Digital Economy Bill
Wednesday 8th February 2017
(7 years, 4 months ago)
Lords ChamberDigital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 80-IV Fourth marshalled list for Committee (PDF, 161KB) - (6 Feb 2017)
Baroness Benjamin
“Original programmes for children and young people
After section 289 of the Communications Act 2003 (regional matters in the public teletext service) insert— “289A Original programmes for children and young people(1) The regulatory regime for every licensed public service channel must include the conditions that OFCOM consider appropriate for securing—(a) that the programmes included in the channel include high quality original programmes for children and young people;(b) that the programmes for children and young people included in the service are of a suitable range;(c) that the programmes for children and young people so included are broadcast for viewing at appropriate times.(2) The regulatory regime must also include conditions that OFCOM consider appropriate for securing that, in each year—(a) the time allocated to the broadcasting of programmes for children included in the service, and(b) the time allocated to the broadcasting of programmes for young people so included,constitute no less than what appears to OFCOM to be an appropriate proportion of the time allocated to the broadcasting of all the programmes included in the channel.(3) Before determining for the purposes of this section the proportionate time to be allocated to the broadcasting of programmes for children and young people, OFCOM must consult the provider of the channel, or, as the case may be, the person who is proposing to provide it.(4) The requirement to consult is satisfied, in the case of the imposition of a condition by way of a variation of a license, by compliance with section 3(4)(b) of the Broadcasting Act 1990 (licences under Part I).””
Baroness Benjamin (LD)
My Lords, I will speak to my Amendment 229, which aims to move children’s content on public service broadcasting from tier 3 back to tier 2. The amendment is also in the names of my noble friend Lady Bonham-Carter and the noble Baroness, Lady Jones. I declare an interest as per the register.
My amendment seeks to underline the fact that we are at a pivotal point in the future of the children’s production industry and quality UK-produced content for our children. This is without doubt the best opportunity in a generation to make a legislative change that could revive and strengthen a successful industry that not only nurtures our nation’s youngsters but projects Britain around the world.
Yes, we have over 30 dedicated children’s channels, but the majority do not show UK-produced programmes. They usually show acquired animated cartoons, made abroad. This means that our UK children’s production industry is in decline. Thank goodness for the BBC, with its successful CBeebies and CBBC channels. However, we cannot expect the BBC to bear the burden of producing the majority of British-made children’s programming. Some might point out that there has been a slight increase in the investment from commercial broadcasters for children’s productions, but it is just a drop in the ocean considering the large profits they have made over the past year.
To be clear, this amendment is not relevant to all commercial broadcasters, such as Disney, Nickelodeon or Cartoon Network. It is relevant only to public service broadcasters, especially commercial broadcasters, which each have been allocated PSB status and the benefits that go with that. Therefore, public service broadcasters should be producing content for everyone, and that includes children.
The amendment I have introduced has cross-party support and is timely. It aims to do two things: first, to give Ofcom the ability to require public service broadcasters to commission more original British-made Nickelodeon children’s content in the future; and, secondly, to give flexibility to the commercial PSBs, in consultation with Ofcom, around the level of their future investment in children’s content. This is a common- sense approach that could easily be embraced.
As I have said many times in this House, PSB investment, in particular from commercial PSBs, has reduced drastically over the past 10 years—by an overwhelming 93% since 2003. This decline started when the Communications Act 2003 reversed the Ofcom requirement for PSBs to commission a certain level of children’s content, by moving it from tier 2 to tier 3. Recent tax reliefs for animation and children’s live action content have provided a welcome boost for the sector, but they have not brought the commercial PSBs back to the table, which was expected. The Government’s pilot contestable fund over the next three years will work only if PSBs are required to commission more content.
The Save Kids’ Content UK campaign, supported by the whole industry and PACT, is very clear that requiring PSBs to commission a certain level of content is the only way to secure the future of this sector and Great British content in the future. All other options proposed are merely a short-term fix. Ofcom has repeatedly reported that it does not have the legislative tools to change the current situation. It pointed out during its last PSB review that there is a substantive risk that PSB requirements in this area will not be met in the future for our children. This is so distressing that it breaks my heart.
I understand that we have to be realistic and not demand that the commercial PSBs commission or compete with what the BBC is already doing. We know that children are viewing content in all sorts of ways, but the important word here is “content”. No matter how children view content, it must be relevant and reflect their culture and surroundings. Having said that, a recent Ofcom review showed that television viewing was still by far the most popular way of watching content.
It is also important to remember that, although investment in original British programming for children is in serious decline, television still remains a huge influence on young people today. According to research by the London School of Economics, 96% of children aged five to 15 use a TV set to watch television and 87% of viewing among 14 to 15 year-olds is on broadcast television. So it is absolutely vital that children have access to UK-made content that is not only entertaining and informative but also that our children can identify with.
As I said before, my amendment is a common-sense approach to the problem. The key element is that broadcasters will be consulted on the level of investment appropriate to each channel. It is definitely not a quota system, nor does it only apply to commercial PSBs; it also applies to the BBC, which already has good levels of investment, but the amendment would ensure that this investment is maintained into the future.
ITV has made recent investments, but what happens if it gets taken over? There is no legislation in place to ensure that new owners should provide any adequate children’s productions at all. Channel 4 has specific obligations for older children. Because of successful lobbying, it has recently committed to invest in children’s. Their production of “We’re Going on a Bear Hunt” was one of the most watched programmes over Christmas, which shows that there is an appetite for that type of content which, I am sure, will be sold worldwide. Channel 5 has “milkshake!”, an established, successful strand for pre-school, but it spends very little on new, original UK content. Most of its programmes are acquired.
All of the commercial PSBs do a bit, but there are areas where children’s provision is lacking, and they all need to do more to serve our children’s cultural appetites. The latest figures from Ofcom show that UK children’s programming decreased yet again in both spend and output in 2015. Spend on first-run UK-originated children’s programming stood at £77 million in 2015, a year-on-year decrease of 13% in real terms. This cannot go on indefinitely.
We understand that PSBs may well have concerns about the imposition of requirements or how the amendment is able to accommodate the changing viewing habits in this digital world. This is why the flexibility that has been built into this amendment is crucial. The amendment strikes a balance between giving Ofcom the muscle to require children’s content from PSBs, which it does not have at the moment, and allowing the level of investment to be determined through consultation between Ofcom and each broadcaster, and coming to a reasonable agreement. The amendment will require a variation of each broadcaster’s licence.
There is also flexibility around the genres that Ofcom could choose to include in any requirements. The amendment refers to a “suitable range” of content. This can be tailored appropriately to each channel and would take into account content broadcast on a main channel, on a subsidiary channel or online. Surely this should allay any fears or doubts. This amendment has deliberately built in the flexibility to allow broadcasters to use digital and interactive content across all platforms. It is not intended to dictate how, where or what children should watch. It is about ensuring that there is a range of quality British content available on all platforms.
Some may say, “How do we know Ofcom will decide what is reasonable?”. I was on the advisory board of Ofcom for three years, and I know from experience that Ofcom has always erred on the side of caution when it comes to avoiding anything that would damage the industry. Over the last 14 years of its history, its reputation has been exemplary.
As I mentioned earlier, the Government have announced the introduction of a contestable fund, and children’s programming will be in line to receive some of the funding. At the moment the fund is time-limited to three years. I strongly believe that my amendment could ensure that that money is used in the most productive and constructive way. The fund could be used to develop programme ideas for children which the PSBs could then commission, having had all the development work funded.
The UK children’s production sector has always had a strong international presence, which adds to the UK’s economy, and it is proud of that. At the moment, however, our UK children’s production sector is facing many challenges because the market for producing children’s UK original content is shrinking rapidly, while the demand for quality children’s programmes remain vigorous. There are many opportunities for global partnerships through co-productions, so we desperately need commissions for those partnerships to work. It would be short-sighted to cut the cord of a continuing British success story, but more importantly we need UK creative original content to be produced to influence our children’s imagination and thinking as well as their emotional, mental and inspirational well-being. We owe it to them and must not let them down, so we must use this opportunity to provide the means to fulfil their needs.
This is why my amendment is asking the Government to take another look at the issues and change legislation to secure the long-term future and sustainability of the UK children’s content production sector. I firmly believe that only a change to primary legislation will give Ofcom the necessary tools to require commercial PSBs to provide British-made children’s programming and give PSBs the opportunity to show their commitment to the nation’s children by saving UK kids production content. We must not let this great opportunity fall by the wayside. The future of Great British content for our children that will last long into the future is now in the hands of the Government. I beg to move.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I support my noble friend Lady Benjamin. It is clearly of paramount importance that our children have access to British-made television content. As I mentioned before when talking about the electronic programme guide—and I am afraid the Minister will have to appreciate that the issue is not going away—easy access is important. As my noble friend said, children need to see programmes that reflect their lives and our diverse, vibrant nation. It is my experience that children do actually watch television, certainly the ones I know. That is one reason why they love their step-grandmother, because she encourages it. Importantly, as my noble friend mentioned, flexibility is built into this amendment. It includes consultation with Ofcom about how it should be implemented in practice and around genres. It is important that this sector is not just left for the BBC to carry.
The Minister recently responded to a Liberal Democrat debate on the importance of the creative industries. That is another reason why the children’s independent television sector should be encouraged. We have only to look at the Harry Potter films to see what the children’s market can contribute to our economy and to Britain’s soft power. Let us support this sector and unlock its great potential and, in particular, not break my noble friend’s heart.
Lord Watson of Invergowrie (Lab)
My Lords, I support Amendment 229 in the name of the noble Baroness, Lady Benjamin, who I congratulate on formulating the amendment and for moving it so comprehensively with her usual chutzpah. I declare an interest on two levels, first as the Opposition Front-Bench spokesman on children and families, although I am clearly not speaking in that role today; and secondly, I have a more direct interest as the parent of a five year-old.
It is a source of both regret and concern that there is a dearth of UK original content in children’s television. Less than 1% of television hours available for UK children are original, first-run British programming. I very much doubt that the average parent would appreciate that, and I suspect that they would be both surprised and disappointed when told. I know that I certainly was. While Ofcom requires public service broadcasters to offer a minimum number of hours of original productions—70% for CBBC, 80% for CBeebies—they can include, and invariably for the most part consist of, repeats and spin-offs. Evidence presented last week on Welsh broadcasting to the Welsh Affairs Committee in another place suggested that the effects were particularly felt by regional public service broadcasters, where the number of repeats broadcast has increased exponentially since the Communications Act 2003. The example was given of the Welsh language channel S4C, where the share of broadcasts comprising repeats has risen to 57%. That decrease in original content threatens seriously to impoverish UK children’s cultural exposure, in particular to local and regional identities and experiences to which they can relate.
Reduced funding has been both a cause and an effect of that. The latest figures from Ofcom show that UK children’s programming decreased again, as the noble Baroness, Lady Benjamin, said, in both spend and output in 2015, the last year for which figures are available. Spend on first-run UK-originated children’s programmes showed a year-on-year decrease of 13% in real terms. That is a real worry. Recent tax reliefs for animation and children’s live-action content have provided a welcome boost for the sector. However, they do not ultimately increase the size of the funding pot available or incentivise the commercial public service broadcasters to return. The Government’s pilot £60 million contestable fund over the next three years will work only if public service broadcasters are compelled to commission more content, but of course the fund is not just restricted to children’s broadcasting; religious and other cultural programming is covered by it as well.
An increasing reliance on licensing revenue means that quality is not being maintained, because it has reduced in importance. Licensing plays a significant part in the commissioning of new children’s shows because so little money comes from broadcasters. The global TV brand licensing industry is reckoned to be worth around $190 billion and the ability of a programme to generate merchandise in the form of DVDs, books, branded clothes and toys now tends to determine its future. That is a concern because it creates a financial incentive to tick all the right boxes to produce a brand that can be easily licensed. As we all know from experience, box-ticking is rarely a positive driver, in any situation. Children are now spending more time online than in front of the television. My son increasingly wants access to the iPad to watch varying content of variable quality on YouTube. Fortunately, his mother is well qualified to ensure that he does so safely, but for his generation, watching a small screen is already second nature.
