Grand Committee
(1 year, 5 months ago)
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Investigatory Powers Commissioner (Oversight Functions) Regulations 2022
(1 year, 5 months ago)
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Lord Sharpe of Epsom
That the Grand Committee do consider the Investigatory Powers Commissioner (Oversight Functions) Regulations 2022.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I beg to move that the Grand Committee consider the draft Investigatory Powers (Covert Human Intelligence Sources and Interception: Codes of Practice) Regulations 2022, laid before the House on 19 October 2022, and the Investigatory Powers Commissioner (Oversight Functions) Regulations 2022, laid on 18 October 2022.
Protecting our national security and keeping the public safe remains a top priority for the Government, as does ensuring that public trust and confidence in the exercise of investigatory powers are maintained. These two sets of regulations are concerned with the exercise of investigatory powers, and in particular with the important safeguards and oversight. The investigatory powers with which they are concerned are set out in the Investigatory Powers Act 2016 and the Regulation of Investigatory Powers Act 2000, which I will henceforth refer to as RIPA.
We are concerned with three key measures today. First, I will turn to amendments to the Covert Human Intelligence Sources Code of Practice. Throughout this debate I will refer to covert human intelligence sources as CHIS, and the code of practice itself as the CHIS code.
The CHIS code sets out the processes and safeguards governing the use of CHIS by public authorities and provides detailed guidance on how CHIS powers should be exercised and duties performed, including examples of best practice. The draft regulations before the Committee today will bring into force changes to the CHIS code. These changes have been made following amendments made to RIPA by the Covert Human Intelligence Sources (Criminal Conduct) Act 2021, which I will refer to as the CHIS Act throughout today’s debate.
The amendments made to Part II of RIPA by the CHIS Act ensure that there is a clear and consistent statutory basis to authorise CHIS to engage in conduct that could otherwise be criminal, where it is necessary and proportionate to do so, having regard to the Human Rights Act and the UK’s obligations under the European Convention on Human Rights.
The draft revised CHIS code enhances the protection for children and vulnerable adults where they are to be authorised as CHIS in exceptional circumstances. There has been substantial consultation with charities and interest groups, and we have given due consideration to the valuable feedback they have provided on the changes we have made to the CHIS code.
The investigatory powers regulations will also make necessary changes to the Interception of Communications Code of Practice, which I will now refer to throughout the debate as the interception code. The draft revised interception code provides further guidance on the use of interception by public authorities that exercise such powers, also known as intercepting authorities.
The amendments to the draft revised interception code will reflect the Government’s long-standing position on serving interception warrants on cloud service providers and the enterprise services they provide to customers. These changes will provide much-needed clarity to relevant UK and US companies impacted by enterprise service issues. By enterprises, we mean companies, academic institutions, not-for-profit organisations, government agencies and similar entities that pay cloud service providers to store and/or process their organisations’ electronic communications and other records. When a cloud service provider is providing such services to an enterprise, the enterprise is responsible for providing accounts to its users and determining the reasons for which data is retained and processed.
A public consultation on the proposed changes was carried out between July and October. After further cross-governmental engagement on the draft revised interception code, three additional changes to the proposed revisions were made to provide further examples of the circumstances under which a warrant may be served on a cloud service provider instead of an enterprise customer, and to outline the obligations imposed by the Investigatory Powers Act regarding unauthorised disclosure to help protect national security.
Finally, I turn to the changes to the Investigatory Powers Commissioner’s oversight functions, as proposed in the Investigatory Powers Commissioner regulations. I will refer to the Investigatory Powers Commissioner as the IPC throughout.
These regulations place two areas on a statutory footing: first, the IPC’s oversight of the GCHQ equities process; and, secondly, compliance by members and civilian staff of SO15 at the Metropolitan Police Service and officers of the National Crime Agency with the guidance referred to as the Principles Relating to the Detention and Interviewing of Detainees Overseas. These areas have previously been overseen by the IPC and his office on a non-statutory basis.
The IPC has made it clear, and the Government agree, that he considers formalising his oversight responsibilities as being in the best interests of transparency and robust oversight. As a statutory authority, the parameters of the IPC’s remit are set by Parliament. These changes will provide greater public accountability and enable the effective discharge of the IPC’s responsibilities.
These regulations are vital for keeping the public safe by providing clarity and transparency around the use and oversight of powers. I hope the Committee will be able to support these measures and their objectives. I commend the draft regulations to the Committee. I beg to move.
Baroness Chakrabarti (Lab)
My Lords, I apologise for coming in when the Minister was already on his feet. I declare an interest as a council member of Justice, the all-party law reform group that took a significant interest in the CHIS Bill when it was going through the House. It was a very strange time: it was during lockdown when we had Zoom Parliament and so on, as the Minister will recall.
All noble Lords will appreciate that the legislation was—and remains—controversial. Whatever the arguments for and against its necessity, it is controversial to grant advance immunity from prosecution not only to police officers or direct officials and agents of the state but to those whom they run in the community, including in criminal fraternities. We have had the arguments in relation to the legislation itself. None the less, we all need to recognise the dangers that exist with that kind of advance immunity from criminal prosecution, including for quite serious crimes.
During the passage of the legislation the Government said that the Human Rights Act would be a safeguard, and the Minister has repeated that. But we are constantly told that the Human Rights Act is in jeopardy and, with the return of Mr Raab to the Office of the Deputy Prime Minister and as Justice Secretary, that remains in the balance. That needs to be on our minds when we consider these powers and the codes of practice made thereunder.
I will make one further point, about the consultation around the CHIS codes of practice. Justice informs me and other noble Lords that the consultation took place between 13 December 2021 and 6 February 2022—an eight-week period that included Christmas and serious restrictions because of the rise of the omicron variant. That was of concern not only to Justice but to other charities and NGOs that had concerns about the legislation and about victims’ rights in particular. One of their substantive concerns is that there is not enough in the current codes of practice to encourage victims to seek compensation in the event that they are harmed as a result of advance criminal immunity being given to CHIS.
Christmas is a problem for people who work in the sector in any event, because staff are on holiday and so on, but lockdown made it harder still. What Justice says about that is if the Home Office had compensated for the short festive period by going out proactively to consult potential interested parties, that consultation deficit could have been met. But that, I am told, did not happen. As a result, both Justice and the Centre for Women’s Justice, which of course had been very involved in supporting the female victims of the spy cops scandal, made their views known to the Home Office. That has not been a satisfactory engagement.
I know there is a limit to what can be done about this at this point but I intervene today to put this to the Minister. He perhaps was not the Minister responsible at the time of the consultation but might, none the less, keep this under review and possibly open up a line of ongoing communication with Justice and the Centre for Women’s Justice. Although these regulations are of course going to pass, these codes of practice need to be kept under review, as does the operation of this legislation with the codes of practice. I know from my dealings with him that the Minister is a reasonable person. After the regulations pass, I hope that he will perhaps meet these people to keep that conversation going and ensure that the operation of these provisions and vital codes of practice is monitored, and that the monitoring from the Home Office actively encourages involvement from those who work on victims’ rights and in the sector.
