Product Security and Telecommunications Infrastructure Bill (Third sitting)
Thursday 17th March 2022
(2 years, 1 month ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 March 2022 - (17 Mar 2022)
The Committee divided: - Ayes: 4 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Chair
We are now sitting in public and the proceedings are being broadcast. Before we begin, I have a few preliminary announcements. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings, but I have no guidance on jelly babies.
We now begin the line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates.
The Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate. At the end of debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate if they wish to withdraw the amendment or seek a decision. If any Member wishes to press any other amendment in a group to a vote, they need to let me know.
Clause 1
Power to specify security requirements
Chris Elmore (Ogmore) (Lab)
I beg to move amendment 6, in clause 1, page 1, line 17, at end insert—
‘(2A) The Secretary of State must exercise the power in subsection (1) so as to specify security requirements which make mandatory each of the first three guidelines in the Code of Practice for consumer IoT security published by the Department for Digital, Culture, Media and Sport on 14 October 2018 (“no default passwords”, “implement a vulnerability disclosure policy” and “keep software updated”).”
This amendment would set out the three security requirements expressly in Part 1 of the Bill rather than it being defined in future regulations.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clauses 2 and 3 stand part.
New clause 3—Report on security risks to UK consumer connectable products—
‘(1) The Secretary of State must prepare a report on the security risks to UK consumer connectable products—
(a) within the period 3 months beginning with the day on which this Act receives Royal Assent, and
(b) every 12 months thereafter.
(2) Any report prepared under subsection (1) must be laid before Parliament.’
This new clause would require the Secretary of State to lay before Parliament a report on the security risks to UK consumer connectable products.
Chris Elmore
It is a pleasure to serve under your chairmanship, Mr Stringer.
This important legislation establishes, through regulations, three core security requirements for “connectable products”. The requirements derive from the voluntary 2018 “Secure by Design” code introduced by the Department for Digital, Culture, Media and Sport. The inclusion of these three requirements is, without doubt, a step that the Opposition welcome. However, we believe that the legislation can be improved, and that the three security requirements, rather than being defined in future regulations at the discretion of the Secretary of State, should be expressly set out in the Bill. That would be beneficial for two reasons. First, it would give manufacturers and distributors a greater understanding of the legal obligations that they face, thus speeding up the entire process. Secondly, it would ensure that the consumer was better protected, which I am sure we all agree would be a good thing. The consumer rights group Which? emphasised that when it gave oral evidence on Tuesday.
New clause 3 would require the Secretary of State to publish a report on the security risks to UK connectable products. On Tuesday, Madeline Carr, professor of global politics and cyber-security at University College London, said that she does not have an Alexa in her house because of the security risks that those devices, and others like them, pose. Tellingly, she also said that the Bill as constituted would not give her sufficient confidence to purchase one. Given that, and given the tragic scenes unfolding following Russia’s invasion of Ukraine, and the willingness of that rogue regime to engage in state-sponsored cyber-warfare, the Opposition believe it is in the public and national interest to understand how secure our connected products really are. We are becoming more reliant on smart devices in our daily life, both professionally and personally. It is imperative that the security of these devices is routinely monitored and reported on.
As I stated on Second Reading, the Opposition support the Bill, but believe it can be strengthened. Amendment 6 and new clause 3 would ensure that consumers were better protected and more aware of the threats facing their connected devices. As such, I believe that all Committee colleagues should support amendment 6 and new clause 3.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
It is a pleasure to serve under your chairmanship, Mr Stringer. I apologise for giving you a dilemma about the advice on jelly babies. I will start with a few words about the importance of the Bill. As we heard from our panels of witnesses this week, and as we know from our increasing dependence on technology, improving protection for consumers and networks from a range of harms associated with cyber-attacks is incredibly important. In the first half of last year, there were 1.5 billion attempted compromises of internet of things devices—double the 2020 figure for the same period. Voluntary standards, such as the 2018 code of practice for consumer IOT security, are not being adopted quickly or consistently enough. That is why we need legislation to progress security in the design of consumer connectable products.
Before turning to amendment 6, I thank the hon. Member for Ogmore for the constructive and helpful way that he has approached the legislation and for the Opposition’s broad support of it. As this is the first Bill that I am taking through the House in its entirety, I am particularly grateful for that constructive approach. It may reassure him that the Government are committed to introducing security requirements based on the first three guidelines through regulations at the earliest appropriate opportunity. We have consulted on those security requirements and have communicated them extensively.
We have not been vague on the matter. In April 2021, we published our response to the call for views on consumer connectable product security legislation. We stated in detail how the three security requirements would work. When the Bill was announced by Her Majesty at the start of the Session, we repeated that commitment. Indeed, as hon. Members will see in the Bill’s explanatory notes, we have again committed to those three requirements. We made that clear from the start for an important reason: we need industry to act and prepare for implementation. We do not want surprises for manufacturers, importers or distributors. They know what they have to do.
Amendment 6 is unnecessary, but might also be dangerous. We are keen to ensure that the legislation retains flexibility, so that it can adapt to and reflect the changing threat landscape, and the security requirements needed to address it. What might seem like a no-brainer security requirement today might become a security threat or barrier to security innovation in years to come.
Amendment 6 reaches back to 2018, when our code of practice was first published. Security requirements have developed since then. When the Bill is implemented, we do not think it should be constrained by what was appropriate five years ago. The requirements we will introduce are based on the first three guidelines in the code of practice, but they also contain necessary improvements. They are up to date, more detailed and have been translated into practical requirements that businesses can implement to get the right security outcomes without unnecessary burden. Stakeholder engagement and impact assessment work conducted since 2018 ensures that the guidelines are nuanced, and are in a robust and enforceable statutory framework that delivers optimal security outcomes.
Finally, hon. Members may not be aware that because this new legislation will impact on manufacturers globally, we have given notice of the Bill to the World Trade Organisation. We invited comments on our proposals two years ago, and when the Bill was introduced to Parliament, we gave notice again. We have worked to ensure that all manufacturers understand our intentions. Amendment 6, if accepted, would cause confusion by taking us back to 2018, and away from the more developed position we have reached on the three principles. That would cause market confusion, require new notification to the WTO, and potentially delay this vital regime from coming into force. With those reassurances, I hope the hon. Member will feel able to withdraw his amendment.
Clause 1 is needed to provide the Government with the necessary powers to specify and mandate security requirements, through secondary legislation, that businesses must comply with. There is a common notion that Governments are behind the curve when it comes to regulating technology. not in this case. By establishing a flexible and futureproof regulatory framework in this way, the Government can be agile and proactive in amending and introducing security requirements through regulations, in lockstep with tech innovation. Parliament will be able to scrutinise any future security requirements designated through the secondary legislation process and, as new threats emerge and international standards develop, we can act and set new security requirements, keeping consumer connectable product security up to date and fit for the future.
The purpose of clause 2 is to provide further detail about how the Secretary of State’s power to specify security requirements can be used. Clause 3 is essential because it provides the Secretary of State with powers to specify circumstances in which a person is deemed to have complied with the security requirements. The clause, when exercised, would provide more than one route to compliance and would provide the necessary flexibility to accommodate and recognise international standards and mutual recognition agreements where appropriate.
I turn to new clause 3. In practice, it would commit the Government to reporting on a fixed basis on the security risks posed by products affected by the Bill. Those reports would be laid before Parliament. Cyber-security is definitely not an area where the Government hold back on publishing information. If we are to raise the cyber-resilience of the nation, we need to ensure that everyone is clear about the threat. In December, we published our national cyber strategy. The Government will continue to publish regular reports on our progress on that strategy, as we did with regard to the previous strategy. The Government also publish an annual report that surveys cyber-breaches across the economy. This report, together with others, forms a key part of the evidence base used to inform organisations about action to take to raise security standards. Indeed, the breaches survey meets the quality threshold to be managed as a set of official statistics.
Our National Cyber Security Centre is also a model of transparency. It is there to advise businesses, and guide them towards better managing cyber-threats. It publishes an annual report, and for those who want to focus on consumer connectable products, it provides specific advice on those, too. Parliament is already regularly kept informed of cyber-security matters; our regular publications are placed in the Library. Our national strategy, implemented with £2.6 billion of investment, is overseen by the Public Accounts Committee. The Intelligence and Security Committee and the Joint Committee on the National Security Strategy provide further oversight. Also, there are mechanisms for holding the Government to account in the manner intended by the provision, such as regular parliamentary debates and questions.
Cyber-security is a fast-moving and sensitive topic. A fixed-period reporting clause that imposes an obligation to report on security risks may duplicate existing activity. Such a system would also lack the agility necessary to enable us to report quickly when threats are identified. It may reassure the hon. Gentleman to know that the Secretary of State will be required to review the effectiveness of the Bill’s enforcement regime; they, or the designated enforcing authority, will be required to report on that to the relevant departmental Select Committee after Royal Assent. The enforcement authority will also report its activity and findings, where appropriate. The measures already in place will likely meet the intention behind new clause 3. For the reasons that I have set out, I do not accept the need for the new clause.
I turn to the points that the hon. Gentleman raised about Dr Carr’s concerns about Alexa, which I also found eye-catching. A lot of secondary legislation comes with this Bill, and that will hopefully reassure Dr Carr. I also note the comment made by a lot of our witnesses: we can never have 100% security with those devices. I therefore commend clauses 1 to 3 to the Committee.
Kevin Brennan (Cardiff West) (Lab)
Good morning, everybody. Happy St Patrick’s day to everyone. I congratulate the Minister on her first Bill. I have been through the process many times, and it is an exciting and proud moment to lead on a Bill for the Government for the first time. When I did it, my father, who was from West Cork, said, “Not bad for someone from the peat bogs of West Cork.” I am sure that the Minister’s family are equally proud of her achievement.