Although television remains a huge influence on young people, children’s programmes are competing not only with other genres for space on public service broadcasting but with online content for children’s attention. An Ofcom report in 2015 came to that conclusion, and unsurprisingly, online streaming providers such as Netflix are exploiting this market. While support of independent children’s production by online service providers is to be encouraged, public service broadcasters have a responsibility to carry at least equal weight in the provision of enriching children’s programming.
Such original children’s programming has the potential to be a thriving industry and an exporter of high-quality British product. That product in particular is digital, interactive and produces some of the most innovative content, generating huge revenues overseas with many iconic programmes. “Teletubbies”, which first aired on the BBC in 1997, has been shown in 120 countries and in 45 different languages. It generated a reported £200 million in revenue and some £50 million in merchandising. Those are impressive figures by any standard. I have moved through the age-appropriate levels with my son and have enjoyed almost as much as he has CBeebies productions such as “In the Night Garden”, “Show Me Show Me”, “64 Zoo Lane”, “Charlie and Lola”, “Grandpa in My Pocket”, with the inimitable James Bolam, “Octonauts”, “Katie Morag” and “Nina and the Neurons”. Those and many more children’s productions combine entertainment, play and learning; surely one of the fundamental purposes of public service broadcasting. They do so in a manner unimaginable when I watched “Andy Pandy” and “The Flower Pot Men” with my mother a very long time ago.
In the uncertainty of the post-EU world, maintaining and even increasing this strong international presence will be vital to supporting the UK’s economy and cultural currency. As the noble Baroness, Lady Benjamin, said, between 2003 and 2013 commercial public service broadcasting participation plummeted by 93%. Without a vibrant market the industry is in danger of dying out, and without that industry the nation’s children will not grow up with the programmes that the adult population took for granted. That is why, last September, I was one of the signatories to a letter to the Secretary of State for Culture, Media and Sport on behalf of Save Kids’ Content UK, setting out the current position on the decline of the independent children’s TV production industry in the UK and asking what the Government would do to support it. I regret to say that it took five weeks for a reply to arrive, and from a junior Minister at that, which told the sector nothing it did not already know, and concluded with the patronising words:
“Thank you for taking the time to share your views on this issue”.
However, that letter was a cry for help, not a sharing of views. To be dismissed in such a manner was unacceptable. The Government need first of all to understand the nature of the problem—which, as that letter demonstrates, is a position at which they have not yet arrived—and then they need to work with the sector to seek solutions. Amendment 229 would be a first step and I hope that the Minister will take the opportunity offered by this short debate to begin the process, with a sympathetic response and a commitment to return to the issue on Report with a suitable amendment.
Lord Gordon of Strathblane (Lab)
My Lords, I am in the awkward position of being unable to give this my full support, which I very much regret. I am now a grandparent, with four grandchildren who watch children’s programming avidly. Inevitably, I watch it with them; I greatly value the British content and want it increased. The question is, how do we do that? We cannot in fairness ask ITV to do children’s programming while at the same time this Parliament has legislated that no advertising in children’s programming will be allowed. A service that depends on advertising for its funding has been denied funding to do the sort of programming somebody wants to do—so we have got to find another way round it.
That is why the Government have come up with the idea of the contestable fund. I would agree that this is a higher priority than local television, for example. If I were in the Government, I would allocate all the contestable fund to children’s programming. It would then be possible, through contestable funding, to get some programmes made. The difficulty then would be to find a platform that will air them, given that—as has been rightly recognised—nowadays nobody puts children’s programming on their main channel. The BBC does not do it; it is not on BBC1 or BBC2, but CBeebies. If ITV were to do it, it would have to be on CITV. The question is how one gets people willingly to commission children’s programming that is not going to make them any money, unless it is an absolute winner. If there were “Teletubbies” round every corner, everybody would be making children’s programmes every day. The fact is, though, that it is extremely difficult to get right: “Teletubbies” is 20 years old. “In the Night Garden” is wonderful, but children grow out of that quite quickly. Children are quite demanding. It becomes almost a rite of passage; they are almost proud of growing out of things. “That’s for little people; I’m a big boy now”.
We have got to find some way of helping the sector to get the exposure on British television and then launch it internationally. I think one idea might be to invite ITV and Channel 4 to have a say in the selection of the recipients of the contestable fund. If they had helped to commission the programme they would then be in a less strong position to refuse to accept it once it was completed. That might be a way forward. I find it very difficult to find another way, because ITV faces more competition now than it did in 2003, when Ofcom took the decision that it was reasonable to downgrade children’s programming from tier 2 to tier 3. The position has not improved since then. Netflix, Amazon and so on are all producing programmes in a way that was not even thought of in 2003, so the position is even more difficult. We have got to find a way of getting enlightened self-interest to lead broadcasters to do children’s programming and screen it. I think that the contestable fund is a way forward.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very pleased to speak in support of Amendment 229, to which I have added my name, which aims to secure the future and sustainability of original TV children’s programmes. I pay tribute to the campaign Save Kids’ Content for its diligence in championing this issue over a long period. I am sure it will continue to do so. I also pay tribute to the work of the noble Baroness, Lady Benjamin, who has been a great figurehead for this campaign. As the noble Baroness and others have said, it is incredibly frustrating that the quantity and quality of children’s programmes have suffered such a rapid decline over the last 15 years. It feels as though it is the result of policy neglect rather than a deliberate plan to let the provision deteriorate, but whatever the reason, the outcome is still the same. As we have heard, there has been a reduction in spending of more than 50% on children’s programmes, and a drop of 93% by commercial public service broadcasters. As the noble Baroness said, the heroic exception is the BBC, whose investment in CBBC and CBeebies has provided a crucial creative flow for children’s entertainment. But it cannot be right that the responsibility in the longer term remains on the BBC’s shoulders. Ofcom itself recognised in its 2015 review of public service broadcasting that there is an issue:
“In children’s content, there is very limited provision of non-animation programming beyond the BBC”,
and went on to say that this represented a substantial risk to Parliament’s objective of strengthening public service broadcasting to this group. I would argue that we have a responsibility as Parliament to address this shortcoming.
We should all care about what programmes are available for children to watch. They have just as much right as adults to expect high-quality entertainment and the knowledge that will enrich and inspire their lives. In a sense, what people watch as children develops the habits and interests they will have as they move on to programmes and entertainment for teenagers and adults. Our great expectation that public service broadcasters will provide very good quality programming for adults is wasted if we do not provide for the next generation as well, so that it can recognise it and create that demand for it. Children also have as much right to see UK-made content.
We all squirm when we see reality TV programmes in which children have been somehow dumped in front of an endless diet of American cartoons, but we are complicit in making that a reality. It does not need to be like this and our amendment is a practical and balanced approach to reversing the decline. It would introduce powers for Ofcom to set quotas for broadcasting original children’s programmes as a condition of a PSB licence, and it would require PSBs to report to Ofcom annually on how they are meeting those targets.
As has been said, inherent in the proposals is flexibility for Ofcom and the PSBs to agree how the targets can best be met. This would allow each PSB to take a separate approach to delivering the expanded children’s programme output, including access to the contestable fund. I agree with my noble friend Lord Gordon that the money from local TV could be put to much better use by making quality children’s programmes, so perhaps that is one of the factors that could be put in the mix.
Only an initiative on this scale will reverse the decline. We have in the UK the programme makers with the skills and the creativity to produce programmes and build an expanded children’s TV offer. Moreover, the demand is there because each new generation brings with it its own demands, so I do not agree with my noble friend that people pass through and that is the end of the story. New generations come forward and we want them to be able to recognise what quality programming really is, and we will do that only if we reach out to them when they are children.
It was never the intention of Parliament to let children’s TV fall into such disrepair, and this is our chance to do something about it. I hope the Minister will listen to the strong case that has been put forward and that he will see the proportionality of our proposals. I hope also that he will feel able to support the amendment and to work with us to make the changes we are proposing a reality.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, Amendment 229 addresses the important issue of children’s television, something that I know the House and this Committee rightly feel strongly about. I thank noble Lords for their speeches, in particular the noble Lord, Lord Gordon of Strathblane, for pointing out some of the problems, particularly that of advertising revenue for commercial PSBs. Children’s programming has been and remains a very important aspect of the UK’s public service broadcasting system. The provision of a range of high-quality children’s programming must be a priority for public service broadcasting. Ofcom has an oversight role for the system as a whole, and indeed has found that more than eight in 10 people think that the PSB system,
“provides a wide range of high quality and UK made programmes for children”.
The BBC, as has been mentioned by many noble Lords, remains a particularly strong provider of UK-originated children’s content. That is why the new BBC charter and framework agreement make it clear that Ofcom must have particular regard to setting requirements for key public service genres like children’s programming. But as many parents will know, children now consume content via an increasing range of platforms and providers. Ofcom has found that children are watching 25% less broadcast TV than they did five years ago. The Government therefore want to support the provision and plurality of children’s content.
As the noble Baroness, Lady Benjamin, has reminded us, we are going to pilot a contestable fund for underserved public service content, with children’s content a potential key area. We expect to see the commercial public service broadcasters work closely with the contestable fund and commission more children’s content. If this does not happen, the Government will be prepared to consider whether further action is needed. It is a pilot and we will have to see where it goes. Beyond that, the Government have also extended tax relief for animation and high-end TV programmes to UK children’s programmes because, as the noble Baroness, Lady Bonham-Carter, pointed out, we recognise the tremendous benefit to the economy of the creative industries. There are also other positive developments led by the market. An example which has been mentioned is that this year, Netflix will make its first British children’s programmes. I therefore believe that additional regulation in such a fast-developing area at this time is not in the interests of a diverse and vibrant children’s TV landscape in the UK.
With that explanation, I hope the noble Baroness feels able to withdraw her amendment.
Baroness Benjamin
My Lords, I thank the Minister for his response. I also thank all noble Lords who have supported this amendment, or partly supported it. I am especially grateful to my noble friend Lady Bonham-Carter and the noble Baroness, Lady Jones, for putting their names to the amendment and supporting it so strongly. However, I am rather disappointed with the line the Minister has taken, as this is an opportunity to put in place a robust piece of legislation that would guarantee the future of original content made in Britain, not just on the BBC but on commercial PSBs. They are doing their bit, yes; but I want to see that being sustainable and this amendment would ensure that that happens.
We do not need more cartoons and imported programmes, which is what the majority of commercial broadcasters are offering. What we need, what the children need, are quality, UK-produced programmes. Children’s productions have always made a huge contribution to the UK economy from their international sales. We need that to continue. We are not looking for huge amounts of investment from the commercial PSBs, just what the broadcasters feel, after discussion, that they can afford. They are doing so; I want them to continue to feel that they can afford to invest in children. I want a guarantee from them, but there is no guarantee—there is no framework for them to guarantee such a thing. As I said, Ofcom often finds itself in an impossible position on this issue and can sometimes look ineffective and inadequate, because even though it proves through research that more provision for children is needed from commercial PSBs, they cannot do anything about it, as the legislation prevents them doing so.
Throughout the passage of the Bill we have talked about safeguarding and protection. Well, this amendment is about safeguarding and protecting our children’s production sector and ensuring that it continues. The sentiments behind the amendment, which I believe are sensible and reasonable, are transparency and trust—it was in that spirit that I kept the Minister regularly informed. I also engaged with Ofcom and the commercial PSBs to discuss my amendment and I have been waiting anxiously to see how the Government would respond. I am rather disappointed with what the Minister has just said.