Lord Paddick (LD)
I thank the Minister for introducing these draft statutory instruments. As he said, the Investigatory Powers (Covert Human Intelligence Sources and Interception: Codes of Practice) Regulations 2022 cover highly controversial changes made to the Regulation of Investigatory Powers Act 2000 by the Covert Human Intelligence Sources (Criminal Conduct) Act 2021 which enable the police, security services and other public bodies to task informants or agents to commit crime, where it is necessary and proportionate, for which they will be immune from prosecution and civil damages. As the noble Baroness, Lady Chakrabarti, has just said, that is not just the officers who task the individuals or authorise that tasking, but the individuals involved in the criminal acts themselves.
Taking up the point made by the noble Baroness, my understanding is that victims who have suffered as a result of the participation of CHIS in crime cannot make claims because the agents and CHIS are immune from being sued in the civil courts, as well as from criminal prosecution. In relation to the spy cops issues, can the Minister clarify whether that immunity from civil claims is not retrospective and that where undercover officers were inappropriately engaging in relationships with protesters and activists, they may therefore still be liable for civil damages?
The Act’s measures were fiercely debated in this House and, despite the safeguards that were brought in through amendments passed by it, they remain controversial—not least given the potential tasking of children and vulnerable adults to commit crime, and the danger and safeguarding issues surrounding the use of children and vulnerable adults in this way. Since the safeguards introduced in the CHIS Act came into force in 2021, can the Minister explain why it has taken until now to publish these codes of practice, which instruct the police and the security services on how they must comply with the 2021 Act?
The Explanatory Memorandum says:
“It is not considered that relevant public authorities or the IPC need to be provided with additional time to adopt different patterns of behaviour with a delayed commencement date”
as the changes contained in the revised codes of practice have been in force since 2021. If, as the Explanatory Memorandum says,
“the new provisions in the CHIS Act”
provide guidance
“covering the way that Criminal Conduct Authorisations … must be authorised and reflects the changes made to the use of children and vulnerable adults as CHIS”,
what is the point of the revised codes of practice? If they are important, even essential, to ensure the relevant authorities comply with the law, why have those authorities been allowed to operate without them since 2021, bearing in mind that there was no statutory basis for authorising CHIS to participate in crime before the 2021 Act?
Lord Ponsonby of Shulbrede (Lab)
My Lords, I will speak first to the Investigatory Powers (Covert Human Intelligence Sources and Interception: Codes of Practice) Regulations 2022. This SI updates the CHIS code of practice, following the 2021 Act, and the interception code of practice. We believe the first duty of any Government is to keep our country safe. The Labour Party recognises the importance of covert intelligence and the necessary, if at times uncomfortable, role of covert human intelligence sources and the contribution they make on our behalf.
The Labour Party supports the CHIS Act but, along with a number of Members from across the House, we pushed for additional safeguards with varying degrees of success. In particular, we pushed to limit the types of criminal conduct that could be authorised and for prior judicial oversight to be sought for an authorisation; we did so without success. However, the House was successful in adding some safeguards to the Bill by securing extra protection for children and young people and ensuring the notification of authorisations to the Investigatory Powers Commissioner. I pay particular tribute to the noble Lord, Lord Anderson of Ipswich, and the noble Baroness, Lady Kidron, who played a leading role in securing these changes.
We support the regulations but I have a number of questions. The first concerns what the Explanatory Memorandum says about Section 72 of RIPA. It sets out the effect of the code. I will read out the further explanation:
“Failure to comply with the Code does not render that person liable in any criminal or civil proceedings. However, the Code is admissible in evidence in criminal and civil proceedings, and may be taken into account of any court”.
Can the Minister give any information on this? What would be the case if there was a failure to comply with the code? What could or would be the repercussions for those breaking the code?
Further, there is a requirement for public authorities
“to ensure that any criminal conduct to be authorised is compliant with the relevant Articles of the European Convention on Human Rights and the Human Rights Act 1998.”
How will that be impacted by the proposed Bill of Rights Bill? My noble friend Lady Chakrabarti also raised the prospect of rescinding the ECHR even though Dominic Raab repeatedly says that he does not want to do that. Nevertheless, doubts and scepticism persist.
On children, I note that most of the consultation responses focused on protecting children and vulnerable adults. I can see that the Government have reflected on those submissions. It is right that children are authorised as CHIS sources only in exceptional circumstances, and that the duty of care owed to the children in this context is taken extremely seriously.
I have received an extensive briefing from Just for Kids Law, as I am sure other noble Lords have. Although I want to make it clear that I do not agree with its central proposition that children should never be used for CHIS, it raised a number of valid questions that I will repeat for the Minister now. Specifically, paragraph 4.14 of the draft code refers to Articles 8 and 9 of the juveniles order. It is not clear what this refers to: the juveniles order has only six articles. It would assist if the Minister could clarify what is meant by this reference.
Secondly, there is a continued discrepancy between the code and the primary legislation. The juveniles order sets out the protections given to those aged under 18 who are used as a CHIS. It is referenced at paragraph 4.4 of the code of practice. The protections in the order now differ from the protections set out in the code of practice. Will the Government amend the order to reflect the new code of practice?
My third question is about the test for the appointment of an appropriate adult for a young person. A new test has been written—this goes to the point raised by the noble Lord, Lord Paddick—so can we have confirmation that the appropriateness of that test for appointing an appropriate adult for somebody aged under 18 or who is vulnerable will be kept under review? My experience of youth courts is that the guidance for appointing appropriate adults tends to be a bit rigid, so my view is that it needs to be reviewed to see whether it is being used appropriately in all circumstances.
My noble friend Lady Chakrabarti raised a couple of points. Specifically, as in the Justice briefing, the draft code of practice makes no mention of CHIS acting as agents.
Baroness Chakrabarti (Lab)
I beg your pardon; what I meant was agents provocateurs.
Lord Ponsonby of Shulbrede (Lab)
Right, so the point is about provoking others to commit criminal acts. What would be the view of that?
I remember the original debates when somebody—I am not sure whether it was the noble Lord, Lord Paddick—gave a very evocative example that hit home for me. It was of a 17 year-old girl being run as a prostitute by her older drug-dealing boyfriend. I understand that it was the noble Baroness, Lady Hamwee, who gave that example and spoke about the appropriateness of engaging that girl to effect a conviction of her boyfriend. It was obviously an extremely difficult case but it illustrates the sensitivity and difficulty of the cases with which we are dealing.
The noble Lord, Lord Paddick made another good point, which I will repeat. It was the question of whether the immunity that would be available to CHISs for some action would be retrospective, particularly in the context of women who have been in relationships with officers who were CHIS officers and may well be seeking compensation for those relationships. I would be interested to hear an answer from the Minister on that.
Baroness Chakrabarti (Lab)
On the point about agents provocateurs—that is, CHIS who are not just having to commit criminal acts to keep their cover but are perhaps actively encouraging others to commit crimes—the concern is not just about the 17 year-old girl in the prostitution example. There is a big concern here from the trade union movement and the protest movements that CHIS could be actively encouraging peaceful protest movements to tip into criminal acts. The concern is that the code should at least make it clear that that kind of agent provocateur behaviour would be unacceptable. Will the Minister consider adding that to the code?