I want to raise a couple of general issues, as we are debating the first three quarters of the Bill in this grouping. I congratulate the Minister for providing such a comprehensive impact assessment on the Bill. I was slightly confused by the figure for the cost of business, which is set at net present value, and is put at “£1,246.9.9” million. That figure looks like a typo. I wondered what the correct figure was, and if the Minister could provide it. I suggest it is just the one “point nine”.
This is a very significant piece of legislation, given the impact it will have on consumers and business. It is very technical. Page 8 of the impact assessment details the Government’s key assumptions about how the Bill will impact on businesses. Businesses will have to dispose of devices that no longer satisfy the criteria that the Minister is likely to set. The impact assessment’s optimistic assessment of what percentage of devices will have to be disposed of is 5%. Its working assessment is 45%. The figure it is using, however, for the impact on business is that 10% of devices will have to be disposed of by businesses.
Julia Lopez
I thank the hon. Member for Cardiff West for his contribution and his kind comments. I will have to get back to him on the precise figures that he identified in the impact assessment. However, in relation to the breadth of the impact assessment, he will know from this legislation that we are taking a broad range of powers. As we debated earlier, that is very deliberate because this is a fast-moving area. Technology is developing faster than Parliament can regulate it, which is a major challenge for Governments around the world. The Bill will help us to be nimble and agile in how regulate that technology.
A lot of the issues that the hon. Gentleman has concerns about will be something for secondary legislation, which we will be developing hand in glove with businesses so that we understand what is changing in the technological world and what impact that will have on matters such as the disposal of devices. I share his concerns about the environmental impacts if we get the regulations on that wrong—none of us wants to see a lot of technology become redundant.
We are trying to help consumers have more information so that if someone buys a device, they do not necessarily have to dispose of it simply because the period for which the manufacturer says it is covered has expired. It will be up to the consumer to decide whether to keep that device if they think it is less secure than it otherwise might be. It has been controversial to take these broad powers. We understand the concerns that any Parliament would have about the level of scrutiny it will have. However, the Government think that this is right because, as I say, we have to maintain that agility.
The hon. Member for Cardiff West referenced the points raised by Dr Carr. As I said earlier, I share those concerns. What we are trying to do is raise the level of security overall; we want to help consumers and manufacturers to understand this as an issue. This was initially a voluntary code, which did not do enough to make manufacturers take the cyber obligations seriously. There was an interesting discussion on the panels earlier this week when one contributor—I cannot remember who it was exactly—said that the legislation will give boards the spark or impetus to discuss and get funding for these kinds of cyber-security requirements for their products. If it is voluntary, it is very hard for anybody to make the case within their company that they need to take cyber-security seriously.
We hope that the secondary legislation will allay some of Dr Carr’s concerns. We will never have 100% security, but we hope that these provisions will raise the bar overall and help to raise consumer and manufacturer awareness of cyber as a whole. I hope that those comments will reassure the hon. Gentleman. I also assure him that we will look at how to get the balance right in the secondary legislation, and we will be in close contact with businesses as we do so.
Chris Elmore
I listened to what the Minister had to say, in particular in relation to amendment 6. I take her at her word; it is a probing amendment, so I will withdraw it on the basis that she will bring forward secondary legislation in relatively short order. As she mentioned, cyber-security is a fast-paced and changing environment, so it is important that we do not wait a number of years for additional improvements to legislative competence.
On the basis of what the Minister said, I am also happy not to move new clause 3. However, I wonder whether she could write to me setting out the reporting periods that she mentioned, particularly in terms of the DCMS Committee, following Royal Assent—assuming that the Bill gets Royal Assent, which I am sure it will—as well as the other reporting obligations that she says the Secretary of State or reporting officer will have. The new clause seeks to place a requirement on the Secretary of State specifically in this new legislation. If the Minister feels that those things are already in train or are part of the reporting process, that is fine, and I am happy not to move the new clause. However, it would be good to have that list for future understanding—particularly if reporting does not take place, in which case the Opposition will hold the Government to account.
Julia Lopez
I am happy to write to the hon. Gentleman and offer those assurances. A new body will also be set up, which will probably have its own reporting requirements in relation to this legislation. These things will be developing, but I am happy to offer him the assurances he requested.
Chris Elmore
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 1 to 3 ordered to stand part of the Bill.
Clause 4
Relevant connectable products
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clauses 4 to 6 define the products to which the new regulatory regime will apply. Clause 4 introduces the terms “internet-connectable product”, “network-connectable product” and “excepted product”. Clause 5 defines the terms “internet-connectable” and “network-connectable”. It is a pivotal clause in capturing the necessary products that make up a huge part of the internet of things threat landscape. Any network is only as secure as its weakest link, and that could be a single consumer connectable product.
Focusing on a product’s capabilities—instead of attempting to exhaustively list all consumer connectable products—is part of our agile, future-proof approach. We are ensuring that the Bill will remain relevant and effective by capturing new consumer technologies that come to market, based on their capabilities and the risks they present.
Many products captured by the Bill are capable of connecting to the internet, exposing them to remote access and attack. Those are “internet-connectable products”, such as routers, smartphones and certain smart appliances. Some products captured by the Bill are not able to connect to the internet directly, but can connect to other products. In doing so, they can form, and contribute to the formation of, networks, meaning that vulnerabilities in those products can open the door to cyber-attack. Those are “network-connectable products”, such as certain smart lightbulbs, smart home products, and headphones.
Clause 6 defines the term “excepted product”. It allows the Secretary of State to except products from the scope of the Bill via regulations. The Government intend to except products from the scope of the Bill where inclusion would subject them to double regulation or be disproportionate to their risk profile. The Government have consulted on that approach. Products such as electric vehicles, medical devices and smart meters will be excepted from scope because they are already, or soon will be, covered by alternative regulation. I therefore commend clauses 4 through 6 to the Committee.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clauses 5 and 6 ordered to stand part of the Bill.
Clause 7
Relevant persons
Chris Elmore
I beg to move amendment 7, in clause 7, page 5, line 24, at end insert—
“(5A) A person who provides an online facility through which a distributor makes a product available in the United Kingdom is also a distributor.”
This amendment would ensure that online marketplaces are considered to be distributors and are thus subject to the security requirements of the Bill.
Chris Elmore
The amendment itself is fairly self-explanatory. However, I will take the opportunity to speak briefly on it in the hope of persuading Conservative Members—and indeed the Minister—to support it.
Clause 7 defines the relevant persons subject to the security requirements as being manufacturers, importers and distributors. Crucially, however, online platforms such as eBay and Amazon are not defined as falling under any of those categories. To my mind, that is both deeply concerning and preposterous, given that, under any definition, online platforms such as the two I have just mentioned are without doubt distributors themselves.
I am sure everyone in this Committee has either sold or bought something through eBay or Amazon. The oversight in the Bill has real-world consequences, as products sold on those online platforms will not be policed in the same way. That is problematic, as research by groups such as Which?—which we heard evidence from earlier this week—has consistently shown that online marketplaces are flooded with insecure products, while the Bill would do nothing to increase the legal responsibility online marketplaces have for the safety and security of products sold through them.
In tabling the amendment, we are merely expanding the number of organisations that the security requirements would apply to, in order to better protect all our constituents, which is the expressed aim of the Bill according to the Minister’s opening remarks and indeed those of the Secretary of State at Second Reading. I therefore urge the Minister and all Committee members to support the amendment.
Kevin Brennan
I support my hon. Friend in pressing the amendment to a vote. As we heard from the Minister, the Bill covers quite a lot of different devices. The examples given by the Government in their impact assessment include the following:
“Smartphones; connectable cameras, TVs and speakers; connectable children’s toys and baby monitors; connectable safety-relevant products such as smoke detectors and door locks; Internet of Things base stations and hubs to which multiple devices connect; wearable connectable fitness trackers; outdoor leisure products, such as handheld connectable GPS devices that are not wearables; connectable home automation and alarm systems; connectable appliances, such as washing machines and fridges”
and, as we have heard, “smart home assistants”, including things such as Alexa-type smart speaker products.
Julia Lopez
I thank the hon. Members for Ogmore and for Cardiff West, and I am happy to address their concerns. The Bill covers obligations on manufacturers, importers and distributors, but I will provide a bit more detail.
Clause 7 specifies which relevant persons will be responsible for ensuring that the security requirements are properly complied with. In that regard, a “relevant person” is defined as a manufacturer, importer or distributor of a relevant connectable product. As a result, amendment 7 is wrong to suggest that online marketplaces are exempt from this new legislation. Online marketplaces do not just offer products on behalf of third parties, but are often acting as the retailer, so in those cases the full security requirements apply. I accept that there may be instances in which the online marketplace is not the distributor. None the less, it is necessary for the third party operating in the marketplace to comply with the security requirements, and it is not just that one party who carries liability under the Bill: the manufacturer and importer also have responsibility. We think we have taken a belt-and-braces approach in that regard.
We have also worked closely with industry to make sure the regulation is proportionate and fits the wider regulatory environment for product safety. Manufacturers care a great deal about these regulatory requirements. On Tuesday, we heard from a representative of Google, who described how it works to comply with requirements in many different jurisdictions. Over the past three years, hundreds of manufacturers have engaged with my Department through the many public consultations and industry discussions we have had. The hon. Member for Ogmore gives the impression that amendment 7 would provide consumers with a vital line of defence, but that is not the case: there are already multiple lines of defence in this Bill.
It is also worth noting that consumers can never be 100% protected by regulation—a point that we have already discussed this morning. We need to have a broader approach to raising national cyber-resilience, which is why in December we published our national cyber strategy. The Cyber Aware campaign is ongoing—hon. Members may have seen the advertisements last weekend, or the ones on the radio and online this week. We also have a range of school programmes designed to reach parents and teachers in order to raise cyber-security awareness, and the Home Office, the police and the NCSC run regular campaigns at a local level in every region of the country. In relation to the comments made about Ukraine, the point is even more important because of the context in which we are operating.