We do not know who might own public service companies in the near future or whether they will feel obliged to provide British content for our children. Therefore, I feel that we cannot and must not leave anything to chance. Also we cannot afford to waste precious time waiting to see how the market beds in and develops, as the Minister said, because it is highly unlikely that there will be another opportunity like this to return PSB children’s programming to tier 2 where it belongs and secure homemade programming for our children in the foreseeable future, rather than leave it languishing in tier 3 where we have seen it continue to decline over the past 10 years.
Throughout my 40 years working in children’s television I have personally witnessed the lasting legacy that British-made programmes have had on the nation’s children, who discovered themselves and their world. They knew they were loved, they felt special, because the programmes reflected their lives. We owe it to the generations to come to feel and experience that same thing. I am passionate and determined not to abandon our nation’s children and I hope that the Minister and the Government will walk that path with me by rethinking and reconsidering my amendment in more depth, as I cannot give an undertaking that we will not return to this issue on Report. However, at this stage, with a heavy heart, I beg leave to withdraw the amendment.
Lord Puttnam
“Mergers: specified considerations for mergers involving broadcasting media enterprises
(1) Section 58 of the Enterprise Act 2002 (specified considerations) is amended as follows.(2) After section (2C) insert—“(2D) The need for those who, as a result of a merger, have increased control of media enterprises (excluding newspaper enterprises) which require a broadcasting licence, under section 3(3) of the Broadcasting Act 1990 or the Broadcasting Act 1996, to be fit and proper to hold such a licence having regard in particular to—(a) the extent of any criminal wrongdoing that has taken place by companies and other organisations under their control; and(b) the extent of any failures of corporate governance and management in such companies and organisations.(2E) The need for there to be, in the governance arrangements of any relevant media enterprise (excluding newspaper enterprises), which provides news services, sufficient safeguards for unrestricted editorial freedom in the provision of full and accurate news services by such media enterprises.(2F) The need to prevent a media enterprise (excluding a newspaper enterprise) from—(a) exercising undue influence over distribution of, and access to, rights, talent and other forms of cultural expression;(b) promoting its own business interests through its editorial outlets, to the detriment of competitors where this is against the wider public interest;(c) exercising undue pressure in the regulatory and political environment, to the detriment of competitors where this is against the wider public interest.”
Lord Puttnam (Lab)
My Lords, in speaking to the two amendments that stand in my name, I should first declare my interest both as a content owner and as president of the Film Distributors’ Association. A number of factors encourage me to take up what is in effect the unfinished business of 15 years ago, when I was closely involved in the 2003 Communications Bill. The most recent was something that the noble Baroness, Lady Warsi, said on the “Today” programme 10 days ago. In response to a question regarding the ramifications of the immigration controversy raging across the Atlantic, she said:
“It all comes down to the type of country we want to live in”.
Of course, the noble Baroness was right. Pretty well every decision we make in this House sooner or later comes down to the type of country we want to live in. What we have just heard from the noble Baroness, Lady Benjamin, is about precisely that. What kind of country do we want to live in, and how far are we prepared to push ourselves to get there?
As I am sure the noble Baroness, Lady Buscombe, will confirm, this was repeatedly discussed during the passage of what became the Communications Act 2003. At that time we were by turns both amused and concerned by the antics of the then Italian Prime Minister Silvio Berlusconi and his attempts to muzzle, or better still own, the Italian media. This House was at one in agreeing that the provision of a free, fair and plural media ecology, in all its many and varied forms, was fundamental to the health of any democracy worthy of the name.
As a result, and after a great deal of debate, the general duties of Ofcom in carrying out its functions were finally legislated in this way:
“It shall be the principal duty of OFCOM, in carrying out their functions—
(a) to further the interests of citizens in relation to communications matters; and
(b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.
The wording of those two general duties, and the order in which they fall, along with the public interest test that accompanied them, were hard fought for, and they were won by an overwhelming vote on the Floor of this House—two-thirds to one-third—against the wishes of both Front Benches.
Fifteen years later, we find ourselves looking anxiously across the Atlantic at a new and democratically elected kind of Berlusconi on stilts—and we are jolted into reminding ourselves how very much ownership of both the media and the message matters. The true architect of the public interest test was the noble Lord, Lord Crickhowell, and the engineer who created the double lock that gave it teeth was the now noble Lord, Lord Lansley.
As the House may know, a public interest intervention notice is issued by the Secretary of State, and specifies a media interest. The grounds for referral are listed in Section 58 of the Enterprise Act 2002: the media interest grounds for referral are listed in Section 58 (2A) to (2C). The Secretary of State may specify further grounds for referral by laying an order before Parliament. Ofcom then carries out a report based on the grounds specified by the Secretary of State.
That is what is supposed to happen—but, as we discovered during the misadventures of the then Secretary of State, Jeremy Hunt, there is far too much wriggle room, and a lack of clarity as to the precise grounds on which a referral is based. In this respect, I supplied the Minister with a copy of the five-page letter I sent to Jeremy Hunt on 11 March 2011, setting out the reasons why I believe that the UILs he proposed to set in place prior to waving through the then News Corp—now 21st Century Fox—bid for what was then called BskyB were hopelessly inadequate. Milly Dowler’s death made any response to that letter wholly unnecessary.
Following a meeting that the present Secretary of State kindly agreed to, I recently sent her a copy of that letter, for the consideration of her officials. In my note to her I included a few additional reasons why I felt reference to Ofcom was the only sensible way in which any new bid for Sky could be transparently dealt with. Given that the Government have the world’s most highly regarded media regulator at their service, it is extremely hard to see why they would not be eager to distance themselves from the well-documented suspicions of favours given and favours returned that now, sadly, dog their predecessors.
The purpose of my amendments is to buttress the referral process by adding further and easily understood grounds directly to the Bill. Specifically, they would add a fit and proper persons test, which, somewhat bizarrely, exists only as an ongoing test for licence holders, not bidders, and is thus to be conducted only after the fact of any merger. I say “bizarrely” because I ask: how sensible does it seem to judge the ongoing fitness and propriety of a licence to a higher standard than the one sought at entry? Possibly when she comes to answer the Minister might help me understand what I see as an extraordinary anomaly.
Baroness Bonham-Carter of Yarnbury
My Lords, my name is also attached to these amendments, and I support the noble Lord, Lord Puttnam. They add the necessary extra scrutiny needed for media mergers and ensure that Ofcom’s fit and proper test is effectively applied.
These amendments specify further grounds for the Secretary of State to refer media mergers to Ofcom. As the noble Lord, Lord Puttnam, mentioned, the existing plurality safeguards are no longer adequate. They do not deal with market dominance and they are not sufficient for protecting editorial independence of media outlets. It is vital for the media environment that no company possesses disproportionate power to influence public opinion or the political and policy-making process. Plurality safeguards are an essential part of protecting the public and decision-makers from media organisations which are allowed to expand without proper scrutiny.
Then there is the matter of Ofcom’s fit and proper test. As many noble Lords will know, Ofcom must supply a test of fitness and propriety to owners of broadcast licences. At the moment, this test is not spelled out. What we propose would add definition to the test, using the recommendations of Leveson 2. Taking the current Sky-Fox bid as an example, I believe that this would ensure that the present chief executive of 21st Century Fox, James Murdoch, would undergo proper scrutiny if he were to retain a senior position at Sky.
I echo the noble Lord, Lord Puttnam, in one of the letters to which he referred. How we deal with the concentration of power decides the kind of country we are. I, too, understood that that is what Theresa May said when she became Prime Minister. Now it is for her Government to follow the logic, evidence and facts, and accept these amendments. They do not bind the Government; they simply strengthen the merger and plurality regime already in place. They put appropriate and proportionate power in the hands of an independent regulator, Ofcom, in order to protect the interests of citizens and consumers.
To quote my friend, Sir Vince Cable:
“The public interest centres on plurality and fitness”.
These are beneficial proposals which have been carefully agreed through cross-party consideration. I hope that the Minister will recognise this and respond positively.
Baroness O'Neill of Bengarve (CB)
My Lords, I support this amendment. I remember well—and the noble Lord, Lord Puttnam has reminded us of it—that, in 2003, we had quite dramatic discussions in your Lordships’ House about the dual duties of Ofcom to the citizen and to the consumer. There was a bit of a wobble after Ofcom was set up, but since then it has properly seen itself as defending these two separate interests and not, as was initially suggested, merging them into the interests of a fictitious character called the citizen-consumer. That was an unfortunate, but brief, episode.
I believe the noble Lord, Lord Puttnam, hit the nail on the head when he said that this pair of amendments is highly congruent with the Government’s policy. Not merely has the Prime Minister spoken about acting in the interests of “you rather than the few”, she has also started to refer to “issues of corporate governance”. This is basically what this is about—the standards that we think are relevant in corporate governance.
This has been a very unhappy decade in which there have been failures of corporate governance in many sectors. I am a member of the Banking Standards Board, looking at the culture of the banks. I read every day about this culture and realise how vital is the requirement that only those who have passed fit and proper person tests come into positions of leadership and influence in the banking sector. I realise how important this also is for the media sector—indeed, it is perhaps more important.
As we have seen clearly in the last few weeks, with the presidential campaign in the United States, the media have changed hugely in this decade. We can get spiralling misinformation that is extremely difficult to stem once it gets a hold in social media; once it spreads with the rapidity which the greediest of proprietors could never have imagined. In this world, more than ever, serious corporate governance has to take account of the ethics, as well as the law, of the fitness and propriety of leadership, as well as the adequacy of regulation. I support the proposal that Ofcom get a clear grip on the fitness and propriety of those who lead the broadcasting industries.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very important debate on a very big issue. Its sharpness has been reinforced by the fact that we are currently in a process involving all the issues that have been referred to. Obviously, this will be reflected in the fact that the response will not be made by a Minister in the department which might have to deal with some of the results of the current proposals for a merger, and we respect that and understand the reasons for that.
The wonderful speech by my noble friend Lord Puttnam, which took us back to the origins of the Ofcom regime that we now have and reflected on points along the way, including the dark shadows cast by the events of 2011, gave a texture to this that makes it much more important. The noble Baroness, Lady O’Neill, spoke about the need to think about how all this interfaces into descriptions of the sort of country we want to live in and the sort of society that we can enjoy. The necessary handles on both policy and the implementation of that policy are very important.
At heart, the amendments are simple. They draw out in more detail and focus on issues which have been live ever since they were first introduced. Indeed, I recall discussions in your Lordships’ House on two Bills which dealt with issues that bore on this and for which we had debates of this type. That does not mean to say that this is ground that no longer needs to be tilled. It does, because in thinking about this we have to recognise some of the issues that have already surfaced in Committee today and throughout the Bill—that when we are talking about the media, particularly but not restricted to the digital media, we have to think very carefully about the pace of change and the adjustments that have to be made to the policy framework in order to achieve what will be proportionate and appropriate regulatory functions later on down the line.
The good thing about the amendments is that they make us think about the words that were used, which seemed appropriate at the time, in relation to the twin requirements: that we look at plurality in relation to media but also at control. If this were a simple case of looking at how a monopoly might influence outcomes and how consumers are treated, it would not be necessary, perhaps, to delve so deeply. The issues that are currently addressed by the CMA, for instance, are largely economic. They deal with prices. They deal with the way in which consumers are treated, but they are basically around whether or not the price has been artificially moved in order to favour the producer against the citizen. In that sense, we do not need to think too hard about some of the issues, although we can regret them, as we did in the debate in the dinner hour, which I was able to participate in, which focused almost exclusively on why consumers have disappeared from government, consumer interests are rarely referred to and there are not even consumer panels on the CMA. But that debate can be read in Hansard, and I am sure it will be of much interest to those who are interested in this point.