Lord Ponsonby of Shulbrede (Lab)
My Lords, if I might move on to the other SI with which we are dealing, we support the Investigatory Powers Commissioner (Oversight Functions) Regulations 2022. This SI provides the commissioner with oversight of compliance by members and civilian staff of the Metropolitan Police Force in relation to counterterrorism legislation, and officers of the National Crime Agency with guidance referred to as the Principles Relating to the Detention and Interviewing of Detainees Overseas and the Passing and Receipt of Intelligence Relating to Detainees. The regulations take two functions where the Investigatory Powers Commissioner currently exercises oversight on a non-statutory basis and places them on a statutory footing. This change has been requested by the IPC himself; I thank Sir Brian Leveson and his team for the work they do.
The National Security Bill has passed through the other place and will soon start here in the House of Lords. My honourable friend Holly Lynch has sought legal opinion on some of the provisions in this SI in relation to the oversight of GCHQ, in particular that the new regulations stipulate that the oversight functions of the commissioner include keeping under review the exercise of GCHQ processes for whether information about vulnerabilities in technology should be disclosed. I think the Minister made that clear in the other place so, on that basis, I welcome this extension of the oversight powers allocated to the commissioner. It is appropriate that these powers are put on a statutory footing.
Lord Sharpe of Epsom (Con)
My Lords, I thank all three noble Lords for their considered responses on these regulations. As I set out earlier, the changes we are seeking to make through the regulations will ensure that the investigatory powers regime functions effectively, with appropriate oversight and safeguards, to protect our national security and keep the country safe; I welcome the reassurance from the noble Lord, Lord Ponsonby, on that from his side. I will do my best to answer all the questions that have been asked. Obviously, if I miss anything, I will carefully go through Hansard and commit to write to noble Lords.
The noble Baroness, Lady Chakrabarti, asked why the public consultation was somewhat truncated, over Christmas and what have you. When the CHIS Bill was introduced to Parliament in September 2020, the Government also published a draft revised code of practice setting out the changes that it was anticipated would be appropriate, were the Bill to be enacted as introduced. The noble Baroness recalled the lively debates in Parliament during the Bill’s passage and the Government’s collaborative approach to engagement with both parliamentarians and wider stakeholders, during which a broad range of expertise was brought to bear and views were aired in respect of the policy underlying the Bill. The public consultation on the revised CHIS code, which commenced on 13 December 2021 and concluded on 6 February 2022, as noted, concerned not the policy underlying the CHIS Act but the proposed changes to the current code. Many of these changes were set out in the draft revised code, published alongside the Bill, in September 2020. The consultation was originally scheduled to last six weeks but, as much of that period was over the Christmas holidays, we extended the consultation by a further two weeks to accommodate that.
The noble Baroness also asked about compensation for victims of criminal conduct authorisations. Section 27A of RIPA makes it clear that those who have been victims of criminal conduct authorised under a criminal conduct authorisation are entitled to compensation, notwithstanding that the criminal conduct may have been authorised by a CCA. Any person or organisation is able to make a complaint to the Investigatory Powers Tribunal against a public authority if they suspect a public authority of using covert techniques against them, which will be independently considered by the IPT. Additionally, a person is able to make a claim to the IPT under the Human Rights Act 1998 for any suspected breaches of human rights that they believe have been committed against them in connection with conduct where Part II of RIPA is concerned.
I want to go into a little detail on the comments around women’s groups. I reiterate that it is never acceptable for an undercover operative to form an intimate sexual relationship with those whom they are employed to infiltrate and target or may encounter during their deployment. That conduct will never be authorised, nor must it be used as a tactic of a deployment. The noble Baroness, Lady Chakrabarti, will know that, in a specific case, the review is ongoing.
We are aware of historical instances in which the authorisation of CHIS has disproportionately disadvantaged women, for example in the case of Wilson v Metropolitan Police. That related to the actions of undercover police officers deployed to gather intelligence on protest groups and people associated with them between 2003 and 2009. The Investigatory Powers Tribunal found that the sexual relationships of an undercover officer with a female member of those protest groups demonstrated that there had been failures in the supervision and management of undercover officers.
Since 2013, steps have been taken by His Majesty’s Government to strengthen safeguards and increase oversight to prevent such activity by law enforcement. Separately, the Undercover Policing Inquiry was established in 2015 to inquire into and report on undercover police operations in England and Wales since 1968. That inquiry is ongoing; the Home Office will consider the report of its findings in due course. I am sorry to answer that point at length, but I think it is worth stressing.
On the question from the noble Lord, Lord Paddick, about the public consultation and the Government’s response to it, Home Office officials carefully considered all the responses received on the revised code as part of the public consultation. The process took more time than expected, but we wanted to ensure that we gave full consideration to the concerns raised. Having a robust code of practice is an important part of maintaining public trust and confidence in the use of the powers to which the code relates.
On operating without a CHIS code, safeguards in the Act and under it were already enforced; the code provides guidance. A draft revised code has been in place since the Bill was before the House.
All noble Lords referred to safeguards. It is of course important that authorisation of CHIS activity is subject to robust and independent safeguards. The CHIS code provides guidance and clarity on the safeguards related to the use of CHIS that are set out in the CHIS Act. For example, all authorisations are granted by an experienced and highly trained authorising officer, who, as noble Lords will recall, is of high rank and will ensure that the authorisation has strict parameters and is clearly communicated to the CHIS. In addition, as with other sensitive investigatory powers, the use of CHIS is overseen by the Investigatory Powers Commissioner under the Investigatory Powers Act 2016, thereby providing robust and independent oversight of the power.
When public authorities authorise criminal conduct authorisations, the judicial commissioners within the Investigatory Powers Commissioner’s office, which I will henceforth refer to as IPCO, must be notified of a criminal conduct authorisation within seven days of an authorisation being granted or cancelled. Where an authorisation is granted, such notifications must set out the grounds to which the authorisation relates and specify the conduct that is authorised.
The IPCO also conducts inspections of public authorities that have the power to authorise CHIS and publishes an annual report on the findings from these inspections. Previous annual reports on the management of CHIS have been positive. In 2018 the IPCO annual report found that, in all instances, MI5’s authorisations of CHIS participation in criminal conduct were
“proportionate to the anticipated operational benefits”
and met “a high necessity threshold”.
On the safeguarding of children, I stress that the revised code makes clear that children are able to be authorised as CHIS only in exceptional circumstances and subject to the enhanced safeguards, including the risk assessment process set out in Article 5 of the juveniles order. An enhanced level of safeguards also applies to the rare occasions when there is a need to authorise a vulnerable adult to engage in CHIS activity, including criminal conduct. As with authorising children as sources, vulnerable adults should be authorised to act as a CHIS only in exceptional circumstances.
These are substantive amendments to the code of practice that focus on the well-being and safety of the child or vulnerable adult. It is right that there are additional safeguards for these authorisations. These amendments provide this further protection while ensuring that they do not create any unintended consequences that risk the safety of the individual. We have consulted extensively with charities and rights organisations in preparing the draft code to ensure that these safeguards are at the heart of the guidance.
On the limits on CHIS criminal conduct, a CHIS will never be given authority to engage in criminal conduct of any and all kinds. All authorisations must be necessary and proportionate to the criminality they are seeking to prevent, and the authorising officer must ensure that the level of criminality authorised is at the lowest level of intrusion possible to achieve the aims of the operation.
