general principles such as this. Our efforts to engage and communicate our intentions have been clear, and the requirements we have set out for the relevant persons have been widely understood and are in line with international standards.

The noble Lord, Lord Fox, asked why the Government have chosen these three specific security requirements rather than others. During the consultation in 2019, we explored a number of options including mandating that all consumer-connectable products meet all 13 guide- lines in the code of practice. They are all important, but the majority of respondents supported the option that the top three security requirements represented the most appropriate baseline, by balancing the important requirements that are testable, being applicable across a range of devices and creating the right incentives to improve security in these products. That is why the Government are initially mandating the implementation of security requirements that will make the most fundamental impact on the risks posed by insecure consumer-connectable products for consumers, businesses and the wider economy.

The noble Lord also asked about where products end and apps begin. The powers in Part 1 allow Ministers to set out requirements that include products and software. The proposals in the consultation he mentioned relate to those who operate app stores. So, while I acknowledge the good intentions behind it, I hope I have been able to set out why the Government feel that this amendment—

Lord Fox Portrait Lord Fox (LD)
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I thank the Minister for giving way. That does not answer the question of where an app starts. If I am downloading Nest for my heating system, I am getting it from an app store, so where is the regulation coming? Is it the app that is coming from the app store, or is it the connectable device law that is coming through here? In which case, I think some explicit connectivity between the apps that run the connected devices needs to be written into the Bill.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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Perhaps, if the noble Lord is happy, we can explore this. The example he gives, as he knows, includes software and technology. Perhaps we can have a detailed discussion where we can work through some of those examples. I would be very happy to talk to him about them because on the question he poses the line is drawn in a different place depending on the product and its nature.

Earl of Erroll Portrait The Earl of Erroll (CB)
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The Minister talked about standards a moment ago. If we are going to rely on standards, who is writing them? I presume that he is talking about British standards; to write a standard will take a year or two. I hope that the Government are going to fund it. We got no help from them in trying to fund stuff around age verification, even though that was core to the Digital Economy Act. If we are going to elevate it to an international standard, that will take another year or two, so we will not see any action for a long time if we are going to rely on externally written standards. I have chaired two BSI standards so far, and it does not happen just like that.

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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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Some of the standards in this area have been set in the UK and have already been adopted by other jurisdictions, so I hope that we can give the noble Earl some reassurances. While I acknowledge his point about the time it takes for these to be adopted internationally, in some areas the UK is setting the way, and these are being picked up across the globe.

As I said, while I note the good intentions behind Amendment 1, these are the reasons why the Government are unable to support it. However, I am very happy to pick up the questions about apps and products with the noble Lord and others who wish to join that conversation. I hope that, for now, the noble Lord will be content to withdraw his amendment.

Lord Fox Portrait Lord Fox (LD)
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My Lords, while that was a relatively disappointing response, I am pleased that we can have the discussion about apps. I thank noble Baroness, Lady Merron, and the noble Earl, Lord Erroll. I think he put his finger on it. If we are to keep pace with the speed of change only through a standards regime without making the companies delivering these products in some way responsible—whether through a code of practice or a duty of care, I am not quibbling—there is no way that a standards regime can keep pace with the innovative speed that international crime is running at on cybercrime.

The idea that we can chase this down the road is wholly wrong. I ask the Minister to sit down with the department and perhaps we can come up with a different way of doing it. I am totally agnostic about how we go about it, but some sense that we are not just chasing this needs to be in this Bill, otherwise it is going to be after the fact. That said, I am happy to beg leave to withdraw Amendment 1.

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Lord Fox Portrait Lord Fox (LD)
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My Lords, I will speak to Amendments 3 and 5 and in support of the other two amendments in this group. All these amendments refer to Clause 1 and seek to add some specificity to its general nature. The first amendment in my name and that of my noble friend Lord Clement-Jones is Amendment 3. This inserts a new paragraph (c) into Clause 1(1), adding the text

“children where they are not primary users of products but are subjects of product use”.

Why is this necessary? Here I am indebted to a report on cybersecurity, the UK Code of Practice for Consumer IoT Security produced by the PETRAS National Centre of Excellence for IoT Systems Cybersecurity. Noble Lords may be aware of this group; it has a very strong record in this area. It is a consortium of leading UK universities dedicated to understanding the critical issues of the privacy, ethics, trust, reliability, acceptability and security of IoT. I commend this organisation to the small number of noble Lords in this Chamber interested in this area.

This report highlighted, among other things, the importance of children’s connected toys receiving the necessary scrutiny, due to the implications of embedded cameras and microphones, with the aim of ensuring the child’s and the parents’ protection and right to privacy. Such devices include a wide range of everyday artefacts with internet connectivity intended for use by children or in caring for them, such as interactive toys, learning development devices and baby or child monitors.

These connected toys and tools have the potential for misuse and unauthorised contact with vulnerable minors. The British Toy & Hobby Association has responded by offering a range of guidance notes and by interpreting the code of practice, but with SMEs manufacturing most of these devices, there is much more to be done to ensure that those organisations are sufficiently informed and equipped to produce and market toys that are secure.

Security is not straightforward, as the Minister has already pointed out. While these devices offer a range of advantages through their connectivity, they also potentially expose children and their families to risks that have not yet been fully articulated to many of the consumers who are buying these toys.

A real-life example is that the toy giant Mattel launched Hello Barbie. The Minister may be familiar with it—I do not know. This was as far back as 2015. It was a very innovative toy which it launched with a start-up business called ToyTalk. The principle of this toy was that it could converse using internet connectivity with speech recognition, so as well as talking it could listen. Hello Barbie also allowed parents to log in later and eavesdrop on their children’s conversations with their toys. I will leave your Lordships to decide the ethics of that.

But this connectivity raised some concerns, primarily around who could listen in and record these devices and store conversations and behavioural and location data, and for what purpose this data could be used. Toys like these are now prevalent and they raise significant questions about the appropriate support and guidance for the toy manufacturers, which understand an awful lot about conventional safety—they know how to make physically safe toys—but do not have a track record on developing informationally and data-safe toys because they have never been asked to do that before. This is a new venture for them, and it requires a totally new set of skills and standards, as the Minister might say.

As technology evolves hacking is increasing in sophistication, so it is necessary to keep moving forward. The challenge for cybersecurity in remaining ahead of the risks is inevitably a technological one, and the Minister may remember that the Hello Barbie toy, having been launched and lauded for its security, was ultimately found at some point to have serious security issues. Even that toy, from a very large manufacturer, fell foul of the progress of information crime.

Nevertheless, it is clear that today some toy manufacturers are releasing connected toys without adequate safety and security features. This is a competitive and dynamic marketplace—a lot of it is to do with price—and first movers are rewarded. In addition, the skillset and knowledge base, as I have just said, for conventional toy safety is mismatched with these new toys and we need to find a way of addressing that divergence. This is going to require investment and new learning and will not happen unless the toy manufacturers are required to do it.

Secure software development and cybersecurity are novel demands on this sector. However, the fact remains that these toy manufacturers are potentially placing consumer safety and privacy at risk. It does not matter whether this occurs due to the immaturity of the sector, market pressures or the lack of sectoral attention to the problem.

In the view of the Petras report,

“there are no indications that this will be addressed through market forces. Instead, the certainty of legislation to maintain standards would level the playing field and make clear for SMEs where they need to invest to make their toys market ready.”

Thus, more than the technological challenge of staying ahead of hackers, what is salient here are the challenges to the implementation of basic security features in manufacturing such as basic authentication and encryption, without which children’s safety and security is at risk.

This amendment explicitly places child security front and centre in this Bill. In other legislation involving the internet and digital issues, such as the Online Safety Bill, the Government have imposed more onerous duties on those delivering services to children than to adults. This amendment would be entirely consistent with that approach—very much in the spirit of understanding that our children and young people are more vulnerable and therefore need more protection from harms.

I turn next to Amendment 5. The eagle-eyed among your Lordships will spot that it is very similar to Amendment 4, proposed by the noble Baroness, Lady Merron, and set out very elegantly by the noble Lord, Lord Bassam. In fact, I would suggest that, largely, its construction is better than ours because they managed to do the same thing in fewer words. I will speak to Amendment 5 but my comments apply to Amendment 4 as well.

Amendment 5 seeks to ensure that:

“Regulations under this section must include provision that all security requirements specified in accordance with this Act are included as essential requirements in statutory conformity assessments and marking procedures under the Radio Equipment Regulations 2017 … and in any other such assessments and procedures applicable to relevant connectable products.”


I am speaking to the spirit of both these amendments. Amendment 5—similar to that of the noble Lord, Lord Bassam—follows on from the advice and help of Which? I thank that organisation, which has really been at the forefront of the consumer issues involved. In essence, the amendment picks up on three of the issues that the Minister tells us will be dealt with in SIs as soon as the Bill becomes an Act, but it takes the rather stronger approach of placing them in the Bill.

Paragraph (a) of proposed new subsection (2A) goes further than the general principle in specifying that passwords are not to be weak. As Which? explains, many smart products push the user to create a password themselves, rather than use a default password. However, they then allow weak and easily guessable passwords to be created, meaning that the risk of compromise stays high.

One of the outcomes of this amendment would be the introduction of a requirement for responsible password policy guidance to be adopted by the industry to ensure that security liability is not simply passed from the device manufacturer to the consumer. The Bill and associated guidance should be amended to clarify that every individual device must have a unique or user-set password that meets effective complexity requirements.

Paragraph (b) of proposed new subsection (2A) seeks to avoid the risk of disclosures going into a black hole or taking many years to fix. The Bill and associated guidance should be amended to make clear what is required of manufacturers, importers and distributors on provision of disclosure policy information, particularly around vulnerabilities. The appointed regulator should also clearly define and distribute a risk assessment framework for vulnerabilities that removes any sense of subjectivity and ensures that the response is effectively mandated.

Paragraphs (c) and (d) of our proposed new subsection concern the length of time a product is supported. The Government should introduce mandatory minimum support periods for smart products and consider whether these periods should reflect how long consumers, on average, continue to use such products. There is a precedent here. New ecodesign and energy labelling requirements came into force in England, Scotland and Wales in 2021. They include a requirement for electronic display items, including televisions, to be provided with firmware and security update support for a minimum of eight years after the last unit of a model has been placed on the market. A consistent approach to support periods for a range of products therefore needs to be considered, and it has already been considered in this other legislation.