The amendments would go back over the grounds on which a PIIN is issued and make it clearer than it is currently that simple questions of plurality, which are readily gamed in terms of corporate structures these days—this issue was perhaps not so resonant at the time that the legislation was drafted—need to have a little bit more bite if they are to look at some of the detail that we want in this area. We have to look not just at the question of ownership and control in relation to a market-facing issue but at the way in which such an agglomeration can distort and change that market, which is not in the public interest. It is very important that we do that. There may well be a way of dealing with this under the existing legislation, but it would be so much easier if the amendment was accepted because it would take us down a line that was more focused on the particularity of the media arrangements.
Then there is the question of the fit and proper person test for those who have broadcast licences. The basic structure is there. Again, on reflection, it could be argued—and I think it has been demonstrated today—that without more concern about the issues which arise out of the merger, without more concern about how the operation will work in terms of who activates it, what exactly the issues are that will be looked at, what the proprieties are that we are concerned about, and where the ethical concerns are and all that, then it will not be as effective. I look forward to hearing from the Minister.
Baroness Buscombe (Con)
My Lords, I thank all noble Lords who have taken part in this important debate. It is good to have this debate.
This group of amendments seeks to make extensive changes to the broadcast media public interest considerations that may be relied upon to intervene in certain media merger situations and the fit and proper test that Ofcom has a duty to apply to all those who hold a broadcasting licence in the UK.
Before I get into the detail, the debate has included views from across the House about the parties to the Fox/Sky merger. There is a proposed merger currently in train, which it is very likely the Secretary of State will need to consider under her existing powers. As the Secretary of State noted in her written statement of 10 January, any decision will be a quasi-judicial one. It is important that she is able to act independently and that the process is scrupulously fair and impartial. As a result, neither I nor any Minister can comment on the merits of this specific case. I will have to restrict my comments to the substance of the amendments themselves.
I have noted carefully the views of noble Lords, and of the noble Lord, Lord Puttnam, in particular. I have a transcript here of some of the debate of the then Communications Bill, in 2003. Of course, the noble Baroness, Lady O’Neill, remembered the key issue about citizen and consumer. Indeed, Lord Puttnam and I met outside this Chamber to try to come to terms with our approach to this issue—I was part of Her Majesty’s Opposition in those days. A lot was achieved. Of course, it was a government amendment on Third Reading which created the plurality and public interest test. It was my noble friend Lord Lansley, who is unfortunately unable to be in his place tonight, who sat on the draft legislative committee on that Bill, and who retains that interest.
Drawing all the contributions together brings us to a single question: do the Government believe they have the necessary powers to allow them to deal with complex media mergers and a concentration of ownership that would be damaging to media plurality?
In our view, the tests introduced in 2003 are wide-ranging and provide the Secretary of State for Culture, Media and Sport, who is responsible for media mergers, with a wide discretion to intervene. For example, in cases where there are concerns about media plurality, or where a bidder does not have a genuine commitment to the UK’s well-established rules on content standards and cross-promotion, which are overseen by Ofcom, the Secretary of State can consider those concerns as part of her deliberations as to whether to intervene in the proposed merger.
Turning to the amendments themselves, given the discretion to intervene based on the existing media public interest considerations, we do not believe it is necessary to add the additional requirements set out in Amendment 229ZA and would argue that these are matters that can already be considered under the existing tests. In addition, the matters set out are considered by Ofcom on an ongoing basis in its regulatory role.
There are three existing broadcast media public interest considerations that the Secretary of State can take into account in deciding whether or not to intervene in a merger. The first is the need for a sufficient plurality of persons with control of media enterprises—I stress, plurality of persons. The second is the need for a wide range of broadcasting which is both high quality and appeals to a wide variety of interests. In other words, the focus must be on content and plurality of content. The third is the need for persons carrying on media enterprises to have a genuine commitment to broadcasting standards. Together, these powers give the Secretary of State discretion to consider a wide range of matters in deciding whether the specified public interests may be relevant, and whether or not to intervene in a particular merger.
Amendment 229ZA, which inserts new Section 58(2D) into the Enterprise Act, would allow the Secretary of State to intervene in a media merger based on the need for those holding broadcasting licences to be a fit and proper person, as noble Lords have said today. The issue of who is a fit and proper person to hold a broadcasting licence is a regulatory matter for Ofcom. Ofcom is under an ongoing duty to remain satisfied that those holding broadcasting licences are fit and proper to do so, under Section 3 of the Broadcast Act 1990 and Section 3 of the Broadcast Act 1996. Ofcom’s assessment of these matters will consider the conduct of those who have material influence or control over broadcast licensees and will consider a wide range of factors in assessing who is fit and proper, including the matters set out in the amendment.
The amendment also proposes a new Section 58(2E), which is aimed at allowing intervention on the basis that the governance of broadcast media enterprises providing news needs to include sufficient safeguards for editorial freedom in the provision of full and accurate news services. I entirely accept—and the Government entirely agree with noble Lords on this—that the issue of governance is crucial, although we discussed in earlier debates today that the issue of accurate news is becoming a very difficult one and will exercise all our minds in the coming months. It is a long-established condition of broadcast licences in the UK that news is reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code.
The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test.
Lord Stevenson of Balmacara
I thank the Minister for going through this in so much detail. The issue raised in the first part of the amendment on the fit and proper person test was not whether the powers exist but how they would be triggered. The worry is that they would be triggered post hoc rather than anticipatorily with regard to a merger. Do the Government accept that there is a difficulty here?
Baroness Buscombe
The Government do not accept that there is a difficulty in this. The important issue is that the powers remain broad in their application. To the best of my understanding, though, there is no difficulty regarding when they are triggered.
Lord Puttnam
What I believe the noble Lord, Lord Stevenson, is saying, and it is very important, is that there is an accidental anomaly in the Bill. As someone who, like the Minister, pored over every word of it, I take some responsibility for this, but it is extraordinary— I even referred to it as bizarre—that the bar that is set for an ongoing licensee is higher than the bar for a bidder. Surely common sense requires that someone bidding has to reach the same standards of honesty and probity that are required of an ongoing licensee. There is an anomaly, and I am trying to help the Government to get rid of it because it should not be there. Obviously there should be a bar, but it should apply to anyone applying for a licence just as it does to anyone who has an ongoing licence that is being looked at.
Baroness Buscombe
I am going to wait for a reply on that. I would like to be able to respond tonight, rather than saying that I will write to noble Lords; if the Committee will bear with me, let us just wait and see. I understand what the noble Lord is saying about bidders meeting the same standards as those who already have a licence.
It is a long-established condition of broadcast licences in the UK that news be reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code. The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test. I have been informed that the fit and proper test can be looked at by Ofcom only once they hold a licence, but we believe that the provisions on genuine commitment to broadcasting standards give the Secretary of State the powers she needs in this regard.
Lord Puttnam
I think that we all deserve to be very clear about this: can we be sure that the Secretary of State will apply exactly the same standards to a bidder as she would require of an ongoing licensee?
Baroness Buscombe
There is nothing coming from the Box—I think that I will have to come back to this point.
Ofcom’s role as a regulator is to have ongoing oversight of these matters. The important point, however, is that the Secretary of State’s power to intervene in media mergers provides an additional layer of protection for media plurality in the UK. In the case of Amendment 229ZA, the very fact that these matters are part of the regulatory broadcasting framework with which licence holders must comply means that they can be taken into account by the Secretary of State in deciding whether or not to intervene, particularly in terms of the impact that such matters have on the need for persons holding broadcast licences to have a commitment to broadcasting standards. In addition, any merger must also be judged on competition grounds by the relevant competition authority, and the existing competition law. The Government believe that the existing provisions in the Enterprise Act 2002 already give the Secretary of State wide and proportionate powers in relation to proposed media mergers. While we understand the intent behind this amendment, we do not judge that it is necessary.
Amendment 229ZB would similarly seek to add unlawful acts or corporate governance failures as specific matters that Ofcom could take account of when determining, on an ongoing basis, whether an individual or a corporate body satisfies the fit and proper person test, which will include an assessment of those with material influence or control over such bodies. Ofcom can and does take into account such matters and this amendment is therefore unnecessary. There is also a risk that this amendment may potentially narrow Ofcom’s discretion here, although I acknowledge that that is not the noble Lord’s intention.
From a legal standpoint, there is always a danger in seeking narrowly to define the parameters of the law. Indeed, I sought to do just that during our debates on this issue back in 2003. I was seeking to limit the scope—the boundaries—of the Government’s intended plurality test; I wanted the law to be narrowly defined and to target specific circumstances in which the plurality and public interest test could apply. The noble Lord, Lord Puttnam, disagreed with me, saying that breadth is very important. Of course, it was he who won the day. So I do think it important to take care when trying to narrowly define what does and does not apply, thus narrowing the scope, as that can constrain the whole approach. It is important to take this into account when considering these amendments overall.
The Government therefore believe that the powers introduced in 2003 are sufficiently wide to deal with complex media merger cases which raise public interest concerns and, for this reason, we ask the noble Lord to withdraw his amendments.
Lord Puttnam
I thank the noble Baroness for an extremely full response. Perhaps I may say several things. First—I probably should have made it clearer—the noble Baroness was extraordinarily helpful and generous to me during the very painful passage of that Bill. On every occasion when I sought some form of compromise, she always came up with a constructive solution. She knows I feel this, because we have discussed it, but I am very happy to pay public tribute to her.
I think that some mistakes were made in 2003. We could not look into the future, and there were things that we were not even allowed to do under our terms of reference. However, it is worth recalling that, yes, it was a government amendment that was passed at Third Reading, but it was passed, as the noble Baroness will remember, because of a crushing defeat on Report.
I have no desire whatever to go through that process again, I promise you. On the other hand, I think I have a sufficient understanding of this House to know that when it comes to the issue of media ownership and any suspicion of undue pressure, this House will again vote overwhelmingly in favour should I press these amendments. I do not think that my amendments as they stand are good enough. The noble Lord, Lord Stevenson, has already hinted at that. I would infinitely prefer the Government to come back and offer the sense of security that I seek. I very much liked the Secretary of State on the one occasion I met her. She is clearly an honourable, decent woman. It would be very helpful for her to be able to say that the standards that she would require of a licensee are exactly the same, and as exacting, as those of a bidder. I think it would be good for the Government.
I was not being silly when I discussed Theresa May’s speech. I found it a very remarkable speech from an incoming Prime Minister. I think she did lay out her stall. I think we have every reason to have expectations that are higher than we had of recent predecessor Governments. I am quite ashamed of some of the things that my own Government did in respect of cosying up to and colluding with media owners. That has got to stop.
There is a wonderful line of Mark Twain’s: “A lie can run around the world while the truth is still trying to put its boots on”. We are living in that world. We are living in a post-truth society. We can no longer afford an over-cosy relationship between the Government of the day and media owners whose job is simply to tell the truth as they see it. That is all I am seeking.
I am very grateful to the Committee. I will happily withdraw this amendment, but I am certain that we will be returning to this subject in the hope that the amendments put forward by the Government will be acceptable to the entire House. I beg leave to withdraw.
“OFCOM: regulation of digital publications
Within one year of the passing of this Act, the Secretary of State must report to each House of Parliament on the arrangements that would need to be made by OFCOM if it were to assume the responsibilities of an independent regulator for digital publications.”
Lord Stevenson of Balmacara
My Lords, this amendment deals with the preparations that will need to be made should we be in the unfortunate situation that was animadverted by Sir Brian Leveson when he finished his part 1 report, if the press self-regulation proposals made in it are not fulfilled.
The current situation is complex, and it may be slightly premature to assume that everything is going to fail, but I think that, of the two types of problem that he identified, the first—that no recognised regulator was appointed within a year of the recognition panel’s being established—has not come through. We have a recognised regulator, and it was approved very recently, within a year of the recognition panel’s being established. That is a good thing, and we should bank on that.