Any authorisation for a CHIS to engage in criminal conduct must comply with the European Convention on Human Rights—the noble Baroness will forgive me for not speculating as to the current state of affairs with that. This includes the right to life, and prohibition of torture or subjecting someone to inhuman or degrading treatment or punishment.
The noble Lord, Lord Ponsonby, referred to the fact that the CHIS Act does not list specific crimes that may be authorised or prohibited. The reason is sound: to do so would place in the hands of criminals, including terrorists and hostile state actors, a means of creating a checklist for suspected CHIS to be tested against. That would threaten the future of CHIS capability and result in an increased threat to the public.
As I have already said, a CHIS may be granted only where necessary, proportionate and compliant with the Human Rights Act. The use of agents provocateurs or entrapment undermines a person’s right to a fair trial. That is reflected in the Undercover Policing Authorised Professional Practice, which states in clear terms that an undercover officer
“must not act as an agent provocateur.”
Although agent provocateur is not a defence at law, it is managed through common-law principles, and the updated director’s guidance on charging provides safeguards to ensure that the Crown discharges its disclosure obligations to ensure that an agent provocateur issue does not cause a miscarriage of justice. Furthermore, the criminal courts have developed safeguards to ensure fairness in criminal proceedings, including where entrapment is alleged to have occurred.
I am sorry, I am slightly out of sync. The noble Lords, Lord Ponsonby and Lord Paddick, asked whether the juveniles order will be amended to reflect paragraph 4.4 of the code. We have already amended the juveniles order. We do not intend to amend it again at present.
Finally on this, a failure to comply or to have regard to the code would be a relevant error per Section 231(9)(a) of the Investigatory Powers Act. It is therefore an oversight issue, so it would be a matter for IPCO.
I move on to the interception code, which the noble Lord, Lord Paddick, asked about. We wanted to make these changes as close as possible to the entry into force of the UK-US data access agreement, given that the number of requests to which this existing policy will apply will be significantly higher now that the agreement has entered into force. Additionally, as per Section 260 of the IPA, the Home Secretary will shortly publish a report on the operation of the IPA, in line with her statutory obligations. It would be wrong to pre-empt the outcomes of that report. We will continue to keep all the IPA codes of practice under review.
I must stress that this instrument does not expand the IPC’s remit but simply formalises existing functions. Neither will it provide intelligence agencies or law enforcement authorities with new powers. The regulations to amend IPCO’s functions will ensure that the IPC’s functions are underpinned by statute, increasing public accountability, transparency and robust oversight. These are important powers—again, I join the noble Lord, Lord Ponsonby, in singling out the relevant personnel for our thanks and praise—and will allow our agencies to keep the public safe and to protect national security.
I think I have answered all the questions. I am very grateful for the contributions that have been made, but as I set out in my introduction, these changes we seek to make will ensure the greater efficiency of the IPA and that the Act continues to retain world-leading safeguards and oversight.
Investigatory Powers (Covert Human Intelligence Sources and Interception: Codes of Practice) Regulations
(1 year, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Grand Committee do consider the Investigatory Powers (Covert Human Intelligence Sources and Interception: Codes of Practice) Regulations.
Relevant documents: 16th Report from the Secondary Legislation Scrutiny Committee
Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022
(1 year, 5 months ago)
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Lord Sharpe of Epsom
That the Grand Committee do consider the Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022.
Relevant documents: 16th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, this draft statutory instrument raises the existing threshold in the Proceeds of Crime Act 2002 below which certain businesses in the anti-money laundering regulated sector do not need to submit defence against money laundering suspicious activity reports, known as DAMLs. The amount is being raised from £250 to £1,000. This aims to increase the efficiency and effectiveness of the DAML regime for law enforcement, businesses and customers.
A DAML is submitted to the National Crime Agency by a person proposing to deal with suspected criminal property that may make them liable for one of the principal money laundering offences under the Proceeds of Crime Act 2002. By submitting a DAML, a person can avoid criminal liability by obtaining consent or deemed consent for the act they propose to carry out; for example, a customer’s transaction to pay their rent. The DAML provides intelligence to the National Crime Agency and effectively freezes a transaction until it gives a consent decision or seven working days pass, after which businesses can assume that they have the relevant consent.
Raising the threshold to £1,000 is required now because the volume of DAMLs is rising and the vast majority do not provide law enforcement with asset seizure opportunities. Instead, they place regulatory burdens on businesses to submit and burdens on law enforcement to review, and cause a delay to customers, who must often wait seven days for their transaction to process.
To put the volumes in perspective, between 2018-19 and 2019-20 they increased by 80%, from 34,543 to 62,341. They then increased by, by my calculations, a further 41% to approximately 105,000 in 2020-21. In 2019-20, only 2% of all DAMLs, equivalent to 1,365, were refused consent by the National Crime Agency. Of those, only 1,062 progressed to law enforcement pursuing asset denial. The threshold applies to transactions in the operation of an account which do not relate to the opening or closing of an account. It applies only to deposit-taking bodies—in essence, banks and building societies—and to electronic money and payment institutions. This uplift in the threshold will result in fewer delayed transactions for businesses and customers where a DAML is no longer needed. It will allow businesses to prioritise their resources towards intelligence-led investigations and will enable law enforcement to focus on higher-priority reports that provide opportunities for asset seizure and disruption of criminal activity.
Lord Paddick (LD)
My Lords, again I thank the Minister for explaining this order. Raising the threshold from £250 to £1,000, the £250 limit being unchanged since 2005, seems quite a reasonable increase. I understand from the Explanatory Note that some organisations wanted the threshold to be raised to £3,000. I think The Home Office is right to limit the increase to £1,000. Law enforcement must focus its limited resources on transactions that are likely to be the result of money laundering. This order has the additional benefit of reducing the burden on commercial organisations, which can, in any event, report suspicious activity to law enforcement despite the changes in the limits in this order. Therefore, we support it.
Lord Ponsonby of Shulbrede (Lab)
My Lords, we support this order as well. As the noble Lord, Lord Paddick said, it seems a reasonable increase and some organisations would have gone to £3,000. However, there were other respondents to the consultation who were against the increase to £1,000; they wanted to keep it at the lower limit. Can the Minister say what their concerns were? Although I agree with the noble Lord, Lord Paddick, that £1,000 seems reasonable, other people thought it should have stayed at its original level: does the Minister know why they thought that? He indicates that he does not know why—okay.
I have some of the same figures that the Minister quoted. The Explanatory Memorandum states that the volume of DAMLs is rising steeply and gave those figures. The question is: what percentage of those 105,000 referrals were over the new £1,000 threshold—what difference will increasing the threshold to £1,000 make?
On the further figures that the Minister quoted, he said that only 2% of all DAMLs were refused consent in 2019-20, of which only 1,062 progressed towards asset denial. The question is, of that 2%, how many of those DAMLs were for amounts over £1,000 and so would still be caught? Both those questions are about how much the amount of work will be reduced by increasing this limit, although we of course approve of the objective.