Kevin Brennan
Just to be clear, if, for example, I purchased a connectable baby monitor online through Amazon, but it came from a third-party supplier—which is quite common when customers are given that list of products to buy—how would the Bill impact on that device and its availability in the UK?
Julia Lopez
As I say, we are putting requirements on not just manufacturers, but the importer. The importer would be under an obligation to check whether the product fulfilled some of the requirements we would have for it, as would the distributor. I would hope that, along the chain, that product would have been checked several times to make sure it complies.
We have done a lot of work on general cyber-resilience. I will take this opportunity to add that it is also important that we as Members of Parliament try to make our constituents aware of the increasing challenges we face with cyber-resilience, and that we all need to have our own cyber-hygiene in that regard.
The amendment is well intentioned—we understand where the hon. Member for Ogmore is coming from—but it is drafted in a way that would have a much broader reach than just online marketplaces. It would impose security requirements on businesses that cannot comply with them, such as advertising platforms and website hosting services. Distributors use many online facilities offering a vast array of cloud services to support e-commerce to make their products available. As drafted, the amendment would extend duties beyond what is intended.
The Government have carefully considered the amendment. It is clear that our intention is to secure consumer connectable products in the most effective and proportionate manner, without hindering business growth and the online retail facilities enjoyed by consumers. For the reasons I have set out, I am not able to accept the amendment. I hope the hon. Gentleman will consider withdrawing it.
I turn now to chapter 2 of the Bill and clauses 8 to 25. These clauses place duties on businesses in the supply chain of a consumer connectable product to comply with security requirements. Compliance is fundamental to the operation of the regulatory regime. Under these clauses, manufacturers, distributors and importers must prepare, or ensure the presence of, a document to accompany the product that states that, in the opinion of the manufacturer, it has complied with the security requirements, before that product is made available in the UK. I note the point that was made about baby monitors. I hope that, in that process, there would be clear information and a record provided with the product that stated compliance.
The clauses in chapter 2 also require that businesses take all reasonable steps to investigate a compliance failure or potential compliance failure. That is vital to hold businesses accountable for complying with their security requirements and to mandate investigation of potential compliance failures. If compliance failure has occurred, businesses in the supply chain must take all reasonable steps to prevent the product from reaching UK customers and remedy the compliance failure. The measure is needed to ensure that insecure products do not remain on the market and that those that have not yet reached UK customers are prevented from doing so.
Finally, the clauses in chapter 2 require manufacturers and importers to retain records of compliance failures and investigations for at least 10 years. The Secretary of State is able to request this information to investigate and to enforce the legislation. These duties encourage ongoing compliance and accountability. The records will allow a clear audit of the importer’s and manufacturer’s activities, so that we can have effective enforcement.
Chris Elmore
I have listened to the Minister. The Opposition are not in any way suggesting that the Government do not do an awful lot on cyber awareness-raising. All Governments could do more—that is the nature of teaching and learning and of being able to get our constituents to understand the cyber-security space and the impact that it can have on their homes.
In response to my hon. Friend the Member for Cardiff West, the Minister mentioned the belt-and-braces approach. However, organisations such as Which? say that there is an exemption for online marketplaces such as Amazon and eBay. The Online Safety Bill has of course been published today, and there are economic crime impacts linked to this. If this is a belt-and-braces approach, as the Minister says, surely another level of protection would be to include the online marketplaces. She says there are three stages that could be protected—importer, product design and distribution—but there is this gap through which some products could come. Therefore, I am not minded to withdraw the amendment and would ask the Committee for a decision.
Question put, That the amendment be made.
Julia Lopez
Clause 26 gives the Secretary of State responsibility for enforcing the product security provisions in the Bill, and clauses 27 to 52 create the regime. This allows the Secretary of State to authorise another person, and pay them, to carry out enforcement functions. The provisions provide powers to issue enforcement notices—including compliance notices, stop notices and recall notices—as well as powers to forfeit products and issue monetary penalties.
Additional enforcement powers include the power to seize and detain products, publish information about compliance failures and the details of the enforcement action taken, recall products, and disclose information as necessary to conduct enforcement activity. The Bill includes two offences—the offence of failure to comply with an enforcement notice and the offence of purporting to act as authorised to exercise enforcement function—as well as adopting within the PSTI regulatory regime the offences found in schedule 5 to the Consumer Rights Act 2015. I commend the clauses to the Committee.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Clauses 27 to 52 ordered to stand part of the Bill.
Clause 53
Guidance
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clauses 53 to 56 cover guidance and interpretation of the Bill. They allow for guidance to be issued to support relevant operators to meet their obligations. They also set out the technical terms and interpretations of the commonly used terms throughout the Bill. I commend the clauses to the Committee.
Question put and agreed to.
Clause 53 accordingly ordered to stand part of the Bill.
Clauses 54 to 56 ordered to stand part of the Bill.
Clause 57
Meaning of “occupier” in relation to land occupied by an operator
Question proposed, That the clause stand part of the Bill.
Julia Lopez
It is crucial that, where telecoms operators have apparatus installed on land, they can request new or additional code rights, allowing them to maintain, expand and improve their existing networks, improving service and connectivity, to the direct benefit of consumers. I hope we all wish to see that. At present, this is not always possible. There are some specific scenarios in which operators with apparatus already installed on land, such that they occupy the land, are unable to obtain new code rights or follow an existing statutory process to have an agreement that has run its course replaced by a new agreement, which I will refer to today as a renewal agreement.
For example, in some cases the parties might have an existing agreement that, for whatever reason, proceeds on a more informal basis and is not set out in writing, or otherwise does not meet the necessary criteria for it to be renewed under an existing statutory process. The operator is therefore still authorised under the existing agreement to keep their apparatus on the land, but under the current legislative framework cannot pursue a renewal agreement through an existing statutory process.
Kevin Brennan
The Minister says that the Government might revisit the clause, perhaps in the other place. If somebody who is operating equipment on the land is potentially deemed legally to be the occupier, under the provisions in the clause would the person who would then be asked to consult about further extending any arrangements be the landowner? Is that the assumption in the clause, in most instances?
Julia Lopez
As I said, this is a very complex and technical area. I do not want to provide the hon. Member with an incorrect answer, because this is one of the issues on which we are still in discussions with industry to ensure that we get it right. I believe that is the intention, but I will have to get back to him.
Kevin Brennan
Some inspiration might come to the Minister during the course of the debate. It seems to me quite an important question. I thought that what she meant was that, in an instance where somebody is deemed to be the operator on the land, because they have the equipment there, they obviously cannot grant themselves an extension of permission, and so it would be sensible for there to be a way to go to the landowner in order to achieve that further agreement. If that is not the case, that is quite important, because who will they go to in that instance? She said that if the landowner or interested party could not be identified, it would be people with a principal interest. What sorts of people would that be? Would it be the local community, or neighbours of the land involved? Even if she cannot offer an explanation now, it is quite important that the Committee at least has a grasp of what is intended by the clause.
Julia Lopez
This is tricky, because I wish I could provide greater clarity, but I cannot, which is obviously an unsatisfactory position to be in. In this case, I think the court would be approached to make a decision if the landowner was not in a position to grant those rights and they could not get a position out of the landowner. The intention, I think, would be for it to be decided at a legal level. I apologise that I cannot provide clarity.
Without the clause, there is a gap in the legislation that prevents operators who need code rights from being able to obtain them. This has potentially adverse consequences for consumers and businesses, with the risk of service disruptions and unnecessary delays in the delivery of improved capacity and enhanced services. As we all increasingly rely on digital services, it is important to address this situation. This is an area of active discussion, because we want to make sure we get it right. I believe it would be the case that, if the landowner were not in a position to offer the rights, the operator would go to the court to seek redress.
Kevin Brennan
I understand the difficulty the Minister faces, but it would be helpful if there was official support for her at times when technical questions are asked. It is important that the Committee gets a full explanation before agreeing to a clause. The sensible thing to do in this instance would be for the Government to revisit the clause—possibly on Report. It would certainly be of help if, by then, a clearer view as to the intention could be given to Members of the Committee and people interested in the Bill. I am sure there is a fairly straightforward answer to the question, so we should make note of the fact that it needs to be dealt with at some point.
Julia Lopez
I acknowledge that this is legally a very complex area. It is something that we have not entirely settled on, and it is under active consideration. We will come back to the Committee if we believe we have not got the policy intention correct. I am sorry that I was unable to address the hon. Member’s point in greater detail, but I am reluctant to provide information that might not be correct.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Rights under the electronic communications code to share apparatus
Julia Lopez
I beg to move amendment 1, in clause 58, page 41, line 25, at end insert—
‘(4A) In paragraph 13 (access to land)—
(a) in sub-paragraph (1)(a), for “paragraph 3” substitute “paragraph 3(1)”;
(b) in sub-paragraph (2), for “paragraph 3” substitute “paragraph 3(1)”.
(4B) In paragraph 38 (right of landowner or occupier of neighbouring land to require removal of electronic communications apparatus), in sub-paragraph (3), for “paragraph 3(h)” substitute “paragraph 3(1)(h)”.’
This amendment is consequential on the amendment made by clause 58(2)(a) to paragraph 3 of the electronic communications code.
Julia Lopez
Clause 58 deals with the sharing of telecommunications apparatus between operators within the electronic communications code. It inserts a right to share apparatus into paragraph 3 of the code, which sets out a list of rights that are statutory “code rights.” The code rights in paragraph 3 must be conferred on an operator by an occupier or imposed by a tribunal. The 2017 code reforms introduced paragraph 17 automatic rights, allowing operators to upgrade or share their apparatus without the need for an agreement. Those automatic rights are separate from the paragraph 3 code rights and are subject to strict limitations.