The second problem, however, remains. His feeling was that there would be no value in the self-regulatory proposals he was advocating if significant news publishers remained outside the recognised regulator. That has happened in spades. There is a body established by the industry and largely for the industry, IPSO, which is not seeking recognition under the existing procedures. Therefore, that would, I think, represent a failure in terms of Leveson’s original proposal. We also have a situation in which the recognised regulator is not attracting significant support from the press which might be regulated by it, although it does have some support, and that is good, and we support that. It is not, however, operating at the scale or encompassing sufficient of the broad press, which was the focus of the original report, to be considered a success.
We are facing a problem. The problem was anticipated, and the solution proposed by Lord Justice Leveson at that stage was a backstop regulator. Therefore this amendment—which is limited in terms of the exact wording to the digital media, although it could, I think, be read as more appropriate for the wider situation—is almost certainly going to be required because of the situation I have outlined. Obviously, we regret that. We wish, as we always have, that a properly self-regulatory system could be established. However, it is extraordinary that the press, as Lord Justice Leveson says, benefits from considerable support in statute for the activities that it wants, including a provision in an amendment to this Bill to protect journalists who wish to break stories that were in the public interest and who might otherwise be caught by concerns about data leakage. That is an example of the sorts of ways we have often legislated for and supported the press because everybody believes in a free press and believes that the press should be able to operate within the law and without any constraint. However, we also believe—this is particularly true of those who have been victims of press intrusion into their private lives—that the public will not settle for a situation in which the press escapes standards regulation altogether.
We will therefore face a situation within a few months where it is likely that it will not be possible that the Leveson proposals have been brought in and there is a need for a standards regulator. The standards regulator proposed by Leveson in his report is Ofcom, and there is much in the report which shows and explains why that would be a good thing. My amendment, which I hope the Government will accept, says that it is time to start to think about how this will impact on Ofcom’s work and to bring forward proposals under which that should operate. I beg to move.
Lord Foster of Bath (LD)
My Lords, it is four years after the Leveson inquiry, and I certainly believe that Section 40 of the Crime and Courts Act 2013 should be implemented, and should be implemented now. I voted for it in your Lordships’ House last October and I certainly support the amendments today, which have much the same effect. I also support the fail-safe amendment moved by the noble Lord, Lord Stevenson, although I hope that it is not necessary and that Section 40 will be brought in.
Some incredibly misleading statements have been made about the impact of Section 40. Most of the newspapers, as we know, do not support its implementation and have featured some quite amazing one-sided editorials. To the best of my knowledge, none of them has permitted a right of reply. I am the former Member of Parliament for the wonderful city of Bath, which is included in my title, so I am sure that noble Lords will not be surprised that I take a particular interest and am an avid online reader of the Bath Chronicle. Three weeks ago it published one of these anti-Section 40 diatribes. I wrote a rebuttal and asked the Bath Chronicle to publish it. I have not even had an acknowledgement so far—so much for a free press.
Perhaps to explain why I support these amendments, and to ensure it is published—albeit in Hansard rather than in the Bath Chronicle—I will read what I wrote, because it sums up exactly where I stand:
“I am a strong supporter of local newspapers and the Bath Chronicle in particular. But I was surprised by your recent editorial suggesting that measures being considered by parliament will mean that ‘Any investigation in the public interest could be silenced by anyone with a vested interest’. This is a complete misreading of the proposals made by Lord Justice Leveson after the Public Inquiry which followed the appalling phone hacking scandal.
Few could deny that in the past the press had a shocking track record of setting up its own toothless regulators which failed to protect the public. Leveson has proposed that the press should now establish a truly independent regulator whose independence is checked and then ‘recognised’ by a body which is itself impartial and independent from government or the press.
This is what the public want as shown by a YouGov poll just last week. When asked ‘Do you think it is important that any newspaper self-regulator undergoes an audit to ensure it is effective and that it is genuinely independent of both politicians and the press?’ nearly three-quarters (72%) said yes and just 6% said no.
The ‘regulator’ under which the Bath Chronicle operates—called IPSO—doesn’t meet this test. It is not only funded but controlled by the newspapers it regulates.
Were the Chronicle to join a ‘recognised’ regulator, or were IPSO to demonstrate through getting recognised that it met proper standards of independence and effectiveness, the funding issues you describe would not happen. Moreover, the public would be protected and you”—
that is, the Chronicle—
“would receive protection from wealthy and powerful local figures if they tried to bully you into withholding stories about them by threatening you with unaffordable court costs”.
My article ended:
“I hope Parliament will agree to support the public and back Leveson’s proposals”.
I certainly hope the Government will accept the amendments before us today.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, I am obliged to the noble Lord, Lord Stevenson, for expressing this amendment and also to the observations of the noble Lord, Lord Foster of Bath. I would say, with respect to his most recent comments, that the test of a free press is not whether or not they publish a letter. Indeed, the fact that they do not publish your letter is itself an expression of freedom.
Amendment 229ZC would require the Government to report to Parliament about the arrangements that would need to be made should Ofcom assume the responsibilities of an independent regulator of digital publications. I acknowledge the care with which the noble Lord, Lord Stevenson, has drafted this amendment. He was quite candid in saying that his real concern is the regulation of the press, but he was equally candid in indicating that, in order to come within scope for the purposes of this Bill, he was not really concerned with all publications by the press but only digital publications.
I see in his amendment an expression of concern—and, indeed, of frustration—over the lack of progress being made towards a viable avenue for press regulation. I am sure that in a sense that, in part, has prompted this amendment. However, he said himself that it might be slightly premature. With respect, I would concur with that observation. It is perhaps too soon—and people will say in response, “Four years after Leveson, is anything too soon?”—but we have to remember that the press landscape has altered quite dramatically over the last four or five years. That is reflected in the fact that certain matters have gone out for consultation—particularly with regard to Section 40, which is going to be raised in a later amendment—albeit that the consultation process has been somewhat stymied by an application for judicial review.
I move on to the core of the present amendment, which is the idea that we should move towards—and this was a backstop of Lord Leveson’s report—Ofcom as a regulator. The idea that Ofcom should regulate digital publications—albeit with “digital publications” not being a defined term, and I make nothing of that—has behind it the real push that Ofcom should become the regulator for the press. As I understand it, that is essentially what lies behind the amendment.
Let us remember that Ofcom already has huge responsibilities as a regulator, many of which we have debated over the last week. Among other things, it has to ensure that we have fast broadband connections, competition decisions, such as the current consideration of the future of Openreach, which has been referred to, and spectrum management, including forthcoming auctions. We have also discussed today its new role in respect of the BBC and its function in managing listed events, and we have heard from my noble friend Lord Borwick in respect of Ofcom’s regulatory functions and in respect of subtitles and the accessibility of on-demand services. There is plenty more, over and above that, that Ofcom does, and that is without even going into the question of postal regulatory functions.
We have the greatest respect for Ofcom as a regulator, but the question arises about how much more we can put on its plate. This amendment seeks to pile on more. For the first time, it would be setting a regulatory requirement on Ofcom, in statute, in relation to internet content, which is not TV-like, if I may use that rather crude term. As my noble friend Lady Buscombe has already made clear, moving to a situation in which Ofcom is a regulator of a broad range of online content would be an enormous undertaking for Ofcom, or indeed for any other regulatory body.
Lord Stevenson of Balmacara
I thank the noble and learned Lord for his full response. I am sorry that he guessed the plot rather early on in the game: I am guilty as charged. It was very hard to get anything on this into the scope of the Bill. There seems to have been a change of management upstairs in the Public Bill Office and they are much tougher than they used to be, and we will have to have a think about that.
Anyway, the reason for including the amendment was to have the debate that we have just had to find out a little more about the Government’s thinking, and to flag up that it is worth thinking about how we can recapture some of the cross-party spirit that informed the process leading up to the original Leveson proposal and, out of that, the statutory position we are now in. However, as the noble and learned Lord says, we may be a bit premature on that. You can never plan too far ahead, but it is cautious optimism to think that the department has begun thinking about these things. That is as far as we want to get on this. Following this good exchange, which can be read in Hansard, and the sense that we are at least on the same page, if not the same sentence, I beg leave to withdraw the amendment.
“Offence of using digital ticket purchasing software to purchase excessive number of tickets
(1) A person commits an offence if he or she utilises digital ticket purchasing software to purchase tickets over and above the number permitted in the condition of sale.(2) A person commits an offence if he or she knowingly resells or offers to resell, or allows to be resold or offered for resale on a secondary ticketing facility, a ticket that the person knows, or could reasonably suspect, was obtained using digital ticket purchasing software and was acting in the course of a business.(3) For the purposes of subsection (2) a person shall be treated as acting in the course of a business if he or she does anything as a result of which he or she makes a profit or aims to make a profit.(4) A person guilty of an offence under this section shall be liable on summary conviction to—(a) imprisonment for a period not exceeding 51 weeks,(b) a fine not exceeding level 5 on the standard scale, or(c) both.(5) In this section—“digital ticket purchasing software” means any machine, device, computer programme or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets;“retail ticket purchasing platform” shall mean a retail ticket purchasing website, application, phone system, or other technology platform used to sell tickets.”
Lord Stevenson of Balmacara
My Lords, before I introduce the amendment, I wonder whether we could reflect on the fact that we are missing rather an important person from the debate. The noble Baroness Heyhoe Flint was a keen and active Member of your Lordships’ House. She had several special interests apart from cricket and a wonderful raconteur’s skill of telling stories of her exploits at the crease. She was rather good at it. Whatever it was, it was always a delight to hear. She had a special interest in secondary ticketing, and in many of the debates held in your Lordships’ House on this issue, she was present and often contributed. She was responsible, along with the noble Lord, Lord Moynihan, whom I see in his place, for getting changes made to the Consumer Rights Act 2015, which brought in the first of what we hope will be a series of measures to improve and clear up this issue.
The amendment to the Consumer Rights Bill that we inserted in 2015 raised from a secondary legislation provision to a primary legislation provision a series of measures to improve and clear up the secondary ticketing market. It was done primarily to ensure that those who buy tickets for sports, arts and music events can do so in the sure and certain knowledge that their tickets are valid, that they will be able to gain access to what they want to see and that they are not being ripped off in the process.
It is fair to say that we got this only after a considerable struggle—and the noble Lord, Lord Moynihan, might wish to share with us some of the difficulties that he experienced—but one of the things that was necessary in order to achieve that victory was to agree to a report on secondary ticketing to be carried out by a distinguished person. That person was Professor Waterson. He has now done that and the report has come out. Those involved are entitled to take a moment to reflect on the fact that what we were saying in Committee on the Bill and what we did in moving amendments and getting them inserted into what became the Act was brought out by the professor’s report, which was a comprehensive piece of work that showed that the scale of the issue was as we described it and that there was a need for further action.
The Bill before us is an opportunity to do more work, and the group of amendments that I am introducing—and for which I am hoping to get support from the noble Lords, Lord Moynihan, Lord Clement-Jones and Lord Foster of Bath, and others as we go through it—is a mixed bag because there are still things that need to be sorted out. An issue that arose in the other place and which was very nearly accepted by the Government was the question of an offence caused by using digital ticket-purchasing software—so-called bots. They are a scourge of many people who organise and run events—particularly in the music industry, but they apply right across the piece. Automated software operated by a number of individuals creates a situation where virtually no tickets are available on the first release of an event, but they then appear very quickly at very much higher prices through secondary ticket outlets. This amendment would, we hope, stamp this out. It has been tried in a number of territories, including New York very recently, and it does seem to work, so we recommend that.