One of the main benefits suggested by the Government, with which we agree, is that this measure should free up law enforcement to pursue other activities. We welcome that in itself. We heard from the current Home Secretary’s predecessor that the National Crime Agency has been asked to make staffing cuts of up to 20%. Can the Minister say anything about whether that previous expectation is still in place or has now been ruled out?
The Explanatory Memorandum states:
“A full Impact Assessment has been published alongside the Economic Crime and Corporate Transparency Bill, which considers the impact of the changes in this instrument.”
One of our key concerns about that Bill is its failure to tackle fraud and economic crime, with falling rates of enforcement and prosecution. I understand that this change is intended to reduce the number of ineffective DAMLs, but what action is being taken alongside that to try to increase the prosecution rate? It is a huge problem and it is very time-intensive to secure successful prosecutions—I understand that—so although we support this SI I would be grateful if the Minister could set out in a slightly broader context how he will try to increase the possibility of getting successful convictions.
Lord Sharpe of Epsom (Con)
My Lords, I thank both noble Lords for their support. In answer to the detailed statistical questions from the noble Lord, Lord Ponsonby, the National Crime Agency has yet to publish its report into 2020-21 or 2021-22. The details will be in there; I will be happy to share that report as soon as it is published, if that is acceptable.
The noble Lord also asked me about staffing at the National Crime Agency. I cannot answer his specific question and do not wish to stray there, but I can say that we are increasing capacity in law enforcement to analyse and act on suspicious activity report intelligence. That includes 75 additional officers in the UKFIU, which will almost double capacity. Some 45 of those officers are already in post, and the milestone for recruiting the remaining 30 is the end of this financial year, 2022-23. I will not go beyond that at the moment but we all share the noble Lord’s concerns, particularly about financial crime, which, as we know, is a pressing problem.
However, we should also salute the news stories I heard this morning about the Metropolitan Police apparently busting a fairly sizeable scamming organisation. Well done them; let us hope that that results in a large number of successful prosecutions.
I will stop there. Once again, I thank both noble Lords for their support. We believe that this intelligence is a critical tool in our ability to identify, disrupt and recover the hundreds of millions of pounds that underpin the most serious organised crime in the UK. That intelligence will be preserved through this adjustment and the requirement to submit intelligence-only SARs even when businesses are using the threshold exemption. Increasing the threshold is a measure supported by industry and law enforcement. I am sorry, I do not know who did not support the rise; I will try to find out.
Setting the threshold at a more appropriate level to reflect the current landscape is an important step towards improving the performance of the anti-money laundering system to better disrupt money laundering, terrorist financing and high-harm offences.
Air Quality (Designation of Relevant Public Authorities) (England) Regulations 2022
(1 year, 5 months ago)
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Lord Benyon
That the Grand Committee do consider the Air Quality (Designation of Relevant Public Authorities) (England) Regulations 2022.
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, this instrument designates National Highways as a relevant public authority under Part 4 of the Environment Act 1995 as amended by the Environment Act 2021. The effect of this is to place a duty on National Highways to collaborate with local authorities to achieve local air quality objectives.
Air pollution at a national level continues to reduce significantly, with nitrogen oxide levels down 44% and PM2.5 down 18% since 2010, but we know there is more to do. Road vehicles contribute to both nitrogen dioxide and PM2.5 in our atmosphere and we are committed to driving down emissions across all modes of transport.
Although it is important that the Government continue to drive action to improve air quality nationally, it is also necessary that we enable local authorities to take meaningful action at a local level. Local authorities rightly have responsibility to review and assess air quality in their areas and to act when statutory air quality objectives are not met. Often, this requires working with partners, so already, through the Environment Act, we have created a more collaborative framework with the concept of air quality partners.
The Act requires all tiers of local government and the Environment Agency to work together, where appropriate, to meet air quality objectives. It also requires neighbouring local authorities to co-operate, where appropriate. The Act sets out powers for the Secretary of State to designate other relevant public authorities as air quality partners. Traffic on the strategic road network, for which National Highways is responsible, has in many cases resulted in local authorities not meeting their air quality objectives.
Following overwhelming support for designation from a public consultation, this instrument would therefore designate National Highways as an air quality partner, requiring it to collaborate with local authorities to address local air quality problems. Specifically, National Highways will be required to commit to relevant and proportionate actions to take for inclusion within local authority air quality action plans.
The actions National Highways will take will be for it to determine and will be consistent with its responsibilities under the road investment strategy. They could include speed restrictions, improvements to road infrastructure or signage to improve traffic flow. Together with clarified duties on upper-tier authorities, this will create a more collaborative framework, bringing all authorities with responsibility for our roads together to co-operate to address excess pollution.
Over the summer, the Government provided newly published guidance to local authorities on how they should work with air quality partners. We will also provide further statutory guidance to support collaborative working between local authorities and National Highways specifically.
In line with published guidance, there is no need to conduct an impact assessment for this instrument. This is because no, or no significant, impact on the private or voluntary sector is foreseen, as this instrument is limited to requiring action from National Highways.
The territorial extent of this instrument is England only, as air quality is a devolved policy area.
I hope your Lordships agree that these regulations are an important contribution to further strengthening the local air quality management framework to enable local action to reduce pollution and therefore reduce negative health impacts. I beg to move.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for introducing this statutory instrument. The quality of the air we breathe is essential for the population to remain healthy and fit. We have seen in press reports the effects that poor air quality can have on individuals, from minor ailments to life-threatening conditions, especially for young children.
Part IV of the Environment Act 1995 established the local air quality management framework. This requires local authorities to set an air quality management area whereby they assess air quality in their area and act if pollution levels reach a dangerous level. This is easier said than done. Local authorities find it difficult to achieve air quality management plans as there is often a lack of co-operation on the part of the polluter. This may be a road haulage business or a busy NHS hospital.
This instrument should ensure that National Highways plays a full part in implementing and supporting air quality management plans. The consultation that Defra conducted was extensive and well publicised. Not surprisingly, there was strong support for National Highways becoming the designated body to assist with improving air quality. It does, after all, construct the main highways running through or close to our communities.
Given local authority responsibility and National Highways involvement, one would imagine that close proximity to main road thoroughfares and highways would play an important part in the planning decisions for schools, nurseries and housing designated for young families. However, I fear that this is not always the case.
Although I accept that this instrument does not cover London, which comes under the remit of the Mayor of London, I was nevertheless horrified when the secondary school in London that I walk past on my way to the Tube station was remodelled, allowing it to take in a large number of extra pupils. No thought appeared to be given to the fact that the main entrance was yards away from a busy junction with traffic lights, with the exact time when the children were attending in the morning coinciding with the main commuter rush hour. The quality of the air these children were breathing must have been very poor. It was at least five years before the entrance for pupils was moved away from the main road to a subsidiary entrance round the corner and away from traffic, at the back of the school playground.
There will be many other such examples up and down the country where children and young people are exposed to unacceptable air pollution, which damages their health. Local authorities and National Highways both have a role to play here. Can the Minister give reassurances that this statutory instrument will improve outcomes for those currently breathing poor-quality air? Given that co-operation is defined as being “appropriate”, can he also say what happens when the co-operation is not appropriate? Apart from those two questions, we support this SI.