Since their introduction, there has been confusion about the interaction between the paragraph 17 automatic rights and the paragraph 3 code rights. In particular, while “upgrading” is a paragraph 3 code right, sharing is not. Clause 58 addresses this by making apparatus sharing a paragraph 3 code right that an operator—the “first operator”—can request to be included in an agreement to which the code applies. Clause 58 also amends the statutory purposes in paragraph 4 of the code to include sharing activities.
Apparatus sharing is a cost-effective way for operators to extend their networks without having to build extensive infrastructure themselves, helping to deliver greater coverage, capacity and consumer choice, while reducing impacts on the environment and disruption caused by installation works. As with the other code rights, if agreement on rights to share cannot be reached consensually, an operator may ask a tribunal to impose the requested rights. In those circumstances, the tribunal will apply the public benefit test and the statutory valuation regime, as it already does for other code rights.
If the right to share is a statutory code right, the factors that a tribunal will consider in deciding whether such a right should be imposed—and if so, on what terms—will be the same as those for all other code rights. Including a right to share apparatus in the paragraph 3 code rights will therefore provide greater certainty for all parties and support smoother negotiations.
Code rights can only be obtained in relation to land. Consequently, the new right to share apparatus can be requested only by the first operator that is keeping apparatus installed on, under or over land. A second operator that wishes to share the use of that apparatus will not be able to request from an occupier a paragraph 3 right permitting them to do so. Instead, once the occupier has conferred such a sharing right on the first operator, the second operator will need to negotiate the sharing of the apparatus with the first operator.
The first operator’s right to share their apparatus will, like other code rights, be exercisable only in accordance with the wider terms of the agreement. It will therefore be important for the first operator to consider carefully any terms that it may need included in its agreement with an occupier, such as additional access rights, to enable any subsequent sharing of the apparatus with other operators. To that end, clause 58 inserts corresponding code rights for the first operator to enter and carry out works on the land for the purpose of such apparatus sharing.
Finally, it should be emphasised that the new right to share introduced by clause 58 is entirely separate from the automatic rights to share that are currently available under paragraph 17 of the code, and to the rights introduced by clauses 59 and 60. Those are automatic rights—subject to specific conditions—that do not need to be agreed with a landowner or imposed by the courts. The rights in clause 58 cover situations where the operator wants rights to share over and above those automatic rights.
Government amendment 1 is a consequential amendment that reflects the restructuring of paragraph 3 provided for by clause 58(2)(a) of the Bill. It replaces cross-references to paragraph 3 of the code with cross-references to sub-paragraph 3(1).
Clause 58 introduces rights to share apparatus to the menu of code rights that is currently set out in paragraph 3 of the code. In doing so, new sub-paragraph 3(2) will be inserted into the code, setting out who can obtain a right to share apparatus. The current paragraph 3 will therefore become sub-paragraph 3(1) of the code. As there are references to paragraph 3 in other parts of the code, consequential amendments are necessary so that anyone reading the code is referred instead to the new sub-paragraph 3(1).
Amendment 1 agreed to.
Clause 58, as amended, ordered to stand part of the Bill.
Clause 59
Upgrading and sharing of apparatus: subsisting agreements
Chris Elmore
I beg to move amendment 9, in clause 59, page 41, line 42, after “agreement” insert
“other than with a private landlord”.
This amendment, together with Amendments 10, 11 and 12, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
The Chair
With this it will be convenient to discuss the following:
Amendment 10, in clause 59, page 43, line 26, at end insert—
“5B (1) This paragraph applies where—
(a) an operator (‘the main operator’) keeps electronic communications apparatus installed on, under or over land, and
(b) the main operator is a party to a subsisting agreement in relation to the electronic communications apparatus.
(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—
(a) upgrade the electronic communications apparatus, or
(b) share the use of the electronic communications apparatus with another operator.
(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which the agreement relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.
(4) The second condition is that the upgrading or sharing imposes no additional burden on the other party to the agreement.
(5) For the purposes of sub-paragraph (4) a burden includes anything that—
(a) has an adverse effect on the person’s enjoyment of the land, or
(b) causes loss, damage or expense to the person.
(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.
(7) A notice attached for the purposes of sub-paragraph (6) must—be attached in a position where it is reasonably legible,
(a) be attached in a position where it is reasonably legible,
(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and
(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.
(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).
(9) Any agreement under Part 2 of this code is void to the extent that—
(a) it prevents or limits the upgrading or sharing, in a case where the conditions mentioned in sub-paragraphs (3), (4) and (6) are met, of any electronic communications apparatus to which the agreement relates that is installed on, over or under land, or
(b) it makes upgrading or sharing of such electronic communications apparatus subject to conditions to be met by the operator (including a condition requiring the payment of money).
(10) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.
(11) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.
(12) In this paragraph—
‘the relevant land’ means—
(a) in a case where the main operator has a right to enter the land, that land;
(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out;
‘subsisting agreement’ has the meaning given by paragraph 1(4) of Schedule 2 to the Digital Economy Act 2017.”
This amendment, together with Amendments 9, 11 and 12, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Clause stand part.
Amendment 11, in clause 60, page 43, line 38, after “land” insert
“not owned by a private landlord”
This amendment, together with Amendments 9, 10 and 12, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Amendment 12, in clause 60, page 44, line 47, at end insert—
“17B (1) This paragraph applies where—
(a) an operator (‘the main operator’) keeps electronic communications apparatus installed on, under or over land owned by a private landlord,
(b) the main operator is not a party to an agreement under Part 2 of this code in relation to the electronic communications apparatus, and
(c) the electronic communications apparatus was installed before 29 December 2003.
(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—
(a) upgrade the electronic communications apparatus, or
(b) share the use of the electronic communications apparatus with another operator.
(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which any existing agreement between the operator and the landlord relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.
(4) The second condition is that the upgrading or sharing imposes no additional burden on the landlord.
(5) For the purposes of sub-paragraph (4) a burden includes anything that—
(a) has an adverse effect on the person’s enjoyment of the land, or
(b) causes loss, damage or expense to the person.
(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.
(7) A notice attached for the purposes of sub-paragraph (6) must—
(a) be attached in a position where it is reasonably legible,
(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and
(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.
(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).
(9) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.
(10) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.
(11) In this paragraph ‘the relevant land’ means—
(a) in a case where the main operator has a right to enter the land, that land;
(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out.”
This amendment, together with Amendments 9, 10 and 11, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Clause 60 stand part.
Chris Elmore
These amendments would apply a different regime to private landlords under the 2017 electronic communications code, giving operators automatic upgrade rights for properties owned by private landlords, subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
When we talk of the digital divide in our telecommunications infrastructure, we often speak of it in terms of a divide between rural and urban areas. Indeed, it is true that a divide exists between rural and urban areas in levels of connectivity, and the Bill has been designed to help reduce the rural-urban connectivity gap, which the Labour party wholeheartedly supports.
However, a division also exists within urban areas themselves. Catherine Colloms, the managing director of Openreach, said in evidence that it is particularly difficult for Openreach and similar organisations to upgrade properties that are owned by private landlords to full fibre. Openreach alone currently has 55,802 multi-dwelling unit premises on hold. Based on this, it is forecast that 1.5 million MDU premises could be unserved by the end of the commercial roll-out.
Julia Lopez
I thank the hon. Member for tabling these amendments. I represent an urban constituency and, as the Minister for digital connectivity, I am very alive to any concerns about the digital divide. I have tested the legislation to make sure that we are not exacerbating that. The amendments relate to circumstances in which an operator can upgrade or share the use of their apparatus without specific permission from a landowner or a court order. Crucially, the amendments relate to rights that the Bill grants retrospectively to agreements that are already in place. The amendment seeks to expand those rights in circumstances where apparatus is situated on, under or over land owned by private landlords.
Retrospective legislation must take particular care to strike a balance between impacts on individual rights and any public benefit that the legislation aims to deliver. The Government believe at this time that expanding retrospective upgrading and sharing rights in the way these amendments suggest would not be justified. Upgrading and sharing electronic communications apparatus offers a wide range of substantial benefits. Those are benefits that the Government specifically recognised in their 2017 reforms, when limited automatic rights were introduced for operators to upgrade and share their apparatus. The exercise of the new upgrading and sharing rights was made subject to certain conditions. Those conditions were intended to strike the right balance between the rights of individual landowners hosting apparatus and the public benefits delivered by operators upgrading and sharing their apparatus.
The changes made in the 2017 reforms therefore permit upgrading and sharing to take place without a landowner’s specific consent only where any impacts on that individual will be limited. However, it was recognised that any use of those rights could have some impact, albeit very limited, on individual landowners.
Ruth Edwards (Rushcliffe) (Con)
I remind the Committee of the declaration of interest that I made: I have worked for a number of providers, including BT and techUK, that will be affected by the legislation, and I carried out cyber-security consulting for MHR last year. I agree with the Minister about the need to seek a balance between the rights of landowners and the rights of operators. However, we cannot lose sight of the fact—this is a point she has been making powerfully—that we must get behind upgrading our digital infrastructure as fast as is practicably possible.
I am aware that we are about to debate amendment 8, which would make it more expensive for operators to access land, and put them at a disadvantage compared with other utility companies. Does the Minister agree that adopting amendments 9 to 12—and then 8—would risk sending a mixed signal to the market? On the one hand we are making it more expensive and difficult for our operators to access land, but on the other hand we are rolling back the scrutiny that they have to access private property at the moment.
The Chair
Before I call the Minister, I will take this opportunity to say that interventions should be relatively short and to the point. It will not be difficult for hon. Members to catch my eye to make points in a debate if they wish to.
Julia Lopez
I thank my hon. Friend for her intervention. I know that she has considerable expertise in this field. It is a difficult balance to strike, ensuring that we are protecting landowner rights while making sure we are giving telecoms operators the powers they need to make sure all of our constituents have the digital connectivity that they demand—and will increasingly need—going forward.