The other amendments deal with changes that we would like to see to improve the broader approach taken in the Consumer Rights Act which, in practice, needs to be taken to another stage. They are basically to do with greater transparency and accountability in how the secondary ticket market works. It is really important, however, that we get clear at the start that nothing in these amendments would stop the resale of tickets once purchased by an individual who wished to sell them because they could not attend the event or that they wanted to sell them on to other people in a closed circle. This is not about private purchases or operations. It is about those who go into the ticket market on a commercial basis, very often making huge amounts of money by exploiting people who do not understand and cannot get to the heart of the issue and therefore pay ridiculous prices. It also would help stamp out what is clearly a fraudulent activity that has been partially stopped by the changes made in 2015 but has not stopped completely. People buy what look on the surface to be valid tickets, but when they turn up at the venue they discover that they are not valid and are refused entry. This is fraud on an industrial scale, and probably the source of much money laundering and illegal activity, which was referred to by the police in their Podium report prior to the 2012 Olympics.
These amendments should be taken as a batch; they build on work in which this House has already been involved and they are the right changes to make this stage. I beg to move.
Lord Moynihan (Con)
My Lords, I support the seven amendments in this group spoken to by the noble Lord, Lord Stevenson. I echo that it is particularly appropriate in many ways, albeit very sad, that we debate the often malicious and pernicious use of bots on the sad day of the funeral of my very close friend Lady Rachael Heyhoe Flint. One afternoon, she was purposefully striding down the Corridor outside the Peers’ Guest Room, and said, “I need you”. I jumped to attention and we headed off to the Department for Business, Innovation and Skills. I was totally unaware of why I was accompanying her on that occasion, or indeed the matter proposed for discussion. Rachael launched into a thinly veiled, front-foot attack on those in and around the secondary market, who fleece consumers to no benefit to cricketers, musicians, sportsmen and sportswomen, who are the ones who entertain them. Through her hard work and persuasive skills, I was galvanised into action. I thank the Government for the progress that we made in the Consumer Rights Bill at the time, as well as the Opposition and noble Lords from all sides of the House.
That was just a first yet important step. Today is the second opportunity to make further progress. I was very sad not to be at Rachael’s funeral today to pay my close personal, political and sporting respects, but she would have been the first to admonish me. She would have said, “Why on earth are you not down in Westminster putting on your pads, your gloves and picking up your bat, and going into the centre of the parliamentary wicket to hit those bots for six?”. I will do my best, captain. I will do my best. In paying tribute to her, because she was absolutely instrumental in the work that we undertook during the passage of that Bill, I must also pay tribute to Nigel Adams, Member of Parliament in another place, who has taken this to his heart and has done so much good work.
The whole issue of bots goes right to the heart of the disappointment of thousands of music and sporting fans who have on occasion faced the reality of having their credit card ready in their hand with minutes to go before the sale of tickets for a particular gig or match but no sooner do they go on sale than they sell out. Minutes later, tickets can be spotted on reselling websites. The new, hidden threat that is snatching tickets from under the noses of genuine fans is ticketing bots.
Music and sports fans have always battled against touts buying up tickets to make a quick buck by selling them on again at inflated prices. But now touts have a new cyberweapon that allows them to step up their game. These ticketing bots are software; they buy up huge numbers of tickets for events as soon as they go on sale. Buyers then use the secondary websites to sell them on. Reg Walker, who has done an enormous amount of good work on this at the O2, stated:
“They then harvest tickets at high speed and that effectively blocks out genuine fans from being able to purchase tickets at face value. These tickets are then immediately resold on secondary ticketing platforms”.
What then happens is that those who are sitting in their garages using bots programmed with all this information press the button immediately and get their 200 tickets, and sell them on to one of the four secondary platforms where nearly 80% to 90% of resale now takes place. In so doing, they do not necessarily always get all the tickets they want. Their preferred status and good relationship with the platform is critical to their next sale. So, if necessary, they will have the income on a very high-price ticket with a high margin to go out and counterfeit tickets to make up the gap between those they have committed to supply and the actual number that they have. That is why the wholesale harvesting of tickets by touts not only incentivises these individuals to create relationships with the main providers of the secondary market tickets, the providers even develop power-seller programmes to encourage the delivery of mass tickets.
This is all at the same time that you are trying to type in your name in order to get a couple of tickets, as the true fan of a music show at the O2 or a sporting event. The reality is that you have no chance. We have all tried it; I have tried it on many occasions and cannot believe that they have sold out before I have got down my name, address, credit card number and so on. It is no surprise, though, when bots are available purely for the benefit of the profit of the individual. No artists, no sportsmen and no fans benefit. That mark- up goes straight into the pocket of the individual who has got the ticket and the secondary sales platforms that provide those tickets at inflated prices to consumers.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Lords, Lord Stevenson and Lord Moynihan. I shall speak to Amendment 231 and express my support for Amendments 230 and 233B to 233E. Despite the lateness of the hour, I hope that the Minister will not mind my adding my tribute to the late Baroness Heyhoe Flint. She will be greatly missed, and it was moving to hear what the noble Lord, Lord Moynihan, had to say. In a sense it is a complete loss not to have her here today to speak to these amendments because we know that she would have made a passionate case for all of them, so we are here to help move forward this campaign. I am a member of the All-Party Parliamentary Group on Ticket Abuse. Together with other noble Lords, I debated these matters on the Consumer Rights Bill and I feel strongly that we must move on from where we are today. I want to make a few comments in connection with the amendments for that reason.
The market in ticket resale is some £1 billion per annum across music, sports, theatre and comedy, and it is a very lucrative business. There is increasing evidence that it is a market manipulated by touts. We have listened to the egregious examples given by the noble Lord, Lord Moynihan. Fans who want to buy tickets for the events that are most highly in demand are systematically directed towards platforms like viagogo, StubHub, Get Me In and Seatwave, where scalpers and bot users are able to operate anonymously and bulk-sell inventory at hyped-up prices. Another example to add to those already given is the latest in a long line of victims: Ed Sheeran fans attempting to buy tickets last week for his upcoming UK arena shows. I looked at the ticket listings for his concert at the O2 on 2 May and counted almost 1,500 tickets for sale across Get Me In, Seatwave, StubHub and viagogo, all for prices way over face value, with service fees in excess of 20%.
Ed Sheeran has publicly condemned ticket touts and before these shows went on sale he carefully communicated to his audience to buy only from authorised ticket agents. He also appointed a resale agent to enable fans to transfer tickets at face value, yet touts still infiltrated the sale. No wonder people are so angry: they feel the system is rigged. An industry campaign, the FanFair Alliance, is fast gathering support, and I am very grateful to it for helping brief us all for this debate. Fans themselves are petitioning the Government. More than 33,000 have signed a parliamentary petition in the last week, begging politicians to tackle this issue. Of course, we have debated this in Parliament. The Culture, Media and Sport Select Committee held a short inquiry which came to the conclusion late last year that action was needed. The committee chair has described ticket touting as “a national scandal” and a massive racket which is making people in the industry millions, while exploiting genuine fans who just want to pay a fair price to attend live events.
The noble Lords, Lord Moynihan and Lord Stevenson, mentioned the report undertaken for the Government by Professor Michael Waterson, which raised major concerns. He made nine recommendations to the Government, yet here we are eight months later and despite some encouraging words in the other place, particularly about bots, the Government have yet to respond. Legislation, even the inadequate legislation we managed to get the Government to agree to on the Consumer Rights Bill, is still not being enforced. All the secondary ticketing sites that I mentioned still operate without a shred of transparency. How many more members of the public will be ripped off before the Government decide to take action? There is clearly an urgent need for government intervention in this market, to push forward the handful of decisive actions which are all reflected in the range of amendments being tabled today.
We know that the amendment on bots is similar to the one put forward in the House of Commons, and I want to add the name of Sharon Hodgson to that of Nigel Adams, because she has played a major role in the campaign in the other place.
Lord Moynihan
I am very grateful to the noble Lord for giving way because it gives me the opportunity of declaring my interest as co-chair with Sharon Hodgson of the all-party group. I echo the view that without her extraordinary energy, a lot of the cross-party support in another place would not have been secured. We should recognise that as an important contribution today.
Lord Clement-Jones
I thank the noble Lord for that. I will not go into the detail—it has been very well described by the two noble Lords—but measures to criminalise the use of bots were implemented last year in New York, and have since been extended to many other states. Why should the US have better legislation that we do? At a minimum, we would like to see similar legislation implemented and enforced in the UK.
I should speak very briefly to Amendment 231, because it is in my name and that of the noble Lord, Lord Foster of Bath. This amendment would give artists and event organisers greater control over who is authorised to resell their tickets. It would add to the Consumer Rights Act 2015 a provision requiring online secondary ticketing platforms to resell tickets only for events where they were the authorised resale agent. I realise, of course, that it needs further work—it probably does not quite deliver the purpose for which it was intended—but it does have very considerable support in principle, particularly, interestingly, from the Society of London Theatre and UK Theatre, both of which have written to express their support. It would place further control on the UK secondary ticketing market, putting the power back into the hands of the promoters of events to control their own ticketing by allowing resale only via authorised secondary ticketing websites, in a similar way to how an event organiser currently appoints a primary ticketing agent or agents. This amendment would allow them, if they chose to, to also appoint a secondary ticketing agent or agents to enable ticket resale. This is an important measure that, if we get the drafting right, could have a major impact.
All the measures contained in these amendments are what most sensible people would view as pragmatic steps that should help protect consumers without any real risk of unintended consequences. The only losers will be the touts. Why should audiences in the UK get anything less than the best protection? I hope that the Government will continue to move forward in this area and listen to the arguments being made. Quite apart from responding to the amendments, I very much hope that the Minister can give us some idea of when the Government will respond on Waterson—it is high time that we had a proper answer on those recommendations. I look forward to hearing what the Minister has to say.
The Earl of Glasgow (LD)
My Lords, I support Amendments 230 and 231, to which my noble friends Lord Clement-Jones and Lord Foster of Bath have put their names. I am very aware of the time, so I am going to be very brief. Most of what I wanted to say has already been said. The intention of the two amendments, as I understand them, is to help prevent fans who are keen to attend a concert, sporting event or popular West End show from being misled or ripped off when they buy their tickets from a secondary market on the internet.
The first choice, of course, is to buy tickets directly from the theatre, sporting venue or event organiser. This is known as the primary market, where people pay the advertised price and there should be no problem. But if someone has trouble getting tickets from a primary source they may find themselves resorting to one of the secondary market websites—StubHub and viagogo are two of the best known. The buyer is now in a sort of digital marketplace where buying and selling is the name of the game. If they are lucky they may find what they are looking for but still have to pay considerably more than the face value of the tickets. If they are very lucky, close to the date of the event, they may even have to pay less than the original price. None the less, they have entered a world where fraudsters and touts thrive.
Tickets for popular events may already have been bought up by groups that are only out to make a profit by reselling them. Sometimes many of the tickets have already been hoovered up by bots and offered at an extortionate price. Of course people can always refuse to buy them, but there are those who are want a ticket at any price. Mark McLaren of FanFair has stated that online event ticketing started as a great idea, has grown into a very big business and has now become no less than a racket.
These important amendments attempt to contain and control that racket. The Consumer Rights Act 2015 addresses the issue and tries to regulate those practices, but as my noble friend Lord Clement-Jones said, we seem to be having trouble in enforcing the law. One of the problems is that many of the secondary ticket websites are registered abroad. The recently commissioned Waterson report has made recommendations that should improve the situation, but even that report had to admit that this is a very complex issue, with a lot of potential loopholes. If my noble friend’s amendments can be agreed, that would be an important step in the right direction.
Lord Ashton of Hyde
My Lords, I too would, of course, like to pay tribute, on behalf of the Government, to Baroness Heyhoe Flint today. I agree that it is particularly appropriate that we should be discussing this subject today.