Baroness Hayman of Ullock (Lab)
I thank the Minister for introducing this statutory instrument. Like the noble Baroness, Lady Bakewell, we support it. She explained why there are so many concerns about air quality standards right across the country and went into the details of some of the challenges that have been facing local authorities around how to tackle this in their area.
We know that air pollution is still a huge problem and a great worry to many people. As the Minister will recall, we recently debated the clean air Bill; that debate demonstrated the huge amount of support for the Government to get on and tackle this seriously.
We very much welcome the designation of National Highways following the Government’s consultation. The Minister mentioned further designations. When are we likely to see any further designations? What will the process and timescale of that be? What came out in the consultation around potential further designations? How will this work with the development of local plans with local government around clean air strategies? In particular, what are the duties going to be to tackle health inequalities?
Finally, the Minister will not be surprised to hear me ask whether there is any update on when we are likely to see the air quality targets, whether they will all be laid together or whether some will be laid first. Will there be prioritisation? What are the targets likely to be? With that, we support the regulations. It is a very important decision to bring National Highways into this.
Lord Benyon (Con)
My Lords, I am grateful for your support for this measure, which is fairly limited in its extent but can have an important effect. As noble Lords will know, and as the noble Baroness, Lady Bakewell, said, there are trunk roads under the responsibility of National Highways that go through some very urban areas and have a massive impact on the people living there. I used to represent the town of Newbury. Many Members will remember the issue of the Newbury bypass. Cross-party support in and around the town at the time was predicated on the basis that children were growing up, attending school and living close to areas with extremely high levels of pollution.
That is an example in my head that shows that these regulations are perhaps overdue. In most cases, it is not a problem because National Highways is working with local authorities on their plans, but the regulations place a duty on it that could resolve an issue where there was a lack of support for those local plans.
I can absolutely assure the noble Baroness, Lady Bakewell, that this is a key part of our policy in moving towards a healthier environment. We will see how it works. To answer her points in a bit more detail, once designated as a relevant public authority, air quality partners, including National Highways, have a clear duty under the Environment Act to provide a local authority with such assistance in relation to carrying out air quality functions as it reasonably requests. That is important to answer her question about appropriate requests for co-operation. As public bodies, air quality partners can be expected to comply with their legal duties.
National Highways will also be required to commit to taking action to reduce pollution in the context of local air quality action plans where pollution from vehicles using the strategic road network contribute to exceeding an air quality objective. If proposed actions are not sufficient, there is a last resort power of ministerial direction, which can be used to direct National Highways to make further proposals. I hope that gives some reassurance.
A majority of the existing exceedances of air quality objectives—I think 501 out of 532 in England, excluding London—are for roadside emissions of nitrogen dioxide. We have therefore prioritised ensuring that all authorities with a role governing management of the highways, including upper-tier authorities and two-tier authorities, are brought into the statutory local air quality management framework. A call for evidence held in 2021 established that designation of National Highways was advocated by a clear majority of those responding. This reinforced a clear message we had heard from engagement with local authorities as well. Consideration of future designation of public authorities whose relevance may be more locally specific will follow an evidence-based approach and be subject to public consultation.
The noble Baroness, Lady Hayman, is absolutely right: air quality remains a serious problem. These issues were aired in the debate on Friday when my noble friend Lord Harlech responded on behalf of the Government.
There is the possibility of further designations as they come forward and the Government remain committed to setting ambitious targets under the Environment Act. We are currently finalising the Government’s response to the consultation and will continue to work at pace to lay draft statutory instruments as soon as practicable. The noble Baroness, Lady Hayman, will have heard me talk earlier, in response to a Question in the House, about our requirement under the Act to publish our environmental improvement plan in January. That is a target we intend to hit and I am sure she will keep my feet to the fire if there is any slippage on that.
The 2017 NO2 plan was clear that charging for entry into a clean air zone would not be suitable for all locations, particularly those that largely take traffic through rather than into areas. The strategic road network provides main routes for interurban traffic and takes high volumes away from towns and city centres. Charging on key routes could be an alternative and a means by which local authorities, working with National Highways, could implement a meaningful plan. But encouraging drivers to reroute into potentially less suitable local roads could create or worsen air quality issues on them and/or lead to increased carbon and road use issues, so it is really important that these authorities work together and look at it holistically, not just creating displacement of a problem but solving it. National Highways is working with those local authorities which have or are developing plans for clean air zones as part of their NO2 air quality plans.
I repeat my thanks to noble Lords for their contributions. National Highways already works alongside local authorities and has had to consider actions to improve air quality to address exceedances of NO2 national statutory concentration limits on the strategic road network. This instrument clarifies its role in working with local authorities where there are exceedances of air quality objectives locally, which will create a more consistent framework across local authorities. This instrument will make a difference to how local authorities can contribute to improving local air quality in their areas and I commend it to the Committee.
Persistent Organic Pollutants (Amendment) (EU Exit) Regulations 2022
(1 year, 5 months ago)
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Lord Benyon
That the Grand Committee do consider the Persistent Organic Pollutants (Amendment) (EU Exit) Regulations 2022.
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I beg to move that these regulations, which were laid before this House on 19 October, be considered. The instrument makes necessary technical corrections to the retained regulation on persistent organic pollutants, which I will hereafter refer to as POPs, to ensure that it continues to fully function in Great Britain following EU exit. The technical amendments in this instrument address deficiencies in Annex I of the retained POPs regulation, reinstate a set of exemptions also in Annex I that were omitted in error, and correct some provisions that have no legal effect.
I should make it clear that all the amendments introduced by this instrument are technical operability amendments and do not introduce any policy changes. These corrections are permitted by use of the powers available within Section 8 of, and Schedule 7 to, the European Union (Withdrawal) Act 2018. We have worked with the devolved Administrations on this instrument.
These regulations form an essential part of secondary legislation needed to implement the UK’s commitments under both the United Nations Stockholm convention on POPs, to which the UK is a party, and the protocol on POPs to the 1979 Convention on Long-Range Transboundary Air Pollution. POPs are substances recognised as being particularly dangerous to the health of humans, wildlife and the environment. This instrument preserves the current regime for managing, restricting or eliminating POPs in the UK.
I turn to the details of this instrument. When the Persistent Organic Pollutants (Amendment) (EU Exit) Regulations 2020 were drafted in preparation for the end of the implementation period, some errors were made. This resulted in a number of minor issues that need to be remedied by the new instrument.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, the Minister has clearly set out why we are debating this statutory instrument. In 2020, under the auspices of Defra, a very large number of SIs were brought forward and debated—mostly in Grand Committee. Since then, many of them have been amended, mostly for very minor errors. Given the number of SIs, it is not surprising that errors occurred. However, those relating to persistent organic pollutants, or POPs as they are referred to, are more serious, as they could have meant that the UK was not compliant with the Stockholm convention, which aims to prohibit, eliminate or restrict the production and use of POPs.
The original SI was repealed, and Regulation (EU) 2019/1021 replaced it on 15 July 2019. This SI contained errors. We are at the end of 2022 and are only now correcting these errors, mainly due to the current powers expiring at the end of this month. So it is very much the 11th hour, if not quite the 59th minute.