Customers need absolute clarity on the support period manufacturers will offer, so that they are able to make more informed purchasing decisions. There must be a clear definition of what the “point of sale” means and how this relates to the definitions of “supply” in Clause 55. Without clearer specifications on what form the transparency requirements will take, there is a risk that this information could be hidden, obfuscated or even mislead. This amendment is designed to probe the Government’s thinking on these very important issues.

Finally, and very briefly, as a signatory to Amendment 2, I give it my full support.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am very grateful to noble Lords for setting out the cases for Amendments 2, 4 and 5. Since January 2020 the Government have been clear on introducing security requirements based on the three guidelines to which I referred in the previous group.

The commitment to set requirements has been made in response to consultations, published strategies and indeed to the Explanatory Notes to this Bill. Our notification to the World Trade Organization also contained reference to some of these documents. We have put manufacturers, trade bodies and industry representatives on notice. Supply chains are long and surprises unwelcome, so the Government have been very clear on whither we are heading.

Amendment 2 would remove any discretion the Secretary of State has to make regulations. I appreciate that the intention behind tabling it is to explore this issue, and I hope I can assure noble Lords that it is not needed. The regulations will be made, and swiftly. Indeed, we have already consulted on them, in 2020, which I hope gives noble Lords some reassurance that we intend to move swiftly in this area.

Amendments 4 and 5 would insert specific security requirements into the Bill. As several noble Lords mentioned at Second Reading, it is important that technology regulation enables the Government to respond to changes in threat and technology, and to the regulatory landscape. That is precisely why the Bill does not contain details of the requirements that the Government have assured industry they will set out.

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Lord Fox Portrait Lord Fox (LD)
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Perhaps the Minister should consult whoever drew up the legislation that managed to mandate that televisions should be updated for firmware and software for up to eight years after they have stopped being manufactured. Clearly, those people managed to find consensus among the industry—or decided to ignore consensus—and deliver something. If it can be done for electrical display devices, such as televisions, I do not see why it cannot be done here if there is a will to do it. However, I think the Minister is telling us that there is no will to do it.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The noble Lord referred to mandatory minimum support periods for electronic display items and the Ecodesign for Energy-Related Products and Energy Information Regulations 2021. It is not quite correct to say that those requirements are applicable. They ensure that the last available security update continues to be available for at least eight years after the last unit of a product has been placed on the market but the requirement does not ensure that manufacturers continue to provide new security updates over that period to ensure that the product remains secure in response to changing threats.

Lord Fox Portrait Lord Fox (LD)
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I did not say that those requirements are applicable; I implied that they are analogous. Frankly, the fact that there is some mandating of security support after the product has stopped being manufactured is a heck of a lot better than the situation for all the connectable devices we are currently talking about, where there is no requirement at the moment.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I do not think that they are quite analogous. As I say, it is about the requirement to keep the last available updates available to consumers for eight years rather than evolving them. We do not yet consider that there is sufficient evidence to justify minimum security update periods for connectable products, including display equipment—certainly not before the impact of the initial security requirements is known.

It is important to stress that, as consumers learn more, they will expect more. This will drive industry to respond to market pressure. If the market does not respond to this effectively, the Government have been clear that they will consider the case for further action at that point, but we think that consumer expectation will drive the action we want to see in this area.

Amendment 3, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, refers to children. All noble Lords will agree, I am sure, that protecting children from the risks associated with connectable products is vital. I assure noble Lords that the security requirements we will introduce are designed with consideration for the security of all users, including children, alongside businesses and infrastructure. The Bill already gives the Government the flexibility to introduce further measures to protect children, whether they are the users of the products or subject to other people’s use of a product. We therefore do not think that this amendment is necessary as this issue is already covered in the Bill.

The Bill, and forthcoming secondary legislation, will cover products specifically designed to be used by or around children, such as baby monitors and connectable toys; they include Hello Barbie, which I was not familiar with but on which I will certainly brief myself further. However, we recognise that the cyber risks to children are not limited to the connectable products in the scope of this Bill; indeed, a lot of the issues referred to by the noble Lord, Lord Fox, were about the data captured by some of the technology, rather than the security of the products themselves. That is precisely why the Government have implemented a broader strategy to offer more comprehensive protection to children—including through the Online Safety Bill, to which the noble Lord, Lord Bassam, referred.

I hope noble Lords will agree that Amendment 3 is not needed to make a difference to the Bill’s ability to protect children from the risks associated with insecure connectable products—this is already provided for—and will be willing either to withdraw their amendments or not move them.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, this has been a useful and interesting exchange.

In my lordly world, “may” and “must” are sort of interchangeable; they were a useful peg on which to hang our discussion about the statutory instrument nature of this piece of legislation. I am somewhat reassured by what the Minister had to say about that, and acknowledge that some of the regulations were brought forward and consulted on at an earlier stage. However, we on this side of the House—I am sure that I speak for the noble Lord, Lord Fox, as well—want to see increased transparency throughout this process. So much of what is in front of us will be in secondary legislation; it is essential that we, the industry and the sector are properly consulted so that we understand exactly what we are dealing with. I make that plea at the outset.

I was pleased to hear what the Minister said about children as the primary users of particular products. I am glad that we have got beyond the “Peppa Pig” world that the Prime Minister occasionally occupies and are giving this issue proper, serious consideration. It certainly needs to be that way.

I am not entirely convinced by what the Minister said on Amendment 4. I look at our amendment; it is pretty basic, actually. It is hard to argue against setting out a particular prohibition in legislation. The ones that we have picked out for prohibition and restriction are quite important and essential. Of course, the Minister is right that those subjects will change and technology will overtake the words we use. We understand that point but we are trying to secure some basic minimum standards and protections here. Clearly, we will retreat with our amendment and give it some further thought before Report, but we may need some further persuasion on this. That said, I am quite happy to withdraw Amendment 2 and not move Amendment 4.

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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The feast of amendments in this group aim to implement the recommendations of your Lordships’ Delegated Powers and Regulatory Reform Committee. We welcome the committee’s report and are considering its recommendations, as we always do. It will infuriate the noble Lords who have asked detailed questions when I say that, ahead of setting out our response to the committee, I will not be able to cover all the issues they have pressed the Government on today. I am happy to say that we will set out our response in writing ahead of Report. Perhaps once we have done that, and noble Lords have seen the Government’s full thinking in their response to the committee, it might be helpful for us to speak in detail.

The legislation has been designed to protect people, networks and infrastructure from the harms of insecure consumer connectable products, while minimising the unnecessary regulatory burden on businesses. It does so in the context of rapid technological and regulatory change, evolving cybercriminal activities and a growing impact on people in businesses, all of which require us to ensure that the legislation can evolve quickly and effectively. The UK, as I have noted, is leading the world with its approach to regulating connectable products. As other jurisdictions increasingly turn their attention to this important issue, we will use this flexibility to achieve alignment with equivalent regulatory regimes, avoiding unnecessary duplication. These powers, and the others conferred by the Bill to make delegated legislation, are crucial for it to remain effective. We have carefully considered the number, scope and necessity of these powers, and believe we have struck the right balance between the need for that flexibility and the importance of Parliamentary scrutiny, which noble Lords rightly stressed again today.

We welcome the report of your Lordships’ committee and are considering its recommendations. I am afraid I cannot, at this stage, pre-empt our response, which has to be made while considering the recommendations’ impact on the broader framework. We will return to these matters on Report, and I am very happy to have a detailed conversation with the noble Lords about our response after we have responded to the DPRRC.

The noble Lord, Lord Fox, focused on Clauses 9 and 11. I am happy to confirm that nothing about how the powers are drawn in Clause 9 is inadvertent; this was our intent. Clause 9 contains four delegated powers; they will be used predominantly to provide administrative detail deemed too technical for primary legislation. For example, they will explain what must be included as a minimum in a statement of compliance, what steps must be taken to determine compliance, where appropriate, and for how long a manufacturer should keep a statement of compliance. They will also provide flexibility to respond swiftly to changes in the market. In addition, the delegated powers in this clause may be used in the future to provide that the statement of compliance is equivalent to certain product markings, or external conformity assessments, such that a manufacturer may be deemed to have provided a statement of compliance where such markings or assessments have been made or completed. This is dependent on regulatory changes to product markings and on the development of the assurance sector for product security.

At this stage, and awaiting our response to your Lordships’ committee, I hope noble Lords will agree that it goes without saying that the Government feel these clauses should stand part of the Bill.

Lord Fox Portrait Lord Fox (LD)
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I sort of thank the Minister for his response, which is really no response at all. He did say that it would infuriate me and he is fairly accurate about that.

As correctly noted, I am merely a cipher for the DPRRC, a very serious committee that does not produce these reports lightly. The point it is making, particularly on Clause 27, is front and centre to this Bill. Who is going to enforce it? Who decides who will enforce the Bill, and how will Parliament know if the Secretary of State decides not to tell it, under the current regulations? These are very serious matters and not ones that your Lordships’ House should step back from. I am sure that the Minister will, on reflection, understand that the DPRRC has a very important point to make. The others are important points, particularly around Clause 3, but the Clause 27 piece is absolutely central to the future of this Bill. That said, I beg leave to withdraw Amendment 6.

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Lord Fox Portrait Lord Fox (LD)
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My Lords, I rise to speak to Amendment 8 in my name and that of my noble friend Lord Clement-Jones. These are two ways of doing the same thing so I support the spirit of Amendment 7, about which we have just heard from the noble Lord, Lord Bassam.

This amendment adds the following wording to Clause 7:

“Any person who is a provider of an internet service that allows or facilitates the making by consumers of distance contracts with traders or other consumers for the sale or supply of a relevant connectable product is to be regarded as a distributor for the purposes of this Act, if not a manufacturer or an importer of the product.”


This amends the language that defines a distributor in the scope of the Bill. Online marketplaces are a mainstream form of today’s retail. Which? research in 2019 found that more than 90% of the UK population had shopped through an online marketplace within the month it was polling. That has increased during the pandemic. However, its research also consistently highlighted how online marketplaces are flooded with insecure products. It has previously demonstrated issues with the lack of legal responsibility of online marketplaces for the security and safety of products sold through their platforms.

The Government have recognised the problem, in their response to the call for evidence on product safety, that current safety rules were designed to fit supply chains as they operated before the world of internet shopping. In the realm of product safety, the Government have acknowledged that this can result in the peculiar situation where no actor is responsible for ensuring product safety. This has resulted in organisations such as Electrical Safety First repeatedly finding unsafe and non-compliant products listed on online marketplaces. Therefore, the traditional conception of actors in the supply chain is now outdated.