In 2015 this House acknowledged the complexity of online ticketing by including the requirement for a review of consumer protection measures relating to online secondary ticketing in the Consumer Rights Act 2015. Professor Michael Waterson conducted that review, and his independent report makes a number of points relevant to these amendments. I will come to the specific question asked by the noble Lord, Lord Clement-Jones, in a minute.
First, Professor Waterson does not recommend a ban on the secondary ticketing market, recognising instead its benefit to consumers. Amendment 231, in the name of the noble Lord, Lord Clement-Jones, on the unauthorised resale of tickets, could in effect ban the secondary ticketing market. There would be no obligation for organisers to approve a resale platform, or to accept returns. As a result there would be no outlet to recoup money for those who found they could not attend an event. Consumers could be left unable to sell any tickets they cannot use, other than through the black market. That would expose buyers and sellers to much greater risk of fraud than using the online secondary ticketing market, which has safeguards and guarantees built in.
Significant market intervention should be carefully considered and consistently applied. Professor Waterson calls for the existing provisions of the Consumer Rights Act to be enforced and tested. We should therefore welcome and await the outcome of the recently announced enforcement investigation by the Competition and Markets Authority.
Lord Stevenson of Balmacara
I am glad the Minister has mentioned the work of the CMA, but is he aware, as I hope he is, that the CMA enforcement activity was on the previous Act, not the current one? In other words, the undertakings it obtained related to previous legislation; it specifically did not and could not look at the situation post the Consumer Rights Act 2015 since it was not in force at the time they got those undertakings.
Lord Ashton of Hyde
I agree with the noble Lord on that. The fact is that the enforcement activity is under way. We think it would be the wrong time, but I hope later to be not entirely discouraging.
Lord Clement-Jones
I am sorry to press the Minister further even at this late hour, but I do not quite understand. Presumably there is a conclusion to the review of the enforcement activity by the CMA, saying whether the enforcement activity is adequate, effective or whatever. Is there a timescale associated with this CMA review?
Lord Ashton of Hyde
I am afraid I do not know what the timescale is. Obviously there will be a conclusion, but I do not know at the moment. I will find out and let the noble Lord know if it is possible to know that.
To add to the Act now while the investigation is under way would serve only to undermine it. We must allow the CMA to carry out its investigation without interfering with the law it seeks to enforce. To do so will simply provide further grounds for those being challenged to resist.
I also have some specific grounds on each of the individual amendments, but in view of the hour, if the noble Lord agrees, and in view of what I hope I will say to help him, if I omit those details on the individual ones we can move on. I understand the aim of these amendments—to ensure compliance with the Consumer Rights Act—but this is already under way and we must await the outcome.
On Amendment 230, concerning the use of ticketing bots, the offences set out in the Computer Misuse Act have broad application. Unauthorised use of a computerised ticketing system may give rise to breaches of that Act. We are of the view that it may also constitute an offence under the Fraud Act. Professor Waterson believed that such breaches need to be reported and investigated. He puts the onus on ticket vendors to guard against the harvesting of tickets by persons with no intention of attending the event. He called on the ticketing industry to do more to protect itself and, with government support, the new National Cyber Security Centre is in touch with ticketing organisations on cybersecurity.
Professor Waterson also stressed the importance of having an effective strategy that deters bot usage. For example, paperless options such as mobile phone ticketing, or a bank card doubling up as a ticket, can make it harder to carry out mass ticket purchasing. Notably, this strategy was employed for the sale of tickets to the musical “Hamilton” in London.
The Government understand the spirit in which these amendments are made and the Secretary of State recently held two round tables specifically on the issue of bots. While noting there are a number of industry-led solutions available, we recognise it is hugely frustrating for fans who miss out on tickets sold on the primary market only to see them disappear on the secondary ticketing market at sometimes hugely increased prices. That is why we will continue to reflect on what has been said by all noble Lords regarding the Government’s response to Professor Waterson’s report, which will be published very soon. Furthermore, we will continue to consider the specific issue of bots and whether there is scope for further government intervention in this area. I hope to be able to update your Lordships on this shortly. With that commitment, I hope noble Lords will feel able not to press their amendments.
Lord Stevenson of Balmacara
Glass half full or glass half empty? I am not quite sure what to make of that. Sometimes the Minister’s choice of words is helpful and informative, light is suddenly shone across the Table and we understand where he is going. I was a bit lost on that, but I think he was saying, “Hold on for a bit, and more will be revealed”. That is the first point. Waterson is clearly the key to it and the response will presumably set out some of the agenda we might want to pursue, either with the Government or separately, if we have to come back on Report.
It would be in everyone’s best interest if those key players who have been involved up to now could meet with the Minister, perhaps soon after the Recess, to try to hammer out what is and is not possible. Bills such as this do not come past very often. There is an opportunity to do something that will fit within the strictures of the Public Bill Office and therefore will be allowable. It would be an awful shame not to get the incremental changes that we think are necessary to fulfil the ambition behind the original Consumer Rights Act, the amendments and changes and the report of Professor Waterson. It would be to the benefit of fans who have called for it.
Lord Ashton of Hyde
Of course, as I said right at the beginning on day one, I am always open to meeting the noble Lord and other noble Lords. I am happy to do so. I think Report will be some weeks after the Recess, so we have some time.
Lord Stevenson of Balmacara
I am heartened by that and, on that basis, I beg leave to withdraw the amendment.
“Active consent of online buyers required for retention and use of contact information
(1) A seller of goods or services via the internet must not retain, share or use any contact information provided by buyers for any purpose except directly facilitating the sale of the good or service, unless the buyer has actively consented to the retention, sharing or use of the information. (2) For the condition in subsection (1) to be satisfied, the seller must have specified any purposes to which the buyer is consenting.(3) The condition in subsection (1) may be satisfied by the buyer ticking a box on the seller’s web page, but it may not be satisfied by the buyer failing to untick such a box which has been pre-filled. (4) A seller who contravenes the requirement in subsection (1) is guilty of an offence.(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding 10% of the seller’s annual gross operating profit.”
Baroness Finlay of Llandaff (CB)
My Lords, I will try to be brief because the hour is late. I should also say that this amendment probably has one part missing. In my role as chair of the National Mental Capacity Forum, I have become aware of the large number of people who are subject to fraud through scams and through “suckers lists” which are compiled and which circulate for a great deal of money among criminal gangs. Unfortunately, these have often originated because people have purchased something online, have provided their details and have not opted out of those details being shared with others who may have like-minded sales intentions, partners or whatever.
One of the problems is that, when they are purchasing online, a lot of people really do not understand which boxes they should have clicked on—such as terms and conditions—and which they should have unclicked. So the point of this amendment is to try to require anyone selling any item online to have a box that has to be opted into for a mailing list, rather than the current opting-out system.
Where the amendment is deficient is that it does not stipulate that such permission should be time limited. I hope the Minister will point out to me that it should be time limited for a year, so that the criteria should be even tighter than in my amendment.
I think that enforcement would have to come through the Information Commissioner’s Office, rather than trading standards, but I am grateful to the trading standards workforce for having discussed this issue with me at length, as have social work leaders.
I know that the general data protection regulation will come into force across the European Union on 25 May 2018. This will replace the European data protection directive. It is associated with severe financial penalties for non-compliance. Despite our Brexit arguments, I would expect that, because of this timing, we should also be adopting this data protection regulation. I would be interested to know from the Minister whether that is correct. Coming in with it is law enforcement data protection—directive 2016/680—on protecting personal data processed for law enforcement purposes. This will replace the data protection framework decision 2008. It appears that this directive must be transposed into national law by member states by 6 May 2018. Again, there is a question over whether this will be coming into force. If both of these come into force fully, they may cover this area, although that is unclear and I cannot help feeling that it would be much better for us to get it in our own legislation first.
So that we are aware of the size of the problem, the national scams team has a current database of more than 240,000 people on suckers lists, which is growing all the time because data are intercepted by enforcement bodies and reveal that more and more people have had their data sold on in this way, often by criminal gangs, who then go on to target people and groom them. Many of the people targeted are lonely, isolated citizens who are confused by the opt-in/opt-out. They do not see the small print and they do not understand the significance. The amendment, I hope, would solve the problem. I beg to move.
Baroness Buscombe
My Lords, I begin by apologising to the noble Baroness, Lady Finlay of Llandaff, that she is, for the second time running, almost a tail-end Charlie. It was the same on Monday evening and she was extremely gracious in waiting for so long for us to get to her amendment. I welcome her amendment, which highlights an issue that most of us here are acutely aware of when buying goods and services online; namely, the consequence of not ticking a box or, in some cases, unticking a box.
The proposed new clause imposes a fine not exceeding 10% of a seller’s annual gross operating profit if a seller of goods and services on the internet were to retain, share or use the contact information of a buyer without the buyer’s consent to do so. It also makes it a requirement that websites provide a tick-box which is not pre-filled, as a means by which an individual can demonstrate their acceptance of having their contact information processed by the seller.
Although I accept the spirit of the amendment, I do not believe it is necessary, for the following reasons. Clause 77 already places a statutory duty on the Information Commissioner to publish a direct marketing code of practice. Putting the ICO’s direct marketing code of practice on a statutory footing will make it easier for the Information Commissioner to take enforcement action against those organisations in breach of the direct marketing rules under the Data Protection Act and the Privacy and Electronic Communications Regulations. The current direct marketing rules are also clear, stating as follows:
“Organisations will need to be able to demonstrate that consent was knowingly and freely given, clear and specific, and should keep clear records of consent. The ICO recommends that opt-in boxes are used”.
The general data protection regulation—GDPR—which will come into force in May 2018 will introduce tough new measures on consent and will place obligations on data controllers to demonstrate clearly how they obtained consent when processing personal data, such as contact information. Silence or pre-ticked boxes as a form of consent will not be permitted under the GDPR. The GDPR will also allow tougher penalties to be imposed on organisations in breach of the rules: up to 4% of the organisation’s total global annual turnover, or €20 million.
The noble Baroness also suggested that the time limit for retaining personal information should be limited, for example, to a year. The reality is that time is not specified: one should hold on to the information only as long as is necessary to process payment or whatever the application is made for. For these reasons, I hope the noble Baroness will feel able to withdraw her amendment.
Baroness Finlay of Llandaff
I thank the Minister for that reply and for welcoming the spirit of the amendment. Just for the record, the reason for specifying a year if someone has opted into the mailing list is that over time their circumstances might change. They might want to withdraw their consent but not be clear about how to do it. I hope the Information Commissioner will consider that. People might also lose cognitive function over time and therefore become much more vulnerable to scams than they were when they opted in. So I hope that a time limit is also introduced. However, on the basis of the Government’s response, I beg leave to withdraw the amendment.
Baroness Hollins
“Awards of costs in respect of legal claims made in relation to digitally published news-related material
(1) This section applies where—(a) a relevant claim is made against a person (“the defendant”),(b) the defendant was a relevant publisher at the material time, and(c) the claim is related to the publication of news-related material which is published on a website.(2) If the defendant was a member of an approved regulator at the time when the claim was commenced (or was unable to be a member at that time for reasons beyond the defendant’s control or it would have been unreasonable in the circumstances for the defendant to have been a member at that time), the court must not award costs against the defendant unless satisfied that—(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator, or(b) it is just and equitable in all the circumstances of the case to award costs against the defendant.(3) If the defendant was not a member of an approved regulator at the time when the claim was commenced (but would have been able to be a member at that time and it would have been reasonable in the circumstances for the defendant to have been a member at that time), the court must award costs against the defendant unless satisfied that—(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator (had the defendant been a member), or(b) it is just and equitable in all the circumstances of the case to make a different award of costs or make no award of costs.(4) This section is not to be read as limiting any power to make rules of court.(5) For the purposes of this section—“relevant publisher” has the same meaning as in section 41 of the Crime and Courts Act 2013;“relevant claim”, “news-related material”, “material time” and “approved regulator” have the same meanings as in section 42 of that Act;“publication” has the same meaning as in section 42(9)(a) of that Act.”