This is about not policy change but ensuring that current policy legally complies with existing regulations. Given the toxic nature of some POPs, it is surprising that these errors were not picked up earlier. I am content that this SI should pass but I have a general question for the Minister.
In the run-up to Brexit and immediately after, there were a large number of Defra-based SIs, as I referred to earlier. The Retained EU Law (Revocation and Reform) Bill has begun its passage in the other place and has been red-rated by the Regulatory Policy Committee. I will not comment on that here but there are rumours that, when passed, this revocation and reform Bill will begin the process for implementing some 2,400 statutory instruments. My heart sank when I heard that as a large number of those SIs are likely to fall within the remit of Defra. My question to the Minister, therefore, is this: is he confident that there will be sufficient staff in Defra to deal with the mountain of SIs coming their way, and that sufficient detail will be covered to ensure that there are no future errors in vital statutory instruments?
Baroness Hayman of Ullock (Lab)
My Lords, we do not have any problem with this statutory instrument as it stands, but our concerns are similar to those of the noble Baroness, Lady Bakewell.
First, I congratulate the Minister on his introduction. He did say that these are necessary technical amendments; some of them sounded extremely technical so I congratulate him on introducing those technical aspects to us today.
Our big concern is exactly as the noble Baroness, Lady Bakewell, said: there were many, many SIs during the Brexit process and we repeatedly raised issues around drafting accuracy. As the Minister knows, a number of those instruments had to come back to us. So it is concerning that, some time on from the first time around, we now have this issue. This was not picked up quickly. Can the Minister explain why it has taken so long to bring it to light? What has happened to draw it to the department’s attention? Was there an audit? Was there a practical issue that shed light on it? As the noble Baroness asked, how do we ensure that this does not happen again in future, because we know that we will be seeing a lot more SIs again? That is our biggest concern: not what is in the SI itself but the process and what has been happening.
Lord Benyon (Con)
I thank noble Lords for their valuable contributions to this debate. The regulations we have debated here today make no change to our existing policy to tackle the restriction and management of POPs. This instrument will ensure that we have the operable regulations we need to continue to protect the current and future health of the population, wildlife and environment of both the United Kingdom and the rest of the world. I absolutely concede the point that this SI has been brought to the Committee because of an error. A Government who do not make mistakes is a Government who do nothing; we are not perfect but we try to be. Did I get that right? Yes, I think I did.
I am very grateful to providence that I was not in the House at the time of that tsunami of statutory instruments. I can see that the scars still linger on the backs of some noble Lords who had to go through that relentless process. We remain committed to all the effects of Brexit, in getting the right regulations on to the statute book in a fit and proper state, and we will endeavour not to have to use noble Lords’ time in correcting them in future.
The unintentional omission of several exemptions for decaBDE did not come to light until June 2021. The process of taking an SI through from inception to coming into force is long and detailed, with many required steps and layers of scrutiny, even when making only minor corrective points with zero changes to policy. This instrument has been progressed as swiftly as possible, while ensuring that the necessary steps are taken, so that it comes into force before the required powers expire on 31 December this year.
Defra has conducted a detailed scoping exercise to identify REUL, retained EU laws, in its policy areas. Defra is in the process of analysing its REUL stock and determining what should be preserved as part of domestic law, as well as REUL that should be repealed or amended. There will be a department-wide programme to co-ordinate this analysis. We are working through how best to involve different stakeholders in this process and I absolutely pledge to keep the House informed throughout it.
I give an assurance that we will make sure we protect the environment in everything we do. In trying to create regulations and laws that are bespoke for these islands, we are not going to weaken them. We will make sure they are better, both from the perspective of people trying to do things and for those who are trying to protect the environment.
I think I have covered most of the points made. As I outlined, all the changes introduced by this instrument are technical operability amendments that are required to ensure that the UK can continue to implement the Stockholm convention to prohibit, eliminate or restrict the production and use of POPs. I commend these draft regulations to the Committee.
Telecommunications Infrastructure (Leasehold Property) (Terms of Agreement) Regulations 2022
(1 year, 5 months ago)
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Lord Parkinson of Whitley Bay
That the Grand Committee do consider the Telecommunications Infrastructure (Leasehold Property) (Terms of Agreement) Regulations 2022.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, I am pleased to introduce the statutory instrument laid before your Lordships’ House on 19 October. The Telecommunications Infrastructure (Leasehold Property) (Terms of Agreement) Regulations are part of the implementing regulations for the Telecommunications Infrastructure (Leasehold Property) Act 2021.
Providing greater access to fast, reliable and secure connections is a priority for His Majesty’s Government. The economic, social and cultural benefits of improving digital connectivity are already self-evident, and improving our digital infrastructure to deliver gigabit-capable connections will enable a profound change in what digital connectivity can contribute to our daily lives.
However, these benefits can be realised to their fullest extent only if they reach every home. For this reason, last year the Government passed the 2021 Act, which will support people living in blocks of flats and apartments, also known as multiple dwelling units, to access broadband services. The aim of the Act is to encourage landlords to respond to requests for access issued by network operators. I should clarify here that the individual who will be the person required to grant rights under the Act could be a landlord but could also be a property management company, depending on the arrangements a particular building has. This person is referred to as the required grantor in the Act, but I shall refer to landlords in the interests of brevity and clarity.
These rights, sought by operators, are essential for delivering connectivity. This is because, while a tenant in a flat may be able to provide permission for the operator to install equipment in his or her own flat, operators may be unable to deploy their services without first obtaining permission to install their equipment in areas which are not part of the target premises. Examples of such areas are shared corridors or riser cupboards, which are often a necessary part of the route to connecting the target premises. Permission to install equipment in these areas could come from either the landlord or a court.
Data provided by a number of operators suggests that around 40% of their requests for access receive no response. When an operator finds itself in this situation, our understanding is that the operator opts to bypass the property in order to maintain momentum for their wider deployment. The result of that operator’s understandable commercial decision is that the residents in the property concerned are left with little choice but to accept that they will miss out on superior connections, such as the installation of fibre where there currently is only a copper line, or perhaps even miss out on a connection altogether. The Government consider this to be unacceptable.
The 2021 Act addresses this issue by amending the electronic communications code—which I will refer to as “the code”—to create a new streamlined route through the courts: the Part 4A process. Operators can use the Part 4A process to access blocks of flats and apartments if a service has been requested by a tenant but a landlord is repeatedly unresponsive to requests for access. This legislation will thus prevent a situation where a leaseholder is unable to receive a service due simply to the silence of a landlord.
However, government policy in this area also works to keep a proportionate balance between the public benefits and the rights of individual landlords. This consideration is particularly important in the Act, where an operator may gain rights to access a property without the express permission, or potentially even the knowledge, of the landlord. The Act has been designed such that the terms and conditions applied to Part 4A code rights will ensure that this balance between the public benefit of network rollout and private property rights is maintained.
These terms and conditions are contained in two statutory instruments. One is the terms of agreement instrument we are debating today. The other is the Telecommunications Infrastructure (Leasehold Property) (Conditions and Time Limits) Regulations 2022—the conditions and time limits instrument—which was laid in Parliament on the same day as this, but is subject to the negative procedure.