The Bill defines “distributor” as

“any person who … makes the product available in the United Kingdom, and … is not a manufacturer or an importer of the product.”

At present, it seems unlikely that certain online marketplaces, including eBay, Amazon Marketplace and Wish.com, will be included within the scope of that definition of distributors in the Bill. This will leave, without overstating it, a sizeable gap in the regulatory scope of this market.

Given the amount of insecure tech readily available on online marketplaces, it is paramount that these platforms are given obligations in the Bill to ensure the safety and security of the products sold on their sites, regardless of whether the seller is a third party. However, the Clause 7(5) definition of “distributor” in terms of making products available on the market is in line with existing product safety law, so we know that certain marketplaces are not classed as distributors and hence not obligated to take action. Amazon Marketplace, Wish.com and eBay are marketplaces where other people are selling; this is the issue.

This amendment seeks to expand the definition of distributors in Clause 7 to include appropriate online retailers, such as listings platforms and auction sites, including eBay, Amazon Marketplace and AliExpress. I feel sure that the Minister did not intend for the legislation to miss these marketplaces out; rather than risk this loophole going any further, we will work with the Minister and Her Majesty’s loyal Opposition to come up with some wording that absolutely iron-clads the Bill to ensure that these sorts of marketplaces are also included.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am grateful to noble Lords for speaking to their amendments in this group, both of which seek to make online marketplaces a “distributor”. It is vital that all products offered to consumers are secure, including those listed through online marketplaces, and we want to ensure that this is achieved in the most efficient way.

The explanatory statement for Amendment 7 suggests that products listed on online marketplaces might not be protected by the security requirements set out in the Bill. I reassure noble Lords, particularly those who tabled Amendment 7, that the security requirements will need to be met for all new connectable products offered to consumers in the UK, including those offered through online marketplaces. These marketplaces often act as a manufacturer, importer or distributor and, in those cases, they are subject to the same duties and security requirements as those three types of economic actor. If, however, the online marketplace does not fall into one of these three categories, the manufacturers, importers and distributors of those products are all still fully responsible for complying with security requirements.

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Lord Fox Portrait Lord Fox (LD)
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This has piqued my interest; how does this exercise relate to the Bill? This process of dealing with the online acquisition of unsafe products would seem to be what the Bill is doing front and centre, so what is that process? How do the two connect?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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They are complementary; the new product security framework sits alongside existing legislation on product safety, which is why we want to conduct a review of the safety framework and publish the consultation. I am certainly happy to write and endeavour to explain.

The noble Lord asked whether products sold through online marketplaces fall into a gap in the Bill. The Bill requires in-scope products offered for sale through online marketplaces to customers in the UK to be as secure as in-scope products sold, for example, in physical stores. We are mindful of the variety of services offered by different online marketplaces. Some act only as advertising platforms, while others facilitate transactions and store and ship products on behalf of the seller. As noble Lords have noted, this changes all the time. This must be carefully considered to ensure that businesses can comply with their legal obligations and that any regulation is necessary, appropriate and proportionate to provide the best protection to consumers.

Lord Fox Portrait Lord Fox (LD)
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I am sorry to keep popping up; being a practical person, I will try to give the Minister a scenario and, if he cannot answer straightaway, he can write. I have bought a product through an online auction that turns out to be unsafe; I go back to the auction site, which tells me, “Not my problem. You have to return to the international manufacturer which made this product”, which turns out to be a brick wall and nothing comes back. First, is that online auction site correct in handing me over to the international manufacturer, which turns out to be a dead end? Secondly, if that site is correct, to whom do I go? Do I go to my local council trading officer or to the person who, under Clause 27, has been mysteriously made the enforcer for the Bill? I may or may not know who they are. How do I seek redress, and from whom?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I will try answer the noble Lord’s question, and I am happy to write with further detail. Products sold on online marketplaces are covered by the Bill. All products sold to customers in the UK will have to comply with the security requirements set out under this framework. Where a product is sold on a third-party online marketplace, the seller will be responsible for ensuring that it is compliant. Third-party sellers who sell new products directly to customers on those platforms will also be covered under the “distributor” definition. I will happily write to the noble Lord with further detail ahead of Report but I hope that, for now, that goes some way towards addressing his question.

Lord Lucas Portrait Lord Lucas (Con)
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My Lords, I would be grateful if my noble friend included me in his replies and letters. Is he aware of the lamentable performance of Her Majesty’s Revenue and Customs when it comes to trying to enforce VAT in similar circumstances, and the enormous difficulty it has had with third-party sellers operating out of the Far East in particular? It is extremely difficult, and the volume of VAT lost runs into the billions. This is a large-scale enterprise and it will easily channel a large volume of unsatisfactory products into the UK if we do not take effective action.

I hope that the Government, in their new consultation, which I look forward to learning about, will be taking a robust attitude towards the platforms. For instance, it is entirely unsatisfactory that there should be a way in which unsafe toys can get into the hands of children at Christmas, and for which there is no effective means of prevention or redress. In other jurisdictions, these online marketplaces have proved amenable to a forceful approach by government. I very much hope that we will be joining in with that.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am happy to include my noble friend in the replies and the letter I send. This touches on work which falls under the Department for Business, Energy and Industrial Strategy, and the points he raised, of course, fall to Her Majesty’s Revenue and Customs. We will make sure that, having consulted officials there, we provide some details of the work those departments are doing as well.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, I am looking forward to the correspondence on this; I fancy that the noble Lord’s civil servants will have a tricky job on their hands. I do not think I quite got a response to what the nature of “being kept under review” really meant, but I await word in the future.

I have been reading the Explanatory Notes, as the Minister will probably be unhappy to hear, and I can see the difficulties. In trying to ensure that the legislation is focused, rightly, on the producers, manufacturers, importers and distributors, it is hard to work round that and not capture people who are simply installers of a product. On the other hand, there are circumstances where installers are primarily responsible for the effectiveness and working of the product, and if it was not for the way they install it, it would not be effective. The terms of the contract are such that it makes that difficult.

I can see the difficulty here, but for now I am happy to withdraw our amendment. In doing so, we are equally supportive of the amendment in the name of the noble Lord, Lord Fox, because the two are contiguous in their formulation.

Product Security and Telecommunications Infrastructure Bill

(Limited Text - Ministerial Extracts only)

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, I am grateful to the noble Lords, Lord Clement-Jones and Lord Fox, for tabling these amendments, which seek to clarify how the new measures in the Bill will interact with existing consumer legislation. In a practical sense, they are about how comfort can be given to the consumer and redress made available where necessary.

We in your Lordships’ House know that consumers have had to fight hard over many years to secure important statutory protections, including rights of redress when products do not live up to the standards that people rightly expect of them. I say to the Minister that the new measures in the Bill are certainly welcome and will improve certain aspects of the consumer experience, but it is also right to probe how this new regulatory regime interacts with consumer rights and protections enshrined elsewhere.

I feel that Amendment 14 seeks to update the state of play to refer to compliance with security requirements, but that needs to be an area where consumer protection is enshrined in legislation. To me, it goes with the sweep of the Bill, which is to bring us into today’s world and able to cope with the new and constantly evolving situation. Amendment 14A is also interesting, in that it seeks to maintain the right of individual consumers to seek redress in relation to defective connectable products rather than leaving these matters to a particular enforcement body or to collective legal action.

We would appreciate it if the Minister could clarify some of these matters in the Bill itself. If that does not prove possible, this is another area where we would very much like rather more information to be made available by the department so that we can seek to protect the rights and interests of consumers.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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I am grateful to the noble Lord and the noble Baroness for probing through Amendments 14 and 14A as tabled by the noble Lords, Lord Clement-Jones and Lord Fox. The amendments seek respectively to amend consumer protection legislation and clarify the relationship between this Bill and consumer protection legislation.

The Consumer Rights Act 2015 requires goods and services to be of a satisfactory quality, and the Consumer Protection Act 1987 imposes liability for defective products. Breaches of this Bill that meet the criteria of these Acts already entitle consumers to the protections they provide. This Bill focuses on the supply chain and what it needs to do to protect and enhance the security of products and their users. The security requirements will relate to processes and services, not just to the hardware of a product as the product safety framework does. It is not appropriate to retrofit the security requirements of this Bill’s regime into the existing framework of consumer protection legislation, which was generally designed to ensure that consumers have rights when products are unsafe—although, as I said, I appreciate the probing nature of these amendments.

Some security requirements will require ongoing action from manufacturers after they make a product available. It would be inappropriate to require traders to confirm one-off compliance with such requirements before contracts become binding. I acknowledge that existing consumer rights legislation will not always enable consumers to seek redress for breaches of the security requirements. I reassure noble Lords that this is not a gap. The evolving technological landscape means that the threats to consumers change, and we need flexibility to protect and compensate customers where that is necessary. The Bill, together with existing consumer rights legislation, already offers this.

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Earl of Erroll Portrait The Earl of Erroll (CB)
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The Minister said earlier that the whole point of the Consumer Rights Act was about unsafe goods. I think that he means “unsafe” as referring to physical harm. Actually, a major security breach could render serious physical harm to someone because having all their money removed from their bank account could affect their mental state and result in the breakdown of their marriage, suicide, failure of business, all sorts of things. Therefore, it may have just as damaging physical effects on someone, though not immediately apparent. Although they are different they are equally unsafe, so this has more merit than he is suggesting.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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At the risk of a philosophical debate on the nature of security versus safety, I accept some of the points that the noble Earl makes. There are distinct differences between our approach to product security and existing product safety as set out in consumer legislation, but I will address myself to that philosophical point in the letter, if I may. For now, I ask the noble Lord to withdraw Amendment 14.

Lord Fox Portrait Lord Fox (LD)
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I hope that the Minister will take some time to read my speech in Hansard and address the issues that I have raised, because there are some specific points that have not been touched.

A lot of this has come from Which? whom I thank for its help. Which? is an extraordinarily experienced organisation, with some of the country’s most experienced consumer lawyers dealing with the sharp end of customer consumer problems. The fact that it has gone to the trouble of raising these issues should raise a red flag. It is not doing it out of mischief or political intrigue, but because it cares about the future of consumers. For that reason, the department needs to take this seriously.

If the Minister requires a meeting with Which? I am sure that I, the noble Lord, Lord Bassam, or the noble Baroness, Lady Merron, will be very happy to broker one. We could then go through some of these consumer issues. This is an organisation dedicated to protecting the needs of consumers. It has gone to the trouble of flagging up this and several other issues. For that reason, for the future of this Bill, it would be very sensible to take Which? seriously.