For the reasons I have set out and will be setting out in further detail, I do not think the amendments will have the desired effect. It was interesting to hear the oral evidence this week, because there was no consensus among the telecoms operators about what powers are required. We have to ensure that we do not give commercial advantage to one player or the other, as that would also trample over some landowner rights.
The changes made in the 2017 reforms permit upgrading and sharing to take place without a landowner’s specific consent only where any impacts on that individual will be limited. However, it was recognised that any use of those rights could have some impact—albeit a very limited one—on individual landowners. The new rights were not applied retrospectively and had no effect on landowners who had entered into agreements before the legislation was passed. The key difference is that agreements made after that date would be completed in the knowledge that the upgrading and sharing rights would apply. Since the 2017 reforms, however, the public need for robust and up-to-date digital services has continued to grow, and was thrown into sharp relief by the recent pandemic, when many of us were reliant on access to those services at unprecedented levels.
Upgrading and sharing apparatus has a more important role to play than ever before. In the light of this and other market developments, we have revisited the position on upgrading and sharing where the rights introduced by the 2017 reforms do not apply. Introducing specific upgrading and sharing rights for such equipment can play an important role in improving coverage and capacity, and amendment 9 appears to agree with that conclusion. However, we need to ensure that the rights of individual landowners are adequately protected. As I said, agreements after the 2017 reforms will have been concluded in the knowledge that they will give rise to automatic rights for apparatus to be upgraded or shared. That is not true of apparatus that is not covered by an agreement concluded after the 2017 reforms. As such, it is only right that any automatic rights to upgrade and share those types of apparatus should be subject to different conditions.
The amendments suggest introducing specific conditions for retrospective upgrading and sharing rights where private landlords are concerned, and those conditions partly reflect those contained in the rights established by the 2017 reforms and those set out in the Bill. However, the conditions in the new rights that we are proposing have been carefully developed to work as a whole; they are intentionally more restrictive and give rise to more limited rights than those available for agreements reached before the 2017 reforms. Taken together, the conditions mean that the operator will have automatic rights only to carry out upgrading and sharing activity that will have no adverse impact on the land or that will put no burden on a relevant individual, but this will still allow activities, such as crucial upgrading work, to be undertaken in relation to historical copper cables installed underneath land.
Sally-Ann Hart (Hastings and Rye) (Con)
I wonder if the Minister could provide some clarity. Underneath the ground, there are ducts that operators can run cables through. We heard in this week’s evidence session about telegraph poles. Operators can go to the bottom of the telegraph pole, but will the Minister provide some welcome clarity on whether they can go up to the top and across? It is really important that they can use existing infrastructure and not have to pay to go around because they cannot use the overhead.
Julia Lopez
We are looking at rights that will provide easier access to underground and over, but not on. These are very techy points. If my hon. Friend feels that that does not answer her question precisely enough, I would be happy to ask officials to get in touch with her.
The measures in the Bill as drafted ensure that apparatus installed under agreements concluded prior to 2017 can be upgraded and shared quickly and cost-effectively. At the same time, the specific conditions that we are introducing will ensure that the right balance is maintained between the interests of private individuals and the wider public benefit, which is a difficult balance to strike. We are concerned that the amendments would not maintain that balance. I hope that gives the hon. Member for Ogmore assurance that the provisions in the Bill regarding retrospective rights to upgrade and share represent a balanced approach, and I ask him to withdraw his amendment.
Clauses 59 and 60 are vital clauses that support and encourage greater upgrading and sharing of existing apparatus. The 2017 code reforms provided operators with limited automatic rights to upgrade and share their apparatus, subject to certain conditions. However, the 2017 changes did not introduce paragraph 17 upgrading and sharing rights for subsisting agreements, which are agreements completed before the 2017 reforms came into force. This means that a significant proportion of the UK’s existing networks cannot be upgraded or shared without specific permission, despite the fact that apparatus can be upgraded and shared in many situations with no adverse impacts on any individual or private land.
Clause 59 therefore inserts new paragraph 5A into schedule 2 to the Digital Economy Act 2017 in order to introduce rights for operators to upgrade and share apparatus installed under a subsisting agreement. These rights differ from those contained in paragraph 17. They are available in more limited circumstances and will be subject to stricter conditions and specific notice requirements. Taken together, the measures in the clause will ensure that apparatus installed under a subsisting agreement can be upgraded and shared quickly and cost-efficiently, and do so in a way that takes into account both the interests of individuals and the wider public benefit.
Clause 60 deals with the same issue of upgrading and sharing apparatus, but in this case in relation to apparatus installed before 29 December 2003 where there is neither a subsisting agreement nor an agreement concluded after the 2017 reforms. It is right that upgrading and sharing rights should be available for all apparatus installed before the 2017 reforms came into effect. Clause 60 therefore inserts proposed new paragraph 17A into the code, conferring rights to upgrade and share apparatus installed under land before 29 December 2003, where the operator who owns that apparatus is not a party to an agreement under part 2 of the code.
Kevin Brennan
I have listened carefully to the Minister and I do not agree with the Government’s position on rejecting the amendment. She is right that large swathes of the Bill are about the difficult balancing act between private property rights and the public interest. It seems to me, in the case put forward by my hon. Friend the Member for Ogmore in support of the group of amendments, that this is an instance where the public interest is overwhelmingly clear, while the private property interest that the Minister defended in her response is not.
My hon. Friend put forward the problem that has been received by the Committee in evidence, which is that many blocks of flats are not updated with their internet connections and so on. There is a huge public policy interest in the digital divide, which we all know about across the country, and in ensuring that the people who live in those kinds of premises have excellent access—as good as someone living with the best infrastructure available in an urban setting. He mentioned the rural-urban divide, but I am talking specifically about the case he made about blocks of flats.
I think what the Minister was saying was that because what is being proposed represents a retrospective change, a higher standard should apply to protecting those private property interests than would apply in the case, for example, of equipment that was installed post 2017. That, however, does not make a jot of difference to a poor child living in a block of flats who does not have good internet access to do their homework. That is a pretty clear judgment for the Government to make, because they have made no real or clear case that any compelling property rights are being imperilled, or that there is any compelling cost—other than minor inconvenience, perhaps—to the landowners who might be affected by the amendment.
There is, however, an overwhelming public policy case for wanting to do everything possible to assist children living in such block of flats. There is an overwhelming public policy case that a child in that block of flats with pre-2017 infrastructure should not be treated any less equally or favourably than a child who lives in a neighbouring block of flats that happens to have equipment that was installed post 2017. I urge the Minister and the Government to rethink their position for those reasons, unless I have misunderstood their case.
Julia Lopez
I reassure the hon. Gentleman that we do not disagree with the ambition. We all want children in such blocks of flats and other difficult-to-reach premises to have excellent digital infrastructure. As the Member for an urban constituency, I certainly want that. We have been testing this extensively, from legal team to legal team of operators. Some operators tell us that the additional rights are not necessary to be able to access buildings in the way that they hope; others say that they are. As I say, we have been testing this. Some of the suggestions would give greater legal access to property than law enforcement has. We have to get the right balance and we have to test whether this proposal will ultimately speed up the roll-out.
Kevin Brennan
That seems to be rather a weak argument. If law enforcement were entering someone’s property, it would probably be to search it, make an arrest or something like that. A telecoms operator entering a property to install some cable is a very different proposition, is it not?
Julia Lopez
It is a difficult balance to get right, between having a roll-out and ensuring that somebody’s property rights are respected. If we are considering giving greater powers to an operator than to law enforcement, we have to ask whether that is necessary. Operators have told us that that is not necessary to get access and to increase roll-out. On balance, therefore, we are not minded to support the amendment.
Chris Elmore
I have listened to the Minister and the debate that followed her speech. The argument is slightly confused, because in the oral evidence sessions, CityFibre and Openreach were in agreement on the need to address the issue. They were also in agreement on the huge deficit in meeting the Government’s targets because of issues in gaining access to flats and properties through leaseholders and site owners.
In answer to the question about the response of tenants or property owners inside the flats, the providers said that it was overwhelmingly positive; they wanted to gain fibre roll-out. As I mentioned in my opening remarks, nearly 56,000 MDU premises are on hold through the roll-out, so what is the plan? What is the solution to deal with the digital divide that is forming in cities and towns across the UK? It was mentioned in evidence that my Ogmore constituency has only 3% MDUs. If I recall correctly, the hon. Member for Hastings and Rye’s constituency was above 13% or 14%—higher again, she is indicating. The numbers increase depending on the area. How will we solve that problem?
Equally, I agree with my hon. Friend the Member for Cardiff West. We cannot simply say that, as we move to more online learning, and more remote working or working from home—business is supportive of that following the pandemic, even if the Government are asking everyone to come back to the office—people now have far greater understanding of their broadband, including its bandwidth, who installed it, who runs it and the costs, than they ever did before the pandemic because everyone needed to use Zoom and Teams; although, personally, there are days when I would rather not use them ever again.
I am minded to press the amendment to a Division, for the reasons that I and my hon. Friend set out. I am not hearing from the Minister what the plan is to rectify the problem. According to Openreach and other providers, the figure for premises on hold is going up year after year, and therefore the target will be missed, despite the Government reducing it at least twice since 2019.
Question put, That the amendment be made.
Product Security and Telecommunications Infrastructure Bill (Fourth sitting)
Thursday 17th March 2022
(2 years, 1 month ago)
Public Bill CommitteesRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 March 2022 - (17 Mar 2022)
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
Chris Elmore (Ogmore) (Lab)
I beg to move amendment 8, in clause 61, page 45, line 37, at end insert—
“(4A) Where the assumptions in subsection (4) cause the market value of a landlord’s agreement to decline, the rent payable under a new tenancy granted by order of the court under this Part of this Act shall not decline by more than 40%.”
This amendment would provide a legal guarantee that site providers’ rents fall by no more than 40% under any new agreement.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clauses 62 to 65 stand part.