Baroness Hollins (CB)
My Lords, I declare an interest as I gave evidence to the Leveson inquiry and my family decided that I should give evidence on their behalf—believing undertakings by the former Prime Minister that Lord Justice Leveson’s recommendations would be implemented. One of those recommendations, as we were all aware, was Section 40 of the Crown and Courts Act 2013, which Parliament enacted with cross-party support, but which the Government have so far failed to commence. This leaves victims of press abuse without affordable access to justice and leaves the royal charter hamstrung with no incentives for its use.
In response to the Government’s failure to follow through on their undertakings, I tabled amendments to the then Investigatory Powers Bill to replace Section 40 of the Crown and Courts Act with a similar provision. Government Ministers and others, in resisting those amendments, suggested that the Digital Economy Bill would be a better vehicle to resolve the matter—particularly because of the urgent nature of the Investigatory Powers Bill. Although my amendments were in scope and the Bill had been amended with a large majority by your Lordships’ House, I agreed to withdraw them when they were returned by the other place.
I will very briefly explain the effect of the amendment I am proposing today. It would make a similar provision to that in Section 40 in the Crime and Courts Act 2013 in so far as is possible within the scope of this Bill. Lord Justice Leveson recommended that all newspapers should join an independently approved regulator that is independent and effective, and that such a regulator would offer guaranteed, low-cost arbitration as a cheap route to justice for the press and free for the public. If a newspaper refused to join a system that Lord Justice Leveson set out and to offer low-cost arbitration, the judge said that, in order to prevent the power and work of newspapers being used to bully and intrude on ordinary members of the public, the newspaper would have to shoulder the court costs of any claim brought successfully against it. To avoid having to meet the costs of claims brought against it, and indeed to benefit from costs protection if sued in court, a publisher need only join a recognised regulator and resolve any claim far more cheaply through that regulator’s arbitration system.
It is this provision that the former Secretary of State decided not to commence. The amendment I am moving today would bring a Section 40 lookalike into effect for online publications. That would include, of course, the major print publishers, which all have significant news websites. Given that it relates only to the online publication of libels or other illegal abuses as they relate to online publication, it is slightly narrower in effect than the provision agreed by Parliament in 2013. It is a weaker substitute for Section 40. But in the absence of any of the access to justice which Section 40 would provide for families and individuals attacked unfairly by the press, it is far better than nothing at all.
The Government may argue that a consultation on these matters is ongoing. Lord Justice Leveson consulted publicly throughout 2011 and 2012. Section 40 was one of his many recommendations. My family and I went through the traumatic process of giving evidence at Leveson because we expected that his recommendations would be taken seriously. The consultation now being considered in private, with a government Minister presiding over it, does not, to be honest, inspire the same confidence.
My second amendment, Amendment 234A, simply provides for immediate commencement for reasons that I do not need to explain. I hope that the Committee will support these probing amendments. I beg to move.
Lord Low of Dalston (CB)
My Lords, I support the amendments because they provide the Government with yet another opportunity to deliver on their commitments to the victims of press abuse and bring this critical access-to-justice measure into force.
Amendment 233F would not bring Section 40 of the Crime and Courts Act into force in full, as we have heard. That is regrettable but it is as much as can be done within the scope of the Bill. However, it will demonstrate to the Government that this matter is not going to go away, and that people like the noble Baroness, Lady Hollins, will keep bringing back amendments such as this and seeking to insert them into any Bill into which they can plausibly be inserted until the Government keep their promises to the victims of press abuse.
It is now almost four years since the cross-party agreement was reached and Section 40 was enacted by Parliament. This House, as the noble Baroness reminded us, voted for it again as an amendment to the Investigatory Powers Bill before Christmas. The press lobby believes that by intimidating the Government with the threat of negative headlines and causing maximum delay, it can prevent it coming into effect. I support the amendment because I do not believe that people such as Mr Murdoch are sovereign and because I do not believe that the Government should override the will of Parliament to placate the interests of newspaper owners.
The consultation that the Government have launched, which has recently ended, is offensive to the victims of press abuse, whose evidence was accepted by Lord Justice Leveson, and should be offensive to Parliament, which enacted this measure in 2013. The former Prime Minister David Cameron, as the noble Baroness, Lady Hollins, has again reminded us, undertook to implement Leveson’s recommendations unless they were “manifestly bonkers”. Retrospective consultations to undermine the recommendations of a public inquiry whose recommendations were not manifestly bonkers, as well as the will of Parliament, are an affront to any understanding of what is meant by “good governance”. It is no wonder that the consultation exercise is facing a legal challenge.
I hope that the Government will keep their promises and implement Section 40 without delay, and I hope that they are under no illusion about the strength of feeling on all sides of the House on this matter. There may not be too many people here at this hour to demonstrate that, but the Government should make no mistake: it is the case. I attended a meeting the other evening where constructive proposals were discussed that seemed to some of us to have the makings of a settlement between those pressing for the implementation of Section 40 and the newspaper editors. Surely the Government should be trying to broker such an agreement instead of just sitting on their hands. Until they do, as I say, amendments such as this will keep coming back.
Lord Prescott (Lab)
My Lords, I support the amendments of the noble Baroness, Lady Hollins. We have been in similar situations on previous legislation regarding the matter of Section 40. The noble Baroness said that she had an interest to declare. I declare that I gave evidence to Leveson about the phone tapping that the police and press did on my phone—so if that is an interest, I record it.
The important point today, though, is that we are not talking about creating a new piece of legislation; we are talking about implementing what both Houses of Parliament agreed is the law of the land. The only thing preventing the implementation of that section of the Crime and Courts Act is the fact that the Government are not prepared to implement the regulation necessary to see it implemented. In earlier debates—I quite understand why—I heard Ministers say, “This isn’t the appropriate piece of legislation”. They were probably right, but the relevant legislation has already been passed. It was agreed unanimously by both Houses of Parliament but for one reason or another the Government are refusing to implement it.
I received a letter today from Christopher Jefferies—now a well-known person to us all—asking if I would be attending this debate. In it he said:
“As you may know, I was a victim of gross press intrusion and libel after my tenant Joanna Yeates’ tragic death in 2010. Some newspapers effectively accused me of her murder, and made other appallingly false allegations and insinuations. I subsequently gave evidence at the Leveson Inquiry”.
He is one of many who cannot understand why—if Parliament has passed this legislation and it was agreed unanimously, by all party leaders and the Prime Minister—we do not implement it, why there is a refusal to do so. I know that I am likely to be told, “We have started a process of consultation; the department is looking at the Leveson proposals”, but I cannot give an answer to Mr Jefferies or any of the others, although I have a suspicion that the influence on the Government is coming from the Murdoch press, which is quite central to all this and which has—as noble Lords will have seen in the papers—many meetings with senior Ministers. A meeting between Murdoch and Thatcher led to his buying the Times, and a recent meeting between Murdoch and May in New York led to the reconsideration of the Leveson proposals that are embodied in the royal charter.
Baroness O'Neill of Bengarve
My Lords, it is late, and I do not want to repeat myself. I am sure that the noble Baroness, the noble Lord and the whole of that long Front Bench—almost as numerous as the rest of the House at this hour—know this issue not going to go away. This retrospective consultation does not do the Government honour. I hope that they will take some action.
Baroness Jones of Whitchurch
My Lords, again, given the lateness of the hour, I simply say that our views are well known, that we have supported the implementation of Section 40 in a number of previous debates in this Chamber, and on that basis we support the amendment.
Lord Keen of Elie
My Lords, I am obliged to the noble Baroness, Lady Hollins. I will address Amendments 233F and 234A together. The amendments, of course, mirror Section 40 of the Crime and Courts Act 2013 but would apply to digitally published news-related material only, as we know. The House has debated the issue of Section 40 on various recent occasions, including during passage of the Investigatory Powers Act and the Policing and Crime Act. There was also a stand-alone debate just before the Christmas Recess.
There is obviously a great strength of feeling about this matter. I realise that some Members of this House are frustrated by what they see as a lack of progress by government on Section 40. However, the Committee should also recall the strength of feeling on the other side of the debate. Many noble Lords have argued passionately in this House against Section 40 and are concerned about its commencement and its impact upon freedom of the press. That is why the Government ran a consultation to consider the matter further.
The press self-regulatory landscape has changed significantly in the past four years since the Leveson inquiry reported. It is right that the Government take stock, look at the changes which have already taken place and seek the views of all interested parties on the most effective way to ensure that the inexcusable practices which led to the Leveson inquiry being established can never happen again.
A consultation was the most appropriate way to ensure that the Government were listening to all views when considering options for the next step in respect of Section 40. Indeed, the consultation closed on 10 January, and it is estimated that we have received more than 140,000 responses. I know that many Members of this House responded to the consultation, and of course we are grateful that they took the time to do that, but many others have responded as well. It will be necessary to consider the many and diverse views that have been expressed with regard to this matter.
As many Members of the Committee will know, and as the noble Lord, Lord Prescott, mentioned, the consultation is now subject to a legal challenge. While I cannot comment on the ongoing legal proceedings, the Government have committed not to take any final decisions on the matters to which the consultation relates until the judicial review application has been determined. As such, it is not possible for me to set out a timetable for when the Government will respond to the consultation. But of course we hope that that judicial review application will be determined much sooner than later.
That brings me on to the amendments from the noble Baroness, Lady Hollins. The issues that she has raised are of critical importance. I appreciate that she and her family were themselves the subject of press abuse, as were other Members of this House. I also recognise the strength of feeling that parties have on the commencement of Section 40. However, with respect, now is not the right time for this House to consider the present amendment.
News consumption is becoming increasingly global and more and more people are reading their news online from a multitude of sources from around the world. Bringing in a law that effectively mirrors Section 40 but for relevant digital publications only would create an incoherent regime applying different rules depending on the mechanism by which an article has been published.
Noble Lords who have supported these amendments have raised the profile of this issue and given a clear signal of their intent—and of their continuing intent. This has not gone unnoticed in government. But we must ensure that we consider this matter properly. As I said before, a free press is an essential component of a fully functioning democracy and we must ensure that we protect that. I note what the noble Lord, Lord Prescott, said about the position in Ireland. I am not in a position to express a view as to the manner in which that operates but I am perfectly content to indicate that we will look at that going forward as well. I hope that that will satisfy the noble Lord. At this stage, however, I urge the noble Baroness, Lady Hollins, to withdraw her amendment.
Baroness Hollins
My Lords, I thank the Minister for his reply. My hope is for a free and responsible press. However, what is most disappointing for the public is that over the last four years of inertia and of the press’s failure to establish a proper regulator, countless more individuals have been affected by press abuse and have no access to redress. They include victims from the Paris Bataclan attack, the Shoreham air disaster, and many more. This issue is still live and is still troubling. All these individuals have been let down by the Government’s decision to renege on their promises and to prevent access to justice for ordinary victims of press abuse. I am disappointed by the Minister’s response and I intend to return to this on Report. I beg leave to withdraw my amendment.
Baroness Buscombe
“( ) section (Prevention or restriction of use of communication devices for drug dealing);”
Baroness Buscombe
“( ) Chapter 5 of Part 5, so far as relating to the disclosure of information by the Welsh Revenue Authority, comes into force on whatever day the Welsh Ministers appoint by regulations made by statutory instrument.”
“( ) Chapter 1 of Part 5, so far as relating to the disclosure of information to or by a water or sewerage undertaker for an area which is wholly or mainly in Wales, comes into force on whatever day the Welsh Minsters appoint by regulations made by statutory instrument.”
Baroness Buscombe
“( ) Sections (Disclosure of information to water and sewerage undertakers) and (Disclosure of information by water and sewerage undertakers) extend to England and Wales only.”
Baroness Buscombe