That said, I beg leave to withdraw Amendment 14.

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Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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No, I give credit where it is due. I congratulate the noble Lord, Lord Arbuthnot, on his amendment because the issues that he raised and the questions posed by the noble Lord, Lord Fox, in particular, are legitimate ones.

Although this is not the place to amend or change the Computer Misuse Act 1990, as the noble Lord, Lord Fox, said, it certainly is the place to raise concerns. After all, we are talking about product security and safety. It is vital that we have appropriate safeguards in place to prevent and, if need be, punish cyberattacks and other forms of hostile behaviour online.

However, as we seek to make smart devices safer, clearly there is a role for researchers and others to play in identifying and reporting on security flaws. They need to be able to do this within the safe zone of concern, knowing that they are not themselves going to be captured by those who are responsible for cybersecurity. As I understand it, exemptions exist in similar legislation to ensure that academics and other legitimately interested parties can access material relating to topics such as terrorism. The amendment before us today raises the prospect of granting a similar exemption and defence in this particular field.

I am conscious that the noble Lord, Lord Fox, raised the spectre of auras in the form of the noble Lords, Lord Vaizey, Lord Clement-Jones and Lord Holmes of Richmond—as well as the intent of the noble Baroness, Lady Neville-Jones, who is of course very knowledgeable about the business of security and has had both professional and political responsibility in that field. However, I think that, when those auras and his own say that this is an issue of concern, we as the Official Opposition reflect that concern.

I hope that the noble Lord will engage with the noble Lord, Lord Arbuthnot, and others following Committee on this—I am sure he will—because it is a very important subject. A campaign backed by such an esteemed cross-party group of colleagues in the Committee and in another place cannot be entirely wrong. The Computer Misuse Act 1990 is the framework we have got, but it is right that it is reviewed and that something fresh is brought before us to protect us from cyberattacks in the future.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am very grateful to my noble friend Lord Arbuthnot of Edrom for representing the other three signatories to this amendment. I was glad to meet him and the noble Lord, Lord Clement-Jones, to discuss this yesterday.

The role of security researchers in identifying and reporting vulnerabilities to manufacturers is vital for enhancing the security of connectable products. The good news is that many manufacturers already embrace this principle, but there are also some products on the market, often repackaged white label goods, where it is not always possible to identify the manufacturer or who has the wherewithal to fix a fault. The Bill will correct that.

As noble Lords have noted, there are legal complexities to navigate when conducting security research. The need to stop, pause and consider the law when doing research is no bad thing. The Government and industry agree that the cybersecurity profession needs to be better organised. We need professional standards to measure the competence and capabilities of security testers, as well as the other 15 cybersecurity specialisms. All of these specialists need to live by a code of professional ethics.

That is why we set up the UK Cyber Security Council last year as the new professional body for the sector. Now armed with a royal charter, the council is building the necessary professional framework and standards for the industry. Good cybersecurity research and security testing will operate in an environment where careful legal and regulatory considerations are built into the operating mode of the profession. We should be encouraging this rather than creating a route to allow people to sidestep these important issues.

As noble Lords have rightly noted, the issues here are complex, and any legislative changes to protect security researchers acting in good faith run the risk of preventing law enforcement agencies and prosecutors being able to take action against criminals and hostile state actors—the goodies and baddies as the noble Earl, Lord Erroll, referred to them. I know my noble friend’s amendment is to draw attention to this important issue. As drafted, it proposes not requiring persons to obtain consent to test systems where they believe that consent would be given. That conflicts with the provisions of the Computer Misuse Act, which requires authorisation to be given by the person entitled to control access. As the products that would be covered by this defence include products in use in people’s homes or offices, we believe that such authorisation is essential. The current provisions in the Computer Misuse Act make it clear that such access is illegal, and we should maintain that clarity to ensure that law enforcement agencies do not have to work with conflicting legislation.

The amendment would also limit the use of such a defence as testers would still be subject to the legal constraints that noble Lords have described when reporting any vulnerability that the Government have not banned through a security requirement. If a new attack vector was identified that was not catered for by the security requirements, the proposed defences would have no effect. The amendment would not protect those testing products outside the scope of this regime, from desktop computers to smart vehicles. If we consider there to be a case for action on this issue, the scope of that action should not be limited to the products that happen to be regulated through this Bill. None the less, the Government are listening to the concerns expressed by the CyberUp Campaign, which have been repeated and extended in this evening’s debate.

The Home Secretary announced a review of the Computer Misuse Act last year. As my noble friend noted, the Act dates back to 1990. I do not want to stress too much its antiquity as I am conscious that he served on the Bill Committee for it in another place. His insight into the debates that went into the Bill at the time and the changes that have taken place are well heard. The evidence which is being submitted to the review is being assessed and considered carefully by the Home Office. It is being actively worked on and the Home Office hopes to provide an update in the summer.

I hope, in that context, that noble Lords will agree that it would be inappropriate for us to pre-empt that work before the review is concluded and this complex issue is properly considered. With that, I hope my noble friend will be content to withdraw his amendment.

Lord Arbuthnot of Edrom Portrait Lord Arbuthnot of Edrom (Con)
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My Lords, I was six at the time. It has been a useful debate and I thank all those who have taken part. I am particularly grateful to my noble friend Lady Neville-Jones, who made it quite plain that we understand the problems in the way of the Government in legislating on this but we are getting impatient. With everything that is going on in the world, out-of-date cybersecurity legislation is becoming more dangerous day by day. That said, I beg leave to withdraw the amendment.

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Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, this is of course the first of a number of amendments that deal with Part 2 of the Bill. The amendment refers to telecoms infrastructure. This is far from the only debate that we will have on broad issues around property rights, operators, access to land and so on but, as a general point, it is worth restating our belief that this country needs access to better digital infrastructure. Our concern is that the Government have not been hitting their targets for the rollout of gigabyte-capable broadband. There have also been issues around the rollout of 5G technology. Although we want to see decent infrastructure, we also want to see fairness in the system, and that is what this amendment speaks to. It seeks to ensure a degree of continuity and fairness as new agreements are made to replace existing ones.

The principles cited by the noble Lord, Lord Fox, and in the amendments tabled by the noble Lord, Lord Clement-Jones, are reasonable. Again, they are principles that I am absolutely sure we will return to next week, as we have ever-more detailed discussions about rents, dispute resolution and so on.

As has been outlined in this debate, the court is not currently bound to consider the terms of an existing agreement. This feels like a significant oversight. Perhaps the Minister can inform us about what actually happens in practice and what will happen in practice. Both operators and landowners have, or should have, certain rights and responsibilities within this process. I look forward to the Minister’s response to Amendment 17 and to moving some of our own amendments during day two of Committee.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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As the noble Baroness says, this begins to anticipate some issues to which I know we will return on the second day of Committee, but it is useful to begin them tonight.

Amendment 17 seeks to insert a new clause after Clause 57 of the Bill. Its purpose is to add an extra element to the test at paragraph 21 of the code, where an operator enters into a new agreement because of the provisions in Clause 57. This is likely to be in circumstances where an operator in occupation of the land on which its apparatus is installed has an existing agreement but wishes to seek an additional code right. The code currently provides that operators in exclusive occupation of land are unable to obtain additional code rights until their existing agreement is about to end or has ended. This is because the code currently provides that only an occupier can grant code rights, and the operator clearly cannot enter into an agreement with itself.

Clause 57 remedies this position and allows an operator to obtain code rights where it is in exclusive occupation of the land. The test at paragraph 21 of the code is often referred to as the public interest test and sets out what a court must consider when deciding whether to impose a code right on a landowner. Paragraph 23 then sets out how the court should determine the remaining terms of the code agreement. Clause 57 simply gives an operator the ability to obtain a new code right or rights that they do not already have. The clause does not allow an operator to force changes to its existing code agreement or to compel the other party to modify any of its terms—for instance, to attempt to reduce the amount of rental payments. Furthermore, the clause does not enable an operator to bring an existing agreement to a premature end in order to take advantage of more favourable terms. Any existing code agreement that the operator has will be expected to continue and operate alongside the agreement relating to the new code right.

Amendment 17 seeks to expand the test at paragraph 21 so that the court also has to consider the terms of any existing agreement and any other method of statutory renewal available. We are, however, of the view that the court can already take such matters into consideration when deciding whether to make an order under paragraph 20 of the code, and again when applying the test at paragraph 23 to determine what terms the code agreement should contain.

This is a topical issue. Clause 57 rectifies an issue in the code that currently prevents operators who are in exclusive occupation of the land being able to obtain new code rights. As I said, three cases have touched on this issue, all of which were heard in the Supreme Court earlier this year, and the Supreme Court is due to hand down its judgment tomorrow.

At present we believe that Clause 57, as drafted, achieves its intended objective, but we recognise that this is a complex and technical area, on which the noble Lord, Lord Fox, valiantly conveyed the expert view of the noble Earl, Lord Lytton, and it is imperative that any unintended consequences are avoided. We will of course look closely at the Supreme Court’s judgment and carefully consider whether further amendments are needed, engaging with interested parties as required to ensure that the aim of the clause is fully realised.

I too am very conscious that the noble Earl, Lord Lytton, with whom we have already had some discussions on this and broader aspects of the Bill, will want to join those discussions, so I am sure he will be following the official record. But I am very happy to meet the noble Lords who have spoken, as well as the noble Earl, to discuss this issue in further detail, particularly once we have seen the judgment. For now, I urge the noble Lord to withdraw the amendment.

Lord Fox Portrait Lord Fox (LD)
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I thank the Minister for his response, during which he said that the department is of a view. When I was speaking for my part, rather than for the noble Earl, I made it clear that there were quite strong opinions that that view might not be correct. Three cases are to be judged tomorrow, before this Bill is enacted, so although it may have some relevance, it will potentially —and in the views of the people we have spoken to, almost certainly will—end up back in the courts.

We share the objective of the noble Baroness, Lady Merron, that the rollout be accelerated, not inhibited. We also share the view, as expressed in the not very veiled threat in the part of my speech on behalf of the noble Earl, Lord Lytton, about what the 1963 rent Act did, which was clog up the system. We do not want to do that—we cannot afford to clog up the rollout. There are strong suspicions that, without giving the legal certainty we need to avoid getting tangled up in the courts, we will be back there again, notwithstanding the judgments of tomorrow. That said, I beg leave to withdraw Amendment 17.