Chris Elmore
The Government introduced the electronic communications code in 2017 and promised at the time that reductions in rent would, in reality, be no more than 40%. However, as we heard from Protect and Connect during Tuesday’s evidence session, there have been thousands of cases in which small tenant farmers, sports clubs and community organisations that host masts have seen their rents fall by vastly more than that, with many facing reductions of more than 90%. That was confirmed during the evidence session, when a question was asked about the average, followed by questions from other Members, including me. That clearly showed that there had been far higher reductions for some organisations and owners. One such case is James, a 71-year-old sheep farmer who has maintained a mast on his farm for 15 years, normally receiving £2,900 a year in rent. In 2020, James received a letter informing him that he was now being offered £200 a year under a new agreement. That was a reduction of 93% and a huge overnight shock to his personal and professional finances.
The average reduction for contracts negotiated by Cellnex UK, as Mark Bartlett informed us on Tuesday, has been 63%—a decrease that would cause a huge dent in the finances of all the kinds of organisation I have referred to and a figure well above what the Government promised in 2017. I am sure that members of this Committee would not be best pleased if a significant stream of their income fell by 63%.
I know that the Minister said at Second Reading that valuations pre 2017 were much too high, but surely she must recognise, after the oral evidence we heard on Tuesday, that the race to the bottom that we are seeing is not sustainable and that the level of reduction in rent that is occurring will deter other landowners from agreeing to host infrastructure in the first place, thus slowing the roll-out that this very legislation is designed to speed up.
Rather than leaving reductions to chance, the Opposition have tabled amendment 8, which would enshrine in law that rents under any new agreement fall by no more than 40%. That would strike a much fairer balance between operators and site providers by ensuring that what is a significant income stream for many individuals and community groups is not wiped out overnight. It would also contribute significantly to a faster roll-out of telecommunications infrastructure, as site owners would be more willing to engage. Speeding up the roll-out of new telecommunications infrastructure is the express desire of the Bill. I hope that Members from across the Committee will stand squarely behind their constituents by supporting this amendment.
Kevin Brennan (Cardiff West) (Lab)
I rise briefly to support my hon. Friend in pushing the amendment, in order to hear what the Minister has to say in response. The amendment goes to the heart of what a lot of the Bill is about: balancing the rights of private property owners and the policy requirement to speed up the roll-out of digital infrastructure.
This morning we debated an instance in which there would be no real financial cost to the private property owners from doing the right thing. In that instance, the state was ensuring that their properties could be accessed to put in the necessary infrastructure to roll out digital infrastructure in an urban setting—big blocks of flats, where lots of people might not have very good access to the internet and so on. In that instance, the Government were not prepared to accept our amendment, even though it would not have had any significant detrimental impact on the private property owners. In other words, they took the view that in that instance the private property owners, even if they would be only marginally inconvenienced, had to have their property rights protected, because this was a retrospective imposition and they would not have given permission.
In this instance—in fairness, I think this was not intended in 2017—private property owners have suffered, or might suffer, significant detriment to the income they can acquire through somebody else’s use of their land with the state’s assistance. In those circumstances, it is not unreasonable to say that the balance should be to ensure that they are not affected in a way that causes a massive reduction in the income they can earn from the use of their land.
If that was not a strong enough argument in itself, which perhaps it is not, the way the market has reacted to what happened after 2017 and the problems that there have undoubtedly been, with people reluctant to get involved with rolling out the infrastructure we need for the future, which we all want to achieve through the Bill and by other means, is further evidence that an adjustment perhaps needs to be made. The Minister could discuss with the Committee whether that adjustment is exactly what is contained in the amendment, but whether something should be done to address the arguments and concerns that have been expressed to us by those who own land on which such infrastructure is sited is certainly worth further consideration.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I thank the hon. Members for Ogmore and for Cardiff West for their contributions and for the amendment. I acknowledge that this is a tricky issue. There have been problems between both parties since the 2017 reforms, but we maintain that the 2017 valuation provisions created the right balance between the public need for digital communications and landowner rights. I think there is agreement that the prices being paid for rights to install communications apparatus before that date were simply too high. With digital communications becoming an increasingly critical part of our daily lives, that needed to be addressed.
The new pricing regime is more closely aligned to those for utilities such as water, electricity and gas. We think that that is the correct position. As I said earlier today, we are not seeking to take sides. We are on the side of good digital connectivity for our constituents, and we firmly believe that landowners should still receive fair payments that, among other things, take into account any alternative uses that the land may have and any losses or damages that may be incurred. I was alive to the concerns expressed to me by the Protect and Connect campaign, but also to those raised by individual Members about tricky constituency cases. When I came into my role in September, I met individual Members to discuss those cases. I also met Protect and Connect.
I tested the cases that were brought to my attention and asked for further details, which often were not forthcoming. There was a catch-all excuse that a lot of them were under non-disclosure agreements and the precise amount of rents settled at could not be disclosed. My broad view is that there were initial concerns and difficult cases where the mobile network operators were too aggressive in their negotiations—I think that was effectively acknowledged in the panel discussions earlier in the week—but we seem to have found an equilibrium now, helped partly by some of the cases that have gone through the courts.
We now have a body of case law that can be referred to in some of these tricky negotiations. We are also trying to deter people from going to the courts in the first place, by introducing more alternative dispute resolution mechanisms. I say that to reassure Members. There were problems initially. As far as I can tell from my case load, the correspondence coming in, the discussions that I have had with Members and the lack of additional noise on the subject in the Chamber, a better equilibrium has now been found between the mobile network operators and the landowners. If that is not the case, I am happy to look at those cases again, and we are introducing mechanisms to provide better negotiations between parties via the legislation.
Turning to the amendment, I am not sure why the hon. Member for Ogmore thinks that a specific limit should be imposed on the percentage by which rent can be reduced when the rental payment is determined by a court. Further, it is unclear why he has chosen arbitrarily to apply a figure of 40%. We have strongly resisted specifically regulating the amount of rent payable under a code agreement. Our preference has been to allow the parties to freely negotiate the amount payable under an agreement, based on a statutory framework either in the code, the Landlord and Tenant Act 1954 or the Business Tenancies (Northern Ireland) Order 1996. Even where the parties cannot reach an agreement and the court has to impose its terms, including the rent to be paid, the court has the freedom to reach its own conclusions using that framework, rather than having its discretion restricted by statutory rent controls. As I said, my understanding is that we now have a much better equilibrium, in that we have amounts of rent that both parties are much more content with.
I understand the concerns about whether this has stymied roll-out. If operators cannot get their infrastructure on to land, I imagine that they would start paying more to try to incentivise landowners to take it on. I think we have also seen cases where it has been in the landowner’s interests to try to drag the process out so that they are on the old rents, rather than the reduced, new rents. I think that has also contributed to some of the delays.
If the amount of rent is controlled in the way suggested in this amendment, we will be heading closer to a regime that will apply reductions on a blanket basis, rather than take into account the broader range of relevant circumstances, as permitted by the legal framework. I suspect that that is something that both site providers and operators would be keen to avoid.
I am aware that it has been alleged that the Government expected rents to fall by in the region of 40% following the 2017 reforms. It is unclear whether it is on that basis that the hon. Member for Ogmore chose the statutory cap of 40% in his amendment. At the time of the 2017 reforms, which I confess predate me, the fact is that the Government were unsure what the level of rent reductions would be. We were clear that that was the case. Independent analysis contained in the impact assessment that accompanied those reforms predicted that reductions could be 40%, but that was never a Government prediction nor a target.
Chris Elmore
I did say in my opening remarks where the 40% comes from. Just to help the Minister, it does relate to the 2017 change, but also the Government’s own analysis from the time. I do of course accept that she was not the Minister, but her party was in government, and those are her own Government’s figures.
Julia Lopez
That certainly is a fair point to make, and I apologise for not picking that up in the hon. Member’s comments.
A cap is likely to be even more detrimental to constituents in rural communities, who will benefit from the increased connectivity and reliability that we hope the Bill will bring.
As I have explained, agreements to which the code applies can currently be renewed in various ways, depending on the type of agreement and where in the UK it was entered into. The intention of clause 61, along with clause 62, is to create a clearer and more consistent legislative framework under which agreements are renewed. Central to that is ensuring that, no matter where in the UK an agreement is renewed, the financial terms are calculated in the same way. That will help to ensure that there is not a digital divide across the UK, with one country receiving additional investment at the expense of others because operating costs are cheaper.
The amendment suggests limiting any reduction in rent that may be imposed by the court when agreements are renewed under the 1954 Act. While that proposal is well intentioned, we do not believe that it should be allowed to proceed. It is vital that there is fairness throughout the UK. The Bill as drafted provides a clear framework, which will not only result in all payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We think that will expand the digital network.
Kevin Brennan
I take what the Minister said about the figure of 40%, but it was contained, as my hon. Friend the Member for Ogmore said, in a previous Government’s impact assessment. I remind her that, when Ministers issue impact assessments, they sign them, as she did with this one, saying:
“I have read the Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.”
When her predecessor signed the impact assessment on behalf of the Government to say, “This is the Government’s official view of what is likely to happen,” their official view was that rents would drop, probably by 40%.
Julia Lopez
I accept the point that the hon. Gentleman is making. I also accept that in some cases rent reductions were much greater than expected. As we discussed earlier in the week, some of those were the result of overly aggressive behaviour by mobile network operators. We need to address some of the challenges that were raised by some of the changes that were made. In the body of case law, we now have a better equilibrium between landowners and operators, which should help to address some of those cases.
On some of the more emotive cases that have been raised with me over my tenure, I have sought to understand the details. Those cases are not always as has been presented, and I am led to believe that, in terms of a lot of the initially very difficult cases that came after the 2017 reforms were initially introduced, we are now in a very different place.