The latter instrument specifies conditions to be satisfied before an operator can give a final notice to the landlord. These regulations are designed to make sure that the operator has made sufficient attempts to identify and contact the landlord before making an application to the court to have an agreement imposed. They also give a time limit within which the operator must apply to court for a Part 4A order and an expiry period for the code rights themselves. This is to ensure that the rights gained through this process are balanced in order to facilitate the provision of new connections without encroaching excessively on property rights.
The instrument we are debating today has been informed through detailed consultation with interested parties, including organisations representing landlords and operators, and contains the exact terms to which any code rights imposed under the Part 4A process will be subject.
All rights conferred under the code, whether under Part 4A or another part of the code—for example, rights to access land or install equipment—are subject to the terms contained in the agreement granting those rights. These could, for example, be particular requirements to give notice before entering the land in question. The precise terms to be applied to a code agreement have never previously been set through legislation.
The terms specified in this instrument include the notice requirements an operator must satisfy before entering the building, entry times for the operator, a requirement for the operator to indemnify the landlord for up to £5 million and requirements for labelling the equipment, among other details.
By prescribing the exact terms of a Part 4A agreement, this instrument represents a novel approach in telecoms infrastructure policy. This new approach has been taken for two reasons.
First, the circumstances in which the Part 4A process can be used are very specific. Part 4A can be used only where the operator needs to access land connected to the premises to which it wishes to deliver a service, and where both the target premises and connected land are in common ownership. Further, this process currently applies to multiple dwelling units only. The limited situations in which the Part 4A process can be used mean that, whereas in most cases legislation cannot effectively pre-empt the terms which a particular situation warrants, in this case the scope is so narrow that it can.
Secondly, fixing the terms of a Part 4A agreement makes the process for courts to deal with applications for code rights less complex, allowing decisions on whether to grant rights under the Part 4A process to be much faster. Given that the Part 4A process is designed to provide a quicker route to gaining code rights in order to avoid an operator having to bypass the building altogether, this is crucial. It also has the benefit of allowing courts to make more efficient use of resources. By allowing these cases to be dealt with swiftly, the court will have more time to devote to more complex cases.
Before concluding, I should note that these regulations apply to Scotland, England and Wales but not Northern Ireland. This is due to an issue stemming from the absence of a Northern Ireland Executive between 2017 and 2019, which caused the jurisdiction of code court cases in Northern Ireland courts to fall out of step with the rest of the United Kingdom. Work is under way to resolve this issue through separate regulations, to follow next year. These regulations and the Act that they help to implement represent an innovative approach to enabling digital infrastructure, which has been carefully designed to deliver improved connectivity for tenants while protecting private property rights. This instrument was debated and approved by a Delegated Legislation Committee in another place yesterday; I look forward to hearing noble Lords’ reflections on it today. I beg to move.
Baroness Merron (Lab)
My Lords, I am grateful to the Minister for his thorough introduction to this very practical statutory instrument. It is certainly one that we welcome. It has been subject to consultation and the measures in it seem proportionate.
However, I wish to raise with the Minister the matter of timeliness and process because I believe that, once again, it raises questions about the Government’s prioritisation of business. We can reflect that the enabling legislation was introduced in the Commons in January 2020 and, having been through the Lords, achieved Royal Assent in March 2021. The consultation on the new regime about which we are speaking today ran between June and August 2021, and the government response took until the end of June 2022. Now we find ourselves waiting almost until December for the SI to be laid and debated. I know that the Minister listened carefully to the concerns voiced more recently during the passage of the PSTI Bill about the speed of progress on rollout so, as this is a very helpful regulation to take us forward and speed things up, it begs the question—perhaps the Minister could give some comment in his response—as to why this is taken so long. Does he feel that this is the right way to deal with business?
Turning to the specifics of the regulations, I absolutely agree with the Minister—we have all come to this view—that broadband is an essential utility because it gives us access to nearly every part of society, whether that is shopping, schooling, public services or banking. We need a reliable, fast and affordable connection. Residents who live in multiple-dwelling units, such as blocks of flats or converted townhouses, need broadband just as much as everyone else. Certainly, it is interesting that Openreach warned that, without these much-needed reforms, it would be unable to connect up to 1.5 million apartments, which would undoubtedly risk the creation of a major digital divide. So I welcome the measures that are being introduced to help operators connect people living in apartments where landowners are repeatedly unresponsive. The measures we are considering today will help to resolve some of the most extreme cases but, if we want to meet the scale of the challenge of connecting everyone in a multiple-dwelling unit, further support and reform will of course be needed. I believe that the statutory instrument before us strikes a reasonable balance between operators and landowners and helps to connect people in flats who might otherwise be left behind.
The SI gives a reassurance to landowners that operators have to adhere to certain standards while carrying out the work, which will be a positive move to improve trust in the industry across the board.
I am sure the Minister will acknowledge that operators have raised some concerns that some of the terms are unnecessarily onerous. I will take a moment to refer to those, such as the need to send notice by recorded delivery when all previous attempts to make contact have been ignored or rejected, when many contact addresses for grantors are simply overseas PO boxes. Others have said that they will find it hard to line up permissions. Will the department review whether the use of Part 4A orders is working as intended, and will it record how many are successfully issued and followed through? In other words, will there be a review to see whether we need to make further changes down the line?
My second point is on wider considerations. This piece of delegated legislation deals only with an important but small part of the problem with connections in flats. I want to raise the fact that operators are often forced to move build teams on when they are installing full fibre in a particular area when they get to multiple-dwelling units, which means that those flats are left behind. It could be simply too difficult or costly for operators to come to an agreement with the required grantors in the timeframe during which they are, in a practical sense, in the area. Although it is true that operators can theoretically go back and connect those flats at a later date, that is way less efficient than doing it when they are already there.
The point is that if a build team moves on because the required permissions are not in place, those living in the block will potentially be left without the proper connection for some years until that matter can be resolved. It would be helpful to hear from the Minister how this statutory instrument will resolve the problem of the balance of getting permissions and having teams on the ground.
It would also be helpful if the Minister could comment on the continual revision of broadband rollout targets. Many times in the Chamber he will have heard concerns about constant revision of targets. To prevent this happening again, it is our view that there must be consideration of the broader concerns of those implementing the rollout and an attempt to balance those with the needs of landowners and other interested parties. Can he offer some comment, and indeed reassurance, that targets will not be further watered down?
In conclusion, this SI is a step in the right direction but further reforms will no doubt be necessary to ensure that tenants in flats do not unintentionally become a digitally excluded group. I believe we are all in agreement that broadband is an essential, not a luxury, but it is something that noble Lords will continue to keep an eye on, as I am sure the Minister will.
Lord Parkinson of Whitley Bay (Con)
I am very grateful to the noble Baroness for her scrutiny. It may have been a short debate, but she certainly did not let up on her scrutiny of this statutory instrument, and quite rightly so. I take her points about timeliness—we all want to see faster connectivity delivered as soon as possible—but, as I said in my opening remarks, this is an innovative area of law, which has implications for property rights. The 2021 Act introduced a process in which it will be possible for work to be undertaken on private property without the explicit consent, or potentially even knowledge, of the landlord. It is also important to remember that the Act prescribes the exact terms of an agreement in legislation. As I say, that approach has not previously been taken in telecommunications infrastructure policy.