Product Security and Telecommunications Infrastructure Bill

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

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Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, I was very pleased to put my name to the amendment tabled by the noble Baroness, Lady Harding. As she says, this is simple, limited in scope and extremely practical. It is a clarification of and an improvement to this aspect of the Bill, which works for all parties. I hope the Minister will agree, even if what we end up with is not the exact wording that we start with today.

As the noble Baroness, Lady Harding, explained, poles, like ducts, are regulated under Ofcom’s PIA mechanism, so extending this provision to pre-2017 poles on private land would allow all operators to speed up their rollout equally. That is the essence of what we are talking about in the Bill: extending provision and allowing fair access. This amendment will greatly assist us, not least because if the reforms in the Bill do not work properly we will see more streets being dug up, which is never popular, and in this case might perhaps require the installation of new poles—again, something we could do without.

I hope that when the Bill is amended we will drastically contain the time, cost and disruption caused by the rollout. Although people want to see the rollout, the practical effects in communities create unwelcome disruption. This amendment is needed to confirm that sharing pre-2017 poles on private land needs to be included in the Bill. It will speed up the deliver of rollout and it is welcomed by all across the industry.

I shall briefly refer to the comments by the noble Lord, Lord Vaizey. I do not want at this stage to dwell on the amendments we did not have the benefit of discussing properly, but perhaps the noble Lord can look forward to Amendment 48, which we have tabled. It takes a different tack from the noble Lord’s amendments and puts the onus on government and the industry to find a way forward. I hope that when we get to that amendment the Minister will be open to detailed, cross-party discussion before Report on how we resolve the issue that we were not able to attend to earlier in the debate. I support this amendment and hope the Minister will feel similarly.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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My Lords, I think the whole House is grateful to its former Leader, my noble friend Lady Stowell, for moving Amendment 18 and keeping us on the right procedural track. Amendment 18, spoken to by my noble friends Lady Harding of Winscombe and Lord Vaizey of Didcot, the noble Lord, Lord Fox, and the noble Baroness, Lady Merron, who signed it, concerns rights to upgrade and share telegraph poles.

Clauses 59 and 60 will help to optimise use of the UK’s extensive duct networks through greater upgrading and sharing, but ducts and cables under land do not represent our entire digital network, as noble Lords have reminded us today. Telecommunications lines flown over land play a substantial role too. These lines are dependent on the telegraph poles that support them. Over 1 million such poles are installed across the UK, as noble Lords have noted, providing coverage and connectivity to entire communities, particularly in rural parts of England such as Herefordshire, as the noble Lord, Lord Fox, will know, and urban areas of Scotland.

Since the Bill’s introduction, the Government have been called on to introduce measures to facilitate the upgrading and sharing of poles. We understand that there are substantial public benefits in coverage, connectivity and consumer choice, so we welcome the attention that this amendment has drawn to the significance of poles and lines in network delivery, but as I anticipated at Second Reading, we have concerns as to whether the amendment would deliver material change.

I take on board fully my noble friend Lady Harding of Winscombe’s point about the constructive spirit in which the amendments are brought forward and agree that we must look beyond the drafting of this specific amendment, but as the noble Earl, Lord Lytton, says, this is a legally complex matter. For example, it is not clear whether this amendment would permit pole sharing or allow operators to carry out works beyond those needed for a line to be flown. That might exclude upgrade works that would allow a pole to be used for fibre rather than copper lines.

It is important to note that paragraph 74, to which this amendment refers, deals with land adjacent to or in the vicinity of that on which poles are situated. We need to think about works that might involve the land on which that pole is placed. The Government are looking closely at ways to optimise the use of telegraph poles, but we must ensure that if changes are made in this area, they not only deliver public benefits but include sufficient protections for individuals with poles situated on their land. We will continue to look closely at this issue, but I am not able to accept this amendment today. I repeat the assurance I made at Second Reading that we are actively looking at this issue, and we will continue to consider it ahead of Report.

In response to some general points about requests from the industry, we certainly agree that operators should be able to obtain the rights they need to install and maintain the apparatus needed for robust network coverage throughout the UK. The department undertakes regular engagement with the industry and, if we receive compelling evidence that the Bill can be improved, we are happy to consider whether there is a good case for going further. When doing so, however, the Government will always consider the effect that any potential changes could have on landowners.

My noble friend Lord Vaizey inventively asked why telegraph poles were less contentious than multiple dwelling units, the subject of the amendments lost to today’s debate. We must also bear in mind that a good regulatory framework encourages competition and investment, which are both crucial in delivering consumer choice and supporting deployment to hard-to-reach areas. Measures beneficial to one operator may not always encourage the market competition needed to deliver better outcomes for customers. Indeed, it is important to stress that there is no consensus from the industry on this issue. In fact, many operators have opposed the proposal on the grounds that it would create an unfair advantage for operators that already have equipment inside buildings, and so could potentially have anti-competitive effects.

Lord Vaizey of Didcot Portrait Lord Vaizey of Didcot (Con)
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Now that I am in the swing of things, does my noble friend genuinely believe that outside the main metropolitan areas there is genuine competition between telecoms providers? Is it his view that he should support measures from the competitors of Openreach to prevent the rollout of broadband in rural areas, simply to protect their interests in the main metropolitan areas?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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As I am explaining, we think that the views from other operators point out that my noble friend’s amendment, which was not moved, would create an unfair advantage for operators who already have equipment; that would itself be anti-competitive. Given that the amendment was not put and, as I hope he has heard, would have been resisted in any case—certainly from the Liberal Democrat Benches—perhaps it may be best if he and I discuss it over a cup of tea, which he can add to his tab, between now and Report. I hope that he will not feel it necessary to bring these amendments back on Report.

On Amendment 18 regarding telegraph poles, while reassuring noble Lords that we will continue to look at this actively, I hope that my noble friend Lady Harding —or my noble friend Lady Stowell, who moved it—will be happy to withdraw that amendment for now.

Baroness Harding of Winscombe Portrait Baroness Harding of Winscombe (Con)
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 I rise, somewhat hesitantly, having consulted the oracle that is the former Leader of this House, to respond. I thank my noble friend for that response. As a brief aside, I am pleased to hear his conviction and belief in competition before we come back on Report, if we do, to the amendments that have not been debated.

I am cautiously optimistic that we will find a solution to this. I was slightly worried when I heard my noble friend say “if” we bring something back, rather than when. I would feel considerably more optimistic about solving this problem if I had heard him say “when”. I would also feel a bit more optimistic if I had heard him say that he and the department will be considering alternatives, rather than observing and watching. We have been observing and watching since Second Reading, and the department has proposed no alternatives to my amendment. I look forward to some more active discussions about alternatives to the amendment but, on that basis, I am happy to withdraw it.

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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, as we expected, we have had a lively and somewhat polarised debate on this group, which goes to the heart of quite a lot of what the Bill seeks to do. A number of amendments in it relate to the valuation regime, and they all seek to do slightly different things. I will certainly try to address all of them, although not in numerical order.

However, it might be helpful if I first set out some details about the current position. In England and Wales, agreements can be renewed in two different statutory ways: one is contained in part 5 of the code and the other is in the Landlord and Tenant Act 1954. The position in Northern Ireland is similar: agreements can be renewed using either part 5 or the Business Tenancies (Northern Ireland) Order 1996.

The main difference between the procedures at present is that they have different frameworks against which the financial terms of a renewal agreement are calculated. In the code, the consideration paid to a landowner is calculated on a no-network basis, as was helpfully explained by the noble Earl, Lord Lytton. But this framework does not currently apply to agreements renewed under the 1954 Act or the 1996 order, where rents are calculated on a different basis. The Government do not believe that maintaining this difference is right.

Clauses 61 and 62 will ensure that the approach taken to rent calculation for renewals under the 1954 Act or the 1996 order is consistent with the approach in the code. This means that the same approach will be applied throughout the United Kingdom, reducing disparities in deployment costs in different jurisdictions which could otherwise contribute to a digital divide.

Before turning to the specific amendments, I will pick up a few points raised by noble Lords. The noble Earl, Lord Lytton, mentioned the Central Association of Agricultural Valuers—CAAV—with which DCMS has engaged closely, both in developing the 2017 reforms and in our subsequent discussions regarding their implementation. We welcome the CAAV’s input on these and the wider initiatives aimed at embedding better working practices in the negotiation and completion of code agreements. I am grateful to the noble Earl for sending on further points from the CAAV; these were rather lengthy and detailed, and I do not think that it would be helpful, or do them justice, to discuss them in detail today, but I would be happy to write to him on those matters and copy other noble Lords in.

I welcome the noble Earl’s comments on the code valuation framework and ordinary market valuation principles, and I bow to his expertise in this field. I confirm that DCMS engaged closely with the Royal Institution of Chartered Surveyors in developing the 2017 reforms to the code. In 2019, it produced a specific guidance note for surveyors working in this field, and I understand that this makes clear the relationship between the code valuation framework and the red book global standards of valuation.

The noble Earl referred to independent infrastructure providers, which have a key role to play in the delivery of robust and resilient networks. They invest substantially in the deployment of new apparatus, which can then be shared by multiple operators, expanding coverage and extending choice for consumers. Their role was lauded during the passage of the 2017 reforms, both in another place and in your Lordships’ House, where the noble Lord, Lord Foster of Bath, referred to them having

“some of the most productive telecommunications facilities in the country”.— [Official Report, 31/1/17; col. 1181.]

So I was a little surprised to hear concerns expressed today about the possible disadvantages of this important part of the sector, but I would certainly be happy to discuss those concerns further if noble Lords would like to.

On whether independent infrastructure providers are passing on savings, we are not aware of situations where such providers who have secured new arrangements following the 2017 reforms have failed to pass on any decrease in costs to operators using their installations. It must be remembered that many independent infrastructure sites will still be subject to pre-2017 agreements and, as such, there may not yet be any consequential savings to pass on.

It has been suggested, including by my noble friend Lord Vaizey in his intervention on the noble Earl, Lord Lytton, that the code creates the potential for intermediaries to acquire sites cheaply, using the code valuation framework, and then to charge operators excessive sums to use them. It is important to note that, if such an intermediary has not installed apparatus on the land but is the occupier of the land for the purpose of the code, it would be open to a code operator to seek code rights to do so from that party. However, if the intermediary invests in infrastructure on the land, we think it right that they can agree commercial terms for the use of it with the operators. Naturally, if competitive terms are not offered, operators will go elsewhere.