It is vital that there is fairness throughout the UK. As drafted, the Bill provides a clear framework that will not only result in all rental payments being calculated in the same way, but in the ability to renew agreements quickly and cost-effectively. We hope that will help us expand the digital network across the whole of our country. In those circumstances, I ask the hon. Member for Ogmore to withdraw his amendment.
I will now turn to clauses 61 to 65, which deal with the renewal of agreements to which the code applies that have expired or are about to expire. There are several ways in which such agreements can be renewed, depending on the type of agreement and where in the UK it was entered into. The aim of the clauses is to make all the routes to renewal as clear and consistent as possible, so that the process is the same across the UK.
Chris Elmore
I listened to the Minister’s remarks, and she acknowledges some of the historical cases, but I refer her to this Committee’s first sitting, where I asked Eleanor Griggs of the National Farmers Union about reductions in recent cases. Ms Griggs said that in in recent times, the NFU had made representations in cases in which farmers had received 90% decreases. Later, she referred to a farm in the constituency of the hon. Member for St Austell and Newquay where there was a significant reduction, from £3,500 to £17.50 a year.
We have to acknowledge the impact on many organisations, including farmers, churches, and particularly community groups. I have examples in my constituency of community groups that run scout halls or guide huts losing 60%, 70%, 80% or 90% of the income they use to balance their budgets and ensure that they can run services for children and young people throughout the year. The Minister has committed to review even more of the cases that come through for her personal intervention, but I think there should be a minimum threshold of 40%, which the Government committed to previously in their impact assessment, as my hon. Friend the Member for Cardiff West pointed out. I am therefore not minded to withdraw the amendment. I also hope that their lordships will consider it as part of any future scrutiny in the other place.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
Government amendments 2 to 4.
That the schedule be the schedule to the Bill.
Julia Lopez
I am afraid I have to tell the Committee that this does not get any more inspiring.
The clause creates a bespoke process for telecoms operators to seek access to certain types of land where a person repeatedly fails to respond to requests for access to install apparatus under or over land for the purposes of providing an electronic communications service. The clause sets out that process by inserting into the electronic communications code new part 4ZA, which makes provision for a court to impose an agreement where the operator needs that person, “the landowner”, to confer or be bound by code rights. Part 4ZA will apply in situations where an operator intends to provide an electronic communications service and to achieve that must install electronic communications apparatus under or over, but not on, relevant land. “Relevant land” is defined as land that is not covered by buildings, and that is neither a garden, a park nor a recreational area. The provision also takes a power for the Secretary of State to specify through regulations further types of land that may be “relevant land”, but may only do so following consultation.
The provisions will require an operator to have given two warning notices, followed by a final notice. Those three notices all follow an initial request notice, giving a total of four. The Bill sets out that there must be a period of 14 days between the giving of each notice. For the landowner to fall out of scope of proposed new part 4ZA, all that is required of them is to respond to any of these notices in writing, before the operator applies to the court under part 4ZA. If any response is received, the operator will no longer be able to apply for a part 4ZA order and must either negotiate for a code agreement or apply for rights to be imposed by the courts in the normal way.
If granted, a part 4ZA order will impose an agreement between a landowner and an operator, conferring the rights requested in the initial notice. The terms of that agreement are to be specified in regulations. It may reassure the Committee that those regulations will be subject to the affirmative procedure. Furthermore, before the regulations are made, the Bill expressly obliges the Secretary of State to consult with a range of parties.
Importantly, the provisions impose a six-year maximum time limit on the period for which rights conferred under a part 4ZA order may last. I emphasise that detail, because it forms an important part of the Bill’s safeguards for landowners’ property rights. This clause provides a much needed process that will play a large part in ensuring that homes and businesses benefit from the national gigabit broadband upgrade and are not left behind.
I will now turn to the amendments tabled in relation to clause 66, all of which are technical amendments. Amendments 2 and 3 have been tabled in order to make a minor clarification to the text of the electronic communications code, to avoid any possible unintended interpretation of the legislation. Amendments 2 and 3 clarify that the right mentioned in paragraph 26(8) and paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land. By inserting the words “under or over” into paragraph 26(8) and paragraph 27G(4) of the code, these amendments clarify that part 6 of the code may be used by a landowner to require the operator to remove apparatus installed “under or over”, as well as on, the land.
Without amendments 2 and 3, paragraph 26(8) and 27G(4) as currently worded may be interpreted to mean that while equipment installed on land under the “interim rights” or “unresponsive occupier” process could be removed via the part 6 process, equipment installed under or over land under these processes might not. That is not the policy intention, and as such this amendment is being introduced to clarify the policy position.
Amendment 4 makes a minor amendment to remove a provision which has been found to have no effect. The provision in question—paragraph 3(9) of the schedule to clause 66 in the Bill—was intended to ensure that part 5 of the code does not apply to the process created by clause 66 in the Bill. Part 5 of the code sets out that code rights may persist even after the agreement which underpins them expires. It was never intended that part 5 should apply to rights gained through part 4ZA, due to the importance of the time limits I have mentioned. The Bill provision that this amendment removes was intended to ensure that part 5 did not apply to rights gained through part 4ZA. However, we are satisfied a different part in the code already ensures this. As such, paragraph 3(9) in the schedule of the Bill has no real effect and ought to be removed.
In practical terms, there is no legal or policy change effected through this amendment, beyond increasing the clarity of legislation. This amendment simply removes a provision which had no effect in the first place, and thus tidies the legislation. I hope that everyone will accept that that is beneficial.
Chris Elmore
I want to make clear the Opposition’s support for clause 66. From all my conversations with industry, it is quite clear that where there is an unresponsive landowner, it is extremely complicated to then meet the public’s demands. If the Bill is about improving digital activity for all our constituents, particularly in some of the most rural and hard to reach communities—I find it hard to believe that includes my own constituency, but it does—then this is an important and welcome change.
Kevin Brennan
Despite the very thorough explanation that the Minister gave of what is a technical clause, I understand what the difference is between something being placed over or under land, but I am not sure what the difference is between something placed over or on land. There must be a technical reason why it is there; does she know the answer to that?
Julia Lopez
I think it being on land is a much more intrusive process. For instance, we could be talking about a cable that happens to be going over somebody’s land, and therefore to do something to it would not require a great deal of intrusion. Similarly, if it was the matter of being able to dig at the side of a road, it is technically access land, but only underneath the surface of the land—I hope this makes sense. It is much less intrusive process. I think it is a process that could be objected to far less by a landowner; they are not being asked if somebody can drive over their land, put something unattractive on it or inconvenience them in any way. We are talking about underground works and cabling works that objectively would have no real impact on their land.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Schedule
Unresponsive occupiers: consequential amendments
Amendments made: 2, in the schedule, page 66, line 17, at end insert—
“(c) in sub-paragraph (8), after “placed on” insert “, under or over”.”
This amendment clarifies that the right mentioned in paragraph 26(8) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.
Amendment 3, in schedule, page 66, line 18, after “sub-paragraph (4)” insert—
“(a) after “placed on” insert “, under or over”;
(b) ”
This amendment clarifies that the right mentioned in paragraph 27G(4) of the electronic communications code to require the removal of apparatus applies in relation to apparatus placed under or over land.
Amendment 4, in the schedule, page 66, line 20, leave out sub-paragraph (9).—(Julia Lopez.)
This amendment removes the amendment to paragraph 30(3) of the electronic communications code. The amendment to paragraph 30(3) is unnecessary because paragraph 30(2) would not in any event apply to a code right conferred by virtue of an order under new paragraph 27ZE of the code.
Schedule, as amended, agreed to.
Clause 67
Arrangements pending determination of certain applications under code
Question proposed, That the clause stand part of the Bill.
Julia Lopez
The clause deals with situations where once an agreement to which part 5 of the code applies has run its initially agreed course, one of the parties wants it to be terminated, modified or replaced by an agreement with different terms. In those circumstances, the matter can be referred to a tribunal if the parties cannot resolve matters themselves. It can take time for such disputes to be dealt with, and paragraph 35 of the code deals with the circumstances in which an interim order can be requested, which will apply until the full dispute is heard.
Our policy intention for interim orders is to allow any specific priority aspect of a dispute to be looked at, so that temporary arrangements can be imposed where appropriate. At present, however, paragraph 35 of the code is restricted, so that only a site provider can ask for an interim order, and they can do so only in relation to the consideration paid by an operator. The clause widens that provision so that either party can ask for an interim order and can do so in relation to any term of the former agreement. That will enable specific issues to be dealt with at a much earlier stage of the dispute. In particular, it will mean that operators are given the same opportunity as site providers have to ask for the financial terms of an agreement to be reviewed on an interim basis. This will help ensure that once an agreement to which part 5 of the code applies has run its initially agreed course, there are no unnecessary delays to the valuation framework of the code being applied to new financial arrangements.
It will also provide the courts with greater flexibility to look at situations where a party needs an urgent change to any term of their agreement. We think that will be particularly helpful where an operator needs urgent changes to terms so that they can upgrade or continue using an existing site. There are likely to be situations where this will also benefit site providers. However, the clause is not to be used as a way of circumventing the usual negotiation process. Parties will be expected to negotiate in the usual way before making an application to the court, and to comply with the ADR requirements that the Bill introduces.
We think the clause will help many operators benefit from the full code framework at a much earlier stage, which will allow them to take advantage of provisions to upgrade and share apparatus and the code valuation framework as introduced in 2017. That will result in more investment in the expansion and upgrading of digital networks, ensuring that consumers receive the best coverage and connectivity possible.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68
Use of alternative dispute resolution
Question proposed, That the clause stand part of the Bill.
Julia Lopez
I will now speak to clauses 68 and 69, which introduce measures on alternative dispute resolution and complaints relating to the conduct of operators. The purpose is to encourage more collaborative discussions between landowners and telecoms operators, and to ensure that litigation is used only as a last resort where an agreement cannot be reached.