My noble friend Lord Northbrook and the noble Lord, Lord Clement-Jones, referred to the report by the Centre for Economics and Business Research. I am conscious that we have much to cover, so I do not intend to discuss this in detail, but I will say that, generally, DCMS is aware of it and its findings. We note that it was commissioned by the Protect and Connect campaign, and our understanding is that it focused primarily on the valuation regime, rather than providing a broader view of how the code is working in practice, which is what DCMS aims to do in its engagement with interested parties and through the consultation that has informed the development of the Bill.

Turning to the amendments, I will first address those tabled by the noble Earl, Lord Lytton, the noble Lords, Lord Clement-Jones and Lord Thurlow, and my noble friend Lady McIntosh of Pickering, which relate to paragraph 24 of the code. These go to the crux of the argument regarding the valuation framework. Before the 2017 reforms, the amount of rent payable reflected the value of the site to the operator. Site providers were therefore potentially able to charge an operator thousands of pounds a year to house apparatus on small pieces of land that were otherwise of low or nominal value.

The 2017 reforms were intended to rebalance the relationship: operators would pay a fair rent that reflected the true value of the land, and site providers would remain able to receive additional sums to cover any loss or damage incurred as a result of the operator exercising code rights, or that may be incurred in future, including professional fees. To address a point made by my noble friend Lady McIntosh, those payments should take into account any alternative uses that the land may have and any losses that may be incurred, among other things.

As we have said throughout, and even following the helpful conversations that I have had with a number of noble Lords so far on the Bill, we continue to believe that this balance is right to ensure the cost-effective and efficient delivery of robust digital services. As was noted today, these are becoming ever more necessary in our daily lives, as was thrown into sharp relief during the pandemic.

In his admirably pithy contribution, the noble Lord, Lord Fox, asked whether we believe that incentives still exist for site providers and landowners to enter into agreements. We think that they do. We have been told that the amounts offered by some operators are now so drastically reduced that landowners are less willing to let their land be used, but we maintain that the 2017 valuation provisions created the right balance between the public need for digital communications and landowner rights. We were aware that the valuation framework would result in reductions to rental payments but, in our view, prices being paid for rights to install communications apparatus before 2017 were too high. With digital communications becoming increasingly important, that needed to be addressed.

The code still makes separate provision for landowners to recover compensation for loss or damages. We think that, taken together, the provisions on consideration and compensation mean that landowners should receive a fair payment for allowing their land to be used, despite the fact that overall amounts will normally be lower than they were before the 2017 reforms—but we believe that the incentive remains.

Amendment 23 seeks to amend the valuation framework, moving away from the no-network approach that was introduced in 2017. The amendment appears to us to be a retrograde step, taking the market away from the clear approach established by the 2017 reforms and moving back towards the status quo ante. This could reintroduce some of the problems that were addressed by those reforms, including a return of payments that were unfairly too high, and leave us with a dual approach to valuation on the renewal of agreements, potentially causing confusion for operators, site providers and courts. The Government, therefore, cannot accept this amendment.

Amendments 26 and 27 both relate to agreements renewed under Part 5 of the code. Amendment 26 seeks to phase in rent reductions in these cases through a two-year grace period during which site providers would continue to receive consideration at the previous level. Amendment 27 looks to introduce a tiered phase-in period that would last for three years. The code valuation framework was introduced in 2017 and there has been much publicity on how this has affected payments to landowners for hosting telecommunications apparatus on their land. I believe it has been relatively clear to interested parties for a substantial period that the market has changed significantly, and that, in most cases, reductions in rental payments are to be expected. For this reason, the Government do not think that it is necessary for additional time periods to be given, when the effect will be to increase operational costs and to slow down the rollout of 4G and 5G coverage that the population rightly wants and expects.

Amendment 25 would require the Secretary of State to issue guidance on how paragraph 24 of the code should be interpreted and the maximum permitted reduction in consideration. Statutory guidance can certainly play an important part in ensuring legislative measures achieve their intended aims, but this must be considered on a case-by-case basis. We have concluded that guidance in this area would not be appropriate; code agreements cover a hugely diverse range of circumstances, and the code sets out a clear framework approved by Parliament, which establishes valuation principles which can be applied across different scenarios. We think it is right that, when disputes arise, further interpretation of these principles should rest with the courts. Indeed, the courts have been doing this since the reforms were introduced in 2017 and a body of case law is now well established. We believe that introducing statutory guidance on valuation at this stage would undermine the progress that has been made in that respect, introducing uncertainty and confusion, not least because the status of the proposed guidance from the Secretary of State, and the degree of influence it would have on the courts, is unclear.

Instead, we consider it much better for a court to be able fully to consider all the circumstances of a particular given case and all the relevant evidence before it, and then to act in accordance with the statutory framework set by Parliament. For the same reason, we do not think a statutory cap on rent reductions is appropriate; this would fetter the parties and, ultimately, the courts from proper consideration of all the relevant circumstances. It is also important perhaps to consider non-legislative action that can be taken to promote better relationships: as well as the steps taken in this legislation, there are non-legislative steps the Government are taking to ensure that the code works well in practice. For example, the department’s Barrier Busting Task Force is holding monthly workshops with a broad range of groups with an interest in the code. Those workshops are attended by network operators, landowner representative groups and local authority representatives, as well as professionals and surveyors. The workshops aim to encourage greater collaboration in relation to code negotiations and agreements through identifying and implementing better ways of working. They touch on key issues which parties have raised with us; for example, stakeholders are currently working to agree on standard template wording for common clauses within code agreements.

Amendments 20 and 22 seek to disapply much of the valuation framework to agreements renewed under the 1954 Act and the 1996 order. The Government cannot accept those amendments, as they serve only to entrench the inconsistencies in the different renewal frameworks, which I mentioned at the outset. Were Amendments 20 and 22 to be accepted, some landowners would receive higher rental payments for longer. However, this would allow network costs to remain unacceptably high, penalising swathes of consumers and businesses who may face price increases for digital services, or may have to wait longer for the high-quality, reliable connections they need.

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Lord Northbrook Portrait Lord Northbrook (Con)
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I am sorry to interrupt the Minister. Would he be able to produce any written evidence of these improved relationships between landlords and operators for the Committee?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My letter that was sent just before Committee outlined some of the engagement that the department has had and listed some of the groups with which we have spoken. That goes some way towards that, but I will certainly see whether there is anything further that I am able to share with noble Lords in addition to that table, which was appended to the letter I sent yesterday.

As I say, we believe that the measures in the Bill will address the complex areas that have led to protracted litigation and emphasise the value of collaborative relationships between operators and site providers. I therefore invite noble Lords to withdraw or not to press their amendments in this group.

Earl of Lytton Portrait The Earl of Lytton (CB)
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My Lords, I thank the Minister for that detailed reply. I will obviously not try to cover everything he said, but just touch on one or two points.

The Minister referred to the RICS, and it is true that the RICS produced a guidance note in relation to code changes. It was of course produced in the light of those changes, rather than in an attempt to influence them, and it points out the strong likelihood of very low rents resulting from those changes. Of course, being a guidance note, it does not predict or advise on what the market outcomes are likely to be in practice. I have not had a moment to check, but it is my belief that the manual of valuation and appraisal—otherwise known as the Red Book—produced by the RICS and Institute of Revenues, Rating and Valuation, has made the valuation of mast sites an exception to the market value criteria within the Red Book. It is, if you like, a derogation from that market value principle.

I go back to the point that I made: you cannot have market value in the terms that I described it and the internationally recognised specification and then say that you disregard it and the matter gets to court. So what does that mean? You go to court because you can get it disregarded. Is that the way that the world functions? I am sorry, but I just do not get it—this is an oxymoron of a principle.

That apart, there still remains the fact that reducing rents to around about £750 or so per annum—if that is indeed what will happen, because all these things are hemmed in by confidentiality clauses so that the information does not get out, thus preventing any sort of transparency that would give rise to a market in those terms—calls into question the existence of willing participants, regardless of the valuation assumptions to the contrary. You can make all the assumptions you like, but the market will tell you what it is going to do. If you have people who are disengaged, then that is it.

The Minister is in denial that the market is moving towards, or is effectively at, a point at which it is bust. I hope that he will be able to produce some statistics to back what he says. While he says that, on one hand, the comments from organisations such as the CAAV may be regarded as apocryphal, I have difficulty in understanding that what he says his department is receiving is of any better or worse quality than that. We are in a land of the unknown, with people saying one thing and meaning another. We are effectively relying on a lack of evidence. That really is not good enough.

If we are getting to a stage where the market is not functioning, what then? How long will the Government wait before they decide that something needs to be done? And what will they do—more compulsion, more work for the law courts and legal profession, more time spent getting these masts in place and rolled out? I do not see it. I would really love to know what the greater vision is. The Minister referred to “greater collaboration”; I am sorry, but I do not see it. I see anything other than greater collaboration coming out of this. It takes two to tango—the old business about taking a horse to water may well apply.

I will not press these amendments and will withdraw them at this juncture; they can be resisted, but the real world outside will continue notwithstanding. It does not matter what sort of bubble you live in and what sort of vision you create—whether the commercial vision of code operators or the vision of what is happening from the point of view of the department that wishes to defend the policy that it has had in place since 2017—the situation on the ground will work out the way that it will work out. There is no changing that any more than one can change the basic DNA of transactional analysis in property markets. I beg leave to withdraw Amendment 20.

--- Later in debate ---
Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, the debate on this group raises a number of interesting points, but they are all on the same theme. They are about what happens should disputes arise. No one wants to be in dispute, but when one arises, it is crucial that everybody knows what the rules are and that the resolution creates an environment and practice which means that the same issues do not continually arise. The contributions from noble Lords today have talked a lot about fairness, respect and calling to heel those who need to be called to heel for fairness and respect to occur. It is about getting the balance of rights and responsibilities between the parties right. I hope the Minister will consider the valid points raised by this group.

In particular, it would be helpful to hear how the Minister feels about the present situation, where the operator must only consider the use of the dispute resolution system—and even then, only if it deems it is reasonably practicable to do so. Has that been satisfactory, because this set of amendments clearly suggests not? I was particularly struck by the words of the noble Earl, Lord Lytton, who spoke about such resolution being easily avoidable. That does not give us confidence. I therefore hope that the Minister will reflect on the spirit and intent and, perhaps, come to us with some practical measures to improve the current situation.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, I shall first address points made by the noble Earl, Lord Devon, as well as my noble friends Lord Northbrook and Lady McIntosh, about some of the case studies. I certainly agree entirely with the noble Earl, who speaks from personal experience and makes the point that some of the lobby groups which have been vocal on the Bill are painting a very different picture to those directly involved, and with whom we have had extensive discussion. Your Lordships’ House benefits from having people such as the noble Earl and my noble friends who can speak from personal experience.

In particular, at Second Reading, the noble Earl showed how he speaks not just as a landowner and the litigator but as a consumer who shares the objective of wanting better connectivity. I am very happy to make absolutely clear that I understand that his point and those of other noble Lords are made in that spirit. I hope he can see that, for my part, we have been willing to listen and continue to be receptive to hearing contrary points; it is just that, in our discussions with the industry, we have had a clear picture painted.

The noble Earl asked a general but important question: why should site providers bother, given the other ways they could use their land? Without wishing to reopen the debate on valuation, we believe that the 2017 provisions created the right balance between the public need for digital communications and landowners’ rights. The code makes separate provision for landowners to recover compensation for loss or damages and, taken together, we think the provisions on consideration and compensation mean that landowners can still receive a fair payment for allowing their land to be used.

The new pricing regime is more closely aligned to those for other utilities, such as water, electricity and gas. We do not think it is less attractive than other comparable uses. As I said on a previous group in relation to a point raised by my noble friend Lady McIntosh, landowners should still receive their payments—which, among other things, take into account any alternative uses that the land may have and any loss or damage that may be incurred.

Turning to the amendments in this group, the purpose of Clause 68, as probed by my noble friend Lady McIntosh of Pickering and the noble Earl, Lord Lytton, is to encourage more collaborative discussions between landowners and operators and to ensure that litigation is only used as a last resort. We know that code negotiations can be difficult—my noble friend Lord Northbrook referred to that from his experience—and that, in some cases, landowners have felt pressured to accept any terms offered to avoid the risk of being taken to court. To address this, Clause 68 encourages the use of alternative dispute resolution to minimise the risk of landowners feeling pressured and to facilitate co-operative discussions.

At Second Reading, my noble friend Lady McIntosh suggested that alternative dispute resolution is optional for operators. I hope I can give her and other noble Lords some assurance on this matter, given the requirements for parties to consider use of ADR and for the courts to consider unreasonable refusal to engage in ADR when awarding costs.

ADR not being mandatory is a deliberate feature of this policy. That choice was made for two reasons. First, ADR may not be suitable in certain cases. For example, where a disagreement is based on differing interpretations of the law, this may have to be determined by a court. Mandatory ADR would add cost and time to this process without any benefit. Secondly, where ADR is appropriate, mandatory ADR would compel some parties to participate in a process they do not want to be involved in, making them less inclined to actively engage. This would increase the risk of failure, and the parties would then have to go to court anyway—only adding further time and costs for landowners. The clear majority of groups—including the Country Land and Business Association—opposed compulsory ADR when we consulted them.

I turn to Amendment 39, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton. This amendment would require evidence of a breach of Ofcom’s code of practice to be taken into account in ADR judgments. It should be noted that not all forms of ADR have judgments. Mediation is one such alternative. Furthermore, the Ofcom code of practice gives guidance on best practice; it does not set out specific requirements to be adhered to. As such, using the code of practice to underpin or effect decisions made in alternative dispute resolution risks creating further disagreements and disputes, rather than resolving them.

Finally, and most crucially, the amendment would undermine the open and collaborative approach on which successful ADR relies by forcing operators to enter any ADR process on a defensive footing. The outcome would be simply to blunt the effectiveness of alternative dispute resolutions and add to the administrative and cost burden for all parties. It is on this basis that I invite noble Lords not to press their amendments.

I turn to the Ofcom code of practice. We know that, in some cases, landowners are reluctant to enter into code agreements because they are concerned about how the operator or their contractors will behave when they carry out their works. Clause 69 addresses this issue by requiring guidance to be prepared by Ofcom, following consultation, regarding operators’ handling of complaints about their conduct. This guidance will be added to Ofcom’s code of practice. To complement this, the Government also intend to bring forward secondary legislation—in consultation with Ofcom and others where appropriate—to make regulations to achieve three things: first, to create a requirement on operators to have a complaints procedure in place to handle complaints relating to their conduct; secondly, to set out minimum standards which this process must meet; and, thirdly, to oblige operators to have regard for the Ofcom code of practice when handling complaints.

Amendment 40, tabled by the noble Lords, Lord Clement-Jones, Lord Fox and Lord Blunkett, and the noble Earl, Lord Lytton, would make adherence to Ofcom’s code of practice obligatory and make breaches of that code punishable by a fine of £1 million. As I mentioned in relation to Amendment 39, the Ofcom code of practice is intended to set out guidance. Deciding whether a particular course of action is a breach would be very subjective. The code of practice applies to both operators and landowners, and this amendment does the same. While some operators may have the resources to sustain such fines, very few landowners would.

We all want network rollout to proceed as quickly as possible. However, making compliance with the Ofcom code of practice mandatory and failure to do so subject to a heavy fine means that operators and landowners would be disincentivised from seeking to reach agreements at all. For those who might proceed, one can imagine them doing so as slowly and gingerly as possible to avoid the risk of breaching a code of practice that was never designed to be used in such a way.

Amendment 41, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton, and Amendment 42, tabled by the noble Lord, Lord Fox, set certain requirements regarding complaints handling, such as time limits for responding and compensation payable. As I noted earlier, Clause 69 will require Ofcom to amend its code of practice to include guidance on complaints handling. The Government also intend to make regulations to set out minimum standards for operators’ complaints processes. Both of these could feasibly include elements similar to those proposed in the amendments, and both will be developed through consultation. The Government firmly believe that this is the best way to encourage all parts of the sector to welcome and comply with the new procedure.

Also related to the code of practice is Amendment 42A, tabled by the noble Earl, Lord Lytton. Currently, for a private organisation to seek and exercise rights under the Electronic Communications Code, it must be the subject of a direction from Ofcom that the code applies to it. The first part of the noble Earl’s Amendment 42A would require Ofcom to reconsider each operator’s status as an operator for these purposes every five years, taking into consideration, among other things, complaints made against it for breaches of the code of practice. His amendment would make an operator’s rights to install, maintain and upgrade infrastructure potentially subject to adherence to a code of practice which, as I described just now, would serve only to disincentivise operators from extending their networks swiftly.

The second part of his amendment concerns obligations for operators to report to Ofcom about complaints that they receive, and for Ofcom to publish an annual summary of these reports. These are also the sorts of matters that will be considered when the Government make their regulations to set minimum standards for operators’ codes of practice, and when Ofcom amends its own code of practice.

Amendment 44, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, concerns building safety. The importance of building safety is self-evident, and the Government are committed to doing everything possible to ensure that it is maintained at all times. None the less, the amendment is unnecessary since the code already contains ample protections to ensure that building safety is maintained. Paragraph 23(5) of the code requires that when a court imposes an agreement under part 4, that agreement must include terms for ensuring that the least possible loss and damage is caused in exercise of the rights. Such terms will provide significant building safety protections.

Paragraph 99 of the code makes it clear that the code does not authorise the contravention of laws passed before the code came into force. This means that legislation that was in place before the code came into force, including that on building safety, would not be superseded by measures in the code. Regulation 10 of the Electronic Communications Code (Conditions and Restrictions) Regulations 2003 requires that if an operator receives a report that its apparatus is in a dangerous state, it shall investigate and, if necessary, make the apparatus safe. Therefore, together these provisions already provide robust protections to ensure that building safety is maintained.

The noble Lord, Lord Fox, rightly mentioned Dame Judith Hackitt’s report, which places great importance on the clarity and simplicity of systems to ensure building safety. The Government believe that this amendment would add further unnecessary complexity to the robust protections that already exist in this area. Therefore, Amendment 44 is not needed.

Lord Fox Portrait Lord Fox (LD)
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As I explained earlier, it is a probing amendment designed not to go into legislation but to get an answer, and the answer was not forthcoming.

First, the code is designed to comply with building safety that has come before it. The Building Safety Act is subsequent to the code so in this respect, that is not a helpful answer. Secondly, there are specific statutory instruments, as a result of the Building Safety Act, which deal with utilities. I asked a very clear question: will the Government be considering this function of digital infrastructure to be a utility? Also, will there be statutory instruments as a result of that Act which cover this issue, or does it need to be covered in another way? It is not covered in the answer the Minister has just given, so this must be specifically opted into the process that the Building Safety Act has ushered in as a result of the Hackitt review.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The Building Safety Act received Royal Assent on 28 April, as the noble Lord knows. It will strengthen oversight and protections for residents in high-rise buildings, it will give a greater say to residents of tall buildings and it will toughen sanctions against those who threaten their safety. Its focus will help owners to manage their buildings in a better way while giving the housebuilding industry the clear and proportionate framework it needs to deliver more and better-quality homes.

Building regulations to be made under the new powers inserted by that Act will provide for more stringent requirements, separate from the Electronic Communications Code, regarding building work on high-rise buildings. People undertaking such work as employees or contractors of companies, including network operators, will have duties to ensure that their work complies with all the relevant building regulations. That will include the provision of information as part of the golden thread which will be handed over to accountable persons on completion of the building work.

I note also that the building regulations already include requirements to install infrastructure to support high-speed electronic communications networks in new buildings. DCMS has consulted on plans further to amend the building regulations to mandate gigabit-ready infrastructure and gigabit-capable connections to new homes. When such work is carried out it is required to meet all relevant requirements of the building regulations, include those for fire safety, so we do think that this is provided for already. I understand that it is a probing amendment; none the less—

Lord Fox Portrait Lord Fox (LD)
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Without labouring the point tonight, the Minister can perhaps pander to my curiosity and come back with the specific statutory instruments that are expected to implement this. As I understand it, statutory instruments were laid and then withdrawn, and I do not think that they included digital infrastructure in the initial wording. I have a specific concern that there is a slight falling between the cracks. Perhaps the Minister can reassure me with some specifics in a letter.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am very happy to consult my colleagues at the Department for Levelling Up, Housing and Communities and to provide the letter the noble Lord requires. I invite him now to withdraw his probing amendment, and other noble Lords not to move theirs.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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Did I hear my noble friend correctly regarding the Country Land and Business Association? If so, I can put his mind at rest. It is most definitely in favour of the alternative dispute resolution being made mandatory. He should be aware of a briefing that was sent to us at a much earlier stage. This dates back to January, so I hope it is not still the case:

“Throughout the Government’s consultation on the Bill, the Department of Digital, Culture, Media and Sport has repeatedly refused to meet with our organisations”,


including the CLA and others,

“to hear the views of our members. The Bill was subsequently published without any economic impact assessment.”