Clause 68 sets out two new requirements for operators and one new requirement for courts. Together, they will encourage the greater use of alternative dispute resolution processes. The requirements are as follows. First, when a request notice is sent for access to land or other rights under the electronic communications code, all operators must inform the landowner of the availability of ADR processes if the landowner is unhappy with the offer made. Secondly, in cases where an agreement cannot be reached operators must consider using ADR processes before applying to the courts. If the matter relates to modification of an expired agreement, either party must consider ADR before applying to the court. Finally, when awarding costs, the courts will be required to take into account any unreasonable refusal to engage in ADR by either party.
Some landowners and their representatives have told us that they find negotiations for code rights difficult. In some cases, landowners have felt pressured to accept any terms offered, to avoid the risk of being taken to court—this relates to the David and Goliath situation that we discussed earlier in the week. The measures in clause 68 address this issue by encouraging the use of ADR in order to minimise the risk of landowners feeling such pressure, and to facilitate co-operative discussions between landowners and telecoms.
Clause 69 inserts new subsection (ca) into paragraph 103 of the electronic communications code, which lists the issues that Ofcom’s code of practice must deal with. Subsection (ca) adds to the list
“the handling by operators of complaints relating to the failure of operators to comply with the code of practice”.
Landowners and their representatives have reported to the Government that, in some cases, they are reluctant to enter into code agreements because they are concerned about how the operator or their contractors will behave when they access the relevant land. The clause works to address the issue by requiring Ofcom to prepare guidance, following consultation, regarding operators’ handling of conduct. To complement that, we will bring forward secondary legislation to introduce a new statutory requirement for operators to have a complaints process for code matters, enforced by Ofcom.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clause 69 ordered to stand part of the Bill.
Clause 70
Power to impose time limits on the determination of code proceedings
Julia Lopez
I beg to move amendment 5, in clause 70, page 60, line 15, at end insert—
“, and
(b) amend or repeal any of the following provisions (which provide signposts to those regulations)—
(i) paragraph 2A of Schedule 3 to the New Roads and Street Works Act 1991;
(ii) section 107(1A) of this Act;
(iii) paragraph 97 of Schedule 3A to this Act;
(iv) section 69(5A) of the Marine and Coastal Access Act 2009;
(v) section 27(6A) of the Marine (Scotland) Act 2010.”.
This amendment ensures that the power conferred by the new section 119A of the 2003 Act includes power to amend or revoke certain signposts in primary legislation which might otherwise be rendered otiose by the exercise of that power.
Julia Lopez
It is clearly desirable that legal disputes relating to code rights be dealt with as quickly as possible; that will minimise delays to network deployment and expansion in a number of ways.
Fast dispute resolution will make sure that, where the public interest test is satisfied, operators can get the rights they need for network deployment and expansion as soon as possible. It also means that where that test is not satisfied, that is identified promptly, so that operators know they have to explore different options. Finally, fast dispute resolution is in the best interests of all parties. Protracted legal proceedings take time, cost money and harm ongoing stakeholder relationships.
However, while we recognise that fast dispute resolution has a lot of benefit, it is important that there be no undue interference with the judicial process and the ability of courts to deal with cases justly. Time limits should not, for example, interfere with a court’s ability to provide the parties with sufficient opportunities to identify, locate or produce evidence. Any statutory provisions relating to the time within which disputes must be determined therefore require careful consideration and close scrutiny.
Legislation already makes limited provision for certain applications relating to new code rights to be heard within six months, but this provision sits outside the code; it is in the Electronic Communications and Wireless Telegraphy Regulations 2011. It was introduced in the course of our transposing European legislation, rather than as a specific element of the domestic code framework.
The new power in clause 70 will enable the Secretary of State to make regulations that are broader in scope, and can specify a period within which a full range of code-related disputes must be determined. As the clause makes clear, regulations made under it may amend or revoke provisions made under the 2011 regulations. That gives the Secretary of State flexibility to consider a full range of approaches, including having no time-limited period at all, if appropriate.
Other, wider measures that we are introducing in the Bill, and potentially in subsequent secondary legislation, will affect court resources. In many cases, the changes will ensure that caseloads are more evenly distributed, particularly between the first-tier and upper-tier tribunals. Rather than seeking to make changes relating to dispute time limits now, we are therefore putting in clause 70 a power permitting the Secretary of State to make regulations on this issue in future. That will enable the Government to revisit the measures as a whole, once the other measures in the Bill come into force, so that their overall impact can be assessed when considering whether changes are appropriate. We will, of course, work closely with the Ministry of Justice and the Northern Ireland and Scotland Governments before making any further proposals on this issue.
Amendment 5 provides a very limited power for the Secretary of State to amend a specified list of provisions in primary legislation. The provisions signpost to regulations about time limits for disputes on code rights. It is clearly desirable that legal disputes relating to code rights be dealt with very quickly. Any statutory provision relating to the time within which disputes must be determined requires careful consideration. The amendment ensures that, if changes are made to the existing regulations, corresponding amendments can be made to legislation that signposts those regulations.
Chris Elmore
This point also relates to previous clauses, but I think links best to clause 70. The Minister mentioned that the Secretary of State would review dispute resolution at a later date. Throughout the oral evidence sessions, there were calls from the NFU, Protect and Connect and other organisations for the dispute resolution to become compulsory. If resolutions were slowing down, and decisions were not being reached, would the Minister consider introducing, through secondary legislation, a compulsory element, so that we can avoid some of the concerns raised by the witnesses, particularly those representing landowner and club groups and so on?
Julia Lopez
I think it is implicit in what I said that we will keep all of this under close review, because we do not want any of the changes we make to slow the roll-out. We hope that the changes have their intended effect, which is ultimately not about any particular group’s interests, beyond their getting better digital connectivity. We are always happy to keep this under close review. We do not think a mandatory ADR would serve our overall goal. If problems come up over the next few years, these powers will enable us to make changes.
Amendment 5 agreed to.
Clause 70, as amended, ordered to stand part of the Bill.
Clause 71
Rights of network providers in relation to infrastructure
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Sharing infrastructure in the roll-out of gigabit-capable networks can greatly reduce the cost of deploying networks, increase the pace of roll-out and reduce the frustrating need to dig up streets, preventing unnecessary disruption to the local populations we represent and reducing carbon emissions. The Communications (Access to Infrastructure) Regulations 2016 enable sharing of information about access to physical infrastructure across the utility, transport and communications sectors. They include the right to access that infrastructure on fair and reasonable commercial terms and conditions. The 2016 regulations were implemented in the UK, following the European broadband cost reduction directive, to reduce the cost of deploying high-speed electronic communications networks.
We recently published our response to a call for evidence on a review of those regulations. We set out that there may be areas where the 2016 regulations could be made easier to understand and use. We said we would legislate to allow future changes to the 2016 regulations via secondary legislation, rather than having to rely on primary legislation. This legislation would be subject to a further consultation with Ofcom and such other persons the Secretary of State considers appropriate. It would also be scrutinised in the Parliament through the affirmative procedure.
Clause 71 grants the Secretary of State the power to make provisions, through regulations, conferring rights on network providers in relation to infrastructure for the purpose of developing communications networks. These provisions include the power to amend, revoke or replace the 2016 regulations. The clause details the areas in which provisions may be made by the Secretary of State through regulations. These areas include: provisions relating to grants of access to relevant infrastructure; the carrying out of work as specified; procedures and forms of request by network providers for rights conferred by the regulations; and disputes under the regulations.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Clause 72
Power to make consequential amendments
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clause 72 confers on the Secretary of State a power to make any changes to other legislation that are required as a consequence of part 2 of the Bill coming into force. By way of example, changes may be needed to ensure that legislation that references the electronic communications code continues to work correctly after the Bill is passed. The power can be used to amend any legislation. In the case of primary legislation, it is limited to legislation passed or made before the end of the parliamentary Session in which the Bill is passed.
Clause 72 requires that any regulations made using this power that amend or repeal primary legislation be subject to the affirmative procedure. The negative procedure will apply to any other regulations made using this power. Where any changes are required to devolved legislation, the UK Government will work with the devolved Administrations to ensure that the wider legislative framework operates as intended. Clause 73 provides a straightforward explanation regarding references in this Bill to the electronic communications code.
Kevin Brennan
As the clause impacts the devolved Administrations and gives Ministers the right to interfere with primary legislation that is being passed by the devolved Governments, what consultation there has been with the Senedd, Scottish Parliament and Northern Ireland Assembly about this power of the UK Government?
Julia Lopez
We have official-level contact frequently, in case something has to be changed. I would like to reassure the hon. Gentleman that I have met my counter-parts in the Scottish and Welsh Administrations, including one of his colleagues in the Labour Administration. I will continue to have those meetings, in case changes that would have any meaningful impact are required as a result of the legislation.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.
Clause 73 ordered to stand part of the Bill.
Clause 74
Power to make transitional or saving provision
Question proposed, That the clause stand part of the Bill.
Julia Lopez
Clause 74 allows the Secretary of State to make transitional or saving provisions. This is required to provide for a smooth introduction of the new legal framework by, for example, specifying grace periods before the legislation comes into force. Clause 75 makes provision about a number of technical matters that regulations made under the Bill address, and enables such regulations to be exercisable by statutory instrument.
Clause 76 sets out the extent of the provisions of the Bill. Both cyber-security and telecommunications are reserved matters, and, for the most part, the Bill extends across the UK. Clause 77 sets out the commencement. Clause 27, on matters of enforcement, comes into force on Royal Assent, and the remaining clauses come into force via commencement regulations made by the Secretary of State. Clause 78 is the short title of the Bill.
Question put and agreed to.
Clause 74 accordingly ordered to stand part of the Bill.
Clauses 75 to 78 ordered to stand part of the Bill.
Ordered, that further consideration be now adjourned.—(Steve Double.)