I am slightly concerned that my noble friend appears to be unaware of something as fundamental as the difference between a mandatory and a voluntary ADR, and I wanted to correct him on that.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I am sorry to disagree with my noble friend, but the CLA’s response to the consultation opposed compulsory ADR. I would be very happy to speak to her and triple check that with officials afterwards, but we clearly have different understandings of its position. I would be happy to speak to her afterwards to make sure that we can clarify that.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, we clearly have some clearing up to do between Committee and Report on who said what and who supports what. I too was quite surprised to hear that the CLA would be opposed to compulsory ADR in these circumstances.

I thank noble Lords for their support for the amendments and the Minister for his very detailed reply. I do not think there is any dispute between us. We all want greater connectivity and to see 1-gigabit rollout. The whole question is whether we want greater trust—the word that I think the noble Earl, Lord Lytton, used. Quite frankly, across the Committee there is a view, on the valuation questions, on retrospectivity in the previous group and on the lack of compulsory ADR, that this will lead to more disputes. The Government seem to be going down this track where they plan for there to be more disputes so that more tribunals can be brought into effect and more lawyers will be employed, no doubt with rejoicing in various parts of the City. Everything in these amendments was designed to minimise the number of disputes, and to make sure that we had compulsory ADR and that Ofcom’s code actually bites.

It was very disappointing to hear what the Minister had to say. I hope that, between Committee and Report, he will reflect on some of the points made in this respect and that we can check to see whether landowners are unanimous on this, because using ADR as a filter would be a perfectly acceptable way of doing things. Once certain aspects are established as a matter of law then a dispute can of course be referred, but a mediator can, by agreement of the parties, refer it to a court to be determined. There is no impediment to using ADR as that initial filter, which would mean that there would be many fewer disputes. We would actually have faster rollout as a result and the Bill’s purposes would be entirely achieved.

I am sure that this will be a candidate for Report as well. In the meantime, I beg leave to withdraw the amendment.

Product Security and Telecommunications Infrastructure Bill

(Limited Text - Ministerial Extracts only)

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This text is a record of ministerial contributions to a debate held as part of the Product Security and Telecommunications Infrastructure Bill 2022-23 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Fox Portrait Lord Fox (LD)
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My Lords, if there is an abiding theme in this group, it is transparent reporting and then using the data within those reports to make sensible decisions.

Notwithstanding the Minister’s special day tomorrow, I am guessing that he is quite a lot younger than me, so he might be able to remember his childhood. I can remember a game that we used to play, of running down hills with our eyes closed. This was tremendous fun, until it stopped—and it usually stopped when you fell over or hit something. The argument advanced by the Government is, “We mustn’t do a review. We can’t have data because it’ll upset the market”—in other words, we cannot open our eyes because it will stop us running down the hill fast enough. That is the nature of what we are doing. In order to make sure that we do not fall over and that we are running in the right direction, we need to have our eyes open. In their different ways, these amendments seek to open our eyes to the effect that the Bill and all of this public and private investment will have on the objective that we all share: putting fibre in every home in this country. Without information, and without transparency in that information, we will not know how fast we are going and in which direction.

I care little about whether the Government accept the words in these amendments, but I do care about a Government who have enough sense to get the information, publish it and then act on it.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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My Lords, I am particularly grateful to my noble friend Lady Stowell for her early birthday wishes. Finishing Committee a day ahead of schedule is a delightful early present. There are still to hours to go before tomorrow, and I hope that we will rise before noble Lords have to sing “Happy Birthday”.

Amendments 45, 47 and 49 seek to impose duties on the Government to assess and report on various impacts of the 2017 code reforms and, indeed, of this Bill once brought into force. I certainly appreciate the spirit of these amendments, which are designed to ensure that the Government are held to account; the noble Baroness, Lady Merron, referred to the conversations we had right at the beginning of our discussions on the Bill. Noble Lords will know that there are already ways in which some or all of the effects of these amendments can be achieved. For instance, Ofcom publishes its annual Connected Nations report, which it updates a further two times a year; this provides a clear assessment of the progress in both fixed and mobile connectivity. I hope that noble Lords will agree that the independent regulator is well placed to provide information on the progress of gigabit-capable broadband. Moreover, the Government continue to answer questions and provide clarity on all aspects of their work in this area, both in your Lordships’ House and in another place.

Amendment 45, tabled by the noble Baroness, Lady Merron, and the noble Lords, Lord Bassam of Brighton and Lord Blunkett, seeks an assessment of the legislation passed in 2017 to update the code, and particularly the impact of changes to the valuation regime. When the 2017 reforms were introduced, we recognised that the market would need time to adapt and settle. We have engaged with interested parties since the reforms came into force to identify any emerging issues. In our view, there is not yet enough evidence for a properly robust and comprehensive analysis to be made of the impacts that the 2017 reforms have had, of which the valuation framework was only one aspect. That is particularly the case given the impact of the Covid-19 pandemic, which has caused major shifts both in the demands on telecommunications operators and on their ways of working. However, in light of the feedback we have received through our engagement and our public consultation, the Government believe that the changes we are making in the Bill are needed to ensure that the 2017 reforms have their intended effect. That is not to say that we think the 2017 reforms failed—much progress has been made; we simply think that more can and must be done to maximise their impact. Making these changes now through the Bill will help to meet the Government’s 2025 connectivity target for at least 85% of homes and businesses to have access to gigabit broadband.

The noble Baroness, Lady Merron, asked how often our engagement has taken place. The access to land workshops is one part of it; there are in fact three separate groups which have been going for over a year. They met this month and will meet again in July, so we are undertaking that engagement on a regular basis.

Amendment 47, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, asks the Government to review and report on the impact of Part 2 of the Bill against our gigabit delivery targets. Again, I appreciate that noble Lords will be keen to ensure, as they should, that the Government are on track with their commitments. DCMS currently carries out monitoring, and regular updates are published on a quarterly basis by Building Digital UK. That monitoring and reporting will naturally capture and reflect any accelerations that occur after this Bill comes into force.

The most recent Project Gigabit quarterly update highlighted the progress we are making. This includes reaching a milestone of over 100,000 broadband vouchers issued, worth more than £185 million, with 65,000 claimed to date to support households and businesses with the additional costs of securing gigabit-capable connections; launching two new regional procurements in Norfolk and Suffolk and two local supplier procurements in Cornwall, bringing our total live procurements to 10 and extending gigabit-capable connectivity to up to around 380,000 premises; completing over 20 market engagement exercises across the UK further to inform our future procurement pipeline; and launching as an executive agency of DCMS and publishing our first corporate plan setting out our key strategic objectives for 2022-23 and how Building Digital UK will drive the expansion of gigabit connectivity to all parts of the country.

Lord Fox Portrait Lord Fox (LD)
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Briefly, if it is going so well, why are the Government changing everything? The Minister has just told us how well it is going, and now they are changing everything.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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From our engagement, to which I have referred, we believe it is going well and progress has been made, but our engagement with stakeholders suggests that the reforms that we are putting forward through this Bill are needed. We are extending that progress following consultation.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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I am sorry to interrupt the Minister. As he knows, certainty is absolutely crucial for business. What is always created when new legislation supersedes old legislation is uncertainty. What confidence can the Minister possibly have that the impact of this Bill will be beneficial to rollout?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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With such an accelerating market, thanks to the pro-investment environment that the Government are creating, it is quite challenging to quantify the extent to which progress is attributable to any single piece of legislation in a market that reflects so many factors. That is one reason why we think it would be of limited value.

My noble friend Lord Northbrook asked me to comment on the Centre for Economics and Business Research report on the 2017 reforms. We believe that the CEBR report does not provide a sufficiently rounded picture in its assessment of how the 2017 reforms have affected the pace of telecommunications delivery. The Government, as I have said, acknowledged in 2017 that reductions in payments could make landowners less keen to enter into agreements to host apparatus on their land. We expected an initial slowdown following the implementation of the 2017 reforms while the market adapted to them, but our understanding, informed by our conversations and consultation, is that both new and renewal agreements are now being successfully concluded. For instance, we were informed in January this year that, since 2017, 900 agreements had been renewed and that 83.5% of those agreements were concluded consensually, to give noble Lords some data.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

By extension, is the Minister expecting a slowdown again as the market gets used to these changes? Clearly, the Government expected a slowdown when they made the last set of changes; are they anticipating a similar slowdown this time?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
- Hansard - - - Excerpts

These changes build on the changes of 2017, so we do not expect there to be such an impact, because there is not such a change for the market.

We think it is too simplistic to attribute the changes in the market since 2017 solely to the valuation framework. The reforms in 2017 also made it easier for operators to share equipment, which will have reduced the demand for new mast sites to be built. Of course, we all hope that there will not be disruptive effects of a pandemic, as we have seen in the years since 2017.

Amendment 49, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton, asks the Government to conduct an implementation review of the Act after it is brought into force. However, we believe including such a requirement in the legislation is not necessary. The Government will of course monitor the effect of this legislation to understand how it is working in practice. Requiring an assessment at a specific time and which is focused on such specific elements would fetter the Government’s ability to judge when a meaningful review of progress can most sensibly be completed and what information it should include. I am happy to reassure my noble friend Lady Stowell that of course we want to monitor the effect of this legislation and to see and understand how it is working in practice.

Amendment 50, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, the noble Earl, Lord Lytton, and the noble Baroness, Lady Merron, seeks to impose duties on telecommunications operators to provide a variety of annual data to Ofcom. It must be remembered that imposing reporting obligations on the industry necessarily diverts resources away from delivering the very targets that the Government have challenged them to deliver and on which noble Lords are rightly pressing us for progress. Any such obligations must therefore be proportionate.

The Communications Act 2003 already gives Ofcom substantial powers to collect and publish data. Procedures are therefore in place to monitor the progress that is being made and to ensure that details of this progress are published. For example, licence obligations for the shared rural network require mobile network operators to report on coverage and the number of new sites built through the programme. Operators also provide Ofcom with information on the geographic availability of coverage to enable consumers to make informed decisions. This is all data that is, or will be, published in Ofcom’s Connected Nations report.